Attachment 0004 - Excerpt from DA Cost Analysis Manual 22 Sep 2011.pdf

APPENDIX A

Excerpt from DA Cost Analysis Manual

May 2002

COST ELEMENT STRUCTURE FOR DEVELOPMENT OF LIFE CYCLE COST ESTIMATES AND

PROGRAM OFFICE ESTIMATES

Section I - Cost Element Structure

1.0 RESEARCH, DEVELOPMENT, TEST, AND EVALUATION (RDT&E)-FUNDED ELEMENTS

1.01 DEVELOPMENT ENGINEERING*

1.02 PRODUCIBILITY ENGINEERING AND PLANNING (PEP)*

1.03 DEVELOPMENT TOOLING*

1.04 PROTOTYPE MANUFACTURING*

1.05 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

1.051 PROJECT MANAGEMENT ADMINISTRATION (PM CIV/MIL)

1.052 OTHER

1.06 SYSTEM TEST AND EVALUATION

1.07 TRAINING

1.08 DATA

1.09 SUPPORT EQUIPMENT

1.091 PECULIAR

1.092 COMMON

1.10 DEVELOPMENT FACILITIES

1.11 OTHER RDT&E

2.0 PROCUREMENT-FUNDED ELEMENTS

2.01 NONRECURRING PRODUCTION

2.011 INITIAL PRODUCTION FACILITIES (IPFs)*

2.012 PRODUCTION BASE SUPPORT (PBS)*

2.013 OTHER NONRECURRING PRODUCTION*

2.02 RECURRING PRODUCTION

2.021 MANUFACTURING*

2.022 RECURRING ENGINEERING*

2.023 SUSTAINING TOOLING*

2.024 QUALITY CONTROL*

2.025 OTHER RECURRING PRODUCTION*

2.03 ENGINEERING CHANGES*

2.04 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

2.041 PROJECT MANAGEMENT ADMINISTRATION (PM CIV/MIL)

2.042 OTHER

2.05 SYSTEM TEST AND EVALUATION, PRODUCTION

2.06 TRAINING

2.07 DATA

2.08 SUPPORT EQUIPMENT

2.081 PECULIAR

2.082 COMMON

* These elements should be further subdivided to reflect the MIL-STD-881B Level 3 prime mission equipment WBS elements. Greater level of detail is permissible.

2.09 OPERATIONAL/SITE ACTIVATION

2.10 FIELDING

2.101 INITIAL DEPOT-LEVEL REPARABLES (SPARES)

2.102 INITIAL CONSUMABLES (REPAIR PARTS)

2.103 INITIAL SUPPORT EQUIPMENT

2.104 TRANSPORTATION (EQUIPMENT TO UNIT)

2.105 NEW EQUIPMENT TRAINING (NET)

2.106 CONTRACTOR LOGISTICS SUPPORT

2.11 TRAINING AMMUNITION/MISSILES

2.12 WAR RESERVE AMMUNITION/MISSILES

2.13 MODIFICATIONS

2.14 OTHER PROCUREMENT

3.0 MILITARY CONSTRUCTION (MC)-FUNDED ELEMENTS

3.01 DEVELOPMENT CONSTRUCTION

3.02 PRODUCTION CONSTRUCTION

3.03 OPERATIONAL/SITE ACTIVATION CONSTRUCTION

3.04 OTHER MC

4.0 MILITARY PERSONNEL (MP) DIRECT-FUNDED ELEMENTS (not reimbursed by any other appropriation)

4.01 CREW

4.02 MAINTENANCE (MTOE)

4.03 SYSTEM-SPECIFIC SUPPORT

4.04 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

4.041 PROJECT MANAGEMENT ADMINISTRATION (PM MIL)

4.042 OTHER

4.05 REPLACEMENT PERSONNEL

4.051 TRAINING

4.052 PERMANENT CHANGE OF STATION (PCS)

4.06 OTHER MP

5.0 OPERATIONS AND MAINTENANCE (O&M)-FUNDED ELEMENTS

5.01 FIELD MAINTENANCE CIVILIAN LABOR**

5.02 SYSTEM-SPECIFIC BASE OPERATIONS

5.03 REPLENISHMENT DEPOT-LEVEL REPARABLES (SPARES)**

5.04 REPLENISHMENT CONSUMABLES (REPAIR PARTS)**

5.05 PETROLEUM, OIL, AND LUBRICANTS (POL)**

5.06 END-ITEM SUPPLY AND MAINTENANCE

5.061 OVERHAUL (P7M)

5.062 INTEGRATED MATERIEL MANAGEMENT

5.063 SUPPLY DEPOT SUPPORT

5.064 INDUSTRIAL READINESS

5.065 DEMILITARIZATION

5.07 TRANSPORTATION

5.08 SOFTWARE

** These elements should be further subdivided to reflect the MIL-STD-881B Level 2 prime mission equipment WBS elements and the support equipment element. Greater level of detail is permissible.

5.09 SYSTEM TEST AND EVALUATION, OPERATIONAL

5.10 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

5.101 PROJECT MANAGEMENT ADMINISTRATION (PM CIV)

5.102 OTHER

5.11 TRAINING

5.12 OTHER O&M

6.0 ARMY WORKING CAPITAL FUND (AWCF) ELEMENT

6.01 AWCF CLASS IX WAR RESERVES

Section II - Cost Element Definitions

This element includes the costs of planning, design, fabrication, assembly, installation, modification, maintenance, and rework of all tools, inspection equipment, and test equipment supporting the development of a specified system component. It includes that time expended in determining tool, inspection, and test equipment requirements; planning of fabrication and testing operations; maintaining tool records; scheduling and control of all tools orders; and programming and preparing software for all numerically controlled machine tools used in development of a system component. It includes the costs of new materials used in the fabrication, assembly, installation, modification, and maintenance and rework of dies, jigs, fixtures, inspection equipment, handling equipment, work platforms, and test equipment used to develop each system component, as well as tools normally purchased in final form or that require negligible effort to assemble.

1.04 PROTOTYPE MANUFACTURING

This element includes the costs of fabrication, processing, subassembly, final assembly, reworking modification, and installation of parts and equipment, power plants, boosters, electronic equipment, explosives, and other items (including Government-Furnished equipment [GFE]), and the proving of such equipment and instruments for the specified system prototype element. This includes the construction of piece parts from raw materials—the cutting, forming, stretching, and blanking operations performed on materials to make individual parts. It includes bench assembling of all minor and major assemblies; mating or joining of primary sections;

installation of special and general equipment, instruments, and accessories performed after the mating; and all other preparation and/or processing and preflight and production service operations. Also included is the raw and semi-fabricated material plus purchased parts used in the manufacture of the specified system prototype item. The costs of prototype spare assemblies and parts are also included within this element.

1.05 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

1.051 PROJECT MANAGEMENT ADMINISTRATION (PM CIV/MIL)

This element includes the RDT&E-funded costs of the PM's office (civilian and military reimbursement) for system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and integrated logistics support (ILS) management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. System engineering/ management efforts that can be associated specifically with the individual hardware elements are excluded. This element includes any RDT&E reimbursement to MP for military personnel costs associated with project management in the PM's office. Also included are any PM office RDT&E-funded costs to manage and administer environmental efforts, e.g., PM environmental management team, and compliance with the National Environmental Policy Act (NEPA) and the National Aerospace Standard (NAS) 411 for pollution prevention plans.

1.052 OTHER

This element includes the costs of any other RDT&E-funded costs for system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. System engineering/ management effort that can be associated specifically with the individual hardware elements is excluded. This element also includes any RDT&E reimbursement to MP for military personnel costs associated with project management not in the PM's office.

1.06 SYSTEM TEST AND EVALUATION

This element includes the RDT&E-funded costs of system-related test activities, including costs of specially fabricated hardware to obtain or validate engineering data on the performance of the system. This element also includes costs of the detailed planning, conduct, support, data reduction, and reports from such testing, as well as hardware items that are consumed or planned to be consumed in the conduct of such operations. This element includes the testing of innovative pollution prevention technologies and neutralization processes as well as the costs of any hazardous, toxic, or radiological materials used during system test and evaluation. Also included are the costs of all efforts associated with the design, production, and disposal of models, specimens, fixtures, and instrumentation in support of the test program. The actual test articles (i.e., functionally configured systems) are excluded from this element; they were included in the element prototype manufacturing. Also excluded is all testing that is O&M-funded. Testing that can be associated with a subsystem (e.g., aircraft engine) is included in the costs of that subsystem, rather than this system-oriented cost element.

1.07 TRAINING

This element includes the costs of services, devices, accessories, aids, equipment, facilities, and parts used to facilitate instructions through which personnel acquire sufficient concepts, skills, and aptitudes to operate and maintain the system with maximum efficiency. This element includes costs of efforts associated with the design, development, and production of prototype training equipment, and the execution of training services. It includes the RDT&E costs of training initial service test crews and maintenance personnel, including temporary duty of Government personnel, involved in the testing including training needed on handling hazardous materials and proper use of personal protection equipment.

1.08 DATA

This element includes the costs of preparation, revision, and reproduction of drawings, specifications, parts lists, test plans, testing procedures, draft manuals, environmental reports, and other documentation that are produced in support of project management, engineering, tooling fabrication, and testing functions. Relative to a contract, this element includes costs of all deliverable data listed on a DD Form 1423, i.e., such efforts as can be reduced or eliminated with reductions or elimination of the listed requirements. If the data are Government peculiar, include the efforts of acquiring, writing, assembling, reproduction, etc. If the data are not Government peculiar, but are identical to that used by the contractor except in a different format, include costs of such efforts as reproduction, packaging, shipping, and, if necessary, reformatting.

1.09 SUPPORT EQUIPMENT

1.091 PECULIAR

This element includes the costs of the design and development of those deliverable items and associated software required to support and maintain the system or portions of the system while not directly engaged in the performance of its mission, and that have application peculiar to the given system. It includes, for example, vehicles, equipment, tools, etc., unique to the system used to fuel, service, transport, hoist, repair, overhaul, assemble, disassemble, test, inspect, or otherwise maintain the mission equipment.

1.092 COMMON

This element includes the costs of the design and development of those deliverable items and associated software required to support and maintain the system or portions of the system while not directly engaged in the performance of its mission, and that have application common to other than the given system. It includes, for example, vehicles, equipment, tools, etc., not unique to the system used to fuel, service, transport, hoist, repair, overhaul, assemble, disassemble, test, inspect, or otherwise maintain the mission equipment.

1.10 DEVELOPMENT FACILITIES

This element includes the RDT&E-funded costs of any new building, conversion or expansion of facilities or sites, and the acquisition of real estate for development and testing of the system. This includes those RDT&E-funded costs for facilities to handle or store hazardous materials or waste including underground storage tanks. It also includes any RDT&E funded construction costs for modification and testing of systems already in the Army inventory if necessary to the furtherance of the R&D program.

1.11 OTHER RDT&E

This element includes any RDT&E-funded costs not included in the previous elements. Costs must be system specific and clearly identified.

2.0 PROCUREMENT-FUNDED ELEMENTS

All procurement-funded costs resulting from the production and introduction of the materiel into the Army's operational inventory. This includes:

(1) All costs to the Government, defined as contractor costs plus in-house costs, of products and services necessary to transform the results of development into a fully operational system consisting of the hardware, training, and support activities necessary to initiate operations.

(2) Costs of both a nonrecurring (i.e., costs that are required to establish a production capability) and recurring nature (i.e., costs that occur repeatedly during production and delivery to user organizations).

(3) All costs resulting from production and introduction into inventory irrespective of how allocated, e.g., unit equipment (UE), maintenance float (MF), war reserve (WR), and training usage classification.

2.01 NONRECURRING PRODUCTION

2.011 INITIAL PRODUCTION FACILITIES (IPFs)

This element includes the cost of the initial hard tooling and production line set up to support low-rate and full-scale production of the system; and the cost of fabrication, assembly, and installation of tools (including modification and rework of development tools for production purposes), dies, templates, patterns, form block manufacture, jigs, fixtures, master forms, inspection equipment, handling equipment, load bars, work platforms (including installation of utilities thereon), and test equipment (such as checkers and analyzers) to support the manufacture of the specified system. It includes initial and duplicate sets of tools necessary to reach full-rate production plus modification of LRIP tool records, establishment of make-or-buy and manufacturing plans on nonrecurring tools and equipment, scheduling and control of tool orders, and programming and preparation of software for numerically controlled machine equipment. Included in this element are any provision of industrial facilities (PIF), depot maintenance plant equipment (DMPE), and layaway of industrial facilities that are system specific.

2.012 PRODUCTION BASE SUPPORT (PBS)

This element includes the procurement-funded costs of construction, conversion, or expansion of facilities for production, inventory, or maintenance required to accomplish the program. These costs may be identified with either or both the contractor and in-house efforts. They may be identified with the total system or with specific components of the total system, such as the engine. This element excludes any PIF costs included in IPFs.

2.013 OTHER NONRECURRING PRODUCTION

This element includes any procurement-funded, nonrecurring production costs not included in the above sub-elements. Costs must be system specific and clearly identified. For example, disposal, demilitarization, or layaway costs of Government-owned production equipment should be included here as a cost to the system.

2.02 RECURRING PRODUCTION

2.021 MANUFACTURING

This element includes the costs of material, labor, and other expenses incurred in the fabrication, checkout, and processing of parts, subassemblies, and major assemblies/subsystems needed for the final system.

This element also includes Government-furnished equipment and material, as well as costs of subcontractors and purchased parts/equipment. The element further includes costs of the efforts to integrate and assemble the various subassemblies into a working system, costs to install special and general equipment, costs to paint and package the system for shipment to its acceptance destination, and costs associated with preplanned product improvements. It also includes moves in order to assemble into a final system.

2.022 RECURRING ENGINEERING

This element includes the costs of all engineering efforts performed in support of production, including maintainability/reliability engineering, maintenance engineering, value engineering, and production engineering costs associated with the system. It also includes redesign, evaluation, and other support engineering efforts (either in-house, contract, or separate contractor) directly involved with production of the components/end item, e.g., maintenance of the TDP, preparation of engineering change proposals (ECPs), engineering change orders (ECOs), and analysis of test results.

2.023 SUSTAINING TOOLING

This element includes the costs of maintenance replacement or modification of tools and test equipment after the start of production. It includes the replacement of initial tools that break down, and modification, maintenance, and rework of initial and duplicate sets of tools occurring after production begin.

2.024 QUALITY CONTROL

This element includes the costs of implementing controls necessary to ensure that a manufacturing process produces a system that meets the prescribed standards. Included are costs of receiving, in-process, and final inspections of tools, parts, subassemblies, and complete assemblies. It also includes such tasks as reliability testing, establishment of acceptable quality levels (AQLs), statistical methods for determining performance of manufacturing processes, preparation and review of reports relating to these tasks, stockpile reliability testing, and the performance of production acceptance tests (PATs).

2.025 OTHER RECURRING PRODUCTION

This element includes any procurement-funded, recurring production costs not included in the above sub-elements. Costs must be system specific and clearly identified, e.g., warranty cost for a specific item.

2.03 ENGINEERING CHANGES

This element includes the costs of official alterations made to a system while it is still in the manufacturing process (before acceptance by the Army). Modifications that change the performance of the system or done after the system is accepted by the Army will be costed in modifications.

2.04 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

2.041 PROJECT MANAGEMENT ADMINISTRATION (PM CIV/MIL)

This element includes the procurement-funded costs of the PM's office (civilian and military reimbursement) for system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. System engineering/ management efforts that can be associated specifically with the individual hardware elements are excluded.

This element also includes any procurement reimbursement to MP for military personnel costs associated with project management in the PM's office. Also included is any PM office procurement-funded costs to manage and administer environmental efforts, e.g., PM environmental management team, and compliance with the National Environmental Policy Act (NEPA) and the National Aerospace Standard (NAS) 411 for pollution prevention plans.

2.042 OTHER

This element includes the costs of any other procurement-funded costs for system engineering and technical control as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. System engineering/ management effort that can be associated specifically with the individual hardware elements is excluded. This element also includes any procurement reimbursement to MP for military personnel costs associated with project management not in the PM's office.

2.05 SYSTEM TEST AND EVALUATION, PRODUCTION

This element includes the procurement-funded costs of the system-related production test activities that are identifiable with the evaluation of the system. Included are the costs of hardware to obtain or validate data.

Also included are the costs of the planning, conduct, support, data reduction, and reports from such testing and test items consumed in the conduct of such operations, as well as the costs of design, production, handling, storage, and disposal of models, specimens, fixtures, instrumentation, and hazardous materials or waste in support of the test program. Articles for testing that are complete production units should be costed under recurring production.

2.06 TRAINING

This element includes the system-specific, procurement-funded costs of training devices, accessories, aids, equipment, facilities, and parts used to facilitate instruction through which personnel will acquire sufficient concepts, skills, and aptitudes to operate and maintain the system with maximum efficiency. This element includes costs for the efforts associated with the production and fielding of training equipment.

2.07 DATA

This element includes the procurement-funded costs of gathering, storing, reproducing, and disseminating system-specific technical, environmental, and managerial supportability data, and the cost of preparing, updating, and reproducing publications such as technical orders, handbooks, and field manuals during production. Relative to a contract, this element includes costs of all deliverable data listed on a DD Form 1423.

This element includes only such efforts that can be reduced or will not be incurred if the data item is eliminated.

If the data are Government peculiar, include the efforts of acquiring, writing assembling, and reproduction. If the data are not Government peculiar, but are identical to that used by the contractor, except in a different format, include costs of such efforts as reproduction, packaging, shipping, and, if necessary, reformatting.

2.08 SUPPORT EQUIPMENT

2.081 PECULIAR

This element includes the costs of the production of those deliverable items and associated software required to support and maintain the system or portions of the system while not directly engaged in the performance of its mission, and that have application peculiar to the given system. It includes, for example, vehicles, equipment, tools, etc., unique to the system used to fuel, service, transport, hoist, repair, overhaul, assemble, disassemble, test, inspect, or otherwise maintain the mission equipment. Excluded are any initial support equipment costs.

2.082 COMMON

This element includes the costs of the production of those deliverable items and associated software required to support and maintain the system or portions of the system while not directly engaged in the performance of its mission, and that have application common to other than the given system. It includes, for example, vehicles, equipment, tools, etc., not unique to the system used to fuel, service, transport, hoist, repair, overhaul, assemble, disassemble, test, inspect, or otherwise maintain the mission equipment. Excluded are any initial support equipment costs.

2.09 OPERATIONAL/SITE ACTIVATION

This element includes the procurement-funded costs of real estate, construction, conversion, utilities, and equipment to provide all facilities required to house, service, and/or launch prime mission equipment at the organizational and intermediate levels. This element includes the conversion of site, ship, and vehicle; and system assembly, checkout, and installation into the site facility to achieve operational status. It also includes contractor support in relation to operational/site activation. This element also includes the procurement reimbursement costs for system-specific initial base operations (BASOPS)/real property maintenance activities (RPMA)—such as utilities, repair of real property, minor construction, fire prevention, supply operations, maintenance of materiel, and transportation—for site activation equipment installation and one-time BASOPS.

Excluded from this element are any MC-funded efforts under operational/site activation construction or O&M-funded efforts under transportation, system testing and evaluation, training, or system-specific base operations.

2.10 FIELDING

2.101 INITIAL DEPOT-LEVEL REPARABLES (SPARES)

This element includes the procurement costs for initial spare components, assemblies, and subassemblies (reparable items) necessary to fill initial ASL/PLL stock to support end-item fielding throughout the system life cycle. It includes any purchases from the AWCF for reparables. However, any items costed as part of manufacturing should be excluded here, such as engines.

2.102 INITIAL CONSUMABLES (REPAIR PARTS)

This element includes the procurement costs for consumables necessary to fill initial ASL/PLL stock to support end-item fielding. It includes any purchases from the AWCF for consumables. This element also includes consumable (non-reparable) individual parts, assemblies, or subassemblies required to support end-item fielding. It excludes consumables used in depot maintenance overhaul, repair, or modifications covered in redistribution of displaced equipment.

2.103 INITIAL SUPPORT EQUIPMENT

This element includes the procurement-funded, one-time, system-specific fielding costs (both labor and material) for special equipment, tools, de-processing of new equipment, and those fielding costs associated with post-production software support (PPSS) that were not funded by RDT&E. Normally, initial support equipment is packaged with equipment end items prior to delivery of the equipment to Army units.

2.104 TRANSPORTATION (FIRST DESTINATION) (FDT)

This element includes only the procurement-funded costs of moving materiel from the manufacturer to the first point of acceptance, receipt or storage point by the Government. This represents a portion of a total system cost. FDT includes transportation costs for shipments, which may be interrupted for test or modification before acceptance. Included are such costs as temporary duty (TDY) of crews from duty station to manufacturing plant, to delivery point, and return to duty station; supplies, minor repairs, and fuel during delivery; transporting hazardous materials; and other costs. Excluded is transportation costs paid by a vendor as prescribed in procurement contracts for manufacturing, as well as all one-time costs of retrograding equipment that is being replaced by the materiel system.

2.105 NEW EQUIPMENT TRAINING (NET)

This element includes the system-specific, procurement-funded costs of training services for new equipment training through which personnel will acquire sufficient concepts, skills, and aptitudes to operate and maintain the system with maximum efficiency. It includes the costs for TDY of Government personnel, of training initial-service test crews, maintenance personnel, instructors, initial crew, maintenance personnel and NET teams, as well as the one-time cost of establishing system-specific individual training programs, including all services and manuals. It excludes the costs of replacement training.

2.106 CONTRACTOR LOGISTICS SUPPORT

This element includes the procurement-funded contractor support when introducing a new materiel system. It includes all contractor-provided support required to field and maintain the system until normal maintenance procedures are established and assumed by the unit receiving the new equipment.

2.11 TRAINING AMMUNITION/MISSILES

This element includes the costs of ammunition and missiles consumed by the system being costed (e.g., an aircraft or a tank) during both unit training and annual service practice. The cost of ammunition and/or missiles consumed during the training of replacement personnel, along with the procurement cost of replacement equipment, is included in this cost element. It excludes the MP associated with replacement training and the O&M-funded training services cost.

2.12 WAR RESERVE AMMUNITION/MISSILES

This element includes the costs of war reserve (WR) ammunition/missiles required to sustain combat operations of approved forces through the prescribed period. WR ammunition includes basic load. This element includes all system-specific WR ammunition and basic load.

2.13 MODIFICATIONS

This element includes the procurement-funded costs of the labor and material associated with any approved alteration made to a system by accomplishing a Modification Work Order (MWO), retrofit, conversion, remanufacture, or engineering change after fielding by the Army. It excludes modifications that require a Milestone C Decision Review, as well as the MP-funded labor costs for installation of these modifications.

2.14 OTHER PROCUREMENT

This element includes any procurement-funded costs not included in the above elements. The costs must be system specific and clearly identified. This element may include any procurement-funded services to address environmental litigation and liabilities.

3.0 MILITARY CONSTRUCTION (MC)-FUNDED ELEMENTS

Military construction projects associated with a materiel system are defined as either system specific or not system specific. System-specific requirements and projects are defined as those that meet the following test:

(1) The materiel system cannot be fielded without the construction; and

(2) The need for the construction is generated by the decision to acquire and field a given materiel system or, conversely, if and when a materiel system acquisition is terminated prior to fielding, the need for the construction ceases and the construction project is automatically canceled along with materiel system program;

and

(3) Stationing and organizational requirements such as barracks, dining facilities, unit headquarters building, and the like oriented toward forces' support will be excluded from materiel system cost estimates, unless approved for inclusion as an exception to policy. An example of an exception that would be system specific is the construction of a new fielding location not contiguous to an existing Government facility, i.e., basic site construction for PATRIOT.

Examples of system-specific construction projects are simulator buildings, missile bunkers, and billets associated with the fielding of new organizations for the new systems. All other military construction projects related to the materiel system, either directly or indirectly, is not considered system specific.

3.01 DEVELOPMENT CONSTRUCTION

This element includes only the MC-funded costs of any new building, conversion or expansion of facilities or sites, and acquisition of real estate for development and testing of the system. It includes any construction costs for modification and testing of systems already in the Army inventory if necessary to the furtherance of the development program. This element also includes any MC-funded environmental remediation costs for preparation and cleanup of structures and real estate before, during, and after system specific development or testing.

3.02 PRODUCTION CONSTRUCTION

This element includes only the MC-funded costs of real estate, construction, conversion, utilities, and equipment to achieve initially the total production capability for the materiel system. This includes planning, acquisition of real estate, minor construction, and other MC-funded supporting activities. This element also includes any MC-funded environmental remediation costs for preparation and cleanup of structures and real estate before initial total production capability is achieved.

3.03 OPERATIONAL/SITE ACTIVATION CONSTRUCTION

This element includes only the MC-funded costs of real estate, construction, conversion, environmental remediation, utilities, and equipment to provide all facilities required to house, service, and/or launch prime mission equipment at the organizational and intermediate level. This element includes planning, acquisition of real estate, minor construction, and other MC-funded supporting activities.

3.04 OTHER MC

This element includes any MC costs not included in the previous elements. The costs must be system specific and clearly identified.

4.0 MILITARY PERSONNEL (MP) DIRECT-FUNDED ELEMENTS (not reimbursed by any other appropriation)

This element includes all MP-funded costs associated with the development, production, fielding, operation and support of the materiel system not reimbursed by any other appropriation.

4.01 CREW

This element includes the costs of base pay and allowances, theater costs, and special pay of military personnel whose primary function is to operate the materiel system being costed. Excluded are the costs of those who operate other equipment in the force unit such as trucks and switchboards.

4.02 MAINTENANCE (MTOE)

This element includes the costs of base pay and allowance, theater costs, and special pay of those direct and general support military personnel below depot level whose primary function is to maintain the materiel system being costed. Excluded are the costs of those persons whose primary function is to maintain other equipment in the force unit such as trucks and switchboards.

4.03 SYSTEM-SPECIFIC SUPPORT

This element includes the costs of base pay and allowances, theater costs, and special pay of all military personnel below depot level who are charged to the materiel system and who are not crew or maintenance. It includes the costs of persons in those units (battalions, companies, or attached platoons) that exist only because of the system being costed. Examples of persons who might be included are a company commander, a switchboard operator, a truck driver, a truck repairman, a fuel handler, and an ammunition handler.

4.04 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

4.041 PROJECT MANAGEMENT ADMINISTRATION (PM MIL)

This element includes the MP-funded costs of the PM's office (not reimbursed by the RDT&E or procurement appropriations.) For system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. This element excludes any RDT&E or procurement reimbursement to MP for military personnel costs associated with project management in the PM's office. Also included is any PM office MP-funded costs to manage and administer environmental efforts, e.g., PM environmental management team, and compliance with the National Environmental Policy Act (NEPA) and the National Aerospace Standard (NAS) 411 for pollution prevention plans.

4.042 OTHER

This element includes any other MP-funded costs for system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. This element excludes any RDT&E or procurement reimbursement to MP for military personnel costs associated with project management not in the PM's office.

4.05 REPLACEMENT PERSONNEL

4.051 TRAINING

This element includes the MP-funded costs of all pay and allowances for the system-specific replacement personnel undergoing formal training for future assignment to the given materiel system. It also includes the pay and allowances of the instructors for the replacement personnel training.

4.052 PERMANENT CHANGE OF STATION (PCS)

This element includes the MP-funded costs associated with the permanent change of station of system-specific replacement personnel to and from overseas theaters and within CONUS.

4.06 OTHER MP

This element includes any MP-funded costs not included in the previous elements. Costs must be system specific and clearly identified.

5.0 OPERATIONS AND MAINTENANCE (O&M)-FUNDED ELEMENTS

All O&M-funded costs associated with the development, production, fielding, operation, and support of the materiel system.

5.01 FIELD MAINTENANCE CIVILIAN LABOR

This element includes the costs of civilian maintenance labor at any level below depot maintenance. It includes contractor performed DS/GS maintenance costs. It excludes civilian labor at the depot.

5.02 SYSTEM-SPECIFIC BASE OPERATIONS

This element includes the O&M-funded costs of system-specific initial BASOPS/RPMA—such as utilities, repair of real property, environmental remediation, minor construction, fire prevention, supply operations, maintenance of materiel, and transportation—for site activation equipment installation and one-time BASOPS. Excluded from this element are any O&M-funded efforts under system test and evaluation, training, transportation, or software.

5.03 REPLENISHMENT DEPOT-LEVEL REPARABLES (SPARES)

This element includes the consumer's O&M costs of purchasing from the AWCF reparables required to re-supply initial stock. It also includes the repairable individual parts, assemblies, or subassemblies required on a recurring basis for the repair of major end items of equipment (including PME and support equipment) subsequent to fielding.

5.04 REPLENISHMENT CONSUMABLES (REPAIR PARTS)

This element includes the consumer's O&M costs of purchasing from the AWCF consumables required to re-supply initial stock. It also includes the consumable (non-reparable) individual parts, assemblies, or subassemblies required on a recurring basis for the repair of major end items of equipment (including PME and support equipment) subsequent to fielding.

5.05 PETROLEUM, OIL, AND LUBRICANTS (POL)

This element includes the costs of fuel, oil, and lubricants for the system.

5.06 END-ITEM SUPPLY AND MAINTENANCE

5.061 OVERHAUL (P7M)

This element includes the costs of material, labor, and overhead for the repair/overhaul of the basic end item and associated components including any compliance costs associated with hazardous materials or waste.

The material, labor and overhead costs for contractor-performed depot overhaul are also included in this element.

5.062 INTEGRATED MATERIEL MANAGEMENT

This element includes central supply and maintenance activities conducted in support of end-item distribution, disposal, requirements determination, requisition processing, stock control, WR requirements, cataloging, weapons systems management, weapon systems supply support, provisioning, budgeting/ funding, allowances, configuration management, technical support, and maintenance management. It excludes conventional ammunition and secondary-item integrated materiel management.

5.063 SUPPLY DEPOT SUPPORT

This element includes operations at supply depots, manpower, peculiar support equipment, necessary facilities, and associated costs directly identifiable to end-item supply operations including any compliance costs associated with hazardous materials or waste. It excludes conventional ammunition and secondary-item supply depot operations.

5.064 INDUSTRIAL READINESS

This element includes manpower authorizations, peculiar and support equipment, necessary facilities, environmental compliance, and other associated costs specifically identifiable to management of end-item industrial preparedness activities.

5.065 DEMILITARIZATION

This element includes manpower authorizations, peculiar and support equipment, necessary facilities, and associated costs specifically identifiable to end-item demilitarization activities.

5.07 TRANSPORTATION (SECOND DESTINATION)

This element includes the O&M-funded costs for movement of Army supplies and equipment worldwide, after receipt from production or either a CONUS port, CONUS depot, or CONUS Customer. This includes, but not limited to delivery of new equipment to units (except first destination transportation), direct equipment redistribution, TOE equipment moves on direct unit PCS, and transporting items to depot maintenance facilities and back to the operational units. Examples are special transportation of tracked vehicles to and from training areas and one-time costs of retrograding equipment that is being replaced by the materiel system. Costs must be system specific and clearly identified. It excludes transportation funded by stock fund/AWCF and movement of cargo by TOE units as part of their mission functions.

5.08 SOFTWARE

This element includes all O&M-funded costs for software. This would normally be predominately.

However, this element should include any software development, procurement, and support costs that were not funded by either the RDT&E or the procurement appropriations.

5.09 SYSTEM TEST AND EVALUATION, OPERATIONAL

This element includes the O&M-funded costs of system-specific test activities, including costs of specially fabricated hardware, to obtain or validate engineering data on system performance. It also includes costs of the detailed planning, conduct, support, data reduction, and reports from such testing. The actual test articles (i.e., functionally configured systems) are excluded from this element; they should be included in the prototype manufacturing or manufacturing elements.

5.10 SYSTEM ENGINEERING/PROGRAM MANAGEMENT

5.101 PROJECT MANAGEMENT ADMINISTRATION (PM CIV)

This element includes the O&M-funded costs of the PM's office (not funded by the RDT&E, or procurement) for system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system. Also included are any PM office O&M-funded costs to manage and administer environmental efforts, e.g., PM environmental management team, and compliance with the National Environmental Policy Act (NEPA) and the National Aerospace Standard (NAS) 411 for pollution prevention plans.

5.102 OTHER

This element includes the costs of any other O&M-funded costs for system engineering and technical control, as well as the business management of the system/program. It encompasses the overall planning, direction, and control of the definition, development, and production of the system/program, including functions of logistics engineering and ILS management, e.g., maintenance support, facilities, personnel, training, testing, and activation of a system.

5.11 TRAINING

This element includes the O&M-funded costs of system-specific, individual training for replacement personnel. The training can include a specific course taught in a TRADOC school and/or transition training for qualifying the replacement personnel. It includes recurring costs associated with training materiel and devices.

It excludes the MP costs associated with the instructors and students, and the procurement costs for training ammunition/ missiles.

5.12 OTHER O&M

This element includes any O&M-funded costs not included in the previous elements. Costs must be system specific and clearly identified. They may include supplies, direct support operations, indirect support, environmental efforts (pollution prevention, compliance, remediation, and restoration), and quarters, maintenance, and utilities (QMU) that are not included above. In the event that any R&D or production efforts are O&M-funded costs and are not captured above, they should be separately identified under this cost element.

6.0 ARMY WORKING CAPITAL FUND (AWCF) ELEMENT

6.01 AWCF CLASS IX WAR RESERVES

This element includes the costs of Class IX war reserve components, assemblies, and subassemblies determined to be combat-critical for maintaining and sustaining combat operations of the materiel system until re-supply can be accomplished, which are procured with Supply Maintenance, Army operating cost authority and held to satisfy the War Reserve Materiel Requirements.