IFI~ANCIAL MANAGEMENT AND COMPTROLLER) 1000 NAVY …

DEPARTMENT OF THE NAVY

IOFFICE OF THE ASSISTANT SECRETARY

IFI~ANCIAL MANAGEMENT AND COMPTROLLER)

1000 NAVY PENTAGON WASHINGTON. DC 20350?1000

MEMORANDUM FOR DISTR~BUTJON

'MAY 3 2002

Subj: ACCEPTANCE OF REIMBURSABLE ORDERS FOR WORK OR SERVICES

Ref: (a) DoD FMR Volume 11A Chapter 2

(b) DoD FMR voiume 11A Chapter 3

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The purpose of ~his memorandum is to reiterate Department of the Navy (DoN) policy on the percentage of in-house performance necessary to accept ~ project order or a reimbursable Economy Act order.

A project order !is a specific, definite and certain order placed with and acce~ted by a separately managed Department of Def6nse (000) activity. A project order obligates appropriations in th~ same manner as orders or contracts placed with commercial entetprises. By reference (a), 000 policy provides that orderi~g activities issue project orders only to those 000 activities! that are capable of subsLantially

performing the work prdered. The reference (a) guidance defines

"substantialN as not: less than 51 percent of the total costs attributable to rend~ring the work ordered. The cost of commercial goods or ~ervices necessary to perform the work accepted is incorpor~ted as a component of total cost.

Reimbursable Ec~nomy Act orders are authorized for use by

all components of th~ DoN for requesting work or services from any Government-owned I and operated establishment, when the order does not meet the cr~teria of a project order specified in reference (a). Econpmy Act orders may be accepted on a reimbursable basis by any DoN activity that is equipped and in a position to perform ~ll or a substantial part of the requirements of the prder. It is still DoN policy that 51 percent of the work ~r services of a reimbursable Economy Act order be performed i~-house by the accepting activity, even though reference (b) I does not specify a percentage for in-house work to be performedl for Economy Act orders. The accepting activity must perfor~ 51 percent of the work or services with in-house resources a~d not merely be in a position to potentially do so. ~\In-house" includes the cost of all direct labor, material and ~upplies, travel and minor equipment. Chargeable overhead fosts of Navy Working Capital Fund activities are also ~ncluded. Also included are those contracts that provide technicfl support of organic in-house effort.

or Subj: ACCEPTANCE REIMBURSABLEORDERS FOR WORK OR SERVTCES

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Excluded from the d~finition of in-house performance are those contractual efforts ithat produce the product or service required by the requesting a~tivity with only contractual oversight provided by the accepting activity and work ordered from other

government activitief by the accepting activity.

Exceptions to th~ 51% rule for project orders cannot be granted, since this ~equirement is delineated in reference (a). To the extent specif~c situations arise for which it appears reasonable to grant ~n exception to the DoN reimbursable Economy Act order 51% policy,\, requests should be forwarded to: Office of Assistant secretary o~ the Navy (Financial Management and Comptroller), Office pf BUdget, Budget policy and Procedures

Division (FMB-5).

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Distribution: AAUSN

CNO

CMC

CINCLANTFLT CINCPACFLT

CINCU5NAVEUR

COMNAVAIRSYSCOM COMNAVSEASYSCOM COMSPAWARSYSCOM

COMNAVSPECWARCOM

COMNAVFACENGCOM

coMNAVRESFOR.

CHNAVPERS

COMSC CRBUMED DIRSSP

COMONT

COMNAVMETOCCOM

I GLADYS J. COMMONS

Principal Deputy Assistant Secretary of the Nevy (Financial Management and Comptroller)

CNET

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