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ACQ 1010 Fundamentals of Systems Acquisition Management > Module 5 - Financial Management > Flashcards

Module 5 - Financial Management Flashcards

1
Q

Budget Authority

A

Spending limit provided by Congress

Amount you can obligate on your program in terms of Purpose, Time, and Amount, that leads to commitment, obligation, expenditures, and outlay

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2
Q

Commitment

A

Administrative Reservation of funds by the local comptroller, in anticipation of future obligation.

It Ensures that the funds are available in the amount requested, correct fiscal year, and proper appropriation.

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3
Q

Obligation

A

Legal reservation of funds to make a future payment of money

An obligation is created when the local Procuring Contracting Officer (PCO) signs a contract

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4
Q

Expenditure

A

A charge against available funds, resulting from a voucher, claim, or other document approved by a competent authority

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5
Q

Outlay

A

The vendor cashes the expenditure check and money flows from the Treasury to the vendor or supplier

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6
Q

Five Defense-Wide Appropriation Categories

A

Research Development Test and Evaluation (RDT&E)
Procurement
Operation and Maintenance (O&M)
Military Personnel (MILPERS)
Military Construction (MILCON)

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7
Q

Research Development Test and Evaluation (RDT&E)

A

Funds
* Research and development of equipment Materials and computer application software
* Research and development installations
*Testing and Evaluation

Obligation Period
2 Years

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8
Q

Procurement

A

Funds
* Programs approved for production, including purchasing end items and defense systems, spares, and major modifications

Obligation Period
3 Years

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9
Q

Operation and Maintenance (O&M)

A

Funds
* Day to day operations, minor construction, HQ operations, training and education, civilian salaries, expenses of operational military forces, travel, base operations support, fuel, and recruiting

Obligation Period
1 Years

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10
Q

Military Personnel (MILPERS)

A

Funds
* Pay and allowances of active duty and reserve military personnel, permanent Change of Station (PCS) moves, training in conjunction with PCS, subsistence, bonuses, and retire pay accrual

Obligation Period
1 Years

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11
Q

Military Construction (MILCON)

A

Funds
* Bases, schools, missile storage facilities, Maintenace facilities, medical/dental clinics, libraries, and military family housing

Obligation Period
5 Years

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12
Q

Flyaway Cost

A

Prime Mission Equipment (PME)

Uses Procurement appropriations only

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13
Q

Weapon System Cost

A

Flyaway Costs AND Support Items

Uses Procurement appropriations only

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14
Q

Development Cost

A

Development Costs of PME and support Items

Systems Engineering

Program management

Test and Evaluation

Uses RDT&E appropriations Only

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15
Q

Procurement Costs

A

Weapon System Cost (Flyaway Costs + Support Items) AND Initial Spares

Uses Procurement appropriations only

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16
Q

Program Acquisition Cost

A

Development Cost (RDT&E) + Facilities (MILCON) + Procurement Costs (PROC)

17
Q

Operation and Support Cost

A

Sustainment Cost (O&M and MILPERS) + Disposal Cost (O&M)

18
Q

Life Cycle Cost

A

Program Acquisition Cost (RDT&E, MILCON, PROC) AND Operating and Support costs (O&M, MILPERS)

19
Q

Life Cycle Cost Estimate (LCCE) and Three Topics

A

Estimated cost of developing, producing, deploying, maintaing, operating and disposing of a system over its entire lifespan.

Prepared and reviewed at Milestones A, B, and C

Topics:
*Appropriation Categories
*Life Cycle Cost Categories
*Work Breakdown Structure

20
Q

Life Cycle Cost Categories

A

*Research and Developemnt (R&D)
*Operations and Support (O&S)
*Investment Costs
*DEMIL/Disposal Cost

21
Q

LCCE Cost Categories: Research and Developemnt (R&D)

A

Costs associated with the research and development phases including MSA, TMRR, and EMD phases

22
Q

LCCE Cost Categories: Operations and Support (O&S)

A

Costs incurred in using the system: personnel, fuel, maintenance (unit and depot), sustaining investment (replenishment spares), and training.

incurs the largest percentage of program costs

23
Q

LCCE Cost Categories: Investment Costs

A

Costs include the total cost of procuring the prime equipment, its related support equipment, facilities, initial spares, and fielding of the system

Incurred mainly in the Production and deployment phase

24
Q

LCCE Cost Categories: DEMIL/Disposal Cost

A

Cost to demilitarize and dispose of the system after its useful life

25
Q

Work Breakdown Structure

A

Provides a framework for:
*Program and technical planning
*Cost estimating
*Resource allocations
*Performance measurements
*Status reporting

LCCE uses the WBS to aggregate and show costs by system and subsystem

26
Q

Cost Estimating Techniques: Analogy

A

Used early int he life of a program in MSA< TMRR, and early EMD

Compares new system with one or more existing similar systems which has accurate cost and technical data

Strength:
-Quick
-inexpensive
-Easy to change

Weaknesses:
-Subjective
-Not as Precise
-New system may not have a direct comparison

27
Q

Cost Estimating Techniques: Parametric

A

Used in TMRR and Early EMD

Generate an estimate based on system performance or design characteristic
Uses a database of elements from similar systems
Uses multiple systems and makes statistical inferences about Cost Estimating Relationships (CER)

Strength:
-Uses CER
-Inexpensive
-East to do What if drills

Weaknesses
-Moderately subjective
-Precision only as good as database

28
Q

Cost Estimating Techniques: Engineering

A

Used towards later stages of EMD when you have detailed designs for the system

Most detailed of all techniques and costliest to implement

Starts at the lowest level of definable work within the WBS and estimates:
- Direct labor hours using company and general industry standards
- Raw materials and purchase part requirements

Strength
-Very accurate in later stages of EMD
-Limited subjectivity

Weaknesses
-Very expensive
-Very time consuming
-Difficult to do what if drills

29
Q

Cost Estimating Techniques: Actual Costs

A

Used mainly in P&D phase

Employs extrapolation from actual costs that were contracted for or actually incurred on that system during an earlier period

Strengths
-Very accurate
Limited subjectivity

Weaknesses
-Often actual cost data are not available when creating the budget request
-Hard to do what if drills

30
Q

Above Threshold Reprogramming Actions Requiring Congressional Prior Approval

A
  • Congressional special interest items
  • Major system procurement quantity increases
  • General transfer authority (GTA)
  • Initial of new start RDT&E estimated to cost >= $10M within first 3 years
  • Initiation of new start procurement program estimated to cost >= $10M within first 3 years
  • Termination of appropriated programs
31
Q

Above Threshold Reprogramming Actions that can be executed Internally

A
  • Do not involve a change in the purpose or amounts approved by Congress
  • Must be approved by the DoD Comptroller
  • Applies mainly to administrative realignment of BA
32
Q

Below Threshold Reprogramming

A
  • Allows limited transfer of Budget Authority among programs within an appropriation category
  • Controlled and approved by local or service defense agency comptrollers
  • Does not require Congressional involvement
33
Q

Below Threshold Programming: RDT&E

A

MAX INTO: Lesser of +$10M or +20%
MAX OUT: Lesser of -$10M or -20%
Level of Control: Program Element (PE)
Obligation Availability: 2 Years

34
Q

Below Threshold Programming: PROC

A

MAX INTO: Lesser of +$10M or +20%
MAX OUT: Lesser of -$10M or -20%
Level of Control: Line Item
Obligation Availability: 3 Years

35
Q

Below Threshold Programming: O&M

A

MAX INTO: +$10M
MAX OUT: -$10M
Level of Control: Budget Activity
Obligation Availability: 1 Years

36
Q

Below Threshold Programming: MILPERS

A

MAX INTO: +$10M
MAX OUT: -$10M
Level of Control: Budget Activity
Obligation Availability: 1 Years

37
Q

Below Threshold Programming: MILCON

A

MAX INTO: Lesser of +$2M or +25%
MAX OUT: No specific Congressional Restriction
Level of Control: Project
Obligation Availability: 5 Years

38
Q
A

ACQ 1010 Fundamentals of Systems Acquisition Management (10 decks)

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