DEPARTMENT OF THE NAVY
IOFFICE OF THE ASSISTANT SECRETARY
IFI~ANCIAL MANAGEMENT AND COMPTROLLER)
1000 NAVY PENTAGON
WASHINGTON. DC
MEMORANDUM FOR
Subj:
Ref:
20350·1000
'MAY
3 2002
DISTR~BUTJON
ACCEPTANCE OF REIMBURSABLE ORDERS FOR WORK OR SERVICES
(a) DoD FMR Volume 11A Chapter 2
(b) DoD FMR voiume 11A Chapter 3
i
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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
"substantial N 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.
Subj:
ACCEPTANCE
or
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).
~9-{!" ~rJ
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Distribution:
AAUSN
CNO
CMC
CINCLANTFLT
CINCPACFLT
CINCU5NAVEUR
COMNAVAIRSYSCOM
COMNAVSEASYSCOM
COMSPAWARSYSCOM
COMNAVSPECWARCOM
COMNAVFACENGCOM
coMNAVRESFOR.
CHNAVPERS
COMSC
CRBUMED
DIRSSP
COMONT
COMNAVMETOCCOM
CNET
GLADYS J. COMMONS
Principal Deputy
Assistant Secretary of the Nevy
(Financial Management and Comptroller)