Material support division, working capital fund - Air Force Link

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AFMAN 23-110 Volume 1
Part 3, Chapter 7
incurring a Standard Price charge. The Item Manager will then notify the MSD Stock
Fund Manager that a cost code “M” free issue of the asset took place due to missing parts.
The SMAG will absorb the cost during the year of execution as a loss. This loss will be
reflected in subsequent year's prices to SMAG customers, through the SMAG surcharges.
Reference AFMCI 21-130, Section 1H, 1.51.5.1.
7.12.4.2.2. If a principal item (e.g., aircraft, engines, or missiles) arrives at a depot repair
activity (for program depot maintenance (PDM)) missing MSD components or parts, the following
should occur:
7.12.4.2.2.1. DMAG will notify the AFMC SM of the principal item.
7.12.4.2.2.2. The AFMC SM of the principal item will notify the owning MAJCOM that
it is required to provide either (1) additional funding to pay for the added cost of the
replacement materiel; or (2) a replacement part.
7.12.4.2.2.3. The owning MAJCOM has sixty days from notification to exercise one of
the above options. If the DMAG receives neither the funding nor the part within sixty
days it will unilaterally bill the customer for the cost.
7.12.4.2.3. If the principal item was sent to PDM with missing components or parts because
of supply support problems, DMAG will negotiate with the MAJCOM on who should absorb
the cost of the replacement. If DMAG is to absorb the cost, DMAG will absorb it during the
year of execution as a loss. This loss will be reflected in subsequent years' prices to DMAG
customers, through the DMAG PDM sales rates.
7.12.4.3. These policies will be tailored to fit actual circumstances as required. For example, a
component is missing, but it cannot be determined if the asset was missing before or after induction
at the depot; then the DMAG, SMAG, and MAJCOM customer should negotiate a mutually
acceptable settlement on a case-by-case basis. This should be consistent with the general principles
outlined in this manual and the financial policies governing the operation of the appropriations
involved and the DWCF.
7.13. Stock Funding of Initial Spares.
7.13.1. The stock funding of initial spares begins when the SM identifies the initial spares requirements
in conjunction with developing the cost estimate for the program.
7.13.1.1. The SM must identify the initial spares requirement along with the rest of the system
acquisition funding requirements to the lead MAJCOM for the weapon system, modification, or
equipment. This should be included in the program objective memorandum, budget estimate submission,
presidential budget (PB) submission.
7.13.1.2. If the MAJCOM is successful in obtaining funding for the weapon system, modification,
or equipment, including the initial spares through the POM process, the SM must request Air
Force SMAG cost authority through AFMC to SAF/FMB and HQ USAF/ILG during the SMAG
BES process.
7.13.1.3. Cost authority is only included in the SMAG BES to the extent that the MAJCOM has
identified appropriated funding in the POM/BES. The procurement budget authority (BA) programmed
by the MAJCOMs is requested based on the anticipated outlay rate over five years.