MIL-HDBK-1032/2
b) When the use of the existing asset will deprive the Government
of cash planned to be realized by sale.
In all other cases, the value of existing assets employed will be
treated as expenses incurred prior to the decision point and will not affect
the analysis. Existing assets shall be included at their fair market value.
The basis for arriving at the estimate shall be fully documented.
Value of Existing Assets Replaced. The value of assets or property
2.5.1.5
already onhand, the current need for which is eliminated by a proposed
project, shall be deducted from investment cost if, and only if, there is a
documented alternative use for the assets.
Terminal Value. The terminal value of a project is the estimated
2.5.1.6
value of the proposed investment at the end of its economic life. Terminal
value is impacted by such factors as the probability of continued need for the
asset for Government or private use, appreciation, and depreciation (physical
and functional).
2.5.2
Recurring Costs. Recurring costs are annual costs associated with
operation of the facilities and consist of personnel costs, operating costs,
and other annual costs.
2.5.2.1
Personnel Cost.
All costs of civilian and military personnel and
employee benefits.
2.5.2.2
Operating Cost. All operating costs, other than labor. Include
materials, supplies, utilities, other services, maintenance, repair, support,
and overhead costs.
2.5.2.3
Other.
All recurring annual costs which do not fit into the above
categories.
2.5.3
Life-Cycle Cost. Life-cycle cost in an economic analysis is the
total cost to the Government of acquisition and ownership of an alternative
system over its full life. It includes the investment and recurring costs of
subparagraphs 2.5.1 and 2.5.2 and emphasizes the timing of costs and savings.
Technical Approval. Figure 4 illustrates the administrative steps
2.6
that a project must follow. Technical review and approval of functional plans
and specifications prior to and at the 35 percent design stage by the Naval
Supply Systems Command (NAVSUP) Navy Warehouse Utilization Program is required
in consonance with Storage and Warehousing Facilities and Services, NAVSUPINST
4450.21 Series. Coordination of system and facility layout and material flow
patterns with architectural design is critical to completion of a functional
facility. The Navy Energy and Environmental Support Activity shall be
included in the review of Navy Occupational Safety and Health funded hazardous
material storage facilities.
2.6.1
Layout And Flow Concept. Facility aspects dealing with system
layout and material flow shall be coordinated and reviewed with NAVSUP Navy
Warehouse Utilization Program for compliance with operational requirements,
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