Military Equipment Valuation (MEV) How Do We Deal with OPTEMPO? Mr. - - PowerPoint PPT Presentation

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Military Equipment Valuation (MEV) How Do We Deal with OPTEMPO? Mr. - - PowerPoint PPT Presentation

Sep 04, 2023 344 likes •524 views

Military Equipment Valuation (MEV) How Do We Deal with OPTEMPO? Mr. Richard K. Sylvester 26 February 2008 1 Update Accountability and Management of Military Equipment Improving Physical Accountability of Capital Assets Increased

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Military Equipment Valuation (MEV) How Do We Deal with OPTEMPO?

  • Mr. Richard K. Sylvester

26 February 2008

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Update…

Accountability and Management of Military Equipment

  • Improving Physical Accountability of Capital Assets
  • Increased Capabilities of Capital Asset Management

System – Military Equipment (CAMS-ME)

  • Accountability Transition Plan
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Update…

Accountability and Management of Military Equipment

  • Balancing the Accountability Coin

– Fiscal Accountability – Physical Accountability

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Military Equipment Valuation and Accountability Long-term Goal

  • Achieve full compliance with Statement of Federal

Financial Accounting Standard No. 6

  • Assert to audit readiness enterprise-wide
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Military Equipment Valuation and Accountability Challenges

  • Determining just how precise and at what cost
  • Impact of military OPTEMPO on useful life of

military equipment

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OPTEMPO…

Operational Tempo is the pace at which a piece

  • f military equipment is used, either for training
  • r for actual combat operations…..usually

measured by the number of miles driven or the number of hours or days operated.

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Military Equipment Useful Life…

Military equipment useful life is how long a piece

  • f equipment can be used before it is worn down

to a point where it either needs to be replaced or go through a major service life extension.

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Variables that Impact on Useful Life…

  • Usage
  • Fatigue
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Determining Military Equipment Useful Life

  • Traditional Aging Models overlook effects of

OPTEMPO on useful life estimates

  • OPTEMPO in wartime is not the same as OPTEMPO

in peacetime

  • No DoD model evaluates impacts of changes in

OPTEMPO on useful life estimates

  • Industry uses a consumption model to express

useful life and is moving toward an OPTEMPO- based model

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Factors Impacting Consumption of the Collective Service Life of a Program

  • Usage – how much of engineering estimates for life

expectancy are consumed

  • Fatigue – degradation of an asset that goes

beyond usage…how and where used

  • Losses – accounting for equipment destroyed,

disposed of or retired…unplanned losses

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C-17 Globemaster III

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High Mobility Multipurpose Wheeled Vehicle (HMMWV)

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The Next Steps…

  • Continue validation of methodology
  • Better define and quantify effects of

fatigue

  • Determine how to apply results to the

budget process

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Summary…

  • Established military equipment baseline
  • Putting more accurate numbers on financial statements
  • Moving toward contract-based valuation of military equipment
  • Factoring OPTEMPO into determination of useful life
  • Applying results to acquisition and budgeting processes
  • Working with Components on Accountability Improvement

Plans to achieve better fiscal and physical accountability

  • Identifying and resolving policy issues
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For More Information Please Visit

www.acq.osd.mil/me

If you have questions, complete an MEVA Support Form

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Thank You