The responsibility of accounting for assets within the Department of the Navy comes down from the Secretary of the Navy (SECNAV) to the commanding officers of field activities throughout the Navy. Commanding officers must ensure proper fiscal administration by the directives, principles, and policies prescribed by the Comptroller of the Navy.
The Naval Supply Systems Command is responsible for administering supply management policies, to include cataloging, standardization, inventory control, storage, issue, and disposal of naval material. You, as a medical supply person, must be familiar with the methods of procuring and accounting for naval materials.
In this chapter the proper procedures to use in estimating supply needs, procuring supplies and material, and accounting for supplies and operating funds will be discussed. The last section of the chapter deals with contingency supply blocks and their maintenance.
Manuals, Publications and Directives
To function well in the Navy supply system, you must be familiar with the NAVSUP publications that deal with the different areas of supply. Some of these publications that are of particular interest are described below.
NAVSUP Manual. The Naval Supply Systems Command Manual is designed to institute standardized supply procedures. At present there are four volumes in the NAVSUP Manual:
Volume I-Introduction to Supply
Volume II-Supply Ashore
Volume III-Retail Clothing Stores and Commissary Stores
Volume IV-Transportation of Property
NAVSUP P-437, Operating Procedures Manualfor Military Standard Requisitioning and Issue Procedures and the Military Standard Transaction Reporting and Accounting Procedure (MILSTRIP/MILSTRAP). This publication issues policy on the MILSTRIP/MILSTRAP system. It takes precedence over conflicting provisions contained in other supply system manuals or directives. The manual consists of 11 chapters and several appendices and exhibits. It covers system management, requisitioning ashore, inventory control, financial matters, and other topics. The publication provides forms, formats, and codes, and it serves as a comprehensive ready reference for those involved in preparing or processing MILSTRIP documents. NAVSUP P-437 is not distributed afloat.
NAVSUP P-409, MILSTRIP/MILSTRAP Desk Guide. Since NAVSUP P-437 is a large comprehensive three-volume publication, NAVSUP P-409 was published as a handy reference for personnel responsible for originating and processing MILSTRIP/MILSTRAP documents. This small booklet contains common definitions used on a day-to-day basis. Blank space is provided for entering commonly used routing identifier, fund, project, and locally assigned codes.
NAVSUPINST 4235.3, Fleet Use of MILSTRIP. This instruction serves the same purpose as NAVSUP P-409, but for fleet personnel. In addition, it is designed to indoctrinate and train fleet personnel in the use of the MILSTRIP
NAVSUP P-485, Afloat Supply Procedures. This publication establishes policies for operating and managing afloat supply departments and activities. The procedures contained in this publication are the minimum essential to acceptable supply management and are mandatory unless specifically stated as being optional.
Although this publication is designed primarily for nonautomated supply procedures, much of the information it contains also applies to automated systems.
COMNAVMEDMATSUPPCOM NOTE 6700, Naval Medical and Dental Material Bulletin. This publication is issued monthly by the Commander, Naval Medical Material Supply Command. It contains information of importance and interest to medical supply departments such as changes in stock numbers, addition and deletions, availability of excess equipment, and notification of material unfit for use and disposal instruction. When received, it should be read carefully and any necessary changes made to your files and references.
An appropriation is defined in the NAVCOMPT Manual as ". . . an authorization by an act of Congress to incur obligations for specified purposes and to make payments therefor out of the Treasury. " The Navy used appropriations to receive money to pay for ships and the cost of their operation and maintenance, the cost of training and pay for personnel, and the money to operate shore establishments needed to support the fleets.
Types of Appropriations
Three types of appropriations may be used in the Navy, depending on the purpose for which they are issued. Most appropriations are for 1 fiscal year (FY) and are used to finance the normal operating costs of the Navy. Other appropriations may be granted without a time limit or for a specified time in excess of 1 year.
Annual appropriations generally cover the current operating and maintenance expenses of the Navy. They become available at the beginning of fiscal year cited in the Appropriation Act. From that time on throughout the fiscal year, these appropriations may be directly expended or obligated. At the end of the fiscal year, the Navy must return any unobligated funds to the Treasury.
A continuing appropriation or a no-year appropriation is one that is available for incurring obligations until the funds are exhausted or until the purpose for which it is made is completed. A continuing appropriation does not have a fixed- period restriction and is used for shipbuilding, public works construction, research and development, and other long-term projects.
Multiple-year appropriations are made for purposes that required a long lead time. They are available for obligation only for the period of time specified.
An operating budget is the annual budget of an activity and is assigned by the Chief of Naval Operations (CNO), Fiscal Management Division, to major claimants. A major claimant is an office or command, or Headquarters, Marine Corps, that is designated as the administering office under the operation and maintenance appropriation. Holders of operating budgets may grant a degree of financial responsibility to subordinates by issuing operating targets (OPTARs). OPTARs are generally apportioned in four equal quarterly divisions that represent the maximum amount that can be spent for each quarter of the fiscal year. By using this system, facilities are able to manage and effectively control the expenditure of funds. This system prevents the overexpenditure of funds early in the fiscal year and helps prevent financial crisis at the end of the year. Unused quarterly funds can be carried over to the next quarter simply by adding them to the new quarterly apportionment. At the end of the fourth quarter, all accounts are balanced and closed; new expenditures are not authorized until appropriated funds are made available for the new fiscal year.
Medical OPTAR funds are used to fulfill four major requirements, as follows:
Authorized Medical Allowance List (AMAL). The AMAL is the minimum amount of medical material to be maintained on board a ship or on order at any given time. The amount of material as noted in an AMAL is designated by NAVMEDCOM for each class of ship and is based on past experience. Recommendations for changes to the AMAL should be forwarded through the chain of command to COMNAVMEDCOM.
Type Commander's (TYCOM) Requirements. To supplement the AMAL, TYCOMs may have additional requirements to maintain units in a high state of readiness and allow units to be selfsupporting in an emergency. TYCOM requirements for medical considerations relate to such items as first aid gun bags, airways, litters, and battle dressing supplies.
Special Mission Usage
Administrative Requirements. The purchase of consumables or medical OPTAR restricted items may be made from the medical OPTAR with the approval of the executive officer. Books and publication listed in NAVMEDCOMINST 6820.4 series may also be purchased with this OPTAR.
Federal Supply Catalog System
The Defense Logistics Agency administers the Federal Supply Catalog System under the direction of the Secretary of the Navy. This includes the naming, description, classification, and numbering of all items carried under centralized control of the United States Government. Only one identification maybe used for each item from purchase to final disposal.
The Department of Defense Supply System contains more than 4 million different items and the Navy alone stocks more than 1 1/2 million items. To order supplies effectively from this system, you must have a basic understanding of its structure and terminology.
Bulk Stock - Material in full, unbroken containers available for future use.
Consumables - Any supplies that are consumed in use or disposed of after use.
Controlled Equipage - Equipment that is under management control due to high replacement cost, likelihood of pilferage, or is highly essential to mission accomplishment.
Equipment - Any functional unit of hull, mechanical, electrical, ordnance, or electronic material operated singly or as a component of a system or subsystem. Equipment is a noncom- sumable item.
Material - All supplies, repair parts, equipment, and equipage.
Repair Part - A replaceable part of machinery or equipment.
Reserve Stock - Items on hand and available for issue for a specific purpose, but not for general use.
Standard Stock - Material under the control of an inventory manager and identified by a National Item Identification Number (NIIN).
Stock Unit - The smallest quantity of a supply item.
Federal Supply Classification System
The Federal Supply Classification (FSC) System is designed to permit the classification of all items of supply used by the United States Government. Each item of supply is classified by a single 4-digit number. The first two digits identify the major group and the second two digits identify the class of commodities within that group.
As presently established, the FSC consists of 90 groups, some of which are currently unassigned. These groups are subdivided into approximately 600 classes.
An example of an FSC group and its classes is as follows:
Group 65 Medical, Dental, and Veterinary Supplies and Equipment
6505 - Drugs Biological, and Official Reagents
6508 - Medicated Cosmetics and Toiletries
6510 - Surgical Dressing Material
National Stock Numbers
Every item in the Federal Supply Catalog is identified by a single 13-digit number. The National Stock Number (NSN) is composed of a 4-digit classification code and a 9-digit National Item Identification Number.
The National Item Identification Number is a 9-digit number that identifies each item of supply used by the Department of Defense. Although the NIIN is part of the NSN, it is used independently to identify an item within a classification. Unlike the FSC, the NIIN is assigned serially, without regard for the name, description, or classification of the item.
Navy Item Control Numbers
The Navy Item Control Number (NICN) identifies items of material that are not included in the FSC but are stocked in the Navy supply system. These are 13-digit numbers assigned by inventory control managers for either temporary or permanent control.
Local Item Control Numbers
Technically, any item identification number assigned by an activity for its own use is a Navy Item Control Number. To distinguish between NICNs that are authorized in supply transaction documents and those that are not, the term Local Item Control Number (LICN) is often used. The LICN consists of 13 characters, with the fifth and sixth characters being "LL." A full explanation of the composition of NIINs, NICNs, and LICNs is contained in Afloat Supply Procedures, NAVSUP P-485.
Although cognizance symbols are not part of the NSN, they are used as supply management codes that identify the Navy inventory manager for the specific category of material requisitioned. This symbol consists of two parts, one numeric and one alphabetic. The symbol for all Navy- owned bulk medical material is "9L."
Federal Supply Catalog
The Federal Supply Catalog contains all standard stock items available to agencies of the United States Government. It furnishes identification and management data for single-manager supply items. The sections of the catalog that are of greatest interest to you are those dealing with medical items, as listed in figure 14-1. Each subsection deals with specific categories of material.
Introduction-provides a general overview of the contents and use of the catalog.
Alphabetical Index-a list of item names, colloquial names, synonyms, common names, and trade names referenced to index numbers to help locate an item within the subsection.
Glossary of Colloquial Names and Therapeutic Index (6505/6508 subsection only)-contains colloquial names, synonyms, and trade names arranged in alphabetical order and cross-referenced to appropriate National Item Names. It also classifies items by therapeutic use.
Preface-each subsection contains a preface that includes special instructions pertaining to that individual subsection.
Alphabetical Index-a list of National Item Names cross-referenced to index numbers to help locate an item when the NSN is not known.
National Stock Number Index-a list of NSNs arranged in numerical order and referenced to index numbers to help locate an item within a subsection.
Procurement is the act of obtaining materials or services. Material may be procured by requisition or purchase. Requisitions are most frequently used, but purchase is used for procuring non- standard material and emergency requirements
Levels of Supply
There must be some control over the quantity of supplies kept by a medical department. Without controls, policy changes or poor ordering procedures may result in some items being in short supply, while other items are stockpiled in quantities that would not be consumed for several years. To avoid such occurrences, it is necessary to develop rules governing the levels of supply that accurately indicate the quantities of stock that should be maintained.
Supply Level Terminology
The levels of supply may be expressed in two ways: in numerical terms and in terms of months of usage.
Months of usage is the most commonly used measurements of supply levels. It is the best method to use in accounting for items that are in recurring demand. Figure 14-2 illustrates the relationship between the various levels of supply.
In expressing the supply level of any stock item, four measurements may be used: operating level, safety level, storage objective, and requisitioning objective.
Operating Level - This measurement indicates the quantity of an item that is required to sustain operations during the interval between requisitions or between the receipt of successive shipments of supplies. The operating level should be based upon the length of the replenishment cycle. For example, if requisitions are submitted every 2 months, the operating level would be the quantity of the item that is consumed every 2 months. This level will vary for different items.
Safety Level - This measurement indicates the quantity of an item, over and above the operating level, that should be maintained to ensure that operations will continue if replenishment supplies are not received on time, or if there is an unpredictable heavy demand for supplies. This measurement simply provides a margin of safety.
Stockage Objective - This measurement indicates the minimum quantity of a stock item that is required to support operations. It is the sum of the operating level and the safety level. For example, if the operating level of an item is 80 units and the safety level is 20 units, the stockage objective would be to maintain 100 units of that item in stock at all times.
Requisitioning Objective - This measurement indicates the maximum quantity of a stock item that should be kept on hand and on order to support operations. It is the sum of the operating and safety levels and the quantity of an item that will be consumed in the interval between the submission of a requisition and the arrival of the supplies.
The most accurate guide in determining stock level requirements is past experience as reflected in accurate stock records. Stock record cards, which will be discussed in detail later in the chapter, should be kept current to assist in the material usage notes. Stock records can tell you how much of each item has been used in the past. From this past usage rate, you can make a reasonable projection of future usage rates.
DD Form 1348m, DOD Single-Line Item Requisition System Document (Mechanical). DD Form 1348m (fig. 14-3) is a standard manila punchcard that is used by automated ships and nonautomated ships with punchcard capabilities. It is used for requisitions; requisition follow-up, modification, or cancellation; and tracer requests. It is also used by automated shore activities for supply status, shipment status, follow-up replies, cancellation confirmation, and various other supply functions.
NAVSUP Form 1250-1, Single-Line Item Consumption/Requisition Document (Manual). This document (fig. 14-4) is a seven-part multipurpose form used as a consumption document and as a MILSTRIP requisitioning document by nonautomated ships for procuring material or services from another ship, naval supply centers, naval supply depots, and NPSC Philadelphia. NAVSUP Form 1250-1 is used in lieu of DD Form 1348 by authorized activities.
DD Form 1348-6, Non-NSN Requisition (Manual). This document (fig. 14-5) is a six-part form used to requisition material that cannot be identified by an NSN, NATO stock number, or NICN other than permanent "LL" coded NICNs. The form consists of two sections. The upper section includes essentially the same data elements as DD Form 1348. The lower section includes ten data blocks for additional identification data.
NAVMEDCOM-controlled items are essential to preserve life, are easily pilferable, and/or have a high acquisition or replacement cost. Requisition standard stocked NAVMEDCOM-controlled items on DD Form 1348, and forward the request through the chain of command to the Naval Medical Material Support Command (NAVMEDMATSUPPCOM) for technical review.
Professional Books and Publications
The listing of all books and publications that are required to be maintained at an activity are listed in BUMEDINST 6820.4 and NAVMEDCOMINST 5604.1. GSA periodically makes open-end contracts that cover the procurement of books. All books are procured under the provisions of these contracts. PURCHASES
Purchase actions are normally taken by a shore activity as a result of ships' requisitions. However, ships' supply officers and commanding officers of ships without Supply Corps officers may obtain requirements for supplies or services by purchase on the open market.
Purchase order for purchases not in excess of $10,000.
Imprest fund for cash purchases not in excess of $300.
A single requirement may NOT be divided with more than one purchase action for the purpose of avoiding monetary limitations.
Procedures for purchases by ashore activities are provided in NAVSUP P-467.
Uniform Material Movement and Issue Priority System (UMMIPS)
An integral and vital part of MILSTRIP is the requirement to assign priorities in accordance with standards set forth by UMMIPS. In the movement and issue of material, it is necessary to establish a common basis to determine the relative importance of completing demands for resources of logistics systems. The means for determining the relative importance and urgency of logistics requirements is provided by the priority designator (PD), a two-digit code that ranges from 01 (highest) to 15 (lowest). The priority designator is determined from the urgency of need designator (UND) and the Force/Activity Designator (F/AD), as shown in table 14-1.
Table 14-1 - Listing of priority designators
(Uniform Material Movement and Issue Procedures( (Card Columns 60-61)
Combining the assigned F/AD (Force/Activity Designator) and the appropriate UND (Urgency of Need Designator) will enable the requisitioner to determine the appropriate Priority Designator. It should be noted that an assigned F/AD normall limits the requisitioner to choosing from three Priority Designators consistent with the UND. For example, a requisitioner assigned FAD III will normall select Priority Designator Ø3, Ø6 or 13 based on the requisitioner's determination as to whether the UND is A, B or C. The following table illustrates the above relationship:
UMMIPS: How to Determine the Right Priority
Urgency of Need Designators*
Unable to Perform Mission
Impaired Operational Capability