Which color of money has a three-year life in the described categories?

Which color of money has a three-year life in the described categories?

• A. Procurement (OPA)
• B. Military Construction (MILCON)
• C. Research, Development, Testing & Evaluation (RDT&E)
• D. Operations & Maintenance (O&M)

Answer: (A)

In DoD budgeting, different funding types are treated as different “colors of money,” each with its own time horizon for obligating and liquidating funds. Procurement money is three-year money, meaning it can be obligated and used over a three fiscal-year period to buy equipment and major systems. This enables planning across multiple years to support long-lead procurement, contracts, and delivery timelines, without tying up funds indefinitely. This contrasts with operating and maintenance funds, which are typically one-year money used for day-to-day operations and must be spent within the fiscal year. MILCON and RDT&E funds usually have longer, multi-year authorities to support construction and long-term development efforts. Hence, the three-year life belongs to procurement funds.

In DoD budgeting, different funding types are treated as different “colors of money,” each with its own time horizon for obligating and liquidating funds. Procurement money is three-year money, meaning it can be obligated and used over a three fiscal-year period to buy equipment and major systems. This enables planning across multiple years to support long-lead procurement, contracts, and delivery timelines, without tying up funds indefinitely.

This contrasts with operating and maintenance funds, which are typically one-year money used for day-to-day operations and must be spent within the fiscal year. MILCON and RDT&E funds usually have longer, multi-year authorities to support construction and long-term development efforts. Hence, the three-year life belongs to procurement funds.