Security Assistance Management Manual (SAMM), E-Change 295

1. Insert new section to the SAMM immediately following Section C15.1.4.11. to read as follows:

C15.1.4.12. Section 1263 South China Sea Initiative (SCSI). Section 1263 of the NDAA for Fiscal Year 2016 (P.L. 114-92) provides authority for the South China Sea Initiative until September 30, 2020. This section authorizes the Secretary of Defense, with the concurrence of the Secretary of State, to provide assistance (equipment, supplies, defense services, training, and small-scale military construction) to assist the national military or security forces that have maritime security missions as part of their fundamental responsibilities in the countries of Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Section 1263 may also be used to pay for training for ministry, agency and headquarters level organizations of these countries. Further, this section authorizes the Secretary of Defense to pay the incremental expenses (i.e., per diem, incidental expenses, and travel costs to and from the partner nation) associated with training of organizational personnel of Brunei, Singapore, and Taiwan.

C15.1.4.12.1. Section 1263 is funded with one-year Operations & Maintenance (O&M) funds, which are only available for new obligations until September 30 of the year of appropriation. Civilian and military personnel services, to include any related travel and per diem, must cease program-related activities no later than the end of the period of funds availability (September 30 of the year of appropriation). For the procurement of articles that under normal production may not be delivered to the USG until after the funds period of availability has expired, the lead-time exception to the bona fide needs rule allows the USG to obligate the funds to procure the articles during the funds period of availability and deliver the items in the subsequent fiscal year. In addition, O&M funds authorized for non-severable services under the Section 1263 authority may be obligated during the current fiscal year even though the services being performed may cross into the next fiscal year. Non-severable contracted services, such as below the line transportation, unpacking, assembly, and basic initial operation and maintenance training necessary to operate the equipment, are typically considered to be non-severable services associated with the equipment delivery. By contrast, tactical training, field service representatives, and deployment training and services generally constitute severable services. The contracting officer at the executing activity, with the advice of counsel, will review the contract statement of work to determine if contractor services are severable or non-severable. For guidance on contractor-provided services, refer to Section C15.3.4.1., "Contractor Services", and the relevant subparts C15.3.4.1.1. for Severable Contractor Services and C15.3.4.1.2. for Non-Severable Contractor Services.

C15.1.4.12.2. Although funds for training are considered obligated on the date the student enters the course, based on the expiring nature of Section 1263 funding and the lack of cross fiscal year authority, any USG-provided training must be obligated and accomplished within the appropriation fiscal year and may not extend beyond September 30 of the same fiscal year.

C15.1.4.12.3. Transportation services are considered non-severable when using Below-The-Line Transportation because they are assessed as an indirect charge to the line and funds are obligated when the line item is obligated (i.e., when a contract is awarded or a requisition is placed). Funds on Transportation Cases or Transportation Lines on cases, however, are severable and will expire for obligation on September 30 of the appropriation year because there is no valid obligation for the funds (i.e., the transportation provider has not accepted the funds and no manifest for transportation has been established).