September 1, 1970                                                         In Reply Refer to: W1x2

TO:    All Holders of Operations Manual

FROM :     Director, Weather Bureau

SUBJECT:     Transmittal Memorandum for Operations Manual Issuance 70-37

1.    Material Transmitted:

Weather Bureau Manual Chapter A-36, Equipment Replacement (3 pages) with three appendices. New chapter.

2.    Summary:

This chapter contains new policy and procedures for planning and justifying equipment replacement. The last decade has been a period of rapid advancement in science and technology, and the Weather Bureau has budgeted heavily for equipment for new programs. Meanwhile, our older equipment has been wearing out and/or becoming obsolete, especially those of vacuum tube design. The intent of this chapter is to emphasize replacement so that it it does not lose out to program expansion in the competition for inclusion in budget submissions. The procedures apply only to staff offices in Weather Bureau and Regional Headquarters.  (A forthcoming separate chapter will include procedures for planning and justifying facilities replacement.)

3.    Effect on Other Instructions.    This chapter expands upon the general policy, as it pertains to equipment, contained in Chapter A-34, Section 3, "Equipment/Facilities Replacement Policy". It is suggested that page 15, Chapter A-34, be annotated with a cross-reference to this chapter ("see Chapter A-36") to avoid confusion.

Issue Date    Org. Code     NATIONAL WEATHER SERVICE    Program    Part     Chap.
9-1-70            W1x2                  Operations Manual                             010         A        36
                                                                                                               040


                                                EQUIPMENT REPLACEMENT

Table of Contents:

1.    Purpose

2.    Definition

3.    Exceptions

4.    General Policy

5.    Procedures

    5.1    Annual Equipment Review
    5.2    Decision Process
    5.3    Research and Development
    5.4    Priorities

6.     Justification and Plans

7.    Timing of Procurement

8.    Disposal of Replaced Equipment

Exhibit: Annual Review Equipment Replacement Decision Process

Appendix A: Purchase, Lease, and Lease/Purchase Decisions

Appendix B: Outline for Equipment Replacement Justification and Plan

1.    Purpose. This chapter sets forth Weather Bureau policy on equipment replacement and defines the procedures for planning and justifying equipment replacement, including review and budgeting.

2.   Definition. "Replacement" includes (1) lease or purchase of new equipment to replace deteriorated or obsolete components of a system and, (2) the major modification and/or overhauling of existing equipment. The substitution of sophisticated systems for simpler equipment, such as ceilometers for ceiling lights, hygrothermometers for liquid-in-glass instruments or automatic observing station systems for groups of separate equipment systems, will be regarded as program expansion and thus excluded from the definition of "replacement" as used in this chapter.

3.    Exceptions. These instructions do not pertain to facilities, general purpose computers, calculators,or office equipment.

4.    General Policy.  The Weather Bureau equipment replacement program will be based on the continuing need for output of each equipment system, the availability of better equipment to perform the same job, and the state of the equipment in inventory. In this last regard, replacement will be attempted when protected maintenance cost exceeds the cost of replacement, based on a reasonable amortization schedule, or when the frequency or duration of equipment outages seriously reduces the usefulness of the system or the effectiveness of the program.

Economy will be one of the basic considerations in all equipment replacement decisions. Thus, replacement will be done by the least expensive method consistent with the equipment's required function and operational needs. Before deciding on purchase of new replacement equipment, possible long-term savings from the following actions will be considered:

5.    Procedures. The policy will be carried out by a standing committee and program representatives (or their alternates) in Weather Bureau Headquarters. The Equipment Replacement Review Committee will be chaired by a member of the Plans and Requirements Coordination Staff, with representatives of the following organizations:

Office of Hydrology
Systems Development Office
Engineering Division
Weather Analysis and Prediction Division
Data Acquisition Division (several representatives)
Overseas Operations Division
Communications Division

5.1    Annual equipment Review. As part of each budget/planning cycle, program representatives will review annually all equipment in the Bureau's inventory to determine whether or not the system's output will continue to be required. The equipment providing data (or performing other functions) which continues to meet a need will then be reviewed for replacement eligibility. (See Appendix B, paragraph 3, for conditions which would indicate a need for equipment replacement.) Input from Weather Bureau Regional Headquarters (RH's) and the National Meteorological Center (NMC) will be requested as part of the review.

5.2    Decision Process. Appendix C is a chart showing the major decisions which usually are required of program representatives as part of the annual review of a major equipment item.

5.3    Research and Development. When research and development (R&D) is required as part of the replacement process, this need will be identified at the time of the annual review.

5.4    Priorities. The Equipment Replacement Review Committee will, as part of the annual review, prepare a replacement package showing relative priorities.

6.    Justification ant Plans. The program representatives will have the responsibility for preparing the justifications for the necessary expenditures. Justifications will be prepared as indicated in Appendix These justifications will be compiled and submitted as a package (1) to Weather Bureau Regional and Headquarters Directors for review and, (2) to the Director, Weather Bureau for approval. The appropriate budget and planning actions will proceed accordingly.

7.    Timing of Procurement. Consideration will be given to the economic advantages of single-year buys of a large quantity of a single item of equipment. However, such purchases would also depend on the practicality of absorbing large one-year budget requests. Balancing these two factors, planning the timing of quantity replacement purchases will include careful study of price breaks, in order to optimize unit cost economies within budgetary considerations.

8.    Disposal of Replaced Equipment. Replaced items will be disposed of in accordance with the Federal Property Management Regulations (FPMR). Replaced equipment will not be reinstalled at the same or other locations without specific approval of the Director, Weather Bureau. Requests for such approval will include a reference to this paragraph.

The following general guidelines should be considered in making purchase / lease / lease-with-option-to-purchase decisions.

Purchase Method is recommended:

(The possibility that future technological advances will render the selected equipment comparatively obsolete before the cost advantage point is reached should not rule out purchase if the selected equipment is expected to be able to satisfy the system requirement economically.)

Lease Method is recommended:

When it is necessary or advantageous to proceed with the acquisition of  the equipment and it has been established conclusively that purchase is not the more advantageous.

Lease-with-option-to-Purchase Method is recommended:

When it is necessary or advantageous to proceed with the acquisition of the equipment that meets system specifications, but it is desirable to defer temporarily a decision on purchase because circumstances do not fully satisfy the conditions which would intricate purchase. m is situation might arise when it is determined that a short period of operational experience is desirable to prove the validity of a system design on which there is not previous experience, or where decisions which might substantially alter the system specifications are imminent.

References: The following documents offer guidelines for lease-or-purchase decisions:

Bureau of the Budget Circular A-76
Department of Commerce Administrative Order 200-41

(1)    Spare parts unobtainable or expensive
(2)    Frequent outages
(3)    Other maintenance problems

            d.   Other problems

    a.     Buy, lease or lease/purchase of replacement equipment

    b.     Overhaul/major modification

    c.     Interim modification with plan to buy new later

Appendix B

WSOM Issuance
70-37    9-1-70