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THE MANUAL

OF

COSTING, CHARGING AND COST RECOVERY

PART TWO

SCHEDULE OF RATES AND CHARGES

SEPTEMBER 2002

Enclosed are rates and charges for use by the Australian Department of Defence

THE MANUAL OF COSTING, CHARGING AND COST RECOVERY

AMENDMENT NO 2

NOEL DOBBIEActing Assistant Secretary Accounting Policy and Practices

15 September 2004

Sequence Amendment Remarks

1. Pages 42/43 AL2

THE MANUAL OF COSTING, CHARGING AND COST RECOVERY

AMENDMENT NO 1

GEOFF HINEActing Assistant Secretary Accounting Policy and Practices

28 June 2004

Sequence Amendment Remarks

1. 3 AL1


September 2002 i

FOREWORD

The Schedule of Rates and Charges has been produced as part two of the Manualof Costing, Charging and Cost Recovery.

The Manual of Costing, Charging and Cost Recovery is an initiative to provide acoordinated, consolidated and reliable source of costing and cost recovery policy andinformation relevant to Defence business. With each successive iteration of the Manual ofCosting, Charging and Cost Recovery more detail will be added.

The Manual of Costing, Charging and Cost Recovery Part Two has beendeveloped to provide reasonable and consistent estimates of the costs involved inperforming Defence business, activities and the provision of goods and services. Whilethis document will support the majority of costing demands, the principal purpose of thedocument is in the support of internal costing initiatives and cost recovery requirements.

The First Assistant Secretary, Financial Services Division, is the sponsor of theManual of Costing, Charging and Cost Recovery. The contact officer for questions on theuse of, or the information contained within, the Manual of Costing, Charging, and CostRecovery is the Assistant Director Costing and Analysis (ADC&A).

Lloyd Bennett

Chief Finance OfficerChief Finance Officers Group

30 September 2002


September 2002 ii

DISCLAIMER AND COPYRIGHT

The Manual of Costing, Charging and Cost Recovery is a tool developed solely for internaluse by the Department of Defence in support of Defence initiatives and in meetingstatutory cost-recovery requirements.

The Manual of Costing, Charging and Cost Recovery does not provide actual cost data.Sourcing of Data concerning actual costs must be from the appropriate authorised Defencesystem or facility.

The Manual of Costing, Charging and Cost Recovery is subject to change without notice.

The Commonwealth of Australia declares that use of the Manual of Costing, Charging andCost Recovery, by any person, in any manner, shall be an acknowledgment, by that personfor itself its employees and agents, that the Commonwealth of Australia does not warrantthe Manual of Costing, Charging and Cost Recovery's correctness or currency or reliabilityin any degree, or make any representation of its appropriateness or reliability for anypurpose whether in connection with the Department of Defence or otherwise.

© Commonwealth of Australia 2000

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, nopart may be reproduced by any process without prior written permission from theDepartment of Defence.

All Defence information, whether classified or not, is protected from unauthoriseddisclosure under the Crimes Act 1914. Defence information may only be released inaccordance with the Defence Protective Security Manual (SECMAN 4) and/or DefenceInstruction (General) OPS 13-4- Release of Classified Defence Information to OtherCountries, as appropriate.

Address requests and inquiries to the Director, Costing and Analysis Section, R1-2-B075,Russel Offices, Department of Defence, CANBERRA ACT 2600.


September 2002 iii

CONTACT OFFICER

Costing and Analysis Section, as an element of the Financial Services Division in theDepartment of Defence, holds responsibility for the development and maintenance of thisdocument.

The contact officer for comments and inquiries about this document, or requests forsupplementary information, is:

Assistant Director of Costing & AnalysisADC&A

R1-2-B108Russell OfficesDepartment of DefenceCanberra ACT 2600

Telephone (02) 6265 5339 or (02) 6265 5371Facsimile (02) 6265 6246

An electronic version of this document is available on the CFO Group Web site at:http://defweb.cbr.defence.gov.au/cfo/


September 2002 iv

AMENDMENTS

Amendments to the previous edition are as follows:

Changes

• The structure of the tables has changed to provide uniformity;

• Tables for the costing of ADF Support (Cargo SpaceAvailability RAAF Aircraft) have been added;

• Tables for the costing of Defence Speakers have been added;

• Tables for the costing of The Provision of Training have beenadded;

• Charges for Commercial Use of Military Working Dogs havebeen added;

• Charges for In-Flight Rations Issued in RAAF Aircraft havebeen added;

• Defence Photocopying Costs have been added; and

• Army B Class Motor Vehicle Rates have been added.

Updates

• References to key positions and contacts within the CFOStructure have been updated to be current as of September 2002;

• References made to Chief Executive Instructions have beenrevised to correlate with the current set of CEI’s as of July 2002;

• Personnel costs and extensions in each of the tables have beenupdated to reflect the current rates as published in the CostingManual Part 1 (Personnel Costs); and

• Flying Hour Cost Recovery Rates have been updated to thecurrent rates as of May 2002 for Air Force Aircraft and ArmyAircraft.


September 2002 v

TABLE OF CONTENTS

Foreword...................................................................................................................................................................................................... iDisclaimer and Copyright ........................................................................................................................................................................... iiContact Officer .......................................................................................................................................................................................... iiiAmendments.............................................................................................................................................................................................. iv

DEFINITIONS................................................................................................................................................. 1

SECTION 1:- INTRODUCTION................................................................................................................... 3REFERENCE OF TERMS..................................................................................................................... 3PURPOSE .............................................................................................................................................. 3

SECTION 2:- PRINCIPLES & METHODOLOGY .................................................................................... 4PRINCIPLES ......................................................................................................................................... 4

DEFENCE CHARGING PRINCIPLES ...................................................................................................... 4VARIATION FROM DEFENCE CHARGING PRINCIPLES.......................................................................... 4DELEGATION TO DETERMINE RATES AND CHARGES ........................................................................... 4GOODS AND SERVICES TAX............................................................................................................... 5PUBLIC EVENTS OF SIGNIFICANCE (PES)........................................................................................... 5

METHODOLOGY................................................................................................................................. 5CALCULATING RATES AND CHARGES ................................................................................................ 5CALCULATION OF BASIC ASSET RATES AND CHARGES...................................................................... 6RATES AND CHARGES FOR PERSONNEL COSTS .................................................................................. 7CHARGES FOR THE PROVISION OF GOODS AND SERVICES.................................................................. 8CALCULATION OF A PRO RATA FACTOR ............................................................................................ 8CALCULATING TOTAL RATES AND CHARGES..................................................................................... 9ASSISTANCE IN THE CALCULATION OF RATES AND CHARGES ............................................................ 9

SECTION 3:- COSTING EXAMPLES ....................................................................................................... 10RATES AND CHARGES FOR THE HIRE OF EQUIPMENT .......................................................... 10

CHARGE FOR ONE DAY HIRE OF A LASER & OPERATOR ................................................................. 10Calculation Procedure............................................................................................................... 10Daily Basic Rate for the Provision of a Laser ........................................................................... 10Charge for the Provision of a Laser Operator for 1 Day ........................................................... 11Charge for the Provision of a Laser for 1 Day .......................................................................... 11Total Charge for One Day Hire of a Laser & Operator............................................................. 11

RATES AND CHARGES FOR THE HIRE OF FACILITIES ............................................................ 12CHARGES FOR HIRE OF A CLASSROOM ............................................................................................ 12

Calculation Procedure............................................................................................................... 12Daily Basic Rate for the Provision of a Classroom................................................................... 12Charge for the Hire of a Classroom for 1 Month ...................................................................... 13

RATES AND CHARGES FOR THE PROVISION OF TRAINING .................................................. 14SPACE AVAILABILITY BASIS FOR A SCHEDULED INTERNAL COURSE ............................................... 14

Calculation Procedure............................................................................................................... 14Charge for the Provision of Personnel ...................................................................................... 15Charge for the Provision of Facilities, Rations, Quarters, Stores and Equipment..................... 16Pro Rata Factor ......................................................................................................................... 17Total Charge for the Provision of Training on a Scheduled Internal Course ............................ 17

PROVISION OF A COURSE ADDITIONAL TO PROGRAMMED TRAINING............................................... 18Calculation Procedure............................................................................................................... 18Charge for the Provision of Personnel ...................................................................................... 19Charge for the Provision of Facilities, Rations, Quarters, Stores and Equipment..................... 20Pro Rata Factor ......................................................................................................................... 21Total Charge for the Provision of a Course Additional to Programmed Training..................... 21

USE OF A TRAINING RANGE AND ASSOCIATED EQUIPMENT............................................................. 22Calculation Procedure............................................................................................................... 22Charge for the Provision of Personnel ...................................................................................... 23Charge for the Provision of Facilities, Rations, Quarters, Stores and Equipment..................... 24Pro Rata Factor ......................................................................................................................... 25Total Charge for the Provision of Training on a Scheduled Internal Course ............................ 25


September 2002 vi

RATES AND CHARGES FOR THE PROVISION OF ADF SUPPORT ........................................... 26SPACE AVAILABILITY BASIS FOR CARGO TRANSPORT..................................................................... 26

Calculation Procedure............................................................................................................... 26Charge for the Provision of a C130J Hercules .......................................................................... 26Pro Rata Factor ......................................................................................................................... 26Total Charge for Cargo Transport on a Space Availability Basis ............................................. 27

PROVISION OF DEFENCE SPEAKERS ................................................................................................. 28Calculation Procedure............................................................................................................... 28Charge for the Provision of Personnel ...................................................................................... 28Charge for the Provision of Facilities, Rations, Quarters, Stores and Equipment..................... 29Pro Rata Factor ......................................................................................................................... 29Total Charge for the Provision Defence Speakers .................................................................... 29

ADMINISTRATIVE CHARGE .............................................................................................................. 30Calculation Procedure............................................................................................................... 30Charge for the Provision of Personnel ...................................................................................... 30Miscellaneous Charges.............................................................................................................. 31Pro Rata Factor ......................................................................................................................... 31Total Administrative Charge..................................................................................................... 31

SECTION 4:- SCHEDULE OF RATES AND CHARGES........................................................................ 32RATES FOR SHIPS............................................................................................................................. 32

DAILY RECOVERY RATES FOR NAVY VESSELS................................................................................ 32RATES FOR AIRCRAFT.................................................................................................................... 33

FLYING HOUR RATES FOR RAAF AIRCRAFT ................................................................................... 33FLYING HOUR RATES FOR NAVY AIRCRAFT .................................................................................... 34FLYING HOUR RATES FOR ARMY AIRCRAFT.................................................................................... 35

RATES FOR VEHICLES .................................................................................................................... 36ARMY B CLASS VEHICLES (EXCLUDING DRIVER) ........................................................................... 36ARMOURED VEHICLE RATES ........................................................................................................... 36STANDARD VEHICLE RATES ............................................................................................................ 37

DEPARTMENTAL AND SERVICE MOTOR TRANSPORT ........................................................... 38HOME GARAGING OF DEFENCE VEHICLES....................................................................................... 38DEPARTMENTAL BUS SERVICES ...................................................................................................... 38

Transport To/From Work.......................................................................................................... 38For Sports Meets, Appointments, Shopping Trips, and Recreational Events............................ 39School Bus Services.................................................................................................................. 40School Term Tickets (Prepaid) ................................................................................................. 40

FACILITY RATES.............................................................................................................................. 41CHARGES FOR COMMERCIAL USE OF RAAF AIRFIELDS ............................................ 41

UTILITY SERVICES........................................................................................................................... 41RATES FOR MEALS, MESSES AND ACCOMMODATION........................................................... 42

SERVICE MESS MEAL RATES........................................................................................................... 42Non-Defence Civilians and Overseas Defence Personnel......................................................... 42Steward and Housekeeping Services......................................................................................... 42Casual Meals Charges for Members of the ADF and Defence Civilians .................................. 42

CHARGES FOR IN-FLIGHT RATIONS ISSUED IN RAAF AIRCRAFT ..................................................... 42ACCOMMODATION RATES ............................................................................................................... 43

Accommodation Charges for Members of the ADF and Defence Civilians.............................. 43CHARGES FOR HIRING SERVICE MESSES FOR PRIVATE FUNCTIONS ................................................. 43

MISCELLANEOUS RATES AND CHARGES .................................................................................. 44CHARGES FOR COMMERCIAL USE OF MILITARY WORKING DOGS ................................................... 44CHARGE FOR PHOTOCOPYING COSTS................................................................................................ 44

ON-COSTS FOR GOODS AND SERVICES...................................................................................... 45ON-COSTS FOR GOODS.................................................................................................................... 45ON-COSTS FOR FUELS ..................................................................................................................... 45

Navy Fuels ................................................................................................................................ 45Aviation Fuels ........................................................................................................................... 46

SECTION 5:- SCHEDULE OF RATES AND CHARGES ....................................................................... 47

RECOVER OF COSTS FROM FOREIGN FORCES.................................................................................... 47


September 2002 1

DEFINITIONS

Costing, Charging, and Cost Recovery DefinitionsTerm Definition

Additional Costs Costs that are specifically attributed to an activity but excludeexpenditure which would normally have been incurred whether theactivity had been carried out or not.Additional Costs could include expenditure directly attributed toan activity such as fuel, spares and maintenance. Additional Costshowever exclude expenditure on items incurred regardless of theoccurrence of the activity such as salaries and superannuation.

Charge To affix a price, fix or ask as fee or payment, or to record debt,obligation, or liability, for the provision of goods or services.

Cost A resource sacrificed or forgone to achieve a distinct or specificobjective.

Cost Driver Any factor when modified that causes a change in the cost of arelated cost object.

Cost Object Any activity or item for which a separate measurement of cost isdesired.

Direct Costs Costs that can be identified specifically with or traced directly to agiven activity or cost object (eg personnel, transport freight) by aneconomically feasible method. These costs will fluctuate in totaland directly with any change in cost drivers (eg personnelnumbers, number of shipments).Direct costs include operating and maintenance costs of plant andequipment, vehicles, aircraft or vessels, personnel costs (salaries,allowances), consumables and travel costs etc.

Fixed Costs Costs that do not vary in total, in direct proportion to changes of acost driver.Example: fixed costs of personnel can be infrastructure, power andlighting, as they do not change in total and directly with eachchange in the cost driver (personnel numbers).Note: these costs can also be Semi-Variable costs depending on theframe of reference.

Fixed Overhead This rate represents that proportion of the Defence budget,identified as relevant to managing and administering personnel,not identified specifically with or traced directly to a given costobject (Personnel). This rate does not vary directly with changesof a cost driver (Personnel Numbers).

Full Cost Provides the total of all associated costs of a specific cost object oractivity.

GeneralAdministrativeOverhead

The allocation of Budget suppliers expense information identifiedas relevant to managing and administering personnel.Previously referred to as Activity Overheads.


September 2002 2

Costing, Charging, and Cost Recovery DefinitionsTerm Definition

Goods and ServicesTax (GST)

Introduction of the goods and services tax (GST) was on 1 July2000. It is a broad-based tax of 10 per cent on the supplies of mostgoods, services, or other items sold or consumed in Australia.Advice on applying the GST should be obtained from the DefenceTax Management Office (DTMO) on 1800 806 053 [email protected].

Indirect Costs(On-Costs)

Costs or outlays that cannot be identified specifically with, ortraced directly to, a given activity or cost object, by aneconomically feasible method, sometimes referred to in Defence ason-costs. These costs do not fluctuate in total and directly withany change in cost drivers.Example: indirect costs can include such costs as overheadexpenses for general administration, and costs associated with theuse of infrastructure such as buildings, heating, cleaning, fuel, lightand power etc.

ManagementOverhead

The allocation of Budget salary information identified as relevantto managing and administering personnel.

Net Additional Cost The additional cost incurred as a direct consequence of anoperation less any cost offsets.The impact of an operation on Defence resources outside ofnormal budgeted activities.

Semi-Variable Costs Costs that vary with specific changes in volume, but not in directproportion to the cost driver.Example: building infrastructure can be a semi-variable cost as anincrease or decrease in direct personnel numbers does not changebuilding numbers, but a change of a specific volume of personnelmay.

Step Costs Costs that are approximately fixed over a specific volume rangebut are variable across a greater range.Example: with ship costs, if rate of effort was increased by doublecrewing then personnel costs would increase as a step.

Variable Costs Costs that vary in total, in direct proportion to changes of a costdriver (personnel numbers). Salaries and leave are variable costsof personnel, as they change in total and direct proportion witheach change in the cost driver (personnel numbers).

Variable Overhead This rate represents that proportion of the Defence budget,identified as relevant to managing and administering personnel,not identified specifically with or traced directly to the given costobject (Personnel). This rate is variable directly with changes ofthe cost driver (Personnel Numbers).


September 2002 3

SECTION 1:- INTRODUCTION

REFERENCE OF TERMS

1.1 Herein:

a. The Manual of Costing, Charging and Cost Recovery Part One,Personnel Costs and Related Overheads (previously published as theReady Reckoner of Personnel Costs and Related Overheads) is referred to asthe ‘Costing Manual Part 1 (Personnel Costs)’;

b. The Manual of Costing, Charging and Cost Recovery Part Two,Schedule of Rates and Charges (previously published as the Schedule ofRates and Charges) is referred to as the ‘Costing Manual Part 2 (Rates &Charges)’; and

c. The Defence Employees Certified Agreement 2002-2003 is referred to asthe ‘DECA 2002-2003’.

PURPOSE

1.2 The Costing Manual Part 2 (Rates & Charges) has been developed to supportmanagement decision making by providing current and reliable estimates of the costsassociated with performing Defence business, activities and the provision of goods andservices. This complex and potentially costly process requires access to a wide range ofinformation and a consistent approach to the use of that information.

1.3 The Costing Manual Part 2 (Rates & Charges) provides costing informationand examples of rates and charges for the recovery of costs associated with performingDefence business, activities and the provision of goods and services.

1.4 Reasonable approximations of cost, as provided in this document, are sufficientfor most decision-making purposes.

1.5 The Costing Manual Part 2 (Rates & Charges) provides component costs andcharges only. It does not provide the means to assess the total cost of any given Defenceactivity. Information on the use of Defence resources and the costs of specific Defenceprograms can be obtained from the Budget or Additional Estimates for the DefencePortfolio, the Annual Report, the Defence Financial Management Plan and the DefencePlan.


September 2002 4

SECTION 2:- PRINCIPLES & METHODOLOGY

PRINCIPLES

DEFENCE CHARGING PRINCIPLES

2.1 Defence charging principles are based on Government policy that the full cost ofthe provision of goods and services is recoverable, except under special circumstances.

2.2 In accordance with this policy, Defence applies the ‘user pays’ principle inproviding goods and services to other agencies, governments, organisations, and membersof the public. This principle also applies to Defence personnel (civilian, ADF andcontracted) undertaking activities not related to Defence business.

2.3 Charging principles are based on full cost recovery and full charging. Where fullcost rates are not available, commercial rates should be charged for the particular goods orservices.

VARIATION FROM DEFENCE CHARGING PRINCIPLES

2.4 As stipulated in the Chief Executive Instructions (CEIs), Part 1, Instruction 5,Defence charging principles apply in all but the following special circumstances:

a. Where variation is directed by Government;

b. Where variation is stipulated in legislation or international agreements andarrangements of inter-Departmental arrangements;

c. Where the transaction is of a one-off nature involving a negligible amount,as approved by the delegate; and

d. Where it can be shown that the ongoing administrative costs of charging willexceed expected long-term efficiency gains.

2.5 Variations to full cost recovery on the basis of public interest considerations mustbe applied uniformly, using common overhead rates and percentage indirect costs subjectto approval by First Assistant Secretary Business Strategy (FASBS).

2.6 The only exceptions are the delegation to approve a variation for full cost recoveryup to a maximum of $20,000 for the Head Industry Division (HID) and $10,000 for theDirector General International Material (DGIM), and the delegations in DI(G) 05-1Defence Assistance to the Civil Community.

DELEGATION TO DETERMINE RATES AND CHARGES

2.7 FASFS and Assistant Secretary Accounting Policy and Practices (ASAPP) aredelegated by the Secretary of Defence to determine rates and charges for all supplies andservices provided by Defence.


September 2002 5

GOODS AND SERVICES TAX

2.8 Introduction of the goods and services tax (GST) was on 1 July 2000. It is abroad-based tax of 10 per cent on the supplies of most goods, services, or other items soldor consumed in Australia.

2.9 Defence applies the GST when recovering cost or charging for goods and servicesin accordance with Australian Taxation Office (ATO) guidelines and GST legislation.

2.10 Advice on applying the GST should be obtained from the Defence TaxManagement Office (DTMO) via the telephone hotline 1800 806 053 (AEST businesshours) or through the email address [email protected].

PUBLIC EVENTS OF SIGNIFICANCE (PES)

2.11 A Public Event of Significance (PES) program activity is a special occasion orevent of National, State or Territory importance. The PES program may include eventssuch as the Commonwealth Games, tattoos, displays and other significant sporting orpublic interest events.

2.12 Defence participation in PES events attracts public attention, and providessubstantial public relations and recruiting opportunity. Defence may participate in PESevents that are organised by civilian authorities, including those from which the organiserintended to make a profit. The Defence contribution usually involves specific Defenceskills, logistic or managerial support.

2.13 In assessing involvement in PES activities any benefits gained by Defence, such asan enhanced public image and training, must be balanced against the drain on Defenceresources.

2.14 The PES program allows Defence to support nominated significant events inaccordance with approved guidelines.

2.15 PES activities are classified as Defence Assistance to the Civil Community(DACC) Category 4 (CAT 4) and are submitted to the Minister for Defence biannually forthe periods January to June and July to December.

2.16 To calculate the cost of activities included in the PES program only direct costsare used (unlike calculating the cost of other DACC CAT 4 activities, which require fullcosts). Procedures outlined in DI(G) Ops 05-1 must be adhered to.

METHODOLOGY

CALCULATING RATES AND CHARGES

2.17 When calculating rates and charges for the provision of goods and services therates provided in Section 4 - Schedule of Rates and Charges should be used inconjunction with the methodologies provided in this section (Section 2 - CostingPrinciples & Methodology).

2.18 For goods and services with rates not covered in Section 4, the basic direct ratesand charges should be calculated as set out in Section 2, part 2.20.


September 2002 6

2.19 Examples for calculating rates and charges for the provision of goods and servicescan be found in Section 3 – Costing Examples.

CALCULATION OF BASIC ASSET RATES AND CHARGES

2.20 The following methodology should be utilised when calculating rates and chargesfor the provision of goods such as facilities, classrooms, equipment and items that are notprovided for in Section 4 - Schedule of Rates and Charges:

Calculation of Basic Asset Rates and Charges

Component Description ValueAgreed Values

Asset Value Original asset value Agreed ValueLife of Asset Estimated useful life of the asset Agreed ValueAsset Age Age of the asset at time of rate calculation Agreed ValueAsset Measure Measure of asset (eg square metres for facilities) Agreed ValueAsset Measure Used Measure of asset used (eg square metres for facilities) Agreed ValueCapital Cost Cost of capital (Opportunity Cost) Agreed ValueUsage Annual availability for use of the asset (days, weeks or hours) Agreed Value

Calculated ValuesDepreciation The annual write down value of the asset Formula 1Net Book Value The residual value of the asset as a product of its age Formula 2Capital Charge The opportunity cost of the asset Formula 3Proportion Used The proportion of the asset used for charging purposes Formula 4

Total Basic Asset Rate or Charge (no GST) Formula 5a/5b

CalculationsFormulae

Asset Value1) Depreciation =

Life of Asset

2) Net Book Value = Asset Value – (Depreciation x Asset Age)

3) Capital Charge = Net Book Value x Capital Cost

Asset Measure Used4) Proportion Used =

Asset Measure

5a) Basic Asset Charge Rate = (Depreciation + Capital Charge) x Proportion Used(annual)

ORDepreciation + Capital Charge

5b) Basic Asset Charge Rate(weekly, daily or hourly)

= (Usage

) x Proportion Used

Notes: 1. Agreed Values are set values determined for each asset. If these values are not known for a specific asset they can besourced from the relevant controlling area, DMO for equipment and vehicles, CSIG for Infrastructure assets.

2. Asset Measure and Asset Measure Used are only required where a proportion of the asset value is recoverable, forexample classrooms in a Defence facility. The default value is 1 for both.

3. Calculated Values; are used in determining the Basic Asset Charge Rate.4. Basic Asset Charge Rate provided the total charge rate for the asset without GST and On-Costs included.5. On-Costs are not included with the calculation of the Basic Asset Charge Rate as they should be incorporated when

calculating the charges for the provision of goods and services.6. GST is not included with the calculation of the Basic Asset Charge Rate as it should be incorporated when

calculating the charges for the provision of goods and services.7. Total Basic Asset Charge Rate provides the total charge for the provision of goods and is GST and On-Cost

inclusive.8. Advice should be sought for calculating the rates and charges for an asset that has been revalued.

2.21 GST and On-Costs are not included with the calculation of the Basic AssetCharge Rate, as they should be incorporated when calculating the charges for the provisionof goods and services. The methodology to be utilised when calculating charges for theprovision of goods and services is set out in the Costing Manual Part 2 (Rates &Charges), Section 2, Part 2.27 - Charges for the Provision of Goods and Services.


September 2002 7

2.22 The calculation of the Basic Asset Charge Rate utilising the above methodologyshould only be used if specific rates are not available (as set out in the Costing ManualPart 2 (Rates & Charges), Section 4 - Schedule of Rates and Charges).

RATES AND CHARGES FOR PERSONNEL COSTS

2.23 The Costing Manual Part 1 (Personnel Costs) should be utilised whencalculating the personnel component of any rates and charges for the provision of goodsand services.

2.24 The Costing Manual Part 1 (Personnel Costs) provides costing information oneach rank equivalent across the Services and for each Civilian classification within theDepartment. Regional variation influence cost differences in supporting personnel of thePermanent Force and locations, coinciding with the 12 CSIG regions, present the variationin costs. This manual is organised in such a way as to provide information on directpersonnel costs, variable personnel costs and full personnel costs, and includes provisionfor allowances, accruals, and overheads.

2.25 Full cost figures are used when calculating the personnel component of rates andcharges for the provision of goods and services, with the exception of PES programactivities and some specific special circumstances, for which direct cost figures are used.

a. Direct Costs, provide the total cost that is identified specifically with ortraced directly to personnel. This provides the discrete personnel costexclusive of all overheads and associated costs.

b. Full Costs, include both variable and fixed cost components and areindicative of the full cost of personnel to the Department.

2.26 The following methodology should be utilised when calculating the personnelcomponent of rates and charges for the provision of services:

Personnel Rates and Charges

Rank/Classification Location Quantity &Duration

Unit CostCost Type

Charge

Units Units Units1 Formula 12 Formula 13 Formula 14 Formula 15 Formula 1

Total Charge for the Provision of Personnel (Excluding GST) A Sum AboveGST (If Applicable) B GST % of A

Total Charge for the Provision of Personnel (GST Inclusive) A + B


1) Charge = Quantity x Duration x Unit Cost


September 2002 8

Notes: 1. Rank/Classification is the Service rank and/or Civilian classification.2. Location is only required for personnel of the Permanent Force, and is the CSIG region in which the person lives not

where they work.3. Quantity & Duration is the number of personnel for each Rank/Classification and the measure of the charge period

attributed to each Rank/Classification. This value has per person Units of hours, days, weeks, years etc.4. Unit Cost is the per person rate to charge as obtained from the Costing Manual Part 1 (Personnel Costs), direct cost for

PES program activities, full cost for all other calculations, unless stipulated in CEI, Part 1, Instruction 5. The rate mustcorrespond to the Units of the Duration measure eg hourly, daily, weekly, annually etc.

5. Charge provides the total charge for the individual personnel components calculated for each Rank/Classification. Thisvalue has Units of hours, days, weeks, years, per course, per exercise etc.

6. GST is the Goods and Services Tax attributable to the calculation, in general no GST is attributed for PES programactivities, 10% GST for all other calculations. GST is calculated on each component.

7. Total Charge is provided both exclusive and inclusive of GST.

CHARGES FOR THE PROVISION OF GOODS AND SERVICES

2.27 The following methodology should be utilised when calculating charges for theprovision of goods (facilities, equipment and items) and services, with rates provided inSection 4 - Schedule of Rates and Charges, or calculated using the basic direct rates andcharges as set out in Section 2.

2.28 The following methodology should be utilised when calculating charges for theprovision of goods and services:

Provision of Goods and Services

Goods/Services Supplied Quantity &Duration

Unit Cost Total Cost On-Cost Charge

Units Units Units %1 Formula 1 Formula 2 Formula 32 Formula 1 Formula 2 Formula 33 Formula 1 Formula 2 Formula 34 Formula 1 Formula 2 Formula 35 Formula 1 Formula 2 Formula 3

Total Charge for the Provision of Goods and Services (On-Cost Inclusive) A Sum AboveGST (If Applicable) B GST % of A

Total Charge for the Provision of Goods and Services (On-Cost and GST Inclusive) A + B


1) Total Cost = Quantity x Duration x Unit Cost

2) On-Cost = Total Cost x On-Cost Percentage

3) Charge = Total Cost + On-Cost

Notes: 1. Goods/Services Supplied is the type of goods or service provided.2. Quantity & Duration is the number for each Goods/Services Supplied and the measure of the charge period attributed

to each Goods/Services Supplied. This value has per component Units of hours, days, weeks, years etc.3. Unit Cost is the rate to charge as provided in Section 4 - Schedule of Rates and Charges, or calculated using the basic

direct rates and charges as set out in Section 2, part 2.20. The rate must correspond to the Units of the Quantity &Duration measure eg hourly, daily, weekly, annually etc.

4. Total Cost provides the cost for the total number of each goods and services component for the total of the charge period.5. On-Costs should be included on Goods and Services supplied by Defence as shown in Section 4, Parts 4.31 to 4.36 of

the Costing Manual Part 2 (Rates & Charges) and CEI, Part 1, Instruction 5.6. Charge provides the total charge for the individual goods and services components, including On-Costs. This value has

Units of hours, days, weeks, years, per course, per exercise etc.7. GST is the Goods and Services Tax attributable to the calculation, in general no GST is attributed for PES program

activities, 10% GST for all other calculations.8. The Total Charge is On-Cost inclusive and is provided both exclusive and inclusive of GST.

CALCULATION OF A PRO RATA FACTOR

2.29 A pro rata rate should be utilised when calculating rates and charges for theprovision of a proportion of goods and services. Pro rata is a proportion according to anexactly calculable factor as a share or liability. A pro rata factor is utilised to determine theproportion of goods and services that will be charged for the recovery of cost on a ‘userpays, basis.


September 2002 9

2.30 Some examples of situations where a pro rata factor is utilised are as follows:

a. Providing a student, or students, placement on a training course; and

b. Providing use of only a proportion of a facility (eg classroom, theatre, hall,sports facilities).

2.31 The following methodology should be utilised when calculating a pro rata factorfor the determination of proportionate rates and charges for the provision of goods andservices:

CalculationsFormulae1) Number Charged

Pro Rata Factor = Total Provided

Notes: 1. Number Charged represents that proportion of the whole that is to be charged.2. Total Provided represents the whole of the goods and services provided.

CALCULATING TOTAL RATES AND CHARGES

2.32 The following methodology should be utilised when calculating the total chargefor the provision of goods and services with multiple components:

Total Charge for the Provision of Goods and Services

Goods/Services Supplied Charge GST ChargeOn-Cost Inclusive On-Cost and GST

InclusiveComponent 1 Value Value ValueComponent 2 Value Value ValueComponent 3 Value Value Value

Totals A Sum Above Sum Above Sum AbovePro Rata Factor B Value Value Value

Pro Rata Totals C A x B = C1 A x B = C2 A x B = C3

Total Charge for the Provision of Goods and Services (On-Cost Inclusive) C1

Total GST Component for the Provision of Goods and Services C2

Total Charge for the Provision of Goods and Services (GST and On-Cost Inclusive) C3

Notes: 1. As each of the components is calculated with the relevant GST, the Total Charge is GST inclusive.2. As each of the components is calculated with the relevant On-costs, the Total Charge is On-costs inclusive.3. For the purpose of charging the Total Charge should be rounded to the nearest $0.05 in line with standard practice

ASSISTANCE IN THE CALCULATION OF RATES AND CHARGES

2.33 For any information, or assistance in the calculation of rates and charges for theprovision of goods and services including the personnel component, or on which rates touse, contact Costing and Analysis Section as detailed in the Costing Manual Part 2(Rates & Charges) Contact Officer Section, page iii.


September 2002 10

SECTION 3:- COSTING EXAMPLES

RATES AND CHARGES FOR THE HIRE OF EQUIPMENT

CHARGE FOR ONE DAY HIRE OF A LASER & OPERATOR

3.1 The following example demonstrates the methodology for charging a non-Defenceorganisation for the hire of equipment including an operator.

Calculation Procedure

3.2 The steps involved in calculating the charge are:

a. Calculation of the daily basic rate for providing a laser;

b. Calculation of a charge for providing a laser operator for 1 day;

c. Calculation of a charge for providing the laser for 1 day; and

d. Calculation of the total charge for 1 day hire of the laser & operator.

Daily Basic Rate for the Provision of a Laser


Asset Value Original value of the Laser $90,000Life of Asset Estimated useful life of the Laser 10 YearsAsset Age Age of the Laser at time of rate calculation 2 YearsAsset Measure Measure of asset 1 (default value)Asset Measure Used Measure of asset used 1 (default value)Capital Cost Cost of capital (Opportunity Cost) 11 percentUsage Annual availability for use of the Laser 104 Days

Calculated ValuesDepreciation The annual write down value of the asset $9,000Net Book Value The residual value of the asset as a product of its age $72,000Capital Charge The opportunity cost of the asset $7,920Proportion Used The proportion of the asset used for charging purposes 1.00000

Daily Basic Rate of the Laser (no GST) $162.69

Calculations

$90,000 (Asset Value)Depreciation =

10 (Life of Asset)= $9,000

Net Book Value = $90,000 (Asset Value) - $9,000 (Depreciation) x 2 (Asset Age) = $72,000

Capital Charge = $72,000(Net Book Value) x 11% (Capital Cost) = $7,920

1 (Asset Measure Used)Proportion Used = 1 (Asset Measure) = 1.00000

$9,000 $7,920(Depreciation)

+(Capital Charge)

Basic Asset Charge Rate(weekly, daily or hourly)

= ( 104 (Usage)) x 1.00000

(Proportion Used)= $162.69

Notes: 1. Asset Measure and Asset Measure Used are set at the default value of 1, as the whole of the laser cost is recoverable.


September 2002 11

Charge for the Provision of a Laser Operator for 1 Day


Unit CostFull Cost

Charge

persons days daily1 APS Level 3-4 (Technical) N/A 1 1 $275.00 $275.00

Total Charge for the Provision of a Laser Operator for 1 Day (Excluding GST) $275.00GST 10% $27.50

Total Charge for the Provision of a Laser Operator for 1 Day (GST Inclusive) $302.50

Calculations

1 Charge = 1 (Quantity) x 1 (Duration) x $275.00 (Unit Cost) = $275.00

Notes: 1. Unit Cost for the laser operator is the Full Cost daily rate obtained from the Costing Manual Part 1 (Personnel Costs),civilian tables, as an APS officer regional variation is not a factor in attributing costs for charging purposes.

2. A GST of 10% is calculated with this component.3. On-costs are not applied to personnel costs for charging purposes.

Charge for the Provision of a Laser for 1 Day



items days daily %1 Laser 1 1 $162.69 $162.69 0 $0.00 $162.69

Total Charge for the Provision of a Laser for 1 Day (On-Cost Inclusive) $162.69GST 10% $16.27

Total Charge for the Provision of a Laser for 1 Day (On-Cost and GST Inclusive) $178.96

Calculations

1 Total Cost = 1 (Quantity) x 1 (Duration) x $162.69 (Unit Cost) = $162.69

On-Cost = $162.69 (Total Cost) x 0% (On-Cost %) = $0.00

Charge = $162.69 (Total Cost) + $0.00 (On-Cost) = $162.69

Notes: 1. Unit Cost is the Daily Basic Rate of the Laser obtained from the first part of this example.2. A GST of 10% is calculated with this component.3. On-costs are not applicable in this example.

Total Charge for One Day Hire of a Laser & Operator


InclusiveCharge for Provision of a Laser Operator for 1 Day $275.00 $27.50 $302.50Charge for Provision of a Laser for 1 Day $162.69 $16.27 $178.96

Totals $437.69 $43.77 $481.46

Total Charge for One Day Hire of a Laser & Operator (On-Cost Inclusive) $437.69

Total GST Component for One Day Hire of a Laser & Operator $43.77

Total Charge for One Day Hire of a Laser & Operator (GST and On-Cost Inclusive) $481.46

Notes: 1. As each of the components is calculated with the relevant GST, the Total Charge is GST inclusive.2. As each of the components is calculated with the relevant On-costs (in this example no On-costs are included), the Total

Charge is On-costs inclusive.3. For the purpose of charging each Total would be rounded to the nearest 5 cents, in line with standard practice.

3.3 For any information pertaining to this example, or assistance in the calculation ofrates and charges for the provision of goods and services, or on which rates to use, contactCosting and Analysis Section as detailed in the Costing Manual Part 2 (Rates &Charges) Contact Officer Section, page iii.


September 2002 12

RATES AND CHARGES FOR THE HIRE OF FACILITIES

CHARGES FOR HIRE OF A CLASSROOM

3.4 The following example demonstrates the methodology for charging a non-Defenceorganisation for the hire of a classroom ONLY in a Defence facility.



a. Calculation of the daily basic rate for providing a classroom; and

b. Calculation of the charge for providing the classroom for 1 month calculatedat 20 workdays per month.

Daily Basic Rate for the Provision of a Classroom


Asset Value Original value of the building containing the classroom $5,000,000Life of Asset Estimated useful life of the building 20 yearsAsset Age Age of the building at time of rate calculation 10 yearsAsset Measure Measure of asset 5,000sqmAsset Measure Used Measure of asset used 100 sqmCapital Cost Cost of capital (Opportunity Cost) 11 percentUsage Annual availability for use of the Laser 251 days

Calculated ValuesDepreciation The annual write down value of the asset $250,000Net Book Value The residual value of the asset as a product of its age $2,500,000Capital Charge The opportunity cost of the asset $275,000Proportion Used The proportion of the asset used for charging purposes 0.02000

Daily Basic Rate of a Classroom no GST $41.83

Calculations

$5,000,000 (Asset Value)Depreciation =

20 (Life of Asset)= $250,000

Net Book Value = $5,000,000 (Asset Value) - $250,000 (Depreciation) x 10 (Asset Age) = $2,500,000

Capital Charge = $2,500,000(Net Book Value) x 11% (Capital Cost) = $275,000

100 (Asset Measure Used)Proportion Used = 5,000 (Asset Measure) = 0.02000

$250,000 $275,000(Depreciation)

+(Capital Charge)

Basic Asset Charge Rate(weekly, daily or hourly)

= ( 251 (Usage)) x 0.02000

(Proportion Used)= $41.83

Notes: 1. Asset Measure and Asset Measure Used are required, as the classroom only constitutes a proportion of the facility.


September 2002 13

Charge for the Hire of a Classroom for 1 Month



items days daily %1 Classroom 1 20 $41.83 $836.60 0 $0.00 $836.602 Utilities 1 20 $5.00 $100.00 0 $0.00 $100.00

Total Charge for the Hire of a Classroom for 1 Month (On-Cost Inclusive) $936.60GST 10% $93.66

Total Charge for the Hire of a Classroom for 1 Month (On-Cost and GST Inclusive) $1,030.26

Calculations




Notes: 1. Unit Cost for the Classroom is the Daily Basic Rate of the classroom obtained from the first part of this example.2. Unit Cost for Utilities is the purchase price of the item, as recorded by the relevant area. The figures in this example are

for demonstration purposes only.3. A GST of 10% is calculated with this component.4. In circumstances where it is difficult to determine the full cost of Defence facilities, the use of market rent is appropriate.

This information on market rates or facility costs should be sought from CSIG, Infrastructure Division.5. For the purpose of charging each Total would be rounded to the nearest 5 cents, in line with standard practice.



September 2002 14

RATES AND CHARGES FOR THE PROVISION OF TRAINING

SPACE AVAILABILITY BASIS FOR A SCHEDULED INTERNAL COURSE

3.7 The following example demonstrates the methodology for charging a member of aforeign defence force provided with training on a space availability basis for a scheduledinternal course.

3.8 The description of the course is as follows:

Course Element DetailsCourse Location Nowra (ACT/South NSW)Duration 6 days (March-in to March-out), including 5 Classroom DaysRank of Students MAJOR (E)Number of Places 20 places for course 1 place chargedDetails of Student A member of an foreign defenceFacilities Used 1 x classroom in a Defence facilityInstructional Staff 1 x Warrant Officer – Navy,

2 x Chief Petty Officer, and1 x Petty Officer

15 hours10 hours each5 hours

Direct Support Staff 1 x Commander,1 x APS Level 2, and1 x APS Level 1

5 hours20 hours15 hours

Stores 6 x reams of Paper (500 sheets each), 40 x Pens, and 20 Work FoldersRations and Quarters 6 days Meals (Breakfast, Lunch and Dinner), and 5 nights accommodation in the

Officers MessMiscellaneous A 100km (duration 4 hours) familiarisation bus tour using a Bus Motor Medium (17-

22 Seater) and including a driver or rank Seaman (Qualified).Notes: 1. This course does not qualify as an Education Course and as such will attract GST where applicable.

2. Only direct costs are used in the calculation of the rates and charges for as this training is provided to a member of anoverseas defence force as outlined in CEI, Part 1, Instruction 5.

3. The charge is calculated on a pro rata basis.



a. Calculation of a charge for the provision of personnel, includinginstructional and support staff as well as a bus driver for the familiarisationtour.

b. Calculation of a charge for the provision of facilities, rations, quarters, storesand equipment, including the provision of, a classroom for 5 days, trainingsupplies, meals (6 days) and accommodation (5 nights), and a bus for the100km familiarisation tour.

c. Calculation of the pro rata factor in which, this example the charge iscalculated as a proportion of the total cost, or charge of the activity.


September 2002 15

Charge for the Provision of Personnel


Unit CostDirect Cost

Charge

Instructional Staff persons hours hourly1 Warrant Officer-Navy National Average 1 15 $36.00 $540.00

2 Chief Petty Officer National Average 2 10 $34.00 $680.00

3 Petty Officer National Average 1 5 $30.00 $150.00Support Staff persons hours hourly

4 Commander National Average 1 5 $49.00 $245.00

5 APS 2 N/A 1 20 $21.00 $420.00

6 APS 1 N/A 1 15 $19.00 $285.00Bus Driver persons hours hourly

7 Seaman (Qualified) National Average 1 4 $25.00 $100.00$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Total Charge for the Provision of Personnel (On-Cost Inclusive) $2,420.00GST 10% $242.00

Total Charge for the Provision of Personnel (On-Cost and GST Inclusive) $2,662.00

$0.00

$0.00

$0.00

$0.00

$0.00

Total Charge for the Provision of Personnel (On-Cost Inclusive) $0.00GST 10% $0.00

Total Charge for the Provision of Personnel (On-Cost and GST Inclusive) $0.00

Calculations


Each of the other individual components should be calculated using the method demonstrated above.

Notes: 1. Unit Cost is the Direct Cost rate obtained from the Costing Manual Part 1 (Personnel Costs). For calculation of theDirect Cost Hourly rate contact Costing and Analysis Section as detailed in the Costing Manual Part 2 (Rates &Charges) Contact Officer Section, page iii.

2. Only direct costs are used in the calculation of the charge for the provision of personnel as this training is provided to amember of an overseas defence force as outlined in CEI, Part 1, Instruction 5.

3. A GST of 10% is calculated on these components.4. On-costs are not applied to personnel costs for charging purposes.

Total Charge for the Provision of Personnel (Excluding GST) $2,420.00GST Component $242.00

Total Charge for the Provision of Personnel (GST Inclusive) $2,662.00


September 2002 16

Charge for the Provision of Facilities, Rations, Quarters, Stores and Equipment



Facilities items days per day %1 Classroom 1 5 $41.83 $209.15 0 $0.00 $209.15

Stores items course per course %2 Paper (ream of 500 sheets) 6 1 $6.00 $36.00 0 $0.00 $36.00

3 Pens 40 1 $3.00 $120.00 0 $0.00 $120.00

4 Work Folders 20 1 $10.00 $200.00 0 $0.00 $200.00Rations persons days per day %

5 Meals (Officers Mess) 20 6 $57.14 $6,856.80 0 $0.00 $6,856.80Provision of Bus items km per km %

6 Bus Motor (17-22 Seater) 1 100 $0.37 $37.00 0 $0.00 $37.00$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

Total Charge for the Provision of Goods (On-Cost Inclusive) $7,458.95GST 10% $745.90

Total Charge for the Provision of Goods (On-Cost and GST Inclusive) $8,204.85Quarters (GST Exempt) persons days per day %

7 Accommodation-Officers Mess 20 5 $13.73 $1,373.00 0 $0.00 $1,373.00$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00


Total Charge for the Provision of Goods (On-Cost and GST Inclusive) $1,373.00

Calculations




Each of the individual components should be calculated using the method demonstrated above.

Notes: 1. Unit Cost for facilities is the Daily Basic Rate of the classroom obtained from the first part of the Charges for Hire of aClassroom example at Section 3, part 3.4.

2. Unit Cost for stores is the purchase price of the item, as recorded by the relevant area. The figures in this example are fordemonstration purposes only.

3. Unit Cost for the bus is the Direct Cost rate obtained from the Costing Manual Part 2 Section 4 Rates for Vehicles.4. Meal rates are based on the total of all meals for Officer messes and Accommodation is based on the Single Room

Shared Facility rate (no housekeeping), as sourced from the Costing Manual Part 2 (Rates & Charges), Section 4.5. A GST of 10% is calculated with each of these components.6. On-costs are not applied for charging a member of a foreign defence force.

Total Charge for the Provision of Goods (Excluding GST) $8,831.95GST Component $745.90

Total Charge for the Provision of Goods (GST Inclusive) $9,577.85


September 2002 17

Pro Rata Factor

1 (Number of Places Charged)Pro Rata Factor = 20 (Total Places Provided) = 0.05000

Notes: 1. The pro rata factor is calculated on 1 place on a training course of 20.

Total Charge for the Provision of Training on a Scheduled Internal Course


InclusivePersonnel $2,420.00 $242.00 $2,662.00Facilities, Rations, Quarters, Stores and Equipment $8,831.95 $745.90 $9,577.85

Totals $11,251.95 $987.90 $12,239.85Pro Rata Factor 0.05000 0.05000 0.05000

Pro Rata Totals $562.60 $49.40 $611.99

Total Charge for the Provision of Training (On-Cost Inclusive) $562.60

Total GST Component for the Provision of Training $49.40

Total Charge for the Provision of Training (GST and On-Cost Inclusive) $611.99

Notes: 1. For the purpose of charging each Total would be rounded to the nearest 5 cents, in line with standard practice.



September 2002 18

PROVISION OF A COURSE ADDITIONAL TO PROGRAMMED TRAINING

3.11 The following example demonstrates the methodology for charging members of aforeign defence force that are provided with training on a course that is additional toprogrammed training. This example demonstrates a situation whereby a country has approachedthe ADF with a request to provide a course specifically tailored for their personnel, withinAustralia.

3.12 The description of the course is as follows:

Course Element DetailsCourse Location PuckapunyalDuration 16 days (March-in to March-out), including, 15 Classroom DaysRank of Students CAPT (E)Number of Places 16 places for course 16 places chargedDetails of Student Members of an foreign defence forceFacilities Used 1 x classroom in a Defence facilityInstructional Staff 1 x Captain,

1 x Warrant Officer Class 1,1 x Warrant Officer Class 2, and2 x Sergeant

10 hours30 hours40 hours40 hours each

Direct Support Staff 1 x Major, and3 x APS Level 2

2 hours15 hours each

Stores 8 x Paper (ream of 500 sheets), 48 x Pens, 16 Work Folders, and 16 LASERInstruction Manuals

Equipment 2 day use of a LASER and operator for instructional purposes.Rations and Quarters 16 days Meals (Breakfast, Lunch and Dinner), and 15 nights accommodation in the

Officers MessMiscellaneous A 100km (duration 4 hours) familiarisation bus tour using a Bus Motor Medium (17-

22 Seater) and including a driver or rank CorporalNotes: 1. This course does not qualify as an Education Course and as such will attract GST where applicable.

2. Full costs are used in the calculation of the rates and charges for as this training is provided to members of an foreigndefence force on a full cost recovery basis as outlined in CEI, Part 1, Instruction 5

3. The charge is calculated on a whole of course basis, as this is a course that is developed additional to programmedtraining.



a. Calculation of a charge for the provision of personnel, includinginstructional and support staff are provided as well as a bus driver for thefamiliarisation tour.

b. Calculation of a charge for the provision of facilities, rations, quarters, storesand equipment, including a classroom for 15 days, training supplies, aLASER and operator for 2 days, meals (16 days) and accommodation (15nights), and a bus for the 100km familiarisation tour.

c. Calculation of the pro rata factor, which, in this example is developedadditional to programmed training and is calculated on a whole of coursebasis.


September 2002 19



Unit CostFull Cost

Charge

Instructional Staff persons hours hourly1 Captain Southern Victoria 1 10 $55 $550.00

2 Warrant Officer 1 Southern Victoria 1 30 $56 $1,680.00

3 Warrant Officer 2 Southern Victoria 1 40 $54 $2,160.00

4 Sergeant Southern Victoria 2 40 $50 $4,000.00Support Staff persons hours hourly

5 Major Southern Victoria 1 2 $59 $118.00

6 APS 2 N/A 3 15 $33 $1,485.00Bus Driver persons hours hourly

7 Corporal Southern Victoria 1 4 $47 $188.00Laser Operator persons days daily

8 APS 3-4 (Technical) N/A 1 2 $275 $550.00$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Total Charge for the Provision of Personnel (On-Cost Inclusive) $10,731.00GST 10% $1,073.10


$0.00

$0.00

$0.00

$0.00

$0.00



Calculations



Notes: 1. Unit Cost is the Full Cost rate obtained from the Costing Manual Part 1 (Personnel Costs).2. Full costs are used in the calculation of the charge for the provision of personnel as this training is provided to the

members of an overseas defence force on a full cost recovery basis as outlined in CEI, Part 1, Instruction 5.3. Location is the CSIG region in which the person lives not where they work, and is required for full cost rates.4. A GST of 10% is calculated on these components.5. On-costs are not applied to personnel costs for charging purposes.

Total Charge for the Provision of Personnel (Excluding GST) $10,731.00GST Component $1,073.10



September 2002 20




Facilities items days per day %1 Classroom 1 15 $41.83 $627.45 0 $0.00 $627.45

Stores items course per course %2 Paper (ream of 500 sheets) 8 1 $6.00 $48.00 0 $0.00 $48.00

3 Pens 48 1 $3.00 $144.00 0 $0.00 $144.00

4 Work Folders 16 1 $10.00 $160.00 0 $0.00 $160.00

5 Laser Instruction Manuals 16 1 $50.00 $800.00 0 $0.00 $800.00Rations persons days per day %

6 Meals-Officers Mess 16 16 $57.14 $14,627.84 0 $0.00 $14,627.84Vehicles items km per km %

7 Bus Motor (17-22 Seater) 1 100 $1.18 $118.00 0 $0.00 $118.00Equipment items days per day

8 Laser 1 2 $162.69 $325.38 0 $0.00 $325.38$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

Total Charge for the Provision of Goods (On-Cost Inclusive) $16,850.67GST 10% $1,685.07

Total Charge for the Provision of Goods (On-Cost and GST Inclusive) $18,535.74Quarters (GST Exempt) persons days per day %

9 Accommodation-Officers Mess 16 15 $13.73 $3,295.20 0 $0.00 $3,295.20$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00


Total Charge for the Provision of Goods (On-Cost and GST Inclusive) $3,295.20

Calculations





Notes: 1. Unit Cost for facilities is the Daily Basic Rate of the classroom obtained from the first part of the Charges for Hire of aClassroom example at Section 3, part 3.4.

2. Unit Cost for stores is the purchase price of the item, as recorded by the relevant area. The figures in this example are fordemonstration purposes only.

3. Meal rates are based on the total of all meals for Officer messes and Accommodation is based on the Single RoomShared Facility rate (no housekeeping), as sourced from the Costing Manual Part 2 (Rates & Charges) Section 4.

4. Unit Cost for the bus is the Full Cost rate obtained from the Costing Manual Part 2 (Rates & Charges) Section 4 Ratesfor Vehicles.

5. A GST of 10% is calculated with each of these components (excluding accommodation).6. On-costs are not applied for charging a member of a foreign defence force.

Total Charge for the Provision of Goods (Excluding GST) $20,145.87GST Component $1,685.07



September 2002 21

Pro Rata Factor


Notes: 1. The charge is calculated on a whole of course basis, as this is a course that is developed additional to programmed trainingwith the total number of places provided being equal to the total number of places charged.

Total Charge for the Provision of a Course Additional to Programmed Training


InclusivePersonnel $10,731.00 $1,073.10 $11,804.10Facilities, Rations, Quarters, Stores and Equipment $20,145.87 $1,685.07 $21,830.94

Totals $30,876.87 $2,758.17 $33,635.04Pro Rata Factor 1.00000 1.00000 1.00000

Pro Rata Totals $30,876.87 $2,758.17 $33,635.04

Total Charge for the Provision of Training (On-Cost Inclusive) $30,876.87

Total GST Component for the Provision of Training $2,758.17

Total Charge for the Provision of Training (GST and On-Cost Inclusive) $33,635.04

Notes: 1. For the purpose of charging each Total would be rounded to the nearest 5 cents, in line with standard practice



September 2002 22

USE OF A TRAINING RANGE AND ASSOCIATED EQUIPMENT

3.15 The following example demonstrates the methodology for charging members of aforeign defence force that are provided with use of a Defence range and associatedequipment to support training in Australia.

3.16 The description of the requirement is as follows:

Cost Element DetailsLocation PuckapunyalDuration 5 daysRank of Students CAPT (E)Number of Places 15 places required 15 places chargedDetails of Student Members of an foreign defence forceFacilities Used 1 x Defence Training Range (General Access Charge $1.00)Range SupervisionStaff

1 x Major,1 x Sergeant, and3 x APS Level 2

5 Days5 Days5 Days each

Range Clearance andRepair Staff

1 x Sergeant, and3 x APS Level 2

3 Days5 Days each

Explosive OrdnanceDisposal (EOD) Team

1 x Captain, and3 x Corporal

3 Days3 Days each

Stores 5 cubic metres of road fill, 8 x Boxes Explosives, $1,500 Liquid Fuel (at cost),$4,500 Aviation Fuel (at cost) and $250 Maps and aerial photographs (at cost)

Range Clearance andRepair Equipment

1 x Grader,1x GS Truck,2 x Land Rover, and1 x Backhoe,

5 Days5 Days3 Days each3 Days

Equipment General 10 x Land Rover,1 x Caribou

5 Days each7 hours

Rations and Quarters 5 days Meals (Breakfast, Lunch and Dinner), and 4 nights accommodation in theOfficers Mess

Miscellaneous $3,000 Freight and Cartage (at cost), $450 Range Supervision Staff Allowances,$1,425 Range Supervision Staff Travel and Subsistence, $200 Range Clearance andRepair Staff Allowances, $1,026 Range Clearance and Repair Staff Travel andSubsistence, $650 Explosive Ordnance Disposal (EOD) Team Allowances and $684Explosive Ordnance Disposal (EOD) Team Travel and Subsistence

Notes: 1. The training exercise is supervised by existing range personnel.2. For range management staff, only actual additional costs (travel and subsistence, allowances) are charged. Full costs are

used in the calculation of the charge for the provision of the Explosive Ordnance Disposal (EOD) Team as this service isprovided on a full cost recovery basis as outlined in CEI, Part 1, Instruction 5



a. Calculation of a charge for the provision of personnel, including rangeclearance, supervision, repair and Explosive Ordnance Disposal personnel.

b. Calculation of a charge for the provision of facilities, rations, quarters, storesand equipment, including a Defence training range, general stores, freightand charges, meals (5 days) and accommodation (4 nights), allowances,travel and subsistence, range clearance and repair equipment, vehicles, aCaribou aircraft and fuel.

c. Calculation of the pro rata factor, which, in this example is not charged on apro rata basis.


September 2002 23



Unit Cost Charge

Range Supervision Staff persons days No Charge1 Major Southern Victoria 1 5 $0 $0.00

2 Sergeant Southern Victoria 1 5 $0 $0.00

3 APS 2 N/A 3 5 $0 $0.00Range Clearance and Repair Staff persons days No Charge

4 Sergeant Southern Victoria 1 3 $0 $0.00

5 Corporal Southern Victoria 3 5 $0 $0.00Explosive Ordnance Disposal (EOD) Team persons days Full Cost Daily

6 Captain Southern Victoria 1 3 $436 $1,308.00

7 Corporal Southern Victoria 3 3 $376 $3,384.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Total Charge for the Provision of Personnel (On-Cost Inclusive) $4,692.00GST 10% $469.20


$0.00

$0.00

$0.00

$0.00

$0.00



Calculations



Notes: 1. Unit Cost for existing range management staff is zero as, only actual additional costs (travel and subsistence, allowances)are charged, these are captured under miscellaneous charges.

2. Full costs are used in the calculation of the charge for the provision of the Explosive Ordnance Disposal (EOD) Team asthis service is provided on a full cost recovery basis as outlined in CEI, Part 1, Instruction 5. Full Cost Rates are sourcedfrom the Costing Manual Part 1 (Personnel Costs).

3. Location is the CSIG region in which the person lives not where they work, and is required for full cost rates.4. A GST of 10% is calculated with each of these components.5. On-costs are not applied to personnel costs for charging purposes.




September 2002 24




Facilities items use charge %1 Defence Training Range 1 1 $1.00 $1.00 0 $0.00 $1.00

Goods and Stores items use per item %2 Road Fill (cubic metres) 5 1 $100.00 $500.00 20 $100.00 $600.00

3 Explosives (Boxes) 8 1 $50.00 $400.00 20 $80.00 $480.00

4 Maps and Photographs (at cost) 1 1 $250.00 $250.00 20 $50.00 $300.00Vehicles items days per day %

5 Land Rover (EOD Team) 2 3 $95.00 $570.00 0 $0.00 $570.00

6 Land Rover (Trainee Use) 10 5 $95.00 $4,750.00 0 $0.00 $4,750.00

7 Backhoe 1 3 $95.00 $285.00 0 $0.00 $285.00

8 Grader 1 5 $150.00 $750.00 0 $0.00 $750.00

9 General Service Truck 1 5 $125.00 $625.00 0 $0.00 $625.00Aircraft items hours per hour %

10 Caribou 1 7 $13,677.00 $95,739.00 0 $0.00 $95,739.00Fuel items use per item %

11 Liquid Fuel (at cost) 1 1 $1,500.00 $1,500.00 20 $300.00 $1,800.00

12 Aviation Fuel (at cost) 1 1 $4,500.00 $4,500.00 15 $675.00 $5,175.00Rations persons days per day %

13 Meals-Officers Mess 15 5 $57.14 $4,285.50 0 $0.00 $4,285.50Miscellaneous items use per item %

14 Freight and Cartage 1 1 $3,000.00 $3,000.00 5 $150.00 $3,150.00Allowances, Travel, Subsistence

15 Range Supervision Staff 1 1 $1,875.00 $1,875.00 0 $0.00 $1,875.00

16 Range, Clearance, Repair Staff 1 1 $1,226.00 $1,226.00 0 $0.00 $1,226.00

17 EOD Team 1 1 $1,335.00 $1,335.00 0 $0.00 $1,335.00$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

Total Charge for the Provision of Goods (On-Cost Inclusive) $122,946.50GST 10% $12,294.65

Total Charge for the Provision of Goods (On-Cost and GST Inclusive) $135,241.15Quarters (GST Exempt) items Course per item %

18 Accommodation-Officers Mess 15 4 $13.73 $823.80 $0.00 $823.80$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

$0.00 $0.00 $0.00

Total Charge for the Provision of Goods (On-Cost Inclusive) $823.80GST 0% $0.00

Total Charge for the Provision of Goods (On-Cost and GST Inclusive) $823.80

Calculations





Notes: 1. The General Access Charge is a nominal sum ($1) as outlined in CEI, Part 1, Instruction.2. Meal rates are based on the total of all meals for Officer messes and Accommodation is based on the Single Room

Shared Facility rate (no housekeeping), as sourced from the Costing Manual Part 2 (Rates & Charges), Section 4.3. Unit Cost for vehicles, stores, Freight and Cartage, fuel, travel, subsistence and allowances is the purchase price of the

item, as recorded by the relevant area. The figures in this example are for demonstration purposes only.4. Unit Cost for the Aircraft is the Full Cost Rate from the Costing Manual Part 2 (Rates & Charges), Section 4.5. A GST of 10% is calculated on these components (excluding accommodation).6. On-costs have been applied where applicable.

Total Charge for the Provision of Goods (Excluding GST) $123,770.30GST Component $12,294.65



September 2002 25

Pro Rata Factor


Notes: 1. This Example is not Charged on a Pro Rata Basis.

Total Charge for the Provision of Training on a Scheduled Internal Course


InclusivePersonnel $4,692.00 $469.20 $5,161.20Facilities, Rations, Quarters, Stores and Equipment $123,770.30 $12,294.65 $136,064.95


Pro Rata Totals $128,462.30 $12,763.85 $141,226.15

Total Charge for the Provision of Training (On-Cost Inclusive) $128,462.30

Total GST Component for the Provision of Training $12,763.85

Total Charge for the Provision of Training (GST and On-Cost Inclusive) $141,226.15

Notes: 1. For the purpose of charging each Total would be rounded to the nearest 5 cents, in line with standard practice



September 2002 26

RATES AND CHARGES FOR THE PROVISION OF ADF SUPPORT

3.19 The following examples demonstrate a variety of methodologies for calculatingcharges for the provision of goods and services by the Department of Defence to otheragencies, governments, organisations and members of the public.

SPACE AVAILABILITY BASIS FOR CARGO TRANSPORT

3.20 The following example demonstrates the methodology for charging otheragencies, governments, organisations and members of the public provided transport ofcargo by Defence on a space availability basis.


Element DetailsAircraft C130 HerculesTotal Cargo Capacity 19,300 kilogramsRequired Cargo Capacity 71 kilogramsFlying Hours 4.25 hoursMiscellaneous No Miscellaneous Rates and Charges used in this example.Notes: 1. Full costs are used in the calculation of the rates and charges for as this is a service provided on a full cost recovery, ‘User

Pays’ basis as outlined in CEI, Part 1, Instruction 5.2. The charge is calculated on a pro rata basis.



a. Calculation of a charge for providing a C130J Hercules for 4.25 hours; and

b. Calculate the pro rata factor based on 71 kilograms of cargo as a proportionof 19,300 kilograms total cargo capacity.

Charge for the Provision of a C130J Hercules



items hours hourly %1 C130J Hercules 1 4.25 $32,463 $137,967.75 0 $0.00 $137,967.75

Total Charge for the Provision of a C130J Hercules (On-Cost Inclusive) $137,967.75GST 10% $13,796.78

Total Charge for the Provision of a C130J Hercules (On-Cost and GST Inclusive) $151,764.53

Calculations

1 Total Cost = 1 (Quantity) x 4.25 (Duration) x $32,463.00 (Unit Cost) = $137,967.75

On-Cost = $137,967.75 (Total Cost) x 0% (On-Cost %) = $0.00

Charge = $137,967.75 (Total Cost) + $0.00 (On-Cost) = $137,967.75

Notes: 1. Unit Cost; for the C130J Hercules is the Total Full Cost Reporting Rate obtained from Section 4, part 4.1.2. A GST of 10% is calculated with each of these components.3. On-costs are already included in the flying hour rate.

Pro Rata Factor

71 (Required Cargo Capacity)Pro Rata Factor = 19,300 (Total Cargo Capacity) = 0.0036787565

Notes: 1. The pro rata factor is based on 71 kilograms of cargo as a proportion of 19,300 kilograms total cargo capacity.


September 2002 27

Total Charge for Cargo Transport on a Space Availability Basis


InclusiveCharge for the Provision of a C130J Hercules $137,967.75 $13,796.78 $151,764.53


Pro Rata Totals $507.55 $50.75 $558.30

Total Charge for Cargo Transport (On-Cost Inclusive) $507.55

Total GST Component for Cargo Transport $50.75

Total Charge for Cargo Transport (GST and On-Cost Inclusive) $558.30



September 2002 28

SCHEDULE OF RATES AND CHANGES

PROVISION OF DEFENCE SPEAKERS

3.24 The following example demonstrates the methodology for charging for theprovision of Defence personnel as speakers to other agencies, governments,organisations and members of the public.

3.25 The description of the requirement is as follows:Element Details

Location Presentation in Melbourne (Staff based in Canberra)Duration 1 day (Note: for local presentations use presentation and travelling time)Recipient Organisation Other Agencies, Governments, Organisations and Members of the PublicPresentation Staff 1 x Brigadier (Medical and Dental) 1 dayDirect Support Staff 1 x Colonel (Medical and Dental) 5 hoursStores 10 x Overhead Projector Transparencies, and Miscellaneous StationeryRations Part-day travel allowance ($53)Miscellaneous $150 Cab-charges, $550 Return Business Class Airfares to MelbourneNotes: 1. Only costs outlaid by Defence are to be charged and are based on the greater of the market rate or the full cost

2. Full costs are used in the calculation of the rates and charges as this is a service provided on a full cost recovery, ‘UserPays’ basis as outlined in CEI, Part 1, Instruction 5.



a. Calculation of a charge for the provision of personnel, includingpresentation and support staff.

b. Calculation of a charge for the provision of facilities, rations, quarters,stores and equipment, including supplies, Part-day Travel Allowance (1day), a return business class airfare from Canberra to Melbourne and$150 of Cab-Charges.

c. Calculation of the pro rata factor, which, in this example is not chargedon a pro rata basis.

Charge for the Provision of PersonnelRank/Classification Location Quantity &

DurationUnit Cost

Full CostCharge

Presentation Staff Persons Days Daily1 Brigadier - Medical ACT & South NSW 1 1 $928.00 $928.00

Support Staff Persons Hours Hourly2 Colonel - Medical ACT & South NSW 1 5 $99.00 $495.00

$0.00

Total Charge for the Provision of Personnel $1,423.00GST 10% $142.30

Total Charge for the Provision of Personnel $1,563.30

Calculations1 Charge = 1 (Quantity) x 1 (Duration) x $928.00 (Unit Cost) = $928.00

Each of the other individual components should be calculated using the method demonstrated above.Notes: 1. Unit Cost is the Full Cost rate obtained from the Costing Manual Part 1 (Personnel Costs).

2. Location is the CSIG region in which the person lives not where they work, and is required for full cost rates.3. A GST of 10% is calculated on these components.



September 2002 29

SCHEDULE OF RATES AND CHANGES

Charge for the Provision of Facilities, Rations, Quarters, Stores and EquipmentGoods/Services Supplied Quantity &

DurationUnit Cost

(GSTExclusive)

Total Cost On-Cost Charge

Stores items use for use %1 Overhead Transparencies 10 1 $0.50 $5.00 20 $1.00 $6.002 Miscellaneous Stationery 1 1 $20.00 $20.00 20 $4.00 $24.00

Rations (Travel Allowance) persons days per day %3 Part-day Travel Allowance 1 1 $53.00 $53.00 n.a. n.a. $53.00

Miscellaneous items use for use %4 Return Airfare (Excludes GST) 1 1 $500.00 $500.00 n.a. n.a. $500.005 Cab-charges (Excludes GST) 1 1 $136.36. $136.36 n.a. n.a. $136.36

!C43 Is Not In Table 0 !F43 Is Not In Table $0.00

$0.00 0 $0.00 $0.00



Calculations1 Total Cost = 10 (Quantity) x 1 (Duration) x $0.50 (Unit Cost) = $5.00




Notes: 1. Unit Cost for stores and miscellaneous items is the purchase price of the item, as recorded by the relevant area. Thefigures in this example are for demonstration purposes only.

2. For Travel Allowances refer to the ADF Pay and Conditions Manual for military personnel and the DefenceEmployees Certified Agreement 2004-2006 (DECA) for Defence civilians.

3. A GST of 10% is calculated with each of these components.

Total Charge for the Provision of Goods (Excluding GST) $719.36GST Component $71.94

Total Charge for the Provision of Goods (GST Inclusive) $791.30

Pro Rata Factor

1 (Number Charged)Pro Rata Factor = 1 (Total Provided) = 1.00000

Notes: 1. This example is not charged on a pro rata basis

Total Charge for the Provision Defence SpeakersGoods/Services Supplied Charge GST Charge

On-Cost Inclusive On-Cost andGST Inclusive

Personnel $1,423.00 $142.30 $1,563.30Facilities, Rations, Quarters, Stores and Equipment $719.36 $71.94 $791.30

Totals $2,142.36 $214.24 $2,356.60Pro Rata Factor 1.00000 1.00000 1.00000

Pro Rata Totals $2,142.36 $214.24 2,356.60

Total Charge for the Provision of Defence Speakers (On-Cost Inclusive) $2,142.36

Total GST Component for the Provision of Defence Speakers $214.24

Total Charge for the Provision of Defence Speakers (GST and On-Cost Inclusive) $2,356.60

Notes: 1. For the purpose of charging the Total would be rounded to the nearest 5 cents, in line with standard practice.

3.27 For any information pertaining to this example, or assistance in the calculationof rates and charges for the provision of goods and services, or on which rates to use,contact Costing and Analysis Section as detailed in the Costing Manual Part 2(Rates & Charges) Contact Officer Section, page iii.


September 2002 30

ADMINISTRATIVE CHARGE

3.28 The following example demonstrates the methodology for calculating theadministrative charge associated with the provision of a Goods or Service to otheragencies, governments, organisations and members of the public.


Course Element DetailsLocation CanberraRecipient Organisation Other Agencies, Governments, Organisations and Members of the PublicAdministrative Personnel 1 x Executive Level 2,

1 x APS Level 6, and1 x Private (Proficient)

0.5 hours1 hour1.5 hours

Stores and Equipment Use of a Defence vehicle (Commodore 6cyl) for a 10 kilometre tripMiscellaneous No Miscellaneous Rates and Charges used in this example.Notes: 1. Only costs outlaid by Defence are to be charged.

2. The charge shall be based on the greater of the market rate or the full cost3. Full costs are used in the calculation of the rates and charges for as this is a service provided on a full cost recovery, ‘User

Pays’ basis as outlined in CEI, Part 1, Instruction 5.


3.30 The steps involved in calculating the administrative charge associated with theprovision of a Goods or Service are:

a. Calculation of a charge for the provision of personnel, includingadministrative personnel;

b. Calculation of miscellaneous charges, including a Defence vehicle(Commodore 6cyl) used for a 10 kilometre trip;

c. Calculation of the pro rata factor, which, in this example is not charged on apro rata basis.



Unit Cost Charge

Presentation Staff persons hours hourly1 Executive Level 2 N/A 1 0.5 $62.00 $31.00

2 APS Level 6 N/A 1 1 $45.00 $45.00

3 Private (Proficient) ACT/South NSW 1 1.5 $47.00 $70.50



Calculations

1 Charge = 1 (Quantity) x 0.5 (Duration) x $62.00 (Unit Cost) = $31.00


Notes: 1. Unit Cost is the Full Cost rate obtained from the Costing Manual Part 1 (Personnel Costs).2. Full costs are used in the calculation of the charge for the provision of personnel as this is a service provided on a full cost

recovery, ‘User Pays’ basis as outlined in CEI, Part 1, Instruction 53. Location is the CSIG region in which the person lives not where they work, and is required for full cost rates.4. A GST of 10% is calculated on these components.5. On-costs are not applied to personnel costs for charging purposes.

Total Charge for the Provision of Personnel (Excluding GST) $146.50GST Component $14.65

Total Charge for the Provision of Personnel (GST Inclusive) $161.15


September 2002 31

Miscellaneous Charges



Stores item km per km %1 Commodore 6cyl 1 10 $0.64 $6.40 0 $0.00 $6.40

$0.00 0 $0.00 $0.00

$0.00 0 $0.00 $0.00

$0.00 0 $0.00 $0.00

$0.00 0 $0.00 $0.00

$0.00 0 $0.00 $0.00

$0.00 0 $0.00 $0.00

$0.00 0 $0.00 $0.00



Calculations





Notes: 1. Unit Cost for the Commodore 6cyl is.2. A GST of 10% is calculated with each of these components.

Total Charge for the Provision of Goods (Excluding GST) $6.40GST Component $0.64

Total Charge for the Provision of Goods (GST Inclusive) $7.04

Pro Rata Factor

1 (Number Charged)Pro Rata Factor = 1 (Total Provided) = 1.00000

Notes: 1. This example is not charged on a pro rata basis

Total Administrative Charge


InclusivePersonnel $146.50 $14.65 $161.15Facilities, Rations, Quarters, Stores and Equipment $6.40 $0.64 $7.04

Totals $152.90 $15.29 $168.19Pro Rata Factor 1.00000 1.00000 1.00000

Pro Rata Totals $152.90 $15.29 $168.19

Total Administrative Charge (On-Cost Inclusive) $152.90

Total GST Component for the Administrative Charge $15.29

Total Administrative Charge (GST and On-Cost Inclusive) $168.19




September 2002 32

SECTION 4:- SCHEDULE OF RATES AND CHARGES

RATES FOR SHIPS

DAILY RECOVERY RATES FOR NAVY VESSELS

4.1 The following are important with respect to daily recovery rates for Navy vessels:

a. Daily rates include all costs over Sea-days (24 hours Steaming) only.Multiplying the daily rates and sea-days may derive annual rates (over seaand harbour time). Dividing the rates by 24 may derive hourly rates.

b. Additional Cost is an estimate of the Marginal or Extra costs incurred toundertake tasks additional to normally programmed activities. It may beused as an estimate of the extra direct running costs incurred by Navy toundertake such activities.

c. Direct Cost includes costs of fuel, ammunition, manpower, rations, stores,and repairs. Used for internal Defence costing of activities.

d. Full Cost includes direct costs plus indirect costs of manpower, capital costdepreciation, opportunity cost of capital and fixed percentages of othercomponents defined in departmental policy. The calculation of NavySteaming Day Rates is currently under review. In the next edition capitalcosts will be shown as direct costs.

e. Steaming Day Rates should not be used for full life cycle costing.

4.2 The following table provides an indication of the daily recovery rates for Navyvessels (as supplied by Navy, Effective 1 July 2000):

Daily Recovery Rates for Navy VesselsVessel ROE Specific Costs Full Cost

Class Type Sea days Additional Direct Reporting GST Recoveryno GST no GST no GST GST inclusive

days / year $ per day $ per day $ per day $ per day $ per dayFFG Guided Missile Frigate 115 33,467 254,387 934,543 93,454 1,027,997DDG Guided Missile Destroyer 120 52,224 390,005 1,163,160 116,316 1,279,476FF Frigate Anzac Class 115 27,359 195,890 893,059 89,306 982,365FCPB Patrol Boat 120 4,142 31,138 65,115 6,512 71,626SSG Submarine Collins Class 120 15,193 106,721 1,033,310 103,331 1,136,641LSH Landing Ship Heavy 145 17,877 119,491 264,614 26,461 291,075LPA Landing Platform Amphibious 145 25,270 218,454 436,625 43,663 480,288LCH Landing Craft Heavy 110 2,702 18,985 34,041 3,404 37,445AOR Auxiliary Oiler Replenishment Ship 115 27,853 269,895 703,760 70,376 774,136AO Under-way Replenishment Ship 135 24,098 106,089 446,642 44,664 491,306HSS Hydrographic Survey Ship 145 17,547 129,476 223,003 22,300 245303SML Survey Motor Launch 140 1,060 10,236 19,717 1,972 21,689MHI Inshore Mine Hunter 135 1,474 14,409 78,178 7,818 85,996MHC Coastal Mine Hunter 135 7,426 46,303 226,889 22,689 249,578MSA Auxiliary Mine Sweeper 100 1,030 11,803 16,345 1,635 17,979MSA-T Minesweeper Auxiliary Trawler 100 2,375 13,491 24,829 2,483 27,312

4.3 Information regarding these rates and their calculation may be obtained fromDMAP-N on (02) 62655131.


September 2002 AL1 33

RATES FOR AIRCRAFT

FLYING HOUR RATES FOR RAAF AIRCRAFT

4.4 The following are important with respect to daily recovery rates for RAAFAircraft:

a. Direct Cost includes fuel, spares, contract servicing costs, capital costs(depreciation and opportunity costs) and the direct cost of crew per hour.

b. Full Cost includes attribution of all direct and indirect costs that can bereasonably traced to aircraft operations.

� The full cost rates include a high proportion of indirect costs(overheads) therefore the rate must not be used for thecalculation of budget variations.

� Full Cost rates apply where Defence, on behalf of theCommonwealth, is recovering the cost of providing a serviceto an external organisation, and that service is not part of thenormal budgeted activities of Defence.

� Where Defence is providing a service, which is outside itsnormal role, the full cost of providing the service, is normallyrecovered or used as the basis for calculating costs which maysubsequently be varied or waived. Examples include DACCtasks to organisations such as QANTAS, community servicegroups, mining companies and film crews.

4.5 The following table provides an indication of the flying hour rates for Air Forceaircraft (date of effect, 21 May 2004):

Flying Hour Rates for RAAF AircraftAircraft ROE Specific Costs Full Cost

Id Description Type Achieved Additional Direct Reporting GST Recovery2000-2001 no GST no GST no GST GST inclusive

hours $ per hour $ per hour $ per hour $ per hour $ per hour

A04 Caribou 4,332 831 3,531 13,852 1,385 15,237A08 F111 2,779 11,069 100,140 146,893 14,689 161,582A09 Orion P3 8,172 3,045 61,583 79,318 7,932 87,250A10 HS748 2,969 823 5,387 11,164 1,116 12,280A20 B707 1,377 8,529 46,240 62,462 6,246 68,708A21 Hornet FA18 14,077 3,497 59,812 74,510 7,451 81,961A23 PC9 Roulette 18,916 471 3,142 5,363 536 5,900A27 Hawk LIF 6,691 1,584 23,409 29,401 2,940 32,341A97 Hercules C130H 6,285 2,587 15,565 24,605 2,461 27,066A97 Hercules C130J 7,337 2,819 34,435 43,551 4,355 47,906

4.6 These cost recovery rates should not be used for the budgetary impacts caused byincreases or decreases in rates of effort, or increases or decreases in the number ofairframes in use. Special rates for these purposes can be calculated by DAS�AF.

4.7 Information regarding these rates and their calculation may be obtained fromDDCOST�AF on (02) 6265 5501.


September 2002 34

FLYING HOUR RATES FOR NAVY AIRCRAFT

4.8 The following points are important with respect to flying hour rates for navyaircraft:

a. Additional Cost is an estimate of the Marginal or Extra costs incurred toundertake tasks additional to normally programmed activities. It may beused as estimate of the extra direct running costs incurred by Navy toundertake additional activities.

b. Direct Cost includes costs of fuel, spares, CSP contracting and direct cost ofpersonnel. It is the cost generally used for internal Defence costing ofactivities.

c. Full Cost includes direct costs plus indirect costs of personnel, capital costsand fixed percentages of other components defined in the departmentalpolicy. The calculation of Navy Flying Hour Rates is currently under review.In the next edition capital costs will be shown as direct costs.

d. Flying Hour Rates should not be used for full life cycle costing.

e. SEASPRITE aircraft are yet to be accepted into Navy Service. Therefore,costs have yet to be identified.

4.9 The following table provides an indication of the flying hour rates for Navyaircraft (as supplied by Navy, Effective 1 July 2000):

Flying Hour Rates for Navy AircraftAircraft ROE Specific Costs Full Cost

Class Type Additional Direct Reporting GST Recoveryno GST no GST no GST GST inclusive

$ per hour $ per hour $ per hour $ per hour $ per hour

Sea King Mk 50A 1,971 9,865 17,559 1,756 19,315Squirrel AS350BA 98 2,043 3,872 387 4,259Seahawk S 70-B-2 985 6,444 33,695 3,369 37,064Super Seasprite SH2-B

4.10 Information regarding these rates and their calculation may be obtained fromDMAP-N on (02) 62654930.


September 2002 35

FLYING HOUR RATES FOR ARMY AIRCRAFT

4.11 The following points are important with respect to flying hour rates for armyaircraft:

a. Direct Cost include Petrol, Oil Lubricants (POL), spares, contract servicing,in-house servicing, aircrew and capital costs.

b. Full Cost includes direct costs plus and non-Army Group costs (overheads).

4.12 The following table provides an indication of the flying hour rates for Armyaircraft (as supplied by Army, Effective 1 April 2002):

Flying Hour Rates for Army AircraftAircraft ROE Specific Costs Full Cost

Class Type Additional Direct Reporting GST Recoveryno GST no GST no GST GST inclusive

$ per hour $ per hour $ per hour $ per hour $ per hour

Blackhawk S70A-9 4,790 13,850 15,729 1,573 17,302Iroquois UH-1H 1,851 3,576 4,427 443 4,870Kiowa LOH B2066-1 1,284 2,202 2,926 293 3,220Chinook CH-47D 5,486 20,449 23,111 2,311 25,422King Air 1,152 1,855 2,279 228 2,507Twin Otter 1,152 1,761 2,155 216 2,371

4.13 Information regarding these rates and their calculation may be obtained from theDirector, Army Aviation Systems Program Office, Army Aviation Centre (07) 46917849.


September 2002 36

RATES FOR VEHICLES

ARMY B CLASS VEHICLES (EXCLUDING DRIVER)

4.14 The following table provides an indication of the rates for Army B Class vehicles,excluding driver on a per kilometre basis (Effective 1 April 2002):

Motor Vehicle Rates Army B Class (Excluding Driver)Direct Cost Full Cost

Vehicle Base Cost Base Cost GST Totalno GST no GST GST inclusiveper km per km per km per km

Motor Cycle Road MC4 $0.60 $1.31 $0.13 $1.44Scooter Motor MC4 $0.24 $0.74 $0.07 $0.81Auto Station Wagon Grade 3 Large $0.21 $0.49 $0.05 $0.53Auto Station Wagon Grade Compact $0.21 $0.57 $0.06 $0.62Auto Sedan Grade 1 MC4 (Hvy) $0.28 $0.66 $0.07 $0.73Auto Sedan Grade 2 MC4 (Mdm) $0.21 $0.65 $0.06 $0.71Auto Sedan Grade 3 MC4 (Std) $0.21 $0.50 $0.05 $0.55Auto Sedan Grade 4 MC4 (Lt) $0.23 $0.61 $0.06 $0.67Bus Motor Hvy MC4 (45 Seater) $1.19 $4.11 $0.41 $4.52Bus Motor Mdm MC4 (17-22 Seater) $0.37 $1.18 $0.12 $1.30Truck Ambulance 4 Litter MC3 (4*4) Perentie $3.22 $9.45 $0.95 $10.40Truck Ambulance 4 Litter MC3 (Domestic) $1.02 $3.17 $0.32 $3.49Truck Carryall Ltwt MC4 (Hiace) $0.24 $0.56 $0.06 $0.61Truck Carryall Mini MC4 $0.28 $0.57 $0.06 $0.62Truck Ute Mini MC4 $0.16 $0.97 $0.10 $1.07Truck Ute Ltwt MC3 $0.32 $0.69 $0.07 $0.76Truck Ute Ltwt MC4 $0.28 $0.69 $0.07 $0.76Van Panel Ltwt MC4 $0.17 $0.56 $0.06 $0.61Truck Station Wagon Lt MC3 (Landrover) $0.21 $0.44 $0.04 $0.48Truck Cargo Lt MC4 (Less Than 2 Tonne) $0.49 $1.12 $0.11 $1.23Truck Cargo Mdm MC4 (2-5 Tonne) Unimog $0.36 $2.20 $0.22 $2.42Truck Cargo Hvy MC4 (5 Tonne + ) Mack $0.83 $1.63 $0.16 $1.79Truck Dump Mdm MC4 $1.12 $2.71 $0.27 $2.98Truck Refrig Mdm MC4 $1.16 $3.68 $0.37 $4.05Truck Tractor Lt MC4 $1.47 $2.83 $0.28 $3.12Truck Tractor Mdm MC4 $0.93 $1.79 $0.18 $1.97Truck Tractor Heavy MC4 $1.70 $3.63 $0.36 $4.00

ARMOURED VEHICLE RATES

4.15 The following table provides an indication of the rates for armoured vehicles asused by Defence, excluding driver on a per kilometre basis (Effective 1 July 2001):

Armoured Vehicle Rates Standard (Excluding Driver)Direct Cost Full Cost

Vehicle Base Cost Base Cost GST Totalno GST no GST GST inclusive

Description Type per km per km per km per km

APC M113A $20.47 $45.95 $4.60 $50.55Reconnaissance ASLAV $15.20 $64.99 $6.50 $71.49Tank LEOPARD $131.45 $341.49 $34.15 $375.64Notes: 1. Direct cost includes fuel, oil, spares, and maintenance.

2. Full cost includes direct costs plus capital costs and departmental on-costs.3. The rates above have been adjusted to include the diesel rebates where applicable.


September 2002 37

STANDARD VEHICLE RATES

4.16 The following table provides an indication of the rates for standard motor vehiclesas used by Defence, excluding driver on a per kilometre basis (Effective 1 June 2001):

Motor Vehicle Rates Standard Vehicles (Excluding Driver)Direct Cost Full Cost

Vehicle Base Cost Base Cost GST Totalno GST no GST GST inclusive

Description Type per km per km per km per km

Up to 2000cc Corolla (E) 4 cylinder $0.12 $0.49 $0.05 $0.542000–3000cc Camry (E) 4 cylinder $0.14 $0.53 $0.05 $0.58Over 3000cc Commodore (E) 6 cylinder $0.15 $0.64 $0.06 $0.70Luxury Statesman (E) 8 cylinder $0.19 $0.97 $0.10 $1.07People Mover Tarago (E) 4 cylinder $0.15 $0.81 $0.08 $0.894WD Landcruiser (E) 6 cylinder $0.24 $0.96 $0.10 $1.06Notes: 1. For motor vehicles that are not listed, commercial rates (ie market rate charged by National Car Rental or some other

commercial organisation such as AVIS, Thrifty, etc) are to be used for cost recovery purposes.2. Rates for motor vehicles are based on vehicle classifications and data published in the NRMA Vehicle Operating Costs

booklet (June 2001).3. The rate to be charged depends on the type and size of the vehicle, distance travelled and the cost of the driver (if

required).


September 2002 38

DEPARTMENTAL AND SERVICE MOTOR TRANSPORT

HOME GARAGING OF DEFENCE VEHICLES

4.17 The charging rate for personnel granted approval to garage Defence vehiclesovernight at their private residence is $128.15 (GST Inclusive) per fortnight (Effective 1November 2003). The fortnightly rate will be automatically deducted from each pay forthe duration of the approved period. Provision exists for reimbursement to be sought forthe number of days in each pay period that the Defence vehicle was not home garaged.Further information on home garaging should be sought from CEI, Part 1 Instruction 8.

DEPARTMENTAL BUS SERVICES

Transport To/From Work

4.18 The following table provides charging rates for when Defence personnel and theirdependants are provided with departmental bus services in the absence of satisfactorypublic transport to and from their places of work (Effective 1 July 2001):

Departmental Bus Services for Transport To/From Work

Adult FareSingle Fare Return Fare

Metropolitan Area Base Cost GST Total Fare Base Cost GST Total Fareno GST GST inclusive no GST GST inclusive

Up to 20 km $2.01 $0.19 $2.20 $4.01 $0.39 $4.4021 to 30 km $3.05 $0.30 $3.35 $6.10 $0.60 $6.70Over 30 km $3.32 $0.33 $3.65 $6.69 $0.66 $7.35Daily fare (maximum fare) $3.65 $7.35

Single Fare Return FareCountry Area Base Cost GST Total Fare Base Cost GST Total Fare

no GST GST inclusive no GST GST inclusive

Up to 20 km $1.91 $0.19 $2.10 $3.82 $0.38 $4.2021 to 30 km $2.87 $0.28 $3.15 $5.73 $0.57 $6.30Over 30 km $3.14 $0.31 $3.45 $6.28 $0.62 $6.90Daily fare (maximum fare) $3.45 $6.90Notes: 1. Where the bus trip requires more than two fares each way, then only the maximum daily fare should be charged.

2. To obtain details as to what constitute metropolitan or country areas see paragraph 4.13.


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For Sports Meets, Appointments, Shopping Trips, and Recreational Events

4.19 The following table provides charging rates for Defence personnel and theirdependants who utilise departmental bus services for attending sporting events, religiousservices, medical/dental appointments, shopping trips and recreational events (eg. concerts,art exhibitions) with approval of the Commanding Officer (Effective 1 July 2001):

Departmental Bus Services for Sports Meets, Appointments, Shopping Trips, andRecreational Events

Adult FareSingle Fare Return Fare


Up to 20 km $2.01 $0.19 $2.20 $4.01 $0.39 $4.4021 to 50 km $4.01 $0.39 $4.40 $8.01 $0.79 $8.8051 to 100 km $8.01 $0.79 $8.80 $16.05 $1.60 $17.65101 to 150 km $10.06 $0.99 $11.05 $20.05 $2.00 $22.05




Child and Concession FaresSingle Fare Return Fare





Up to 20 km $0.96 $0.09 $1.05 $1.91 $0.19 $2.1021 to 50 km $1.91 $0.19 $2.10 $3.82 $0.38 $4.2051 to 100 km $3.82 $0.38 $4.20 $7.64 $0.76 $8.40101 to 150 km $4.78 $0.47 $5.25 $9.95 $0.95 $10.50Notes: 1. To obtain details as to what constitute metropolitan or country areas see paragraph 4.13.

2. For every 50 km over 150 km add an extra $4.85 single/ $9.70 return fare for an adult, and $2.40 single / $4.80 returnfare for a child or concession holder.

3. Child/concession fare applies to children under 15 years of age; full time students with a student concession card; adultswith a pensioner/senior card.

4. Children under five years of age accompanied by an adult travel free.


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School Bus Services

4.20 The following table provides charging rates for transporting dependant schoolaged children of Defence personnel to and from school (Effective 1 July 2001):

School Bus Services

First and Second ChildSingle Fare Return Fare


Up to 20 km $1.00 $0.10 $1.10 $2.01 $0.19 $2.2021 to 30 km $1.46 $0.14 $1.60 $2.96 $0.29 $3.25Over 30 km $1.60 $0.15 $1.75 $3.23 $0.32 $3.55Maximum Daily Fare $3.55




Third and Subsequent ChildrenSingle Fare Return Fare





Up to 20 km $0.46 $0.04 $0.50 $0.96 $0.09 $1.0521 to 30 km $0.69 $0.06 $0.75 $1.41 $0.14 $1.55Over 30 km $0.87 $0.08 $0.95 $1.82 $0.18 $2.00Maximum Daily Fare $2.00Notes: 1. To obtain details as to what constitute metropolitan or country areas see paragraph 4.13.

2. For families with more than two dependant school aged children being transported on departmental bus services, thethird and subsequent child will be carried at a reduced fare.

3. Where the bus trip to/from School requires more than 2 fares each way, the maximum daily fare only should be charged.

School Term Tickets (Prepaid)

4.21 The following table provides the rates to charge for prepaid school term tickets fortransporting dependant school aged children of Defence personnel to and from school(Effective 1 July 2001):

School Term Tickets for both Metropolitan and Country Areas (Prepaid)Item Base Cost GST Total Fare

no GST GST Inclusive

Dependant School Aged Children One and Two $60.19 $6.01 $66.20Third and Subsequent Children $50.19 $5.01 $55.20Notes: 1. For families with more than two dependant school aged children being transported on departmental bus services, the

third and subsequent child will be carried at a reduced fare.2. There is no differentiation between Metropolitan and Country Areas.

4.22 Details of what is defined as Metropolitan and Country Areas can be found in theCosting Manual Part 1 (Personnel Costs), under the Regional Information Section.Alternatively contact Costing and Analysis Section on (02) 62655371.


September 2002 41

FACILITY RATES

CHARGES FOR COMMERCIAL USE OF RAAF AIRFIELDS

4.23 Department of Finance regulations require cost recovery to be initiated wheneveraccess to Commonwealth facilities is granted.

4.24 To prevent any appearance of unfair competition with other airfield operators,charges are to be calculated and levied in keeping with the charging procedures or fixedamounts applying to the nearest equivalent civil airfield that would otherwise be used bythe operator. (A quote from a civil airfield may include GST, indicating in this case, thatDefence must not add a second GST amount to the price when charging.)

4.25 Use of Navigation Aids (NAVAIDS) without actually landing does not involvethe use of RAAF facilities and hence does not attract a charge under these guidelines.

4.26 When charges are based on time, the period of charge extends from first contactwith RAAF controllers to the point when the aircraft reverts to civil control.

4.27 For further guidance on charges for the commercial use of RAAF airfields contactDAS-AF on (02) 62655506.

UTILITY SERVICES

4.28 The following table provides information on how to charge users for generalutility services and electricity drawn from Defence mains (Effective 1 July 2001):

Charge Calculation for General Utility Services and ElectricityUser General Services Electricity

(eg. telephone, water, etc) (drawn from Defence mains)Approved commercial users andoccupants of married quartersother than ADF members andAustralian Government employees

Are charged the amount indicatedby the supply authority for theparticular service add 5%

Are charged the rate that wouldapply if the user drew the electricitydirectly from the local supplyauthority (on-cost exempt)

ADF members and AustralianGovernment employees occupyingmarried quarters

Are charged the amount specifiedby the supply authority for theparticular service (on-cost exempt).

Are charged the rate that wouldapply if the user drew the electricitydirectly from the local supplyauthority (on-cost exempt)

Notes: 1. For further information pertaining to procedural rules for the basis of charges for utilities provided from Defence mains,refer to Chief Executive Instructions, Part 1 Instruction 5 (Utilities).

2. Price for Other Services prices for services not covered above are to be at cost plus five percent on-cost.3. GST is to be added to the total cost derived, except for water charges.



RATES FOR MEALS, MESSES AND ACCOMMODATION

SERVICE MESS MEAL RATES

Non-Defence Civilians and Overseas Defence Personnel

4.29 The following table provides the rates to charge for non-Defence civilians andoverseas Defence personnel provided with meals in a service mess, (date of effect09 September 2004):

Meal Rates for Non-Defence Civilians and Overseas Defence Service PersonnelOfficer and Senior NCO Messes OR Messes

Meal Times Base Cost GST Full Charge Base Cost GST Full Chargeno GST GST inclusive no GST GST inclusive

Breakfast $15.36 $1.54 $16.90 $9.18 $0.92 $10.10Lunch $16.41 $1.64 $18.05 $9.82 $0.98 $10.80Dinner $29.77 $2.98 $32.75 $17.82 $1.78 $19.60Total for all meals $61.54 $6.16 $67.70 $36.82 $3.68 $40.50Notes: 1. United States military personnel provided with meals and accommodation under the Acquisition and Cross-

Servicing Agreement (ACSA) are to be charged at the ADF casual rates.

Steward and Housekeeping Services

4.30 The meal rates applying to officers and senior non-commissioned officer’s messesvary according to availability of steward service.

4.31 The rates are charged as per the relevant service provision contract agreement forthe region. When steward service is not provided rates applicable to the other ranks messwill be applied.

Casual Meals Charges for Members of the ADF and Defence Civilians

4.32 ADF members and Defence civilians on Defence business pay the ADF rates forCasual Meals in Service messes as specified in the ADF Pay and Conditions Manual,Volume 2 Chapter 7, Annex C, part four (http://defweb.cbr.defence.gov.au/dpedet/).

Charges for In-Flight Rations

4.33 The following table provides the rates to charge for in-flight rations, (date of effect09 September 2004):

Charges for in-Flight RationsHours/Minutes of Flight Meal Issue Base Cost GST Full Charge

no GST GST Inclusive 0 - 1�59 No (Refreshments) $2.07 $0.21 $2.28 2 - 3�59 Yes $8.80 $0.88 $9.68 4 - 5�59 Yes $16.03 $1.60 $17.63 6 - 7�59 Yes $17.58 $1.76 $19.34 8 - 9�59 Yes $18.66 $1.87 $20.5310 - 11�59 Yes $26.35 $2.64 $28.9912 - 14�59 Yes $27.43 $2.74 $30.17Notes: 1. GST is not to be applied to flights that include an overseas destination.

2. All costs include a 20% on cost, refer to Section 4, Paragraph 45.



ACCOMMODATION RATES

4.34 The following table provides the daily accommodation rates for civilians(including Defence-Contractors), ADF personnel not on duty and overseas militarypersonnel, (date of effect 09 September 2004):

Accommodation RatesAccommodation Type Per Day Base Cost

(no GST)GST Per Day Base Cost

(plus GST)(This cost applies to continuous

accommodation for 28 days or more)(This cost applies to continuous

accommodation less than 28 days)Sub-standard Accommodation $1.75 $0.18 $1.93Dormitory Room $6.25 $0.63 $6.88Shared Room $12.45 $1.25 $13.70Single Room with Shared Facilities $14.90 $1.49 $16.39Single Room with Own Facilities $17.35 $1.74 $19.09Notes: 1. Sub-standard Accommodation is below levels 1-5 in the ADF Pay and Conditions Manual, Volume 1, Chapter 7.

2. An additional charge is applied where housekeeping services are provided. For periods of accommodation of 28 continuousdays or more the charge is $5.82 (with no GST) per day. For periods of accommodation less than 28 days the charge is$6.40 (including GST of 0.58 cents) per day.

3. United States military personnel provided with meals and accommodation under the Acquisition and Cross-ServicingAgreement (ACSA) are to be charged at the ADF casual rates.

4. GST is to be applied only to accommodation costs where the total period of accommodation is less than 28 continuous days.

CHARGES FOR HIRING SERVICE MESSES FOR PRIVATE FUNCTIONS

4.35 Defence personnel may request the hire of a Service mess, or part of a mess, forprivate functions. Hiring a mess facility can include full use of the venue, kitchenappliances, and equipment if required.

4.36 The rates for hiring Service messes are deemed to recover the cost of fuel, lightand power, maintenance and operation of the facility, cleaning services and waste removal,regardless of whether or not the kitchen is used.

4.37 Where additional cleaning and waste removal is incurred these additional costs,plus a 5% service fee and GST, are to be borne by the person(s) hiring the mess.

4.38 Money received from the hire of the Service messes for private functions belongsto the Commonwealth, not the individual mess or Service.

4.39 The following table provides the rates to charge for hiring service messes forprivate functions.

Charges for Hiring Service Messes for Private FunctionsOfficer and Senior NCO Messes OR Messes

Period of Hire Base Cost GST Full Charge Base Cost GST Full Chargeno GST GST inclusive no GST GST inclusiveper hour per hour per hour per hour per hour per hour

1 to 3 hours $34.41 $3.44 $37.85 $27.50 $2.75 $30.253 to 5 hours $57.32 $5.73 $63.05 $45.82 $4.57 $50.40Notes: 1. Living-in members are not to be charged for the hire of the mess, paying only direct costs associated with the function

eg. Food, drinks and labour, etc.2. Moneys received from the hire of Service messes for private functions belong to the Commonwealth, not the individual

mess or Service and must be returned to the Commonwealth.3. Guidance for the procedures to be observed in respect of receiving and accounting for Public Money is contained in

Chief Executive Instruction’s part 4, Instruction 3 (Receiving Public Money).4. The direct costs associated with food, drinks, labour, additional cleaning and waste removal or extraneous items such as

candles and paper serviettes are not included in the hiring rates. These costs are additional and are to be borne in full bythe person hiring the mess.


September 2002 44

MISCELLANEOUS RATES AND CHARGES

CHARGES FOR COMMERCIAL USE OF MILITARY WORKING DOGS

4.40 The following table provides the rates to charge for commercial use of militaryworking dogs (as supplied by Air Force Headquarters, RAAF Security and Fire School,Amberley QLD, Effective 1 April 2002):

Charges for Commercial Use of Military Working DogsDirect Cost Full Cost

Item Base Cost GST Full Charge Base Cost GST Full Chargeno GST GST inclusive no GST GST inclusiveper day per day per day per day per day per day

Military Working Dogs $187.58 $14.18 $201.76 $382.02 $38.20 $420.22Notes: 1. Further information can be obtained from the Directorate of Costing and Analysis on 6265 5371.

CHARGE FOR PHOTOCOPYING COSTS

4.41 The following table provides the rates to charge for recovery of photocopyingcosts, excluding operator costs (Effective 01 October 2001):

Charge for Photocopying Services (Excluding Operator Costs)Item Base Cost GST Total Charge

no GST GST Inclusiveper sheet per sheet per sheet

A4 Sheet (210mm x 297mm) $0.05 $0.01 $0.06A3 Sheet (297mm x 420mm) $0.25 $0.03 $0.28


September 2002 45

ON-COSTS FOR GOODS AND SERVICES

4.42 Goods and services supplied by Defence to other government departments, foreigngovernment entities, private individuals, corporations and firms should include an on-costcomponent excluding the following:

a. Sales of clothing and necessaries to Defence personnel; and

b. Materials in aid of Defence orders issued to manufacturing contractors whohave lodged a bank guarantee (these materials will be charged at the ratesspecified in the applicable contract).

4.43 The on-cost component for stores and equipment, including ration commoditiesand fuels and oils, should be added to the item replacement cost excluding GST.

4.44 For sales to other government departments the issuing entity is to charge GST inaccordance to ATO guidelines. Sales to other government departments are not exempt fromGST, unless the purchaser can provide proof that the goods are to be exported.

ON-COSTS FOR GOODS

4.45 The following table provides the percentages to be used in calculating the on-costcomponent of Defence goods (Effective 1 July 2001):

Percentages for Calculating the On-Cost Component of Defence GoodsPurchasing Entity Purchased Overseas Purchased in Australia

Government Departments, Foreign GovernmentEntities, Private Individuals, Corporations and Firms(excluding Philanthropic Organisations)

35% 20%

Philanthropic Organisations 20% 5%Notes: 1. Defence stores provided under the Defence Cooperation Program (DCP) are subject to on-costs of 20% for stores

provided from service stocks 5% for stores procured by Defence for DCP activities.2. Defence stores provided to Papua New Guinea, Fiji, Solomon Islands, Tonga and Vanuatu under Logistic Support and

Supply Support arrangements are subject to an on-cost of 10%.3. Defence stores provided to New Zealand under the Cooperative Defence Logistic Support Agreement are subject to an

on-cost of 10%.4. GST is to be added to the total cost derived.

ON-COSTS FOR FUELS

Navy Fuels

4.46 The following table provides the percentages to be used in calculating the on-costcomponent for issues of Navy bulk fuels (Effective 1 July 2001):

Percentages for Calculating the On-Cost Component of Navy Bulk FuelsPurchasing Entity Quantities On-Cost

PercentageGovernment administrations of other countries All 15%

Less than 5000 cubic metres (cz) 10%Government administrations of other countries wherethe supply of bulk fuel is arranged through commercialsources and provided directly without any storage,handling or distribution by Defence

Greater than 5000 cubic metres (cz) 5%

Notes: 1. In charging for issues of Navy bulk fuels these on-cost percentages should be added to the contract price.2. Charging for fuel should include customs duties and/or excise unless the purchaser is exempt.3. GST is to be added to the total cost except where the goods are to be exported within 60 days


September 2002 46

Aviation Fuels

4.47 The following table provides the percentages to be used in calculating the on-costcomponent for issues of aviation fuels (Effective 1 July 2001):

Percentages for Calculating the On-Cost Component of Aviation FuelsPurchasing Entity On-Cost

PercentageAustralian and State Government departments and instrumentalities not engaged in activitiesof a commercial nature

15%

Australian and State Government departments and instrumentalities engaged in activities ofa commercial nature

20%

Government administrations of other countries 15%Notes: 1. In charging for issues of aviation fuels these on-cost percentages should be added to the contract price.

2. Charging for fuel should include customs duties and/or excise unless the purchaser is exempt.3. Fuel issued to government-owned aircraft of other countries on flights departing Australia is exempt from customs and

excise. Sales to Australian domestic airlines and QANTAS are not exempt.4. GST is to be added to the total cost except where the goods are to be exported within 60 days.


July 2003 47

SECTION 5: - RECOVERY OF COSTS FROM FOREIGNFORCES

5.1 Defence provides foreign forces with goods and services on a regular basis. Examples ofsituations when foreign forces receive support from Defence include during joint activities withthe Australian Defence Force (ADF), during unilateral training and when visiting Australia whilein transit to other destinations. The provision of support for the purposes of this section includessupport provided to foreign forces in Australia and support provided to foreign forces overseas.Commonwealth Government policy requires Defence to recover the full costs associated withproviding support to foreign forces. Defence charging policy, as outlined in the Chief ExecutiveInstructions (CEI 1.5 – Charging and Cost Recovery), is that the full cost of the goods andservices provided is recovered except in special circumstances.

5.2 This section presents the over-arching policy on recovery of costs for support provided toforeign forces. It is expected that each Group will develop its own internal processes andprocedures to align itself with the over-arching policy.

5.3 Defence may have international agreements and arrangements with foreign forces thatdefine the terms for support being provided and received. The CEIs list international agreementsand arrangements as one of the exceptions to the principle of full cost recovery. As exceptions,international agreements and arrangements can stipulate that a foreign force will be charged lessthan full cost for goods and services provided.

5.4 Annex A contains a list of related Government and Defence policies and instructions.

5.5 Annex B contains a flow chart of the recoveries process.

5.6 Annex C contains contact details.

PRINCIPLES

COST RECOVERY5.7 Commonwealth Government policy on the provision of support to other parties is that thecosts incurred by Defence should be recovered. This includes the support provided to foreignforces. This is established in section 44 and section 47 of the Financial Management andAccountability Act 1997. Further guidance is provided in Department of Finance andAdministration (DOFA) Finance Circular 2002/02.

CHARGING PRINCIPLE5.8 Defence applies the ‘user pays’ principle when providing support to a foreign force. Thisimplies that a foreign force should be charged for all goods and services that it is supplied with.Defence charging principles are based on Commonwealth Government policy that the full cost of


July 2003 48

the goods and services is to be recovered except in special circumstances. These specialcircumstances are defined in CEI 1.5 under Variation to Charging Principles.

5.9 Although the full cost may not be recovered under the provisions of specialcircumstances that are outlined in CEI 1.5 the amount which is forgone needs to be captured,costed and recorded.

5.10 Full cost recovery would normally include recovering all costs associated with a specificcost object or activity. Refer to the definitions and examples of calculating full costs in theManual of Costing, Charging, and Cost Recovery Part 2 for more details on full costs.

COSTING5.11 The Group that provides support to a foreign force is responsible for recording andcosting the goods and services that it has supplied. Each Group determines its own procedures inrelation to providing support to a foreign force. When developing their procedures Groups needto be cognisant of security related issues around the services provided and these should beincorporated into the processes. Appropriate documentation of the goods and services providedis to be kept for audit purposes.

5.12 All goods and services provided to a foreign force, including those provided in Exchangetransactions, must be recorded and accounted for, regardless of whether full cost recovery ismade or not. Mutual Logistic Support Request (MLSR) forms, when used, should accuratelyrecord the type and quantity of goods and services supplied to facilitate future costing andinvoicing.

5.13 When costing the support provided to a foreign force the financial provisions of theinternational agreement or arrangement that govern the activity must be applied.

AGREEMENTS AND ARRANGEMENTS5.14 The process for the initiating, drafting, negotiating and concluding of internationalagreements and arrangements is set out in DI(G) Admin 48-1, International Agreements andArrangements. As part of the prerequisite clearance process for international agreements andarrangements by relevant Groups within the Defence Organisation the financial provisions of aninternational agreement or arrangement must receive appropriate approvals.

5.15 An international agreement or arrangement must be agreed upon in advance of an activityto be binding.

5.16 The applicable international agreements and arrangements are documents that govern theprovision of support during exercises, operations and combined or unilateral activities involvingforeign forces. The provisions of international agreements and arrangements determine the coststhat need to be recovered from foreign forces.

5.17 International agreements and arrangements with foreign forces include a financial sectionthat stipulates what will be charged to the foreign force and the type of costing method to applywhen calculating an invoice.


July 2003 49

5.18 An international agreement or arrangement can direct that goods and services will beprovided free of charge or at less than full cost, but this is the exception rather than the rule.When the financial provisions do not stipulate providing support free of charge or define acosting method, the full cost method is applied.

5.19 In a situation where an international agreement or arrangement does not exist with aforeign force the full cost is to be charged for all goods and services provided. Where full costrates are not available for calculating charges, commercial rates for similar goods and servicesshould be applied. Any requests for cost waiver are to be approved by the appropriate delegatestated in CEI 1.5 Charging and Cost Recovery.

5.20 International agreements (that is documents legally binding in international law and alsoknown as treaties) can be accessed through the Australian Treaties Database located on theDepartment of Foreign Affairs and Trade (DFAT) web-site.

http://www.info.dfat.gov.au/treaties/

5.21 Copies of other international agreements and arrangements can be obtained by requestingthem from the Directorate of Agreements (DAGTS). Contact details are attached in Annex C.

5.22 DAGTS are the point of contact for general assistance with matters relating tointernational agreements and arrangements. Assistance relating to policy guidance andimplementation of international logistics agreements and arrangements is available from theDirectorate of International Logistics (ILOG). Assistance relating to financial provisions isavailable from the Directorate of Costing and Analysis (DC&A).

REQUEST FOR RAISING AN ACCOUNTS RECEIVABLE INVOICE5.23 Corporate Services and Infrastructure Group (CSIG) raise invoices to be issued to foreignforces except for the provision of fuel where this is arranged by the Joint Fuels and LubricantsAgency (JFLA). For CSIG to raise an invoice a Request for Raising an Accounts ReceivableInvoice (form AC978) must be completed and include all items that the foreign force is beingcharged for. When Groups provide information on the Request for Raising an AccountsReceivable Invoice (form AC978) they need to be cognisant of security issues. This will meannot all details are disclosed on the request but that Groups will need to provide an appropriatecontact officer for reference on the invoice.

5.24 The Group responsible for collecting all costing data, calculating the total cost and theinvoice amount and completing the Request for Raising an Accounts Receivable Invoice (FormAC978) depends on the activity being conducted by the foreign force and for which Defenceprovides support. The different activities are categorised as:

a) Minor and Unilateral Support: A foreign force is provided with support but is notdirectly involved in any activities with one of the Service Groups. Examples of Minorand Unilateral support include a foreign navy vessel stopping at an Australian port to re-stock, a foreign aircraft landing at a RAAF base en-route to other destinations and foreignforces conducting unilateral activities at Australian facilities.


July 2003 50

b) Single Service Activity: When one or more foreign forces take part in an activity withone Service Group only and are provided with support. For example, Exercise AirWarrior that takes place between the United States Airforce and RAAF.

c) Combined Activity: More than one Service Group takes part in an activity that involvesone or more foreign force that receive some form of support. For example, ExerciseTamex that involves RAN, RAAF, New Zealand forces and United States forces.

MINOR AND UNILATERAL SUPPORT5.25 When a foreign force is provided with support the Group that receives the support requestis responsible for raising the request for invoice. Each area providing support is responsible forrecording and costing the resources it provided, the costing data is then forwarded to the Groupresponsible for the raising the request for invoice. This Group calculates the total amount owingand requests the raising of an accounts receivable invoice. The CSIG regional office is taskedwith raising the invoice for the foreign force.

SINGLE SERVICE ACTIVITY5.26 When a single Service Group is involved in an activity with a foreign force the task ofrequesting the raising of an accounts receivable invoice becomes the responsibility of the ServiceGroup involved. Each Group that has provided support during the activity is responsible forrecording the goods and services it provided and the relevant costs. The costs are then forwardedto the Service Group involved in the activity to enable them to request the raising of an accountsreceivable invoice from the CSIG regional office.

COMBINED ACTIVITY5.27 When joint activities that involve more than one Service Group and one or more foreignforces takes place, Headquarters Australian Theatre (HQAST) is responsible for requesting theraising of an accounts receivable invoice. HQAST will nominate the area responsible for thecollation of the cost data in the administrative instruction for the exercise or operation. All of theGroups that have provided support to a foreign force are required to present their cost data to theHQAST nominated area in order to create a single invoice for each foreign force that lists allcosts for the activity.

RAISING AN ACCOUNTS RECEIVABLE INVOICE5.28 When the relevant coordinating Group has calculated the total cost to be charged to theforeign force the completed AC 978 form is forwarded to the CSIG regional office to raise andissue the accounts receivable invoice. The foreign force generally has 45 days from the issue dateof the invoice to make the full payment or dispute the invoice.

5.29 CSIG regional contacts are available through the Defence Intranet viahttp://intranet.defence.gov.au/csig/

5.30 Costs incurred that are not invoiced under the terms of an international agreement orarrangement need to be recorded and forwarded to the Director of Financial Reporting throughthe monthly reporting pack.


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DEBT MANAGEMENT5.31 When an invoice has not been paid in full after 45 days the debt management process isinitiated. The debt management process is handled by CSIG and follows the processes in theAccounts Receivable and Debt Management Procedures Manual. In the event that an invoice isdisputed the foreign force deals with CSIG so that the matter is coordinated centrally andresolved using CSIG procedures for debt management.

TAXATION ISSUES

5.32 A 10% Goods and Services Tax (GST) was introduced in Australia on 1 July 2000. TheCommonwealth Tax Act, A New Tax System (Goods and Services Tax) Act 1999 (‘the GSTAct’) requires, as a general rule, Defence to pay to the Australian Taxation Office (ATO), 10%of the value of any taxable supply it makes, including those taxable supplies provided to foreignforces.

5.33 In line with the GST Act, Defence is to charge 10% GST for any supplies (such as goodsand services) it makes to foreign forces (except where the goods and services are specificallyGST exempt, GST-free or input taxed under the GST Act). Common examples of GST-freesupplies include accredited education courses and medical supplies.

5.34 Special GST payment arrangements exist with respect to acquisitions made by the USDepartment of Defence, US commissaries and the US Government in relation to Defencefacilities at Pine Gap and the North West Cape (‘eligible acquisitions’). When Defence makes ataxable supply of any eligible acquisition to the US visiting force, GST is to be charged (unlessthe supply is GST-free, GST-exempt or input-taxed). However, the Australian Department ofDefence (on behalf of the US visiting force) will make payment of any GST liability (withrespect to the particular eligible acquisition). Therefore, when invoicing US visiting forces forsuch eligible acquisitions, raise the invoice for the GST inclusive amount. When US officialshave received the invoice they will certify the goods as “eligible acquisitions” and send a copy ofthe invoice to the Directorate of Taxation Management (DTM) for payment of the GSTcomponent. Advice on the process can be obtained from the DTM.

5.35 The application of the GST in relation to foreign forces is described in the tax policydocument entitled, Goods and Services Tax, Recovery and Visiting Forces. This document isavailable through the Chief Finance Officer web page.http://defweb.cbr.defence.gov.au/cfo/tax/gst/topics/foreign.pdf

RESOURCES RECEIVED OR PROVIDED FREE OF CHARGE

5.36 Under some international agreements and arrangements, Defence provides and receivesgoods and services on a non-reimbursement basis to and from foreign forces. This may be underan international agreement or arrangement that provides for exchange transactions (In Kind or ofEqual Value), for example fuel exchange agreements. Alternatively the goods or services may beprovided on a non-reimbursement basis with no specific reciprocal obligation.

5.37 AAS 29 “ Financial Reporting by Government Departments” requires resources receivedfree of charge to be recognised as revenue equivalent to the fair value of the services or assetsreceived. All goods and services received or provided on a non-reimbursement basis, as part of


July 2003 52

an exchange transaction or for a nominal consideration are to be recorded by the Group receivingor providing the benefit and reported to the Directorate of Financial Reporting via the monthlyreporting pack.

5.38 In relation to exchange transactions where the goods and services are provided toDefence on the condition that Defence makes a reciprocal transfer of economic benefits, and thereciprocal transfer has not occurred prior to the reporting date, Defence must recognise a liabilityas at the reporting date in respect of such amounts. The liability must be reported to the Directorof Financial Reporting in the monthly reporting pack.

5.39 More information regarding Resources Received Free of Charge is available from DRB48, AAS 29 or by contacting the Directorate of Accounting Policy.

GOVERNMENT DEPARTMENTS DIRECTING COST WAIVER

5.40 Occasionally Defence may be directed to waive the cost of goods and services it hasprovided. For example, DFAT may request that fuel for a visiting foreign dignitary’s aircraft isprovided free of charge.

5.41 Where this happens the request is to be obtained in writing and filed for audit purposes. Itis the responsibility of the requesting area to obtain the appropriate cost waiver for the goods andservices supplied. In the previous example this would require DFAT to obtain the cost waiver.

5.42 More information can be obtained on this issue by contacting DC&A.

REVIEW

5.43 CFO Group reserves the right to review all procedures and documentation held byGroups.

ANNEXESA. Related Government PolicyB. Recoveries Process Flow ChartC. Contact Details


July 2003 53

ANNEX A TOSECTION 5: RECOVERY OF COSTS FROM FOREIGN FORCES

GOVERNMENT POLICY

Financial Management and Accountability Act 1997, section 44 & 47

Department of Finance and Administration Finance Circular 2002/02

Chief Executive Instruction 1.5, Charging and Cost Recovery

DRB 48 Chapter 3, Resources Received Free of Charge

DI(G) Admin 48-1-International Agreements and Arrangements

DI(G) Log 05-1-International Cooperative Logistics Arrangements

Australian Accounting Standard 29

Manual of Costing, Charging and Cost Recovery Part 1 (Ready Reckoner of Personnel Costs andRelated Overheads)

Manual of Costing, Charging and Cost Recovery Part 2 (Schedule of Rates and Charges)

Accounts Receivable and Debt Management Procedures Manual

Taxgram: Goods & Services Tax (GST) Recovery and Visiting Forces


July 2003 54

ANNEX B TOSECTION 5: RECOVERY OF COSTS FROM FOREIGN FORCES

FLOWCHART OF RECOVERY PROCESS

YES

YES

NO YES

Support provided to foreignforce. Record the cost of goodsand services supplied.

Locate the relevant internationalagreement or arrangement.(Contact DAGTS for advice)

Do the financial provisions of theinternational agreement orarrangement stipulate providingthe support at no charge?(Contact DAGTS, DILOG orDC&A for advice)

No invoice is required. Details ofcosts incurred are to be forwardedin the monthly reporting packunder Resources Provided Free ofCharge to DFINR.

Invoice is required. Apply thefinancial provisions of theinternational agreement orarrangement to calculate costs.(Contact DC&A for advice)

Was support provided to theUSA?

Did the support include goodsand services that have a GSTcomponent?

Forward cost data tocoordinating Group.

Coordinating Group completesform AC 978, Request for Raisingan Accounts Receivable Invoice.

CSIG raise accounts receivableinvoice, issue it and coordinatedebt management.

Contact DTM if assistance isrequired on the treatment of theGST in relation to the USA.


July 2003 55

ANNEX C TOSECTION 5: RECOVERY FOF COSTS FROM FOREIGN FORCES

CONTACT DETAILS

Corporate Services and Infrastructure Group section for foreign force debt [email protected]

Directorate of Agreements02 6266 [email protected]

Directorate of Costing and Analysis02 6265 219702 6265 5339

Directorate of Accounting Policy(02) 6265 6544

Directorate of International Logistics02 6265 700902 6265 701002 6265 7024

Directorate of Taxation Management1800 806 [email protected]

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