DoDI 7041.04, July 3, 2013
Change 1, 07/01/2020 ENCLOSURE 3
(a) For military personnel, the programmed amount is normally the annual DoD
Composite Rate, which includes an average base pay, BAH, BAS, incentive and specialty pays,
permanent change of station expenses, the DoD contribution to medical health care coverage and
to the MERHCF, and the DoD contribution to the retired pay accrual account listed in Enclosure
4 of this instruction.
(b) For civilian personnel, the programmed amount includes base pay, adjusted for
locality (listed in Enclosure 4), plus the applicable Civilian Personnel Fringe Benefit rate
(established annually by the USD(C)/CFO pursuant to Reference (g), and published at
OUSD(C)/CFO website. This rate varies by Military Service and DoD Component. It includes
miscellaneous fringe benefits and DoD contributions to Federal Employees Retirement System
(FERS), FEHBP, Federal Employees Group Life Insurance (FEGLI), Old Age, Survivors, and
Disability Insurance (OASDI), and Medicare.
(3) Full Cost to DoD. Full cost to the DoD is determined by adding the programmed
amount to the costs of additional benefits that are borne by the DoD as a result of employing
military or DoD civilian personnel (e.g., subsidized groceries, child development and family
support services, family housing subsidies, education assistance, training, and advertising and
recruiting). These additional benefits borne by the DoD are listed in Enclosure 4 of this
instruction.
(4) Full Cost to the Federal Government. Full cost to the Federal Government is
determined by adding the full cost to the DoD to the additional costs that are borne by other
federal agencies as a result of the Department employing military or DoD civilian personnel. For
military personnel, the additional costs that must be taken into account include Department of
Treasury contributions toward payments for concurrent receipts; Department of Education
contributions to the Impact Aid Program; Department of Labor contributions for the training and
employment of veterans; and the full costs of the Department of Veterans Affairs. See Enclosure
4 for specifics. For civilian personnel, costs that must be taken into account include Department
of Treasury contributions to the unfunded portion of the civilian retirement fund and to the
annuitants’ health and life insurance benefits listed in Enclosure 4 of this instruction.
b. Manpower Conversions - Military to DoD Civilian or DoD Civilian to Military. When
comparing the costs of military and DoD civilian manpower, as discussed in paragraph 2a, all
cost elements in paragraph 4a(3) should be considered in determining the full costs to the DoD,
and all costs elements in paragraph 4a(4) should be considered in determining the full costs to
the Federal Government. The direct non-labor costs addressed in paragraph 2b(1) and the
indirect non-labor costs addressed in paragraph 2b(2) should also be reviewed. Direct and
indirect non-labor costs that are common costs may be excluded from both estimates provided
the cost comparison is for an equal number of DoD civilian and military personnel. Where the
number of military and DoD civilian personnel differ, adjustments must be made to the estimates
to account for the difference in indirect costs that result from the difference in the number of
military and DoD civilian personnel.
c. Cost Comparisons of DoD Manpower and Contract Support. The rules that appear in
paragraphs 4c(1) through 4c(3) of this enclosure apply when comparing the costs of DoD