Understanding the OPEX vs CAPEX Challenge

Across federal, state, and local government, decision-makers must modernize while working within constrained annual budgets. Recurring items such as training, consulting, and maintenance are commonly funded as operational expenses (OPEX), which often reset each fiscal year. By contrast, capital expenses (CAPEX) support investments in enduring assets—equipment, infrastructure, and systems that deliver measurable value over time. When structured correctly, many technology-related services can qualify as capital investments, allowing agencies to fund modernization under long-term capital programs.

When Services Become Capital Investments

Under widely adopted accounting principles (e.g., GAAP; for governments, see guidance such as GASB on intangible assets), intangible work associated with software development, system integration, and implementation-related training can be capitalized if it provides long-term operational benefit and is directly tied to a capital asset.

• Training and Certification: Instruction that directly supports deployment or continued use of a system—for example, UAS operator training or technical surveillance courses—may be included as part of the total system cost.
• App or Software Development: Custom applications and integrations that extend mission systems—such as VMS integrations or analytics dashboards—can qualify as intangible assets. See Custom App Development.
• System Integration and Engineering: Configuration and integration of sensors, communications, and data systems into a deployable capability often provide enduring value and may be treated as part of the capitalized system.

Procurement Scenarios: From Services to Capital Assets

1) Body-Worn and Technical Surveillance Systems

When procuring body wires, covert recording systems, or tactical surveillance kits, agencies can include supporting services in the same capital project: technical surveillance training, counter-surveillance training, and software configuration for evidence and data management. These activities directly support system use and extend functional life, aligning them with capital project objectives.

2) UAS Programs and Operator Certification

For agencies building a drone program, bundling UAS pilot training and certification, operational procedure development, and integration with command platforms alongside the purchase of airframes and payloads (UAS platforms) can establish a complete, capitalizable capability rather than a collection of short-term expenses.

3) Citywide or Campus-Wide Surveillance

Municipal or campus deployments benefit from pre-deployment site surveys, video management system (VMS) selection and configuration, camera placement design, and integration with dispatch or a real-time crime center. These services contribute to a functioning capital asset—the surveillance network itself—so costs can be spread over the useful life of the system. Explore related offerings on MAXSUR Services.

Compliance and Financial Stewardship

Capitalizing services requires collaboration with finance and procurement teams to confirm eligibility, capitalization thresholds, useful life, ownership, and documentation standards. It is essential to link each service element to the functionality of the capital asset and ensure consistent application of internal policies and applicable guidance.

How MAXSUR Helps Agencies Reframe Investments

MAXSUR blends technical enablement with financial structuring to help agencies convert essential services into enduring, auditable capabilities:

• Custom Application Development that extends mission systems and improves data flow.
• Professional and Mission-Based Training for law enforcement, intelligence, and technical operations.
• Integrated UAS Solutions tailored to operational requirements.
• Consulting and Advisory Services that help classify, fund, and sustain complex programs.

The MAXSUR Advantage

MAXSUR’s team combines veteran law enforcement and intelligence professionals with firsthand operational experience, alongside technologists and analysts holding graduate-level degrees in finance and business. This fusion ensures each solution is engineered for mission effectiveness and fiscal responsibility, from procurement planning through deployment and sustainment.

Next Steps

If your organization is exploring how to capitalize technology investments, contact MAXSUR for a confidential consultation. We can help structure procurements for training, app development, UAS systems, and surveillance networks as capital investments that deliver sustainable value.

Call: 314-270-2150
Email: ops@maxsur.com
Learn more: MAXSUR Services