diff --git a/include/update.h b/include/update.h
index 63a75fef..b4befb2a 100644
--- a/include/update.h
+++ b/include/update.h
@@ -84,6 +84,9 @@ extern void age_levels(int);
 extern void delete_old_announcements(void);
 /* bp.c */
 extern struct bp *bp_alloc(void);
+extern int bp_skip_sect(struct bp *, struct sctstr *);
+extern int bp_skip_unit(struct bp *, struct empobj *);
+extern void bp_consider_unit(struct bp *, struct empobj *);
 extern void bp_set_from_sect(struct bp *, struct sctstr *);
 extern void bp_to_sect(struct bp *, struct sctstr *);
 /* deliver.c */
@@ -98,7 +101,7 @@ extern int feed_people(short *, int);
 extern double food_needed(short *, int);
 extern int famine_victims(short *, int);
 /* land.c */
-extern void prep_lands(int);
+extern void prep_lands(int, struct bp *);
 extern void prod_land(int, struct bp *, int);
 /* main.c */
 /* in server.h */
@@ -122,13 +125,14 @@ extern void do_plague(struct sctstr *, int);
 extern int plague_people(struct natstr *, short *, int *, int *, int);
 extern void plague_report(natid, int, int, int, int, char *, char *);
 /* plane.c */
-extern void prep_planes(int);
+extern void prep_planes(int, struct bp *);
 extern void prod_plane(int, struct bp *, int);
 /* populace.c */
 extern void populace(struct sctstr *, int);
 extern int total_work(int, int, int, int, int, int);
 /* prepare.c */
 extern void prepare_sects(int, struct bp *);
+extern void prep_one_sect(struct sctstr *, int, struct bp *);
 extern void pay_reserve(struct natstr *, int);
 /* produce.c */
 extern void produce(struct natstr *, struct sctstr *);
@@ -148,7 +152,7 @@ extern void spread_fallout(struct sctstr *, int);
 extern void decay_fallout(struct sctstr *, int);
 extern void produce_sect(int, struct bp *);
 /* ship.c */
-extern void prep_ships(int);
+extern void prep_ships(int, struct bp *);
 extern void prod_ship(int, struct bp *, int);
 
 #endif
diff --git a/info/Update-sequence.t b/info/Update-sequence.t
index 15ec422d..91593216 100644
--- a/info/Update-sequence.t
+++ b/info/Update-sequence.t
@@ -6,7 +6,13 @@ This document gives a rough order of events during the update.
 .s1
 .nf
 1) Prepare
-	a) prepare all sectors
+	a) prepare all ships
+		a) pay military on board
+	b) prepare all planes
+		a) pay crew
+	c) prepare all land units
+		a) pay military on board
+	d) prepare all sectors
 		a) fallout is checked, if FALLOUT is defined
 		b) guerrilla warfare is checked
 		c) if the sector doesn't have the plague, see if it
@@ -17,12 +23,6 @@ This document gives a rough order of events during the update.
 		e) taxes are collected from civs & uws; mil are paid.
 		f) if the sector is a bank it makes $$ proportional to
 			its efficiency
-	b) prepare all ships
-		a) pay military on board
-	c) prepare all planes
-		a) pay crew
-	d) prepare all land units
-		a) pay military on board
 	e) pay for military reserves.
 
 2) Produce
diff --git a/src/lib/commands/budg.c b/src/lib/commands/budg.c
index f1538e25..b518d121 100644
--- a/src/lib/commands/budg.c
+++ b/src/lib/commands/budg.c
@@ -156,12 +156,11 @@ calc_all(void)
     budget->start_money = budget->money = np->nat_money;
     bp = bp_alloc();
 
+    prep_ships(etu, bp);
+    prep_planes(etu, bp);
+    prep_lands(etu, bp);
     prepare_sects(etu, bp);
-    prep_ships(etu);
-    prep_planes(etu);
-    prep_lands(etu);
-    for (i = 0; i < MAXNOC; i++)
-	pay_reserve(getnatp(i), etu);
+    pay_reserve(np, etu);
 
     /* Maintain ships, planes and land units */
     prod_ship(etu, bp, 0);
diff --git a/src/lib/update/bp.c b/src/lib/update/bp.c
index b2dcf941..c3d5d527 100644
--- a/src/lib/update/bp.c
+++ b/src/lib/update/bp.c
@@ -41,8 +41,12 @@
 #include <config.h>
 
 #include <stdlib.h>
+#include "empobj.h"
 #include "optlist.h"
+#include "player.h"
+#include "prototypes.h"
 #include "update.h"
+#include "xy.h"
 
 /* Item types we want to track. */
 enum bp_item_idx {
@@ -51,6 +55,12 @@ enum bp_item_idx {
     BP_MAX = BP_HCM
 };
 
+enum bp_status {
+    BP_UNUSED,			/* not tracked, values are invalid */
+    BP_WANTED,			/* tracked, values are still invalid */
+    BP_USED			/* tracked, values are valid */
+};
+
 /*
  * Stuff to track for a sector.
  * A bp map is an array of these.
@@ -58,7 +68,7 @@ enum bp_item_idx {
 struct bp {
     short bp_item[BP_MAX + 1];
     short bp_avail;
-    unsigned char bp_tracked;
+    unsigned char bp_status;
 };
 
 /* Map i_type to enum bp_item_idx. */
@@ -68,6 +78,33 @@ static enum bp_item_idx bud_key[I_MAX + 1] = {
     BP_LCM, BP_HCM, BP_NONE, BP_NONE
 };
 
+/* Return true when @bp doesn't track @sp. */
+int
+bp_skip_sect(struct bp *bp, struct sctstr *sp)
+{
+    return bp && bp[sp->sct_uid].bp_status == BP_UNUSED;
+}
+
+/* Return true when @bp doesn't track @unit's sector. */
+int
+bp_skip_unit(struct bp *bp, struct empobj *unit)
+{
+    return bp && bp[XYOFFSET(unit->x, unit->y)].bp_status == BP_UNUSED;
+}
+
+/* If @unit belongs to the player, start tracking its sector in @bp. */
+void
+bp_consider_unit(struct bp *bp, struct empobj *unit)
+{
+    int id;
+
+    if (!bp || unit->own != player->cnum)
+	return;
+    id = XYOFFSET(unit->x, unit->y);
+    if (bp[id].bp_status == BP_UNUSED)
+	bp[id].bp_status = BP_WANTED;
+}
+
 /* Set the values tracked in @bp for sector @sp to the values in @sp. */
 void
 bp_set_from_sect(struct bp *bp, struct sctstr *sp)
@@ -83,11 +120,11 @@ bp_set_from_sect(struct bp *bp, struct sctstr *sp)
 	    bp[sp->sct_uid].bp_item[idx] = sp->sct_item[i];
     }
     bp[sp->sct_uid].bp_avail = sp->sct_avail;
-    bp[sp->sct_uid].bp_tracked = 1;
+    bp[sp->sct_uid].bp_status = BP_USED;
 }
 
 /*
- * Copy the values tracked in @bp for sector @sp back to @sp.
+ * Copy the values tracked in @bp for sector @sp back to it.
  * Values must have been set with bp_set_from_sect().
  */
 void
@@ -96,7 +133,7 @@ bp_to_sect(struct bp *bp, struct sctstr *sp)
     i_type i;
     enum bp_item_idx idx;
 
-    if (CANT_HAPPEN(!bp[sp->sct_uid].bp_tracked))
+    if (CANT_HAPPEN(bp[sp->sct_uid].bp_status != BP_USED))
 	return;
 
     for (i = I_NONE + 1; i <= I_MAX; i++) {
@@ -110,6 +147,7 @@ bp_to_sect(struct bp *bp, struct sctstr *sp)
 /*
  * Return a new bp map.
  * Caller should pass it to free() when done with it.
+ * The map initially tracks the sectors belonging to the player.
  */
 struct bp *
 bp_alloc(void)
@@ -119,6 +157,8 @@ bp_alloc(void)
     int i;
 
     for (i = 0; i < n; i++)
-	bp[i].bp_tracked = 0;
+	bp[i].bp_status = getsectid(i)->sct_own == player->cnum
+	    ? BP_WANTED : BP_UNUSED;
+
     return bp;
 }
diff --git a/src/lib/update/land.c b/src/lib/update/land.c
index e6434cf3..1db2ee18 100644
--- a/src/lib/update/land.c
+++ b/src/lib/update/land.c
@@ -53,7 +53,7 @@ static void landrepair(struct lndstr *, struct natstr *, struct bp *,
 		       int, struct budget *);
 static int feed_land(struct lndstr *, int);
 
-void prep_lands(int etus)
+void prep_lands(int etus, struct bp *bp)
 {
     int mil, i;
     double mil_pay;
@@ -69,6 +69,7 @@ void prep_lands(int etus)
 	    continue;
 	}
 
+	bp_consider_unit(bp, (struct empobj *)lp);
 	mil = lp->lnd_item[I_MILIT];
 	mil_pay = mil * etus * money_mil;
 	nat_budget[lp->lnd_own].mil.count += mil;
@@ -87,6 +88,8 @@ prod_land(int etus, struct bp *bp, int build)
     for (i = 0; (lp = getlandp(i)); i++) {
 	if (lp->lnd_own == 0)
 	    continue;
+	if (bp_skip_unit(bp, (struct empobj *)lp))
+	    continue;
 	upd_land(lp, etus, bp, build);
     }
 }
diff --git a/src/lib/update/main.c b/src/lib/update/main.c
index a19be3bf..91d9c457 100644
--- a/src/lib/update/main.c
+++ b/src/lib/update/main.c
@@ -90,12 +90,12 @@ update_main(void)
 	nat_budget[n].start_money = nat_budget[n].money = np->nat_money;
     }
 
+    prep_ships(etu, NULL);
+    prep_planes(etu, NULL);
+    prep_lands(etu, NULL);
     logerror("preparing sectors...");
     prepare_sects(etu, NULL);
     logerror("done preparing sectors.");
-    prep_ships(etu);
-    prep_planes(etu);
-    prep_lands(etu);
     for (i = 0; i < MAXNOC; i++)
 	pay_reserve(getnatp(i), etu);
 
diff --git a/src/lib/update/plane.c b/src/lib/update/plane.c
index 0bec6d67..e9c2ba57 100644
--- a/src/lib/update/plane.c
+++ b/src/lib/update/plane.c
@@ -48,7 +48,7 @@ static void upd_plane(struct plnstr *, int, struct bp *, int);
 static void planerepair(struct plnstr *, struct natstr *, struct bp *,
 			int, struct budget *);
 
-void prep_planes(int etus)
+void prep_planes(int etus, struct bp *bp)
 {
     int mil, i;
     double mil_pay;
@@ -64,6 +64,7 @@ void prep_planes(int etus)
 	    continue;
 	}
 
+	bp_consider_unit(bp, (struct empobj *)pp);
 	mil = plchr[pp->pln_type].pl_mat[I_MILIT];
 	/* flight pay is 5x the pay received by other military */
 	mil_pay = mil * etus * money_mil * 5;
@@ -82,6 +83,8 @@ prod_plane(int etus, struct bp *bp, int buildem)
     for (i = 0; (pp = getplanep(i)); i++) {
 	if (pp->pln_own == 0)
 	    continue;
+	if (bp_skip_unit(bp, (struct empobj *)pp))
+	    continue;
 	upd_plane(pp, etus, bp, buildem);
     }
 }
diff --git a/src/lib/update/prepare.c b/src/lib/update/prepare.c
index 364ae80c..f966a651 100644
--- a/src/lib/update/prepare.c
+++ b/src/lib/update/prepare.c
@@ -76,6 +76,8 @@ prepare_sects(int etu, struct bp *bp)
     }
 
     for (n = 0; NULL != (sp = getsectid(n)); n++) {
+	if (bp_skip_sect(bp, sp))
+	    continue;
 	bp_set_from_sect(bp, sp);
 	if (sp->sct_type == SCT_WATER || sp->sct_type == SCT_SANCT)
 	    continue;
diff --git a/src/lib/update/sect.c b/src/lib/update/sect.c
index 3dd72b8e..de26026f 100644
--- a/src/lib/update/sect.c
+++ b/src/lib/update/sect.c
@@ -233,6 +233,8 @@ produce_sect(int etu, struct bp *bp)
     double cost;
 
     for (n = 0; NULL != (sp = getsectid(n)); n++) {
+	if (bp_skip_sect(bp, sp))
+	    continue;
 	if (sp->sct_type == SCT_WATER || sp->sct_type == SCT_SANCT)
 	    continue;
 
diff --git a/src/lib/update/ship.c b/src/lib/update/ship.c
index e97c8d92..7b5ee00e 100644
--- a/src/lib/update/ship.c
+++ b/src/lib/update/ship.c
@@ -56,7 +56,7 @@ static void shiprepair(struct shpstr *, struct natstr *, struct bp *,
 static void ship_produce(struct shpstr *, int, struct budget *);
 static int feed_ship(struct shpstr *, int);
 
-void prep_ships(int etus)
+void prep_ships(int etus, struct bp *bp)
 {
     int mil, i;
     double mil_pay;
@@ -72,6 +72,7 @@ void prep_ships(int etus)
 	    continue;
 	}
 
+	bp_consider_unit(bp, (struct empobj *)sp);
 	mil = sp->shp_item[I_MILIT];
 	mil_pay = mil * etus * money_mil;
 	nat_budget[sp->shp_own].mil.count += mil;
@@ -90,6 +91,8 @@ prod_ship(int etus, struct bp *bp, int build)
     for (i = 0; (sp = getshipp(i)); i++) {
 	if (sp->shp_own == 0)
 	    continue;
+	if (bp_skip_unit(bp, (struct empobj *)sp))
+	    continue;
 	upd_ship(sp, etus, bp, build);
     }
 }