Order Code IB10062
Issue Brief for Congress
Received through the CRS Web
Defense Research:
DOD’s Research, Development,
Test and Evaluation Program
Updated October 23, 2002
John D. Moteff
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Total RDT&E Budget
Science and Technology Funding
Ballistic Missile Defense
Other Issues
Evolutionary Acquisition/Spiral Development
Research and Technology Protection
Operational Test and Evaluation
Funding Tables
LEGISLATION
FOR ADDITIONAL READING

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Defense Research: DOD’s Research, Development, Test and
Evaluation Program
SUMMARY
In its FY2003 budget proposal, the Bush
appropriated last year.
Administration requested $379 billion for the
Department of Defense, including $53.9
The House authorized $2.5 billion more
billion for the Research, Development, Test
for RDT&E than what the Administration
and Evaluation (RDT&E) account. This is
requested, $2.1 billion being DERF-related
about $5 billion more than what Congress
funds transferred to regular RDT&E accounts.
appropriated for the RDT&E account in
The bill provides $10.0 billion for S&T. This
FY2002. The Administration also requested
includes $332 million in DERF-related S&T
$67 million in research and development
The Senate authorized $55.7 billion for
within the Defense Health Program and $303
RDT&E, this includes $1.9 billion in DERF-
million for research and development in the
related funds transferred to regular RDT&E
Chemical Agents and Munitions Destruction
accounts. The Senate bill also recommended
Program. The Administration also requested
$10.2 billion for S&T. This includes $293 in
$20 billion for a Defense Emergency Re-
DERF-related funds. The Senate also voted to
sponse Fund (DERF) to support the on-going
reduce BMD RDT&E by roughly $800 mil-
war on terrorism. Half the fund would sup-
lion, but added that amount to an account that
port specific projects identified by the Admin-
the President may spend on either counter-
istration (including $2.2 billion in additional
terrorism activities or BMD RDT&E.
RDT&E). The other half would function like
a contingency fund.
The House voted to appropriate $57.8
billion for RDT&E, $3.9 billion more than
According to the FY2003 budget, the
what the President’s requested. It also voted
Administration is planning to request $288.5
to increase S&T funding to$11.4 billion. The
billion for RDT&E through FY2007, with
Senate voted to appropriate $56.1 billion for
annual funding reaching $60.7 billion in
RDT&E, $10.8 billion for S&T programs.
FY2005. Funding would decline after that.
Both the House and Senate have ap-
The Administration’s request for the
proved the FY2002 defense appropriations
S&T portion of the FY2003 RDT&E budget
conference report. The conference report
was $9.7 billion. This is about $200 million
appropriated $58.2 billion for RDT&E, of
below the amount appropriated last year.
which $11.5 billion would go toward S&T.
However, DOD counted $213 million in
This includes reductons to the RDT&E ac-
research and development within the transfer
count totally $407 million to take into consid-
account mentioned above as S&T funding.
eration savings from management initiatives
This would bring the FY2003 S&T request to
and to reduce cost growth in information
$9.9 billion. The $9.9 billion represents 2.7%
technology developments. It does not include
of DOD’s topline, short of the Administra-
additional reductions associated with changes
tion’s own goal of 3%.
in economic assumptions. The report also
appropriated $459 million for RDT&E in the
The Administration requested $6.7 bil-
Defense Health Program, and $303 million in
lion in research and development for missile
RDT&E for the Chemical Agent and Muni-
defenses, about $300 million below what was
tions Destruction Program.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The House approved the FY2003 defense appropriations conference report (H.Rept.
107-732 accompanying H.R. 5010) on October 10. The Senate approved it on October 16.
The conference report appropriated $58.2 billion for RDT&E, minus some reductions
mentioned below. The defense authorization bill remains in conference.
BACKGROUND AND ANALYSIS
Congress supports the research and development efforts of the Department of Defense
(DOD) with a Research, Development, Test and Evaluation (RDT&E) appropriation. The
appropriation primarily supports the development of the nation’s future military hardware
and software and the technology base upon which those products rely. It is the federal
government’s single largest research and development account. Besides supporting the
nation’s military needs, some of the technology developed with RDT&E funds spills over
into the commercial sector. For these reasons, RDT&E funding draws a considerable amount
of attention within Congress each year.
During the Clinton Administration’s tenure, Congress appropriated between $34 billion
and $41 billion a year in RDT&E funding. Almost 80% of the RDT&E funding goes toward
the development and demonstration of operational military hardware and software. The rest,
over $10 billion in FY2001, goes toward basic research and more fundamental technology
development and demonstration, referred to as the Science and Technology (S&T) program.
Most of the RDT&E appropriation is provided for in Title IV of the defense
appropriations bills (Title II in the defense authorization bill). However, over the last couple
years, Congress has also provided RDT&E funds separately in two other accounts: the
Defense Health Program and the Army’s Chemical Agents and Munitions Destruction
Program. The Defense Health Program supports a wide range of activities, including
research in areas such as breast and prostate cancer. The Chemical Agents and Munitions
Destruction Program supports activities to destroy the U.S. inventory of lethal chemical
agents and munitions to avoid future risks and costs associated with storage. Last year,
Congress also appropriated $113 million in RDT&E funds within a $478 million Counter-
Terrorism and Operational Response Transfer Fund (Title IX of the Department of Defense
Appropriations for FY2002—P.L. 107-117). The RDT&E funds were directed to three
areas: antibiotics and vaccines ($44 million), biological warfare exposure treatment ($30
million), and information security detection, warning, and response capabilities ($39
million). While this issue brief tracks RDT&E funding in these other areas, most of the
focus of the issue brief is on those RDT&E funds provided in Title IV.

Every year, Congress must review and approve or revise how much money the
Administration requests in RDT&E funding and how that money is allocated. This issue
brief tracks the evolution of the RDT&E budget from the Administration’s budget request
through Congress’s final authorization and appropriation (see Table 2), and discusses key
issues that arise.
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Funding data presented in this issue brief are expressed as total obligational authority
(TOA), except where noted otherwise. Total obligational authority is a budget concept used
by DOD that represents the value of the direct Defense program for a fiscal year. It is
equivalent to the sum of all budget authority granted by Congress, plus amounts from other
sources authorized to be credited to certain accounts, plus unobligated balances of funds
from prior years which remain available for obligation. Rescissions, transfers and other
budget modifications affect TOA and budget authority (BA) differently. Therefore, TOA and
BA differ by a few tens of millions of dollars when examining past year funding levels.
Budget requests are in terms of budget authority and Congress authorizes and appropriates
budget authority. However, funding data for individual program elements and cumulative
RDT&E budget activities in DOD’s R-1 document (used by this issue brief as the primary
source of budget data in Tables 1 and 2) are reported as TOA. To remain consistent, all data
in this brief are expressed as TOA, except where noted. It should be noted that in the current
year (in this case FY2003) BA and TOA for RDT&E are the same. Differences occur only
when considering past year activities.
For a general discussion of the fundamental principles and concepts of the RDT&E
account, as well as long term budget trends and recurring issues, the reader is referred to CRS
Report 97-316 SPR, The Department of Defense’s Research, Development, Test and
Evaluation Program: A Primer. For a general discussion of the basics of the overall defense
budget, the reader is referred to CRS Report RL30002, A Defense Budget Primer. For a
discussion of last year’s defense appropriations bills in their entirety as they progressed
through the House, Senate, and conference, the reader is referred to CRS Appropriations
Report RL31005, Appropriations and Authorization for FY2002: Defense.
Total RDT&E Budget
The Bush Administration requested $53.9 billion in Title IV RDT&E funding. This is
about $5 billion more than what Congress appropriated for Title IV RDT&E for FY 2002.
Furthermore, the budget sets out a funding plan that would request $288.5 billion for
RDT&E through FY2007, with annual funding reaching $60.7 billion in FY2005. See Figure
1. The Bush Administration had intended to increase military research and development
prior to September 11. The budget now reflects additional support for RDT&E in response
to the war on terrorism.
Figure 1. Total RDT&E: FY2003 Budget
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In addition to the $53.9 billion in Title IV RDT&E funding, the Bush Administration
also requested RDT&E funds for the Defense Health Program ($67 million) and the Army’s
Chemical Agents and Munitions Destruction Program ($303 million). In FY2002, these
programs received $464 million and $274 million, respectively. The Administration also
proposed a $20.1 billion Defense Emergency Response Fund. Roughly half of this would
provide support for specific anti-terrorism activities (such as protecting military facilities and
personnel, improving world-wide command and control capabilities, and procuring specific
equipment). Of this amount, $2.2 billion was requested for various RDT&E accounts. The
other half of this fund would be spent on a contingency basis.
Historically, RDT&E funding peaked in constant dollars in FY1987, declining over the
next 8 years. Funding leveled off in FY1995 and FY1996 before beginning to rise again, due
primarily to Congress appropriating more than what the Clinton Administration had
requested (Figure 2). The FY2003 request would exceed, in constant FY2003 dollars, the
peak set in FY1987.
Figure 2. RDT&E Funding Trend
(in millions of dollars)
60000
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50000
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ta
to
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1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002
fiscal year
current $
FY2003$
In the past, the ability of Congress to increase RDT&E funding was constrained by the
1997 budget agreement which had set caps on defense spending. Increases in RDT&E had
to come at the expense of other Department of Defense programs, or be declared as
emergency spending. FY2000 was the first year Congress could increase defense spending
above the agreement’s caps by offsetting those increases with decreases in other non-defense
discretionary programs. The constraint of budget caps subsided when the prospect of future
budget surpluses would allow rising DOD’s budget, including RDT&E, without the need to
offset the increases. The Bush Administration had indicated its intention to provide even
larger increases in defense spending and RDT&E. However, prior to the September 11
terrorist attacks at the World Trade Center and the Pentagon, a tax cut and a declining
economy introduced new stresses into the budget environment. Since September11,
declining surpluses do not appear to be an issue as Members have expressed a willingness
to provide the necessary funding to meet the terrorist challenge. Even so, RDT&E must
always compete with other priorities within the DOD budget, including quality of life,
readiness, and, perhaps now more so than before, operations.
The House approved its defense authorization bill (H.R. 4546, H.Rept. 107-436) on
May 10. The bill recommended $56.4 billion for RDT&E, $2.5 billion more than the
Administration requested. This included $2.1 billion of DERF-related projects transferred
to the regular RDT&E accounts. The House did not authorize a separate transfer account for
these projects. The House chose to address the contingency half of the Administration’s
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Defense Emergency Response Fund (DERF) request in a separate bill (H.R. 4547). The
House approved the Administration’s request for RDT&E within the Defense Health
Program and the Chemical Agents and Munitions Destruction Program.
The Senate approved its authorization bill (S. 2514, S.Rept. 101-151) on June 27. The
bill authorized $55.7 billion for Title IV RDT&E, $1.8 billion more than the Administration
requested. Like the House, this included $1.9 billion for RDT&E projects identified in the
DERF request. The $55.7 billion figure also includes reductions associated with savings the
Senate expects the Department to achieve due to improvement in financial management and
contract services. The Committee also recommended approval of the Administration’s
request for RDT&E within the Defense Health Program and the Chemical Agents and
Munitions Program.
The House approved its defense appropriation bill (H.R. 5010, H. Rpt. 107-532) on
June 27, and provided $57.8 billion for RDT&E, approximately $3.9 billion more than the
Administration requested. The Senate approved is defense appropriation bill (H.R.5010
amended, S. Rpt. 107-213) on August 1, and provided $$56.1 billion for RDT&E.
Both the House (October 10) and Senate (October 16) approved the defense
appropriations conference report (H.R. 5010, H. Rpt. 107-732). The report appropriated
$58. 6 billion for the Title IV RDT&E account. However, this figure was reduced by a total
of $407 million to account for savings associated with certain management initiatives
(Section 8100 of the bill) and to reduce cost growth in information technology developments
(see Section 8109 of the bill). Section 8135 of the bill would reduce this figure further by
allocating Title IV RDT&E its share of a $1.4 billion general reduction to reflect revised
economic assumptions. Therefore, the net appropriation for Title IV RDT&E is around $58
billion. This is approximately $10 billion mor than what was appropriated for FY2002,and
approximately $5 billion more than what the Bush Administration had requested. In
addition, the conference report appropriated $459 million for RDT&E within the Defense
Health Program and $303 billion for RDT&E in the Chemical Agents and Munitions
Demilitarization Program. The former is a significant increase over the amount requested
and includes $150 million and $85 million for breast cancer and prostrate cancer research,
respectively.
Science and Technology Funding
DOD’s RDT&E budget supports a wide range of activities, from basic research (e.g.,
atmospheric sciences) to the full scale development of large military systems (e.g., the F-22
fighter). The RDT&E budget is accordingly divided into seven budget activities: basic
research, applied research, advanced technology development, demonstration and validation,
engineering and manufacturing development, management support, and operational systems
development. DOD has designated these activities as 6.1 through 6.7, respectively (see
Tables 1 and 2 at the end of this issue brief).
Basic research (6.1), applied research (6.2), and advanced technology development (6.3)
together are referred to as DOD’s Science and Technology (S&T) program. S&T projects
seek new ways of accomplishing tasks of military value and the underlying scientific and
engineering principles involved. S&T projects are not directed at developing specific
operational weapon systems, although they may support such development by solving
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specific problems. Many of the weapon systems used with such effectiveness in recent
military actions, can trace their origins to earlier S&T projects. Besides developing the
technology base upon which future weapons systems rely, S&T programs (primarily 6.1
projects) support the future manpower expertise that DOD relies upon. A large share of
university research in certain scientific and engineering disciplines (e.g. materials
engineering and math) is supported by the S&T program (especially 6.1 programs).
S&T funding has followed a slightly different trend than overall RDT&E funding (see
Figure 3). As total defense (and total RDT&E) spending started to decline in the late 1980s,
Figure 3. S&T Funding Trend
(in millions $)
ty 12000
10000
authori
8000
onal
6000
4000
igati
2000
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0
total
1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
fiscal year
current $
FY03 $
efforts were made to maintain S&T spending levels, especially 6.1 and 6.2 activities. And,
in fact, funding for S&T generally increased over the next 6 years. FY1993 S&T funding,
impacted by the Gulf War, saw a sharp increase. After FY1993, however, S&T funding
began to decline. Over the next 6 years it fell back to FY1987 levels as measured in constant
FY2001 dollars. The downward trend after FY1993 raised some concern within the S&T
community (including universities), especially since the Clinton Administration’s multi-year
budgets continued to project declining funds for S&T in the out-years.
In the last three years, Congressional action has essentially reversed the downward
trend. In FY2000, Congress appropriated nearly $1 billion more for S&T than what the
Clinton Administration had requested and in FY2001 appropriated $1.5 billion more than
what was requested (appropriating $9.0 billion). In FY2002, the Bush Administration
requested $8.8 billion for S&T, a significant increase over what the Clinton Administration
was planning to request, but below what Congress had appropriated in FY2001. Congress
again increased S&T funding above the requested level, appropriating nearly $10 billion in
FY2002. The Bush Administration’s FY2003 budget would keep S&T at approximately $10
billion in current dollars for the next three years, before allowing it to drop to $9.5 billion in
FY2006 and FY2007.
Assuring adequate support for S&T activities is seen by some in the defense community
as imperative to maintaining U.S. military superiority. But, because the time between
specific S&T projects and successful new operational systems is long and unpredictable, and
because it is difficult to calculate a return on investment for the S&T program as a whole,
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it is difficult to determine what is a sufficient investment. There is concern in the S&T
community that support within Congress and within DOD’s own acquisition community may
wane when faced with competing budgetary demands. They viewed the decline in S&T
funding after FY1993 as a sign that DOD was under-investing in S&T.
The FY1999 defense authorization bill (P.L. 105-261, H.R. 3616, Section 214)
expressed the sense of Congress that S&T funding between FY2000 and FY2008 should
increase no less than 2% above inflation per year, using the FY1999 request as the baseline.
The Clinton Administration’s subsequent budgets made an effort to meet these goals in the
budgets’ current year, but were never able to sustain the commitment into the out-years.
However, Congressional action has more than achieved that rate of increase the last four
years (see Figure 4). The F2003 Bush budget for S&T would also achieve this goal.
Figure 4. Inflation + 2% vs Appropriations/Budgets
(in millions of current $)
12000
9000
6000
3000
0
total obligational authority
1999
2000
2001
2002
2003
2004
2005
2006
2007
fiscal year
baseline + inflation + 2%
appropriation
FY03 budget
In its defense authorization bill, the House authorized $10.0 billion for S&T. However,
it also recommended $11 million less than what the Administration requested for basic
research. The total S&T recommendation includes $332 million allocated from the Defense
Emergency Response Fund. The House voted to appropriate $11.4 billion for S&T. The
appropriators did not go along with the authorization bill reducing basic research, but instead
increased basic research slightly above the Administration’s request. Between reducing
DOD overall topline compared to the Administration’s request and its increase in S&T
funding, the House S&T appropriations reached 3.2% of DOD’s topline figure.
The Senate authorized $10.2 billion for S&T in FY2003. This includes $293 million
transferred from the DERF request. The Committee recommended $60 million more in basic
research than what the House authorized. The Senate voted to appropriate $10.8 billion for
S&T, this is 3.0% of the total DOD topline appropriated by the Senate.
The FY2003 defense appropriations conference report appropriated $11.5 billion for
S&T. This does not take into considerations S&T’s share of the general reductions to the
overall RDT&E account.
In testimony before the Senate Armed Services Committee last year (June 5, 2001),
Under Secretary of Defense for Acquisition, Technology, and Logistics Pete Aldridge
suggested that S&T should receive between 2.5 percent and 3 percent of DOD’s total budget,
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based on the percent of sales certain high technology sectors of private industry invest in
research. This became official policy in the 2001 Quadrennial Review, released in
September, 2001, which stated that DOD planned to stabilize S&T funding at 3% of overall
DOD funding. A number of Members have embraced this objective and the Senate Budget
Committee has added it to the Senate Budget Resolution (S. Con. Res. 100). However, the
ability of S&T budgets to keep up with overall DOD budgets has already become an issue.
The Bush Administration’s FY2003 S&T budget request does not make the 3% goal, nor do
any of the other planned annual budgets through FY2007 (see Figure 5). Also, as the policy
is stated, it would imply that should overall DOD budgets decline, S&T would decline as
well.
Figure 5. S&T as a Share of Total DOD
Spending
(in millions of current $)
y 12500
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FY01
FY03
FY05
FY07
Total S&T
% of DOD Topline
How much should DOD spend on S&T? The 2% plus inflation goal established by
Congress was essentially an arbitrary target. The goal of 3% of DOD’s total budget is also
arbitrary, but is based, in part, on a June 1998 report by the Defense Science Board (DSB—
Defense Science and Technology Base for the 21st Century). The report reviewed how firms
in several technologically sophisticated industries decide how much to spend on research.
The Board found that firms do not typically go through an objective analytical process to
determine how much to spend. Instead firms rely more on subjective “rules of thumb” that
consider other investment needs, competitive pressures, etc. The metric is generally
characterized in terms of investment as a percent of sales. The Board recommended drawing
an analogy between sales revenue in the private sector and DOD’s overall budget and using
the pharmaceutical industry, which the DSB reported as having the highest commercial
investment in research as percent of sales (3.4%), as a benchmark.
The DSB report argued that the pharmaceutical industry is an appropriate model for
deciding how much DOD should spend on S&T because it is considered a high technology
industry and that the competitiveness of firms depends on the ability to develop new
products. But comparisons stopped there and the analogy may be inadequate. For example,
the pharmaceutical industry is primarily manufacturing oriented and revenues are generated
on the sale of products. A large part of DOD’s mission and budget could be considered
service oriented. If the pharmaceutical industry were also involved in delivery of services,
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would its investment in research as a percentage of sales still be as high? Perhaps only that
part of DOD’s budget devoted to acquisition should be used as an analog to pharmaceutical
revenues. Also, the DSB report chose not to consider as part of DOD’s current investment
the amount DOD reimburses private contractors for independent research and development
(IR&D). In 1997 (the last year for which figures were kept), DOD allowed defense
contractors to claim $2.7 billion in IR&D expenses considered relevant to DOD’s needs.
The DSB report suggested that this should not be considered since the results of this research
are not held solely by DOD. Nor did the DSB report make any allowance for the fact that
the United States already significantly outspends its competitors (i.e. foreign governments)
in defense research.
The amount of money appropriated to S&T, relative to the overall amount appropriated
to DOD in the FY2003 defense appropriations bill, and before the reductions mentioned
above are applied, meets the 3% objective.
Ballistic Missile Defense
The Bush Administration has proposed major changes in the structure, funding, and
acquisition strategy for ballistic missile defense, including changing the name of the
organization from Ballistic Missile Defense Organization to Missile Defense Organization
(MDO). The Administration has also gone forward with its stated goals of withdrawing from
the Anti-Ballistic Missile (ABM) Treaty, which for decades had put constraints on the
development of ballistic missile defenses as part of the overall strategic arms control strategy
between the United States and the former Soviet Union. For a more thorough discussion of
missile defense (MD) policies and issues, see For Additional Reading for other CRS
products on the topic.
In 2001, the Administration proposed, and Congress went along with, a reduction in
the number of program elements associated with the program as well as doing away with
programmatic distinctions between theater and national missile defenses (the Administration
envisions that theater and national systems will be melded into an integrated global system).
Consequently, RDT&E program elements are now divided along “functional” lines (boost,
midcourse, and terminal segments, with system integration, etc.). The Administration also
promised to increase greatly the amount of funding devoted to ballistic missile defense.
Also, rather than follow a tradition acquisition approach, where a program heads toward
a definitive system architecture designed to meet specific performance criteria, the
Administration is proposing a new evolutionary approach (being called evolutionary
acquisition, see Other Issues) where the final overall system architecture is not determined
ahead of time but will evolve as new elements contributing to the global capabilities are
brought on line. The Administration has also floated a concept called capabilities-based
management that it intends to use with missile defense. Citing these conceptual models of
development as the reason, the Administration suggests that it can no longer provide
Congress with much of the programmatic projections that the program has provided in the
past. The Administration claims these projections were too constraining of development and
deployment and unreliable in any event. Some Members have expressed concerns that
without this information there is no way for Congress to exercise its oversight
responsibilities.
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For FY2003, the Bush Administration requested $6.7 billion for the RDT&E part of the
Missile Defense program. This is approximately $250 million less than what was available
for MD RDT&E in FY2002. The Administration again, as it did last year, proposed
transferring more mature elements of the program (e.g. PAC-3) to the Services (to the Army
in the PAC-3 case). Congress did not approve of this in FY2002. During the Clinton
Administration, missile defense RDT&E was funded between $3 billion and $4 billion per
year.
The House authorized $7.0 billion for missile defense RDT&E. This included increases
in the missile defense technology program, and the systems, midcourse, and terminal phase
programs. The recommendation reduced the Administration’s request for the boost phase
program. The House appropriated $6.8 billion.
The Senate authorized $5.9 billion for BMD RDT&E and another $813 million which
the President may spend on either counter-terrorism activities or BMD RDT&E. The Senate
appropriated $6.1 billion for BMD RDT&E and also appropriated another $813 million as
previously authorized.
The FY2003 defense appropriations conference report appropriated $6.7 billion for
ballistic missile defense RDT&E, the same amount requested by the Administration. Major
changes to the President’s request included less funding for space-based laser and for boost
phase kinetic kill development and more funding for the joint U.S.-Israeli Arrow program.
Other Issues
Evolutionary Acquisition/Spiral Development
The Bush Administration has stated its support of an acquisition concept called
“evolutionary acquisition/spiral development.” However, in early statements regarding this
concept, different officials used the terms “evolutionary acquisition” and “spiral
development” interchangeably. Also, the explanation of what these concepts mean has
varied, causing some Members to be concerned about the impact these concepts might have
on the ability to provide adequate oversight .
These concepts are not entirely new, the Air Force has been developing them for a
number of years, and to some extent they merely expand upon more traditional acquisition
concepts such as block upgrades of existing operational systems and pre-planned product
improvements (P3I). In an effort to clear up some of the uncertainty involving the
terminology, the Undersecretary of Defense for Acquisition, Technology, and Logistics
(UDATL) released a memorandum on April 12, 2002, which provided an official definition
of these terms. However, these definitions provide little insight in how the concepts are
implemented. Perhaps a more useful document is the Air Force Instruction 63-123,
explaining Evolutionary Acquisition for Command and Control Systems (see:
[http://afpubs.hq.af.mil.])
Essentially, evolutionary acquisition is an attempt to develop systems incrementally,
achieving useful capabilities in stages (say in 5 years intervals) rather than taking 20 years
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to fully develop all of the capabilities ultimately desired in a system. Conceptually, this
allows for more accurate program projections regarding cost and performance and would
allow a program, at each successive stage, to integrate the very latest mature technology
available. It also would allow a system (albeit with more modest capabilities at first) to be
fielded sooner, with input from the field being used to inform the next stage of development.
Spiral development involves making tradeoffs between cost, performance, and operational
concepts within a given stage of evolutionary development. This requires rapid prototyping
and early and frequent operational testing of the prototype, with lessons learned fed back into
the development process. Evolutionary acquisition differs from block upgrades or pre-
planned product improvements in that an evolutionary acquisition program does not know
ahead of time what the ultimate system design and capability will be. Only the next stage
of development will have a clearly defined capability goal which must be incrementally
better than the current stage, yet cost-effective (i.e. worth the cost to develop). These goals
will be determined in part by the maturity of the technology available for the next stage.
While the lack of common definitions and understanding among the proponents of these
concepts has created uncertainty among some Members, it is not yet clear whether a common
definition and understanding will resolve all of the Members’ concerns or just raise new
ones. For example, planning horizons under these concepts are much shorter and it would
seem that ultimate production volumes, with the subsequent impacts on jobs, etc. less certain.
While there has been some conceptual development, led early on by the Air Force,
regarding evolutionary acquisition/spiral development, the term capabilities-based
management has also been added to the systems development lexicon. This idea has not yet
undergone the same level of conceptual development as evolutionary acquisition. However,
the Administration has stated that it will use this concept to develop missile defenses and has
cited this decision as reason for providing Congress with much less program information
than Congress has received in the past. Missile defense is also exempt from some of the
Department’s own internal oversight processes. The concept is being applied primarily to
missile defense and not to other programs.
Additional uncertainty over what this concept is, its apparent preferred application to
missile defense, and its apparent impact on the information the Administration is willing to
provide Congress, has some Members concerned. In last year’s Defense Authorization Act
for FY2002 (P.L.107-107), Congress required that each system entering engineering and
manufacturing development (i.e the 6.5 stage of development) be identified by a separate
program element number in the budget. Also, the Secretary must submit to Congress a
program plan for these elements that include the cost, schedule, test, and performance goals.
Also, for those programs not yet entering engineering and manufacturing, the Secretary was
required to include in his budget justification documents, information on the previous year’s
funding, expected funding for the next 6 years, and a detailed schedule of significant
deliveries of hardware and software, decision points, and test events.
This year, the Senate Armed Services Committee recommended in its defense
authorization bill that the Secretary of Defense provide guidance to the Services on how to
conduct evolutionary acquisition and spiral development. Furthermore, the Committee
recommends that the Secretary report to Congress on how the Department plans to meet
statutory requirements for providing Congress with programmatic information while
implementing evolutionary acquisition programs. Meanwhile, the Committee requested this
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information, which it says it has not received in either of the last two budgets, for certain
missile defense projects. Finally, the Committee recommended that programs utilizing the
spiral development concept be conducted on a pilot basis.
The House bill, while acknowledging the Missile Defense Agency’s (MDA)
responsiveness to specific information requests, also requires that MDA provide the
Congress with the performance goals and development baselines generated in its internal
Technical Objectives and Goals document. It also requires that MDA provide a funding
profile for developing the major components for each project that may be fielded.
Research and Technology Protection

In March 2002, the Assistant Secretary of Defense for Command, Control,
Communications, and Intelligence (along with the Undersecretary of Defense for
Acquisition, Technology, and Logistics), and the Director of Operational Test and
Evaluation, released a draft of a proposed revision to Department of Defense Directive
(DODD 5200.39, Security, Intelligence, and Counterintelligence Support to Acquisition
Program Protection). The proposal would expand upon the current policy protecting critical
acquisition program information, technology and/or systems (collectively referred to as CPI),
by extending the directive to include the protection of critical research technology (CRT) and
by prescribing, in more detail, the protections that must be put in place. The current policy
specifically applies to certain acquisition programs and not to Science and Technology
(S&T) programs. The proposed policy would cover information and technology generated
by all RDT&E activities, including S&T activities. Under the proposal, all sites (including
contractor sites) at which RDT&E activities take place must have a security plan. Among
the protections required is advance approval for all public releases of all technical data
determined to be critical research. The proposal states that the added precautions are needed
to better protect the technological edge of the United States both militarily and economically.
Critics are concerned that U.S. scientists and engineers will choose not to do business with
the Department of Defense under the proposed controls and that research, especially basic
research, progresses best in an free and open exchange of information and ideas.
However, the draft now has been set aside while a set of integrated product teams (IPTs)
led by the Deputy Undersecretary of Defense for Laboratories and Basic Sciences and Deputy
Director of Defense Research and Engineering review the policy. While the draft policy may
be modified, the current policy, which only applies to acquisition programs, may still be
changed.
Operational Test and Evaluation
The Senate Armed Services Committee recommended giving the Director of
Operational Test and Evaluation more authority over the funding and improvement of the
Test and Evaluation facilities run by the Services. Currently, the Director of Operational
Test and Evaluation provides centralized oversight of all test and evaluation facilities and
activities, but the funding and operations of the facilities are primarily supported by the
Services. A December 2000 report by the Defense Science Board and the FY2001 annual
report of the Director of Operational Test and Evaluation found the test and evaluation
function significantly lacking. According to these reports, fewer systems were undergoing
fewer tests (due in part to the shifting of costs to individual development programs), some
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tests that were done were not adequate, and in some cases corrective actions identified by
tests were not taken. The reports also indicated that the number of facilities were not an
issue, but they lacked certain equipment, size, and targets.
Based on the reports mentioned above, the Committee made the following
recommendations: establish a Department of Defense Test and Evaluation Resource
Enterprise, which reports to the Director of Operational Test and Evaluation, and which
would be responsible for funding investments, operations, development and management of
Major Range Test and Evaluation Base facilities; transfer of .625% of the Services’ 6.4, 6.5
and 6.7 accounts in FY2003 to Department test and evaluation accounts (the Senate approved
this in appropriations); increase the authorization for the Central Test and Evaluation
Investment Program; require a single financial management system for all Test and
Evaluation facilities; require a strategic human resource plan; and, require approvals for any
deviation from a program’s Test and Evaluation Master Plan.
The Administration supports only the human resource planning and the single financial
management system. It has come out against the centralized funding and management of the
facilities and against the need for approval to deviate from a program’s original Test and
Evaluation Master Plan.
The FY2003 defense appropriations conference report makes no mention of the Senate
proposal.
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Funding Tables
Table 1. Department of Defense RDT&E
($ millions)
FY2000
FY2001
FY2002
FY2003
estimate
Requestc
Accounts
Army
5,314
6,263
7,053
6,918
Navy
9,065
9,596
11,389
12,502
Air Force
14,527
14,313
14,548
17,601
Defense Agencies
9,551
11,316
15,285
16,614
(DARPA)
(1,850)
(1,977)
(2,253)
(2,685)
(BMDOa)
(3,457)
(4,208)
(6,969)
(6,691)
Dir. Test & Eval
265
225
230
222
Dir. Op.Test/Eval
31
35
Total Ob. Auth.
$38,753
$41,748
$48,505
$53,857
Budget Activity
Basic Research
1,139
1,287
1,376
1,365
Applied Res.
3,409
3,674
4,086
3,780
Advanced Dev.
3,789
3,972
4,415
4,532
Demonstr./Valid.
6,514
8,052
10,361
10,539
Engrg/Mftg. Dev.
8,879
8,441
11,018
13,550
Mgmt. Supportb
3,076
3,342
2,850
2,890
Op. Systems Dev.
11,947
12,980
14,399
17,200
Total Ob. Auth.
$38,753
$41,748
$48,505
$53,857
Other Defense Programs
Defense Health Program
295
432
464
67
Chemical Agents and Munitions Destruction
292
599
731
303
Source: FY2001 to FY2003 figures based on Department of Defense Budget, Fiscal Year 2003 RDT&E
Programs (R-1), February 2002. FY2001 to FY2003 figures for Defense Health Program and Chemical Agents
and Munitions Destruction Program come from OMB’s FY2003 Budget Appendix. All other figures come
from prior year R-1s and OMB budgets. Totals may not add due to rounding.
a. Includes only MDO RDT&E. Does not include procurement and military construction or missile defense
RDT&E in other accounts.
b. Includes funds for Developmental and Operational Test and Evaluation.
c. Does not include RDT&E funds associated with the proposed Defense Emergency Response Fund.
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Table 2. Department of Defense RDT&E
($ millions)
House
Senate
House
Senate
Apprn.
FY2003
Auth.
Auth.
Apprn.
Apprn.
Conf.
requestd
HR 4546
S2514
HR 5010 HR5010
HR 5010
H Rpt
S Rpt
Auth.
H Rpt
S Rpt
H Rpt
107-436
107-151
Conf.
107-532e 107-213e
107-732f
Accountsa
Army
6,918
6,933
7,301
7,447
7,410
7,628
Navy
12,502
13,275
12,929
13,562
13,276
13,865
Air Force
17,601
18,803
18,604
18,639
18,538
18,729
Defense Agencies
16,614
17,191
16,491
17,863
16,611
17,734
(DARPA)
(2,685)
(2,578)
(2,245)
(2,851)
(2,698)
(2,778)
(BMDOa)
(6,691)
(6,991)
(5,924)
(6,821)
(6,145)
(6,741)
Dir. Test & Eval
222
222
362
242
303
246
Dir. Op.Test/Eval
–
Total Ob. Auth.
$53,857
$56,424
$55,686
$57,753
$56,138
$58,202
Budget Activity
Basic Research (6.1)
1,365
1,354
1,413
1,418
1,491
1,494
Applied Res. (6.2)
3,780
3,832
3,971
4,451
4,479
4,598
Advanced Dev. (6.3)
4,532
4,837
4,780
5,483
4,822
5,383
Demonstr./Valid. (6.4)
10,539
10,973
10,155
10,905
9,832
11,059
Engrg/Mftg. Dev. (6.5)
13,550
13,950
13,677
13,449
14,106
14,034
Mgmt. Supportb (6.6)
2,890
2,959
3,274
3,053
3,200
3,075
Op. Systems Dev. (6.7)
17,200
18,674
18,767
19,150
18,362
19,120
Adjustments
personnel costs accrualc
-155
-155
-155 -155
-155
financial mgmt. svgs.
-107
contract services svgs.
-91
Section 8100 svgs.
-299
Section 8109 svgs.
-107
Total Ob. Auth.
$53,857
$56,424
$55,684
$57,754
$56,137
$58,202
Other Defense Programs
Defense Health Program
67
67
67
400
394
459
Chemical Agents and

Munitions Destruction
303
303
303
303
303
303
Source: Department of Defense Budget, Fiscal Year 2003 RDT&E Programs (R-1). Figures for Other
Programs come from OMB’s FY2003 Budget Appendix. Remaining figures come from associated Committee
reports.
a. Includes only BMDO RDT&E. Does not include procurement and military construction or ballistic missile
defense RDT&E in other accounts.
b. Includes funds for Operational Test and Evaluation.
c. RDT&E’s share to support Department’s retirement and health care expenses.
d. Does not include RDT&E funds associated with the proposed Defense Emergency Response Fund.
e. Does not include the minor amendments made during floor debate.
f. Does not include general reduction associated with improved economic assumptions, see Section 8135 of
appropriations conference report.
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LEGISLATION
H.R. 4546 (Stump)
National Defense Authorization Act for FY2003. Introduced April 23, 2002. Reported
out of the Armed Services Committee May 3, (H.Rept. 107-436). Passed House with
amendments, May 10.
S. 2514 (Levin)
An original bill to authorize appropriations for fiscal year 2003 for military activities
of Department of Defense. Introduced May 15, 2002. Reported out of the Senate Armed
Services Committee, May 15 (S.Rept. 107-151). Passed Senate, with amendments, June 27.
Incorporated into H.R. 4546 as an amendment in the form of a substitute, June 27.
H.R. 5010(Lewis)
An original bill making appropriations for the Department of Defense for the fiscal year
ending September 30, 2003, and for other purposes. Introduced June 25. Reported out of
House Appropriations Committee (H.Rept. 107-532), June 25. Passed House, with
amendments, July 27. Received in Senate and referred to Senate Appropriations Committee,
July 28. Reported out of the Senate Appropriations Committee with amendments in the form
of a substitute (S. Rpt. 107-213), July 18. Passed Senate with amendments, August 1.
Conference report filed October 9. House approved Oct. 10. Senate approved Oct. 16.
FOR ADDITIONAL READING
CRS Report 97-316 SPR, The Department of Defense’s Research, Development, Test, and
Evaluation (RDT&E) Program: A Primer, by John Moteff.
CRS Report RL30002, A Defense Budget Primer, by Mary Tyszkiewicz and Stephen
Daggett.
CRS Report RL31005, Appropriations and Authorizations for FY2002: Defense, by Amy
Belasco, Mary Tyszkiewicz and Stephen Daggett.
CRS Report RL31111, Missile defense: the current debate, coordinated by Steven A.
Hildreth and Amy F. Woolf.
CRS Info Pack IP496B, Ballistic Missile Defense.
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