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Updated January 5, 2023
Defense Primer: Procurement
Background
may span many years. In some cases, programs have been
While procurement implies a process of obtaining goods or
procured using incremental funding, a funding policy
services, the word also refers to a specific title and
typically associated with research and development
associated accounts within the annual National Defense
activities. Under incremental funding, a system’s cost is
Authorization Act (NDAA) and Department of Defense
divided into two or more annual portions, or increments,
Appropriations Act.
that can reflect the need to make annual progress payments
to the contractor as the system is built. Incremental funding
Appropriations for Procurement
has principally been used to procure certain ships and
The Department of Defense (DOD) procurement
submarines.
appropriations title provides funds for non-construction-
related investment costs—the costs to acquire capital assets,
Table 1. Funding for DOD Procurement Accounts in
such as an F-35 Joint Strike Fighter aircraft or a Virginia-
the Department of Defense Appropriations Act, 2023
class submarine. Investment costs are distinguished from
expenses—the costs of resources consumed in operating the
$
department, such as food and fuel. DOD uses procurement
Account (Acronym)
(billions)
appropriations to obtain various categories of materiel,
Aircraft Procurement, Army (APA)
$3.8
including
Missile Procurement, Army (MIPA)
$3.8
new military hardware (e.g., aircraft, ships, armored
Procurement of Weapons and Tracked Combat
$4.5
vehicles, radios, and satellites);
Vehicles, Army (WTCV)
upgrades to existing equipment, including service life
Procurement of Ammunition, Army (PAA)
$2.8
extension or remanufacturing programs;
Other Procurement, Army (OPA)
$8.7
weapons and ammunition (e.g., air-to-air missiles and
Aircraft Procurement, Navy (APN)
$19.0
rifle rounds); and
Weapons Procurement, Navy (WPN)
$4.8
spares and repair parts.
Procurement of Ammunition, Navy and Marine
$0.9
Corps (PANMC)
Procurement funding provided to the department in a given
fiscal year can usually be obligated over a period of three
Shipbuilding and Conversion, Navy (SCN)
$32.0
years. The most prominent exception is Navy Shipbuilding
Other Procurement, Navy (OPN)
$12.1
and Conversion funding, which is available for five years.
The Department of Defense Appropriations Act, 2023
Procurement, Marine Corps (PMC)
$3.7
(Division C of P.L. 117-328) provided $162.2 billion for
Aircraft Procurement, Air Force (APAF)
$22.2
procurement accounts (see Table 1).
Missile Procurement, Air Force (MPAF)
$3.0
Procurement of Ammunition, Air Force (PAAF)
$0.9
Defense Authorization and Appropriations
Other Procurement, Air Force (OPAF)
$28.0
Resources
Procurement, Space Force (PSF)
$4.5
CRS In Focus IF10516, Defense Primer: Navigating the NDAA
CRS In Focus IF10515, Defense Primer: The NDAA Process
Procurement, Defense-Wide (PDW)
$6.1
CRS In Focus IF10514, Defense Primer: Defense Appropriations
Defense Production Act Purchases
$0.4
Process
National Guard and Reserve Equipment
$1.0
How is DOD Procurement Funded?
TOTAL
$162.2
In general, Congress appropriates money for defense
Source: CRS analysis of Department of Defense Appropriations Act,
procurement under a policy of full funding, which requires
2023 (Division C of P.L. 117-328) and accompanying explanatory
funding the entire procurement cost of end-items (e.g.,
statement.
AIM-9 Sidewinder missiles or KC-46A refueling tankers)
Note: Totals do not include emergency funding provided in the
in one fiscal year. In other words, the total funding
Additional Ukraine Supplemental Appropriations Act, 2023 or the
necessary to acquire a useable end-item is approved by
Disaster Relief Supplemental Appropriations Act, 2023 (Division M
Congress in a single fiscal year, even though related work
and Division N, respectively, of P.L. 117-328).
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Defense Primer: Procurement
Figure 1. Milestones for Major Capability Acquisition
Source: CRS graphic based on DOD Instruction 5000.02, “Operation of the Adaptive Acquisition Framework,” January 23, 2020, p. 9.
Exceptions to Full Funding
Goods and services from the private sector are purchased
through contracts and accounted for as contract obligations.
Multiyear Procurement. Under 10 U.S.C. §2306b,
These individual activities—most of which are too granular
Congress sometimes authorizes multiyear procurement
to be captured in appropriations data—are tracked at the
(MYP) for programs. MYP can achieve savings by
level of obligations. Obligation is the term used when
committing to buy items from a contractor over multiple
agencies enter into contracts, employ personnel, or
years for a reduced price per unit. Qualifying for MYP
otherwise commit to spending money.
requires a program to achieve savings in estimated costs,
receive sufficient funding, and procure items unlikely to
Relevant Statutes
substantially change over the multiyear period.
Examples include ships (e.g., Virginia-class submarines
Title 10, U.S. Code, Part IV—Service, Supply, and Procurement.
and DDG-51 Arleigh Burke-class destroyers); aircraft
(e.g., UH-60 Black Hawk helicopters, MV-22 Osprey
tilt-rotor aircraft, and C-130J Super Hercules cargo
planes); and munitions (e.g., M142 High Mobility
CRS Products
Artillery Rocket Systems, or HIMARS, and MGM–140
Army Tactical Missile Systems, or ATACMS).
For information on the Defense Acquisition System, see CRS
Report RL34026, Defense Acquisitions: How DOD Acquires
Advance Procurement. More commonly, programs
Weapon Systems and Recent Efforts to Reform the Process
receive advance procurement funds for components of a
For information on the ful funding policy in DOD
unit that need to be purchased long before the unit itself
procurement, see CRS Report RL31404, Defense Procurement:
is purchased. For programs using MYP, advance
Full Funding Policy—Background, Issues, and Options for Congress
procurement may also be used to achieve economic
For information on special cases of procurement, see CRS
order quantity, which is defined as buying enough of an
Report R41909, Multiyear Procurement (MYP) and Block Buy
item to minimize the total cost.
Contracting in Defense Acquisition: Background and Issues for
When Does a Program Enter
Congress
Procurement?
For information on RDT&E funding see CRS In Focus IF10553,
Defense Primer: RDT&E.
Programs that produce a major capability (e.g., an aircraft
carrier or armored fighting vehicle) usually enter
For general information on defense procurement and contract
procurement after they receive Milestone C approval in the
acquisition, see CRS In Focus IF10600, Defense Primer:
Defense Acquisition System. Prior to procurement,
Department of Defense Contractors and CRS Report R44010,
programs are considered to be in development and
Defense Acquisitions: How and Where DOD Spends Its Contracting
generally funded through Research, Development, Test and
Dollars
Evaluation (RDT&E) appropriations. Some programs will
receive procurement funds before a formal Milestone C
approval. See Figure 1 for an overview of milestones
associated with major capability acquisition, one pathway
Other Resources
within DOD’s adaptive acquisition framework.
DOD Comptrol er, Defense Budget Materials,
How Else Does DOD Purchase Goods
http://comptrol er.defense.gov/Budget-Materials
and Services? How Does Procurement
DOD 7000.14-R, “Financial Management Regulation,” Budget
Relate to Defense Contracting?
Formulation and Presentation: Procurement Appropriations, vol. 2B,
ch. 4, November 2017, at https://comptrol er.defense.gov/
DOD is authorized and appropriated procurement funding
Portals/45/documents/fmr/Volume_02b.pdf
for non-construction investments. DOD typically uses
funding other than procurement to purchase services (e.g.,
research, architectural design, or cleaning services) and
smaller goods (e.g., gauze or light bulbs) because such
Heidi M. Peters, Analyst in U.S. Defense Acquisition
purchases are considered to be expenses rather than
Policy
investments and are funded in other parts of DOD’s budget.
Brendan W. McGarry, Analyst in U.S. Defense Budget
IF10599
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Defense Primer: Procurement
Disclaimer
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