Defense Primer: Procurement

Defense Primer: Procurement

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Updated May 7, 2024
Defense Primer: Procurement
Overview
necessary to acquire a useable end-item is approved by
While procurement implies a process of obtaining goods or
Congress in a single fiscal year, even though related work
services, the word also refers to a specific title and to
may span many years.
associated accounts within the annual National Defense
Authorization Act (NDAA) and Department of Defense
Table 1. Funding for DOD Procurement Accounts in
Appropriations Act.
the Department of Defense Appropriations Act, 2024
(Division A of P.L. 118-47)
Appropriations for Procurement
The Department of Defense (DOD) procurement
Account (Acronym)
$ (billions)
appropriations title provides funds for nonconstruction-
Aircraft Procurement, Army (APA)
$3.3
related investment costs—the costs to acquire capital assets,
such as an F-35 Joint Strike Fighter aircraft or a Virginia-
Missile Procurement, Army (MIPA)
$4.6
class submarine. Investment costs are distinguished from
Procurement of Weapons and Tracked
$4.2
expenses—the costs of resources consumed in operating the
Combat Vehicles, Army (WTCV)
department, such as food and fuel. DOD uses procurement
appropriations to obtain various categories of materiel,
Procurement of Ammunition, Army (PAA)
$2.9
including
Other Procurement, Army (OPA)
$8.6
• new military hardware (e.g., aircraft, ships,
Aircraft Procurement, Navy (APN)
$19.8
armored vehicles, radios, and satellites);
Weapons Procurement, Navy (WPN)
$5.9
• upgrades to existing equipment, including service
life extension or remanufacturing programs;
Procurement of Ammunition, Navy and Marine
$1.2
Corps (PANMC)
• weapons and ammunition (e.g., air-to-air missiles
and rifle rounds); and
Shipbuilding and Conversion, Navy (SCN)
$33.7
• spares and repair parts.
Other Procurement, Navy (OPN)
$14.4
Procurement, Marine Corps (PMC)
$3.9
Procurement funding provided to the department in a given
fiscal year can usually be obligated over a period of three
Aircraft Procurement, Air Force (APAF)
$20.8
years. The most prominent exception is Navy Shipbuilding
Missile Procurement, Air Force (MPAF)
$4.7
and Conversion funding, which is available for five years.
The Department of Defense Appropriations Act, 2024 (P.L.
Procurement of Ammunition, Air Force
$0.6
118-47) provided $168.7 billion for procurement accounts
(PAAF)
(see Table 1).
Other Procurement, Air Force (OPAF)
$31.3
Procurement, Space Force (PSF)
$4.1
NDAA and Defense Appropriations
Procurement, Defense-Wide (PDW)
$6.4
CRS In Focus IF10516, Defense Primer: Navigating the NDAA
Defense Production Act Purchases
$0.6
CRS In Focus IF10515, Defense Primer: The NDAA Process
National Guard and Reserve Equipment
$1.0
CRS In Focus IF10514, Defense Primer: Defense Appropriations
Process
TOTAL
$168.7
Source: CRS analysis of Department of Defense Appropriations Act,
How is DOD Procurement Funded?
2024 (Division A of P.L. 118-47) and accompanying explanatory
statement.
In general, Congress appropriates money for defense
procurement under a policy of full funding, which requires

funding the entire procurement cost of end-items (e.g.,

AIM-9 Sidewinder missiles or KC-46A refueling tankers)
in one fiscal year. In other words, the total funding
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Defense Primer: Procurement
Exceptions to Full Funding
research, architectural design, or cleaning services) and
smaller goods (e.g., gauze or light bulbs) because such
• Incremental Funding. In rare cases, programs have
purchases are considered to be expenses rather than
been procured using incremental funding, a funding
investments and are funded in other parts of DOD’s budget.
policy typically associated with research and
development activities. Under incremental funding, a
Goods and services from the private sector are purchased
system’s cost is phased over two or more fiscal years.
through contracts and accounted for as contract obligations.
Incremental funding has principally been used to
These individual activities—most of which are too granular
procure certain ships and submarines (e.g., Virginia-
to be captured in appropriations data—are tracked at the
and Columbia-class submarines) but is typically
level of obligations. Obligation is the term used when
avoided as a funding mechanism for procurement.
agencies enter into contracts, employ personnel, or
otherwise commit to spending money.
• Multiyear Procurement. Under 10 U.S.C. §3501,
Congress sometimes authorizes multiyear procurement
Relevant Statutes
(MYP) for programs. MYP can achieve savings by
committing to buy items from a contractor over multiple
Title 10, U.S. Code, Part IV—Service, Supply, and Procurement.
years for a reduced price per unit. Qualifying for MYP
requires a program to prove that it will achieve

substantial savings throughout its annual buys, receive
sufficient and stable funding, and procure items unlikely
CRS Products
to substantially change over the multiyear period.
Examples include ships (e.g., Virginia-class submarines
For information on the Defense Acquisition System, see CRS
and DDG-51 Arleigh Burke-class destroyers); aircraft
Report RL34026, Defense Acquisitions: How DOD Acquires
(e.g., UH-60 Black Hawk helicopters, MV-22 Osprey
Weapon Systems and Recent Efforts to Reform the Process
tilt-rotor aircraft, and C-130J Super Hercules cargo
For information on the ful funding policy in DOD
planes); and munitions (e.g., M142 High Mobility
procurement, see CRS Report RL31404, Defense Procurement:
Artillery Rocket Systems, or HIMARS, and MGM–140
Full Funding Policy—Background, Issues, and Options for Congress
Army Tactical Missile Systems (ATACMS)).
For information on special cases of procurement, see CRS
•
Report R41909, Multiyear Procurement (MYP) and Block Buy
Advance Procurement. Programs receive advance
Contracting in Defense Acquisition: Background and Issues for
procurement funds for components of a unit that need to
Congress
be purchased long before the unit itself is purchased.
For information on RDT&E funding see CRS In Focus IF10553,
Advance procurement requires a separate initial
Defense Primer: RDT&E.
contract, and its authority is provided in an
appropriations act. For programs using MYP, advance
For general information on defense procurement and contract
procurement may also be used to achieve economic
acquisition, see CRS In Focus IF10600, Defense Primer:
order quantity, which is defined as buying enough of an
Department of Defense Contractors and CRS Report R44010,
item to minimize the total cost.
Defense Acquisitions: How and Where DOD Spends Its Contracting
Dollars
When Does a Program Enter
Procurement?

Programs that produce a major capability (e.g., an aircraft
carrier or armored fighting vehicle) usually enter
Other Resources
procurement after they receive Milestone C approval in the
DOD Comptrol er, Defense Budget Materials,
Defense Acquisition System. Prior to procurement,
http://comptrol er.defense.gov/Budget-Materials
programs are considered to be in development and
DOD 7000.14-R, “Financial Management Regulation,” Budget
generally funded through Research, Development, Test and
Formulation and Presentation: Procurement Appropriations, vol. 2B,
Evaluation (RDT&E) appropriations. Some programs will
Ch. 4, November 2017, https://comptrol er.defense.gov/
receive procurement funds before a formal Milestone C
Portals/45/documents/fmr/Volume_02b.pdf
approval.
How Else Does DOD Purchase Goods

and Services? How Does Procurement
Alexandra G. Neenan, Analyst in U.S. Defense
Relate to Defense Contracting?
Infrastructure Policy
DOD is authorized and appropriated procurement funding
for nonconstruction investments. DOD typically uses
IF10599
funding other than procurement to purchase services (e.g.,

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Defense Primer: Procurement

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
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