The Department of Defense (DOD) Budget: An Orientation

The Department of Defense (DOD) Budget: An Orientation

The Department of Defense (DOD) Budget:
November 12, 2021
An Orientation
Pat Towell
This report uses the FY2022 budget request for the Department of Defense (DOD) to provide a
Specialist in U.S. Defense
general orientation to the composition and activities of that agency.
Policy and Budget

The report divides the budget request into sections that largely correspond to the major divisions
(or “titles”) of the annual defense authorization and appropriations bills. Using DOD budget data,

the report identifies several categories of activity funded within each of those parts of the budget
and—in some cases—provides more specific, selected examples.
The report is not designed to provide detailed analysis of elements of the budget request, but it incorporates cross-references
to many CRS products intended for that purpose.

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Contents
Overview ................................................................................................................................... 1
Military Personnel ..................................................................................................................... 2
Operation and Maintenance ...................................................................................................... 4
Defense Health Agency, Defense Working Capital Funds, and Other DOD Activities ............ 6
Defense Working Capital Funds ......................................................................................... 7
Procurement .............................................................................................................................. 9
Research and Development ..................................................................................................... 10
Military Construction .............................................................................................................. 13

Figures
Figure 1. FY2022 Department of Defense (DOD) Budget Request ................................................ 2
Figure 2. FY2022 Military Personnel Budget Request ................................................................... 3
Figure 3. FY2022 DOD Operation and Maintenance (O&M) Budget Request .............................. 5
Figure 4. FY2022 DOD Budget Request for Defense Health Program (DHP) and Other
DOD Activities ............................................................................................................................. 8
Figure 5. FY2022 Budget Request .................................................................................................. 9
Figure 6. FY2022 DOD Research and Development (R&D) Budget Request ............................. 12
Figure 7. FY2022 Military Construction Budget Request ............................................................ 13

Tables
Table 1. FY2022 Military Personnel Budget Request ..................................................................... 3
Table 2. FY2022 Operation and Maintenance (O&M) Budget Request ......................................... 5
Table 3. FY2022 Budget Request for Defense Health Program (DHP) and Other DOD
Programs....................................................................................................................................... 8
Table 4. FY2022 Procurement Budget Request ............................................................................ 10
Table 5. FY2021 R&D Budget Request ........................................................................................ 12
Table 6. FY2022 Military Construction Budget ............................................................................ 13

Contacts
Author Information ........................................................................................................................ 14

Congressional Research Service

The Department of Defense (DOD): An Orientation

his report presents a concise but comprehensive description of the Department of Defense
(DOD) budget, outlining the agency’s major activities as identified in its annual funding
T request.
Because of DOD’s size and the scope and scale of its activities, a baseline of information about
the agency may be of use to Members of Congress whose focus is on other aspects of federal
policy. DOD’s annual budget typically accounts for about half of the federal government’s
discretionary spending in a fiscal year, often making it a factor in congressional deliberations
about spending for other activities of the federal government. Moreover, in the course of its
routine operations, DOD engages with—or has a considerable impact on—a broad range of
public policy issues as diverse as natural resource management, national science and technology
policy, regional economic development, and labor relations.
This report reviews elements of the FY2022 DOD budget request released by the executive
branch on May 28, 2021. CRS’s analysis uses data and categories of funds included in publicly
available documents released by the Undersecretary of Defense (Comptroller).1
Overview
The Biden Administration requested $715.0 billion in discretionary budget authority for DOD in
FY2022.2 This amounts to 49% of all discretionary spending requested for that fiscal year.3
In general, the following analysis divides the budget request into groupings that correspond to
major sections (or “titles”) of the annual defense authorization and appropriations bills: military
personnel, operation and maintenance, procurement, and research and development (R&D). A
fifth section incorporates funding for the Defense Health Program and several smaller
components of the DOD budget that the defense appropriation bill treats in two separate titles.
The budget for military construction, the sixth section of this analysis, is covered by a separate
appropriations bill, which also funds the Department of Veterans Affairs and other agencies.4
The report discusses each of those aspects of the budget, explores their constituent parts, and cites
relevant CRS products that elaborate on those subjects.
All dollar amounts cited in this report are in discretionary budget authority.

1 The details of DOD’s budget request and the associated unclassified justification material are available at
https://comptroller.defense.gov/Budget-Materials/.
2 For the most part, discretionary spending consists of funds provided by appropriations bills enacted annually by
Congress. Mandatory spending, on the other hand, occurs each year on the basis of permanent law.
3 The Office of Management and Budget (OMB) organizes the federal budget into categories or “functions” each of
which is intended to include all government activities conducted for a particular purpose regardless of the agency
performing the activity. The DOD budget accounts for 95% if the FY2022 budget request for the National Defense
budget function. That remainder of the budget in that function would cover defense-related work by the Department of
Energy, the FBI, and other agencies.
4 In defense budget discussions, the term “acquisition” refers to the sum of funding for procurement, R&D, and (in
some cases) military construction.
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Figure 1. FY2022 Department of Defense (DOD) Budget Request
In discretionary budget authority

Source: CRS analysis of Defense Budget Overview, United States Department of Defense FY2022 Budget Request,
Table A-1, p. A-1, at https://comptrol er.defense.gov/Budget-Materials/.
Notes: Some data from the source cited are reorganized as fol ows: Most of the funding represented by the
chart segment entitled “Defense Health Program, etc.” is included the Operation & Maintenance category of the
source table. The chart segment entitled “Defense Health Program, etc.” also includes funding categorized by the
source table as Defense Working Capital Funds and $1.1 bil ion for destruction of chemical weapons, which the
source table includes in the Procurement category. See below under the heading “Defense Health Agency,
Defense Working Capital Funds, and Other DOD Activities.”
Totals may not sum due to rounding.
Military Personnel
The budget for military personnel includes funding for cash compensation, deferred (i.e., post-
retirement) compensation, and travel reimbursements. It is allocated across 10 accounts: one for
the active component of each of the four armed services (Army, Navy, Marine Corps, and Air
Force), one for each service’s reserve component, and one for each of the two National Guard
components (Army and Air Force). These accounts fund the major elements of cash
compensation for military personnel, including basic pay, housing allowances (which are linked
to housing costs in the locale where a service member is stationed), and special pays and bonuses
for which some personnel are eligible. The Military Personnel budget also funds deferred
compensation, including military retired pay, Thrift Savings Plan contributions, and the retiree
health care plan known as TRICARE for Life.
The Military Personnel budget does not cover the cost of various other benefits (i.e., noncash
compensation) to military personnel, including health care, subsidized supermarkets (called
commissaries) and child day care, all of which are funded in various other parts of the DOD
budget.5

5 For additional information, see CRS Report RL33446, Military Pay: Key Questions and Answers, by Lawrence Kapp
and Barbara Salazar Torreon.
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For FY2022, the Administration requested $167.3 billion for military personnel accounts (see
Table 1).

Figure 2. FY2022 Military Personnel Budget Request
In discretionary budget authority

Source: CRS analysis of Military Personnel Programs (M-1), Department of Defense FY2022 Budget, at
https://comptrol er.defense.gov/Budget-Materials/.
Note: Totals may not sum due to rounding.

Table 1. FY2022 Military Personnel Budget Request
All portions cover active component personnel, except the one labelled “Reserve and National Guard”
$63.7 bil ion
Basic pay
Linked to rank (grade) and years of service, this typically accounts
for about 60% of the cash compensation paid to the approximately
237,000 officers and 1.1 mil ion enlisted members of the four
active components of the armed services.a
$24.7 bil ion
Reserve and National
Includes $11.2 bil ion for compensation of nearly 90,000 Reserve
Guard
and National Guard members on duty ful -time in support roles.b
$23.0 bil ion
Basic Allowance for
Linked to housing costs in locale to which a service member is
Housing (BAH)
assigned; this varies with the service member’s rank (grade) and
whether the service member has dependents.
$22.2 bil ion
Retired pay accrual
An actuarially calculated payment into the military retirement trust
fund to cover anticipated future retired pay to service members
currently on active duty.c
$9.3 bil ion
TRICARE-for-Life
An actuarially calculated payment into the Medicare Eligible
accrual
Retiree Trust Fund to cover anticipated future benefits for
Medicare-eligible military retirees.d
$6.6 bil ion
Subsistence allowance
Pays for a cash allowance to service members and for meals
(meals)
provided in lieu of the allowance (e.g., during basic training).
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$4.9 bil ion
Social Security
Employer contributions by the U.S. government.
contribution
$4.8 bil ion
Incentive pays and
Includes bonuses for enlistment ($423 mil ion) and reenlistment
special pays
($1.1 bil ion) as well as extra pay for critical or hard-to-fil skil s
including, for example, $834 mil ion for medical professionals and
$627 mil ion for personnel assigned to flight duty.
$4.3 bil ion
Moving expenses
Pays for all movement of personnel (and dependents) being
(“Permanent change of
transferred to or from an assigned duty station, including $2.5
station” or PCS)
bil ion for movement of household goods.
$857 mil ion
Thrift Savings Plan
Employer contributions by the U.S. government.
contribution
$3.1 bil ion
Other
Includes $804 mil ion for issue of uniforms and clothing allowances
and $451 mil ion for pay and allowances for officer cadets enrol ed
in the national service academies and in ROTC programs.
Source: CRS analysis of Military Personnel Programs (M-1), Department of Defense FY2022 Budget, at
https://comptrol er.defense.gov/Budget-Materials/.
Notes: Totals may not sum due to rounding.
a. For additional information, see CRS In Focus IF10685, Defense Primer: Military Officers, by Lawrence Kapp,
and CRS In Focus IF10684, Defense Primer: Military Enlisted Personnel, by Lawrence Kapp.
b. For additional information, see CRS In Focus IF10540, Defense Primer: Reserve Forces, by Lawrence Kapp.
c. For additional information, see CRS In Focus IF10483, Defense Primer: Military Retirement, by Kristy N.
Kamarck.
d. The health care program for military retirees is funded through the Medicare Eligible Retiree Health Fund.
DOD makes an annual contribution to this fund based on actuarial calculations of projected future benefits
to military personnel currently on active duty. Congress scored this payment, which is authorized annually
by the National Defense Authorization Act, as discretionary spending. However, it is provided
automatically, by a provision of permanent law (37 U.S.C. §1009), and therefore is not included in the annual
defense appropriation bil .
Operation and Maintenance
The bulk of the funding in the Operation and Maintenance (O&M) title of the annual defense
appropriations bill covers the operating costs of the 10 active duty and reserve service
components as well as Defense Department management and support costs.
O&M funds pay for fuel, supplies, consumable spare parts, and routine maintenance and major
overhauls of aircraft, ships, ground vehicles, electronic equipment and facilities. The O&M
accounts also pay for recruiting, training, professional education, administrative activities, and
headquarters and supply operations.
Upwards of 20% of the O&M budget covers pay and benefits for civilian federal employees. This
does not include compensation for military personnel performing these O&M-funded activities;
their pay and benefits are provided through the Military Personnel accounts.
For FY2022, the Administration requested $253.6 billion for O&M funding, excluding funds for
the Defense Health Agency (DHA) and certain other activities treated in the following section of
this report. Funding for those excluded activities is included with O&M funds in some DOD
budget documents, but Congress addresses them separately from O&M funds and programs in the
annual National Defense Authorization Act (NDAA) and defense appropriations bills.
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Figure 3. FY2022 DOD Operation and Maintenance (O&M) Budget Request
In discretionary budget authority

Source: CRS analysis of Operation and Maintenance Programs (O-1), Department of Defense FY2022 Budget
Request, at https://comptrol er.defense.gov/Budget-Materials/.
Note: Special Operations forces specialize in conducting relatively low-profile—sometimes clandestine—
operations in relatively small units.

Table 2. FY2022 Operation and Maintenance (O&M) Budget Request
$96.2
Operating
Funds operating costs of units in the field, including fuel and other consumables and
bil ion
Forces
routine maintenance.
$30.3
Base
Funds the cost of public utilities, local transportation, food services, personnel
bil ion
Operations
management, and family support activities on military bases. (This amount excludes
$1.9 bil ion for base operations in the Defense Health Program budget).
$23.6
Classified

bil ion
$22.0
Depot
Funds periodic overhauls of ships, aircraft, vehicles, and their complex components
bil ion
Maintenance
that entail the items being taken out of service for months or years and partly
dismantled at a specialized maintenance facility to allow inspection and repair or
replacement of worn or damaged parts.b
$18.4
Administration Includes funding for routine administrative functions not directly related to combat
bil ion
and Other
missions, including management of personnel and real estate, communications,
supply, and transportation. Also includes $1.0 bil ion for environmental restoration
of current and formerly used DOD sites and miscellaneous other costs.
$14.9
“Fourth
Funds support agencies overseen directly by the Office of the Secretary of Defense,
bil ion
Estate”
rather than by one of the three service departments (Army, Navy, and Air Force);
the total includes $2.2 bil ion for the network of 106 elementary and secondary
schools enrol ing nearly 70,000 military dependents overseas and on domestic bases
in relatively isolated areas;c $1.4 bil ion for the Defense Contract Management
Agency; and $834 mil ion for the Defense Human Resources Agency.
$14.2
Facilities
Funds day-to-day maintenance of DOD’s inventory of more than 500,000
bil ion
Maintenance
structures,d including upgrades and repairs as well as demolition of those structures
and Repair
deemed unneeded or unusable.
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$12.0
Training and
Funds training and educational activities ranging from recruit training ($140 mil ion)
bil ion
Education
to mid-career professional development training at war col eges and other schools
($1.2 bil ion) and flight training ($3.0 bil ion).
$9.3
Special
Funds the combatant command in charge of the more than 70,000 Special
bil ion
Operations
Operations personnel distributed across the four armed forces. Special Operations
Command
forces specialize in conducting relatively low-profile—sometimes clandestine—
(SOCOM)
operations in relatively small units.a
$5.8
Senior
Funds the civilian and military leadership of DOD, including the Office of the
bil ion
Leadership
Secretary of Defense ($1.8 bil ion); the Joint Chiefs of Staff and their supporting Joint
Staff ($1.1 bil ion); and the headquarters of the combatant commands (other than
Special Operations Command) that command all U.S. forces that operate in a
particular region (e.g., European Command – $294 mil ion) or perform a particular
function (e.g., Strategic Command – $475 mil ion).e
$3.8
Support for
Includes $3.3 bil ion to equip, supply, and train the Afghan Army, Air Force, National
bil ion
Afghan and
Police, and Special Security Forces, plus $522 mil ion to equip, train, and supply
anti-ISIS forces counter-ISIS forces in Syria and Iraq.f
$3.1
Military
Includes $1.3 bil ion to bring into the service new officers through the service
bil ion
Personnel
academies, ROTC, and officer candidate schools, and $1.6 bil ion to recruit enlisted
Intake
personnel (including the cost of advertising).g
Source: CRS analysis of Operation and Maintenance Programs (O-1), Department of Defense FY2022 Budget
Request, at https://comptrol er.defense.gov/Budget-Materials/.
Notes: Totals may not sum due to rounding.
a. For additional information, see CRS In Focus IF10545, Defense Primer: Special Operations Forces, by Barbara
Salazar Torreon and Andrew Feickert.
b. For additional information, see CRS In Focus IF11466, Defense Primer: Department of Defense Maintenance
Depots, by Tyler F. Hacker and G. James Herrera. The amount listed in the table ($22.0 bil ion) is the total
amount requested for FY2022 in budget line-items specifically identified by title as being associated with
depot-level maintenance. Some other DOD documents, using a broader definition of depot maintenance,
report a larger total.
c. For additional information, see CRS In Focus IF10335, DOD Domestic School System: Background and Issues, by
Kristy N. Kamarck.
d. Department of Defense, Base Structure Report – Fiscal Year 2018 Baseline, p. 2, at https://www.acq.osd.mil/
eie/BSI/BEI_Library.html.
e. For additional information, see CRS In Focus IF10542, Defense Primer: Commanding U.S. Military Operations,
by Kathleen J. McInnis.
f.
Several months after the FY2022 DOD budget request was sent to Congress, the U.S.-supported Afghan
government col apsed. For additional information, see CRS Report R46879, U.S. Military Withdrawal and
Taliban Takeover in Afghanistan: Frequently Asked Questions, coordinated by Clayton Thomas.
g. For additional information, see CRS In Focus IF11147, Defense Primer: Active Duty Enlisted Recruiting, by
Lawrence Kapp; CRS In Focus IF11788, Defense Primer: Military Service Academies, by Kristy N. Kamarck and
Hibbah Kaileh; and CRS In Focus IF11235, Defense Primer: Senior Reserve Officer Training Corps, by Kristy N.
Kamarck.
Defense Health Agency, Defense Working Capital Funds, and
Other DOD Activities
Some DOD summary budget documents include the budgets for the Defense Health Agency
(DHA) and certain other DOD component in the presentation of Operation and Maintenance
funding. This arises because these components’ budgets include O&M funding in addition to
funding for procurement and for research and development (R&D). Congress usually addresses
these components of the budget in separate titles in the National Defense Authorization Act
(NDAA) and Defense Appropriations Act, as does this report.
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The Defense Health Agency is the largest entity in this category of agencies: it serves 9.6 million
eligible beneficiaries including service members, retirees, and dependents.6 For FY2022, the
Administration requested $35.6 billion for the Defense Health Program. This amount does not
include $8.5 billion for pay and benefits of service members who staff DOD health care facilities,
funding for which is included in the Military Personnel accounts.7 The budget request for the
Defense Health Program also does not include $9.3 billion appropriated in the Military Personnel
budget as accrual payments to fund anticipated health care benefits for military retirees under the
so-called TRICARE-for-Life program.
Defense Working Capital Funds
This category also includes several defense working capital funds (WCFs) through which the
armed services and other DOD organizations spend tens of billions of dollars annually to
purchase from commercial suppliers goods (such as fuel) and services (such as vehicle
overhauls). These funds are intended to let DOD organizations plan and budget for such
commercial purchases despite the fact that their prices can fluctuate between the time of DOD
budget enactment and the time of the purchases.
To provide price stability for budgeting purposes, Congress authorized the creation of several
WCFs, each of which was given an initial appropriation (or cash corpus) with which to make
commercial purchases of goods or services. In turn, the armed services and other DOD
organizations buy those items with appropriated funds from the WCFs. The funds charge their
DOD customers prices that are fixed for a fiscal year but that can change from year to year, or
even within a given year. In theory, the funds can be managed so as to break even, over time. If a
fund’s balance declines during a year, it can increase its prices for a future year or seek a direct
appropriation from Congress.8
An exception to this general rule is the WCF that funds the Defense Commissary Agency
(DeCA). This agency manages a network of 236 commissaries, essentially supermarkets, at
which military personnel and other qualified beneficiaries can purchase food and household
goods for prices that amount to cost plus a 5% surcharge. The 5% surcharge pays for construction
and maintenance of commissary facilities. Congress makes an annual appropriation to the DeCA
fund to cover salaries and other operating costs of the system.

6 For additional information, see CRS In Focus IF10530, Defense Primer: Military Health System, by Bryce H. P.
Mendez.
7 Department of Defense, Defense Budget Overview, FY2022, p. 5-5, Figure 5-2, “Military Health Care Funding.”
8 For additional information, see CRS In Focus IF11233, Defense Primer: Defense Working Capital Funds, by G.
James Herrera.
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Figure 4. FY2022 DOD Budget Request for Defense Health Program (DHP) and
Other DOD Activities
In discretionary budget authority

Source: CRS analysis of Operation and Maintenance Programs (O-1) and Revolving and Management Fund (RF-1),
Department of Defense FY2022 Budget, at https://comptrol er.defense.gov/Budget-Materials/.
Notes: DHP is the Defense Health Program; R&D is research and development.

Table 3. FY2022 Budget Request for Defense Health Program (DHP) and Other
DOD Programs
$18.1 bil ion DHP Private Sector Care
Funds medical and dental care and pharmaceuticals for eligible
beneficiaries through DOD’s TRICARE health care insurance
program.
$9.7 bil ion
DHP In-House Care
Funds inpatient and outpatient treatment of beneficiaries in any of
the 721 Military Treatment Facilities (MTFs), which range in size
from major medical centers to medical and dental clinics.
$6.4 bil ion
DHP Admin. and other

$779 mil ion
DHP procurement

$631 mil ion
DHP R&D
In recent years, Congress typically has added to this request a total
of approximately $1 bil ion for several specific medical research
projects that DOD manages as the Congressionally-Directed
Medical Research Program.a
$1.2 bil ion
Defense Commissary
Funds salaries, transportation, and other operating costs of
Agency (DeCA) Working
DeCA’s network of 236 supermarket-like commissaries at which
Capital Fund
military personnel and their dependents can purchase items for
cost plus a 5% surcharge.b
$740 mil ion
Other Working Capital
Funds the Army, Navy, Air Force, and Defense-wide WCFs.
Funds
$1.1 bil ion
Chemical Weapons
Funds the destruction of the U.S. stockpile of lethal chemical
Destruction
weapons pursuant to the Chemical Weapons Convention, a treaty
ratified by the United States in 1997.
$438 mil ion
DOD Inspector General
Funds independent investigative agency to detect fraud, waste, and
abuse in DOD operations.
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Source: CRS analysis of Operation and Maintenance Programs (O-1) and Revolving and Management Fund (RF-1),
Department of Defense FY2022 Budget, at https://comptrol er.defense.gov/Budget-Materials/.
Notes: Totals may not sum due to rounding.
a. For additional information, see CRS Report R46599, Congressionally Directed Medical Research Programs:
Background and Issues for Congress, by Bryce H. P. Mendez.
b. For additional information, see CRS In Focus IF11089, Defense Primer: Military Commissaries and Exchanges, by
Barbara Salazar Torreon and Kristy N. Kamarck.
Procurement
The procurement accounts fund the purchase of new equipment and modifications to weapons
already in service. Each of the three service Departments (Army, Navy, and Air Force) has several
procurement accounts. The Defense-Wide Procurement account supports Special Operations
Command (SOCOM), the Missile Defense Agency, and various other agencies that report directly
to the Office of the Secretary of Defense.9
For FY2022, the Administration requested $132.5 billion in procurement accounts, excluding
funds for chemical weapons demilitarization treated in the preceding section of this report.
Funding for this excluded activity is included with procurement funds in some DOD budget
documents, but Congress addresses it separately from procurement funding in the annual National
Defense Authorization Act (NDAA) and defense appropriations bills.
Figure 5. FY2022 Budget Request
In discretionary budget authority

Source: CRS analysis of Procurement Programs (P-1), Department of Defense FY2022 Budget Request, at
https://comptrol er.defense.gov/Budget-Materials/.
Note: SOCOM is the acronym of Special Operations Command.

9 For additional information, see CRS In Focus IF10599, Defense Primer: Procurement, by Heidi M. Peters and
Brendan W. McGarry.
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Table 4. FY2022 Procurement Budget Request
$35.7
Aircrafta
Funds procurement and modification of manned and unmanned airplanes and
bil ion
helicopters (except modifications for Special Operations aircraft), including a total
of $10.0 bil ion for procurement and modification of F-35 fighters, variants of
which are being used by the Air Force, Navy, and Marine Corps.
$22.6
Shipsb
Funds procurement of all Navy ships but not smaller watercraft purchased by
bil ion
other services and Special Operations units. Includes $6.3 bil ion for construction
of Virginia-class attack submarines and $4.6 bil ion for Columbia-class ballistic
missile subs. Funds refueling and modernization of nuclear-powered aircraft
carriers, but not modifications to other types of ships.
$21.6
Classified

bil ion
$13.2
Communications
Funds procurement of electronic equipment such as the Navy’s CANES data
bil ion
and Other
network ($412 mil ion), Army night-vision equipment ($1.1 bil ion), and an Air
Electronics
Force program to stockpile specialized computer chips used in many DOD items
($885 mil ion).
$10.5
Missiles
Funds procurement of ballistic and guided missiles, including $1.2 bil ion for anti-
bil ion
ballistic missile interceptors and supporting hardware for the Missile Defense
Agency (MDA).
$4.9 bil ion Armored
Funds procurement and modification of armored vehicles, artil ery, and small
Combat Vehicles
arms, including $981 mil ion for upgrades to M-1 tanks.
and Other
Weaponsc
$4.4 bil ion Munitions
Funds aerial bombs, artil ery shells, small arms ammunition, and Navy torpedoes;
includes $681 mil ion for Army-owned munitions production plants.
$2.8 bil ion Space Satellites
Funds military satellites and support equipment; includes $1.34 bil ion to procure
and Launchersd
satellite launch services.
$2.2 bil ion Special
Funds procurement of equipment unique to Special Operations forces, including
Operations
$1 bil ion for modifications to airplanes and helicopters purchased by the Army
Command
and Air Force.
(SOCOM)
$14.8
Other
Funds procurement of other durable goods, including engineering and
bil ion
construction equipment and noncombat vehicles.
Source: CRS analysis of Procurement Programs (P-1), Department of Defense FY2022 Budget Request, at
https://comptrol er.defense.gov/Budget-Materials/.
Notes: Totals may not sum due to rounding.
a. For additional information, see CRS In Focus IF10546, Defense Primer: United States Airpower, by Jeremiah
Gertler.
b. For additional information, see CRS In Focus IF10486, Defense Primer: Naval Forces, by Ronald O'Rourke.
c. For additional information, see CRS Report R46216, The Army’s Modernization Strategy: Congressional
Oversight Considerations, by Andrew Feickert and Brendan W. McGarry.
d. For additional information, see CRS In Focus IF11531, Defense Primer: National Security Space Launch, by
Stephen M. McCall.
Research and Development
The research and development (R&D) appropriations fund research ranging from highly
speculative (but potentially high-payoff) basic research to the development of improvements to be
installed on weapons already in service. Congress addresses more than 99% of DOD-funded
R&D in single bill titles in both the National Defense Authorization Act (NDAA) and the Defense
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Appropriations Act. Relatively small amounts for R&D related to medical care and other
activities are included in other parts of the annual DOD funding legislation (as discussed
above).10
Each of DOD’s four R&D appropriation accounts (Army, Navy, Air Force, and Defense-wide)
includes upwards of 200 program elements (commonly called “PEs”), each of which may
incorporate several projects. The PEs are organized into eight budget activities (BAs), each of
which is identified both by a title—for instance, “Basic Research”—and by a numerically
designated budget activity—in the case of Basic Research, budget activity 6.1 (typically referred
to simply by the numerical designation).
BA’s 6.1 through 6.5 are organized in a sequence progressing from basic research through
progressively more production-oriented development activities, to the prototyping of items
intended for procurement.11 BA 6.6 funds DOD’s R&D management support and infrastructure—
the laboratories and test ranges. BA 6.7 funds development of modifications to equipment already
in service. BA 6.8 funds a number of pilot programs being managed under modified procedures
designed to accommodate IT-dominated projects.12
DOD identifies BAs 6.1 through 6.3 as comprising its Science and Technology (S&T) budget,
developing intellectual property that activities in BAs 6.4, 6.5, and 6.7 use to generate technology
intended to address DOD’s current or near-term operational needs.
DOD’s R&D budget request uses code names such as Pilot Fish and Retract Juniper for several
programs for which most information other than the amount requested is classified.13 The budget
also requests a total of $27.4 billion for six PEs labelled “Classified Programs,” for which all
information is classified.14
For FY2022, DOD requested a total of about $112 billion in R&D funding. OMB’s assessment of
the federal government’s total R&D investment counts only DOD funding in budget activities
6.1-6.5. This amounted to $63 billion—slightly more than one-third of all federal R&D funding
requested for FY2022.15

10 For additional information, see CRS In Focus IF10553, Defense Primer: RDT&E, by John F. Sargent Jr.
11 In the case of complex systems such as airplanes, there may be a relatively small number of items manufactured
using R&D funding (rather than Procurement funding). Such a Low-Rate Initial Production (LRIP) run is intended to
provide production-representative articles for operational testing before the item is put into full-scale production. In
addition, there are certain missile-defense systems purchased only in relatively small numbers, for which all (or most)
production is funded through the R&D accounts.
12 For additional information, see CRS Report R44711, Department of Defense Research, Development, Test, and
Evaluation (RDT&E): Appropriations Structure, by John F. Sargent Jr.
13 For FY2022, the budget request includes $408.08 million for Pilot Fish and $144.54 million for Retract Juniper. In
the publicly available DOD budget justification books, the entry for each of these code-named programs states: “In
accordance with Title 10, United States Code, Section 119(a)(1) [the program in question is described] in the
[classified] Special Access Program Annual Report to Congress.”
14 Roughly three-quarters of this total, included in the Air Force and Space Force R&D requests, are widely referred to
as a “pass-through” accounts through which funds are provided to highly classified activities of agencies in the
intelligence community. See, for example, Jon Harper, “Can the Air Force Ditch the Pass-Through Budget?” National
Defense, September 13, 2021, at https://www.nationaldefensemagazine.org/articles/2021/9/13/can-the-air-force-ditch-
the-pass-through-budget.
15 Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, FY2022, Table 14-1, p.
178.
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Figure 6. FY2022 DOD Research and Development (R&D) Budget Request
In discretionary budget authority

Source: CRS analysis of Research, Development, Test & Evaluation Programs, (R-1), Department of Defense FY2022
Budget, at https://comptrol er.defense.gov/Budget-Materials/.
Table 5. FY2021 R&D Budget Request
$2.3 bil ion
6.1 Basic research
Funds study and experimentation to increase understanding in
physical, engineering, and life sciences related to long-term defense
requirements; about half of this work is contracted to universities.
$5.5 bil ion
6.2 Applied research
Funds research into the basic feasibility of a particular technological
approach to solving a specific military problem (but not directly
associated with development of a specific piece of hardware).
$6.9 bil ion
6.3 Advanced technology
Funds research involving development of components and efforts to
development
integrate components into system prototypes, as well as field testing
of hardware to demonstrate technological feasibility.
$31.3 bil ion
6.4 Advanced component
Funds testing in realistic operating environments of technologies
development and
integrated into functioning systems; includes $7.1 bil ion for ballistic
prototypes
missile defense projects, accounting for 99% of the Missile Defense
Agency’s R&D budget.
$15.8 bil ion
6.5 System development
Funds engineering development of specific systems slated for
and demonstration
production, the two most expensive of which are a missile launch
detection satellite designated Next Generation OPIR ($2.5 bil ion)
and a new presidential jet ($681 mil ion).
$7.4 bil ion
6.6 Management support
Funds overhead costs, including operation of DOD laboratories and
test ranges and some training of acquisition personnel.
$40.6 bil ion
6.7 Operational systems
Funds development of improvements to systems already in service.
development
Includes a total of $2.1 bil ion (distributed across four PEs) to fund
improvements to the F-35 fighter and $716 mil ion to upgrade B-52
bombers built in the 1960s and slated to remain in service beyond
2040.
$2.3 bil ion
6.8 Software and Digital
First appearing in the FY2021 budget request, this category
Technology Pilot
consolidates funding for software programs that previously was
Programs
divided between O&M and R&D accounts.
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Source: CRS analysis of Research, Development, Test & Evaluation Programs, (R-1), Department of Defense FY2022
Budget, at https://comptrol er.defense.gov/Budget-Materials/.
Note: Totals may not sum due to rounding.
For additional analysis and the text of the DOD definitions of the funding categories, see CRS Report R44711,
Department of Defense Research, Development, Test, and Evaluation (RDT&E): Appropriations Structure, by John F.
Sargent Jr.
Military Construction
The military construction accounts fund acquisition of new construction projects, significant
facilities improvements (going beyond routine maintenance), land acquisition for DOD facilities,
and the operation and maintenance of military family housing built and owned by contractors.
They also fund construction mandated by base closure and realignment commission (BRAC)
decisions and environmental cleanup required for the disposal of DOD property required by the
base closure process (BRAC).
For FY2022, the Administration requested $9.8 billion in military construction and related
funding.
Figure 7. FY2022 Military Construction Budget Request
In discretionary budget authority

Source: CRS analysis of Military Construction, Family Housing, and Base Realignment and Closure Program (C-1),
Department of Defense FY2022 Budget, at https://comptrol er.defense.gov/Budget-Materials/.
Table 6. FY2022 Military Construction Budget
$1.8 bil ion
Maintenance Facilities
Includes $250 mil ion to enlarge a dry dock at Portsmouth Naval
Shipyard; $208 mil ion for a Maintenance facility at the Marine
Corps’ Cherry Point, NC, airbase; and a total of $333 mil ion for
facilities to support the new B-21 bomber slated for basing at
El sworth Air Force Base in South Dakota.
$1.6 bil ion
Operational Facilities
Funds airfield facilities, docks, warehouses, and munitions magazines.
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The Department of Defense (DOD): An Orientation

$1.4 bil ion
Military Family
$1.35 bil ion for furnishing, maintenance, and leasing costs for
Housing
military family housing built and owned by contractors, and $92
mil ion to build new government-owned housing in Vicenza, Italy.
$1.0 bil ion
Planning and Design

$773 mil ion
Training Facilities
Includes $270 mil ion for National Guard and Army Reserve
facilities.
$500 mil ion
Medical Facilities
Includes $313 mil ion for increments of multistage plans to rebuild
major medical centers in Bethesda, MD, and at Ft. Leonard Wood,
MO.
$444 mil ion
Barracks
Includes funding for eight housing complexes for unaccompanied
enlisted personnel.
$285 mil ion
Base Realignment and
Funds construction projects required as a result of BRAC decisions;
Closure (BRAC)
also funds environmental cleanup of DOD-owned sites that are
divested as a result of BRAC process.
$247 mil ion
Energy Efficiency

$212 mil ion
Dependents’ Schools
Funds schools in Germany and Puerto Rico, an administrative
and Child Daycare
headquarters in Belgium, and a day-care center at Sheppard Air
Force Base in Texas.
$1.3 bil ion
Administration and
Includes $313 mil ion to fund, without specific prior congressional
Other
authorization projects estimated to cost no more than $6 mil ion
each.
$206 mil ion
NATO
Funds the U.S. contribution to NATO-funded common-use facilities
in Europe.
Source: CRS analysis of Military Construction, Family Housing, and Base Realignment and Closure Program (C-1),
Department of Defense FY2022 Budget, at https://comptrol er.defense.gov/Budget-Materials/.
Note: Totals may not sum due to rounding.

Author Information

Pat Towell

Specialist in U.S. Defense Policy and Budget

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The Department of Defense (DOD): An Orientation

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