Defense Primer: Procurement

Updated February 11, 2026

Defense Primer: Procurement

Overview

While procurement implies a process of obtaining goods or

services, the word also refers to a specific title and to

associated accounts within the typically annual National

Defense Authorization Act (NDAA) and Department of

Defense Appropriations Act.

Appropriations for Procurement

The Department of Defense (DOD), which is “using a

secondary Department of War designation,”

under Executive Order 14347 dated September 5, 2025,

procurement appropriations title provides funds for

nonconstruction-related investment costs—the costs to

acquire capital assets, such as an F-35 Joint Strike Fighter

aircraft or a Virginia-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 appropriations to obtain

various categories of materiel, including

• new military hardware (e.g., aircraft, ships, armored

vehicles, radios, and satellites);

• upgrades to existing equipment, including service life

extension or remanufacturing programs;

• weapons and ammunition (e.g., air-to-air missiles and

rifle rounds); and

• spares and repair parts.

Procurement funding provided to the department in a given

fiscal year (FY) can usually be obligated over a period of

three years. The most prominent exception is Navy

Shipbuilding and Conversion funding, which is available

for five years. Congress enacted FY2025 appropriations for

DOD through two short-term continuing resolutions (CRs)

and one full-year CR (P.L. 118-83; P.L. 118-158; and P.L.

119-4 ). In total, these CRs provided $167.5 billion for

procurement accounts. (See Table 1).

NDAA and Defense Appropriations

in one fiscal year. In other words, the total funding

necessary to acquire a useable end-item is approved by

Congress in a single fiscal year, even though related work

may span many years.

Table 1. Selected Funding for DOD Procurement

Accounts in the Full-Year Continuing Appropriations

and Extensions Act, 2025 (P.L. 119-4)

Account (Acronym)

$ (billions)

Aircraft Procurement, Army

$3.5

Missile Procurement, Army

$6.0

Procurement of Weapons and Tracked

Combat Vehicles, Army

$3.7

Procurement of Ammunition, Army

$2.9

Other Procurement, Army

$8.7

Aircraft Procurement, Navy

$15.9

Weapons Procurement, Navy

$6.3

Procurement of Ammunition, Navy and Marine

Corps

$1.6

Other Procurement, Navy

$15.1

Procurement, Marine Corps

$3.8

Aircraft Procurement, Air Force

$19.9

Missile Procurement, Air Force

$4.3

Procurement of Ammunition, Air Force

$0.6

Other Procurement, Air Force

$31.0

Procurement, Space Force

$3.9

Procurement, Defense-Wide

$5.7

Defense Production Act (DPA) Purchases

$0.5

National Guard and Reserve Equipment

$0.9

Shipbuilding and Conversion, Navy (SCN)

$33.3

TOTAL

$167.6

CRS In Focus IF10516, Defense Primer: Navigating the NDAA

CRS In Focus IF10515, Defense Primer: The NDAA Process

CRS In Focus IF10514, Defense Primer: Defense Appropriations

Process

How is DOD Procurement Funded?

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)

Source: CRS analysis of Division A, Title IV, Sections 1403-1404 of

the Full Year Continuing Appropriations and Extensions Act, 2025

(P.L. 119-4). The FY2025 reconciliation act ( P.L. 119-21) specified

funds for appropriation that could be used for DOD procurement

but did not specify funds for appropriation by typical title names,

(including procurement) so these figures are not included in this

chart.

Note: Figures rounded.

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Defense Primer: Procurement

Exceptions to Full Funding

•

Incremental Funding. In rare cases, programs have

been procured using incremental funding, a funding

policy typically associated with research and

development activities. Under incremental funding, a

system’s cost is phased over two or more fiscal years.

Incremental funding has principally been used to

procure certain ships and submarines (e.g., Virginiaand Columbia-class submarines) but is typically

avoided as a funding mechanism for procurement.

• Multiyear Procurement. Under 10 U.S.C. §3501,

Congress sometimes authorizes multiyear procurement

(MYP) for programs. MYP can achieve savings by

committing to buy items from a contractor over multiple

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

to substantially change over the multiyear period.

Examples include ships (e.g., Virginia-class submarines

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

Artillery Rocket Systems, or HIMARS, and MGM–140

Army Tactical Missile Systems, or ATACMS)).

• Advance Procurement. Programs receive advance

procurement funds for components of a unit that need to

be purchased long before the unit itself is purchased.

Advance procurement requires a separate initial

contract, and its authority is provided in an

appropriations act. For programs using MYP, advance

procurement may also be used to achieve economic

order quantity, which is defined as buying enough of an

item to minimize the total cost.

When Does a Program Enter

Procurement?

A program that produces a major capability (e.g., an aircraft

carrier) typically enters procurement after it receives

Milestone C approval in the Defense Acquisition System.

Prior to procurement, programs are considered to be in

development and are generally funded through Research,

Development, Test and Evaluation (RDT&E)

appropriations. Some programs may receive procurement

funds before a formal Milestone C approval.

How Else Does DOD Purchase Goods

and Services? How Does Procurement

Relate to Defense Contracting?

Congress typically authorizes and appropriates procurement

funding to DOD for nonconstruction investments. DOD

may use 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 DOD identifies such purchases as expenses rather

than investments and funds them in other parts of its

budget.

DOD purchases goods and services from the private sector

through contracts and accounts for expenditures as contract

obligations. These individual activities—most of which are

too granular to be captured in appropriations data—are

tracked at the level of obligations. Obligation is the term

used when agencies enter into contracts, employ personnel,

or otherwise commit to spending money.

Considerations for Congress

Congress may face several questions relevant to DOD

procurement, including

• Does Congress have adequate information to exercise

oversight of exceptions to full funding policies (e.g.,

incremental funding and multiyear procurement)?

• How might the delineation between procurement and

RDT&E funding impact development of new

capabilities? Is Milestone C approval the appropriate

time for a program to move from RDT&E funding to

procurement funding?

• What demand signal do procurement appropriations

timelines send to the defense industrial base?

Relevant Statutes

Title 10, Part IV, of the U.S. Code—Service, Supply, and

Procurement.

CRS Products

For information on the full funding policy in DOD

procurement, see CRS Report RL31404, Defense Procurement:

Full Funding Policy—Background, Issues, and Options for Congress

For information on special cases of procurement, see CRS

Report R41909, Multiyear Procurement (MYP) and Block Buy

Contracting in Defense Acquisition: Background and Issues for

Congress

For general information on defense procurement and contract

acquisition, see CRS In Focus IF10600, Defense Primer:

Department of Defense Contractors and CRS Report R44010,

Defense Acquisitions: How and Where DOD Spends Its Contracting

Dollars

Other Resources

DOD Comptroller, Defense Budget Materials,

https://comptroller.war.gov/budget-materials/

DOD 7000.14-R, “Financial Management Regulation,” Budget

Formulation and Presentation: Procurement Appropriations, vol. 2B,

Ch. 4, November 2017, https://comptroller.war.gov/Portals/45/

documents/fmr/Volume_02b.pdf

Alexandra G. Neenan, Analyst in U.S. Defense Policy

IF10599

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Defense Primer: Procurement

Disclaimer

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