Defense Procurement: Full Funding Policy - Background, Issues, and Options for Congress. CRS Report for Congress
Abstract
The full funding policy is a federal budgeting rule imposed on the Department of Defense (DoD) by Congress in the 1950s that requires the entire procurement cost of a weapon or piece of military equipment to be funded in the year in which the item is procured. Although technical in nature, the policy relates to Congress' power of the purse and its responsibility for conducting oversight of DoD programs. Support for the policy has been periodically reaffirmed over the years by Congress, the Government Accountability Office, and DoD. In recent years, some DoD weapons -- specifically, certain Navy ships -- have been procured with funding profiles that do not conform to the policy as it traditionally has been applied to DoD weapon procurement programs. DoD, as part of its FY2005 and FY2006 defense budget submission, proposed procuring ships and aircraft using funding approaches that did not conform to the policy as traditionally applied. DoD's proposals would establish new precedents for procuring other DoD weapons and equipment with nonconforming funding approaches. Such precedents could further circumscribe the full funding policy. This, in turn, could limit and complicate Congress' oversight of DoD procurement programs, or require different approaches to exercise control and oversight. A principal effect of the full funding policy is to prevent the use of incremental funding, under which the cost of a weapon is divided into two or more annual portions. Incremental funding fell out of favor for a variety of reasons. Congress has several options for responding to recent proposals for procuring DoD ships and aircraft with funding mechanisms that do not conform to the full funding policy. These options could have the effect of terminating, modifying, maintaining, or strengthening the full funding policy. The process of weighing options may involve balancing a need to meet DoD procurement goals against the goal of preserving Congress' control over DoD spending.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 28, 2005
- Accession Number
- ADA436201
Entities
People
- Ronald O'Rourke
- Stephen Daggett
Organizations
- Library of Congress