Core Defense Appropriations are Growing Faster than DOD’s Annual Requests
Published: October 24, 2018
O&M, Procurement, and RDT&E funding is rising quickly
Making sense of the annual Defense budget can be challenging. The budget is divided into so many buckets, funds, and line items that it can be a real jungle to navigate. Recently, while reviewing the budgets approved by Congress for the Department of Defense over the last 3 years, I came across something interesting; the fact that portions of the DOD’s base discretionary budget, the parts of the budget that provide most of DOD’s annual funding, are growing faster in percentage terms than the department’s overall requests.
DOD has been getting bigger infusions of funding since Donald Trump took office. Still, with all of the congressional bickering around annual appropriations, I thought it worthwhile to go back and double-check how appropriations the last 3 years stacked up against the DOD’s requests. I’m glad I did because the picture is quite positive for contractors.
DOD’s Requested FY 2017-2019 Base Discretionary Budgets
The chart below shows the base discretionary funding that DOD has requested over the last 3 years.
Measured by base discretionary requests alone (i.e., excluding Overseas Contingency Operations (OCO) and Military Construction), the DOD’s budget is up 13.8% from FY 2017 to FY 2019.
The numbers in the chart come from “Table A-4. DoD Base Budget by Appropriation Title” in the Budget Overview Books that DOD publishes each year. They are proposed by DOD to help Congress understand what funding the department needs each year. DOD refers to them as “Defense Bill” in its tables.
Here’s an example of the table from the FY 2019 DOD Budget Request Overview. You can see the total request listed on the Defense Bill line.
DOD’s Appropriated FY 2017-FY 2019 Funding (O&M, Procurement, and RDT&E)
Now compare the appropriated funding (not the requests) for Operations and Maintenance (O&M), Procurement, and Research, Development, Test, and Evaluation (RDT&E) over the last 3 years. These categories provide the lion’s share of DOD’s annual funding. They are the big buckets.
The O&M, Procurement, and RDT&E numbers I’m comparing here are those in the base budget for the Military Departments and Defense Agencies. I have not included Defense Health, Shipbuilding and Conversion, or the numbers for National Guard and Reserves. They are strictly the numbers from the columns highlighted in the table below. Again, this table is taken from the FY 2019 budget
According to these numbers the big buckets in DOD’s funding have grown 23% since FY 2017. This is a rate almost double that of the budgets DOD has requested. This kind of growth probably won’t continue in the years to come, but for now contractors working with the DOD have a much larger pool of funding to look forward to than they did only 2 fiscal years ago.