Last week, the Department of Defense Comptroller published a document with the ponderous title “FY 2026 President’s Budget Activities and Proposals in Support of Planning, Programming, Budgeting, and Execution (PPBE) Reform and Other Budget Execution Flexibilities.” The document summarizes recent efforts to reform the PPBE process and thereby accelerate defense acquisitions. It also provides a few insights into efforts that are underway. This week’s post provides a quick overview of some interesting proposals that may be of interest.

Software Funding Flexibility

This section describes how the software lifecycle and defense budgeting process are not properly aligned, meaning the currently disjointed approach inhibits the DOD’s integration of new capabilities. Specifically, Operation and Maintenance (O&M) funding is usually used to fix issues with existing software while Research, Development, Test, and Evaluation (RDT&E) funding is used to integrate new capabilities. To get past this roadblock, the report proposes adding a general provision to the Defense Appropriations Bill currently before Congress that allows appropriations under titles II, III, and IV to “be used for expenses for the agile research, development, test and evaluation, procurement, production, modification, and operation and maintenance for software and digital technology programs.”

In short, the DOD would like to make available all types of funding, including Procurement, RDT&E, and O&M for the entire lifecycle of software acquisition and development. Doing so would provide flexibility when it comes to allocating resources and ensure that programs have steady and consistent funding.

Foundational Data Governance and Management

Establishing common standards is key to making data useable by modern analytics capabilities. To that end, the DOD is creating a PPBE Common Data Model that defines “a standardized set of data elements aligned to the Standard Financial Information Structure to ensure leaders, forums, and processes in the Department have quality analytic insights to leverage for decisions and guidance.” The DOD has already engineered twelve of twenty targeted data sources on the new standard, providing consistency for Comptroller decision making and finally moving the department toward achieving a clean audit.

Although the document mentions only twenty data sources, it is likely that the new foundation will extend to additional sets. Potential industry partners should therefore make sure they understand the elements of the new foundation before bidding on any work that may be related.

Defense Health Program Transformational Fund

Lastly, the DOD is proposing that the Defense Health Program be given the authority to “transfer unobligated balances of expired discretionary funds in any of its accounts into a Transformation Fund for the purposes of: (1) medical treatment facility infrastructure improvements, including nonrecurring maintenance; (2) military health system information technology systems improvements and sustainment; and (3) shortfalls in the Private Sector Care (PSC)/TRICARE program.”

Assuming that steadily rising PSC/TRICARE costs don’t devour whatever unspent discretionary funds might remain, this additional funding could benefit industry partners working with the Defense Health Agency on IT and architecture, engineering, and construction projects.