A Look at Select Parts of the Defense FY 2026 Budget Appendix

Information has been hard to come by detailing the upcoming Department of Defense (DOD) budget request for fiscal year 2026. That the DOD’s release of the request is late is not unusual. Defense officials often drop their budget documents several weeks, if not months, after the Office of Management and Budget publishes the FY 2026 request. Federal Market Analysis recently published a first take on the numbers in the DOD’s major budget categories that readers can find here. Today’s post provides updated data for three large budget categories – Operations and Maintenance, Research, Development, Test & Evaluation, and Procurement – that came out over the weekend in the Technical Supplement to the 2026 Budget: Department of Defense Appendix.

Operations and Maintenance (O&M)

Updated O&M budget numbers are available for the six largest organizations in DOD – the Military Departments and the Fourth Estate. The numbers shown are also from the regular Service accounts, meaning they do not include funding requested by the Reserves or National Guard.

The data shows that in general O&M funding will remain stable in FY 2026, if Congress includes all the resources the DOD has requested. The one organization for which this does not hold true is the Fourth Estate. Defense Agencies will see a $6.2B drop in O&M funding. The cuts are spread out across the Defense-Wide request, but two accounts stand out as the hardest hit. These include the O&M of Equipment ($7.3B; -$1.6B vs. FY 2025) and Advisory and Assistance Services ($7.1B; -$579M vs. FY 2025)

Research, Development, Test & Evaluation (RDT&E)

RDT&E shows a little more volatility than O&M. This generally means less funding for new programs will be available in the coming fiscal year.

Every part of the DOD, except the Air Force, is slated to see a decline in its RDT&E funding next fiscal year. Funding for Advisory and Assistance Services is scheduled to drop by $377M vs. FY 2025 to a total of $747M, while funding for R&D Contracts will rise by $12.5B vs. FY 2025 to $55.1B.

Procurement

Requested funding for Procurement looks poised to decline across the board with the Army expecting a drop of $10.5B altogether.

Cuts to Army Procurement budgets are found across many budget categories. The ones that stand out include the following:

• $7.3B for the Procurement of Missiles (Other Missiles), $1.6B less than FY 2025.
• $4.7B for the Procurement of Ammunition (Equipment), $1.1B less than received in FY 2025.
• $3.2B for the Procurement of Weapons and Tracked Combat Vehicles (Equipment), $1.2B less than FY 2025.

The good news for many vendors is the funding for Other Procurement, which is where most of the Army’s spending on network services and Information Technology can be found, will actually grow from $7.0B in FY 2025 to $9.2B in FY 2026.

Summing up, while there may be pockets where funding will decline, these appear to be in specialized areas and not across the board. Meanwhile, there are other areas that will see funding increase or remain stable compared to previous fiscal years.