Defense Procurement: Full Funding Policy - Background, Issues, and Options for Congress

The full funding policy is a federal budgeting rule imposed on 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 Congresss power of the purse and its responsibility for conducting oversight of Department of Defense 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, in recent budget submissions, has proposed procuring ships and aircraft using funding approaches that do not conform to the policy as traditionally applied. DODs proposals would establish new precedents for procuring other DOD weapons and equipment with non-conforming funding approaches. Such precedents could further circumscribe the full funding policy. This, in turn, could limit and complicate Congresss oversight of DOD procurement programs, or require different approaches to exercise control and oversight.