Recommendation 11A: Allow Procurement, RDT&E, or O&M to be Used for the Full Cycle of Software Development, Acquisition, and Sustainment

Description and Justification: The Commission recommends that the Under Secretary of Defense (Comptroller) revise the Financial Management Regulation to allow the use of Procurement, RDT&E, or O&M appropriations to fund all software activities. Effective software development and acquisition occurs today through a continuous cycle of development, prototyping, testing, fielding, troubleshooting, revision, and sustainment. The requirement to use different appropriations during these activities fits poorly with this continuous cycle. Allowing Procurement, RDT&E, or O&M to fund software reduces the risks associated with drawing new funding barriers between software and hardware within programs, such as Anti Deficiency Act Violations, while providing the budget agility appropriate for the continuous and iterative nature of software. See page 84 of the Final Report for additional information.

SEC. __. Software Color of Money
(a) IN GENERAL. —Not later than 180 days after the date of the enactment of this Act, the Under Secretary of Defense (Comptroller) shall revise the Department of Defense Financial Management Regulation to provide that funds appropriated for the acquisition of software in any appropriation account shall be available for the full cycle of software acquisition, including development, prototyping, testing, fielding, troubleshooting, revision, and sustainment.
(b) NOTIFICATION. —Not later than 10 days after completing the revisions required by this provision to the Financial Management Regulation, the Under Secretary shall notify the congressional defense committees.