Figure 1. DOD Share of Federal R&D Source: CRS analysis of FY2017 data from Analytical Perspectives, Budget of the United States Government, Fiscal Year 2019. The Department of Defense (DOD) receives nearly 40% of all federal research and development (R&D) appropriations, and more than 43% that of the next largest federal recipient, the Department of Health and Human Services. The work funded by these appropriations plays a central role in the nation's security as well as an important role in U.S. global leadership in science and technology. This report provides an introduction to the structure of DOD's research, development, test, and evaluation (RT&E) budget for staff attempting to understand DOD RDT&E appropriations. In its annual budget request to Congress, DOD presents its RDT&E by organization and program and by the character of the work to be performed. The RDT&E request is summarized in a supporting budget document titled "Research, Development, Test, & Evaluation Programs (R-1)," which is often referred to simply as the R-1. DOD RDT&E appropriations are provided annually through the defense appropriations act, one of the 12 regular appropriations acts that provide most of the discretionary funding for operation of the federal government. Generally, DOD RDT&E funding is provided in four of the act's titles (see box). More than 95% of DOD's RDT&E funding is appropriated in Title IV (Research, Development, Test, and Evaluation), which includes RDT&E appropriations for the Army, Navy, Air Force, a Defense-wide RDT&E account, and the Director of Operational Test and Evaluation. Within each of these accounts are dozens of program elements (PEs) that specify funding for particular activities (e.g., night vision technology, aviation survivability, cyber operations technology development). RDT&E funds are also appropriated for programs in other parts of the act. For example, RDT&E funds are appropriated as part of the Defense Health Program and the Chemical Agents and Munitions Destruction Program, and sometimes as part of the National Defense Sealift Fund. The Defense Health Program (DHP) supports the delivery of health care to DOD personnel and their families. DHP funds (including any RDT&E funds) are appropriated in Title VI. The program's RDT&E funds support congressionally directed research on breast, prostate, and ovarian cancer; traumatic brain injuries; orthotics and prosthetics; and other medical conditions. The Chemical Agents and Munitions Destruction Program supports activities to destroy the U.S. inventory of lethal chemical agents and munitions. Funds for this program are requested through the Defense-wide Procurement appropriations request. Congress appropriates funds for this program in Title VI (Other Department of Defense Programs). The National Defense Sealift Fund supports the procurement, operation and maintenance, and research and development of the nation's naval reserve fleet and supports a U.S.-flagged merchant fleet that can serve in time of need. The RDT&E funding for this effort is requested in the Navy's Procurement request and appropriated in Title V (Revolving and Management Funds) of the appropriation act. RDT&E funds also have been requested and appropriated as part of DOD's separate funding to support Overseas Contingency Operations (OCO, formerly the Global War on Terror (GWOT)). Typically, the RDT&E funds appropriated for OCO activities in Title IX support specified PEs in Title IV. However, they are requested and accounted for separately. The Bush Administration requested these funds in separate GWOT emergency supplemental requests. The Obama Administration included these funds as part of its regular budget request, not in emergency supplemental requests, although it sometimes asked for additional OCO funds in supplemental requests. The Trump Administration included these funds as part of its regular budget requests. The Joint Improvised-Threat Defeat Fund (JITDF, formerly the Joint Improvised Explosive Device Defeat Fund) works to counter improvised threats (e.g., improvised explosive devices (IEDs)) through tactical responsiveness and anticipatory, rapid acquisition. Some of the funds appropriated to JIDF are used for RDT&E. Under the President's FY2019 request, "In accordance with congressional intent ... all appropriations requested for the [Joint Improvised-Threat Defeat Organization] will be transitioned to Defense-wide appropriation accounts," including the RDT&E account. In addition, OCO-related requests and appropriations have included funds for a number of transfer accounts. In the past, these have included the Iraqi Freedom Fund (IFF), the Iraqi Security Forces Fund, the Afghanistan Security Forces Fund, and the Pakistan Counterinsurgency Capability Fund. Congress typically makes a single appropriation to each of these funds and authorizes the Secretary of Defense to make transfers to other accounts, including RDT&E, subject to certain limitations. These transfers are eventually reflected in prior-year funding figures for DOD Title IV. While DOD Title IV appropriations are made by organization (e.g., Research, Development, Test and Evaluation, Army), the DOD R-1 and congressional appropriations reports and explanatory statements also typically characterize this funding by the character of work to be performed. This characterization is provided in seven categories, each with a budget activity code (6.1 through 6.7) and a description (see Table 1 ). DOD's Financial Management Regulation (DoD 7000.14-R) provides a detailed description of the types of activities supported in each budget activity category: [6.1] Basic Research. Basic research is systematic study directed toward greater knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications towards processes or products in mind. It includes all scientific study and experimentation directed toward increasing fundamental knowledge and understanding in those fields of the physical, engineering, environmental, and life sciences related to long-term national security needs. It is farsighted high payoff research that provides the basis for technological progress. Basic research may lead to: (a) subsequent applied research and advanced technology developments in Defense-related technologies, and (b) new and improved military functional capabilities in areas such as communications, detection, tracking, surveillance, propulsion, mobility, guidance and control, navigation, energy conversion, materials and structures, and personnel support… [6.2] Applied Research. Applied research is systematic study to understand the means to meet a recognized and specific need. It is a systematic expansion and application of knowledge to develop useful materials, devices, and systems or methods. It may be oriented, ultimately, toward the design, development, and improvement of prototypes and new processes to meet general mission area requirements. Applied research may translate promising basic research into solutions for broadly defined military needs, short of system development. This type of effort may vary from systematic mission-directed research beyond that in [6.1] to sophisticated breadboard hardware, study, programming and planning efforts that establish the initial feasibility and practicality of proposed solutions to technological challenges. It includes studies, investigations, and non-system specific technology efforts. The dominant characteristic is that applied research is directed toward general military needs with a view toward developing and evaluating the feasibility and practicality of proposed solutions and determining their parameters. Applied Research precedes system specific technology investigations or development. … [6.3] Advanced Technology Development (ATD). This budget activity includes development of subsystems and components and efforts to integrate subsystems and components into system prototypes for field experiments and/or tests in a simulated environment. [6.3] includes concept and technology demonstrations of components and subsystems or system models. The models may be form, fit, and function prototypes or scaled models that serve the same demonstration purpose. The results of this type of effort are proof of technological feasibility and assessment of subsystem and component operability and producibility rather than the development of hardware for service use. Projects in this category have a direct relevance to identified military needs. Advanced Technology Development demonstrates the general military utility or cost reduction potential of technology when applied to different types of military equipment or techniques. Program elements in this category involve pre-Milestone B efforts, such as system concept demonstration, joint and Service-specific experiments or Technology Demonstrations and generally have Technology Readiness Levels of 4, 5, or 6. (For further discussion on Technology Readiness Levels, see the Assistant Secretary of Defense for Research and Engineering's Technology Readiness Assessment (TRA) Guidance.) Projects in this category do not necessarily lead to subsequent development or procurement phases, but should have the goal of moving out of Science and Technology (S&T) and into the acquisition process within the Future Years Defense Program (FYDP). Upon successful completion of projects that have military utility, the technology should be available for transition. [6.4] Advanced Component Development and Prototypes (ACD&P). Efforts necessary to evaluate integrated technologies, representative modes, or prototype systems in a high fidelity and realistic operating environment are funded in this budget activity. The ACD&P phase includes system specific efforts that help expedite technology transition from the laboratory to operational use. Emphasis is on proving component and subsystem maturity prior to integration in major and complex systems and may involve risk reduction initiatives… [6.5] System Development and Demonstration (SDD). System Development and Demonstration (SDD) programs [conduct] engineering and manufacturing development tasks aimed at meeting validated requirements prior to full-rate production. This budget activity is characterized by major line item projects... Prototype performance is near or at planned operational system levels.