Research Development Test & Evaluation (RDT&E) funding is used to pay the operating costs of dedicated activities engaged in the conduct of research, development, and test and evaluation efforts performed by a contractor and/or government organization. It’s used to develop equipment, material, or computer application software and its Development Test and Evaluation (DT&E) and Initial Operational Test and Evaluation (IOT&E).
There is an RDT&E Appropriation Category for each service.
|Appropriations Accounts||Navy||Army||Marines||Air Force||DoD Wide|
|Research and Development (R&D)||3019||2040||3600||0400|
The RDT&E cost may include purchases of end items, weapons, equipment, components, and materials as well as performance of services in order to develop and test the system. This applies to automated information systems as well as weapon systems. RDT&E funds can also be used for both investment-type costs (e.g., sophisticated laboratory test equipment) and expense-type costs (e.g., salaries of civilian employees at R&D-dedicated facilities).
RDT&E funds may also be used in the acquisition or construction of industrial facilities costing less than $750,000 for the dedicated used of research and development. All construction at R&D installations and activities costing more than that will be funded in the Military Construction appropriations.
DoD 7000.14-R Volume 2A “Financial Management Regulation (FMR)” provides general guidance on the formulation and submission of the budget requests to the Office of the Secretary of Defense (OSD). It’s used for a budget review, submission, presentation and justification to Congress. For more on the Research and Development rules and regulations and budget guidance
The budget request for RDT&E projects and programs should be developed and presented in accordance with the following principles: 
- Annual estimates of initial financing needed for new major weapon systems and other development programs and projects requiring several years to complete, and which involve contracts spanning more than one year, should be formulated to cover costs expected to be incurred during each fiscal year.
- Work longer than 12 month but less than 24 months with no logical way to divide it up will be presented.
- 2-year availability of funds authorized for the Research, Development, Test and Evaluation appropriation provides the necessary flexibility for program execution in those circumstances.
- Engineering change orders should be funded commensurate with the level of risk in the program.
AcqLinks and References: