From a budget line to a notice: reading the P-1 and R-1

What the exhibits are

Each year the defense budget request goes to Congress for the fiscal year that starts on the following October 1. The Department's Comptroller publishes it as a set of summary exhibits, each one a table with a row per line. Two matter most to a supplier.

• P-1, Procurement Programs. What the services ask to buy: aircraft, ships, vehicles, missiles, ammunition, equipment, spares.
• R-1, Research, Development, Test and Evaluation Programs. What they ask to develop, one row per program element.

There are others, including the O-1 for operation and maintenance, which is where most sustainment and services money sits. Each is offered as a document and as a spreadsheet.

Reading a P-1 line

A P-1 row names the appropriation, such as Aircraft Procurement, Navy. It gives the budget activity within that appropriation, a line number and the item. Then it gives the quantity and the amount for the prior year, the current year and the year being requested.

Read across. A line that grows from one year to the next is a program moving into production. A line that shrinks is ending or slipping. A line that appears for the first time is a new start, and a new start generally cannot begin until an appropriation is enacted, however early the request was published.

Reading an R-1 line

An R-1 row is a program element: a number, a title, a budget activity and the amounts. The budget activity tells you how far the work is from a product. Activities 1 to 3 are basic research, applied research and advanced technology development. Activity 4 is advanced component development and prototypes. Activity 5 is system development and demonstration. Activity 7 is development on systems already in operation.

Watch a program move. One that goes from activity 4 to activity 5, and then begins to appear in the P-1, is turning into something that will be bought in quantity. That passage takes years, and each step is published before it happens.

The exhibits behind the line

The summary row is an index. The justification books published with the request hold detailed exhibits for each line, and two of them name names.

• P-5a, Procurement History and Planning. For the items on a procurement line: the contracting office, the contractor and its location, the contract method and type, the award date and the date of first delivery.
• R-3, Project Cost Analysis. For a development project: the contract method and type, the performing activity and its location, the award date and the cost by year.

Beside them, the P-40 and the R-2 give the description and the justification, the P-21 gives the production schedule, and the R-4 gives the milestones. Read together they say what is being bought, from whom, under what kind of contract, and when the next award is planned.

From the line to the notice

A budget line and a contract share no identifier. The join is made by reading. Take the item name, the program element number, the contracting office and the contractor from the exhibits, and search the award record and SAM.gov for them. Awards to the named contractor from the named office show the current contract and its end date. Notices from that office that carry the program name are the next buy taking shape.

The order of events is fixed: the request, the appropriation, the notices, the award. A planned award date in a P-5a or an R-3 tells you which fiscal year to watch, and a market research notice from the same office in that year is the one to answer.

The mistakes

• Reading a request as money. Congress appropriates, and the enacted amount can differ from the request. Read the direction and the timing, not the exact figure.
• Assuming one line is one contract. A line can fund many contracts, and a contract can draw on several lines.
• Stopping at the prime. A production line awarded to a large prime is still a market for the companies that supply it. The exhibits say which prime and when production builds up.
• Ignoring the operating accounts. If you sell services or repair, your money is more likely in the O-1 than in either of these.

Defense budget in LastAwarded holds the P-1, R-1 and O-1 lines from each published request, shows how a line has moved from one request to the next, and lists contracts whose descriptions mention it. That list is matched on words, and the screen says so.