A Preliminary Analysis of Advance Appropriations as a Budgeting Method for Navy Ship Procurements

by Irv Blickstein, Giles K. Smith

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Abstract

A companion piece to MR-1526 that examines the pros and cons of applying advance appropriations across a broader segment of the Navy shipbuilding program than just aircraft carriers. The entire cost of a ship is normally included in the congressional budget for the year of construction start, which can cause large year-to-year fluctuations in the shipbuilding budget and complicate budget management. This report analyzes an alternative strategy, advance appropriations, whereby the full cost of a ship is distributed over several budget years. This strategy can reduce fluctuations in the budget level and can create the equivalent of a loan against future budgets, but also constrains management flexibility in coping with unexpected events.

The research described in this report was performed under the auspices of RAND's National Security Research Division.

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