H.R. 3838, Streamlining Procurement for Effective Execution and Delivery and National Defense Authorization Act for Fiscal Year 2026

Bill Summary

H.R. 3838 would specify authorizations of appropriations totaling $884.3 billion for 2026. The bill also includes provisions that would affect the costs of defense programs that would be funded with discretionary appropriations in 2026 and future years. Those provisions mainly would affect force structure, compensation and benefits, and multiyear procurement of weapons systems. For 2026, those costs are included in the authorizations specified in the bill for that year. CBO expects that some costs after 2026 will be covered by specified authorizations in future National Defense Authorization Acts.

Estimated Federal Cost

The estimated budgetary effects of H.R. 3838 are shown in Table 1. Of the $884.3 billion authorized for 2026, nearly all—$882.9 billion—would be for activities within budget function 050 (national defense). The other $1.4 billion would fall within budget functions 270 (energy), 400 (transportation), and 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 3838 will be enacted near the start of fiscal year 2026 and that the authorized amounts will be appropriated in 2026. CBO estimates that appropriation of the specified amounts would increase outlays by $868.1 billion over the 2026-2035 period; those outlays were estimated using historical spending patterns for similar programs.

Spending Subject to Appropriation

H.R. 3838 would specifically authorize appropriations of $884.3 billion for 2026. Almost all of that amount—$882.9 billion—would be for defense programs; $1.4 billion would be for nondefense programs (see Table 2).

The amount authorized for defense programs in 2026 would be $9.6 billion (or 1 percent) less than the $892.6 billion in discretionary funding that was appropriated for defense in 2025. That 2025 appropriation includes $11.8 billion in funding that was designated as an emergency requirement—mostly for shipbuilding and expenses related to natural disasters. Excluding that emergency-designated funding, the amount authorized for 2026 would be $2.1 billion more than the amounts appropriated in 2025. (Those appropriated amounts also exclude the estimated $153.4 billion in mandatory budget authority that was provided for defense activities by Public Law 119-21, the 2025 reconciliation legislation enacted on July 4, 2025; those mandatory amounts are available for obligation through 2029.)

H.R. 3838 would increase authorizations for all major categories of defense spending except procurement. Authorizations would increase for the following categories:

• military personnel by $11.5 billion (or 6 percent),
• operation and maintenance and revolving funds by $0.5 billion (or less than 1 percent),
• research and development by $1.7 billion (or 1 percent), military construction and family housing by $1.4 billion (or 8 percent), and
• atomic energy activities by $0.8 billion (or 3 percent).

Authorizations would decrease for procurement by $13.7 billion (or 8 percent).

For nondefense programs, the bill would specifically authorize $1.4 billion in 2026. That amount includes $1.1 billion for the Maritime Administration, $163 million for a Department of Veterans Affairs medical-facility demonstration fund, $77 million for the Armed Forces Retirement Home, and $13 million for the Naval Petroleum Reserves.

Estimated Costs for Selected Provisions for 2026 through 2030

H.R. 3838 includes provisions that would affect the costs of various defense programs in future years. The estimated effects of some of those provisions are shown in Table 3 and described below. Spending for affected programs and activities would be subject to the appropriation of the estimated amounts. The net costs of those defense-related provisions are not added to the total specified authorizations described above because CBO expects those activities would be funded from the amounts specifically authorized in this bill for 2026 and that, over the 2027–2030 period, the costs associated with those activities would be specifically authorized in future defense authorization acts.

Military End Strength. The bill would affect the force structure of the various military services by setting end-strength levels for 2026. Assuming those authorized end-strength levels continue after 2026, those changes would affect spending in future years.

For 2026, title IV would authorize end-strength levels for active-duty personnel and personnel in the selected reserve of 1,302,800 and 773,400, respectively. Of those reservists, 91,554 would serve full time on active duty in support of the reserves. In total, when compared with levels authorized under current law for 2025, active-duty end strength would increase by 26,100, and the selected-reserve end strength would increase by 100. The number of selected reservists who would serve in full-time support positions would decrease by 627. The specified end-strength levels for each component of the armed forces are detailed below along with CBO’s estimate of how those changes would affect costs of the Department of Defense (DoD) and the Department of Homeland Security (DHS). Those costs for personnel include components of military compensation such as basic pay, allowances, bonuses, and health care, as well as operating costs for training and maintenance.

Active Duty. Section 401 would increase the authorized number of active-duty personnel by 26,100. End strength would increase by 12,300 for the Navy, by 11,700 for the Army, by 1,500 for the Air Force, and by 600 for the Space Force. The end strength authorized for the Marine Corps would remain the same. CBO estimates that the increase in active-duty personnel would increase costs to DoD by $22.5 billion over the 2026-2030 period.

Selected Reserve. Under section 411, the authorized end strengths for the six reserve components in DoD would decrease by a net of 1,400. Authorized end strength would decrease by 3,800 for the Army Reserve, by 2,000 for the Air National Guard, and by 200 for the Navy Reserve. End strength would increase for the Army National Guard by 3,000, for the Marine Corps Reserve by 1,100, and by 500 for the Air Force Reserve. CBO estimates that the net decrease would reduce DoD’s costs by $0.4 billion over the 2026‑2030 period.

In addition, section 411 would raise the authorized end strength for the Coast Guard Reserve by 1,500. CBO estimates that change would increase DHS’s costs by $0.4 billion over the 2026-2030 period.

Full-Time Selected Reserve. Section 412 would reduce by 627 the number of reservists who serve full time on active duty in support of the reserves in 2026 compared with currently authorized end-strength levels for 2025. That decline in full-time reservists would decrease DoD’s costs by $0.6 billion over the 2026-2030 period, CBO estimates.

Reserve Technicians.Section 413 would decrease the end strength for dual-status military technicians by 1,815. Those personnel are federal civilian employees who are required to maintain membership in the selected reserve as a condition of their employment. CBO estimates that spending on salaries for dual-status positions would decrease by $1.2 billion over the 2026-2030 period. (Changing the number of dual-status technicians would not change the number of reservists set by sections 411 and 412, discussed above. Thus, the only budgetary effects would be the decrease in civilian compensation.)

Defense Compensation and Benefits.H.R 3838 would affect compensation and benefits for uniformed personnel and civilian employees of DoD. That compensation includes bonuses and certain allowances.

Expiring Bonuses and Allowances. Section 611 would extend for one year DoD’s authority to enter into agreements to pay certain bonuses and allowances to military personnel. The authority to enter into such agreements currently expires after December 31, 2025. Some bonuses are paid in lump sums; others are paid in annual or monthly installments over several years of military service. Using information from DoD’s budget request for fiscal year 2026, CBO estimates that extending that authority through December 31, 2026, would cost $13.1 billion over the 2026‑2030 period.

Basic Needs Allowance. Section 621 would require DoD to exclude the basic allowance for housing from the calculation of gross household income used to determine eligibility for and the amount of the basic needs allowance, a monthly payment to service members whose gross incomes are less than 200 percent of the federal poverty guidelines. The amount of the basic needs allowance is the difference between a service member’s monthly gross income and the monthly income level at 200 percent of poverty guidelines for the location in the United States where the member lives and the size of the member’s household.

On the basis of information from the department about service members’ pay and family sizes, CBO estimates that under current law, DoD will spend roughly $10 million on the basic needs allowance, paying about $300 a month, on average, to 3,000 families whose gross incomes—including the housing allowance—are less than the 200 percent threshold. If the housing allowance were excluded from the calculation of gross income, 52,000 families would receive an average of $760 each month, CBO estimates. Accounting for the time needed to implement the new policy, CBO anticipates that DoD would begin making payments using calculations required by the bill in April 2026 (halfway through the fiscal year). The authority to pay the basic needs allowance expires after December 31, 2027.

Thus, implementing section 621 would increase costs for the basic needs allowance by $230 million in 2026 and $805 million over the 2026-2030 period, CBO estimates.

Military Health System. Title 7 would increase costs paid from discretionary appropriations for the Military Health System by requiring DoD to cover costs associated with assisted reproductive technology (ART), eliminating out-of-pocket costs for reserve members enrolled in the TRICARE dental program, adding requirements to annual health assessments, and increasing reimbursements to children’s hospitals.

Assisted Reproductive Technology. Section 703 would require DoD to provide assisted reproductive technology to active-duty service members, members of the selected reserve, and their dependents as part of the regular TRICARE health benefit, beginning in fiscal year 2028. CBO anticipates that DoD would provide three services under the provision: in vitro fertilization (IVF), intrauterine insemination (IUI), and gamete retrieval and storage. CBO estimates that implementing section 703 would cost about $1.8 billion over the 2028-2030 period. Those costs include the cost of births that would result from IVF and IUI procedures. Costs would be less in the first year because childbirths will lag the implementation of the policy. The total estimated costs were reduced to account for the approximately $50 million that DoD currently spends each year on limited ART services offered to TRICARE beneficiaries as part of its medical training programs. The total estimated cost includes the following components:

• CBO estimates that IVF procedures would cost about $300 million per year. To estimate the cost of covering IVF, CBO used data from Massachusetts, which requires private health insurance to cover those procedures, to project usage rates for the approximately 900,000 married service members and unmarried female members.Based on that information and on pricing made publicly available by various private clinics, CBO estimates that DoD would cover about 25,000 IVF cycles per year at a cost of $12,000 per cycle.
• CBO estimates that IUI services would cost about $30 million per year. Using publicly available data from various private clinics and literature on IUI prevalence, CBO estimates that DoD would cover about 50,000 IUI procedures per year at an average price of $600 per procedure. Because ART is generally not covered by health insurance, the less expensive and less invasive intrauterine insemination procedures are a more common option; thus, IUI procedures are four times more common than IVF. However, if both IUI and IVF were made available with low out-of-pocket costs, CBO expects that TRICARE beneficiaries would instead use IUI at twice the rate of IVF as the general population. The estimate also includes the likelihood that some people will undergo IUI before attempting IVF.
• CBO estimates that additional childbirths associated with covering ART would cost about $250 million per year. Based on a literature review, information from DoD, and data from Massachusetts compiled by the Centers for Disease Control and Prevention, CBO estimates that about a third of IVF cycles and about a tenth of IUI cycles would result in a successful childbirth, or about 15,000 births per year. However, CBO assumes that half of those births will occur under current law, either because beneficiaries will pay for ART services themselves or will eventually have a child without ART. Because pregnancies involving IVF and IUI have a higher probability of preterm deliveries and multiple births, CBO estimates that the average cost of each birth would be about $30,000—roughly double the cost of a typical childbirth.
• CBO estimates that gamete retrieval and storage would cost about $70 million per year. Under the proposal, DoD may cover gamete retrieval and storage, even in the absence of conditions that cause infertility, for TRICARE beneficiaries who wish to delay or preserve their ability to start a family because of the demands and hazards of military service. There is significant uncertainty about whether DoD would extend that benefit and how many people would use it. Using information on gamete preservation in cancer patients, with adjustments to account for the likelihood that TRICARE beneficiaries would probably use the service at a much lower rate, CBO estimates that about 10,000 men and 3,000 women would undergo gamete retrieval each year. Using publicly available information on pricing for those procedures, CBO estimates that services for men would cost about $500 for retrieval and $125 annually for storage; the cost for women would be about $15,000 for retrieval (multiple cycles are often needed) and about $500 annually for storage.

The estimated costs associated with section 703 are subject to considerable uncertainty. It is difficult to anticipate the rules DoD would set for the use of ART services, and to predict the number of beneficiaries that would ultimately use those services. As a result, the costs of section 703 could be significantly more or less than CBO estimated.

Dental Benefits for Selected Reserve.Section 701 would eliminate all out-of-pocket costs for members of the selected reserve who choose to participate in the TRICARE dental program. CBO estimates that implementing that section would cost about $1.2 billion over the 2026‑2030 period. Under current law, reserve members who participate in the dental program must pay a portion of the insurance premium, as well as any copayments or coinsurance. Based on take-up rates for other reserve health benefits and national statistics on dental care, CBO estimates those changes would increase participation in the TRICARE dental program from less than 100,000 currently to about 425,000 members, and that each enrollee would cost DoD about $600 per year. (Currently, DoD’s share of dental costs average about $225 per enrolled member.)

Health Assessments. Section 702 would require a sports physical, electrocardiogram, metabolic panel, thyroid test, and brain peptide test as part of the annual health assessment for service members. That health assessment currently consists of a detailed questionnaire; additional testing is performed only when deemed necessary by the reviewing physician. CBO estimates that adding those new requirements would increase costs to DoD by about $1.0 billion over the 2026-2030 period. CBO estimates that implementing this section would increase the cost of each assessment by about $120, on average, the maximum allowable charges under TRICARE for those additional tests and exams. Based on the current number of service members, CBO estimates that about two million periodic health assessments are performed each year.

Payments to Children’s Hospitals. Section 723 would increase by 30 percent the reimbursements for outpatient services to children’s hospitals that serve many dependents of active-duty service members. Based on hospital reimbursement data from DoD, CBO estimates that seven hospitals per year would qualify for the additional payments, and that those hospitals currently receive about $175 million per year in outpatient reimbursements. Higher payments would be made the year following an eligibility determination, which CBO anticipates would occur in 2026. Therefore, increasing those reimbursements by 30 percent would cost about $50 million per year beginning in 2027 and total $200 billion through 2030.

Multiyear Procurement and Block Buy Contracts. H.R. 3838 would authorize DoD to enter into multiyear procurement contracts and block buy contracts to purchase certain helicopters and ships. Multiyear procurement is a special contracting method that permits the government to enter into contracts covering acquisitions for more than one year, even though the total funds required for all years are not appropriated at the time the contracts are awarded. Contracts that would cost more than $500 million must be specifically authorized in both an authorization act and an appropriation act. Lawmakers sometimes authorize contracts that would cost less than that threshold. Block buy contracts are also used to procure items over a period of more than one year, but are not subject to the same statutory restrictions as multiyear procurement contracts and do not require authorization in an appropriation act.

Black Hawk Helicopters. Section 111 would authorize the Army to enter multiyear contracts beginning in fiscal year 2027 to procure UH-60 Black Hawk helicopters. The UH-60 is a medium‑lift helicopter that is used to transport military personnel and supplies. CBO estimates that under such contracts the service would procure 96 aircraft over the 2027‑2030 period at a cost of $3.3 billion. If the Army enters into a multiyear contract for 2027‑2031, then the service would require additional appropriations after 2030 to fulfill its contract obligations.

Aircraft Carriers.Section 121 would authorize the Navy to enter block buy contracts for not more than two Ford-class aircraft carriers: CVN-82 and CVN-83. Carriers are the largest ships in the fleet, and each carries an air wing of about 60 aircraft. CBO estimates that under such contracts, the Navy would buy one carrier at a cost of $8.9 billion over the 2026-2030 period. Additional funding would be required to complete the contract after 2030. The Navy estimates that CVN‑81, the most recently ordered carrier, will cost $15.2 billion by the time of its expected delivery date in 2032. The Ford-class program experienced schedule delays and cost growth in recent years. CBO expects that the cost of each aircraft carrier procured under the contracts authorized by section 121 would be similar to or slightly greater than CVN‑81.

Columbia-Class Submarines.Section 122 would authorize the Navy to enter a block buy contract beginning in fiscal year 2026 for not more than five Columbia-class submarines. Strategic ballistic missile submarines (SSBN), which carry Trident ballistic missiles, are one component of the United States’ nuclear triad. CBO estimates that under such a contract, the Navy would order one submarine per year at a cost of $40.3 billion over the 2026-2030 period. Additional funding would be required to complete the contract after 2030. The Navy estimates that SSBN-827, which was ordered in 2024, will cost $10.7 billion in total. The program experienced schedule delays and cost growth in recent years. CBO expects that the unit costs of the five submarines procured under the authority in section 122 would be similar to the most recently ordered submarine.

Barges.Section 125 would authorize the Navy to enter multiyear contracts beginning in fiscal year 2026 to procure Yard, Repair, Berthing, and Messing barges, which are vessels that provide temporary berthing and dining facilities for sailors when the ships to which they are assigned undergo maintenance. CBO expects that under such contracts, the Navy would buy five vessels over the 2026‑2030 period at a total cost of $180 million.

Construction Contracts. Section 2807 would authorize the DoD to enter into multiyear procurement contracts in fiscal year 2026 for the construction of military unaccompanied housing and child development centers. The authority would be limited to projects that use standardized and repeatable designs, demonstrate cost savings relative to single-year contracts, and are included in the current future years defense program. Based on DoD’s plans and the cost of similar facilities, CBO estimates the department would enter into contracts for 10 facilities in 2026 at a cost of $750 million over the 2026-2030 period.

Direct Spending and Revenues

Several provisions in H.R. 3838, described below, would affect direct spending and revenues. CBO estimates the effects of those provisions would not be significant over the 2026-2035 period because they would affect very few people, would have offsetting effects, or would involve transactions of very small amounts.

• Section 512 would authorize the Marine Corps to activate certain Selected Reserve personnel for up to 545 days, an increase of 180 days from the limit in current law. Some of those Reservists could begin receiving retired pay earlier as a result.
• Sections 211, 515, 818, 820, 856, 871, 876, 904, 1103, 1104, 1233, 1234, 1301, 1603, 1615, and 1842 would allow agencies to accept and spend, without further appropriation, amounts received from nonfederal entities for various purposes. Those collections are classified as offsetting receipts (or reductions in direct spending). Because CBO does not expect those agencies to spend all the funds they receive, the net effect of those sections would be an insignificant reduction in direct spending.
• Sections 331 and 333 would affect DoD’s authority to use working capital funds for capital investment and minor construction projects at military depots. Through working capital funds, DoD is authorized to incur obligations in advance of appropriations. That type of authority, called contract authority, is classified as direct spending. Based on information from DoD about the current use of such contract authority, CBO estimates that the increase in direct spending from those provisions would be insignificant.
• Section 534 would require the Selective Service System to automatically register for the military draft every male U.S. citizen and permanent resident between the ages of 18 and 26. Failure to register under current law constitutes grounds for civil and criminal penalties and can delay the ability of some lawful permanent residents to naturalize—that is, to become American citizens—which in turn can delay the receipt of some federal benefits. Because lawful permanent residents would be registered automatically under section 534, their ability to naturalize would not be delayed for failure to register. CBO expects any resulting increase in direct spending for federal benefits and reductions in revenues from penalties would be insignificant.
• Sections 591 and 592 would authorize awards of the Medal of Honor that will not occur under current law. Recipients who are living receive monthly pensions that are paid from mandatory appropriations, and surviving spouses of deceased recipients could receive expanded health benefits or increased survivor benefits.
• Section 651 would allow more people to use commissary stores on military bases. Newly eligible patrons using credit or debit cards would be required to pay a fee to offset the card transaction costs paid by the Department of the Treasury from mandatory appropriations.
• Sections 705, 706, 707, 746, and 747 would change the cost of providing health benefits to service members, military retirees, and their dependents. Health benefits for military retirees who are eligible for Medicare or who are from the other uniformed services (the Coast Guard, National Oceanic and Atmospheric Administration, and Public Health Service) are paid from mandatory appropriations.
• Section 804 would authorize DoD to indemnify contractors for the loss of work in process if they are unable to obtain insurance for such losses because of the classified nature of the contracts. If indemnification claims exceed available appropriations, any additional payments would be made from the Judgment Fund.
• Sections 552, 553, 831, 855, 1205, and 1722 affect the number of people who would be subject to civil or criminal penalties, including fines, for prohibited conduct. Such penalties are recorded as revenues, and some of those penalties can be spent without further appropriation.
• Section 1047 would authorize DoD to transfer ownership of five T-37B aircraft to the Arizona Aviation Historical Group. Some of those aircraft, or parts thereof, could be sold as excess defense articles under current law.
• Section 1081 would expand DoD’s authority to seize unmanned aircraft that threaten military facilities. Proceeds from the sale of such assets are recorded as revenues, deposited into the Assets Forfeiture Fund, and later spent without further appropriation.
• Section 1211 would extend through December 31, 2028, the President’s authority to transfer obsolete or surplus defense articles in the War Reserve Stockpile for Allies to Israel. Those transfers could affect the Foreign Military Sales program. The Foreign Military Sales trust fund can receive and expend amounts without further appropriation.
• Section 1514 would revise federal acquisition regulations, which could affect direct spending by some federal agencies that are allowed to use fees, receipts from the sale of goods, and other collections to cover operating costs.
• Section 2842 would authorize the Government Services Administration to convey 435 acres at the former Curtis Bay Depot in Maryland to a state development corporation. CBO anticipates that the sales price would likely be reduced to account for expected cleanup costs that would otherwise have been borne by the government.
• Section 3532 would increase outlays from currently available balances for grant programs at the Department of Transportation. Changes in outlays from appropriations that are available under current law are classified as direct spending. CBO anticipates that any increase in the costs of such grants would be insignificant.

Uncertainty

Most estimates for this bill are affected by some level of uncertainty, but several provisions in particular are difficult to estimate.

The costs associated with providing assisted reproductive technology under section 703 could be significantly more or less than CBO estimated. The costs would depend on the number of people who use the services and the prices that DoD pays.

The costs associated with multiyear procurement and block buy contracts under sections 111, 121, 122, 125, and 2807 could be significantly more or less than CBO estimated. The total cost of such contracts would depend on unit costs, quantity, and procurement schedules. In addition, the department has not estimated any potential savings that could be realized from using those contracts for the specified programs, and CBO did not include an assumption of savings in its estimate.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. CBO estimates that enacting the bill would change direct spending and revenues by between -$500,000 and $500,000 over the 2025-2035 period.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 3838 would not significantly increase net direct spending in any of the four consecutive 10-year periods beginning in 2036.

CBO estimates that enacting H.R. 3838 would not significantly increase on‑budget deficits in any of the four consecutive 10-year periods beginning in 2036.

Mandates

H.R. 3838 would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the total cost of those mandates would not exceed the thresholds established in UMRA for intergovernmental and private-sector mandates ($103 million and $206 million in 2025, respectively, adjusted annually for inflation).

Mandate that Applies to Intergovernmental and Private Entities

Title IV would increase the costs of complying with existing intergovernmental and private-sector mandates under the Servicemembers Civil Relief Act (SCRA) by increasing the number of active-duty service members relative to current law. The SCRA requires public and private entities to grant service members and some reservists while on active duty with various protections for business and tax transactions, consumer contracts, and court procedures.

The SCRA, for example, allows service members to maintain a single state of residence for paying state and local personal income taxes and to request deferrals for certain state and local fees. It also requires creditors to charge no more than 6 percent interest on a service member’s loan obligations if the loan originated before the service member began active duty, and it allows courts to temporarily stay certain civil proceedings, such as evictions, foreclosures, and repossessions. SCRA prohibits lenders from using a service member’s personal assets to satisfy a trade or business liability during a period of military service. It also allows service members to terminate residential and auto leases and some consumer contracts under certain conditions.

Under the bill, the number of active-duty service members covered by SCRA would increase by 26,100, about 2 percent more than current authorization levels. The cost of the mandate would depend on various factors like how many service members use the SCRA, the frequency and duration of their deployment, and the market rates for car loans and mortgages. CBO estimates that the incremental cost of compliance for public and private entities would result in several millions of dollars in lost revenue each year.

Mandate for Intergovernmental Entities

Section 708 would establish a pilot program to offer enrollees of TRICARE supplemental insurance coverage for otherwise non-covered expenses. Coverage would be sold by not more than two insurance companies, and for the coverage offered, the programmatic requirements of the pilot program would supersede state laws on the licensing of insurance companies and solvency requirements, a preemption of state laws. The bill would require companies participating in the program to be licensed in every state. CBO estimates that the preemption of state laws would not result in an increase in expenditures or losses in revenue.

Federal Costs:

Caroline Dorminey: Procurement and Security Assistance
William Ma: Operations and Maintenance, Military Justice
Christopher Mann: Military Construction and Family Housing
Aldo Prosperi: Research and Development, Maritime Administration
David Rafferty: Military Retirement
Dawn Sauter Regan: Military and Civilian Personnel
Matt Schmit: Specified Authorizations and Military Health Care

Mandates: Brandon Lever

Estimate Reviewed By

David Newman
Chief, Defense, International Affairs, and Veterans’ Affairs Cost Estimates Unit

Kathleen FitzGerald
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis