Can you use RDTE to pay this?
RDT&E funds can be used for expenses necessary for basic and applied scientific research, development, test and evaluation. There are certainly cases where we lease commercial equipment in support of an R&D mission. The fact that IT services themselves are a readily and commercially available service isn't the issue as much as what the services will be used for, such as supporting an RDT&E program. These efforts may include purchases of end items, weapons, equipment, components, and materials as well as performance of services – whatever is necessary to develop and test the system.
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One of the fundamental statutes dealing with the use of appropriated funds is 31 U.S.C. § 1301(a) which states: “Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.” The starting point in applying 31 U.S.C. § 1301(a) is that, absent a clear indication to the contrary, the common meaning of the words in the appropriation act and the program legislation it funds governs the purposes to which the appropriation may be applied. If the labor contract for IT services is in support of the R&D program in which the RDT&E funds were appropriated for, then yes. More detailed definitions for RDT&E Budget Activities are contained in DoD Financial Management Regulation 7000.14-R, Volume 2B, Chapter 5, paragraph 050201.