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The Army is revising its software directive and discontinuing its current software funding policy. Undersecretary Michael Obadal announced the new directive will be released soon and updated annually. The change allows more flexible funding from operations and maintenance, procurement, and research categories.

Additionally, the Army plans to pursue Budget Activity 8 (BA-8) to establish a separate funding category for software, moving away from hardware-centric budgeting. This shift aims to address long-standing challenges in software acquisition, which has been hindered by rigid funding regulations. The Defense Department has experimented with alternative funding paths since 2019, but broader adoption remains contingent on legislative approval.