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Defense weapons systems capabilities are increasingly dependent on software, which is rapidly becoming a very costly and technically challenging component. However, Defense does not know how much it spends on this critical technology. Estimates of software costs range from $24 billion to $32 billion annually-about 8 to 11 percent of Defense's total budget. However, these estimates are rough at best because Defense has not identified or tracked software costs as a discrete item in its weapons systems development programs. Recognizing the importance of tracking software costs, Defense has recently taken action to require new weapons programs to separately identify and report software costs. Defense is also exploring ways to reduce the cost of software. Collecting more complete embedded software cost information could enable Defense to more effectively manage its weapons programs.