Department of Defense news release : DoD releases Selected Acquisition Reports
The Department of Defense has released details on major defense acquisition program cost, schedule, and performance changes since the September 2005 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 2005 reporting period.
SARs summarize the latest estimates of cost, schedule, and technical status. These reports are prepared annually in conjunction with the president’s budget. Subsequent quarterly exception reports are required only for those programs experiencing unit cost increases of at least 15 percent or schedule delays of at least six months. Quarterly SARs are also submitted for initial reports, final reports, and for programs that are rebaselined at major milestone decisions.
The total program cost estimates provided in the SARs include research and development, procurement, military construction, and acquisition-related operation and maintenance (except for pre-Milestone B programs, which are limited to development costs pursuant to 10 U.S.C. [section]432). Total program costs reflect actual costs to date as well as future anticipated costs. All estimates include anticipated inflation allowances.
The following current estimate of program acquisition costs for programs covered by SARs for the prior reporting period (September 2005) was $1,539,048.8 million. After adding the costs for two new programs–ARH (Armed Reconnaissance Helicopter) and JLENS (Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System)–and subtracting the costs for final reports on a completed program (LHD 1 Amphibious Assault Ship), a restructured program (TSAT (Transformational Satellite Communications System)), the completed Fire Unit portion of Patriot PAC-3 (Patriot Advanced Capability), and the completed MK 1 portion of SSDS (Ship Self Defense System) from the September 2005 reporting period, the adjusted current estimate of program acquisition costs was $1,517,182.4 million.
For the December 2005 reporting period, there was a net cost increase of $39,723.0 million billion or + 2.6 % for programs that have reported previously, resulting in a new current estimate of $1,584,718.7 million. The net cost increase was due primarily to the application of higher escalation rates (+ $21,194.6 million), an increase in support requirements (+ $7,521.9 million), a net stretch-out of development and procurement schedules (+ $5,627.0 million), higher program cost estimates (+ $2,589.5 million), additional engineering changes (hardware/software) (+ $2,325.6 million), and a net increase of planned quantities to be purchased (+ $446.6 billion). Details of the most significant changes follow, summarized by program.
The National Defense Authorization Act (NDAA) for FY 2006 made changes to the Nunn-McCurdy unit cost reporting statute for DoD major defense acquisition programs (10 USC [section]2433). The primary change was the addition of 30percent and 50percent unit cost thresholds against the original baseline estimate approved at System Development and Demonstration (Milestone B). The existing 15percent and 25 percent unit cost thresholds were retained against the current baseline estimate. For the December 2005 reporting period:
DoD has one program with a Nunn-McCurdy unit cost breach of more than 15 percent but less than 25 percent to the current baseline estimate. Notification and unit cost breach information will be provided to the Congress for this program.
* GMLRS (Guided Multiple Launch Rocket System)
DoD has three programs with Nunn-McCurdy unit cost breaches of more than 25 percent to the current baseline estimate. Notification and unit cost breach information will be provided to the Congress for these programs, and the USD(AT & L) will consider whether to certify that the programs should continue.
* ASDS (Advanced SEAL Delivery System) (no certification–program cancelled)
* Global Hawk
* NPOESS (National Polar-Orbiting Operational Environmental Satellite System).
DoD has 11 programs with Nunn-McCurdy unit cost breaches of more than 30 percent but less than 50 percent to their original baseline estimate. Notification and unit cost breach information will be provided to the Congress for these programs.
* ATIRCM/CMWS (Advanced Threat Infrared Countermeasure/Common Missile Warning System)
* C-130 AMP (Avionics Modernization Program)
* Chem Demil (Chemical Demilitarization) CMA (Chemical Materials Agency)
* Chem Demil CMA Newport
* EFV (Expeditionary Fighting Vehicle)
* F/A-18
* JASSM (Joint Air-to-Surface Standoff Missile)
* JPATS (Joint Primary Aircraft Training System)
* JSF (Joint Strike Fighter)
* MH-60S
* SSN 774 (Virginia Class)
DoD has 25 programs with Nunn-McCurdy unit cost increases of more than 50 percent to their original baseline estimate. However, these increases are not Nunn-McCurdy breaches since NDAA permits the original baseline estimate to be revised to the current baseline estimate as of Jan. 6, 2006.