Department of Defense news release (Aug. 15, 2005): DoD releases selected acquisition reports.

The Department of Defense has released details on major defense acquisition program cost and schedule changes since the December 2004 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the June 30, 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 for only 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 encompass 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. 2432). Total program costs reflect actual costs to date as well as future anticipated costs. All estimates include anticipated inflation allowances.

The current estimate of program acquisition costs [shown in the sidebar] for programs covered by SARs for the prior reporting period (December 2004) was $1,472,184.3 million. After subtracting the costs for six final reports (Joint Common Missile (JCM), Longbow Hellfire, Maneuver Control System (MCS), Navy Extremely High Frequency Satellite Communications System (NESP), Standard Missile-2 (SM-2), and B-1 B Conventional Mission Upgrade Program (CMUP)), and adding the costs for three new programs (Mission Planning System (MPS), Mobile User Objective System (MUOS), and Ship Self Defense System (SSDS)) from the December 2004 reporting period, the adjusted current estimate of program acquisition costs was $1,474,122.2 million. There was a net cost decrease of $72.8 million (-0.005 percent) during the current reporting period (June 2005), which was the result primarily of revised program estimates for the Air Force's National Airspace System (NAS) program.

For the June 2005 reporting period, there were quarterly exception SARs submitted for six programs. The reasons for the submissions are provided below.

Navy

LPD 17 (Amphibious Transport Dock Ship) -- The SAR was submitted to report a schedule slip of seven months (from July 2006 to February 2007) for Lead Ship Initial Operational Capability resulting from challenges associated with completing lead ship production and testing. There were no cost changes reported since the December 2004 SAR.

MH-60S Utility Helicopter -- The SAR was submitted to report a schedule slip of six months in the Initial Operational Capability of the Airborne Mine Countermine mission capability (from September 2006 to March 2007). This delay was caused by problems with the Carriage Stream Tow and Recovery System (CSTRS). Resolution of the issue requires redesign and manufacture of some CSTRS components. There were no significant cost changes reported since the December 2004 SAR.

Air Force

EELV (Evolved Expendable Launch Vehicle) -- The SAR was submitted to report a schedule slip of seven months (from May 2005 to December 2005) in approval of Full Rate Production (Milestone III) approval. The delay was due to an anomaly during the Delta IV heavy lift demonstration that delayed completion of the exit criteria required to proceed to Milestone III. There were no cost changes reported since the December 2004 SAR.

GBS (Global Broadcast Service) -- The SAR was submitted to report that the current estimate for Initial Operational Capability (IOC) 2/3 has slipped nine months (from March 2006 to December 2006), and the current estimate for the Beyond Low Rate Initial Production review has slipped five months (from November 2005 to April 2006). Both changes were caused by the need to integrate Operational Requirements Document (ORD) III changes into the Test and Evaluation Master Plan (TEMP) and other test planning documentation. Program costs decreased $12.0 million (-1.6%) from $756.0 million to $744.0 million, as the result of a revised cost estimate and a quantity reduction of 12 units from 1,049 to 1,037 units.

NAS (National Airspace System) -- The SAR was submitted to rebaseline from a Development to a Production Estimate following the June 2005 approval of Full Rate Production (Milestone III). The dates for award of the Digital Airport Surveillance Radar (DASR) full rate production contract and the DoD Advanced Automation System production award exercise were both changed from March 2005 to June 2005. The changes were due to a later-than-expected Beyond Low Rate Initial Production report and the effects of a changing management structure following the departure of the previous Milestone Decision Authority. The new baseline also includes the addition of Follow-on Operational Test and Evaluation as recommended by the Air Force Operational Test and Evaluation. Program costs decreased $59.5 million (-4.0%) from $1,480.6 million to $1,421.1 million, because primarily of a refinement in the Navy's cost estimate.

SDB (Small Diameter Bomb) -- The SAR was submitted to rebaseline the program from a Development to a Production Estimate following the April 2005 approval of Low Rate Initial Production (Milestone C). There were no cost changes reported since the December 2004 SAR.

A summary table of the SARs can be found at <http://www.defenselink.mil/news/Aug2005/d20050815sars.pdf>.

CURRENT ESTIMATE ($ IN MILLIONS)

December 2004 (88 programs)                   $1,472,184.3
Less final SAR submissions for six programs:
  JCM, Longbow Hellfire, MCS, NESP,
  SM-2, and B-1B (CMUP)                           -7,136.2
Plus three new programs:
  MPS, MUOS, and SSDS                             +9,074.1
December 2004 Adjusted
  (85 programs)                               +1,474,122.2
Changes Since Last Report:
  Economic                                            $0.0
  Quantity                                            -5.8
  Schedule                                            +1.7
  Engineering                                          0.0
  Estimating                                         -55.0
  Other                                               -0.0
  Support                                            -13.7
  Net Cost Change                                   $-72.8
June 2005 (85 programs)                       $1,474,049.4