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Preventive care prescribed for Pentagon big-ticket programs.


* At triage stations on the battlefield, medics take care of patients on the basis of need.

At the Pentagon, acquisition officials engage in their own version of triage, when they must decide which programs get to live and which ones get put out of their misery.

Among acquisition programs, the most troubled patients are those that exhibit symptoms of an ailment known as "Nunn-McCurdy."

The Nunn-McCurdy law calls for the termination of programs whose total cost grew by more than 25 percent over the original estimate, unless the secretary of defense submits a detailed explanation certifying that the program is essential to national security and that no suitable alternative of lesser cost is available. Programs that exceed their original cost estimate by 15 percent must be reported to Congress, but do not have to be certified.

Rarely is a program canceled outright under this provision. Congress normally regards the explanations from the secretary of defense as acceptable. Nonetheless, the prospect of a Nunn-McCurdy breach is greatly feared at the Pentagon.

Since 2000, thirty-five programs have infringed Nunn-McCurdy--22 of them exceeding the 25 percent threshold.

Of the 22, nineteen have been certified. Two remain in limbo--the Air Force C-5 upgrade program and the joint air-to-surface standoff missile. Only one, the Navy area theater ballistic missile defense, was terminated, even though it was later transferred to the Missile Defense Agency.

But while most of the Nunn-McCurdy violators end up being certified, it doesn't mean their troubles are over.

With the Air Force C-130 avionics modernization program, for example, the Pentagon certified 222 aircraft, instead of the 388 the Air Force wanted, because it was not convinced the Air Force can afford the larger quantity.

The Marine Corps expeditionary fighting vehicle also was certified, but the Corps must now design new prototypes because the current design was not only over budget but failed to meet performance specs.

The Pentagon certified the Army's "war fighter information network-tactical" only on the condition that the Army merge the system with existing communications networks.

In a bid to stave off more Nunn-McCurdy breaches, Pentagon acquisition officials completed last year a six-week "triage assessment" of 100 major procurement programs.

Predictably, they concluded that programs get into trouble for all the usual reasons--the military services change the technical requirements, cut back on quantities, stretch out the production cycles, underestimate costs at the outset, rush to develop technologies that are not mature enough, and generally do a poor job of holding management and contractors accountable for their errors.

So what's next?

Pentagon acquisition officials said they plan to repeat the triage drill periodically so they anticipate problems before they get out of control.

Realistically, though, it may not be possible to keep military acquisitions on budget unless their funding is threatened, suggested Paul Francis, director of acquisition and sourcing management at the Government Accountability Office.

Only the "blunt tool of the budget process" will motivate procurement managers to take drastic actions, Francis told a conference of acquisition executives in Fort Belvoir, Va.

The Defense Department's "investment" accounts for major weapons--including research, development and acquisition- have soared from $100 billion in 2001 to $170 billion in 2007. But the affluence has not helped, Francis said. "More money only allows additional un-executable programs to get started." Problems such as cost growth and schedule delays remain much the same.

As more money has flowed into the Pentagon's coffers, ironically, the military's buying power has eroded.

There is abundant evidence of the Defense Department's declining purchasing power. A case in point is the Joint Strike Fighter. It was supposed to cost $200 billion for 2,900 aircraft. The revised estimate is $225 billion for 2,500 aircraft. The Army had said its Future Combat Systems would cost $86 billion for 15 brigades, but later upped the price tag to $130 billion.

The Air Force space-based infrared missile-warning satellites were expected to cost $4 billion for five spacecraft, but ballooned to $10 billion for just three satellites. The Marines had budgeted $8.7 billion to buy 1,025 new amphibious assault vehicles, but the latest plan calls for $13.5 billion to buy only half that number. The Navy's littoral combat ship, which was hailed as a trailblazer for affordable ships, rose from $1.4 billion for six vessels to $1.8 billion for just four ships.

At this rate, the symptoms of Nunn-McCurdyitis across major Defense Department programs probably will get worse before they get better.

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Title Annotation:DEFENSE WATCH
Comment:Preventive care prescribed for Pentagon big-ticket programs.(DEFENSE WATCH)
Author:Erwin, Sandra I.
Publication:National Defense
Date:Feb 1, 2008
Words:748
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