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Department of Defense News Release (Nov. 15, 2006): DoD releases Selected Acquisition Reports.

The Department of Defense has released details on major defense acquisition program cost, schedule, and performance changes since the June 2006 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the September 2006 reporting period.

SARs summarize the latest estimates of cost, schedule, and performance 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 compared to the current Unit Cost Reporting (UCR) baseline and at least 30 percent compared to the original UCR baseline, or schedule delays of at least six months since the previous report. 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]2432). Total program costs reflect actual costs to date as well as future anticipated costs. All estimates include anticipated inflation allowances.

The current estimate (shown below) of program acquisition costs for programs covered by SARs for the prior reporting period (June 2006) was $1,612,605.8 million. After subtracting the cost for one final report (Active Electronically Scanned Array (AESA)) and adding the costs for one new program (C-5 Avionics Modernization Program (AMP)) from the June 2006 reporting period, the adjusted current estimate of program acquisition costs was $1,612,885.2 million.

For the September 2006 reporting period, there was a net cost increase of $4,824.9 million (+ 0.3 percent), due primarily to revised cost estimates for the Global Hawk and the Chemical Demilitarization (Chem Demil)-Assembled Chemical Weapons Alternatives (ACWA) programs.

For the September 2006 reporting period, there were quarterly exception SARs submitted for five programs. The reasons for the submissions are provided below.


Longbow Apache Block III (AB3) -- This is the initial SAR submission following program initiation at the Milestone B decision in July 2006.

June 2006 (87 programs) $1,612,605.8
 Less final report on one program (AESA) -579.9
 Plus one new program (C-5 AMP) +859.3
June 2006 Adjusted (87 programs) $1,612,885.2
Changes Since Last Report:
 Economic $+14.1
 Quantity 0.0
 Schedule +116.9
 Engineering +347.1
 Estimating +3,696.8
 Other 0.0
 Support +650.0
 Net Cost Change $+4,824.9
September 2006 (87 programs) $1,617,710.1

Light Utility Helicopter (LUH) -- This is the initial SAR submission following program initiation at the Milestone C decision in August 2006.

Air Force

Global Hawk -- The SAR was submitted to report a schedule slip of more than six months. The Operational Assessment Complete date slipped from June 2006 to March 2007 in accordance with the Acquisition Decision Memorandum (ADM) issued subsequent to the Nunn-McCurdy certification in June 2006. Program costs increased $1,676.4 million (+21.4%) from $7,815.7 million to $9,492.1 million due, primarily to higher cost estimates to complete System Development and Demonstration (SDD) (+ $225.7 million); a schedule extension of two additional years of aircraft and sensors (FY 12 and FY 13) (+ $116.9 million); inclusion of all retrofit activities consisting of aircraft, ground station support equipment modifications (i.e., Joint Tactical Radio System (JTRS), Family of Beyond Line of Sight Terminals (FAB-T), Sense and Avoid, etc.) not previously reported in the SAR (+ $339.9 million); costs associated with the activation of an organic depot capability as well as increased support requirements (+ $567.2 million); and higher estimated costs for completion of the Advanced Signals Intelligence Payload (ASIP) and Radar Technology Insertion Program (RTIP) (+ $343.9 million).

Mission Planning System (MPS) -- The SAR was submitted to report schedule slips of more than six months, specifically Increment II Full Deployment Decision Review (FDDR) slipped from June 2006 to April 2007, the Increment III FDDR slipped from May 2007 to May 2008, the Increment IV Milestone B slipped from February 2006 to March 2007, the Increment IV FDDR slipped from June 2008 to August 2009, and Increment V Milestone B slipped from February 2008 to December 2008. These slips were due primarily to software development problems, a restructuring and consolidation of the program software releases, and the incorporation of risk reduction efforts. Program costs decreased $209.1 million (-11.7%) from $1,788.5 million to $1,579.4 million, due primarily to the transfer of Operations and Maintenance funding to legacy program and the elimination of non-acquisition related funds.


Chemical Demilitarization-Assembled Chemical Weapons Alternatives (ACWA) -- The SAR was submitted to report a Nunn-McCurdy unit cost breach to the program. That is, the Program Acquisition Unit Cost (PAUC) has increased by more than 25 percent compared to the current baseline estimate of April 2003. Program costs increased $3,357.6 million (+ 72.8%) from $4,611.6 million to $7,969.2 million, due primarily to the availability of more detailed historical data and the maturation of program designs, both of which contribute to the development of a more accurate estimate.

New SARs (As of September 2006)

The Department of Defense has submitted initial SARs for the Longbow Apache Block III (AB3) and Light Utility Helicopter (LUH) programs. These reports do not represent cost growth. Baselines established on these programs will be the point from which future changes will be measured. The current cost estimates are provided below:
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Title Annotation:In the News
Publication:Defense AT & L
Geographic Code:1USA
Date:Mar 1, 2007
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