U.S. Department of Defense Office of the Assistant Secretary of Defense (Public Affairs) News Release

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		No. 1029-07
IMMEDIATE RELEASE		August 22, 2007

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The Department of Defense (DoD) has released details on major defense acquisition program cost, schedule, and performance changes since the December 2006 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the June 2007 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 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 USC §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 for programs covered by SARs for the prior reporting period (December 2006) was $1,683,973.8 million. After subtracting the costs for two final reports (Land Warrior and E-2C Reproduction) and the MK 2 portion of Ship Self Defense System (SSDS), and adding costs for six new programs - Defense Integrated Military Human Resources System (DIMHRS), Extended Range Munition (ERM), Family of Beyond Line-of-Sight Terminals (FAB-T), Navy Multiband Terminal (NMT), Remote Minehunting System (RMS), and Vertical Takeoff and Landing Tactical Unmanned Aerial Vehicle (VTUAV) from the December 2006 reporting period, the adjusted current estimate of program acquisition costs was $1,689,502.0 million. For the June 2007 reporting period, there was a net cost increase of $4,271.4 million (+0.3 percent), due primarily to revised cost estimates for the Expeditionary Fighting Vehicle (EFV) program.

         For the June 2007 reporting period, there were quarterly exception SARs submitted for five programs. The reasons for the submissions are provided below.

Navy:

Cobra Judy Replacement – The SAR was submitted to report schedule slips of six months or more. The program was restructured to accommodate misalignments between the funding profile and the ship and mission equipment production schedules.  The replanned program delays initial operational capability until December 2012.

EFV (Expeditionary Fighting Vehicle) – The SAR was submitted to report schedules slips of approximately two years since the December 2006 SAR. In February 2007, the program experienced a critical Nunn-McCurdy unit cost breach due primarily to system reliability challenges and a quantity reduction. The department certified a revised program to Congress in June 2007. Program costs increased $4,069.4 million (+34.2 percent) from $11,902.7 million to $15,972.1 million.

LHA Replacement – The SAR was submitted to report schedule slips of six months or more to the program, due primarily to delays in the Detail Design and Construction Contract Award from December 2006 to June 2007 and Ship Delivery from December 2011 to August 2012. Program costs increased $202.0 million (+6.6 percent) from $3,078.9 million to $3,280.9 million to reflect receipt of fiscal 2006 Supplemental Funds to offset Hurricane Katrina impact on the detail design and construction contract.

Air Force:

B-2 EHF (Extremely High Frequency) Increment 1 – This is the initial SAR submission following program initiation at the Milestone B decision in May 2007.

B-2 RMP (Radar Modernization Program) – The SAR was submitted to report schedule slips of six months or more to the program. The Air Force was aggressive with the RMP schedule due to direction from the Department of Commerce to vacate the current B-2 radar operating frequency, but this schedule was not achievable due to the technical maturity of the radar antenna being slower than planned.

        

         The Department of Defense has submitted an initial SAR for the following program for the June 2007 reporting period. This report does not represent cost growth. The baseline established on this program will be the point from which future changes will be measured. 

SAR Program Acquisition Cost Summary as of June 30, 2007: www.defenselink.mil/news/Jun2007/d20070630 - SAR Acquisition Cost Summary.pdf

 

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