U.S. Department of Defense
Office of the Assistant Secretary of Defense (Public Affairs)
|IMMEDIATE RELEASE||March 19, 2015|
The Department of Defense (DoD) has released details on major defense acquisition program cost, schedule, and performance changes since the December 2013 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 2014 reporting period.
SARs summarize the latest estimates of cost, schedule, and performance status. These reports are prepared annually in conjunction with submission of 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 operations and maintenance. Total program costs reflect actual costs to date as well as future anticipated costs. All estimates are shown in fully inflated then-year dollars.
The current estimate of program acquisition costs for programs covered by SARs for the prior reporting period (December 2013) was $1,619,437.8 million. Final reports submitted for the annual December 2013 and for the June 2014 and September 2014 quarterly exception reporting periods were subtracted. Initial reports for the annual December 2013 and for the June 2014 and September 2014 quarterly exception reporting periods were added. Finally, the net cost changes for the June 2014 and September 2014 quarterly exception reporting periods were incorporated.
Click here to access the SAR Summary Tables
| Current Estimate
($ in Millions)
|December 2013 (77 programs)||$ 1,619,437.8|
|Less four final reports on Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS), Patriot Advanced Capability-3 (PAC-3), MH-60S Fleet Combat Support Helicopter, and National Airspace System (NAS).*||-26,237.7|
|Plus six initial reports on Air and Missile Defense Radar (AMDR), Littoral Combat Ship Mission Modules (LCS MM), VH-92A Presidential Helicopter, Combat Rescue Helicopter (CRH), Enhanced Polar System (EPS), and Space Fence Ground-Based Radar System Increment 1 (Space Fence Inc 1)||+31,110.9|
|Net cost changes reported as of June 2014 and September 2014 quarterly exception SARs||-103.0|
|*Note: The dollars for the Fire Unit subprogram of the Patriot/Medium Extended Air Defense System Combined Aggregate Program (Patriot/MEADS CAP) were subtracted because a final report for the Fire Unit was submitted for the December 2013 reporting period. However, the Missile subprogram of the Patriot/MEADS CAP continues to be reported for the December 2014 reporting period as the separate PAC-3 Missile Segment Enhancement (MSE) program.|
|Changes Since Last Report:|
|Net Cost Change||$ -9,118.9|
|Plus Ballistic Missile Defense System (BMDS) development, procurement, and construction funding for Fiscal Year (FY) 2020; previous reports limited total funding through FY 2019||+6,964.4|
|December 2014 (79 programs)||$1,622,053.2|
For the December 2014 reporting period, there is a net cost decrease of $9,118.9 million or -0.6 percent for the 79 programs that have reported in previous SARs. This cost decrease is due primarily to the application of lower escalation rates (-$10,795.2 million) and reductions in support requirements (-$9,000.5 million). These decreases were partially offset by a net increase in the cost of planned quantities to be purchased (+$2,487.2), a net stretch-out of development and procurement schedules (+$2,383.7 million), engineering changes to hardware/software (+$5,432.9 million), a net increase in program cost estimates (+$158.5 million), and an increase in other costs due to prior year impacts to the LPD 17 San Antonio Class Amphibious Transport Dock (+$214.5 million).
DoD is submitting an initial SAR for the following program as of the December 2014 reporting period. This report does not represent cost growth. The baseline established on this program will be the point from which future changes will be measured.
($ in Millions)
| Air Force Intercontinental Ballistic Missile Fuze Modernization
(ICBM Fuze Mod)
Summary Explanations of Selected SAR Cost Changes
(As of December 31, 2014)
A. Nunn-McCurdy Unit Cost Breaches
For the December 2014 reporting period, there are two programs with critical or significant Nunn-McCurdy unit cost breaches to their current or original Acquisition Program Baseline (APB) (see below). In accordance with the provisions of sections 2433 and 2433a of title 10, United States Code, the Department will notify Congress and provide the required unit cost breach information in the SARs for these two programs. However, a certification determination will not be made by the Under Secretary of Defense for Acquisition, Technology and Logistics for the program with a critical breach because the breach resulted from the termination of production.
Critical Breaches: (Unit cost increases of 25 percent or more to the current APB or of 50 percent or more to the original APB)
Joint Standoff Weapon – Baseline Variant and Unitary Warhead Variant (JSOW)– Due to termination of JSOW production after FY 2015 in the FY 2016 President's Budget, the planned quantities of weapons to be purchased have been reduced for both variants. The PAUC and the APUC for the Unitary Warhead Variant increased 45.8 percent and 27.7 percent, respectively, above the current APB, due to a quantity reduction of 3,815 Unitary weapons from 7,000 to 3,185.
Significant Breaches: (Unit cost increases of 15 percent, but less than 25 percent, to the current APB or of 30 percent, but less than 50 percent, to the original APB)
Warfighter Information Network-Tactical Increment 2 (WIN-T Inc 2)– The PAUC increased 36.2 percent and the APUC increased 39.5 percent above the original APB, due primarily to a quantity reduction of 1,684 nodes from 5,267 to 3,583, and an eight-year extension of the procurement schedule to align with the revised Army modernization strategy, which transfers total requirements to WIN-T Inc 2 from WIN-T Inc 3. The unit cost increases are also attributable to a two-year extension of the procurement schedule.
B. Other Significant Program Cost Changes
Joint Tactical Radio System Handheld, Manpack, and Small Form Fit Radios (JTRS HMS)– Program costs decreased $1,697.6 million (13.9%) from $12,184.3 million to $10,486.7 million, due primarily to revised estimates for recurring manufacturing methodology (-$1,394.6 million), decreases in initial spares (-$61.1 million), and decreases in other support costs (-$222.0 million).
Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE)– Program costs decreased $2,677.7 million (-28.2%) from $9,503.9 million to $6,826.2 million, due primarily to a quantity decrease of 435 missiles from 1,528 to 1,093 (-$1,844.3 million) and related reductions in estimated program costs (-$577.8 million). In addition, support requirements decreased due to the acceleration of the procurement buy profile (-$247.5 million).
Warfighter Information Network-Tactical Increment 3 (WIN-T Inc 3)– Program costs decreased $1,858.8 million (-50.0%) from $3,715.5 million to $1,856.7 million, due primarily to a quantity decrease of 699 nodes from 699 to 0 (-$3,294.7 million) and associated schedule, engineering, and estimating allocations* (+$1,905.4 million). There were also decreases in fielding, new equipment training, and hardware end of life (technology refresh) resulting from the quantity decrease (-$457.9 million).
DDG 51 Arleigh Burke Class Guided Missile Destroyer– Program costs increased $4,303.3 million (+4.6%) from $94,024.2 million to $98,327.5 million, due primarily to a quantity increase of 2 ships from 80 to 82 (+$2,492.3 million) and associated schedule, engineering, and estimating allocations* (+$1,136.3 million). There were also increases for the development and integration of Standard Missile-6 Block (BLK) IA Naval Integrated Fire Control (NIFC) Counter Air 2019 into AEGIS Advanced Capability Build (ACB) 16, addition of NIFC-2019, Ballistic Missile Defense improved threat set, Surface Electronic Warfare Improvement Program BLK II, and Combat Identification into AEGIS ACB 20 (+$383.7 million), revised escalation indices (+$105.2 million), and revised estimates for FY 2016-2019 shipbuilding and government furnished equipment (+$283.9 million). These increases were partially offset by an adjustment for current and prior escalation (-$72.7 million).
EA-18G Growler Aircraft– Program costs increased $1,526.5 million (+11.9%) from $12,868.7 million to $14,395.2 million, due primarily to a quantity increase of 15 aircraft from 135 to 150 (+$1,297.6 million) and associated schedule and estimating allocations* (-$62.4 million). There were also increases in support related to the increase in quantity (+$224.8 million) and an increase in FY 2016, FY 2018, and FY 2020 to fund Complex Emitter, Tactical Targeting Network Technology, and Distributed Targeting Processor-Networked efforts (+$89.5 million). These increases were partially offset by a decrease in FY 2014 funding due to a Congressional reduction (-$25.0 million).
KC-130J Transport Aircraft– Program costs decreased $1,143.6 million (-10.4%) from $11,043.4 million to $9,899.8 million, due primarily to accelerating the procurement buy profile by five years (-$481.6 million), and reduced airframe outyear inflation estimates associated with accelerating the procurement buy profile (-$332.9 million). Additional program cost decreases included other support and initial spares associated with accelerating the procurement buy profile (-$243.9 million) and revised outyear escalation indices (-$97.2 million). These decreases were partially offset by non-recurring engineering for production line cut-in of block upgrades (+$12.0 million).
LPD 17 San Antonio Class Amphibious Transport Dock– Program costs increased $1,593.9 million (+8.3%) from $19,125.3 million to $20,719.2 million, due primarily to a quantity increase of 1 ship from 11 to 12 (+$1,224.0 million) and associated schedule, estimating, and other allocations* (+$889.7 million). There was also an increase related to special transfer authority and reprogramming for ship construction on LPDs 26 and 27 (+$28.0 million). These increases were partially offset by an adjustment to reflect the actual cost of the 12th ship as the cost curve overstated the cost of the ship (-$564.1 million).
MQ-4C Triton Unmanned Aircraft System– Program costs decreased $1,039.9 million (-6.8%) from $15,368.4 million to $14,328.5 million, due primarily to a decrease in initial spares resulting from a change from contractor logistics support to organic maintenance support (-$667.8 million) and revised estimates for contractor furnished equipment mission electronics (-$621.0 million) and airframe (-$363.3 million). There were additional decreases due to revised escalation indices (-$161.8 million), a revised estimate for recurring flyaway engineering change orders (-$25.4 million), and a decrease in other support for a quantity stream adjustment (-$7.2 million). These decreases were partially offset by a net stretch-out of the procurement buy profile (+$312.0 million) and associated schedule variance due to learning and rate impacts (+$414.9 million). Other increases include revised estimates for technology refresh phasing (+$39.0 million) and mission control systems (+$18.5 million), and a revised estimate due to the updated Service Cost Position (+$42.3 million).
MQ-8 Fire Scout Unmanned Aircraft System – Program costs decreased $631.2 million (-18.2%) from $3,470.8 million to $2,839.6 million, due primarily a quantity decrease of 58 aircraft from 119 to 61 (-$621.4 million) and associated schedule, engineering, and estimating allocations* (-$431.5 million). There was also a decrease in support requirements due to the quantity reduction (-$116.2 million). These decreases were partially offset by an engineering change to develop and transition to an endurance upgrade and new radar and weapons capabilities (+$288.2 million) and changes to the procurement buy profile (+$251.4 million).
SSN 774 Virginia Class Submarine– Program costs increased $6,764.5 million (+7.3%) from $92,548.1 million to $99,312.6 million, due primarily to a quantity increase of 2 ships from 30 to 32 (+$4,580.0 million), estimating adjustments for advanced procurement to fund the class extension from FY 2019 to FY 2020 (+$1,681.0 million), a revised estimate for Virginia Payload Module procurement (+$1,539.7 million), a revised estimate for the Acoustic Superiority Development program (+$35.0 million), and revised escalation indices (+$169.0 million). These increases were partially offset by a revised estimate due to the refinement of requirements (-$752.0 million), revised estimates for Virginia Payload Module detail design and development (-$254.4 million), adjustments for new outyear, current, and prior escalation indices (-$214.8 million), and a Congressional reduction to FY 2015 advanced procurement (-$51.5 million).
Evolved Expendable Launch Vehicle (EELV)– Program costs decreased $2,842.6 million
(-4.2%) from $67,622.4 million to $64,779.8 million, due primarily to revised estimating assumptions for FY 2021 to FY 2030 (-$3,063.9 million) and revised escalation indices (-$619.8 million). These decreases were partially offset by a quantity increase of 2 launch services from 162 to 164 (+$245.0 million) and additional funding in the FY 2015 National Defense Authorization Act for the development of a rocket propulsion system (+$225.6 million) and investment in one or more launch provider's emerging launch systems (+$292.7 million).
Family of Advanced Beyond Line-of-Sight Terminals (FAB-T)– Program costs decreased $555.2 million (-11.5%) from $4,819.9 million to $4,264.7 million, due primarily to a revised cost estimate for the Command Post Terminal production decision and contract award (-$600.8 million). Additional decreases were due to a quantity decrease of 6 airborne terminals from 150 to 144 (-$51.7 million) and associated schedule and estimating allocations* (-$0.6 million), and a revised estimate for Future Element Terminal procurement beyond the Future Years Defense Program (FYDP) (-$60.0 million). These decreases were partially offset by a revised estimate for Future Element Terminal development beyond the FYDP (+$241.8 million).
Joint Direct Attack Munition (JDAM)– Program costs increased $939.0 million (+13.0%) from $7,229.8 million to $8,168.8 million, due primarily to a quantity increase of 31,509 tailkits from 271,844 to 303,353 (+$899.7 million) and associated schedule and estimating allocations* (+$23.5 million). These increases were partially offset by a reduction in the estimate for procurement as a result of the quantity increase (-$82.2 million).
Ballistic Missile Defense System (BMDS)– Program costs increased $1,238.5 million (+5.9%) from $138,599.3 million to $139,837.8 million, due primarily to additional funding for Ground-Based Midcourse Defense reliability improvements (+$1,585.1 million), an adjustment for current and prior escalation (+$1,400.2 million), refined cost estimates and methodology changes (+$437.5 million), Congressional plus ups for the Iron Dome program (+$455.0 million) and Israeli programs (+$172.0 million), and a Congressional plus up for Aegis SM-3 IB missiles (+$159.0 million). These increases were partially offset by a reduction in THAAD interceptors and THAAD Congressional reductions (-$626.6 million), Aegis realignment to implement SM-3 IB multi-year procurement and reduced SM-3 IIA buys (-$328.8 million), a delay in initial Ground-Based Interceptor procurement from FY 2016 to FY 2018 (-$316.0 million), and revised escalation indices (-$260.1 million).
F-35 Joint Strike Fighter– Overall F-35 program costs decreased $7.5 billion from $398.6 billion to $391.1 billion. The details are provided below by subprogram:
F-35 Aircraft – Subprogram costs decreased $5.8 billion (-1.8%) from $329.9 billion to $324.1 billion, due primarily to the incorporation of the latest prime contractor and subcontractor labor rates for all variants of the F-35 (-$4.4 billion) and revised escalation indices (-$3.4 billion). There were also reductions in initial spares requirements due to maturation of the technical baseline, definition of customer requirements, and further definition of Service bed down/ fielding plans (-$1.1 billion). These decreases were partially offset by increases for revised airframe estimates based on actual costs from early low rate initial production lots (+$4.4 billion).
F-35 Engine – Subprogram costs decreased $1.6 billion (-2.3%) from $68.6 billion to $67.0 billion, due primarily to revised escalation indices (-$0.7 billion), reductions in initial spares requirements due to maturation of the technical baseline (-$0.6 billion), and revised estimates based on actual costs from early low rate initial production lots (-$0.5 billion). These decreases were offset by increases resulting from changes to the procurement profile (+$0.2 billion).
*Note: Quantity changes are estimated based on the original SAR baseline cost-quantity relationship. Cost changes since the original baseline are separately categorized as schedule, engineering, or estimating "allocations." The total impact of a quantity change is the identified "quantity" change plus all associated "allocations."
The Department of Defense announced today the death of a soldier who was supporting Operation Iraqi Freedom.
Spc. Ross E. Vogel, III, 27, of Red Lion, Pa., died Sept. 29 in Kut, Iraq, of injuries suffered from a non-combat related incident. He was assigned to the 67th Signal Battalion, 35th Signal Brigade, Fort Gordon, Ga.
The circumstances surrounding the incident are under investigation.
For more information the media March contact the Fort Gordon public affairs office at (706) 791-6001.
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