Department of Defense Announces Selected Acquisition Report

The Department of Defense (DoD) has released details on major defense acquisition program cost, schedule, and performance changes since the December 2011 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 2012 reporting period. http://www.defense.gov/news/Selected...Tables2012.pdf

SARs summarize the latest estimates of cost, schedule and performance status. These reports are prepared annually in conjunction with the 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 operation 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 2011) was $1,617,549.2 million. Final reports submitted for the annual December 2011 and for the March 2012, June 2012, and September 2012 quarterly exception reporting periods were subtracted. Initial reports for the annual December 2011 and for the March 2012, June 2012 and September 2012 quarterly exception reporting periods were added. Finally, the net cost changes for March 2012, June 2012 and September 2012 quarterly exception reporting periods were incorporated.




Current Estimate

($ in Millions)

December 2011 (83 programs)


$ 1,617,549.2

Less final reports on AIM-9X Block I, C-130 Avionics Modernization Program (AMP), Chemical Demilitarization-Chemical Materials Agency (Chem Demil-CMA), Cobra Judy Replacement, High Mobility Artillery Rocket System (HIMARS), Joint Tactical Radio System Ground Mobile Radio (JTRS-GMR), Multi-Platform Radar Technology Insertion Program (MP-RTIP), National Polar-Orbiting Operational Environmental Satellite System (NPOESS), Stryker, Thermal Weapon Sight(TWS), and Warfighter Information Network-Tactical (WIN-T) Increment 1




-61,541.1

Plus initial reports on AIM-9X Block II, Evolved Expendable Launch Vehicle (EELV), Ground/Air Task Oriented Radar (G/ATOR), Paladin Integrated Management (PIM), Ship to Shore Connector (SSC), and Thermal Weapon Sight(TWS)




+59,377.2

Net cost changes reported as of March 2012, June 2012 and September 2012 quarterly exception SARs


-1,084.6

Changes Since Last Report:




Economic





$ +21,816.4

Quantity





+21,615.6

Schedule





+436.3

Engineering





-29.9

Estimating





-2,561.4

Other





0.0

Support





-1,659.3




Net Cost Change


$ +39,617.7

Plus Ballistic Missile Defense System (BMDS) development, procurement, and construction funding for Fiscal Year (FY) 2018; previous reports limited total funding through FY 2017




+7,064.9



December 2012 (78 programs)




$ 1,660,983.3



For the December 2012 reporting period, there is a net cost increase of $39,617.7 million or
+2.44 percent for the 78 programs that have reported previously in SARs. This cost increase is due primarily to the application of higher escalation rates (+$21,816.4 million), a net increase in planned quantities to be purchased (+$21,615.6 million), and a net stretch-out of development and procurement schedules (+$436.3 million). These increases were partially offset by net decreases in program cost estimates (-$2,561.4 million), engineering changes to hardware/ software (-$29.9 million) and reductions in associated support requirements (-$1,659.3 million).



New SARs

DoD is submitting initial SARs for the following programs as of the December 2012 reporting period. These reports do not represent cost growth. The baselines established on these programs will be the point from which future changes will be measured.





Program


Current Estimate

($ in Millions)

Airborne Warning and Control System (AWACS) Block 40/45 Upgrade


$2,753.1

B61 Modification 12 Life Extension Program (LEP) Tailkit Assembly (TKA)


+1,451.8



Global Positioning System’s Next Generation Operational Control System (GPS OCX)


+3,412.4

Joint Light Tactical Vehicle (JLTV)


+31,108.2

Total


$ 38,725.5





Summary Explanations of Selected[1]SAR Cost Changes

(As of December 31, 2012)

Army:

AH-64E Apache New Build – Program costs increased $328.7 million (+15.3 percent) from $2,155.8 million to $2,484.5 million, due primarily to a stretch-out of the procurement buy profile (+$260.0 million). Since Milestone C in September 2010, 46 of the 56 AH-64E New Build aircraft have been shifted outside the Future Year Defense Program to higher priority programs. There were additional increases for other support (+$78.5 million) and initial spares (+$26.6 million) to reflect a revised Independent Cost Estimate by Cost Assessment and Program Evaluation (CAPE) in support of full rate production approval in March 2013. These increases were partially offset by a quantity decrease of two Overseas Contingency Operations-funded aircraft from 58 to 56 aircraft (-$111.2 million) and associated schedule and estimating allocations* ($+46.3 million).

AH-64E Apache Remanufacture – Program costs increased $1,791.9 million (+15.0 percent) from $11,968.3 million to $13,760.2 million, due primarily to reflect a revised Independent Cost Estimate (ICE) by CAPE in support of Full Rate Production (FRP) approval in September 2012 (+$1,339.5M). There were additional increases for other support (+$347.8 million) and initial spares (+$151.0 million) to reflect the approved CAPE FRP ICE.

UH-60M Black Hawk Helicopter– Program costs decreased $3,166.8 million (-11.0 percent) from $28,860.6 million to $25,693.8 million, due primarily to incorporation of Multi-Year VIII contracting with resulting cost savings (-$3,325.5 million), a net overall acceleration of the procurement buy schedule (-$123.7 million) and a reduction in engineering change orders (-$99.5 million). These decreases were partially offset by revised escalation indices (+$394.0 million).

Warfighter Information Network-Tactical (WIN-T) Increment 2 – Program costs decreased $1,323.9 million (-20.5 percent) from $6,461.3 million to $5,137.4 million, due primarily to a quantity decrease of 690 nodes from 2,790 to 2,100 nodes to align with the capability sets (-$1,115.8 million) and associated schedule and estimating allocations* (+$38.8 million). Other decreases were due to the removal of the Armored Brigade Combat Team recurring A-Kit costs (-$150.8 million), a decrease in initial spares resulting from the decrease of 690 nodes (-$107.6 million), and decreases in fielding, new equipment training, and software maintenance resulting from 690 fewer nodes (-$83.5 million). These decreases were partially offset by an increase due to revised escalation indices (+$82.7 million) and increases resulting from additional costs for follow-on operational test and evaluation; platform certification testing; initial operational testing; and joint command, control, communications, computers, intelligence, surveillance, and reconnaissance radio production qualification testing (+$70.4 million).

Warfighter Information Network-Tactical (WIN-T) Increment 3 – Program costs increased $3,434.6 million (+23.8 percent) from $14,455.5 million to $17,890.1 million, due primarily to a procurement quantity increase of 404 nodes from 3,045 to 3,449 nodes (+$1,232.4 million) and associated schedule, engineering, and estimating allocations* (-$497.7 million), and a development quantity increase of 25 nodes from 39 to 64 nodes (+$158.2 million) for limited user testing. Additional increases related to the increase of 404 procurement nodes include: fielding, new equipment training and hardware end of life (technology refresh) (+$1,556.1 million), software licenses (+$230.9 million), initial spares requirements (+$99.5 million), and engineering change orders for hardware procurement (+$79.1 million). There were other increases attributable to updates to the systems engineering and program management cost estimate (+$322.7 million) and the application of revised escalation indices (+$302.4 million). These increases were partially offset by decreases resulting from descoping of the Point of Presence-Command and Modular Communication Node-Global Information Grid Interface (-$42.8 million) and a reduction in development engineering due to leveraging of the WIN-T Increment 2 design (-$42.5 million).