Department of Defense Releases Selected Acquisition Reports
(Source: US Department of Defense; issued April 11, 2005)
The Department of Defense has released details on major defense acquisition program cost and schedule changes since the September 2004 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 31, 2004 reporting period.
SARs summarize the latest estimates of cost, schedule, and technical 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 (September 2004) was $1,370,943.2 million.
After adding the costs for four new programs (Aerial Common Sensor (ACS), Patriot/Medium Extended Air Defense System Combined Aggregate Program (PATRIOT/MEADS CAP), Standard Missile-6 (SM-6), and B-2 Radar Modernization Program (RMP)) from the September 2004 reporting period, the adjusted current estimate of program acquisition costs was $1,412,567.9 million.
For the December 2004 reporting period, there was a net cost increase of $59,616.4 million or +4.2 percent for programs that have reported previously, resulting in a new current estimate of $1,472,184.3 million.
The net cost increase was due primarily to additional engineering changes (hardware/software) (+$35,203.8 million), the application of higher escalation rates (+$32,127.1 million), a net stretch-out of development and procurement schedules (+$20,112.9 million).
These increases were partially offset by a net decrease of planned quantities to be purchased (-$24,478.7 million) and lower program cost estimates (-$6,603.4 million). Further details of the most significant changes are summarized below by program.
New SARs (As of December 31, 2004)
The Department of Defense has submitted initial SARs for Mission Planning System (MPS), Mobile User Objective System (MUOS), and Ship Self Defense System (SSDS). 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:
--Mission Planning System (MPS): $ 1,682.4
--Mobile User Objective System (MUOS) $ 5,931.4
--Ship Self Defense System (SSDS): $ 1,460.3
TOTAL: $ 9,074.1 million
(EDITOR’S NOTE: Although the total amount increased only marginally, major cost increases were noted for several programs, including the Joint Strike Fighter (+11.7 billion), Future Combat Systems (+$6.2 billion), and the CH-47 ($5.1 billion) and UH-60M (almost $6 billion) helicopters. These were compensated by near-equivalent decreases in the total cost of other acquisition programs.)
