The US Department of Defence has released details on major defence acquisition programme cost, schedule, and performance changes since the September 2010 reporting period. Global Hawk is 23% and the Family of Advanced Beyond Line-of-Sight Terminals programmes is 16%, over budget.
This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 2010 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 programmes 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 programmes that are re-baselined at major milestone decisions.
The total programme cost estimates provided in the SARs include research and development, procurement, military construction, and acquisition-related operation and maintenance (except for pre-Milestone B programmes, which are limited to development costs pursuant to section 2432 of title 10, United States Code). Total programme costs reflect actual costs to date as well as future anticipated costs. All estimates include anticipated inflation allowances.
The current estimate of programme acquisition costs for programmes covered by SARs for the prior reporting period (September 2010) was $1,679,305.3 million. For the December 2010 reporting period, there are seven programmes with critical or significant Nunn-McCurdy unit cost breaches to their current or original APB.
Critical Breaches: (Unit cost increases of 25 percent or more to the current APB or of 50 percent or more to the original APB) (PAUC)
RQ-4/AB Unmanned Aircraft System (UAS) Global Hawk – The Programme Acquisition Unit Cost (PAUC) increased 14.0 percent and the APUC increased 22.8 percent to the current APB, due primarily to changing the mix of aircraft to a larger percentage of the more expensive Block 30 aircraft and less of the Block 40 aircraft, along with a stretch-out of the procurement buy profile (quantities in fiscal 2012-fiscal 2014 were reduced from five to three aircraft per year, and quantities in fiscal 2015-fiscal 2016 were reduced from five to one aircraft per year). There are additional unit cost increases for sensor depot activation and for ground station and communications re-architecture efforts that will resolve diminishing manufacturing source issues and provide critical added capabilities for the Warfighter.
While Global Hawk has only now breached the Nunn-McCurdy critical threshold, the Department anticipated this development and began a review of the programme in June 2010 at the direction of the Under Secretary of Defense for Acquisition Technology and Logistics. This review resulted, in December 2010, in a decision to restructure the programme into sub-programmes. At the same time, the Air Force assembled a Blue Ribbon Panel to review the programme. Recently, the Secretary of the Air Force determined that unit cost increases do exceed the critical 25 percent threshold, and hence the Department will formally review the programme under the Nunn-McCurdy process, including a cost estimate by the D, CAPE, relying heavily on the work already done by the Department prior to the fiscal 2012 budget submission.
Family of Advanced Beyond Line-of-Sight Terminals (FAB-T) – Programme costs increased $630.9 million (+15.8 percent) from $3,981.9 million to $4,612.8 million, due primarily to complexities with software integration and challenges with hardware qualification (+$260.1 million), higher manufacturing costs due to loss of learning and production inefficiencies (+$258.9 million), and other increases due to the schedule stretch-out (+$134.7 million), partially offset by decreases in other support costs (-$32.7 million).
Source: US Department of Defense