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IMMEDIATE RELEASE

Department of Defense Selected Acquisition Reports (SARs)

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Release No: NR-106-16
March 24, 2016
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(As of December 31, 2015)

 

The Department of Defense (DoD) has released details on major defense acquisition program cost, schedule, and performance changes since the December 2014 reporting period.  This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 2015 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 2014) was $1,622,053.2 million.  Final reports submitted for the annual December 2014 and for the June 2015 and September 2015 quarterly exception reporting periods were subtracted.  Initial reports for the annual December 2014 and for the June 2015 and September 2015 quarterly exception reporting periods were added.  Finally, the net cost changes for the June 2015 and September 2015 quarterly exception reporting periods were incorporated.

 

Click here to access the SAR Summary Tables

 

 

Current Estimate

(TY$ in Millions)

December 2014 (80 programs)

$ 1,622,053.2

Less four final reports on RQ-4A/B Global Hawk Unmanned Aircraft System (RQ-4A/B Global Hawk), Joint Standoff Weapon – Baseline Variant and Unitary Warhead Variant (JSOW), Joint Tactical Networks (JTN) and Airborne and Maritime/Fixed Station Joint Tactical Radio System (AMF JTRS) Small Airborne Link 16 Terminal (SALT) subprogram.

 

-14,731.2

Plus two initial reports on Armored Multi-Purpose Vehicle (AMPV) and Joint Air-to-Ground Missile (JAGM).

 

+21,231.0

Net cost changes reported as of June 2015 and September 2015 quarterly exception SARs.

 

-363.7

Adjustment to previously misaligned funding.

 

+38.3

Incorporation of Air Force Intercontinental Ballistic Fuze Modernization
(ICBM Fuze Mod) funding from the December 2014 initial report.

 

+2,076.0

 

 

Changes Since Last Report:

 

Economic

 

$ -4,807.8

Quantity

 

+17,872.4

Schedule

 

+1,277.5

Engineering

 

+7,107.2

Estimating

 

-9,657.2

Support

 

-4,757.2

 

Net Cost Change

$ +7,034.9

 

Plus Ballistic Missile Defense System (BMDS) development, procurement, and construction funding for Fiscal Year (FY) 2021; previous reports limited total funding through FY 2020

 

+7,082.0

 

December 2015 (79 programs)

 

$1,644,420.5

 

For the December 2015 reporting period, there is a net cost increase of $7,034.9 million or      +.43 percent for the 79 programs that have reported in previous SARs.  This cost increase is due primarily to a net increase in the planned quantities to be purchased (+$17,872.4 million), engineering changes to hardware and software (+$7,107.2 million), and a net stretch-out of development and procurement schedules (+$1,277.5 million).  These increases were partially offset by a net decrease in program cost estimates (-$9,658.8 million), the application of lower escalation rates (-$4,807.8 million), and reductions in support requirements (-$4,757.2 million).

 

New SARs

There are no new SARs for the December 2015 reporting period.

 

Summary Explanations of Selected SAR Cost Changes

(As of December 31, 2015)

 

A.  Program Cost Changes Greater than $1B, or 10%

 

Army:

None.

 

Navy:

AGM-88E AARGM – Program costs increased $484.8 million (+22.25%) from $2,178.9 million to $2,663.7 million, due primarily to a quantity increase of 556 missiles from 1,879 to 2,435 (+$294.9 million) and associated schedule, engineering, and estimating allocations* (+$11.4 million).  There were also an increase in the recurring fly away costs for FY 2021 - FY 2023 associated with the quantity increase (+$61.0M), an increase in cost due to the extension of procurement for three years (FY 2021 - FY 2023) (+$51.6M), and an increase in cost due to changes in the telemetry kit requirement for FY 2017 - FY 2021 (+$76.6M).

 

CVN 78 – Program costs increased $1,027.7 million (+2.59%) from $39,667 million to $40,695.5 million, due primarily to the addition of the first year of advance procurement for the CVN 81 (+$968.4 million).  There were also increases to the Ford Class Design for Affordability investments for the identification and development of initiatives to reduce construction costs (+$161.7), an increase to fund to the CVN 79 Program Manager’s Estimate at Completion of $11.498 billion (+$150.4 million), a Congressional increase and revised estimate to shock test the CVN 78 (+$147.2), revised estimates for the CVN 78 Outfitting /Post Delivery (+$26.5 million), and revised escalation indices (+$44.6).  These increases were partially offset by a decrease to the CVN 80 due to efficiencies from optimizing the build sequence and re-phasing funding into earlier years of execution (-$252.0 million), adjustments for current and prior escalation (-$20.8 million), a revised estimate for CVN 79 to align with the revised cost cap of $11.398 billion (-$38.4 million), a revised estimate due to the application of new outyear escalation indices (-$28.2 million), and non-pay, non-fuel purchase rate adjustments (-$115.5 million). 

 

DDG 51 Arleigh Burke Class Guided Missile Destroyer – Program costs increased $8,519.0 million (+8.66%) from $98,327.5 million to $106,846.5 million, due primarily to a quantity increase of four ships from 82 to 86 (+$5,010.0 million) and associated schedule, engineering, and estimating allocations* (+$2,391.4 million).  There were also increases for a Congressional plus-up for an additional ship not in the SAR profile (+$1,000.0 million), revised estimates to reflect refinement of the AEGIS Advanced Capability Build (ACB) 16/AEGIS ACB 20 development including ACB 20 certification, test, and evaluation (+$364.3 million), revised estimates to refine FY 2012, FY 2013, and FY 2015 shipbuilding estimates (+$105.2 million), and revised escalation indices (+$65.4 million).  These increases were partially offset by revised escalation indices (-$8.0 million), realignment of Cyber Security Task Force to another RDT&E Project Unit (-$66.8 million), a Congressional reduction associated with AEGIS ACB 16 (-$28.0 million), adjustment for current and prior escalation (-$38.4 million), revised estimates to reflect the application of new outyear escalation indices (-$27.0 million), Congressional reductions to FY 2016 for shipbuilder and SPQ-9B (-$17.1 million), an adjustment for the impact of Congressional plus-up without increase to profile (-$91.0 million), revised estimate to reflect program efficiencies (-$130.8 million), and a revised estimate to reflect refinement of outfitting and post delivery estimates (-$18.2 million). 

 

EA-18G Growler Aircraft – Program costs increased $1,277.2 million (+8.87%) from $14,395.2 million to $15,672.4 million, due primarily to a quantity increase of seven aircraft from 153 to 160 (+$751.5 million) and associated schedule and estimating allocations* (-$30.8 million).  There were also increases in other support related to the increase in quantity (+$474.5 million), a revised estimate for tactical targeting network technology in FY 2017 to FY 2019 (+$50.9 million), a revised estimate for Distributed Targeting Processor-Networked in FY 2017 to FY 2021 (+$52.4 million), a revised estimate for Complex Emitter in FY 2017 to FY 2020 (+$207.3 million), and an adjustment for current and prior escalation (+$19.9 million).  These increases were partially offset by a decrease in FY 2013, FY 2014, and FY 2015 due to internal Navy realignments (-$211.4 million), revised escalation indices (-$26.2 million), and a decrease in FY 2016 funding due to a Congressional reduction (-$10.0 million). 

 

IDECM Block 4 – Program costs increased $310.6 million (+33.17%) from $936.5 million to $1,247.1 million, due primarily to a quantity increase of 134 ALQ214(V)4/5s from 190 to 324 (+$302.1 million). 

 

Joint Precision Approach and Landing System (JPALS) Increment 1A – Program costs increased $382.0 million (+23.90%) from $1,598.2 million to $1,980.2 million, due to a revised estimate to meet post Nunn-McCurdy certification requirements (+$406.3 million).   This increase was partially offset by Congressional budget adjustments (-$10.0 million), a revised estimate due to service level budget adjustments (-$7.1 million), and revised escalation indices (-$4.5 million).

 

Littoral Combat Ship (LCS) – Program costs increased $7,058.4 million (+32.32%) from $21,842.3 million to $28,900.7 million, due primarily to a quantity increase of 8 ships from 30 to 38 (+$6,414.3), increased cost due to the incorporation of Frigate related enhancement to the LCS baseline (+$2,046.2), increased cost due to schedule changes (+$496.1), and adjustments/revisions to the escalation indices (+$21.7).  These increases were partially offset by revised estimates for schedule changes, proper pricing of outfitting and post-delivery requirements and to reflect LCS actuals (-$1,919.9 million).

 

Multifunctional Information Distribution System (MIDS) - Program costs increased $946.6 million (54.8%) from $1,727.2 million to $2,673.8 million, due primarily to a quantity increase of 2205 MIDS terminals from 6,399 to 8,604 (+$908.8 million) and associated schedule, engineering, and estimating allocations* (-$285.3 million).  The cost also increased with a revised estimate due to quantity change and retrofit inclusion (+$277.7 million), a revised estimate to align with FY 2017 PB to fully fund MIDS JTRS Tactical Targeting Network Technology (TTNT) (+$18.5 million), FY 2014 - FY 2015 new funding for investigation reports for implementation of MIDS JTRS to Air Force Platforms (+$10.8 million), and additional funding in FY 2015 for MIDS Modernization and MIDS JTRS TTNT (+$21.9 million). 

 

SSN 774 Virginia Class Submarine – Program costs increased $4,948.9 million (+4.98%) from $99,312.6 million to $104,261.5 million, due primarily to a quantity increase of 1 ship from 32 to 33 (+$2,989.9 million), and associated schedule and estimating allocations* (-$577.3 million).  There were also increases due to revised estimates for advanced procurement to fund the class restructuring (+$1,734.0 million), additional funding for the Virginia Payload Module program to incorporate the program on Block V and later submarines (+$549.0 million), additional funding in FY 2018 – FY 2021 for the Acoustic Superiority Development program to incorporate design changes to Virginia class submarines (+$618.0 million), a Congressional adjustment to non-core Research and Development (+$37.5 million), a revised estimate for core Hull, Mechanical and Electrical (HM&E) and combat systems research and development (+$14.5 million), and revised escalation indices (+$110.1 million).  These increases were partially offset by a revised estimate due to the refinement of requirements (-$289.1 million), revised estimates for the technology insertion program (-$136.2 million), adjustments for current and prior escalation indices (-$71.8 million), a revised estimate for VIRGINIA Payload Module development program (-$13.5 million), and the removal of expired funds (-$25.6 million).

 

TACTOM – Program costs increase $775.7 million (+13.82%) from $5,614.7 million to $6,390.4 million, due primarily to the inclusion of modernization kits from FY 2021 through FY 2034 (+$590.6 million), an increase of 157 missiles from 4,058 to 4,215 (+$105.5 million), and associated schedule, engineering, and estimating allocations* (+57.6  million).  There was also an increase due to production support costs associated with production of TACTOM missiles in FY 2016 and FY 2017 (+$20.5 million). 

 

V-22 Osprey Joint Services Advanced Vertical Lift Aircraft – Program costs increased $1,104.3 million (+2.02%) from $54,758.0 million to $55,862.3 million, due primarily to an increase in initial spares from revised spares requirements based on current projections for the C/MV-22 Navy variant (+$328.2 million) and a stretch-out and schedule variance in the Navy procurement buy profile from FY 2017- FY 2023 to FY 2017-FY 2025 (+$315.3 million).  There were also increases in other support for support equipment, peculiar training equipment, technical publications, production engineering support, and other integrated logistics support (+$156.3 million) and increases in government furnished equipment, engine, ancillary, and non-recurring costs (+$87.8 million), an increase of one Air Force aircraft, from 50 to 51 (+$74.0 million) and associated schedule, engineering, and estimating allocations* (+$3.2 million), a revised estimate for MV-22 Digital Interoperability (+$88.1 million), and an increase due to FY 2018 Single-Year Procurement vice Multi-Year Procurement assumption (+$49.2 million).   

 

Air Force:

 

Evolved Expendable Launch Vehicle (EELV) – Program costs decreased $2,342.1 million

(-3.62%) from $64,779.8 million to $62,437.7 million, due primarily to revised estimates for launch services pricing from FY 2017 to FY 2028 based on final negotiated contract values (-$2,148.2 million) and a quantity variance resulting from a reduction of four launch services, from 164 to 160, based on decreased satellite vehicle requirements (-$1,538.5 million). In addition there were revised escalation indices (-$373.8 million).  These decreases were partially offset by increased funding to invest in new launch systems providers to support National Security Space mission requirements (+$1,173.4 million), increased funding required for changes in launch vehicle configuration requirements due to satellite vehicles requirements (+$491.6 million), and an adjustment for current and prior escalation (+$55.2 million). 

 

Family of Advanced Beyond Line-of-Sight Terminals (FAB-T) Force Element Terminal (FET) – Program costs increased $565.1 million (+24.04%) from $2,350.6 million to $2,915.7 million, due primarily to a revised estimate for separate FET acquisition beyond the FYDP incorporating the updated baseline from the approved service cost position used for the command post terminal (CPT) milestone (MS) C (+$385.5 million). In addition there was an increase due to initial spares (+$86.0 million) and other support (+$52.6 million) for separate FET acquisition beyond the FYDP incorporating the updated baseline from the approved service cost position used for the CPT MS C, a stretch-out of the procurement buy profile from FY 2022 – FY 2025 to FY 2027 – FY 2030 to separate FET acquisition beyond the FYDP (+$59.0 million), and an increase in initial spares for separate FET acquisition beyond the FYDP incorporating updated baseline per the MS C approved SCP including realignment between OPAF and procurement appropriation SPAF (+$20.0 million). These increases were partially offset by decreased funding due to a quantity reduction of nine ground terminals (-$34.9 million).

 

Global Positioning System III (GPS III) -- Program costs increased $846.1 million (+18.0%) from $4,711.2 million to $5,557.4 million, due primarily to a quantity increase of one satellite in missile procurement, Air Force (MPAF) (+$231.7 million) and a quantity increase of one satellite in space procurement, Air Force (SPAF) (+$235.9 million).  Additional costs increased related to the additional quantities were due to increased costs and long lead and actuals for the procurement of space vehicle (SV)09 in FY 2015 (MPAF) (+$109.3 million), and a revised estimate for SV01 and SV02 due to technical issues with the mission data unit (+$100.8 million), and due to actuals for the procurement of SV10 in FY 2016 (SPAF) (+$77.6 million).   There was also an increase in other support due to additional support requirements, increase in launch operations and SV processing, increase in other government costs, and reallocation efficiency (+$175.8 million).  These increases were partially offset with a decrease in other support due to reclassification of funds from support to flyaway (-$15.7 million), and a reallocation of funding between SV01-10 to SV11+ (-$56.4 million).

 

Joint Direct Attack Munition (JDAM) – Program costs increased $929.5 million (+11.4%) from $8,168.8 million to $9,098.3 million, due primarily to a quantity increase of 52,092 tailkits from 304,157 to 356,249 (+$1,525.7 million), revisions to the escalation indices (+$135.2 million), additional funding for the global positioning system (GPS) M-Code integration (+$56 million), and the alignment of engineering efforts for software updates and GPS M-Code integration (+$51.8 million).  These increases were partially offset by lower unit pricing due to contract negotiations as a result of the quantity increase (-$677.6 million), the acceleration of the procurement buy profile due to increased production capacity based on urgent operational need by the Warfighter(-$34.5 million), and adjustments for current and prior escalation indices (-$118.0 million)

 

Next Generation Operational Control System (OCX) -- Program costs increased $586.4 million (+16.3%) from $3,602.6 million to $4,189.0 million, due primarily to a revised cost estimate to support cost overruns associated with Block 0, 1, and 2 technical issues (+$548.3 million) and associated revised cost estimates for above threshold requirements related to the OCX cost overruns for Block 0, 1, and 2 technical issues (+$44.8 million). 

 

DoD:

 

F-35 Joint Strike FighterAcquisition costs (RDT&E + Procurement + MILCON) for the overall program decreased $12.1B from $391.1B to $379.0B (TY$).  The breakdown by subprogram is:

F-35 Aircraft – Subprogram costs decreased $5.7 billion (-1.8%) from $324.1 billion to $318.4 billion, due primarily to revised estimates for initial spares requirements to include the maturation of the technical baseline, definition of customer requirements, and further definition of service bed down/fielding plans (-$4.3 billion).  Also, there were revised estimates for lower economic inflation rates (-$1.8 billion) and additional reductions due to revised estimate assumptions for block buy and multi-year procurement (-$2.6 billion).  These decreases were partially offset by increases due to additional scope/engineering for aircraft procurement changes for enhanced additional capabilities (+$1.8 billion).  

F-35 Engine – Subprogram costs decreased $6.4 billion (-9.5%) from $67.0 billion to $60.6 billion, due primarily to revised estimates based on actual costs from low rate initial production lots (-$2.9 billion), revised estimates based on revised assumptions about multi-year and block buy procurement options (-$1.0 billion), and additional decreases resulting from revised estimates for initial spares requirements to include the maturation of the technical baseline, definition of customer requirements, and further definition of service bed down/fielding plans  (-$1.9 billion).

 

Joint Light Tactical Vehicle – Program costs decreased $5,906.2 million (-19.32%) from $30,574.0 million to $24,667.8 million, due primarily to revised estimates for unit costs of vehicles and kits based on realized savings (-$3,703.9 million), the stretch out of procurement buy profile due to budget adjustments and revised assumptions regarding the maximum buy profile year (-$1,280.8 million), a methodology change in estimating technical data package costs (-$550.1 million), a decrease in other support due to a change in estimating methodology, updated cost data fielding, and new equipment training (-$115.4 million), revised escalation indices (-$232.2 million), and realized program efficiencies as a result of contractor systems engineering and program management down select (-$23.9 million).  

 

 

B.  Nunn-McCurdy Unit Cost Breaches

For the December 2015 reporting period, there is one program with critical Nunn-McCurdy unit cost breaches to the current or original acquisition program baseline (APB).  Due to cancellation of the Navy Remote Minehunting System (RMS) production after FY 2016 in the FY 2017 President’s Budget, the planned quantities to be purchased have been reduced 44 units from 54 to 10 already delivered.  In accordance with the provisions of sections 2433 and 2433a of title 10, United States Code, the SAR for this program provides the required notification and unit cost breach information.  However, a certification determination will not be made by the undersecretary of defense for acquisition, technology and logistics, because the breach resulted from the cancellation of the program.

 


*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."