The Department of Defense has released details on major defense acquisition program cost and schedule changes since the September 1996 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the December 31, 1996, reporting period.
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 anticipated costs for future efforts. All estimates include allowances for anticipated inflation.
The current estimate of program acquisition costs for programs covered by SARs for the prior reporting period (September 1996) was $705,214.3 million. After subtracting the costs for a terminated report (Palletized Load System) and adding the costs for a new program (Joint Air-To-Surface Standoff Missile), the September 1996 adjusted current estimate of program acquisition costs was $704,762.6 million. There was a net decrease of $2,014.9 million during the current reporting period (December 1996). The cost changes between September and December 1996 are summarized below:
Current Estimate ($ in Millions) September 1996 (71 programs*) $ 705,214.3 Less final report on completed program, PLS -1,235.9 Plus new program, JASSM +784.2** September 1996 Adjusted (71 programs*) $ 704,762.6 * Excludes classified costs for the Air Force's MILSTAR program. ** Pre-Milestone II program reporting development (RDT&E) costs only, in accordance with the provisions of Section 2432, Title 10, United States Code. Changes Since Last Report: Economic $ +5,145.6 Quantity -3,846.8 Schedule +3,873.1 Engineering -692.9 Estimating -572.7 Other 0.0 Support -5,921.2 Net Cost Change $ -2,014.9Plus initial procurement, military construction, and acquisition $ +14,156.7 related operation and maintenance estimates for AIM-9X, LPD 17, and SBIRS (previous reports were limited to development costs per 10 U.S.C. 2432)
December 1996 (71 programs*) $ 716,904.4
The net decrease of $2,014.9 million or -0.3 percent during the current reporting period (December 1996) was due primarily to an overall reduction in program quantities (-$3,846.8 million) and associated support costs (-$5,921.2 million). In addition, engineering changes (hardware/software) and revised program cost estimates were lower by -$692.9 million and -$572.7 million, respectively. These decreases were partially offset by the application of higher outyear escalation rates (+$5,145.6 million) and a net stretchout of the procurement buy schedules (+$3,873.1 million). Details of the most significant changes are attached.
Current Estimate Program ($ in Millions) ABL (Airborne Laser) $ 2,524.7** B-2A Spirit (Stealth Bomber) 44,754.1 C-130J Hercules (Cargo Aircraft) 600.5 EELV (Evolved Expendable Launch Vehicle) 1,999.0** JSF (Joint Strike Fighter) 23,165.9** USMC H-1 UPGRADE (AH-1W Attack Helicopter) 3,571.3 Total $76,615.5* Excludes classified costs for the Air Force's MILSTAR program.
** Pre-Milestone II program reporting development (RDT&E) costs only, in accordance with the provisions of Section 2432, Title 10, United States Code.
ATIRCM/CMWS - Program costs decreased $514.5 million (-15.2%) from $3,378.2 million to $2,863.7 million, due primarily to a quantity decrease of 396 units from 3,069 to 2,673 (-$342.3 million) and a reduction of associated support costs (- $66.1 million). The application of revised escalation indices (- $71.6 million) and the deletion of development funding associated with the F-15 (-$64.8 million) also contributed to the decrease in costs. These reductions were partially offset by a stretch in the procurement buy profile (+$41.0 million).
BLACKHAWK (UH-60L) - Program costs decreased $846.9 million (- 17.5%) from $4,831.4 million to $3,984.5 million, due primarily to a decrease in aircraft procurement quantity of 101 from 648 to 547 (-$355.1 million) and an associated estimating allocation (- $506.2 million*).
BRADLEY FVS UPGRADE - Program costs increased $1,538.2 million (+37.3%) from $4,125.9 million to $5,664.1 million, due primarily to revised estimates based on actual cost experience in the development phase (+$593.4 million), a three-year stretch in the procurement buy profile (+$362.5 million), and engine performance and survivability enhancement costs (+$334.1 million).
SMART-T - Program costs decreased $289.2 million (-29.6%) from $978.5 million to $689.3 million, due primarily to revised terminal costs (-$194.6 million), and a quantity reduction of 74 units from 387 to 313 (-$96.6 million) and associated decrease in initial spares requirements (-$82.6 million). These decreases were partially offset by the addition of engineering changes (+$44.8 million) and revised support costs (+$33.0 million).
CEC - Program costs increased $481.3 million (+18.5%) from $2,587.8 million to $3,069.1 million due primarily to a quantity increase of 22 units from 94 to 116 (+$103.1 million) and associated support costs (+$207.6 million). Additional scope in the development program and two additional years added to the procurement program also contributed to the increase (+$110.3 million).
CVN-77 - Program costs decreased $1,129.5 million (-17.3%) from $6,541.5 million to $5,412.0 million, due primarily to a decision to use a production back-up set of reactor plant heavy equipment rather than new procurement (-$500.0 million), correction of erroneous labor and inflation rates reported in the previous SAR (-$404.7 million), and deletion of planned technology enhancements (-$311.0 million). The decreases were partially offset by an increased estimate to include process and design changes that will reduce manning and maintenance costs (+$88.8 million).
F/A-18 E/F - Program costs decreased $1,467.1 million (-1.8%) from $80,958.7 million to $79,491.6 million, due primarily to a revised support estimate based on actual costs to date and the removal of Aviation Outfitting Account spares (-$3,893.1 million). The decrease was partially offset by the application of revised escalation indices (+$1,032.7 million) and a change in the maximum production rate from 72 to 60 per year (+$1,389.4 million).
MIDS-LVT - Program costs increased $634.5 million (+56.2%) from $1,129.9 million to $1,764.4 million, due primarily to the addition of 894 terminals (+812 F/A-18 terminals and +82 shipboard terminals) (+$440.0 million) and revised cost estimates resulting from the increased buy (+$126.5 million). In addition, funds were added to accelerate MIDS-LVT transition into competitive production with concurrent completion of international development (+$66.7 million).
NEW ATTACK SUBMARINE (NSSN) - Program costs increased $2,142.5 million (+3.3%) from $64,891.4 million to $67,033.9 million, due primarily to a revised procurement profile caused by a change in the acquisition strategy from single source to a teaming arrangement (+$1,428.2 million) and a revised estimate reflecting the higher cost of teaming (+$1,138.1 million), and the application of revised escalation rates (+$943.1 million). The increases were partially offset by a revised initial outfitting cost estimate based on recent information from the Seawolf (SSN 21) program (-$1,296.2 million).
V-22 - Program costs decreased $1,071.7 million (-2.3%) from $46,599.7 million to $45,528.0 million, due primarily to an accelerated production schedule which ramps to 24 MV-22 aircraft in FY 2003 and V-22 production ending in FY 2018 vice FY 2021 (- $1,669.7 million), and a decrease in support requirements (- $1,090.7 million). These decreases were partially offset by the application of revised escalation rates (+$1,558.0 million) and excess advanced procurement funds and other estimating changes (+$130.7 million).
SBIRS - Development program costs increased $469.3 million (+18.2%) from $2,576.8 million to $3,046.1 million, due primarily to the additional costs required to complete development of the program (+$1,096.1 million) and realignment of funds to support the Miniature Sensor Technology Integration launch (+$2.9 million). These increases were partially offset by the application of revised escalation indices ($-13.8 million) and the direction to use missile procurement funds in lieu of research and development funds to buy Geosynchronus Earth Orbits G4 and G5 (-$617.0 million). Previously, the SBIRS SAR reflected only research and development costs; procurement was added to the program in this SAR as a result of Milestone II approval.
TITAN IV - Program costs decreased $2,381.4 million (-10.1%) from to $23,562.2 million to $21,180.8 million, due primarily to the decrease from 46 to 41 vehicles (-$1,190.3 million), the associated reduction in launch services due to truncating the Titan launch schedule from FY 2011 to FY 2005 (-$987.0 million), the associated reduction in program office and technical support (-$702.9 million), the associated reduction for mission integration of non-Air Force missions (-$233.2 million), and the associated reduction in infrastructure maintenance (- $93.8 million). These decreases were partially offset by a revised estimate for contract close-out (+$104.6 million) and new requirements to mitigate risk associated with future environmental compliance, vendor obsolescence, and hardware shelf life (+$683.2 million).
* 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.”