Acquisition Report Highlights New Cost Overruns

The Defense Department’s acquisition programs saw a $7 billion increase in the period ending in December 2015, a jump of less than half of one percent for all programs covered by the Pentagon’s Selected Acquisition Report to Congress, the department announced Thursday. Of the 79 programs included the latest SAR report, five Air Force programs saw a change greater than $1 billion. The cost of the Evolved Expendable Launch Vehicle program decreased by $2.3 billion from $64.7 billion to $62.4 billion because of revised estimates for launches between Fiscal 2017 and 2028 due to new negotiated contract values. However, the Family of Advanced Beyond Line-of-Sight Terminals Force Element Terminal program saw a 24 percent increase from $2.3 billion to $2.9 billion because of new cost projections. The next-generation Global Positioning System III saw an 18-percent cost increase, from $4.7 billion to $5.5 billion because the program added one satellite. The Joint Direct Attack Munition program saw an increase of 11.4 percent, from $8.1 billion to $9 billion, due to a quantity increase of 52,092 tailkits and other program revisions. Lastly, the program costs for the Next Generation Operational Control System, known as OCX, saw an increase of 16.3 percent, from $3.6 billion to $4.1 billion, due to cost overruns related to technical issues. Pentagon officials briefing reporters on background Tuesday, said the fact there are no Nunn-McCurdy breaches this year, other than one cancelled program, and the fact that almost all of the increases in cost were due to increased numbers of units, which “we don’t consider a cost increase,” is a testament to DOD’s continued focus on reducing costs, should-cost, and better buying power.