News

News Release

No. 437-98
(703)697-0192(media)
IMMEDIATE RELEASE August 19, 1998 (703)697-5737(public/industry)

DEPARTMENT OF DEFENSE SELECTED ACQUISITION REPORTS (SARS)

The Department of Defense has released details on major defense acquisition program cost and schedule changes since the December 1997 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the June 30, 1998 reporting period.

SARs summarize the latest estimates of program 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 have had their baseline adjusted 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. 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 (December 1997) was $678,646.0 million. After subtracting the costs for the terminated reports (UHF FOLLOW-ON and CVN-74/75) and adding the costs for the new programs (GBS and MLRS UPGRADE), the December 1997 adjusted current estimate of program acquisition costs was $674,091.0 million. There was a net decrease of $5.1 million during the current reporting period (June 1998). The cost changes between December 1997 and June 1998 are summarized on the next page:

Current Estimate
($ in Millions)
December 1997 (76 programs*) $ 678,646.0
Less final reports on completed programs
(UHF FOLLOW-ON and CVN-74/75) -8,887.1
Plus new programs
(GBS and MLRS UPGRADE) +4,332.1
December 1997 Adjusted (77 programs*) $ 674,091.0
Changes Since Last Report:
Economic $ 0.0
Quantity 0.0
Schedule 0.0
Engineering 0.0
Estimating -5.1
Other 0.0
Support 0.0
Net Cost Change $ -5.1
June 1998 (77 programs*) $ 674,085.9

* Excludes classified costs for the Air Force's MILSTAR program.

For the June 1998 reporting period, there was a net decrease of $5.1 million or -0.001 percent. This decrease was due to a correction to the cost estimate for Cooperative Engagement Capability (CEC). There were three quarterly reports submitted on programs that have reported SARs previously:

Navy: CEC (Cooperative Engagement Capability) -- The SAR was submitted to report revisions in the program schedule since the December 1997 SAR. The CEC test program has been replanned as a result of OT-IIA1 software-related interoperability problems. Planned FY 1998 operational evaluation OT-IIA1 of AN/USG-2 equipment has been deferred to allow software developers adequate time to identify and resolve the software interoperability issues. Extensive Developmental Testing/Operational Testing will be conducted in FY 1999 to ensure thorough resolution of software and interoperability issues and prepare for FY 2000 operational evaluation OT-IIA1. The full rate production decision has been delayed to FY 2001 as a result of the replanned test and evaluation schedule. The FY 2000 operational evaluation OT-IIA1 results will be the basis of the full rate production decision.

Air Force: F-22 -- The SAR was submitted to report a one-year schedule slip in the planned dates for the Low Rate Initial Production (LRIP) decision, contract award and first delivery. The change occurred because the Defense Acquisition Executive redesignated the first aircraft lot from LRIP 1 to Production Representative Test Vehicles and the second aircraft lot from LRIP 2 to LRIP 1. No cost changes were reported.

NAS (National Airspace System) -- The SAR was submitted to report a greater than six-month schedule slip in the planned date for the Voice Communication Switching System Program Review. The slip was caused by Federal Aviation Administration operational testing delays. No cost changes were reported.

New SARs (As of June 30, 1998)

The Department of Defense has submitted initial SARs for two new programs, the Army's Improved Cargo Helicopter (ICH) and the Navy's DD 21 Destroyer. 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:

Current Estimate
Program ($ in Millions)
ICH (Improved Cargo Helicopter) $ 3,114.4
DD 21 Destroyer 2,160.4**
Total $5,274.8
** Pre-Milestone II program reporting development (RDT&E) costs only, in accordance with the provisions of Section 2432, Title 10, United States Code

More detailed information on the Selected Acquisitions Reports cost summaries can be found at www.defenselink.mil/news/fact_sheets/Jun98sum.pdf.