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DoD ISSUES SELECTED ACQUSITION REPORTS

September 1, 2004 by

19 Aug 04. The Department of Defense has released details on major defense acquisition program cost and schedule changes since the December 2003 reporting period. This information is based on the Selected Acquisition Reports (SARs) submitted to the Congress for the June 30, 2004, reporting period.

SARs summarize the latest estimates of 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 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 operation and maintenance (except for pre-Milestone B programs which are limited to development costs pursuant to 10 USC ยง2432). Total program costs reflect actual costs to date as well as future anticipated costs. All estimates include anticipated inflation allowances.

The current estimate of program acquisition costs for programs covered by SARs for the prior reporting period (December 2003) was $1,332,027.2 million. After adding the costs for new programs (listed below) and subtracting the costs for final reports (listed below) from the December 2003 reporting period, the adjusted current estimate of program acquisition costs was $1,267,552.2 million.
There was a net cost increase of $1,524.9 million (+0.1 percent) during the current reporting period (June 2004), which was due primarily to higher cost estimates for the CVN 21 and SBIRS High programs.

Current Estimate

($ in Millions)

_December 2003 (78 programs)__$1,332,027.2_Plus three new programs (COBRA JUDY, MP RTIP, and SDB) +4,856.6

Less final reports (ABRAMS UPGRADE, COMANCHE, the FCR portion of LONGBOW APACHE, the BLOCK I-III portion of SM-2, AWACS RSIP, and JSTARS -69,331.6

_December 2003 Adjusted (77 programs)_ $1,267,552.2_

_Changes Since Last Report:_

Economic

$+18.5

Quantity

-6,119.0

Schedule

+72.1

Engineering

-412.0

Estimating

+7,949.0

Other

+0.0

Support

+16.3

Net Cost Change

$+1,524.9

Plus initial procurement cost estimate for CVN 21 Future Aircraft Carrier (previous
reports limited to development costs per 10 USC 2432) +31,748.7_June 2004 (77 programs)_$1,300,825.8_

For the June 2004 reporting period, there were quarterly exception SARs submitted for 14 programs. The reasons for the submissions are provided below.

Army:

Chem Demil (Chemical Demilitarization) – The SAR was submitted to report schedule slips of six months or more since the December 2003 report. Specifically, the start of operations at Pine Bluff Chemical Agent Disposal Facility is expected to slip seven months from July 2004 to February 2005. The completion of operations at the Aberdeen Chemical Agent Disposal Facility is expected to slip 10 months from July 2005 to May 2006. The 100 percent agent destroyed milestone at Newport Chemical Agent Disposal Facility is expected to slip 16 months from January 2006 to May 2007. Finally, the start of construction at the Blue Grass Chemical Agent Destruction Pilot Plant is expected to slip eight months from January 2005 to September 2005. There were no cost changes reported since the December 2003 SAR.

Navy:

AIM-9X Missile – The SAR was submitted to rebaseline from a development to
production estimate following the May 2004 approval of full-rate production
(Milestone III) by the assistant secretary of the Navy for research, development, and acquisition. There were no cost changes reported since the December 2003 SAR.

ASDS (Advanced SEAL Delivery System) – The SAR was submitted to report a schedule slip of approximately 17 months (from May

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