§4376 Breach of Critical Cost Growth Threshold: Reassessment of Program; Presumption of Program Termination

Summary

If a major defense acquisition program’s unit cost goes up by at least the program’s critical cost growth threshold, the Secretary of Defense must find the root cause. The Secretary, working with the Director of Cost Assessment and Program Evaluation, must estimate the cost to finish the program as-is, the cost if requirements are reasonably reduced, rough costs of reasonable alternatives, and whether other programs would need less funding to cover the increase. After that review, the Secretary must end the program unless, within 60 days after the required Selected Acquisition Report is due, the Secretary sends Congress a written certification that continuing the program is essential to national security; no cheaper alternative gives acceptable capability; the Director has judged the new cost estimates reasonable; the program is a higher priority than programs that would lose funding; and the program’s management can control costs. That certification must include the root-cause analysis, the assessment, and supporting documents. If the program is ended, the Secretary must tell Congress why, what alternatives were considered, and how the Department will meet the needed military capability.