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

Summary

If a major defense program’s unit cost goes up by at least the program’s critical cost growth threshold, the Secretary of Defense must reassess the program and find the reasons for the cost growth. Working with the Director of Cost Assessment and Program Evaluation, the Secretary must estimate the cost to finish the program if requirements stay the same, if requirements are reasonably changed, what a reasonable alternative would roughly cost, and whether other programs would need less money because of this cost growth. After that review, the Secretary must stop the program unless, within 60 days after the related Selected Acquisition Report is due, the Secretary sends Congress a written certification and a report. The certification must say the program is essential to national security; there are no cheaper acceptable alternatives; the Director has judged the new cost estimates reasonable; the program is a higher priority than any programs that would lose funding; and the program’s management can control costs. The certification must include the root-cause analysis, the assessments, and the evidence for each certification point. If the program is terminated, the Secretary must tell Congress why, what alternatives were considered, and how the military’s needs will be met instead.