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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle C--Provisions Relating to Major Defense Acquisition Programs

P. L. 112-81

House Conference Report 112-329

Section 2433a(c) of title 10, United States Code, is amended by adding at the end the following new paragraph:

`(3)(A) The requirements of subparagraphs (B) and (C) of paragraph (1) shall not apply to a program or subprogram if--

`(i) the Milestone Decision Authority determines in writing, on the basis of a cost assessment and root cause analysis conducted pursuant to subsection (a), that--

`(I) but for a change in the quantity of items to be purchased under the program or subprogram, the program acquisition unit cost or procurement unit cost for the program or subprogram would not have increased by a percentage equal to or greater than the cost growth thresholds for the program or subprogram set forth in subparagraph (B); and

`(II) the change in quantity of items described in subclause (I) was not made as a result of an increase in program cost, a delay in the program, or a problem meeting program requirements;

`(ii) the Secretary determines in writing that the cost to the Department of Defense of complying with such requirements is likely to exceed the benefits to the Department of complying with such requirements; and

`(iii) the Secretary submits to Congress, before the end of the 60-day period beginning on the day the Selected Acquisition Report containing the information described in section 2433(g) of this title is required to be submitted under section 2432(f) of this title--

`(I) a copy of the written determination under clause (i) and an explanation of the basis for the determination; and

`(II) a copy of the written determination under clause (ii) and an explanation of the basis for the determination.

`(B) The cost growth thresholds specified in this subparagraph are as follows:

`(i) In the case of a major defense acquisition program or designated major defense subprogram, a percentage increase in the program acquisition unit cost for the program or subprogram of--

`(I) 5 percent over the program acquisition unit cost for the program or subprogram as shown in the current Baseline Estimate for the program or subprogram; and

`(II) 10 percent over the program acquisition unit cost for the program or subprogram as shown in the original Baseline Estimate for the program or subprogram.

`(ii) In the case of a major defense acquisition program or designated major defense subprogram that is a procurement program, a percentage increase in the procurement unit cost for the program or subprogram of--

`(I) 5 percent over the procurement unit cost for the program or subprogram as shown in the current Baseline Estimate for the program or subprogram; and

`(II) 10 percent over the procurement unit cost for the program or subprogram as shown in the original Baseline Estimate for the program or subprogram.'.

The Senate amendment contained a provision (sec. 801) that would allow the waiver of certain requirements applicable to programs that experience critical Nunn-McCurdy breaches in narrow circumstances where the cost growth is attributable almost exclusively to changes in the number of units to be purchased.

The House bill contained no similar provision.

The House recedes.

Senate Report 112-26

Waiver of requirements relating to new milestone approval for certain major defense acquisition programs experiencing critical cost growth due to change in quantity purchased (sec. 801)

The committee recommends a provision that would allow the waiver of certain requirements applicable to programs that experience critical Nunn-McCurdy breaches as a result of steep growth in unit costs, in cases where such cost growth is attributable entirely (or almost entirely) to changes in the number of units to be purchased. The provision recommended by the committee includes strict standards to ensure that all Nunn-McCurdy requirements remain applicable in any case where poor program management or performance contributes to the increase in unit costs.