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

Subtitle A—Provisions Relating to Major Defense Acquisition Programs

JWNDAA Section

House Conference Report 109-702

Section 2435(d)(1) of title 10, United States Code, is amended by inserting after ‘‘with respect to the program under subsection (a)’’ the following: ‘‘prepared before the program enters system development and demonstration, or at program initiation, whichever occurs later’’.

The Senate amendment contained a provision (sec. 803) that would clarify the definition of the term ‘‘Original Baseline Estimate,’’ and provide for periodic reporting of program acquisition unit costs and procurement unit costs above the significant cost growth thresholds identified in section 2433 of title 10, United States Code.

The House bill contained no similar provision.

The House recedes with an amendment that would modify the definition of Original Baseline Estimate to mean the baseline established before the program enters into system development and demonstration.

Senate Armed Services Committee Report 109-254

The committee recommends a provision that would clarify the definition of the term `Original Baseline Estimate', and provide for periodic reporting of program acquisition unit costs and procurement unit costs above the significant cost growth thresholds identified in section 2433 of title 10, United States Code.

Section 802 of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163) defined the term Original Baseline Estimate and restricted the circumstances in which a baseline estimate could be modified. The committee acknowledges that cost estimates made prior to a program entering into systems development and demonstration are a more realistic approximation of the actual costs of the program and are independently reviewed by the Department of Defense. The provision would modify the definition of Original Baseline Estimate to mean the baseline established before the program enters into system development and demonstration.

The provision would also clarify the Department's reporting obligations after the program acquisition unit cost or procurement unit cost has exceeded the significant cost growth threshold. The provision would require that each Selected Acquisition Report following the breach include updated information concerning unit costs, but does not compel the program manager to submit an out of cycle report of each additional increase in unit costs.