WASHINGTON - The cost of the Pentagon's major weapon acquisition portfolio remained stable at $1.6 trillion during the December 2013 reporting period, according to the latest Selected Acquisition Reports. The SARs summarize the latest estimates of cost, schedule, and performance for the Pentagon's major weapons programs. The Department of Defense has removed SARs for the F/A-18E/F, Family of Medium Tactical Vehicles, Light Utility Helicopter, Joint High Speed Vessel, Joint Primary Aircraft Training System, and NAVSTAR Global Positioning System. Five initial reports have been added for AWACS upgrades, B61 modifications, F-22 Increment 3.2B upgrade, GPS Next Generation Operational Control System, and the Joint Light Tactical Vehicle. The Pentagon is also submitting new program cost information for the Air and Missile Defense Radar (AMDR) and Littoral Combat Ship Mission Modules, currently valued at $5.8 billion and $7.3 billion, respectively.

Estimated life cycle costs for the Pentagon's most expensive program, the F-35, have decreased by $89.4 billion, though acquisition costs have increased by $7.4 billion. Four program also suffered critical of significant Nunn-McCurdy unit cost breaches in the December 2013 reporting period, including the MQ-8 Fire Scout. The Navy slashed MQ-8 procurement from 168 to 119 due to cuts to the LCS program, increasing unit costs for the remaining aircraft.

The Army's effort to revamp its Warfighter Information Network - Tactical (WIN-T) program has increased Increment 2 costs by $9.0 billion, and decreased Increment 3 costs by $14.2 billion. The cost fluctuations are due primarily to changes in procurement quantities for both program increments.

The Navy's DDG 51 program's cost increased by $2.8 billion because of a decision to add three ships to the construction schedule, according to the reports. The cost of the LCS fell by $11.3 billion, reflecting the Navy's decision to end construction after 32 ships. The Navy is considering options for a follow-on surface combatant, however, so funding will be redirected to that program as plans become more concrete. The Navy hopes to have a plan in place for the FY16 budget request.

The P-8A program's cost decreased by $1.9 billion due to production being cut from 117 to 109 aircraft. The change reflects the Navy's decision to cut eight aircraft from the FY15 budget request due to sequestration cost caps. The service has requested money for the eight aircraft in the administration's Opportunity, Growth, and Security Initiative, though lawmakers have not given any indications yet that they will support any programs in the supplemental budget fund. E-2D costs, meanwhile, have increased by $1.2 billion due to procurement delays. The cost of the Tactical Tomahawk has decreased by $1.8 billion due to the Navy's decision to end procurement after FY15.

The Air Force's KC-46A tanker's cost has decreased $2.2 billion due to lower construction estimates and the lack of engineering change proposals. Boeing won the tanker competition because of its low-cost bid, so it is crucial that this trend continues. The cost of the Evolved Expendable Launch Vehicle fell by $3.1 billion due to contract savings, revised cost assumptions, and a change in launch vehicle configuration requirements. These savings were partially offset by $2.5 billion for 11 additional launch vehicles. The Air Force also cut 58 MQ-9 Reapers from the program's production schedule, which reduced program costs by $1.5 billion.

Source: U.S. DoD
Associated URL: http://www.defense.gov/Releases/Release.aspx?ReleaseID=16644
Author: S. McDougall, North America Analyst