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Multiyear procurement (MYP) and block buy contracting (BBC) are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by several percent.
Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP. There is a permanent statute governing MYP contracting—10 U.S.C. 2306b. Under this statute, a program must meet several criteria to qualify for MYP.
Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract due to changes in the program independent of the use of MYP rather than annual contracting.
BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC. BBC differs from MYP in the following ways:
Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and the status of the final year of the current MYP contract for procuring V-22 tilt-rotor aircraft.
This report provides background information and issues for Congress on multiyear procurement (MYP) and block buy contractingcontracting (BBC),1 which are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by several percent.
Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U.S.C. 2306b) that governs the use of MYP. Congress's decisions on these issues could affect defense acquisition practices, defense funding requirements, and the defense industrial base.
A contract that the Air Force has for the procurement of Evolved Expendable Launch Vehicle (EELV) Launch Services (ELS) is sometimes referred to as a block buy, but it is not an example of block buy contracting as discussed in this report. The Air Force in this instance is using the term block buy to mean something different. This report does not discuss the ELS contract.
In discussing MYP, BBC, and incremental funding, it can be helpful to distinguish contracting mechanisms from funding approaches. The two are often mixed together in discussions of DOD acquisition, sometimes leading to confusion. Stated briefly:
The use of a particular funding approach in a defense acquisition program does not dictate the use of a particular contracting mechanism. Defense acquisition programs consequently can be implemented using various combinations of funding approaches and contracting mechanisms. Most DOD weapon acquisition programs use a combination of traditional full funding and annual contracting. A few programs, particularly certain Navy shipbuilding programs, use incremental funding as their funding approach. A limited number of DOD programs use MYP as their contracting approach, and to date two Navy shipbuilding programs have used BBC as their contracting approach. The situation is summarized in Table 1.
|
Funding approaches |
||||
|
Full funding |
Incremental funding |
Advance appropriations |
||
|
Contracting mechanisms |
Annual contracting |
Most programs |
A few programs (e.g., CVNs, LHAs, DDG-1000s) |
|
|
MYP |
Selected programs |
|||
|
Block buy contracting |
Virginia class (boats 1-4) and Littoral Combat Ship (ships 5-24) |
|||
Source: Table prepared by CRS.
Notes: Advance procurement (AP) can be used with any of the funding approaches.
This report focuses on the contracting approaches of MYP and BBC and how they compare to annual contracting. Other CRS reports discuss the funding approaches of traditional full funding, incremental funding, and advance appropriations.4
What is MYP, and how does it differ from annual contracting? MYP, also known as multiyear contracting, is an alternative to the standard or default DOD approach of annual contracting. Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item, without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP.
To illustrate the basic difference between MYP and annual contracting, consider a hypothetical DOD program to procure 20 single-engine aircraft of a certain kind over the five-year period FY2017-FY2021, at a rate of four aircraft per year:
How much can MYP save? Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract that was caused by developments independent of the use of MYP rather than annual contracting.
A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) states that "MYP savings analysis is difficult due to the lack of actual costs on the alternative acquisition path, i.e., the path not taken."5 The briefing states that CAPE up to that point had assessed MYP savings for four aircraft procurement programs—F/A-18E/F strike fighters, H-60 helicopters, V-22 tilt-rotor aircraft, and CH-47F helicopters—and that CAPE's assessed savings ranged from 2% to 8%.6
A 2008 Government Accountability Office (GAO) report stated that
DOD does not have a formal mechanism for tracking multiyear results against original expectations and makes few efforts to validate whether actual savings were achieved by multiyear procurement. It does not maintain comprehensive central records and historical information that could be used to enhance oversight and knowledge about multiyear performance to inform and improve future multiyear procurement (MYP) candidates. DOD and defense research centers officials said it is difficult to assess results because of the lack of historical information on multiyear contracts, comparable annual costs, and the dynamic acquisition environment.7
How does MYP potentially save money? Compared to annual contracting, using MYP can in principle reduce the cost of the weapons being procured in two primary ways:
What gives the contractor confidence that the multiyear stream of business will materialize? At least two things give the contractor confidence that DOD will not terminate an MYP contract and that the multiyear stream of business consequently will materialize:
Is there a permanent statute governing MYP contracting? There is a permanent statute governing MYP contracting—10 U.S.C. 2306b. The statute was created by Section 909 of the FY1982 Department of Defense Authorization Act (S. 815/P.L. 97-86 of December 1, 1981), revised and reorganized by Section 1022 of the Federal Acquisition Streamlining Act of 1994 (S. 1587/P.L. 103-355 of October 13, 1994), and further amended on several occasions since. DOD's use of MYP contracting is further governed by DOD acquisition regulations.
Under this statute, what criteria must a program meet to qualify for MYP? 10 U.S.C. 2306b(a) states that to qualify for MYP, a program must meet several criteria, including the following.
Section 811 of the FY2008 National Defense Authorization Act (H.R. 4986/P.L. 110-181 of January 28, 2008) amended 10 U.S.C. 2306b to require the Secretary of Defense to certify in writing, by no later than March 1 of the year in which DOD requests MYP authority for a program, that these and certain other criteria have been met. It also requires that the Secretary provide the congressional defense committees with the basis for this determination, as well as a cost analysis performed by DOD's office of Cost Assessment and Program Evaluation (CAPE) that supports the findings.11 Section 811 further amended 10 U.S.C. 2306b to require the following:
What is meant by "substantial savings"? The meaning of "substantial savings" is open to interpretation and might depend on the circumstances of the program in question. In practice, estimated savings of at least 5% might be judged substantial, and estimated savings in the range of 10% (or more) are more likely to be judged substantial. The amount of savings required under 10 U.S.C. 2306b to qualify has changed over time; the requirement for "substantial savings" was established by Section 808(a)(2) of the FY1991 National Defense Authorization Act (H.R. 4739/P.L. 101-510 of November 5, 1990), which amended 10 U.S.C. 2306b in this regard.13
What is meant by "stable design"? The term "stable design" is generally understood to mean that the design for the items to be procured is not expected to change substantially during the period of the contract. Having a stable design is generally demonstrated by having already built at least a few items to that design (or in the case of a shipbuilding program, at least one ship to that design) and concluding, through testing and operation of those items, that the design does not require any substantial changes during the period of the contract.
What happens if Congress does not provide the annual funding requested by DOD to continue the implementation of the contract? If Congress does not provide the funding requested by DOD to continue the implementation of an MYP contract, DOD would be required to renegotiate, suspend, or terminate the contract. Terminating the contract could require the government to pay a cancellation penalty to the contractor. Renegotiating or suspending the contract could also have a financial impact.
What effect does using MYP have on flexibility for making procurement changes? A principal potential disadvantage of using MYP is that it can reduce Congress's and DOD's flexibility for making changes (especially reductions) in procurement programs in future years in response to changing strategic or budgetary circumstances, at least without incurring cancellation penalties. In general, the greater the portion of DOD's procurement account that is executed under MYP contracts, the greater the potential loss of flexibility. The use of MYP for executing some portion of the DOD procurement account means that if policymakers in future years decide to reduce procurement spending below previously planned levels, the spending reduction might fall more heavily on procurement programs that do not use MYP, which in turn might result in a less-than-optimally balanced DOD procurement effort.
How does Congress approve the use of MYP? Congress approves the use of MYP on a case-by-case basis, typically in response to requests by DOD.14 Congressional approval for MYP contracts with a value of more than $500 million must occur in two places: an annual DOD appropriations act15 and an act other than the annual DOD appropriations act.16
In annual DOD appropriations acts, the provision permitting the use of MYP for one or more defense acquisition programs is typically included in the title containing general provisions, which typically is Title VIII.
An annual defense authorization act is usually the act other than an appropriations act in which provisions granting authority for using MYP contracting on individual defense acquisition programs are included. Such provisions typically occur in Title I of the defense authorization act, the title covering procurement programs.
Provisions in which Congress approves the use of MYP for a particular defense acquisition program may include specific conditions for that program in addition to the requirements and conditions of 10 U.S.C. 2306b.
How often is MYP used? MYP is used for a limited number of DOD acquisition programs. As shown in the Appendix, annual DOD appropriations acts since FY1990 typically have approved the use of MYP for zero to a few DOD programs each year.
A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) shows that the total dollar value of DOD MYP contracts has remained more or less stable between FY2000 and FY2012 at roughly $7 billion to $13 billion per year. The briefing shows that since the total size of DOD's procurement budget has increased during this period, the portion of DOD's total procurement budget accounted for by programs using MYP contracts has declined from about 17% in FY2000 to less than 8% in FY2012.17 The briefing also shows that the Navy makes more use of MYP contracts than does the Army or Air Force, and that the Air Force made very little use of MYP in FY2010-FY2012.18
A 2008 Government Accountability Office (GAO) report stated:
Although DOD had been entering into multiyear contracts on a limited basis prior to the 1980s, the Department of Defense Authorization Act, [for fiscal year] 1982,19 codified the authority for DOD to procure on a multiyear basis major weapon systems that meet certain criteria. Since that time, DOD has annually submitted various weapon systems as multiyear procurement candidates for congressional authorization. Over the past 25 years, Congress has authorized the use of multiyear procurement for approximately 140 acquisition programs, including some systems approved more than once.20
In an interview published on January 13, 2014, Sean Stackley, the Assistant Secretary of the Navy for Research, Development, and Acquisition (i.e., the Navy's acquisition executive), stated:
What the industrial base clamors for is stability, so they can plan, invest, train their work force. It gives them the ability in working with say, the Street [Wall Street], to better predict their own performance, then meet expectations in the same fashion we try to meet our expectations with the Hill.
It's emblematic of stability that we've got more multiyear programs in the Department of the Navy than the rest of the Department of Defense combined. We've been able to harvest from that significant savings, and that has been key to solving some of our budget problems. It's allowed us in certain cases to put the savings right back into other programs tied to requirements.21
What is BBC, and how does it compare to MYP? BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year.22 BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC.
BBC differs from MYP in the following ways:
Given the one key similarity between BBC and MYP (the use of a single contract for more than one year's worth of procurement), and the various differences between BBC and MYP, BBC might be thought of as a less formal stepchild of MYP.
When and why was BBC invented? BBC was invented by Section 121(b) of the FY1998 National Defense Authorization Act (H.R. 1119/P.L. 105-85 of November 18, 1997), which granted the Navy the authority to use a single contract for the procurement of the first four Virginia (SSN-774) class attack submarines. The four boats were scheduled to be procured during the five-year period FY1998-FY2002 in annual quantities of 1-1-0-1-1. Congress provided the authority granted in Section 121(b) at least in part to reduce the combined procurement cost of the four submarines. Using MYP was not an option for the Virginia-class program at that time because the Navy had not even begun, let alone finished, construction of the first Virginia-class submarine, and consequently could not demonstrate that it had a stable design for the program.
When Section 121(b) was enacted, there was no name for the contracting authority it provided. The term block buy contracting came into use later, when observers needed a term to refer to the kind of contracting authority that Congress authorized in Section 121(b). As discussed in the next section, this can cause confusion, because the term block buy was already being used in discussions of DOD acquisition to refer to something else.
What's the difference between block buy contacting and block buys? In discussions of defense procurement, the term "block buy" by itself (without "contracting" at the end) is sometimes used to refer to something quite different from block buy contracting—namely, the simple act of funding the procurement of more than one copy of an item in a single year, particularly when no more than one item of that kind might normally be funded in a single year. For example, when Congress funded the procurement of two aircraft carriers in FY1983, and another two in FY1988, these acts were each referred to as block buys, because aircraft carriers are normally procured one at a time, several years apart from one another. This alternate meaning of the term block buy predates by many years the emergence of the term block buy contracting.
The term block buy is still used in this alternate manner, which can lead to confusion in discussions of defense procurement. For example, for FY2017, the Air Force is requesting funding for procuring five Evolved Expendable Launch Vehicles (EELVs) for its EELV Launch Services (ELS) program.
At the same time, Navy officials sometimes refer to the use of block buy contracts for the first four Virginia-class submarines, and in the LCS program, as block buys, when they might be more specifically referred to as instances of block buy contracting.
How much can BBC save, compared with MYP? BBC can reduce the unit procurement costs of ships by amounts comparable to those of MYP, if the authority granted for using BBC explicitly includes authority for making economic order quantity (EOQ) purchases of components. If the authority granted for using BBC does not explicitly include authority for making EOQ purchases, then the savings from BBC will be less. Potential savings under BBC might also be less than those under MYP if the BBC contract does not include a cancellation penalty, or includes one that is more limited than typically found in an MYP contract, because this might give the contractor less confidence than would be the case under an MYP contract that the future stream of business will materialize as planned, which in turn might reduce the amount of money the contractor invests to optimize its workforce and production facilities for producing the items to be procured under the contract.
How frequently has BBC been used? Since its use at the start of the Virginia-class program, BBC has been used very rarely. The Navy did not use it again in a shipbuilding program until December 2010, when it awarded two block buy contracts, each covering 10 LCSs to be procured over the six-year period FY2010-FY2015, to the two LCS builders.23 A third example, arguably, is the Air Force's KC-46 aerial refueling tanker program, which is employing a fixed price incentive fee (FPIF) development contract that includes a "back end" commitment to procure certain minimum numbers of KC-46s in certain fiscal years.24
When might BBC be suitable as an alternative to MYP? BBC might be particularly suitable as an alternative to MYP in cases where using a multiyear contract can reduce costs, but the program in question cannot meet all the statutory criteria needed to qualify for MYP. As shown in the case of the first four Virginia-class boats, this can occur at or near the start of a procurement program, when design stability has not been demonstrated through the production of at least a few of the items to be procured (or, for a shipbuilding program, at least one ship).
What's the difference between an MYP or block buy contract and a contract with options? The military services sometimes use contracts with options to procure multiple copies of an item that are procured over a period of several years. The Navy, for example, used a contract with options to procure Lewis and Clark (TAKE-1) class dry cargo ships that were procured over a period of several years. A contract with options can be viewed as somewhat similar to an MYP or block buy contract in that a single contract is used to procure several years' worth of procurement of a given kind of item.
There is, however, a key difference between an MYP or block buy contract and a contract with options: In a contract with options, the service is under no obligation to exercise any of the options, and a service can choose to not exercise an option without having to make a penalty payment to the contractor. In contrast, in an MYP or block buy contract, the service is under an obligation to continue implementing the contract beyond the first year, provided that Congress appropriates the necessary funds. If the service chooses to terminate an MYP or block buy contract, and does so as a termination for government convenience rather than as a termination for contractor default, then the contractor can, under the contract's termination for convenience clause, seek a payment from the government for cost incurred for work that is complete or in process at the time of termination, and may include the cost of some of the investments made in anticipation of the MYP or block buy contract being fully implemented. The contractor can do this even if the MYP or block buy contract does not elsewhere include a provision for a cancellation penalty.25
Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and the status of the final year of the current MYP contract for procuring V-22 tilt-rotor aircraft.
Should MYP and BBC in the future be used more frequently, less frequently, or about as frequently as they are currently used? Supporters of using MYP and BBC more frequently in the future might argue the following:
Supporters of using MYP and BBC less frequently in the future, or at least no more frequently than now, might argue the following:
Should Congress create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U.S.C. 2306b) that governs the use of MYP? Supporters of creating a permanent statute to govern the use of BBC might argue the following:
Opponents of creating a permanent statute to govern the use of BBC might argue the following:
Regarding the status of final year of the current MYP contract for procuring V-22 tilt-rotor aircraft, an April 25, 2016, press report states:
Under the final year of the [V-22] program's second multiyear contract, the Marine Corps requested 16 Ospreys in fiscal 2017 at a "flyaway" price of $74.7 million apiece....
But these days even a multiyear is apparently no guarantee of purchase. The Marines were supposed to buy 18 rather than 16 Ospreys in fiscal 2017 but were forced to cut two V-22s and use that $150 million to pay other bills.26
A May 9, 2016, Navy information paper states:
The quantity reduction of two aircraft in FY2017 would breach the terms and conditions of the MYP II contract in its final year. This would effectively create a partial termination for convenience of the contract to which Industry would have the ability to seek compensation. Principal areas of impact that would require evaluation and negotiation via a termination proposal include overhead/labor rates, direct/indirect labor and material, and termination costs for: economic order quantity (EOQ) components, long lead components, and suppliers.
Two mitigation strategies to avoid breach of contract are in-work. The first is an FY 2017 USMC Unfunded Priority List (UPL) request for two aircraft. Second is the opportunity to replace the two aircraft with pending international orders from Japan and/or an FY2016 CV-22 plus up aircraft by the Air Force. The Government of Japan's request for four aircraft was received March 23, 2016 with the program office intending to exercise the MYPII FY2016 Variation in Quantity (VIQ) contract clause by June 30, 2016. The contractual commitment for full funding of the FY 2017 MYPII procurement is due by December 31, 2016.27
Legislative Activity for FY2017As part of DOD's proposed FY2017 budget, the Army is proposing
Also as part of DOD's proposed FY2017 budget, the Navy is proposing a block buy contract for FY2016-FY2022 for procuring the first six John Lewis (TAO-205) class oilers.26
Section 111 of H.R. 4909 as reported by the House Armed Services Committee (H.Rept. 114-537 of May 4, 2016) states:
SEC. 111. Multiyear procurement authority for AH–64E Apache helicopters.
(a) Authority for Multiyear Procurement.—Subject to section 2306b of title 10, United States Code, the Secretary of the Army may enter into one or more multiyear contracts, beginning with the fiscal year 2017 program year, for the procurement of AH–64E Apache helicopters.
(b) Condition for Out-year Contract Payments.—A contract entered into under subsection (a) shall provide that any obligation of the United States to make a payment under the contract for a fiscal year after fiscal year 2017 is subject to the availability of appropriations for that purpose for such later fiscal year.
Section 112 of H.R. 4909 as reported states:
SEC. 112. Multiyear procurement authority for UH–60M and HH–60M Black Hawk helicopters.
(a) Authority for multiyear procurement.—Subject to section 2306b of title 10, United States Code, the Secretary of the Army may enter into one or more multiyear contracts, beginning with the fiscal year 2017 program year, for the procurement of UH–60M and HH–60M Black Hawk helicopters.
(b) Condition for out-year contract payments.—A contract entered into under subsection (a) shall provide that any obligation of the United States to make a payment under the contract for a fiscal year after fiscal year 2017 is subject to the availability of appropriations for that purpose for such later fiscal year.
Section 125 of H.R. 4909 as reported states:
SEC. 125. Ship to shore connector program.
(a) Contract authority.—Notwithstanding section 2306b of title 10, United States Code, the Secretary of the Navy may enter into a contract to procure up to 45 Ship to Shore Connector craft.
(b) Liability.—Any contract entered into under subsection (a) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that the total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.
Section 835(d) of H.R. 4909 as reported states:
SEC. 835. Coast Guard major acquisition programs....
(d) Analysis of using multiyear contracting.—
(1) IN GENERAL.—No later than one year after the date of the enactment of this Act, the Secretary of the department in which the Coast Guard is operating shall submit to the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate an analysis of the use of multiyear contracting, including procurement authority provided under section 2306b of title 10, United States Code, and authority similar to that granted to the Navy under section 121(b) of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105–85; 111 Stat. 1648) and section 150 of the Continuing Appropriations Act, 2011 (Public Law 111–242; 124 Stat. 3519), to acquire any combination of at least five—
(A) Fast Response Cutters, beginning with hull 43; and
(B) Offshore Patrol Cutters, beginning with hull 5.
(2) CONTENTS.—The analysis under paragraph (1) shall include the costs and benefits of using multiyear contracting, the impact of multiyear contracting on delivery timelines, and whether the acquisitions examined would meet the tests for the use of multiyear procurement authorities.
Section 1023 of H.R. 4909 as reported states (see part in bold):
SEC. 1023. National Sea-Based Deterrence Fund.
(a) Transfer authority.—Section 1022(b)(1) of the National Defense Authorization Act for Fiscal Year 2015 (Public Law 113–291; 128 Stat. 3487), as amended by section 1022(b) of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92), is further amended by striking "or 2017" and inserting "2017, or 2018".
(b) Authority for multiyear procurement of critical components to support continuous production.—Section 2218a of title 10, United States Code, is amended—
(1) by redesignating subsections (i) and (j) as subsections (j) and (k), respectively; and
(2) by inserting after subsection (h) the following new subsection (i):
"(i) Authority for multiyear procurement of critical components to support continuous production.—(1) To implement the continuous production of critical components, the Secretary of the Navy may use funds deposited in the Fund, in conjunction with funds appropriated for the procurement of other nuclear-powered vessels, to enter into one or more multiyear contracts (including economic ordering quantity contracts), for the procurement of critical contractor-furnished and Government-furnished components for national sea-based deterrence vessels. The authority under this subsection extends to the procurement of equivalent critical parts, components, systems, and subsystems common with and required for other nuclear-powered vessels.
"(2) Any contract entered into pursuant to paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose and that the total liability to the Government for the termination of the contract shall be limited to the total amount of funding obligated for the contract as of the date of the termination.".
(c) Definition of national sea-based deterrence vessel.—Subsection (k)(2) of such section, as redesignated by subsection (b), is amended—
(1) by striking "any vessel" and inserting "any submersible vessel constructed or purchased after fiscal year 2016 that is"; and
(2) by inserting "and" before "that carries".
H.Rept. 114-537 states:
V–22 Osprey
The committee notes that in the 9 years since the establishment of an initial operational capability, the V–22 Osprey has provided the U.S. Marine Corps and the U.S. Air Force Special Operations Command (AFSOC) with a unique and revolutionary vertical lift capability due to its superior airspeed, range, and survivability. The operational tempo for both Marine and Air Force Ospreys has grown over the years and is expected to continue to increase as combatant commanders more fully exploit the attributes of the tiltrotor platform in helping to meet national security challenges posed by traditional nation-states and terrorist organizations. Recently, the U.S. Navy selected the Osprey to perform the carrier onboard delivery mission that will transform the concept of logistic support at sea. The committee understands that the Navy plans to begin their purchase of 44 aircraft beginning in fiscal year 2018. The committee also understands that U.S. Special Operations Command may have unmet requirements for additional attrition reserve CV–22 platforms that are not accounted for within current Department of the Air Force multiyear procurements (MYPs).
The committee notes that the first and second V–22 MYPs have generated approximately $1.25 billion in savings over year-to-year procurements, and that a third, and last, MYP is under consideration for fiscal year 2018. As this new procurement window opens in 2018, the committee encourages the Department of Defense, particularly the Department of the Air Force, to take advantage of this opportunity to generate further savings over year-to-year procurements. Should there be a plan for additional Ospreys to meet the increased demand, the committee encourages participation in the third MYP. The committee believes that the third MYP CV–22 unit pricing will be lower than independent year-to-year procurements in the future. Air Force participation would also help drive down unit pricing for the Department of Defense and partner nation aircraft.
Therefore, the committee directs the Secretary of Defense to brief the House Committee on Armed Services by November 1, 2016, on the current operational tempo for V–22 aircraft, forecasted demand for the aircraft in the future, and any V–22 procurement strategies under consideration. (Pages 18-19)
H.Rept. 114-537 also states:
TAO(X) oiler shipbuilding program
The committee notes that the budget request seeks to execute a block buy for TAO(X) ships and includes $73.0 million in fiscal year 2017 Advance Procurement (AP) funding, as well as similar amounts in subsequent years to leverage the cost efficiency of a block buy for these required assets. The program's first ship was authorized in fiscal year 2016, and section 127 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92) provided the Navy the authority for use of a block buy for the program. The committee further notes that the 1-ship-per-year TAO(X) procurement rate planned beginning in fiscal year 2018 will result in a lengthy period to fulfill the 17-ship requirement and will not optimally utilize the industrial base, which has the capacity to produce at least 2 ships per year. Accelerating this procurement may serve to reduce overall program costs and minimize the time that the Navy has to continue to operate single-hulled fleet oilers.
Therefore, the committee directs the Secretary of the Navy to submit a report to the congressional defense committees concurrent with the date on which the budget for fiscal year 2018 is submitted to Congress pursuant to section 1105 of title 31, United States Code, on the potential benefits and program savings that could be achieved by increasing the program procurement rate to two ships per year as well as by taking continued advantage of block-buy procurement. The Secretary is further directed to report on the industrial base capacity to construct two TAO(X) fleet oilers per year. (Page 24)
H.Rept. 114-537 also states:
Large Lot Procurement
The committee notes that the significant procurement reductions proposed in the fiscal year 2017 budget request make clear the imperative of changing acquisition policies to generate greater efficiencies and to procure more weapon systems within constrained budgets. The committee is aware that Department of Defense acquisition officials have evaluated a concept known as Large Lot Procurement (LLP), which could generate substantial acquisition savings and more efficient utilization of the defense industrial base. The committee understands LLP to involve using a multiyear contract to purchase units from a portfolio of stable acquisition programs produced in common facilities. Purchases would be sequenced to realize economic order quantities, resulting in substantial savings across acquisition programs. Therefore, the committee encourages Department of Defense officials to continue to explore the LLP concept. The committee directs the Secretary of Defense to provide a briefing to the House Committee on Armed Services not later than September 1, 2016, on the potential utility of LLP, barriers to pursuing LLP, and potential policy and legislative changes necessary to enable LLP. The briefing should also include a list of current multiyear contracts that could be included in an LLP and a description of a notional LLP containing such multiyear contracts. (Pages 186-187)
SenateSection 112 of S. 2943 as reported by the Senate Armed Services Committee (S.Rept. 112-255 of May 18, 2016) states:
SEC. 112. Multiyear procurement authority for UH–60M/HH–60M Black Hawk helicopters.
(a) Authority for multiyear procurement.—Subject to section 2306b of title 10, United States Code, the Secretary of the Army may enter into one or more multiyear contracts, beginning with the fiscal year 2017 program year, for the procurement of UH–60M/HH–60M Black Hawk helicopters.
(b) Condition for out-year contract payments.—A contract entered into under subsection (a) shall provide that any obligation of the United States to make a payment under the contract for a fiscal year after fiscal year 2017 is subject to the availability of appropriations for that purpose for such later fiscal year.
Regarding Section 112, S.Rept. 114-255 states:
Multiyear procurement authority for UH–60M/HH–60M Black Hawk helicopters (sec. 112)
The committee recommends a provision that would allow the Secretary of the Army to enter into a multiyear contract for UH–60M/HH–60M Black Hawk helicopters for fiscal years 2017 through 2021. The proposed multiyear procurement will produce significant savings and facilitate industrial base stability.
The UH–60M/HH–60M Black Hawk is a core aviation program and is approved for full-rate production through the future years defense program. If the proposal is approved, the Army buy will consist of 193 UH–60M aircraft and 75 HH–60M aircraft between fiscal years 2017 and 2021. The Navy is not expected to participate in this multiyear procurement. The request for proposal solicitation was released with a minimum quantity of 36 helicopters per year and a base quantity of 50 helicopters per year with options to increase the maximum quantity to 72 helicopters per year. (Page 6)
Section 113 of S. 2943 as reported states:
SEC. 113. Multiyear procurement authority for AH–64E Apache helicopters.
(a) Authority for multiyear procurement.—Subject to section 2306b of title 10, United States Code, the Secretary of the Army may enter into one or more multiyear contracts, beginning with the fiscal year 2017 program year, for the procurement of AH–64E Apache helicopters.
(b) Condition for out-year contract payments.—A contract entered into under subsection (a) shall provide that any obligation of the United States to make a payment under the contract for a fiscal year after fiscal year 2017 is subject to the availability of appropriations for that purpose for such later fiscal year.
Regarding Section 113, S.Rept. 114-255 states:
Multiyear procurement authority for AH–64E Apache helicopters (sec. 113)
The committee recommends a provision that would allow the Secretary of the Army to enter into a multiyear contract for AH–64E Apache helicopters for fiscal years 2017 through 2021. The proposed multiyear procurement will produce significant savings and facilitate industrial stability.
The AH–64E is a core aviation program and is approved for full-rate production through the current future years defense program. The minimum need for the AH–64E is not expected to decrease during the contemplated multiyear procurement period.
If the proposal is approved, the Army buy will consist of 275 AH–64E Apache helicopters between fiscal years 2017 and 2021. The request for proposal (RFP) was released with a minimum quantity of 46 per year, with options for remanufactured quantities up to 75 per year. The RFP included new build quantities, as a contract option, of up to 30 per year. In no year would total quantities of remanufactured and new build aircraft exceed 90 per year. (Pages 6-7)
Section 841 of S. 2943 as reported states:
SEC. 841. Multiple program multiyear contract pilot demonstration program.
(a) Authority.—The Secretary of Defense may conduct a multiyear contract, over a period of up to four years, for the purchase of units for multiple defense programs that are produced at common facilities at a high rate, and which maximize commonality, efficiencies and quality, in order to provide maximum benefit to the Department of Defense. Contracts awarded under this section should allow for significant savings, as determined consistent with the authority under section 2306b of title 10, United States Code, to be achieved as compared to using separate annual contracts under individual programs to purchase such units, and may include flexible delivery across the overall period of performance.
(b) Scope.—The contracts authorized in (a) shall at a minimum provide for the acquisition of units from three discrete programs from two of the military departments.
(c) Documentation.—Each contract awarded under subsection (a) shall include the documentation required to be provided for a multiyear contract proposal under section 2306b(i) of title 10.
(d) Definitions.—In this section—
(1) the term "high rate" means total annual production across the multiple programs of more than 200 end-items per year; and
(2) the term "common facilities" means production facilities operating within the same general and allowable rate structure.
(e) Sunset.—No new contracts may be issued under the authority of this section after September 30, 2021.
Regarding Section 841, S.Rept. 114-255 states:
Multiple program multiyear contract pilot demonstration program (sec. 841)
The committee recommends a provision that would grant the Secretary of Defense the authority to conduct a multiyear contract for multiple defense programs that are produced at common facilities at a high rate, and which maximize commonality, efficiencies and quality, in order to provide maximum benefit and significant savings to the Department of Defense (DOD). The committee notes that this pilot has the potential to increase savings as compared to the process of having separate annual contracts under individual programs to purchase such units separately and at lower rates that raise costs. (Page 220)
S.Rept. 114-255 also states:
UH–1N helicopter replacement program
The budget request included $18.3 million in Aircraft Procurement, Air Force (APAF), for the UH–1N helicopter replacement program. This program is intended to replace the over four decade-old helicopters currently in use for rapid security response team missions on the Air Force's intercontinental ballistic missile fields. These aircraft are growing increasingly unreliable due to approaching the end of their service lives, are more costly to maintain, and do not meet the minimum requirements necessary for the missile field security mission.
The committee believes the Air Force's proposed approach to procure HH–60 helicopters from the U.S. Army's current multi-year procurement contract, under The Economy Act of 1932, Title 31, United States Code, sections 1535 and 1536, represents the most prudent method to rapidly field the necessary capability, leverages the Air Force's existing organic depot maintenance and supply chain for their current HH–60 and future Combat Rescue Helicopter fleets, avoids costly and lengthy development and testing of a completely new and different aircraft, and decreases both Army and Air Force aircraft procurement unit costs through economic order of quantity.
Therefore, the committee recommends an increase of $302.3 million in APAF for the procurement of eight HH–60 Blackhawk aircraft and initial spares and support equipment. (Page 26)
FY2017 DOD Appropriations Act (H.R. 5293/S. 3000) HouseSection 8010 of H.R. 5293 as reported by the House Appropriations Committee (H.Rept. 114-577 of May 19, 2016) states:
Sec. 8010. None of the funds provided in this Act shall be available to initiate: (1) a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract or that includes an unfunded contingent liability in excess of $20,000,000; or (2) a contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year, unless the congressional defense committees have been notified at least 30 days in advance of the proposed contract award: Provided, That no part of any appropriation contained in this Act shall be available to initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability: Provided further, That no part of any appropriation contained in this Act shall be available to initiate multiyear procurement contracts for any systems or component thereof if the value of the multiyear contract would exceed $500,000,000 unless specifically provided in this Act: Provided further, That no multiyear procurement contract can be terminated without 30-day prior notification to the congressional defense committees: Provided further, That the execution of multiyear authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement: Provided further, That none of the funds provided in this Act may be used for a multiyear contract executed after the date of the enactment of this Act unless in the case of any such contract—
(1) the Secretary of Defense has submitted to Congress a budget request for full funding of units to be procured through the contract and, in the case of a contract for procurement of aircraft, that includes, for any aircraft unit to be procured through the contract for which procurement funds are requested in that budget request for production beyond advance procurement activities in the fiscal year covered by the budget, full funding of procurement of such unit in that fiscal year;
(2) cancellation provisions in the contract do not include consideration of recurring manufacturing costs of the contractor associated with the production of unfunded units to be delivered under the contract;
(3) the contract provides that payments to the contractor under the contract shall not be made in advance of incurred costs on funded units; and
(4) the contract does not provide for a price adjustment based on a failure to award a follow-on contract.
Section 8122 of H.R. 5293 as reported states:
Sec. 8122. Funds appropriated in title III of this Act may be used for a multiyear procurement contract as follows: AH-64E Apache Helicopter and UH-60M Blackhawk Helicopter.
SenateSection 8010 of S. 3000 as reported by the Senate Appropriations Committee (S.Rept. 114-263 of May 26, 2016) states:
Sec. 8010. None of the funds provided in this Act shall be available to initiate: (1) a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract or that includes an unfunded contingent liability in excess of $20,000,000; or (2) a contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year, unless the congressional defense committees have been notified at least 30 days in advance of the proposed contract award: Provided, That no part of any appropriation contained in this Act shall be available to initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability: Provided further, That no part of any appropriation contained in this Act shall be available to initiate multiyear procurement contracts for any systems or component thereof if the value of the multiyear contract would exceed $500,000,000 unless specifically provided in this Act: Provided further, That no multiyear procurement contract can be terminated without 30-day prior notification to the congressional defense committees: Provided further, That the execution of multiyear authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement: Provided further, That none of the funds provided in this Act may be used for a multiyear contract executed after the date of the enactment of this Act unless in the case of any such contract—
(1) the Secretary of Defense has submitted to Congress a budget request for full funding of units to be procured through the contract and, in the case of a contract for procurement of aircraft, that includes, for any aircraft unit to be procured through the contract for which procurement funds are requested in that budget request for production beyond advance procurement activities in the fiscal year covered by the budget, full funding of procurement of such unit in that fiscal year;
(2) cancellation provisions in the contract do not include consideration of recurring manufacturing costs of the contractor associated with the production of unfunded units to be delivered under the contract;
(3) the contract provides that payments to the contractor under the contract shall not be made in advance of incurred costs on funded units; and
(4) the contract does not provide for a price adjustment based on a failure to award a follow-on contract.
Funds appropriated in title III of this Act may be used for a multiyear procurement contract as follows: AH–64E Apache Helicopter and UH–60M Blackhawk Helicopter.
S.Rept. 114-263 states that
the Committee understands that the Joint Strike Fighter [aka F-35] Program Executive Officer is considering formally requesting JSF block buy authority from the congressional defense committees. The Committee notes that block buy authority differs from multiyear procurement authority. The Committee supports acquisition cost savings, however, there is concern that the Department of Defense has not completed a formal review of such a strategy. Therefore, the Committee encourages the Under Secretary of Defense (Acquisition, Technology, Logistics) to review a block buy strategy prior to the submission of such a request to the congressional defense committees. (Pages 8-9)
|
Fiscal Year |
Bill/Law |
Section on MYP |
Program(s) Approved for MYP |
|
2016 |
Section 8010 of Division C |
[none] |
|
|
2015 |
Section 8010 of Division C |
[none] |
|
|
2014 |
Section 8010 of Division C |
E-2D Advanced Hawkeye SSN 774 Virginia class submarine KC-130J, C-130J, HC-130J, MC-130J, AC-130J aircraft, and government-furnished equipment |
|
|
2013 |
Section 8010 of Division C |
F/A-18E, F/A-18F, and EA-18G aircraft Up to 10 DDG-51 destroyers, as well as the AEGIS Weapon Systems, MK 41 Vertical Launching Systems, and Commercial Broadband Satellite Systems associated with those ships Virginia class submarines and government-furnished equipment CH-47 Chinook helicopters V-22 Osprey aircraft variants |
|
|
2012 |
Section 8010 of Division A |
UH–60M/HH–60M and MH–60R/MH–60S Helicopter Airframes MH–60R/S Mission Avionics and Common Cockpits |
|
|
2011 |
Section 8010 of Division A |
Navy MH-60R/S helicopter systems |
|
|
2010 |
Section 8011 of Division A |
F-18 aircraft variants |
|
|
2009 |
Section 8011 of Division C |
SSN Virginia class submarine |
|
|
2008 |
Section 8010 of Division A |
Army CH-47 Chinook helicopter M1A2 Abrams System Enhancement Package upgrades M2A3/M3A3 Bradley upgrades SSN Virginia Class submarine |
|
|
2007 |
Section 8008 of Division A |
C-17 Globemaster F-22A MH-60R Helicopters MH-60R Helicopter mission equipment V-22 Osprey |
|
|
2006 |
Section 8008 of Division A |
UH-60/MH-60 helicopters C-17 Globemaster Apache Block II Conversion Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor (MTADS/PNVS) |
|
|
2005 |
Section 8008 |
Lightweight 155mm Howitzer |
|
|
2004 |
Section 8008 |
F/A-18 aircraft E-2C aircraft Tactical Tomahawk missile Virginia Class submarine |
|
|
2003 |
Section 8008 |
C-130 aircraft FMTV F/A-18E and F engine |
|
|
2002 |
Section 8008 of Division A |
UH-60/CH-60 aircraft C-17 F/A-18E and F engine |
|
|
2001 |
Section 8008 |
Javelin missile M2A3 Bradley fighting vehicle DDG-51 destroyer UH-60/CH-60 aircraft |
|
|
2000 |
Section 8008 |
Longbow Apache helicopter Javelin missile Abrams M1A2 Upgrade F/A-18E/F aircraft C-17 aircraft F-16 aircraft |
|
|
1999 |
Section 8008 |
E-2C aircraft Longbow Hellfire missile Medium Tactical Vehicle Replacement (MTVR) |
|
|
1998 |
Section 8008 |
Apache Longbow radar AV-8B aircraft Family of Medium Tactical Vehicles |
|
|
1997 |
Section 8009 of Section 101(b) of Title I of Division A |
Javelin missiles Army Tactical Missile System (ATACMS) Mk19-3 grenade machine guns M16A2 rifles M249 Squad Automatic Weapons M4 carbine rifles M240B machine guns Arleigh Burke (DDG-15 [sic:51] class destroyers |
|
|
1996 |
Section 8010 |
UH-60 Blackhawk helicopter Apache Longbow helicopter M1A2 tank upgrade |
|
|
1995 |
Section 8010 |
MK19-3 grenade machine guns M16A2 rifles M249 Squad Automatic Weapons M4 carbine rifles |
|
|
1994 |
Section 8011 |
[none] |
|
|
1993 |
Section 9013a |
Defense Support Satellites 23, 24 and 25 Enhanced Modular Signal Processor |
|
|
1992 |
Section 8013 |
MK-48 ADCAP Torpedo UH-60 Black Hawk helicopter Army Tactical missile |
|
|
1991 |
Section 8014 |
Line of Sight-Rear (Avenger)—Pedestal Mounted Stinger Family of Medium Tactical Vehicles (FMTV) LCAC Landing Craft LHD Amphibious Ship MK-45 Gun Mount/MK-6 Ammo Hoist NAVSTAR Global Positioning Satellite (GPS) Defense Support Program Satellites 22 and 23 |
|
|
1990 |
Section 9021a |
M-1 tank engines M-1 tank fire control Bradley Fighting Vehicle Family of Heavy Tactical Vehicles Maverick Missile (AGM-65D) SH-60B/F helicopter DDG-51 destroyer (two years) |
Source: Table prepared by CRS based on text of bills.
a. In H.R. 5504/P.L. 102-396 and H.R. 3072/P.L. 101-165, the general provisions title was Title IX.
Author Contact Information
| 1. |
MYP is an established acronym for multiyear procurement. BBC is not an established acronym for block buy contracting, but is used in this CRS report for purposes of convenience. |
|||
| 2. |
For more on these three funding approaches, see CRS Report RL31404, Defense Procurement: Full Funding Policy—Background, Issues, and Options for Congress, by [author name scrubbed] and [author name scrubbed], and CRS Report RL32776, Navy Ship Procurement: Alternative Funding Approaches—Background and Options for Congress, by [author name scrubbed]. Advance appropriations, which are not to be confused with advance procurement (AP) funding (see footnote 3), are essentially a legislatively locked-in form of incremental funding. Unlike incremental funding, advance appropriations qualify under budgeting regulations as a form of full funding. |
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| 3. |
AP funding is provided in one or more years prior to the year of procurement of a weapon system for the procurement of long-leadtime components—components with long construction times. Such components must be funded prior to the procurement of the remainder of the weapon system if they are to be ready for installation in the weapon system at the appropriate point in the construction process. AP funding is a permitted exception to the full funding provision. AP funding is not to be confused with advance appropriations (see footnote 2). |
|||
| 4. |
See footnote 2 for citations to these reports. Appropriating funding for a program and placing a program under contract are steps in a larger sequence of budget-related events that includes authorization, appropriation, obligation, and outlays. For a general discussion of this sequence, see CRS Report 98-721, Introduction to the Federal Budget Process, coordinated by [author name scrubbed] . |
|||
| 5. |
Slide 10 from briefing entitled "Multiyear Procurement: A CAPE Perspective," given at DOD cost analysis symposium, February 15-17, 2012, posted at InsideDefense.com (subscription required), May 14, 2012. |
|||
| 6. |
Slide 12 from briefing entitled "Multiyear Procurement: A CAPE Perspective," given at DOD cost analysis symposium, February 15-17, 2012, posted at InsideDefense.com (subscription required), May 14, 2012. Slide 12 also stated that these assessed savings were based on comparing CAPE's estimate of what the programs would cost under annual contracting (which the briefing refers to as single-year procurement or SYP) to the contractor's MYP proposal. |
|||
| 7. |
Government Accountability Office, Defense Acquisitions[:] DOD's Practices and Processes for Multiyear Procurement Should Be Improved, GAO-08-298, February 2008, p. 3. |
|||
| 8. |
The term EOQ is occasionally used in discussions of defense acquisition, somewhat loosely, to refer to any high-quantity or batch order of items, even those that do not take place under MYP or BBC. As a general matter, however, EOQs as described here occur only within MYP and block buy contracts. |
|||
| 9. |
A 2008 Government Accountability Office (GAO) report on multiyear contracting lists five areas of savings, most of which are covered in the two general areas of savings outlined above. One of GAO's five areas of savings—limited engineering changes due to design stability—can also occur in programs that use annual contracting. The GAO report states: Multiyear procurement can potentially save money and improve the defense industrial base by permitting the more efficient use of a contractor's resources. Multiyear contracts are expected to achieve lower unit costs compared to annual contracts through one or more of the following sources: (1) purchase of parts and materials in economic order quantities (EOQ), (2) improved production processes and efficiencies, (3) better utilized industrial facilities, (4) limited engineering changes due to design stability during the multiyear period, and (5) cost avoidance by reducing the burden of placing and administering annual contracts. Multiyear procurement also offers opportunities to enhance the industrial base by providing defense contractors a longer and more stable time horizon for planning and investing in production and by attracting subcontractors, vendors, and suppliers. However, multiyear procurement also entails certain risks that must be balanced against potential benefits, such as the increased costs to the government should the multiyear contract be changed or canceled and decreased annual budget flexibility for the program and across DOD's portfolio of weapon systems. Additionally, multiyear contracts often require greater budgetary authority in the earlier years of the procurement to economically buy parts and materials for multiple years of production than under a series of annual buys. Government Accountability Office, Defense Acquisitions[:] DOD's Practices and Processes for Multiyear Procurement Should Be Improved, GAO-08-298, February 2008, pp. 4-5. |
|||
| 10. |
Annual contracts can also include cancellation penalties. |
|||
| 11. |
§811 states that the cost analysis is to be performed by DOD's Cost Analysis Improvement Group (CAIG). In a subsequent DOD reorganization, CAIG was made part of CAPE. |
|||
| 12. |
For more on the Nunn-McCurdy provision, see CRS Report R41293, The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress, by [author name scrubbed] and [author name scrubbed]. |
|||
| 13. |
For a discussion of the evolution of the savings requirement under 10 U.S.C. 2306b, including a figure graphically summarizing the legislative history of the requirement, see Government Accountability Office, Defense Acquisitions[:] DOD's Practices and Processes for Multiyear Procurement Should Be Improved, GAO-08-298, February 2008, pp. 21-22, including Figure 3 on p. 22. |
|||
| 14. |
The Anti-Deficiency Act (31 U.S.C. 1341) prohibits the making of contracts in advance of appropriations. A multiple-year commitment may be made when authorized by Congress by entering into a firm commitment for one year and making the government's liability for future years contingent on funds becoming available. |
|||
| 15. |
10 U.S.C. 2306b, subsection (l)(3). |
|||
| 16. |
10 U.S.C. 2306b, subsection (i)(1). |
|||
| 17. |
Slide 4 from briefing entitled "Multiyear Procurement: A CAPE Perspective," given at DOD cost analysis symposium, February 15-17, 2012, posted at InsideDefense.com (subscription required), May 14, 2012. |
|||
| 18. |
Slide 5 from briefing entitled "Multiyear Procurement: A CAPE Perspective," given at DOD cost analysis symposium, February 15-17, 2012, posted at InsideDefense.com (subscription required), May 14, 2012. |
|||
| 19. |
S. 815/P.L. 97-86 of December 1, 1981, §909. |
|||
| 20. |
Government Accountability Office, Defense Acquisitions[:] DOD's Practices and Processes for Multiyear Procurement Should Be Improved, GAO-08-298, February 2008, p. 5. |
|||
| 21. |
"Interview: Sean Stackley, US Navy's Acquisition Chief," Defense News, January 13, 2014: 22. |
|||
| 22. |
Using the hypothetical example introduced earlier involving the procurement of 20 aircraft over the five-year period FY2017-FY2021, DOD would follow the same general path as it would under MYP: DOD would issue one contract covering all 20 aircraft in FY2017, at the beginning of the five-year period, following congressional approval to use BBC for the program, and congressional appropriation of the FY2017 funding for the program. To continue the implementation of the contract over the next four years, DOD would request the FY2018 funding for the program as part of DOD's proposed FY2018 budget, the FY2019 funding as part of DOD's proposed FY2019 budget, and so on. |
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| 23. |
For further discussion, see CRS Report RL33741, Navy Littoral Combat Ship (LCS)/Frigate Program: Background and Issues for Congress, by [author name scrubbed]. |
|||
| 24. |
For more on the KC-46 program, see CRS Report RL34398, Air Force KC-46A Tanker Aircraft Program, by [author name scrubbed]. |
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| 25. |
Source: Telephone discussion with Elliott Branch, Deputy Assistant Secretary of the Navy for Acquisition & Procurement, October 3, 2011, and email from Navy Office of legislative Affairs, October 11, 2011. Under the termination for convenience clause, the contractor can submit a settlement proposal to the service, which would become the basis for a negotiation between the contractor and the service on the amount of the payment. |
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| 26. |
Richard Whittle, "Magical Navy V-22 Buy: Now You See 'Em, Now You Don't," Breaking Defense, April 25, 2016.
Navy information paper dated May 9, 2016, provided to CRS by Navy Office of legislative Affairs on May 10, 2016. |
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| 29. |
Jason Sherman, "Navy Seeking Permission for Two-Year, Ship-to-Shore Connector Block Buy," Inside Defense (Daily News), April 18, 2016. |