INSIGHTi

FY2024 NDAA: Department of Defense Office
of Cost Assessment and Program Evaluation
(CAPE)
September 27, 2023

The U.S. Department of Defense’s (DOD) Office of Cost Assessment and Program Evaluation (CAPE)
provides independent analysis of the cost and performance of major weapons systems and plays a key role
in developing the DOD budget. With a current budget of $67.9 million and 157 staff, CAPE was
established in 2009 pursuant to the unanimously passed Weapon Systems Acquisition Reform Act
(WSARA; P.L. 111-23).
The House-passed version of a National Defense Authorization Act for Fiscal Year 2024 (NDAA; H.R.
2670) would repeal the position of director of CAPE, disestablish the office, and authorize the Secretary
of Defense to determine where to transfer certain office responsibilities. The Senate-passed version (S.
2226) included a Sense of the Senate supporting CAPE’s role in providing independent cost assessments
but would also modify the responsibilities of the Director of CAPE, among other things.
Background
10 U.S.C. §139a and 10 U.S.C. Chapter 222 describe CAPE’s current statutory duties. The director of
CAPE is appointed by the President and approved by the Senate. CAPE plays a role in both DOD’s
Planning, Programming, Budgeting, and Execution (PPBE) process and in the Defense Acquisition
System (DAS). Within PPBE, CAPE informs the assessment of resource requirements in warfighting
scenarios; convenes senior leader decision-making bodies; and has primary responsibility for generating a
classified budget-related database called the Future Years Defense Program (FYDP). Within the DAS,
CAPE guides and evaluates the analysis of alternatives, which occurs early in the acquisition process;
conducts or reviews independent cost estimates and/or lifecycle cost analyses for all Major Defense
Acquisition Programs (MDAPs); and establishes DOD-wide policy and procedures for estimating the
total costs of procurement contracts, including multi-year procurements (MYP).
Congressional Research Service
https://crsreports.congress.gov
IN12254
CRS INSIGHT
Prepared for Members and
Committees of Congress

---

Congressional Research Service
2
Proposed Legislation
House-Passed Provision
Section 902 of H.R. 2670 would repeal the position of CAPE Director, disestablish the office, and require
the Secretary of Defense to allocate any remaining personnel, functions, and assets to a newly designated
DOD office and senior official. By repealing Chapter 222, Title 10 of the U.S. Code, it would also
eliminate the statutory requirement for DOD-managed MDAPs to obtain independent cost estimates.
Neither the text of the bill nor the accompanying report provided a rationale for the proposal. A news
organization reported that some lawmakers view CAPE as taking certain actions that have undermined
congressional intent, for example, by questioning the need for the Marine Corps to maintain a minimum
of 31 amphibious assault ships, as required by law.
In a Statement of Administration Policy on H.R. 2670, the Biden Administration “strongly” opposed the
House provision, calling CAPE “the backbone of DOD’s analytical workforce” responsible for reducing
median cost growth in acquisition programs from 27% to 3% since 2009.
Senate-Passed Provisions
Section 807 of S. 2226 includes a Sense of the Senate provision supporting CAPE’s role in providing
independent cost assessments, including by providing timely review and oversight of cost estimates
performed by the defense agencies and military departments.
Section 903 would amend 10 U.S.C. §139a, making CAPE responsible for standardizing analytical
methodologies within DOD and submitting certain classified reports. The provision would also require
the Secretary of Defense to establish 1) an independent Program Evaluation Competitive Analysis Cell to
“critically assess” CAPE’s analytical methodologies, assumptions, and data; and 2) a pilot program to
conduct strategic portfolio reviews of near-term and mid- to long-term requirements using alternative
analytic approaches. Finally, the provision would require the Secretary to establish an “Analysis Working
Group” convening key DOD strategic planning stakeholders to assess emerging methodologies, tools,
tradecraft, data sets, and applications informing the DAS and PPBE process.
Section 1636 would limit the availability of funds for the office of CAPE until submission of a report on
missile defense roles and responsibilities.
Discussion
Some observers oppose closing CAPE, defending it as a credible source of independent cost analysis.
Others, such as some of the sources cited in this article, have argued that the office is not complying with
congressional intent. Still others make the case that DOD should abolish CAPE but establish a similar
organization and update its mandate.
The scope of CAPE’s work represents a major portion of the overall DOD budget. The FY2024 DOD
budget requested $170 billion for procurement programs and projected $871 billion in such requirements
across the five-year FYDP. According to the Government Accountability Office’s (GAO) 2023 Weapons
Systems Annual Assessment, 14 of 35 selected MDAPs accounted for projected increases of $50 billion
in systems acquisition lifecycle costs. GAO noted that “inconsistent cost data” for other types of defense
programs may complicate “DOD’s efforts to maintain oversight.”
Other observers support CAPE’s continued existence but note that the office could benefit from certain
improvements. A 2018 RAND study found that “CAPE lacks sufficient personnel or data to perform all

---

Congressional Research Service
3
the cost activities mandated by law or to do them with rigor,” and recommended that the office increase
its staff and continue “efforts to address data gaps.” Similarly, an interim report from the congressionally
mandated Commission on PPBE Reform recommends “continued efforts to recruit and retain [CAPE]
personnel,” and to pursue “continued efforts to reduce workload and improve analytic capabilities.”
Some Members of the House have previously expressed concerns over CAPE’s transparency and
communications with Congress. In a report accompanying the House Armed Services Committee-
reported version of the FY2023 NDAA (H.R. 7900; H.Rept. 117-397), the committee required DOD to
study CAPE’s effectiveness, noting that “in some instances, the role of CAPE has lacked transparency
and proactive discussions with Congress on issues with major budgetary implications have been
infrequent.” The report tasked DOD with providing the study to Congress by February 2023. A news
outlet published an unofficial version of this study, but DOD has yet to publicly release the study.
While Section 902 of H.R. 2670 would repeal statutory requirements for DOD-managed MDAPs to
receive independent cost estimates, DOD would still be responsible for performing many of CAPE’s
statutory roles if the provision were enacted. For example, Congress requires DOD to submit an FYDP
each year, provide comprehensive materiel-readiness funding estimates, and work with the Department of
Energy on certain nuclear security enterprise matters.



Author Information

Cameron M. Keys
Alexandra G. Neenan
Analyst in Defense Logistics and Resource Management
Analyst in U.S. Defense Infrastructure Policy
Policy





Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN12254 · VERSION 1 · NEW

---