{ "id": "R41293", "type": "CRS Report", "typeId": "REPORTS", "number": "R41293", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 604710, "date": "2016-05-12", "retrieved": "2019-09-16T22:28:17.759182", "title": "The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress", "summary": "The Nunn-McCurdy Act (10 U.S.C. \u00a72433) requires the Department of Defense (DOD) to report to Congress whenever a Major Defense Acquisition Program (MDAP) experiences cost overruns that exceed certain thresholds. A program whose cost growth exceeds the statutory thresholds is said to have a Nunn-McCurdy breach. \nThere are two types of breaches: significant breaches and critical breaches. A significant breach is when the Program Acquisition Unit Cost (the total cost of development, procurement, and construction divided by the number of units procured) or the Procurement Unit Cost (the total procurement cost divided by the number of units to be procured) increases 15% or more over the current baseline estimate or 30% or more over the original baseline estimate. A critical breach occurs when the cost increases 25% or more over the current baseline estimate or 50% or more over the original baseline estimate. \nThe Nunn-McCurdy Act has been amended nine times. One of the most significant changes to the reporting requirements occurred in the FY2006 National Defense Authorization Act (P.L. 109-163), when Congress added the original baseline estimate as a threshold against which to measure cost growth. The new standard prevents DOD from simply re-baselining a program to avoid a breach. Since 2007, there have been 37 Nunn-McCurdy breaches.\nNumber of Nunn-McCurdy Breaches Since Calendar Year 2007\nCalendar YearCritical BreachSignificant Breach\n200714\n200831\n200971\n201044\n20114-\n20121-\n201322\n201411\n\n2015\n1\n-\n\nTotal\n24\n13\n\nAnother significant change occurred in the FY2009 Weapon Systems Acquisition Reform Act (P.L. 111-23), which required programs with critical breaches to be presumed terminated unless the Secretary of Defense certifies the program. For programs that are certified, DOD generally must (1) revoke the prior milestone approval, (2) restructure the program, and (3) provide Congress a written explanation of the root cause of cost growth. These changes were fueled in part over congressional concern that programs with chronic cost growth were not being terminated and Congress was not being provided information on what caused the cost growth. \nAs a result of the Nunn-McCurdy Act, Congress has increased visibility into the cost performance of the acquisition stage of MDAPs. However, some analysts suggest that Nunn-McCurdy is not a sufficiently comprehensive reporting mechanism because program managers can take steps to avoid reporting a breach; Nunn-McCurdy does not apply to all elements of a weapon system\u2019s life-cycle (such as operations and support costs); and the timelines for reporting are such that by the time Congress is notified of a breach, there is little opportunity for Congress to take action.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R41293", "sha1": "7d8c91c21cc978ee6ed371a32737d74a3c43454e", "filename": "files/20160512_R41293_7d8c91c21cc978ee6ed371a32737d74a3c43454e.html", "images": { "/products/Getimages/?directory=R/html/R41293_files&id=/1.png": "files/20160512_R41293_images_53615c69019069c63c696540f1491eb9ae06bdb2.png", "/products/Getimages/?directory=R/html/R41293_files&id=/4.png": "files/20160512_R41293_images_f426c30964c25979a69e700a925c55b86eb08048.png", "/products/Getimages/?directory=R/html/R41293_files&id=/2.png": "files/20160512_R41293_images_a46be01aaaabb9cd00de7a2175c3df7fec75b9f7.png", "/products/Getimages/?directory=R/html/R41293_files&id=/3.png": "files/20160512_R41293_images_a130375c820861b6630c2b8c05421be61d4f35e1.png", "/products/Getimages/?directory=R/html/R41293_files&id=/0.png": "files/20160512_R41293_images_33f36bd879bfb94c070005f5783ba5a541ae87f2.png", "/products/Getimages/?directory=R/html/R41293_files&id=/5.png": "files/20160512_R41293_images_6d0c97244972ec29ed96623071aa6feeabe980e8.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R41293", "sha1": "98924a507e8ec5a0bfe6dac75c6c5dac3ad38b1f", "filename": "files/20160512_R41293_98924a507e8ec5a0bfe6dac75c6c5dac3ad38b1f.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4902, "name": "Air, Land, Sea, & Projection Forces" }, { "source": "IBCList", "id": 4925, "name": "Readiness, Training, Logistics, & Installations" } ] }, { "source": "EveryCRSReport.com", "id": 438770, "date": "2015-03-03", "retrieved": "2016-04-06T19:26:09.577731", "title": "The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress", "summary": "The Nunn-McCurdy Act (10 U.S.C. \u00a72433) requires the Department of Defense (DOD) to report to Congress whenever a Major Defense Acquisition Program (MDAP) experiences cost overruns that exceed certain thresholds. A program whose cost growth exceeds the statutory thresholds is said to have a Nunn-McCurdy breach. \nThere are two types of breaches: significant breaches and critical breaches. A \u201csignificant\u201d breach is when the Program Acquisition Unit Cost (the total cost of development, procurement, and construction divided by the number of units procured) or the Procurement Unit Cost (the total procurement cost divided by the number of units to be procured) increases 15% or more over the current baseline estimate or 30% or more over the original baseline estimate. A \u201ccritical\u201d breach occurs when the program acquisition or the procurement unit cost increases 25% or more over the current baseline estimate or 50% or more over the original baseline estimate. \nThe Nunn-McCurdy Act has been statutorily amended a number of times over the years. One of the most significant changes to the reporting requirements occurred in the FY2006 National Defense Authorization Act (P.L. 109-163), when Congress added the original baseline estimate as a threshold against which to measure cost growth. The new standard prevents DOD from avoiding a Nunn-McCurdy breach by simply re-baselining a program. Since 2007, subsequent to the original baseline threshold being introduced, there have been 12 significant and 22 critical breaches.\nNumber of Nunn-McCurdy Breaches Since 2007\n\nCalendar Year\nCritical Breach\nSignificant Breach\n\n2007\n1\n4\n\n2008\n3\n1\n\n2009\n7\n1\n\n2010\n4\n4\n\n2011\n4\n-\n\n2012\n1\n-\n\n2013\n2\n2\n\nTotal\n22\n12\n\nAnother significant change occurred in the FY2009 Weapon Systems Acquisition Reform Act (P.L. 111-23), when Congress enacted a requirement that programs with critical breaches should be presumed terminated unless the Secretary of Defense certifies the program. For programs that are certified, DOD generally must (1) revoke the prior milestone approval, (2) restructure the program, and (3) provide Congress a written explanation of the root cause of the cost growth. These changes were fueled in part over congressional concern that programs with chronic cost growth and schedule delays were not being terminated and Congress was not being provided specific information explaining what caused the cost growth. \nSome analysts believe that the Nunn-McCurdy Act has been effective as a reporting mechanism for informing Congress of cost overruns in major acquisition programs. As a result of the Nunn-McCurdy process, Congress has increased its visibility into the cost performance of the acquisition stage of Major Defense Acquisition Programs. However, some analysts suggest that Nunn-McCurdy is not a sufficiently comprehensive reporting mechanism because program managers can take steps to avoid a breach and because Nunn-McCurdy does not apply to all elements of a weapon system\u2019s life-cycle costs, such as its operations, support, or disposal costs.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R41293", "sha1": "e0fef85e296df618e5bdc920ed7b508e0a67c72a", "filename": "files/20150303_R41293_e0fef85e296df618e5bdc920ed7b508e0a67c72a.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R41293", "sha1": "77b0da8e92bd35602a04895a07133a7c41619832", "filename": "files/20150303_R41293_77b0da8e92bd35602a04895a07133a7c41619832.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 3231, "name": "Defense Acquisition" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc103099/", "id": "R41293_2011Jan19", "date": "2011-01-19", "retrieved": "2012-09-19T20:16:14", "title": "The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress", "summary": "For almost 30 years, the Nunn-McCurdy Act has served as one of the principal mechanisms for notifying Congress of cost overruns in Major Defense Acquisition Programs (MDAPs). This report discusses the Act's background, amendments, and relevancy to current times.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20110119_R41293_75359c8c8c452f2cd83c19798b1c71864493275c.pdf" }, { "format": "HTML", "filename": "files/20110119_R41293_75359c8c8c452f2cd83c19798b1c71864493275c.html" } ], "topics": [ { "source": "LIV", "id": "Defense policy", "name": "Defense policy" }, { "source": "LIV", "id": "Defense budgets", "name": "Defense budgets" }, { "source": "LIV", "id": "Congress and military policy", "name": "Congress and military policy" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc491601/", "id": "R41293_2010Jun21", "date": "2010-06-21", "retrieved": "2015-01-27T19:40:46", "title": "The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress", "summary": "This report discusses the debate regarding the effectiveness of the Nunn-McCurdy Act, which requires DOD to report to Congress whenever a major defense acquisition program experiences cost overruns that exceed certain thresholds. The purpose of the act was to help control cost growth in major defense systems by holding the appropriate Pentagon officials and defense contractors publicly accountable and responsible for managing costs.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20100621_R41293_4f85c506fc8d39be0e7757c924a4e9d65b83ab72.pdf" }, { "format": "HTML", "filename": "files/20100621_R41293_4f85c506fc8d39be0e7757c924a4e9d65b83ab72.html" } ], "topics": [ { "source": "LIV", "id": "Defense policy", "name": "Defense policy" }, { "source": "LIV", "id": "Defense budgets", "name": "Defense budgets" }, { "source": "LIV", "id": "Congress and military policy", "name": "Congress and military policy" } ] } ], "topics": [ "National Defense" ] }