The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress

Abstract

The Nunn-McCurdy Act (10 U.S.C. 2433) 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.There 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.The 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.

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Document Details

Document Type
Technical Report
Publication Date
May 12, 2016
Accession Number
AD1013630

Entities

People

  • Charles V. O'connor
  • Moshe Schwartz

Organizations

  • Congressional Research Service

Tags

Communities of Interest

  • Ground and Sea Platforms
  • Human Systems
  • Materials and Manufacturing Processes
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Aircraft Carriers
  • Aircraft Nuclear Propulsion
  • Aircrafts
  • Control Systems
  • Cost Estimates
  • Cost Reductions
  • Department Of Homeland Security
  • Fighter Aircraft
  • Information Systems
  • Military Acquisition
  • National Security
  • Navy
  • Radio Equipment
  • Test And Evaluation
  • Unmanned Aerial Systems
  • Unmanned Aerial Vehicles
  • Warning Systems

Readers

  • Defense Acquisition Program Management
  • Life Cycle Cost Analysis
  • Public Financial Management and Budgeting