DOD Cost Overruns: Trends in Nunn-McCurdy Breaches and Tools to Manage Weapon Systems Acquisition Costs

Abstract

For nearly 30 years, the statutory provision known as Nunn-McCurdy1 has been a tool for Congress to use to hold DOD accountable for cost growth on major defense programs. The purpose of the statute was to provide Congress greater visibility into major defense programs' cost growth and to encourage DOD to manage and control cost growth. A Nunn-McCurdy breach occurs when a program unit cost exceeds certain thresholds. When that happens, DOD must notify Congress of the breach. There are two types of Nunn-McCurdy breaches: significant breaches and critical breaches.2 A breach of the significant cost growth threshold occurs when the program acquisition unit cost or the procurement unit cost increases by at least 15 percent over the current baseline estimate or at least 30 percent over the original baseline estimate.3 A breach of the critical cost growth threshold occurs when the program acquisition unit cost or the procurement unit cost increases by at least 25 percent over the current baseline estimate or at least 50 percent over the original baseline estimate. The Nunn-McCurdy process has been amended a number of times over the years.

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Document Details

Document Type
Technical Report
Publication Date
Mar 29, 2011
Accession Number
ADA540275

Entities

People

  • Michael J. Sullivan

Organizations

  • United States Government Accountability Office

Tags

Communities of Interest

  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Best Practices
  • Cost Estimates
  • Cost Overruns
  • Costs
  • Department Of Defense
  • Engineering
  • Governments
  • Manufacturing
  • Military Acquisition
  • Procurement
  • Reconnaissance Satellites
  • Security
  • Systems Engineering
  • United States Government
  • Weapon Systems
  • Weapons

Readers

  • Defense Acquisition Program Management
  • Life Cycle Cost Analysis
  • Mathematics or Statistics