View all text of Chapter 325 [§ 4371 - § 4377]
§ 4375. Breach of significant cost growth threshold or critical cost growth threshold: required action
(a)Breach of significant cost growth threshold; submission of a selected acquisition report.—
(1)General rule.—Except as provided in paragraph (2), whenever the Secretary concerned determines under section 4374 of this title that the program acquisition unit cost or the procurement unit cost of a major defense acquisition program or designated major subprogram has increased by a percentage equal to or greater than the significant cost growth threshold for the program or subprogram, a Selected Acquisition Report shall be submitted to Congress for the first fiscal-year quarter ending on or after the date of the determination or for the fiscal-year quarter which immediately precedes the first fiscal-year quarter ending on or after that date. The report shall include the information described in section 4351(e) of this title and shall be submitted in accordance with section 4351(f) of this title.
(2) Whenever the Secretary makes a determination referred to in paragraph (1) in the case of a major defense acquisition program or designated major subprogram during the second quarter of a fiscal year and before the date on which the President transmits the budget for the following fiscal year to Congress pursuant to section 1105 of title 31, the Secretary is not required to file a Selected Acquisition Report under paragraph (1) but shall include the information described in subsection (d) regarding that program or subprogram in the comprehensive annual Selected Acquisition Report submitted in that quarter.
(b)Breach of Critical Cost Growth Threshold.—If the program acquisition unit cost or procurement unit cost of a major defense acquisition program or designated major subprogram (as determined by the Secretary under section 4374 of this title) increases by a percentage equal to or greater than the critical cost growth threshold for the program or subprogram, the Secretary of Defense shall take actions consistent with the requirements of sections 4376 and 4377 of this title.
(c)Prohibition on Obligation of Funds for Certain Purposes When Required Action Not Taken.—
(1)Prohibition.—If a determination of an increase by a percentage equal to or greater than the significant cost growth threshold is made by the Secretary under section 4374 of this title and a Selected Acquisition Report containing the information described in subsection (d) is not submitted to Congress under subsection (a), or if a determination of an increase by a percentage equal to or greater than the critical cost growth threshold is made by the Secretary under section 4374 of this title and the certification of the Secretary of Defense is not submitted to Congress under subsection (b), funds appropriated for military construction, for research, development, test, and evaluation, and for procurement may not be obligated for a major contract under the program.
(2)Termination of prohibition.—The prohibition under paragraph (1) on the obligation of funds for a major defense acquisition program shall cease to apply at the end of a period of 30 days of continuous session of Congress (as determined under section 8677(b)(2) of this title) beginning on the date—
(A) on which Congress receives the Selected Acquisition Report under subsection (a) with respect to that program, in the case of a determination of an increase by a percentage equal to or greater than the significant cost growth threshold (as determined in section 4374 of this title); or
(B) on which Congress has received both the Selected Acquisition Report under subsection (a) and the certification of the Secretary of Defense under section 4376 with respect to that program, in the case of an increase by a percentage equal to or greater than the critical cost growth threshold (as determined under section 4374 of this title).
(d)Matter to Be Included in Reports.—Except as provided in subsection (e), each report under this section with respect to a major defense acquisition program shall include the following:
(1) The name of the major defense acquisition program.
(2) The date of the preparation of the report.
(3) The program phase as of the date of the preparation of the report.
(4) The estimate of the program acquisition cost for the program (and for each designated major subprogram under the program) as shown in the Selected Acquisition Report in which the program or subprogram was first included, expressed in constant base-year dollars and in current dollars.
(5) The current program acquisition cost for the program (and for each designated major subprogram under the program) in constant base-year dollars and in current dollars.
(6) A statement of the reasons for any increase in program acquisition unit cost or procurement unit cost for the program (or for any designated major subprogram under the program).
(7) The completion status of the program and each designated major subprogram under the program—
(A) expressed as the percentage that the number of years for which funds have been appropriated for the program or subprogram is of the number of years for which it is planned that funds will be appropriated for the program or subprogram; and
(B) expressed as the percentage that the amount of funds that have been appropriated for the program or subprogram is of the total amount of funds which it is planned will be appropriated for the program or subprogram.
(8) The fiscal year in which information on the program and each designated major subprogram under the program was first included in a Selected Acquisition Report (referred to in this paragraph as the “base year”) and the date of that Selected Acquisition Report in which information on the program or subprogram was first included.
(9) The type of the Baseline Estimate that was included in the baseline description under section 4214 of this title and the date of the Baseline Estimate.
(10) The current change and the total change, in dollars and expressed as a percentage, in the program acquisition unit cost for the program (or for each designated major subprogram under the program), stated both in constant base-year dollars and in current dollars.
(11) The current change and the total change, in dollars and expressed as a percentage, in the procurement unit cost for the program (or for each designated major subprogram under the program), stated both in constant base-year dollars and in current dollars and the procurement unit cost for the program (or for each designated major subprogram under the program) for the succeeding fiscal year expressed in constant base-year dollars and in current year dollars.
(12) The quantity of end items to be acquired under the program and the current change and total change, if any, in that quantity.
(13) The identities of the military and civilian officers responsible for program management and cost control of the program.
(14) The action taken and proposed to be taken to control future cost growth of the program.
(15) Any changes made in the performance or schedule milestones of the program and the extent to which such changes have contributed to the increase in program acquisition unit cost or procurement unit cost for the program (or for any designated major subprogram under the program).
(16) The following contract performance assessment information with respect to each major contract under the program or subprogram:
(A) The name of the contractor.
(B) The phase that the contract is in at the time of the preparation of the report.
(C) The percentage of work under the contract that has been completed.
(D) Any current change and the total change, in dollars and expressed as a percentage, in the contract cost.
(E) The percentage by which the contract is currently ahead of or behind schedule.
(F) A narrative providing a summary explanation of the most significant occurrences, including cost and schedule variances under major contracts of the program and any designated major subprogram under the program, contributing to the changes identified and a discussion of the effect these occurrences will have on future program costs and the program schedule.
(17) In any case in which one or more problems with the software component of the program or any designated major subprogram under the program significantly contributed to the increase in program unit costs, the action taken and proposed to be taken to solve such problems.
(e)Breach Due to Termination or Cancellation of Program or Subprogram.—
(1)Limited reporting.—If a program acquisition unit cost increase or a procurement unit cost increase for a major defense acquisition program or designated major subprogram that results in a report under this subsection is due to termination or cancellation of the entire program or subprogram, only the information specified in paragraphs (1) through (6) of subsection (d) and the percentage change in program acquisition unit cost or procurement unit cost that resulted in the report need be included in the report.
(2)Certification not required.—The certification of the Secretary of Defense under subsection (b) is not required to be submitted for termination or cancellation of a program or subprogram.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1850(a), (h), (i), Jan. 1, 2021, 134 Stat. 4265, 4267, 4269; Pub. L. 117–81, div. A, title XVII, § 1701(c)(4), (d)(12), (o)(6)(E)(iv), Dec. 27, 2021, 135 Stat. 2136, 2137, 2148.)