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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle B Provisions Relating to Major Defense Acquisition Programs

DHNDAA Section

Senate Armed Services Report 110-335

SEC. 814. CONFIGURATION STEERING BOARDS FOR COST CONTROL UNDER MAJOR DEFENSE ACQUISITION PROGRAMS.

(a) Configuration Steering Boards- Each Secretary of a military department shall establish one or more boards (to be known as a `Configuration Steering Board') for the major defense acquisition programs of such department.

(b) Composition-

(1) CHAIR- Each Configuration Steering Board under this section shall be chaired by the service acquisition executive of the military department concerned.

(2) PARTICULAR MEMBERS- Each Configuration Steering Board under this section shall include a representative of the following:

(A) The Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics.

(B) The Chief of Staff of the Armed Force concerned.

(C) Other Armed Forces, as appropriate.

(D) The Joint Staff.

(E) The Comptroller of the military department concerned.

(F) The military deputy to the service acquisition executive concerned.

(G) The program executive officer for the major defense acquisition program concerned.

(H) Other senior representatives of the Office of the Secretary of Defense and the military department concerned, as appropriate.

(c) Responsibilities-

(1) IN GENERAL- The Configuration Steering Board for a major defense acquisition program under this section shall be responsible for the following:

(A) Preventing unnecessary changes to program requirements and system configuration that could have an adverse impact on program cost or schedule.

(B) Mitigating the adverse cost and schedule impact of any changes to program requirements or system configuration that may be required.

(C) Ensuring that the program delivers as much planned capability as possible, at or below the relevant program baseline.

(2) DISCHARGE OF RESPONSIBILITIES- In discharging its responsibilities under this section with respect to a major defense acquisition program, a Configuration Steering Board shall--

(A) review and approve or disapprove any proposed changes to program requirements or system configuration that have the potential to adversely impact program cost or schedule; and

(B) review and recommend proposals to reduce program requirements that have the potential to improve program cost or schedule in a manner consistent with program objectives.

(3) PRESENTATION OF RECOMMENDATIONS ON REDUCTION IN REQUIREMENTS- Any recommendation for a proposed reduction in requirements that is made by a Configuration Steering Board under paragraph (2)(B) shall be presented to appropriate organizations of the Joint Staff and the military departments responsible for such requirements for review and approval in accordance with applicable procedures.

(4) ANNUAL CONSIDERATION OF EACH MAJOR DEFENSE ACQUISITION PROGRAM- The Secretary of the military department concerned shall ensure that a Configuration Steering Board under this section meets to consider each major defense acquisition program of such military department at least once each year.

(5) CERTIFICATION OF COST AND SCHEDULE DEVIATIONS DURING SYSTEM DESIGN AND DEVELOPMENT- For a major defense acquisition program that received an initial Milestone B approval during fiscal year 2008, a Configuration Steering Board may not approve any proposed alteration to program requirements or system configuration if such an alteration would--

(A) increase the cost (including any increase for expected inflation or currency exchange rates) for system development and demonstration by more than 25 percent; or

(B) extend the schedule for key events by more than 15 percent of the total number of months between the award of the system development and demonstration contract and the scheduled Milestone C approval date, unless the Under Secretary of Defense for Acquisition, Technology, and Logistics certifies to the congressional defense committees, and includes in the certification supporting rationale, that approving such alteration to program requirements or system configuration is in the best interest of the Department of Defense despite the cost and schedule impacts to system development and demonstration of such program.

(d) Applicability-

(1) IN GENERAL- The requirements of this section shall apply with respect to any major defense acquisition program that is commenced before, on, or after the date of the enactment of this Act.

(2) CURRENT PROGRAMS- In the case of any major defense acquisition program that is ongoing as of the date of the enactment of this Act, a Configuration Steering Board under this section shall be established for such program not later than 60 days after the date of the enactment of this Act.

(e) Guidance on Authorities of Program Managers After Milestone B-

(1) MODIFICATION OF GUIDANCE ON AUTHORITIES- Paragraph (2) of section 853(d) of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2343) is amended to read as follows:

`(2) authorities available to the program manager, including--

`(A) the authority to object to the addition of new program requirements that would be inconsistent with the parameters established at Milestone B (or Key Decision Point B in the case of a space program) and reflected in the performance agreement, unless such requirements are approved by the appropriate Configuration Steering Board; and

`(B) the authority to recommend to the appropriate Configuration Steering Board reduced program requirements that have the potential to improve program cost or schedule in a manner consistent with program objectives; and'.

(2) APPLICABILITY- The Secretary of Defense shall modify the guidance described in section 853(d) of the John Warner National Defense Authorization Act for Fiscal Year 2007 in order to take into account the amendment made by paragraph (1) not later than 60 days after the date of the enactment of this Act.

(f) Major Defense Acquisition Program Defined- In this section, the term `major defense acquisition program' has the meaning given that term in section 2430(a) of title 10, United States Code.

Configuration steering boards for cost control under major defense acquisition programs (sec. 803)

The committee recommends a provision that would require the secretaries of the military departments to establish configuration steering boards (CSBs) to control costs on major defense acquisition programs. CSBs would be responsible for reviewing any proposed changes to program requirements or system configuration that could have the potential to adversely impact program cost or schedule and for recommending changes that have the potential to improve program cost or schedule in a manner consistent with program objectives. The committee expects any CSB decisions with regard to program requirements pursuant to subsection (c)(2) of this provision to be signed personally by the Chairman of the CSB.

In its March 2008 report on selected weapon programs, the Government Accountability Office (GAO) found that changes in program requirements often have a significant adverse impact on cost and schedule. According to GAO:

Unsettled requirements in acquisition programs can create significant turbulence. Sixty-three percent of the programs we received data from had requirement changes after system development began. These programs encountered cost increases of 72 percent, while costs grew by 11 percent among those programs that did not change requirements.

On July 30, 2007, the Under Secretary of Defense for Acquisition, Technology, and Logistics directed the secretaries of the military departments to address this problem by establishing CSBs to control requirements. The Under Secretary's memorandum states that:

The CSBs will review all requirements changes and any significant technical configuration changes which have the potential to result in cost and schedule impacts to the program. Such changes will generally be rejected, deferring them to future blocks or increments. Changes may not be approved unless funds are identified and schedule impacts are mitigated.

The committee understands that the implementation of CSBs by the military departments has been uneven. By institutionalizing the CSB process, the provision recommended by the committee would ensure that CSBs become an effective mechanism for cost control on major defense acquisition programs.
 

House Armed Services Report 110-652

SECTION 846--SYSTEM DEVELOPMENT AND DEMONSTRATION BENCHMARK REPORT

This section would require the secretary of a military department to submit a system development and demonstration benchmark report for each of the following programs: Broad Area Maritime Surveillance, Combat Search and Rescue Helicopter, Joint Light Tactical Vehicle, Aerial Refueling Tanker (KC-45A), Presidential Helicopter (VH-71 Increment II), and the unmanned aerial vehicle, Warrior--Alpha. The benchmark report would include a description of the requirements, estimated development cost, program schedule, and other program matters. This section would also require semi-annual contract performance reports until a full rate production decision is made for each program. This section would further require that the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) establish a Configuration Steering Board for each of these programs and to notify the congressional defense committees of major cost increases and significant schedule delays. Finally, this section would prohibit the milestone decision authority from granting approval to proceed to low-rate initial production if the system development and demonstration costs for such a program grow by more than 25 percent, or if the program schedule slips by more than 15 percent. This restriction could be waived if the USD(AT&L) certifies to the congressional defense committees that proceeding to low rate initial production is in the best interest of the Department.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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