prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: T he Public Safety Officers' Benefits (PSOB) program provides cash benefits to federal, state, and local law enforcement officers; firefighters; employees of emergency management agencies; and members of emergency medical services agencies who are killed or permanently and totally disabled as the result of personal injuries sustained in the line of duty  The Public Safety Officers' Educational Assistance (PSOEA) program, a component of the PSOB program, provides higher-education assistance to the children and spouses of public safety officers killed or permanently disabled in the line of duty  Both programs are administered by the PSOB Office of the Department of Justice (DOJ), Bureau of Justice Assistance (BJA)  Congress appropriates funds for these programs in the annual Departments of Commerce and Justice, Science, and Related Agencies Appropriations Act  For FY2019, the one-time lump-sum PSOB benefit is $359,316 and the monthly full-time attendance PSOEA assistance is $1,224  The PSOB and PSOEA benefit amounts are indexed to reflect changes in the cost of living  Table 1 shows PSOB and PSOEA claims and approvals as reported by DOJ  To be eligible for PSOB benefits for death or disability, a person must have served in one of the following categories of public safety officers: law enforcement officer, firefighter, or chaplain in a public agency; FEMA employee or a state, local, or tribal emergency management agency employee; or emergency medical services member  There is no minimum amount of time a person must have served to be eligible for benefits  To be eligible for PSOB benefits as a law enforcement officer, firefighter, or chaplain, a person must have served in a "public agency" in an official capacity, with or without compensation  For the purposes of PSOB eligibility, a public agency is defined as the federal government and any department, agency, or instrumentality of the federal government; and any state government, the District of Columbia government, and any U S  territory or possession; and any local government, department, agency, or instrumentality of a state, the District of Columbia, or any U S  territory or possession  For the purposes of PSOB eligibility, a law enforcement officer is defined as "an individual involved in crime and juvenile delinquency control or reduction, or enforcement of the criminal laws (including juvenile delinquency), including, but not limited to, police, corrections, probation, parole, and judicial officers " For the purposes of PSOB eligibility, the definition of firefighter includes both professional firefighters and persons serving as an "officially recognized or designated member of a legally organized volunteer fire department " A chaplain is eligible for PSOB benefits (1) if he or she is either an "officially recognized or designated member of a legally organized volunteer fire department or legally organized police department" or public employee of a police or fire department and (2) only if he or she was performing the duties of a chaplain in an official capacity while responding to a police, fire, or rescue emergency  Employees of the Federal Emergency Management Agency (FEMA) and state, local, or tribal emergency management agencies may be eligible for PSOB benefits under certain conditions provided in statute  A FEMA employee or an employee of a state, local, or tribal emergency management agency working with FEMA is eligible for PSOB benefits if he or she is performing official duties that are related to a major disaster or an emergency declared under the Robert T  Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and that are considered hazardous by the FEMA Administrator or the head of the state, local, or tribal agency  A member, including a volunteer member, of a rescue squad or "ambulance crew" who is authorized or licensed by law and the applicable agency and is engaging in rescue services or providing emergency medical services may be eligible for PSOB benefits  The rescue squad or ambulance service may provide ground or air ambulance services and may be either a public agency or a nonprofit entity authorized to provide rescue or emergency medical services  By PSOB regulation, eligible emergency medical services workers include rescue workers, ambulance drivers, paramedics, health care responders, emergency medical technicians, or others who are trained in rescue activity or emergency medical services and have the legal authority and responsibility to provide such services  The PSOB program pays benefits if a public safety officer becomes permanently and totally disabled or dies "as the direct and proximate result of a personal injury sustained in the line of duty " To qualify for coverage under the PSOB program, a public safety officer's disability or death must have been the result of a personal injury  The PSOB regulation defines an injury for the purposes of benefit eligibility as a traumatic physical wound (or a traumatized physical condition of the body) directly and proximately caused by external force (such as bullets, explosives, sharp instruments, blunt objects, or physical blows), chemicals, electricity, climatic conditions, infectious disease, radiation, virii, or bacteria     The regulation also provides that the definition of an injury does not include an occupational disease or a condition of the body caused by stress or strain, including psychological conditions such as post-traumatic stress disorder  However, the PSOB statute specifically provides for deaths caused by certain cardiovascular conditions  The death of a public safety officer due to a heart attack, stroke, or vascular rupture shall be presumed to be a death from a personal injury for the purposes of PSOB eligibility if the officer engaged in nonroutine stressful or strenuous physical activity as part of an emergency response or training exercise; and if the condition began during the physical activity, while the officer remained on duty after the physical activity, or within 24 hours of the physical activity  The PSOB program covers a public safety officer's death or disability if it occurred as the result of an injury incurred in the line of duty  The PSOB regulations provide that an injury occurs in the line of duty if it (1) is the result of the public safety officer's authorized activities while on duty, (2) occurs while responding to an emergency or request for assistance, or (3) occurs while commuting to or from duty in an authorized department or personal vehicle  In addition, if there is convincing evidence that the injury was the result of the individual's status as a public safety officer, that injury is covered by the PSOB program  The lump-sum PSOB death and disability benefit for FY2019 is $359,316  The benefit amount is adjusted annually to reflect changes in the cost of living using the annual percentage change in the Consumer Price Index for Urban Consumers (CPI-U) for the one-year period ending in the previous June  If a public safety officer receives a disability benefit and later dies from the same injury, the officer's survivors may not receive a PSOB death benefit  The payable benefit amount is based on the date of the public safety officer's death or the date of the injury that caused the disability, rather than on the date of application for benefits or disability determination  Thus, if a benefit increase occurs while an application is pending, the benefit is payable at the previous, lower, benefit level  Death and disability benefits are not subject to the federal income tax  In general, PSOB death and disability benefits are paid in addition to any other workers' compensation, life insurance, or other benefits paid for the death of a public safety officer  However, the PSOB death benefit is offset by the following benefits: benefits under the Federal Employees' Compensation Act (FECA) payable to state and local law enforcement officers injured or killed while enforcing federal law; benefits under the D C  Retirement and Disability Act of 1916 for certain police officers and firefighters in the District of Columbia; and payments from the September 11 th Victim Compensation Fund (VCF)  PSOB death benefits are payable to the eligible spouse and children of a public safety officer  A spouse is the person to whom the officer is legally married, even if physically separated, under the marriage laws of the jurisdiction where the marriage took place  Pursuant to regulations issued after the Supreme Court struck down the federal Defense of Marriage Act in United States v  Windsor , the legally married spouse of a public safety office may be of the same sex as the officer  A child is defined as any "natural, illegitimate, adopted, or posthumous child or stepchild" of the public safety officer who, at the time of the public safety officer's fatal or catastrophic injury, is 18 years of age or under; between 18 and 23 years of age and a full-time student in high school or undergraduate higher education; or over 18 years of age and incapable of self-support because of physical or mental disability  PSOB death benefits are paid to eligible survivors in the following order: 1  if the officer is survived by only a spouse, 100% of the death benefits are payable to the spouse; 2  if the officer is survived by a spouse and children, 50% of the death benefits are payable to the spouse and the remaining 50% is distributed equally among the officer's children; 3  if the officer is survived by only children, the death benefits are equally distributed among the officer's children; 4  if the officer has no surviving spouse or children, the death benefits are paid to the individual or individuals designated by the officer in the most recently executed designation of beneficiary on file at the time of the officer's death; or if the officer does not have a designation of beneficiary on file, the benefits are paid to the individual or individuals designated by the officer in the most recently executed life insurance policy on file at the time of the officer's death; 5  if the officer has no surviving spouse or eligible children, and the officer does not have a life insurance policy, the death benefits are equally distributed between the officer's surviving parents; or 6  if the officer has no surviving spouse, eligible children, or parents, and the officer did not have a designation of beneficiary or a life insurance policy on file at the time of his or her death, the death benefits are payable to surviving adult, nondependent, children of the officer  PSOB disability benefits are paid only in cases of permanent and total disability  There are no benefits payable for partial or short-term disabilities  A disability is considered permanent for the purposes of PSOB eligibility if, given the current state of medicine in the United States, there is a degree of medical certainty that the condition will remain constant or deteriorate over the person's lifetime or that the public safety officer has reached maximum medical improvement  A public safety officer is considered to be totally disabled for the purposes of PSOB eligibility if given the current state of medicine in the United States, there is a degree of medical certainty that the officer is unable to perform any gainful work  PSOB regulation defines gainful work as "full- or part-time activity that is compensated or commonly compensated " Applications for PSOB death and disability benefits are filed with the PSOB office, which determines benefit eligibility and commences benefit payment  Unless extended for good cause, application deadlines must be met  Complete benefit applications must be filed no later than for death benefits: three years after the death; one year after the determination of the officer's employing agency to award or deny death benefits payable by that agency; or one year after certification by the officer's employing agency that the agency is not authorized to pay any death benefits; and for disability benefits: three years after the date of the injury; one year after the determination of the officer's employing agency to award or deny workers' compensation or disability benefits payable by that agency; or one year after certification by the officer's employing agency that the agency is not authorized to pay any workers' compensation or disability benefits  A lump-sum interim payment of up to $3,000 may be made if a PSOB death benefit will "probably be paid " The interim payment amount reduces the final PSOB payment amount  If the ultimate decision is to deny death benefits, the interim payment must be returned to the federal government, unless this repayment is waived because it would create a hardship for the beneficiary  Section 611 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act; P L  107-56 ) provides for expedited payment of PSOB death and disability benefits if the officer's injury occurred "in connection with prevention, investigation, rescue, or recovery efforts related to a terrorist attack " In such cases, PSOB benefits must be paid within 30 days of certification from the officer's employing agency that the officer's death or disability was related to terrorism  The Public Safety Officers' Education Assistance (PSOEA) program provides financial assistance with costs associated with higher education to the spouse or children of a public safety officer who is eligible for PSOB death or disability benefits  The spouse or child of a public safety officer who is eligible for PSOB death or disability benefits may be eligible for PSOEA benefits  To be eligible for PSOEA benefits, a spouse must have been married to an eligible public safety officer at the time of the officer's death or injury  A child is eligible for PSOEA benefits until the age of 27  This age limit can be extended by the Attorney General in extraordinary circumstances, or, pursuant to Section 3 of the Public Safety Officers' Benefits Improvement Act of 2017 ( P L  115-36 ), if there is a delay of more than one year in approving PSOB or PSOEA benefits  In addition, to be eligible for PSOEA benefits, the spouse or child must be enrolled at an eligible educational institution  For the purposes of PSOEA eligibility, an eligible education institution is one that meets the definition of an "institution of higher education" as provided by Section 102 of the Higher Education Act of 1965 and that is eligible for federal student aid  PSOEA benefits are payable to the claimant and may be used only to defray costs associated with higher education attendance, including tuition, room, board, book and supplies, and education-related fees  The monthly PSOEA benefit amount is equal to the monthly benefit amount payable under the GI Bill Survivors' and Dependents' Educational Assistance (DEA) program, which is administered by the Department of Veterans Affairs (VA) for spouses and dependents of veterans with disabilities or who died as a result of service-connected conditions  The PSOEA benefit amounts are adjusted annually to reflect changes in the cost of living in accordance with changes to the GI Bill DEA benefit amounts  For FY2019, the PSOEA monthly benefit for a student attending an educational institution full-time is $1,224  The PSOEA benefit rates are prorated for less than full-time attendance  The maximum duration of PSOEA benefits for any person is 45 months of full-time education or a proportionate duration of part-time education  A person is ineligible for PSOEA if he or she is in default on a federal student loan or is ineligible for federal benefits due to a drug trafficking or drug possession conviction  In addition, the Attorney General may discontinue PSOEA benefits for a student that fails to make satisfactory progress in his or her course of study as defined by Section 484(c) of the Higher Education Act of 1965  A claimant who is dissatisfied with a PSOB disability benefit denial may request a reconsideration  There is no reconsideration offered for denials of PSOB death or PSOEA benefits  A claimant who is dissatisfied with a PSOB or PSOEA benefit denial may request a de novo hearing before a hearing officer assigned by the director of the DOJ PSOB Office  The determination of a hearing officer may be appealed to the PSOB Office director  The director's determination is considered the final agency determination and is not subject to any further agency administrative review or appeal  However, provided all administrative appeals remedies have been exhausted, the PSOB Office director's determination may be appealed to the United States Court of Appeals for the Federal Circuit  The PSOB statute authorizes the BJA to prescribe the maximum fee that an attorney or other representative may charge a claimant for services rendered in connection with a claim, with attorney fees generally limited to between 3% and 6% of the total benefit paid, depending on the level in the administrative appeals process the claim is approved  Program regulation prohibits stipulated-fee and contingency-fee arrangements for PSOB representation  Congress provides funding for PSOB and PSOE benefits and associated administrative expenses in the annual Departments of Commerce and Justice, Science, and Related Agencies Appropriations Act  Funding for PSOB death benefits and associated administrative expenses is considered mandatory spending and Congress appropriates "such sums as may be necessary" for the payment of these benefits  Funding for PSOB disability and PSOEA benefits is considered discretionary and is subject to specific congressional appropriations  Annual appropriations language grants the Attorney General the authority to transfer from any available appropriations to the DOJ the funds necessary to respond to emergent circumstances that require additional funding for PSOB disability benefits and PSOEA benefits  


Report 2: The Commercial Space Launch Act Amendments of 1988 established the foundation for the current U S  policy to potentially provide federal payment for a portion of claims by third parties for injury, damage, or loss that results from a commercial launch or reentry accident  A stated goal of the act was to provide a competitive environment for the U S  commercial space launch industry  The act also provided for, among other things, government protection against some losses—referred to as indemnification—while still minimizing the cost to taxpayers  All FAA- licensed commercial launches and reentries by U S  companies, whether unmanned or manned and from the United States or overseas, are covered by federal indemnification for third-party damages that result from the launch or reentry  According to agency officials, in 2016 FAA issued five active licenses, which had an average third-party MPL of about $51 million and ranged from $10 million to $99 million  The amount of insurance coverage that FAA requires launch companies to purchase—the MPL value—is intended to reflect the greatest dollar amount of loss to third parties and the federal government for bodily injury and property damage that can be reasonably expected to result from a launch or reentry accident  FAA calculates separate MPL values for potential damages to third parties and the federal government  For each launch license that it issues, FAA determines MPL values for third parties with the intent of estimating the greatest dollar amount of losses that reasonably could be expected from a launch or reentry accident, which have no less than a 1 in 10 million chance of occurring  For damages to the federal government, FAA determines MPL values with the intent of estimating the greatest dollar amount of losses that reasonably could be expected from a launch or reentry accident, which have no less than a 1 in 100,000 chance of occurring  According to FAA, the agency defines these probability thresholds to estimate the federal government’s exposure to losses above the MPL  Agency officials said that the current probability thresholds are set such that losses are very unlikely to exceed launch companies’ private insurance and become potential costs for the government under CSLCA  FAA’s process for determining the MPL value for a launch or reentry license generally includes three elements: 1  Number of casualties  Estimating the number of third-party casualties involves adding the number of direct and secondary casualties that could result from a launch accident  Direct casualty estimates include serious injuries and deaths  Secondary casualties include those resulting from fires and collapsing buildings  2  Cost of casualties  FAA uses $3 million as an estimate of the average loss per casualty, which is multiplied by the number of estimated casualties  3  Property damage  FAA applies a predetermined factor—which it recently changed from 50 percent to 25 percent—to the estimated cost of casualties to derive estimated losses from property damage  The total MPL is equal to the estimated cost of casualties plus property damage  FAA has revised two components of its MPL methodology since our 2012 report  For example, in April 2016, the agency adopted a new method for estimating the number of casualties, known as the risk profile method  This method uses different tools to simulate a range of possible scenarios to create a distribution of potential casualty numbers and the simulated probability of different levels of casualty numbers  The risk profile method replaced FAA’s “overlay method,” which was a method it had used since the early 1990s which the agency said did not work well for launches of small launch vehicles in remote areas, or for reentries  In addition, FAA reduced the factor it uses to estimate losses due to property damage, based on tests of a new process for estimating such losses that showed the previous factor was too high  We have previously reviewed FAA’s MPL methodology in 2012 and 2017  In 2012 we examined the U S  government’s indemnification policy, the federal government’s potential costs for indemnification, and the effects of ending indemnification on the competitiveness of U S  launch companies, among other aspects of FAA’s MPL methodology  In 2017 we examined the extent to which FAA had revised its MPL methodology since our 2012 report to address previously cited weaknesses and the potential effect of any changes to that methodology on financial liabilities for the federal government  The findings and recommendations of those reports, including any unaddressed weaknesses, are discussed later in this report  CSLCA required FAA to evaluate its MPL methodology incorporating three requirements, but the agency’s report did not fully address these requirements  First, the act required FAA to ensure a balance of risk between launch companies and the federal government  However, agency officials told us that they did not re-evaluate the probability thresholds—which are used to divide the risk of loss between launch companies and the federal government—as part of evaluating its MPL methodology when implementing the risk profile method due to resource constraints  Second, the act required FAA to consider the cost impact of implementing an updated MPL methodology, but the agency did not evaluate the impact of implementing its revised methodology on the direct costs to launch companies (insurance premiums) and to the federal government (indemnification liability)  Third, the act required FAA to consult with the commercial space sector and insurance providers in evaluating its MPL, but they did not consult such parties in response to the act  Without fully addressing CSLCA’s mandated requirements, FAA cannot ensure that the federal government is not exposed to greater liability costs than intended or that launch companies are not required to purchase more insurance coverage than necessary  In its report, FAA states that implementing an updated MPL methodology in April 2016—the risk profile method—helps ensure that the federal government is not exposed to greater liability costs than intended and that launch companies are not required to purchase more insurance coverage than necessary, as required under CSLCA  Further, agency officials told us that their updated methodology is technically more valid and improves their ability to avoid overestimating MPL values (which can cause launch companies to purchase more insurance coverage than necessary) or significantly underestimating MPL values (which can expose the federal government to greater costs than intended)  While an improved model may provide a more realistic calculation of the MPL, by changing the resulting estimates it can also change the balance between the federal government’s exposure to liability costs and the amount of insurance launch companies are required to purchase  For example, if the more realistic results produced by the revised methodology increased the MPL estimates, this would increase insurance costs for the launch companies and reduce the federal government’s exposure, thereby shifting the balance of costs between the two and suggesting a reevaluation of the thresholds  In addition, FAA officials told us that they had not reevaluated the probability thresholds upon implementing the revised MPL methodology, although defining these thresholds is their primary mechanism for adjusting the balance of risk between launch companies and the federal government  Agency officials acknowledged that an examination of the thresholds’ continued appropriateness would be warranted in the future  However, they told us that changing the probability thresholds would require significant effort because it would require them to change federal regulations and that resources are currently allocated to other rulemaking priorities  Nevertheless, without evaluating the appropriateness of the probability threshold as part of the mandated evaluation of the MPL methodology, FAA cannot ensure that the federal government is not exposed to greater liability costs than intended or that launch companies are not required to purchase more insurance coverage than necessary  CSLCA also required FAA to consider the cost impact on both the commercial space launch industry and the federal government of implementing an updated MPL methodology  In its report to Congress, the agency discussed indirect costs to launch applicants and the federal government  For example, FAA discussed indirect data burden costs on launch company applicants and FAA analysts associated with the agency’s risk profile method implementation  The report states that the risk profile method requires more data from a launch applicant than the previous method, but that the added burden is minimal because the information is similar to the type of information required by FAA for a risk analysis  Agency officials also said that the risk profile method requires more of an FAA analyst’s time than the overlay method, but that the added burden is minimal because the work done by FAA on risk analysis provides much of the foundation for an MPL analysis  However, FAA’s report did not include an evaluation of the direct costs to launch companies and the federal government of implementing an updated MPL methodology  The report identifies the direct cost to the launch industry as insurance premiums, and the direct cost to the federal government include potential indemnification payments  Agency officials also told us that the agency does not track commercial space launch insurance costs, and that they do not have meaningful insights on insurance premiums paid by commercial launch companies  FAA officials told us that they only have a general notion of insurance premiums because the industry is reluctant to share such information  FAA officials also told us that, outside of the work done for the report, they have not evaluated the economic implications for launch companies of implementing an updated MPL methodology  Without evaluating direct costs to both the launch companies and the federal government, FAA will be limited in its ability to consider the impact of the cost to both the industry and the federal government of implementing an updated methodology  Although CSLCA required FAA to consult with the commercial space sector and insurance providers in evaluating its MPL methodology for the mandated report, it obtained limited input  For example, FAA officials told us that they obtained input from their Commercial Space Transportation Advisory Committee (COMSTAC) in April 2016 about what to include in their report to Congress, but did not consult with the commercial space sector and insurance providers to evaluate their MPL methodology in response to CSLCA  FAA officials also said that, to respond to CSLCA’s consultation requirement, they did not think they needed to repeat the consultations they took in 2013  In January 2013, the agency solicited input from COMSTAC’s Business/Legal Working Group about how to best conduct a review of FAA’s methodology for calculating MPL, in response to our July 2012 report  FAA also briefed the Business/Legal Working Group in May 2013 to solicit input on MPL methodologies, including the risk profile method  In the January 2013 meeting, a COMSTAC member suggested several contractors for a study by outside experts of the complete MPL methodology, and FAA subsequently hired one of these contractors to develop the risk profile method that it implemented in April 2016  However, the agency did not solicit input from COMSTAC about its risk profile methodology prior to its April 2016 implementation or following CSLCA’s November 2015 mandated evaluation  As a result, FAA lacks input on the effect of its revised MPL methodology on launch companies and the federal government, making it difficult to evaluate the balance of risk between the two  Our 2012 report identified concerns with all three components of FAA’s MPL methodology: estimating the number of casualties, estimating the cost of casualties, and deriving estimated property damage costs from estimated casualty costs  In that report we recommended that the agency reassess its methodology, including the reasonableness of several key elements  As noted in our 2017 report, FAA has since made improvements to its methodology  However, it still has not yet updated the cost of a casualty

ground_truth: The Public Safety Officers' Benefits (PSOB) program provides cash benefits to federal, state, and local law enforcement officers; firefighters; employees of emergency management agencies; and members of emergency medical services agencies who are killed or permanently and totally disabled as the result of personal injuries sustained in the line of duty. The Public Safety Officers' Educational Assistance (PSOEA) program, a component of the PSOB program, provides higher-education assistance to the children and spouses of public safety officers killed or permanently disabled in the line of duty. The PSOB and PSOEA programs are administered by the Department of Justice (DOJ), Bureau of Justice Assistance (BJA). However, claimants dissatisfied with denials of benefits may pursue administrative appeals within DOJ and may seek judicial review before the United States Court of Appeals for the Federal Circuit. Each year, Congress appropriates funding for PSOB death benefits, which is considered mandatory spending, and for PSOB disability benefits and PSOEA benefits, which is subject to annual appropriations. For FY2019, the one-time lump-sum PSOB death and disability benefit is $359,316 and the PSOEA monthly benefit for a student attending an educational institution full-time is $1,224. In FY2017, the DOJ approved 399 claims for PSOB death benefits, 82 claims for PSOB disability benefits, and 601 claims for PSOEA benefits.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2:  In addition, in our 2017 report we also noted that there are instances where deriving estimated property damage from estimated casualty costs is inappropriate  As of November 2017, FAA does not have guidance to identify such instances or to guide decisions on which tools to use in developing the MPL estimate  FAA has taken steps designed to improve two of three elements of its MPL methodology, including revising its methodology for estimating the number of potential casualties for a given launch and changing the factor it uses to derive estimated property damage from estimated casualties  However, the agency has not updated the third element, the amount it uses for the cost of an individual casualty, leaving a previously identified weakness unaddressed  Our 2012 report raised concerns with each of the three components of FAA’s MPL calculation methodology  First, we found that FAA’s method for estimating the number of casualties involved use of a single loss scenario instead of applying the insurance industry’s standard practice of catastrophe modeling, and that the agency’s method might significantly understate the number of potential casualties  Catastrophe modeling, unlike the single-loss approach, generally estimates losses by using various tools to simulate tens of thousands of scenarios to create a distribution of potential losses and the simulated probability of different levels of loss  Second, we reported that FAA had been using an outdated and likely understated figure of $3 million to estimate the cost of a single casualty—including injury or death—which Office of Commercial Space Transportation officials said has not been updated since they began using it in 1988  Third, we reported that the agency’s approach of estimating potential property damage by adding a flat 50 percent to the estimated casualty damage could lead to estimates that were too high in some cases  Given these weaknesses, we recommended that FAA reassess its MPL methodology, including assessing the reasonableness of the cost-of- casualty amount and other assumptions used  Because the agency took actions to assess its MPL methodology, we closed the recommendation as implemented  In March 2017 we reported that FAA had taken steps to address weaknesses in two of these three areas  Specifically, we reported that FAA’s adoption of the risk profile method in April 2016 had improved its estimates of the number of potential casualties associated with a particular license launch  In addition, we reported that the agency had revised the factor it uses to estimate losses from property damage in the MPL calculation from 50 percent to 25 percent  This change has resulted in property damage estimates that FAA officials believe are still conservative but more realistic than previous estimates  However, in our March 2017 report we also determined that FAA had not yet addressed weaknesses in the cost-of-casualty amount we had previously identified; despite the conclusion by a contractor it had hired to study the cost-of-casualty that it was too low  Agency officials told us that they had not addressed this weakness because of other priorities  Given the significance of the cost-of-casualty amount to the MPL calculations, we recommended that FAA prioritize the development of a plan to address the identified weakness in the cost-of-casualty amount, including setting time frames for action, and update the amount based on current information  In October 2017, FAA officials told us that they had not yet updated the cost-of-casualty because they have continued to prioritize completing other work with their limited resources, such as reviewing launch applications and fulfilling other safety responsibilities  As a result, our recommendation remains open  FAA officials told us that they have identified potential steps to update the cost-of-casualty amount, including seeking public input on whether and how to revise the amount, but that they do not expect to make a decision on whether to make any changes to the cost-of-casualty amount until June 30, 2018, at the earliest  FAA officials told us that in order to prioritize the development of a plan to address the identified weakness in the cost-of-casualty amount they will need to consult with both the commercial space and insurance industries about the necessity and implications of any potential increase in the cost-of-casualty amount  Agency officials said that they plan to do such consultations through COMSTAC  However, because COMSTAC was just reestablished in June 2017 after not having been active since November 2016 and new members had not been approved as of October 2017, the anticipated decision date of June 2018 could be further delayed  As we reported in March 2017, an understated cost-of-casualty amount can lead to an inaccurate loss calculation, which in turn understates the amount of insurance a launch company must obtain  This could increase the potential exposure to the federal government, as the insurance amount would be less than the potential losses associated with the launch activity and the property would be inadequately protected  Because of this potential exposure, we maintain that addressing this weakness is a priority  As noted above, in our 2012 report we raised concerns about the first element of FAA’s MPL methodology, which is estimating the number of potential casualties  FAA officials said that they have implemented two tools for estimating the number of potential casualties, and that each tool requires a different level of resources and is more appropriate for different launch scenarios  The Range Risk Analysis Tool creates physics-based simulations of possible accidents using launch vehicle data, such as launch trajectory and types of failures, and assigns each simulated accident a probability of occurrence based on the failure rates of the different elements of the launch vehicle  According to agency officials, the Range Risk Analysis Tool is a comprehensive, high-fidelity tool and is the most appropriate tool for coastal launch sites, which are often located in heavily populated areas, and is labor intensive  The Risk Estimator Sub- orbital and Orbital Launch Vehicle and Entry tool, which in contrast to the Range Risk Analysis Tool, is a medium-fidelity tool that can be used for low-risk launches, such as launch sites located in very sparsely populated areas and reentry operations that do not need the use of a high-fidelity tool  According to FAA, this tool significantly reduces the time required to estimate the risk from launch and reentry vehicle operations  In our 2017 report, we also reiterated that there are cases where the third element of FAA’s methodology, deriving estimated property damage from estimated casualties, could lead to misleading MPL calculations  Specifically, in March 2017 we reported that estimating losses from property damage as a percentage of losses from casualties could lead to overestimates  For example, FAA’s contractor found that, if a launch accident affected a residential area, the agency’s practice of estimating property damage based on casualties would likely overstate property damages because residential structures have relatively low values compared to losses from casualties  We also reported in March 2017 that in some accidents the number of casualties may be low but property losses could still be very large, in which case FAA’s estimating property losses based on casualties would likely understate potential property damage  For example, a launch vehicle could strike an unoccupied structure that is very expensive, such as a neighboring launch complex  Agency officials said that while deriving property losses from casualty losses is a simpler method that may be an effective use of limited FAA resources, it could be inappropriate in scenarios where the number of casualties might be low but property losses could still be very large  In October 2017, agency officials said that FAA had not developed guidance for determining, for a given launch license, which of the available tools would be most appropriate to estimate the number of potential casualties, and whether it would be more appropriate to estimate property losses separately rather than derive them from estimated casualties  While FAA officials said they believe their current decision process is adequate and that they do not need more formal guidance at this time, they also told us that they were in the process of developing internal guidance on the most appropriate tool to use for future launches  The officials said that they did not have a projected completion date for the guidance, primarily because the agency has other priorities and resource limitations  As noted earlier, these priorities include reviewing commercial space launch license applications and managing program safety  Federal internal control standards state that, as part of an entity’s risk assessment component, management should identify, analyze, and respond to risks to achieving objectives  For example, the standards state that management should design control activities in response to the entity’s objectives and risks to achieve an effective internal control system  Without such guidance, FAA could face challenges in ensuring that it is using the most appropriate method to calculate an MPL for a given launch and is making the most efficient use of its resources  Such guidance could become more important as the number of commercial space launches increases, potentially creating greater demands on its resources  We have previously reported that the commercial space launch industry has experienced significant growth in the number and complexity of launches in the past half-decade  FAA has also reported that its licensed launches have increased 60 percent and industry revenue has increased 471 percent since 2012  FAA’s MPL methodology is critical in balancing the encouragement of the U S  commercial space industry with the need to manage the federal government’s risk exposure because it determines how much risk each party will bear for third-party damages resulting from potential space launch accidents  However, despite changes to the methodology, the probability threshold that the agency uses to achieve this balance of risk has been the same since the 1990s, and has not been reviewed for appropriateness  In addition, while FAA evaluated the effect of its MPL methodology on the indirect costs of launch companies and the federal government, it did not similarly evaluate direct costs  Further, although FAA has obtained input from some stakeholders on certain aspects of its MPL methodology, it has not consulted with launch providers and insurance companies to evaluate effects on key potential costs to launch companies and the federal government, as required under CSLCA  FAA officials told us that resource issues and pursuing other priorities have prevented them from taking these actions  However, the longstanding nature of these issues, as well as their importance in determining the federal government’s financial exposure, makes their completion a priority  FAA has also begun improving other aspects of its MPL process, but important actions remain incomplete  For example, the cost of a casualty, a key component of the methodology, has not been updated since 1988  While FAA has identified potential steps to update this amount, it has not implemented these steps and our March 2017 recommendation to prioritize the updating of this amount remains open  Further, agency officials said they have begun to develop internal guidance on how to determine which methodological tools should be used for a given launch, but are not sure when this process will be completed  These are important steps to help ensure the validity of the MPL methodology and the results obtained for each launch, which in turn determine the balance between the amount of insurance launch companies are required to purchase and the potential financial exposure for the federal government  We are making the following four recommendations to FAA: The FAA Administrator should fulfill the CSLCA mandate to include ensuring a balance of risk between the federal government and launch companies as part of FAA’s MPL methodology evaluation by reexamining the current probability thresholds  (Recommendation 1) The FAA Administrator should fulfill the CSLCA mandate to analyze the cost impact of implementing its revised MPL methodology by evaluating the impact on the direct costs of launch companies and the federal government  (Recommendation 2) The FAA Administrator should fulfill the CSLCA mandate to evaluate its MPL methodology in consultation with the commercial space sector and insurance providers by consulting with those entities on the cost impact of its revised MPL methodology, including an updated cost-of-casualty amount, on the launch industry and the federal government  (Recommendation 3) The FAA Administrator should establish an estimated completion date for developing and implementing a plan to establish guidance on the most appropriate MPL methodologies and tools to use for each launch  (Recommendation 4) We provided a draft of this report to the Department of Transportation for their review and comment  In its comments, reproduced in appendix I, the Department of Transportation concurred with our recommendations  The Department of Transportation also provided technical comments, which we incorporated as appropriate  We are sending copies of this report to interested congressional committees and the Secretary of the Department of Transportation  In addition, this report will be available at no charge on GAO’s website at http://www gao gov  If you or your staff have any questions or would like to discuss this work, please contact Alicia Puente Cackley at (202) 512-8678 or cackleya@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  Individuals making key contributions to this report are listed in appendix II  In addition to the contact named above, Patrick Ward (Assistant Director), Jessica Artis, Isidro Gomez (Analyst in Charge), Courtney La Fountain, Maureen Luna-Long, Jessica Sandler, Jennifer Schwartz, Joseph Silvestri, and Shana Wallace made key contributions to this report 
Report 2:  1119 / P L  105-85 of November 18, 1997), which granted the Navy the authority to use a single contract for the procurement of the first four Virginia (SSN-774) class attack submarines  The 4 boats were scheduled to be procured during the 5-year period FY1998-FY2002 in annual quantities of 1-1-0-1-1  Congress provided the authority granted in Section 121(b) at least in part to reduce the combined procurement cost of the four submarines  Using MYP was not an option for the Virginia-class program at that time because the Navy had not even begun, let alone finished, construction of the first Virginia-class submarine, and consequently could not demonstrate that it had a stable design for the program  When Section 121(b) was enacted, there was no name for the contracting authority it provided  The term block buy contracting came into use later, when observers needed a term to refer to the kind of contracting authority that Congress authorized in Section 121(b)  As discussed in the next section, this can cause confusion, because the term block buy was already being used in discussions of DOD acquisition to refer to something else  What's the difference between block buy cont r acting and block buys? In discussions of defense procurement, the term "block buy" by itself (without "contracting" at the end) is sometimes used to refer to something quite different from block buy contracting—namely, the simple act of funding the procurement of more than one copy of an item in a single year, particularly when no more than one item of that kind might normally be funded in a single year  For example, when Congress funded the procurement of two aircraft carriers in FY1983, and another two in FY1988, these acts were each referred to as block buys, because aircraft carriers are normally procured one at a time, several years apart from one another  This alternate meaning of the term block buy predates by many years the emergence of the term block buy contracting  The term block buy is still used in this alternate manner, which can lead to confusion in discussions of defense procurement  For example, for FY2017, the Air Force requested funding for procuring five Evolved Expendable Launch Vehicles (EELVs) for its EELV Launch Services (ELS) program  At the same time, Navy officials sometimes refer to the use of block buy contracts for the first four Virginia-class submarines, and in the LCS program, as block buys, when they might be more specifically referred to as instances of block buy contract ing   How much can BBC save, compared with MYP? BBC can reduce the unit procurement costs of ships by amounts less than or perhaps comparable to those of MYP, if the authority granted for using BBC explicitly includes authority for making economic order quantity (EOQ) purchases of components  If the authority granted for using BBC does not explicitly include authority for making EOQ purchases, then the savings from BBC will be less  Potential savings under BBC might also be less than those under MYP if the BBC contract does not include a cancellation penalty, or includes one that is more limited than typically found in an MYP contract, because this might give the contractor less confidence than would be the case under an MYP contract that the future stream of business will materialize as planned, which in turn might reduce the amount of money the contractor invests to optimize its workforce and production facilities for producing the items to be procured under the contract  How frequently has BBC been used? Since its use at the start of the Virginia-class program, BBC has been used very rarely  The Navy did not use it again in a shipbuilding program until December 2010, when it awarded two block buy contracts, each covering 10 LCSs to be procured over the six-year period FY2010-FY2015, to the two LCS builders  (Each contract was later amended to include an 11 th ship in FY2016, making for a total of 22 ships under the two contracts ) A third example is the John Lewis (TAO-205) class oiler program, in which the Navy is using a block buy contract to procure the first six ships in the program  A fourth example, arguably, is the Air Force's KC-46 aerial refueling tanker program, which is employing a fixed price incentive fee (FPIF) development contract that includes a "back end" commitment to procure certain minimum numbers of KC-46s in certain fiscal years  When might BBC be suitable as an alternative to MYP? BBC might be particularly suitable as an alternative to MYP in cases where using a multiyear contract can reduce costs, but the program in question cannot meet all the statutory criteria needed to qualify for MYP  As shown in the case of the first four Virginia-class boats, this can occur at or near the start of a procurement program, when design stability has not been demonstrated through the production of at least a few of the items to be procured (or, for a shipbuilding program, at least one ship)  What i s the difference between an MYP or block buy contract and a contract with options? The military services sometimes use contracts with options to procure multiple copies of an item that are procured over a period of several years  The Navy, for example, used a contract with options to procure Lewis and Clark (TAKE-1) class dry cargo ships that were procured over a period of several years  A contract with options can be viewed as somewhat similar to an MYP or block buy contract in that a single contract is used to procure several years' worth of procurement of a given kind of item  There is, however, a key difference between an MYP or block buy contract and a contract with options: In a contract with options, the service is under no obligation to exercise any of the options, and a service can choose to not exercise an option without having to make a penalty payment to the contractor  In contrast, in an MYP or block buy contract, the service is under an obligation to continue implementing the contract beyond the first year, provided that Congress appropriates the necessary funds  If the service chooses to terminate an MYP or block buy contract, and does so as a termination for government convenience rather than as a termination for contractor default, then the contractor can, under the contract's termination for convenience clause, seek a payment from the government for cost incurred for work that is complete or in process at the time of termination, and may include the cost of some of the investments made in anticipation of the MYP or block buy contract being fully implemented  The contractor can do this even if the MYP or block buy contract does not elsewhere include a provision for a cancellation penalty  As a result of this key difference, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC  Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP  Should MYP and BBC in the future be used more frequently, less frequently, or about as frequently as they are currently used? Supporters of using MYP and BBC more frequently in the future might argue the following: Since MYP and BBC can reduce procurement costs, making greater use of MYP and BBC can help DOD get more value out of its available procurement funding  This can be particularly important if DOD's budget in real (i e , inflation-adjusted) terms remains flat or declines in coming years, as many observers anticipate  The risks of using MYP have been reduced by Section 811 of the FY2008 National Defense Authorization Act ( H R  4986 / P L  110-181 of January 28, 2008), which amended 10 U S C  2306b to strengthen the process for ensuring that programs proposed for MYP meet certain criteria (see " Permanent Statute Governing MYP ")  Since the value of MYP contracts equated to less than 8% of DOD's procurement budget in FY2012, compared to about 17% of DOD's procurement budget in FY2000, MYP likely could be used more frequently without exceeding past experience regarding the share of DOD's procurement budget accounted for by MYP contracts  Supporters of using MYP and BBC less frequently in the future, or at least no more frequently than now, might argue the following: Using MYP and BBC more frequently would further reduce Congress's and DOD's flexibility for making changes in DOD procurement programs in future years in response to changing strategic or budgetary circumstances  The risks of reducing flexibility in this regard are increased now because of uncertainties in the current strategic environment and because efforts to reduce federal budget deficits could include reducing DOD spending, which could lead to a reassessment of U S  defense strategy and associated DOD acquisition programs  Since actual savings from using MYP and BBC rather than annual contracting can be difficult to observe or verify, it is not clear that the financial benefits of using MYP or BBC more frequently in the future would be worth the resulting further reduction in Congress's and DOD's flexibility for making changes in procurement programs in future years in response to changing strategic or budgetary circumstances  Should Congress create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U S C  2306b) that governs the use of MYP? Supporters of creating a permanent statute to govern the use of BBC might argue the following: Such a statute could encourage greater use of BBC, and thereby increase savings in DOD procurement programs by giving BBC contracting a formal legal standing and by establishing a clear process for DOD program managers to use in assessing whether their programs might be considered suitable for BBC  Such a statute could make BBC more advantageous by including a provision that automatically grants EOQ authority to programs using BBC, as well as provisions establishing qualifying criteria and other conditions intended to reduce the risks of using BBC  Opponents of creating a permanent statute to govern the use of BBC might argue the following: A key advantage of BBC is that it is not governed by a permanent statute  The lack of such a statute gives DOD and Congress full flexibility in determining when and how to use BBC for programs that may not qualify for MYP, but for which a multiyear contract of some kind might produce substantial savings  Such a statute could encourage DOD program managers to pursue their programs using BBC rather than MYP  This could reduce discipline in DOD multiyear contracting if the qualifying criteria in the BBC statute are less demanding than the qualifying criteria in 10 U S C  2306b  Should the Coast Guard should begin making use of MYP and BBC? Although the Coast Guard is part of the Department of Homeland Security (DHS), the Coast Guard is a military service and a branch of the U S  Armed Forces at all times (14 U S C  1), and 10 U S C  2306b provides authority for using MYP not only to DOD, but also to the Coast Guard (and the National Aeronautics and Space Administration as well)  In addition, Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S  140 / P L  115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with EOQ purchases of components in its major acquisition programs  The authority is now codified at 14 U S C  1137  As discussed earlier in this report, the Navy in recent years has made extensive use of MYP and BBC in its ship and aircraft acquisition programs, reducing the collective costs of those programs, the Navy estimates, by billions of dollars  The Coast Guard, like the Navy, procures ships and aircraft  In contrast to the Navy, however, the Coast Guard has never used MYP or BBC in its ship or aircraft acquisition programs  Instead, the Coast has tended to use contracts with options  As discussed earlier, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC  CRS in recent years has testified and reported on the possibility of using BBC or MYP in Coast Guard ship acquisition programs, particularly the Coast Guard's 25-ship Offshore Patrol Cutter (OPC) program and the Coast Guard's three-ship polar icebreaker program  CRS estimates that using multiyear contracting rather than contracts with options for the entire 25-ship OPC program could reduce the cost of the OPC program by about $1 billion  The OPC program is the Coast Guard's top-priority acquisition program, and it represents a once-in-a-generation opportunity to reduce the acquisition cost of a Coast Guard acquisition program by an estimated $1 billion  CRS also estimates that using BBC for a three-ship polar icebreaker program could reduce the cost of that program by upwards of $150 million  The Coast Guard has expressed some interest in using BBC in the polar icebreaker program, but its baseline acquisition strategy for that program, like its current acquisition strategy for the OPC program, is to use a contract with options  As part of its FY2020 budget submission, the Department of Defense is proposing continued funding for implementing several MYP contracts initiated in fiscal years prior to FY2020, but it has not highlighted any requests for authority for new MYP or block buy contracts for major acquisition programs that would begin in FY2020  Appendix A  Text of 10 U S C  2306b The text of 10 U S C  2306b as of April 29, 2019, is as follows: §2306b  Multiyear contracts: acquisition of property (a) In General -To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following: (1) That the use of such a contract will result in significant savings of the total anticipated costs of carrying out the program through annual contracts  (2) That the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities  (3) That there is a reasonable expectation that throughout the contemplated contract period the head of the agency will request funding for the contract at the level required to avoid contract cancellation  (4) That there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive  (5) That the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic  (6) In the case of a purchase by the Department of Defense, that the use of such a contract will promote the national security of the United States  (7) In the case of a contract in an amount equal to or greater than $500,000,000, that the conditions required by subparagraphs (C) through (F) of subsection (i)(3) will be met, in accordance with the Secretary's certification and determination under such subsection, by such contract  (b) Regulations -(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting  (2)(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense  (B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy  (C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration  (c) Contract Cancellations -The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States  The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract  (d) Participation by Subcontractors, Vendors, and Suppliers -In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable- (1) multiyear contracting under subsection (a) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and (2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable  (e) Protection of Existing Authority -The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency- (1) to provide for competition in the production of items to be delivered under such a contract; or (2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule  (f) Cancellation or Termination for Insufficient Funding -In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated  The costs of cancellation or termination may be paid from- (1) appropriations originally available for the performance of the contract concerned; (2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or (3) funds appropriated for those payments  (g) Contract Cancellation Ceilings Exceeding $100,000,000 -(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification  (2) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A),1 give written notification to the congressional defense committees of- (A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned; (B) the extent to which costs of contract cancellation are not included in the budget for the contract; and (C) a financial risk assessment of not including budgeting for costs of contract cancellation  (h) Defense Acquisitions of Weapon Systems -In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section: (1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system  (2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates  (i) Defense Acquisitions Specifically Authorized by Law -(1) In the case of the Department of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may not be entered into under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act  (2) In submitting a request for a specific authorization by law to carry out a defense acquisition program using multiyear contract authority under this section, the Secretary of Defense shall include in the request the following: (A) A report containing preliminary findings of the agency head required in paragraphs (1) through (6) of subsection (a), together with the basis for such findings  (B) Confirmation that the preliminary findings of the agency head under subparagraph (A) were supported by a preliminary cost analysis performed by the Director of Cost Assessment and Program Evaluation  (3) A multiyear contract may not be entered into under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless the Secretary of Defense certifies in writing, not later than 30 days before entry into the contract, that each of the following conditions is satisfied: (A) The Secretary has determined that each of the requirements in paragraphs (1) through (6) of subsection (a) will be met by such contract and has provided the basis for such determination to the congressional defense committees  (B) The Secretary's determination under subparagraph (A) was made after completion of a cost analysis conducted on the basis of section 2334(e)(2) 1 of this title, and the analysis supports the determination  (C) The system being acquired pursuant to such contract has not been determined to have experienced cost growth in excess of the critical cost growth threshold pursuant to section 2433(d) of this title within 5 years prior to the date the Secretary anticipates such contract (or a contract for advance procurement entered into consistent with the authorization for such contract) will be awarded  (D) A sufficient number of end items of the system being acquired under such contract have been delivered at or within the most current estimates of the program acquisition unit cost or procurement unit cost for such system to determine that current estimates of such unit costs are realistic  (E) During the fiscal year in which such contract is to be awarded, sufficient funds will be available to perform the contract in such fiscal year, and the future-years defense program for such fiscal year will include the funding required to execute the program without cancellation  (F) The contract is a fixed price type contract  (G) The proposed multiyear contract provides for production at not less than minimum economic rates given the existing tooling and facilities  (4) If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program  Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions  (5)(A) The Secretary may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item  (B) The Secretary may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law)  (6) The Secretary may make the certification under paragraph (3) notwithstanding the fact that one or more of the conditions of such certification are not met, if the Secretary determines that, due to exceptional circumstances, proceeding with a multiyear contract under this section is in the best interest of the Department of Defense and the Secretary provides the basis for such determination with the certification  (7) The Secretary may not delegate the authority to make the certification under paragraph (3) or the determination under paragraph (6) to an official below the level of Under Secretary of Defense for Acquisition, Technology, and Logistics  (j) Defense Contract Options for Varying Quantities -The Secretary of Defense may instruct the Secretary of the military department concerned to incorporate into a proposed multiyear contract negotiated priced options for varying the quantities of end items to be procured over the period of the contract  (k) Multiyear Contract Defined -For the purposes of this section, a multiyear contract is a contract for the purchase of property for more than one, but not more than five, program years  Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made  (l) Various Additional Requirements With Respect to Multiyear Defense Contracts -(1)(A) The head of an agency may not initiate a contract described in subparagraph (B) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract  (B) Subparagraph (A) applies to the following contracts: (i) A multiyear contract- (I) that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract; or (II) that includes an unfunded contingent liability in excess of $20,000,000  (ii) Any contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year  (2) The head of an agency may not initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability  (3) The head of an agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided in an appropriations Act  (4) Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following: (A) The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total  (B) The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total  (C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total  (D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate  (5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension)  (6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees  (7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement  (8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard  (9) In this subsection: (A) The term "applicable procurement account" means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made  (B) The term "agency procurement total" means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate  (m) Increased Funding and Reprogramming Requests -Any request for increased funding for the procurement of a major system under a multiyear contract authorized under this section shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary under subsection (i)  Appendix B  Programs Approved for MYP in Annual DOD Appropriations Acts Since FY1990 This appendix presents, in two tables, programs approved for MYP in annual DOD appropriations acts since FY1990  Table B-1 covers FY2011 to the present, and Table B-2 covers FY1990 through FY2010 

ground_truth: The federal government shares liability risks with the commercial space launch industry for accidents that result in damages to third parties or federal property. This arrangement requires space launch companies to have a specific amount of insurance to cover these damages. The government is potentially liable for damages above that amount, up to a cap GAO estimated to be $3.1 billion in 2017, subject to appropriations in advance. CSLCA, enacted in 2015, directed the Department of Transportation, of which FAA is a part, to evaluate its MPL methodology and, if necessary, develop a plan to update that methodology. The act also included a provision requiring GAO to assess FAA's evaluation and any actions needed to update the methodology. This report discusses the extent to which (1) FAA's evaluation report addresses the requirements in CSLCA and (2) FAA has addressed previously identified weaknesses in the MPL methodology. GAO reviewed documents and interviewed FAA on its loss methodology evaluation and actions to address weaknesses. The Federal Aviation Administration's (FAA) report evaluating its maximum probable loss (MPL) methodology did not fully address the evaluation and consultation requirements specified by the U.S. Commercial Space Launch Competitiveness Act (CSLCA). Balance of Risk. CSLCA required FAA to include ensuring that the federal government is not exposed to greater indemnification costs and that launch companies are not required to purchase more insurance coverage than necessary as a result of FAA's MPL methodology. FAA said that it ensured this balance by improving its methodology, but it did not reevaluate its probability thresholds after revising its methodology. These thresholds are used to divide the risk of loss between launch companies and the government. Impact on Costs. The act required FAA to consider the costs to both the industry and the federal government of implementing an updated methodology. FAA's report discussed the impact on indirect costs, such as data collection, but did not discuss direct costs: insurance premiums for launch companies and indemnification liability for the federal government. Consultation. The act also required FAA to consult with the commercial space sector and insurance providers in evaluating its MPL methodology in accordance with the preceding requirements. While the agency consulted with some stakeholders, these consultations were limited in scope. FAA officials said they have not been able to take the actions needed to fully satisfy the mandated elements because of issues such as resource limitations and the lack of available data. However, by not resolving these issues, FAA lacks assurance that launch companies are not purchasing more insurance than needed or that the federal government is not being exposed to greater indemnification costs than expected. FAA has addressed two of three previously identified weaknesses in its MPL methodology but has not yet dealt with the remaining weakness. Specifically, the agency has revised its methodology for estimating the number of potential casualties for a launch and changed the factor it uses to derive estimated property damage from estimated casualties. However, FAA has not updated the amount used for the cost of an individual casualty. GAO recommended in a March 2017 report (GAO-17-366) that FAA update this amount. Not doing so could understate the amount of insurance launch companies are required to purchase, exposing the federal government to excess risk. GAO also determined that while FAA has two tools and methods it can use in making its MPL estimates, it does not have guidance on determining which are most appropriate for a given launch scenario. For example, one tool is more comprehensive but also labor intensive to use, while the other is inappropriate for certain launch scenarios and could result in misleading MPL amounts. Officials said they have begun to create such guidance but do not have an estimated completion date. Without such guidance, FAA cannot ensure that the most appropriate MPL methodology is used for each launch. FAA should fully address mandated requirements in evaluating its MPL—probability thresholds, direct costs, and stakeholder consultations— and establish an estimated completion date for developing guidance on tools and methods to use for specific launch scenarios. The Department of Transportation concurred with the recommendations, and provided technical comments.