FY 2011 Annual Report on Cost Assessment Activities

February 2012 
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FY 2011 Annual Report on Cost Assessment Activities

Director, Cost Assessment and Program Evaluation

February 2012

Preparation of this report/study cost the Department of Defense

a total of approximately $89,000 in Fiscal Years 2011–2012.
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Table of Contents

Foreword ..........................................................................................................................................1

Chapter I – Introduction ...................................................................................................................3

Chapter II – Overview of Cost Analysis in DoD..............................................................................5

Overview of Cost Analysis Organizations in DoD....................................................................5

Procedures for Cost Assessments at Milestone Reviews and Other Events..............................6

Cost Assessment Procedures for Major Defense Acquisition Programs.............................6

Cost Assessment Procedures for Major Automated Information Systems..........................7

Multi-Year Procurement......................................................................................................7

Confidence Levels in Cost Estimates..................................................................................7

Cost Estimates for Contract Negotiations...........................................................................8

Cost Analysis Requirements Description............................................................................8

DoD Cost Data Collection Systems...........................................................................................8

Summary....................................................................................................................................8

Chapter III – Compliance for Certifications and Reporting...........................................................11

Sections 2366a & 2366b Certification Requirements for Major Defense Acquisition

Programs..................................................................................................................................11

Sections 2366a/b Certification Status for Major Defense Acquisition Programs....................13

Cost and Software Data Reporting Compliance ......................................................................14

Chapter IV – DoD Cost Assessment Activities in FY 2011...........................................................17

DoD Milestone Review Cost Assessment Activities in FY 2011............................................17

Remarks about Specific Programs.....................................................................................22

DoD Critical Unit Cost (Nunn-McCurdy) Breaches in FY 2011 ............................................23

Other Cost Assessment Activities in FY 2011.........................................................................25

DoD Cost Analysis Symposium........................................................................................25

CAPE Congressional Testimony.......................................................................................25

Chapter V – The Look Forward .....................................................................................................27

Organizations and Human Resources......................................................................................27

Policies and Procedures...........................................................................................................27

Remarks about Specific Documents..................................................................................28

Cost Data Systems...................................................................................................................29

Tracking to Approved Estimate—PPBE and Acquisition .......................................................30

Cost Indexes.............................................................................................................................30

Cost Analysis Education and Training.....................................................................................31

Summary..................................................................................................................................31

Appendix A Cost Analysis Organizations in DoD...................................................................... A-1

Appendix B Major Defense Acquisition Program Unit Cost Reporting ......................................B-1
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Appendix C Major Automated Information System Reporting ...................................................C-1

Appendix D DoD Cost Data Collection Systems........................................................................ D-1

Appendix E Programs Receiving 2366a/b Certifications.............................................................E-1

Abbreviations ............................................................................................................................... F-1

FIGURES

1. Major Defense Acquisition Program Milestone A

Certification Requirements Concerning Cost Estimates........................................................12

2. Major Defense Acquisition Program Milestone B

Certification Requirements Concerning Cost Estimates........................................................12

TABLES

1. Major Acquisition Program Milestone Review Cost Assessment Activities in FY 2011......19

2. Nunn-McCurdy Critical Unit Cost Breaches in FY 2011 ......................................................24

3. Status of CAPE Policy and Procedure Documents ................................................................28

B-1. Nunn-McCurdy Breach Thresholds .....................................................................................B-1

E-1. Programs Receiving 2366a/b Certifications.........................................................................E-2

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CHAPTER I – INTRODUCTION

The office of CAPE provides independent analysis and advice to the Secretary of Defense and 

other senior officials on a wide range of issues concerning (1) cost estimation and cost analysis 

for major Department of Defense (DoD) acquisition programs (both Major Defense Acquisition 

Programs (MDAPs) and Major Automated Information System (MAIS) programs); (2) the DoD 

Planning, Programming, Budgeting, and Execution (PPBE) system; (3) resource decisions 

relating to military requirements; (4) analysis of alternatives to ensure that DoD considers the full 

range of program and non-materiel solutions; (5) evaluations of alternative military force 

structure, plans, and systems; and (6) the development of improved analytical skills and 

competencies within the cost assessment and program evaluation workforce of the Department.

This report is concerned with the first topic—cost estimation and cost analysis.

Section 101(b) of WSARA1 requires that the CAPE submit an annual report to the Congress on 

an assessment of:

(A) the extent to which each of the military departments and Defense 

Agencies have complied with policies, procedures, and guidance issued by the 

Director with regard to the preparation of cost estimates for major defense 

acquisition programs and major automated information systems;

(B) the overall quality of cost estimates prepared by each of the military 

departments and Defense Agencies for major defense acquisition programs and 

major automated information system programs; and

(C) any consistent differences in methodology or approach among the cost 

estimates prepared by the military departments, the Defense Agencies, and the 

Director.

One of the main goals of WSARA is to prevent substantial growth in the costs of MDAPs and 

MAIS programs. Toward that end, CAPE is responsible for ensuring that the cost estimation and 

cost analysis processes of the Department provide accurate information and realistic estimates of 

cost for these programs. This report describes the status of CAPE’s continuing efforts in support 

of this goal.

The organization of this report is as follows:

• Chapter II provides an overview of cost analysis in the Department. It describes the 

range of cost analysis organizations throughout the Department and explains the process 

for preparing cost estimates that support the defense acquisition process. Also, it 

identifies the main DoD cost data collection systems. 

 1 The annual report requirement of WSARA section 101(b) is codified in section 2334(f) of title 10, United 

States Code.
4

• Chapter III describes the status of the certifications (required by sections 2366a and 

2366b2 of title 10, United States Code) that MDAPs must obtain. For new programs, the 

certification requirements are intended to help establish realistic program definitions and 

cost and schedule targets. For programs already underway, the certification requirements 

are intended to put the applicable programs on a more stable footing and help preclude 

substantial additional cost growth. CAPE is committed to providing realistic and 

independent cost estimates to support decision-making and an informed certification 

process. This chapter also provides information about the degree of DoD compliance in 

meeting its own established requirements for cost data reporting for the MDAPs.

• Chapter IV reviews the Department’s FY 2011 cost estimation and cost analysis 

activities associated with MDAPs and MAIS programs. These cost activities include 

independent cost estimates, augmented by assessments of military department and 

Defense Agency cost estimates, which inform the DoD decision authorities at milestone 

reviews and at other important events. This chapter also summarizes the degree to which 

DoD cost estimation and assessment activities in FY 2011 complied with established

procedures, and discusses overall quality and any consistent differences in methodology 

among the cost estimates.

• Chapter V describes the status of several key ongoing initiatives that will ensure that the 

cost assessment and cost estimating functions for the Department will change as 

required to meet both the expanded roles and responsibilities established by WSARA 

and the needs of the Department. These initiatives address a wide range of issues and 

concerns, including organizations and human resources, cost estimating policy or 

procedure changes, cost data systems, and education and training opportunities for the 

DoD cost community. 

The CAPE long-term vision is to ensure that the DoD cost estimating community is 

provided the necessary guidance, authorities, and resources to ensure that program cost and 

schedule estimates are properly prepared and considered in the Department’s deliberations 

on all MDAPs and MAIS programs. The progress and challenges in achieving this vision

will continue to be described in future editions of this report.

 2 Sections 2366a/b, “Major defense acquisition programs: certification required before Milestone A/B 

approval.”
5

CHAPTER II – OVERVIEW OF COST ANALYSIS IN DOD

This chapter identifies the organizations, policies, procedures, and supporting data systems for 

cost estimation in place throughout DoD. Chapter V of this report provides a description of 

efforts to continue to strengthen these institutions to meet the requirements of WSARA.

This report assumes a modest familiarity with the defense acquisition process on the part of the 

reader. Readers in need of an introduction to the defense acquisition process are encouraged to 

refer to the Defense Acquisition Guidebook (see https://dag.dau.mil).

Overview of Cost Analysis Organizations in DoD

There are cost organizations throughout DoD—in OSD, at the headquarters of the DoD 

Components (military departments and Defense Agencies), and in Components’ field 

organizations. DoD has a wide range of cost organizations, with each group having a unique but 

complementary role in support of the defense acquisition process and the broader operations of 

the Department. 

At the OSD level, the CAPE Director is responsible for providing independent cost estimates, for 

both MDAPs and MAIS programs, when the Milestone Decision Authority (MDA) for a program 

is the Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L)). 

Also, the CAPE Director establishes policies for preparation and review of DoD Component cost 

estimates for other MDAPs and MAIS programs. 

Each military department headquarters has its own Service Cost Agency. These cost estimating 

agencies provide independent cost estimates when acquisition oversight is delegated to the 

Component and the MDA is the Component Head or Component Acquisition Executive. Also, 

the Agencies support other important cost analyses and provide policy guidance unique to each of 

the military departments. The Service Cost Agencies reside in the financial management 

organizations of their military departments, and are outside their military department’s acquisition 

chain of command.

There are also many field-level cost organizations. These organizations provide resources to 

support higher headquarters cost estimates and analyses, and they also provide assistance to 

support day-to-day operations of program offices and similar entities. Examples of such activities 

include evaluation of contractor proposals and should-cost analyses; support to competitive 

source selections; cost estimates in support of the programming and budgeting processes; and 

cost estimates used in specific analytic studies, such as systems engineering design trades or 

analyses of alternatives. Field-level elements of the cost community workforce typically possess 

important specialized cost and technical experience unique to specific system types or commodity 

groups (such as satellites, submarines, or tactical missiles).

Appendix A provides a brief description of each Service Cost Agency and field-level cost 

organization. 
6

Procedures for Cost Assessments at Milestone Reviews and Other Events

This section provides a description of DoD cost assessment procedures for MDAPs and MAIS 

programs, many of which have been updated or added after enactment of WSARA.

Cost Assessment Procedures for Major Defense Acquisition Programs

Public law (section 2334 of title 10, United States Code) requires that an independent estimate of 

the life cycle cost for an MDAP be prepared and presented to the MDA before the approval to 

proceed with Milestone A or B, or any decision to enter low-rate initial production or full-rate 

production.3 At these key milestone reviews, when the MDA is the USD(AT&L), the 

independent cost estimate is prepared by the Director, CAPE. When the MDA is delegated to the 

DoD Component, the independent cost estimate supporting a milestone decision is provided by 

the applicable Service Cost Agency or the Defense Agency equivalent, and subsequently 

reviewed by CAPE. In practice, independent cost estimates for a program are conducted by using 

a combination of historical precedence, results of extensive site visits, and the actual performance 

of that program to date. It is a careful, painstaking analysis that looks at all aspects of a program, 

including risks.

DoD policy and procedures for such independent cost estimates are prescribed in DoD Instruction 

5000.02, Operation of the Defense Acquisition System. After the enactment of WSARA, DoD 

updated these procedures in Directive-Type Memorandum (DTM) 09-027 – Implementation of 

the Weapon Systems Acquisition Reform Act of 2009.

One important element of current DoD policy for MDAPs requires the Component to establish a 

formal position on the estimated cost of the program and, furthermore, the Component must 

commit to fully fund the program consistent with the Component cost position. In practice, the 

Component typically establishes its cost position by performing a Component-wide corporate 

review, led by the Service Cost Agency or the Defense Agency equivalent, after consideration of 

a program office cost estimate and preparation of a Component independent cost estimate or 

assessment. 

WSARA also revised the procedures for the certification of an MDAP that experienced sufficient 

cost growth to trigger a critical unit cost (Nunn-McCurdy) breach (as defined in section 2433 of 

title 10, United States Code). Upon such a breach, the USD(AT&L) can certify that the program 

meets certain criteria (set forth in section 2433a of title 10, United States Code), in which case the 

program can continue, or it may be terminated. One element of the required certification is the 

reasonableness of the new estimates of program unit costs. The determination that new program 

unit costs are reasonable is made by the Director, CAPE, and certified by the USD(AT&L). As 

part of a standard business practice, CAPE prepares its own independent cost estimate that is used 

as a benchmark to support the assessment of reasonableness of the new unit cost estimates. Also, 

the CAPE independent cost estimate includes a quantitative assessment of the factors, both 

 3 Section 2344 also requires an independent cost estimate in advance of a recertification to restructure a 

MDAP under a Critical Nunn-McCurdy breach; a report for a critical breach on a MAIS; and at any other 

time considered appropriate by the Director, CAPE or upon the request of the Under Secretary of 

Defense for Acquisition, Technology and Logistics.
7

internal and external to the program, which led to the unit cost growth relative to the original 

baseline estimate. This assessment is provided to the Director of Performance Assessments and 

Root Cause Analyses (PARCA) to assist in the assessment of root causes of cost growth (e.g., 

failures in processes or decision-making). A review of the FY 2011 critical unit cost breaches and 

certifications, and supporting cost assessment activities, is provided in Chapter IV. Appendix B

provides a description of the procedures for unit cost reporting, and the criteria for a NunnMcCurdy unit cost breach.

Cost Assessment Procedures for Major Automated Information Systems

WSARA specifies that CAPE is responsible for preparing independent cost estimates for any 

MAIS program that has experienced a Critical Change (as defined in Appendix C) if the MDA is 

the USD(AT&L). CAPE may also prepare an independent cost estimate for a MAIS program at 

any other time considered appropriate by the CAPE Director, or upon the request of the 

USD(AT&L). In addition, for the MAIS programs for which acquisition oversight has been 

delegated to the Component, CAPE is responsible for establishing policies for preparation and 

review of Component cost estimates at milestone reviews, and for revised program cost estimates 

in support of certification of a MAIS program that has experienced a Critical Change.

The acquisition oversight of MAIS programs has also been changed by additional legislation. 

Until recently, a program that met the criteria for both a MDAP and a MAIS program had to meet 

the statutory and regulatory requirements for both types of programs. This was changed by 

section 817 of the National Defense Authorization Act for Fiscal Year 2010, Public Law 111-84. 

Today, a program that meets both criteria will be treated as either an MDAP or a MAIS program, 

but not both. As a general rule, a program that meets both criteria will be regarded as an MDAP if 

it requires the development of customized hardware, and it will be regarded as a MAIS program 

if it does not require the development of customized hardware. 

Multi-Year Procurement

Public law (section 2306b of title 10, United States Code) establishes several criteria that must be 

satisfied and certified by the Secretary of Defense prior to the award for a multi-year contract for 

a defense acquisition program. Some of these criteria (concerning substantial savings, realistic 

cost estimates, and availability of funding) must be supported by a CAPE cost analysis of the 

proposed multi-year procurement strategy and contract structure, which includes a comparison of 

the estimated costs of multi-year and annual contract awards. The analysis is based on actual cost 

data and experience to date, as well as an evaluation of cost realism in the contractor’s proposals.

Confidence Levels in Cost Estimates

WSARA, as originally enacted, required (1) a statement concerning the confidence level used in 

establishing a cost estimate of an MDAP or a MAIS program, (2) the rationale for selecting the 

specific confidence level used in the estimate, and (3) the justification for selecting a lower 

confidence level if it were less than 80 percent. The WSARA requirement for confidence levels in 

cost estimates was modified by section 811 of the National Defense Authorization Act for Fiscal 

Year 2011, Public Law 111-383. With this modification, there is no longer a requirement to 

justify the choice of a confidence level that is lower than 80 percent. Today, the requirement is to 
8

select a confidence level such that it provides a high degree of confidence that the program can be 

completed without the need for significant adjustment to program budgets. In general, CAPE 

satisfies this requirement by ensuring that all of its cost estimates are built on a product-oriented 

Work Breakdown Structure, based on historical actual cost information whenever possible, and 

most importantly, based on conservative assumptions that are consistent with actual demonstrated 

contractor and government performance for a series of acquisition programs in which the 

Department has been successful.

Cost Estimates for Contract Negotiations

Section 811 of the National Defense Authorization Act for Fiscal Year 2011, Public Law 111-

383, established that for MDAPs and MAIS programs, cost estimates developed for baselines and 

other program purposes are not to be used for the purpose of contract negotiations or obligation of 

funds. Section 811 also states that cost analyses and targets developed for the purpose of contract 

negotiations shall be based on the Government’s reasonable expectation of successful contractor 

performance in accordance with the contractor’s proposal and previous experience. As noted in 

Chapter V, proper policy and procedures are being developed—as part of the Department’s 

“Should-Cost” initiative—to guide the development of cost estimates for contract negotiations, 

and to ensure that independent cost estimates are not used as the basis for negotiations on 

individual contracts.

Cost Analysis Requirements Description

CAPE requires and provides guidance on the technical content and use of a document known as 

the Cost Analysis Requirements Description (CARD). The CARD provides information on the 

acquisition program that is used in preparation of both the Component cost positions and the 

CAPE independent cost estimates. The CARD describes the key technical, programmatic, and 

operational characteristics of an acquisition program. The foundation of a sound and credible cost 

estimate is a well-defined program, and the CARD is used to provide that foundation. 

DoD Cost Data Collection Systems

Systematic and institutionalized cost data collection and validation is critical to the preparation 

and support of credible cost estimates. DoD has three primary collection systems for cost data for 

MDAPs. The Cost and Software Data Reporting (CSDR) system serves as the primary source of 

acquisition cost data for major contracts and subcontracts associated with MDAPs. The Earned 

Value Management (EVM) Central Repository is used to collect and archive EVM reporting 

documents (such as Contract Performance Reports, Integrated Master Schedules, and Contract 

Funds Status Reports). The Visibility and Management of Operating and Support Costs 

(VAMOSC) systems collect historical operating and support (O&S) costs for fielded major 

weapon systems. Appendix D provides additional details concerning all of these data collection 

systems, and Chapter V discusses current CAPE efforts to improve them.

Summary

This chapter reviewed the cost assessment organizations, policies and procedures, and data 

collection systems in DoD. These provide the foundation on which the Department is building as 
9

it continues to implement WSARA and strengthen the cost assessment institutions. The initiatives 

that constitute this implementation and the vision of the changes that are being made are 

described in Chapter V of this report.
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CHAPTER III – COMPLIANCE FOR CERTIFICATIONS AND 

REPORTING

MDAPs are required by statute to obtain certain certifications. Some of these certifications must 

be supported by the appropriate independent cost estimate or assessment. This chapter describes 

the status of the Department’s activities to complete the certifications requiring independent cost 

estimates or assessments as of the end of FY 2011. In addition, it identifies the extent to which 

DoD is meeting its own regulatory CSDR requirements.

Sections 2366a & 2366b Certification Requirements for Major Defense 

Acquisition Programs

The National Defense Authorization Act for Fiscal Year 2006, Public Law 109-163 established a

requirement that the MDA certify that several criteria are met by any MDAP approaching 

Milestone B (permission to enter Engineering and Manufacturing Development (EMD)). To meet 

this requirement, the MDA must sign a certification memorandum for the record that affirms that 

the program meets the specified criteria (concerning program affordability, technological

maturity, and other considerations). This memorandum is then submitted to the congressional 

defense committees with the program’s next Selected Acquisition Report (SAR). The specific 

certification criteria were strengthened and expanded in subsequent legislation, with additional 

criteria concerning reasonable cost and schedule estimates and full funding. Moreover, the 

National Defense Authorization Act for Fiscal Year 2008, Public Law 110-181, established 

additional certification criteria for MDAPs approaching Milestone A.

4 Further, criteria for both 

sections 2366a and 2366b were added by section 801 of the National Defense Authorization Act 

for Fiscal Year 2012, Public Law 112-81. The current milestone certification criteria are codified 

in sections 2366a and 2366b of title 10, United States Code.

Some elements of the certification criteria for both Milestone A and Milestone B approval 

address the adequacy of program cost estimates. The current certification criteria concerning cost 

estimates for programs approaching Milestone A are provided in Figure 1. 

 4 The Milestone A decision is approval for a program to enter the Technology Development phase.
12

Figure 1:

Major Defense Acquisition Program Milestone A Certification 

Requirements Concerning Cost Estimates

Implementation of Section 2366a of Title 10, United States Code, as 

amended by the Weapon Systems Acquisition Reform Act of 2009 

(Public Law 111-23) and the National Defense Authorization Act 

for 2012 (Public Law 112-81)

(a)(6) that a cost estimate for the program has been submitted, with the 

concurrence of the Director of Cost Assessment and Program 

Evaluation, and that the level of resources required to develop, procure

and sustain the program is consistent with the priority level assigned by 

the Joint Requirements Oversight Council

The criteria concerning cost estimates and funding for programs approaching Milestone B are 

provided in Figure 2.

Figure 2:

Major Defense Acquisition Program Milestone B Certification 

Requirements Concerning Cost Estimates

Implementation of Section 2366b of Title 10, United States Code, as 

amended by the Weapon Systems Acquisition Reform Act of 2009 

(Public Law 111-23)

(a)(1)(C) reasonable cost and schedule estimates have been developed to 

execute, with the concurrence of the Director of Cost Assessment and 

Program Evaluation, the product development and production plan under 

the program; and

(D) funding is available to execute the product development and 

production plan under the program, through the period covered by the 

future-years defense program submitted during the fiscal year in which the 

certification is made, consistent with the estimates described in paragraph 

(C) for the program

The most recent changes to the certification criteria are highlighted in bold text. Since enactment 

of WSARA, the determination of the adequacy of program cost estimates is made by the MDA—
13

with the concurrence of the CAPE Director—after consideration of the appropriate independent 

cost estimate.

Further discussion of the most recent DoD policies and procedures associated with MDAP

milestone certifications is provided in DTM 09-027 – Implementation of the Weapon Systems 

Acquisition Reform Act 0f 2009 (see https://acc.dau.mil/wsara). A complete listing of the 

Milestone A certification requirements is provided in Attachment 2 of DTM 09-027 (see 

https://acc.dau.mil/dag_dtm09-027p3), and a listing of the Milestone B certification requirements 

is provided in Attachment 3 (see https://acc.dau.mil/dag_dtm09-027p4; also see section 2366a 

and 2366b amendments discussed above).

Before enactment of WSARA, the Department was up to date in meeting the section 2366a and 

2366b certification requirements. The certification process before WSARA applied to MDAPs as 

they proceeded through Milestone A or Milestone B; it did not apply retroactively to MDAPs that 

had passed either milestone before the sections 2366a/b certification requirements were 

established. WSARA, however, not only expanded the sections 2366a/b certification criteria, but 

also retroactively applied them to MDAPs that had yet to reach Milestone C, had passed their 

Milestone A or Milestone B prior to the enactment of the certification requirements, and were not 

certified in accordance with the appropriate Milestone A or Milestone B criteria. This change 

created a significant backlog of MDAPs that need to obtain the certifications required by sections

2366a/b. These retroactive certifications are referred to as “catch-up” certifications.

For the MDAPs that were already past Milestone C at the time of WSARA enactment, there was 

some degree of ambiguity about the requirements for retroactive certifications. Based on a request 

by DoD, the Congress included a clarification that 2366a/b certifications were not required for 

MDAPs already past Milestone C approval in section 813 of the National Defense Authorization 

Act for Fiscal Year 2011, Public Law 111-383.

Sections 2366a/b Certification Status for Major Defense Acquisition 

Programs 

By the end of FY 2011, there were a total of 30 MDAPs and pre-MDAPs that had been certified 

as required by sections 2366a/b. These 30 programs fall into two groups:

1. Twenty-two of these programs had been certified by the end of FY 2010.

5 The cost 

assessment activities that supported these certifications were discussed in the previous 

two CAPE Annual Reports on Cost Assessment Activities.

2. Another eight programs were certified during FY 2011. Two of these programs6 were 

supported by cost assessment activities conducted in the prior year (FY 2010), and these 

activities are described in last year’s Annual Report. The other six programs were 

supported by cost assessment activities conducted in the same fiscal year (FY 2011). The 

cost assessment activities for these six programs are identified in Chapter IV. 

 5 In addition, the C-27J transport aircraft was certified, but this program was subsequently removed from 

the MDAP list. 6 These two programs are WIN-T Increment 2 and the MQ-1C Gray Eagle.
14

A list of these programs is provided in Appendix E.

Cost and Software Data Reporting Compliance

As described in Chapter II and Appendix D, the CSDR system serves as the primary source of 

acquisition cost data for major contracts and subcontracts for the MDAPs. The Defense Cost and 

Resource Center (DCARC) within CAPE is the primary organization responsible for managing 

the CSDR system. The DCARC continually monitors each MDAP for compliance with CSDR

requirements where applicable. 

CSDR reporting is not required when (1) the program is pre-Milestone A, with no prototypes, or 

(2) the CSDR requirements have been waived by CAPE. Waivers for CSDR requirements may be 

granted when (1) the program is a procurement of a commercial system, or (2) the program is 

purchased under competitively awarded, firm fixed-price contracts, as long as competitive 

conditions continue to exist.

For the programs for which CSDR reporting is required and that are monitored for compliance, 

the compliance ratings established by the DCARC are based on the following five criteria:

• CSDR reporting plans have been submitted and approved.

• Approved reporting plans have been included in the appropriate request for proposal.

• Supporting contract data requirements (i.e., Contract Data Requirements Lists) for the 

various CSDR reports have been submitted.

• CSDR reports have been submitted on time consistently.

• CSDR reports have passed DCARC validation procedures consistently.

A program is rated fully compliant when all five criteria are met with no missing or incomplete 

items. A program is rated mostly compliant when all CSDR reporting requirements are placed on 

contract, but one or more criteria are not completely met. A program is rated not compliant when 

either (1) contracts were awarded that did not meet CSDR reporting requirements, or (2) any 

deficiency in meeting any of the five criteria has been open and unresolved for more than 3 

months past the required due date.

For FY 2011, approximately 97 percent of the programs that have CSDR reporting were fully or 

mostly compliant based on the criteria above; the remaining 3 percent (3 programs) are classified 

as not compliant. This is a slight improvement over FY 2010, where 93 percent of the programs 

were considered compliant or mostly compliant based on the same criteria. CAPE and DCARC 

are continuing to emphasize the importance of CSDR reporting compliance for achieving more 

accurate program life cycle cost estimates in the future.
15

The DCARC aggressively works with all the reporting programs to maintain compliance with 

reporting requirements and data quality. The DCARC web site (http://dcarc.pae.osd.mil) provides 

downloadable report formats and definitions, report examples, and sample language for inclusion 

in Requests for Proposals. The web site also offers on-line CSDR process tutorials. Also, the 

DCARC provides on-site training sessions for government and industry organizations several 

times per year, at sites throughout the nation. Other efforts to improve DoD cost data collection 

are described in Chapter V.
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CHAPTER IV – DOD COST ASSESSMENT ACTIVITIES IN FY 2011

This chapter provides a summary of the DoD cost estimates and cost analyses that were made in 

FY 2011 in support of milestone reviews and similar events, as well as unit cost (“NunnMcCurdy”) breaches, for MDAPs and MAIS programs. 

DoD Milestone Review Cost Assessment Activities in FY 2011

Table 1 provides a summary of the milestone or other review cost assessment activities in 

FY 2011. For each major acquisition program with a milestone review or other event, Table 1

identifies the program name and acronym, the responsible Component, the supporting cost 

estimate(s) or analyses presented to the MDA, and the review event being supported.

There were 17 milestone review or other events supported by cost assessment activities in 

FY 2011 (excluding several cost assessment activities associated with classified programs, which 

are not discussed in this unclassified report). All of the 17 events were supported by the 

appropriate cost estimates or analyses that complied with the requirements of WSARA and the 

established cost assessment procedures described in Chapter II. In particular, each of the 

milestone reviews was supported by (1) a Component cost position, and (2) the appropriate 

CAPE or Service Cost Agency independent cost estimate. As noted in Chapter III, six of these 

milestone reviews were also used to support a concurrent 2366a or 2366b certification.

The overall quality of the cost estimates prepared by each of the military departments continued 

to improve this year due to increased rigor. As noted in Chapter II, CAPE has instituted a

policy―currently in place for all MDAPs—requiring that a signed, dated service cost estimate 

and position must be delivered to CAPE prior to preparation of an independent cost estimate to 

support each major milestone review of the Defense Acquisition Board (DAB). Also, the military 

department’s financial and acquisition communities must provide a statement affirming their 

commitment to fully fund the program to the Service Cost Position during the preparation of the 

next Program Objective Memorandum (POM) and Future Years Defense Program (FYDP).

The quality of the cost estimates for MDAPs provided by the military departments also continued 

to improve this year due to better data. This is largely attributable to improved availability of 

actual cost information for DoD programs as a result of the long-term initiative to collect 

contractor cost and software data reports at the DCARC, and the long-term efforts of each of the 

military departments to improve the collection of actual operating and support cost information 

through the VAMOSC systems.

There were two notable pioneering cases (the Ohio Replacement and the Ground Combat Vehicle 

(GCV)) where CAPE prepared independent cost estimates early in the program development as 

part of the Materiel Solution Analysis phase leading to a Milestone A DAB review. The Materiel 

Solution Analysis phase presents the first substantial opportunity to influence design through 

trade-off studies that balance requirements, performance, technology choices, schedule, and cost 

considerations. The CAPE independent cost estimate is now an important element of this process. 
18

For MAIS programs, due to resource constraints, OSD CAPE involvement in cost estimates has 

been limited to those programs that experience a “Critical Change,” as defined in statute

(described in Appendix C), when the USD(AT&L) is the MDA. In addition, cost reporting for the 

MAIS programs currently is poor, and both quality and compliance need to be improved. There 

remains much work to be done to improve the management and preparation of cost estimates for 

the approximately 46 MAIS and pre-MAIS programs now in the DoD portfolio.

Similarly, OSD CAPE had only limited involvement in cost estimates prepared for major defense 

agency acquisition programs this year. For example, the Missile Defense Agency remains exempt 

from DoD acquisition regulations. Therefore, CAPE does not normally prepare independent cost 

estimates for the Missile Defense Agency’s major acquisition programs. However, in May 2011, 

CAPE was requested to prepare independent cost estimates for several program elements by the 

Missile Defense Agency. These estimates are in progress and will be completed in FY 2012/2013.
19

Table 1. Major Acquisition Program Milestone Review Cost Assessment Activities in FY 2011

Program Name Acronym Component Program Type Cost Assessment Activity Activity Date Supported Event Event Date

DDG 1000 Zumwalt Class Destroyer DDG 1000 Navy ACAT ID CAPE Independent Cost 

Estimate

6-Oct-10 Milestone B 8-Oct-10

Navy Service Cost Position (2366b certification)

Mission Planning Systems -

Increment IV

MPS Inc IV Air Force ACAT IAM CAPE Independent Cost 

Estimate

21-Oct-10 Critical Change Certification 23-Dec-10

Air Force Service Cost 

Position

H-1 Upgrades AH-1Z/

UH-1Y

Navy ACAT ID CAPE Independent Cost 

Estimate

2-Nov-10 Full-Rate Production Decision 28-Nov-10

Navy Service Cost Position

Ohio Class Replacement OR Navy pre-MDAP CAPE Independent Cost 

Estimate

12-Nov-10 Milestone A 10-Jan-11

Navy Service Cost Position (2366a certification) 

Joint Air-to-Surface Standoff Missile -

Extended Range

JASSM-ER Air Force ACAT ID CAPE Independent Cost 

Estimate

15-Dec-10 Milestone C 10-Jan-11

Air Force Service Cost 

Position

Military GPS User Equipment MGUE Air Force pre-MDAP CAPE Independent Cost 

Estimate

22-Dec-10 Milestone A Deferred

Air Force Service Cost 

Position
20

Table 1. Major Acquisition Program Milestone Review Cost Assessment Activities in FY 2011 (cont.)

Program Name Acronym Component Program Type Cost Assessment Activity Activity Date Supported Event Event Date

Global Positioning System IIIA Satellite GPS IIIA Air Force ACAT ID CAPE Independent Cost 

Estimate

29-Dec-10 Milestone C 31-Jan-11

Air Force Service Cost 

Position

H-60 Multi-Year Contracts* H-60 MYP Army/Navy ACAT ID/IC CAPE Independent Estimate 

of Savings for Multi-Year 

Procurement Contracts

14-Feb-11 Award of Multi-Year Procurement 

Contract for FY 2012-16

N/A

Expeditionary Combat Support System 

Increment 1

ECSS Inc 1 Air Force pre-MAIS CAPE Independent Cost 

Estimate

18-Feb-11 Critical Change Certification 22-Feb-11

Air Force Service Cost 

Position

KC-46 Tanker Modernization Program KC-46 Air Force ACAT ID CAPE Independent Cost 

Estimate

23-Feb-11 Milestone B 24-Feb-11

Air Force Service Cost 

Position

(2366b certification)

Joint Air-to-Surface Standoff Missile -

Extended Range

JASSM-ER Air Force ACAT ID Updated CAPE Independent 

Cost Estimate

25-Feb-11 Information paper to USD(AT&L) N/A

Air Force Service Cost 

Position

Littoral Combat Ship LCS Navy ACAT ID CAPE Independent Cost 

Estimate

1-Apr-11 Milestone B 7-Apr-11

Navy Service Cost Position (2366b certification)

* Applies to the Army UH-60M/HH-60M and the Navy MH-60R/MH-60S.
21

Table 1. Major Acquisition Program Milestone Review Cost Assessment Activities in FY 2011 (cont.)

Program Name Acronym Component Program Type Cost Assessment Activity Activity Date Supported Event Event Date

Expeditionary Combat Support 

System Increment 1

ECSS Inc 1 Air Force pre-MAIS CAPE Independent Cost 

Estimate

21-Apr-11 Milestone B Deferred

Air Force Service Cost Position

Joint Tactical Radio System Handheld, 

Manpack and Small Form Fit (SFF)

JTRS HMS Joint ACAT ID CAPE Independent Cost 

Estimate

7-Jun-11 Milestone C 17-Jun-11

Joint Cost Position

AIM-9X Block II AIM-9X II Navy/

Air Force

ACAT IC NCCA Independent Cost 

Estimate

23-Jun-11 Milestone C 24-Jun-11

Navy Service Cost Position

B-2 Defensive Management System B-2 DMS Air Force pre-MDAP CAPE Independent Cost 

Estimate

28-Jun-11 Milestone A 29-Aug-11

Air Force Service Cost Position (2366a certification)

Ground Combat Vehicle GCV Army pre-MDAP CAPE Independent Cost 

Estimate

27-Jul-11 Milestone A 17-Aug-11

Army Service Cost Position (2366a certification)

The term “ACAT ID” refers to an MDAP where the MDA is the USD(AT&L).

The term “ACAT IC” refers to an MDAP where acquisition oversight has been delegated to the Component.

The term “pre-MDAP” refers to a program activity that is anticipated to result in an MDAP upon formal program initiation into the defense acquisition management 

process (which usually occurs at Milestone B).

The term “ACAT IAM” refers to a MAIS program where the MDA is the USD(AT&L).

The term “ACAT IAC” refers to a MAIS program where acquisition oversight has been delegated to the Component.

The term “pre-MAIS” refers to a program activity that is anticipated to result in a MAIS program upon formal program initiation.
22

Finally, we observe no consistent differences in methodology or approach between the cost 

estimates prepared by the military departments and CAPE. Generally, the approach employed by 

the military departments is evolving to become more similar to that employed in CAPE: collect 

actual cost information from ongoing and historical programs; use that information to prepare 

cost and schedule forecasts for new programs or programs proceeding to the next milestone in the 

acquisition process; and review the actual cost information collected, as each individual program 

proceeds, to update and adjust the cost and schedule forecasts for the program to reflect actual 

experience. As the Department improves the systematic collection of actual cost information over 

time, we fully expect smaller differences between the cost and schedule forecasts of the military 

departments and CAPE in the future.

Remarks about Specific Programs

• The Ohio Replacement program completed a Milestone A DAB review for which CAPE 

prepared an independent cost estimate. The CAPE report acknowledged the challenge of 

preparing a complete cost estimate for the program at Milestone A. Key to the CAPE 

assessment was the effect of DoD inflation indices when applied to the program which 

starts procurement beyond the FYDP. Analysis showed that there would be a significant 

loss of procurement buying power when the DoD indices are used, and that cost growth 

due to additional inflation needed to be included in program cost estimates. The issue of 

the use of DoD versus program specific inflation indices is discussed further in 

Chapter V.

• CAPE prepared an independent cost estimate for the Joint Air-to-Surface Standoff 

Missile – Extended Range (JASSM-ER) program in support of the DAB Milestone C 

review held on January 10, 2011. However, after that review, subsequent budget 

deliberations made by the Department led to several significant changes to the annual 

procurement quantities and associated funding for the JASSM-ER program. In light of 

these programmatic changes, CAPE prepared an updated cost estimate on February 25, 

2011 that was provided in an information paper to the USD(AT&L).

• CAPE prepared an independent cost estimate for the Expeditionary Combat Support 

System (ECSS) Increment 1 on February 18, 2011, following Air Force declaration of a 

Critical Change to the program. The USD(AT&L) had also requested that CAPE prepare 

an independent cost estimate for the ECSS Milestone B DAB review, which had been 

scheduled for April 2011. After an assessment of program content and schedule 

execution, CAPE determined that the Critical Change independent cost estimate, without 

modification, remained valid and satisfied the requirement for the cost estimate to 

support the planned Milestone B DAB review.

• The KC-46 Tanker Modernization Program encompasses both the EMD contract for the 

aircraft and separate contracts for training system development, studies and analyses, 

testing, planning, and program support. The aircraft EMD contract has both fixed-price 

incentive (firm target) and firm fixed-price components with an overall contract ceiling 

price of $4.9 billion. The current Air Force Service Cost Position and the CAPE 

independent cost estimate projected that the cost for Boeing to complete the EMD 

contract would exceed the ceiling price by approximately $450 million. These 

independent estimates account for schedule and cost growth consistent with historically 
23

analogous programs and would cover potential contract changes that arise during the 

development process. The KC-46 program funding for EMD has been set consistent with 

the Air Force Service Cost Position. Although the Department is not liable for any 

contract cost overruns that exceed the EMD contract ceiling price, it could be exposed to 

additional cost risks, such as those identified in the Service Cost Position and the CAPE 

independent cost estimate, if it becomes necessary to revise the terms of the existing 

contract.

• CAPE prepared an independent cost estimate for the Littoral Combat Ship (LCS) 

program in support of the Milestone B DAB review held on April 1, 2011. CAPE did not 

concur with the draft LCS Acquisition Program Baseline (APB) or the Acquisition 

Decision Memorandum (ADM). These documents were subsequently approved by the 

MDA. The ADM directed the Navy to fund the program to the Service Cost Position, 

which CAPE argued would result in insufficient funding in FY 2016. This in turn would 

have an adverse impact on the average unit procurement cost and run the risk of requiring 

additional resources to complete the ship builds. Also, CAPE recommended that the LCS 

Mission Module program, which provides tailored warfighting capability to the LCS 

seaframes, should be established as distinct subprograms for each mission area in order to 

more readily assess unit cost metrics and track cost performance. 

• For the Milestone A DAB review of the GCV, the Army established affordability targets 

for both procurement and sustainment costs. For procurement, the CAPE independent 

cost estimate for the program exceeded the Army affordability target by more than 30 

percent. For sustainment, both the Army Service Cost Position and the CAPE 

independent cost estimate project costs more than double the Army affordability target.

DoD Critical Unit Cost (Nunn-McCurdy) Breaches in FY 2011

Table 2 provides a summary of the cost assessment activities supporting certification decisions 

associated with critical unit cost (Nunn-McCurdy) breaches in FY 2011. For each major 

acquisition program with a critical breach, Table 2 identifies the program name and acronym, the

responsible Component, the supporting cost estimate(s) or analyses presented to the 

USD(AT&L), and the date of the critical breach certification. Descriptions of unit cost 

(Nunn-McCurdy) reporting and the certification process associated with unit cost breaches are 

provided in Appendix B.

There were three critical breach certifications in FY 2011. All of them were supported by the 

appropriate cost estimates and analyses that complied with the requirements of WSARA and the 

established cost assessment procedures described in Chapter II. For the critical breach

certifications, the event was supported by (1) new estimates of program unit cost, as reflected in 

the December 2010 SAR,

7 and (2) the corresponding CAPE independent cost estimates for 

program unit cost. In all cases, the Department restructured the program and modified the 

program definition—including technical content, costs, and planned schedules—prior to the 

USD(AT&L) certification of the program to the Congress. 

 7 Each SAR was dated as of December 31, 2010; was submitted in February 2011; and supported the 

FY 2012 President’s Budget.
24

Table 2. Nunn-McCurdy Critical Unit Cost Breaches in FY 2011

Program Name Acronym Component Program Type Cost Assessment Activity Activity Date Supported Event Event Date

Excalibur N/A Army ACAT IC CAPE Independent Cost 

Estimate

7-Jan-11 Nunn-McCurdy Critical Breach 

Certification

10-Jan-11

December 2010 SAR

Chemical Demilitarization-Assembled 

Chemical Weapons Alternatives

ACWA DoD ACAT ID CAPE Independent Cost 

Estimate

27-May-11 Nunn-McCurdy Critical Breach 

Certification

14-Jun-11

December 2010 SAR

Global Hawk RQ-4 A/B Air Force ACAT ID CAPE Independent Cost 

Estimate

7-Jun-11 Nunn-McCurdy Critical Breach 

Certification

14-Jun-11

December 2010 SAR
25

Other Cost Assessment Activities in FY 2011

DoD Cost Analysis Symposium

The annual DoD Cost Analysis Symposium (DoDCAS), which is sponsored by CAPE, was held 

in February 2011 (see http://www.dodcas.org). The theme of the symposium was “Realizing 

Savings.” The plenary sessions and roundtable discussions were supported by several current and 

former senior DoD officials, who addressed the impact of DoD initiatives to realize cost savings 

and efficiency. Also, three concurrent track sessions were held that addressed:

• Realizing Savings in Acquisition: This track provided an in-depth look at the ongoing 

initiatives within DoD to reduce cost and control cost growth. Presentations discussed 

proposed methods for realizing savings and current efforts to reduce costs of defense 

programs.

• Space Systems: This consisted of a series of presentations from noted professionals on 

various aspects of the estimation of space systems including design, production, 

deployment, and operation, as well as presentations on the Space Industrial Base.

• Open Forum: We also offered an open forum track featuring presentations from cost 

professionals on a wide variety of topics of current interest to the cost community,

including An Introduction to Cost Estimating (geared to newer analysts), Education and 

Training, Risk Analysis, Treatment of Inflation, and DoD Costing Policies.

The papers presented at the symposium are archived at the DoDCAS web site. The symposium 

had 423 participants in 2011. 

CAPE Congressional Testimony

There were two instances of congressional testimony supported by CAPE in FY 2011. 

• The Principal Under Secretary of Defense for Acquisition, Technology and Logistics, and 

the CAPE Deputy Director for Cost Assessment provided joint testimony before the 

Senate Subcommittee on Federal Financial Management, Government Information, 

Federal Services, and International Security on March 29, 2011. The testimony concerned 

the Department’s initiatives to combating cost growth in its major weapon systems. A 

printed transcript of the testimony is provided at the Senate Committee on Homeland 

Security and Government Affairs web site (see 

http://hsgac.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=7

682325b-f637-47bb-a2ad-138782fbd7df#.TvI2JQZ91bY.email).

• The CAPE Director provided testimony on the F-35 Joint Strike Fighter program before 

the Senate Armed Services Committee on May 19, 2011. The testimony addressed the 

latest Joint Program Office and CAPE cost estimates, F-35 operating and support costs, 

and the projected strike-fighter shortfall. A transcript of the prepared statement is 

provided at the Committee web site (see

http://armed-services.senate.gov/testimony.cfm?wit_id=10224&id=5213).
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27

CHAPTER V – THE LOOK FORWARD

WSARA introduced major changes to the DoD cost estimation process. Since its enactment, 

CAPE has made significant progress in implementing these changes. This chapter discusses the 

status and future plans for several key initiatives that collectively will provide this 

implementation.

Organizations and Human Resources

WSARA requires the CAPE Director to lead the development of improved analytical skills and 

competencies within the cost assessment and program evaluation workforce of the Department. 

However, as noted in Chapter II, the cost estimating workforce is distributed among several 

organizations throughout the Department. Consequently, identifying and remedying issues with 

the size, education, experience and organization of the DoD cost estimating workforce requires an 

integrated and collaborative effort, with the CAPE Director as the leader and primary advocate 

for the entire DoD cost community. 

Efforts toward that end continued this year with activities to gather data on the workforce size, 

grade, and demographics, as well as experience and education levels. Beyond that, there is 

interest in measuring projected workload volume and content (i.e., what the cost assessment 

community is actually doing), to help assess whether scarce resources are properly focused on 

strategic priorities. CAPE will continue to work with the Service Cost Agencies and other 

appropriate organizations to gather pertinent data in the manner required for workforce 

management and consistent historical tracking. Workforce management will be more critical in 

the future as the cost community faces downsizing pressures along with the rest of the 

Department.

Policies and Procedures 

WSARA states that the CAPE Director—in consultation with other officials of OSD, the military 

departments, and Defense Agencies—shall prescribe policies and procedures for the conduct of 

cost estimation and cost analysis for the acquisition programs of the DoD. These policies and 

procedures have general applicability to all acquisition programs, although the implementation 

details refer specifically to MDAPs and MAIS programs. 

The guidance for cost assessment policies and procedures will be distributed through a series of 

formal issuances (directives, instructions, publications, manuals, and guides) and policy 

memoranda. The status of these documents is provided in Table 3.
28

Table 3. Status of CAPE Policy and Procedure Documents

Topic Document Type Status

DoDD 5105.xx Director, Cost Assessment 

and Program Evaluation (CAPE)

DoD Directive Draft completed and in formal 

coordination.

DoDM 5000.04-M Cost Analysis Guidance 

and Procedures

DoD Publication Draft in progress.

DoDM 5000.04-M-1 Cost and Software Data 

Reporting (CSDR) Manual

DoD Publication New Manual completed and 

approved.

Major Automated Information System 

Programs

Memo Draft completed. Reviewed and 

commented upon by services. Needs 

minor revisions.

Major Defense Acquisition Programs Memo Draft completed. Needs review and 

comment by services.

Nunn-McCurdy Procedures Memo Draft completed. Needs review and 

comment by services.

Operating & Support Cost-Estimating Guide Guidebook Draft in progress.

Confidence Levels in Cost Estimates Memo Work will start in FY 2012.

Multi-Year Procurement Memo Work will start in FY 2012.

Cost Research and Studies Memo Work will start in FY 2012.

Cost Analysis Training/Education Memo Work will start in FY 2012.

Remarks about Specific Documents

• DoD Directive 5105.xx will serve as the CAPE charter. The Directive defines overall 

CAPE responsibilities and authorities in the PPBE, acquisition, and requirements 

processes. The Directive will replace two earlier Directives: DoD Directive 5141.01, 

Director, Program Analysis and Evaluation (PA&E); and DoD Directive 5000.04, Cost 

Analysis Improvement Group (CAIG). 

• DoD Manual 5000.04-M, Cost Analysis Guidance and Procedures, addresses (1) the 

statutory requirement for independent cost estimates; (2) the review process for military 

department and Defense Agency cost estimates (when the MDA is the USD(AT&L)); 

(3) the use of standard life cycle cost terms and definitions; and (4) guidelines for the 

preparation of the CARD. 

• DoD Manual 5000.04-M-1, Cost and Software Data Reporting (CSDR) Manual, 

concerns cost data collection. This Manual is described in the next section of this chapter.

• There will be a policy memorandum that addresses the requirements for cost assessments 

concerning MAIS programs established by WSARA. 

• There will be a policy memorandum that provides guidance concerning Component cost 

estimates, and independent cost estimates, supporting milestone reviews of MDAPs.

• There will be a policy memorandum concerning unit cost (Nunn-McCurdy) breach 

reviews. This memorandum will articulate the CAPE process to establish an independent 

cost estimate, and a position on the reasonableness of new estimates of program unit 

costs, following a critical unit cost breach.

• There will be an update to the OSD Operating and Support (O&S) Cost-Estimating 

Guide. The intent will be to place more emphasis on the role of O&S cost estimates in 
29

support of key decisions in the defense acquisition process throughout the program life 

cycle. Moreover, the Guide will need to be expanded to address new ambitious legislative 

requirements concerning “Assessment, Management and Control of O&S Costs” 

contained in the National Defense Authorization Act for Fiscal Year 2012, Public 

Law 112-81. In part, the Act requires the Department to periodically update estimates of 

program O&S costs, and track and assess these estimates relative to prior estimates. The 

Act also calls for (1) better use of reliability and maintainability test and evaluation data 

to inform system design decisions and provide insights into sustainment cost estimates, 

and (2) new procedures to ensure that sustainment factors are fully considered at key 

management decision points, with emphasis on influencing system design in early 

development. 

• There will be two interim policy memoranda, which will address (1) confidence levels in 

cost estimates and (2) cost analysis for multi-year procurement. These memoranda will 

provide cost assessment procedures that implement the legislative requirements for these 

two areas that were discussed in Chapter II. In addition, CAPE will assist the 

USD(AT&L) in promulgating guidance concerning cost estimates for contract 

negotiations (also explained in Chapter II).

• There will be a policy memorandum concerning DoD cost research and studies. The plan 

is to establish an online database of cost research studies and projects that would span the 

entire DoD cost community and other sponsors of cost research, making the information 

about cost research and studies readily available.

• There will be a policy memorandum for cost analysis training and education. The current 

plan for training and education is described later in this chapter.

Cost Data Systems 

Systematic and institutionalized cost data collection throughout DoD is important to support 

credible cost estimates for current and future acquisition programs. As noted in Chapter II, DoD

has three main cost data reporting systems: (1) the CSDR system, used for acquisition cost data; 

(2) the EVM Central Repository, used for centralized electronic warehousing of EVM data 

reports; and (3) the VAMOSC data systems, used to collect O&S costs for the major fielded 

weapon systems. Additional information on these three data systems is provided in Appendix D.

This year, the DCARC continued to update and strengthen the procedures, report formats, and 

detailed implementation guidance for CSDR. A new version of DoDM 5000.04-M-1, Cost and 

Software Data Reporting (CSDR) Manual, has been approved and is effective as of November 4, 

2011. The Manual serves as the main implementation guidance for the CSDR system. The new 

Manual adds a new report (Contractor Business Data Report) that provides data on plant-wide 

overhead and other indirect costs. The Manual also establishes an improved system for the 

electronic submission of plans and reports through use of a DoD Common Access Card. In 

addition, new versions of the CSDR report formats and instructions to reporting contractors have 

been developed and are effective for any applicable request for proposal or other solicitation as of 

January 1, 2012.
30

The DCARC also continued to develop cost reporting requirements for high-dollar value 

contractor logistics support and similar defense system sustainment contracts. The DCARC has 

developed a new standard format for the reporting of actual sustainment contract costs. The use of 

this standard format is not mandatory at this time, but the format and other similar formats are 

being used on a trial basis for twelve programs. The DCARC will review the lessons learned from 

the trial observation period before the report format for sustainment costs is finalized and 

formally incorporated into the CSDR reporting system. 

Tracking to Approved Estimate—PPBE and Acquisition

Cost estimates made to support milestone reviews and other program reviews should be used as 

the basis for budgeting. However, as programs move beyond their acquisition milestone approval 

and proceed through successive iterations of the PPBE system, changes to programs are often 

necessary for a variety of reasons, including fiscal constraints. As part of the Department’s 

program and budget review process, CAPE—in conjunction with USD(AT&L)—reviewed each 

program with significant funding changes from the latest baseline or prior year’s President’s 

Budget to determine the source of the cost estimate supporting the revised program and to ensure 

that the program remained fully funded. This process of tracking to the approved estimate will be 

even more important in the future, as the Department faces significant funding constraints, 

resulting in more reductions to program quantities and annual procurement rates, and more 

pressures to budget programs at less than full funding.

Cost Indexes

WSARA requires that CAPE periodically assess and update the cost indexes used by the 

Department to ensure that such indexes have a sound basis and meet the Department’s needs for 

realistic cost estimation. The cost indexes used by DoD all rest on inflation forecasts made by the 

administration and issued by the Office of Management and Budget (OMB). The use of the OMB 

forecast is directed by OMB Circular No. A-11 (Preparation, Submission and Execution of the 

Budget). The USD(C) provides the DoD military departments and defense agencies with 

guidance in the DoD Financial Management Regulation (FMR) on how to prepare budget 

estimates that comply with OMB guidelines; this guidance includes instructions on the use of 

USD(C)-provided deflators that are calculated from the OMB inflation forecast.

In FY 2010 CAPE commissioned an independent study concerning cost indexes to provide a 

factual and analytical basis for responding to this provision of WSARA. Much of the study was 

focused on the treatment of inflation for the acquisition costs of MDAPs. The study found that in 

many cases, some DoD organizations—most notably, NAVSEA, NAVAIR, and many Air Force 

program offices—have developed specialized inflation projections for their programs. These 

projections are usually higher than the approved OMB/OSD deflators. However, if the programs 

experience inflation in line with the program-specific projections that is higher than the inflation 

reflected in the approved OMB/OSD deflators, then the programs will be systematically 

underfunded, leading to unnecessarily high real program cost growth. To prevent this cost 

growth, it would therefore be appropriate to permit the use of program-specific inflation 

projections, subject to oversight by CAPE and USD(C). However, the study also found that it is 

appropriate to use the OMB/OSD deflators to calculate program costs in constant-year dollars, for 
31

purposes of estimating program cost growth (including assessments of Nunn-McCurdy unit cost 

thresholds). This approach conforms to OMB’s preference that constant dollars reflect general 

purchasing power relative to the entire economy as a whole. Any program-specific inflation 

projection greater than the inflation inherent in the OMB/OSD deflators will not lead to measured 

cost growth as long as that projection is incorporated in the program baseline cost estimate. 

CAPE and USD(C) intend to update the FMR guidance on the treatment of inflation to be 

consistent with the recommendations of this study.

Cost Analysis Education and Training

CAPE is leading several initiatives to improve the education and training of the larger DoD 

civilian and military workforce in cost assessment in accordance with the assigned 

responsibilities and goals of WSARA. 

CAPE has supported the Navy, the Naval Postgraduate School (NPS), and the Air Force Institute 

of Technology to launch an accredited Master’s Degree Program in Cost Estimating and Analysis 

that began in April 2011. This two-year, distance-learning program will improve the education of 

the cost estimating community in both the DoD and in the defense industrial base. In addition, the 

Army continues to sponsor a one-month residence program, taught by the NPS business school, 

which provides a certificate in cost management for Army personnel. Also, CAPE continues to 

sponsor a one-week resource analysis course taught at the Institute for Defense Analyses. CAPE 

also sponsors and hosts the annual DoD Cost Analysis Symposium as discussed in Chapter IV.

CAPE is now forming a working group, with representatives from each of the Service Cost 

Agencies, to further address cost analysis education and training. This group will work with and 

advise the Defense Acquisition University to evaluate and improve the Defense Acquisition 

Workforce Improvement Act curriculum for certification in cost estimation. The working group 

also will take an inventory of what additional cost analysis training and education is provided by 

the military departments and their field organizations.

Summary

CAPE is continuing to develop and refine plans for the Department’s cost estimating and cost 

analysis functions. Implementation of these plans will ensure that the cost assessment 

organizations, workforce, policies and procedures, data collection systems, and training and 

education programs will be strengthened and improved as necessary to meet the expanded roles 

and responsibilities established by WSARA. CAPE will continue to work with the Department’s 

other cost and acquisition organizations to strengthen cost assessment so that better cost and 

schedule estimates are properly prepared and considered in the deliberations of all major 

acquisition programs. The progress on these initiatives will be reported in future editions of this 

report.
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A-1

APPENDIX A

Cost Analysis Organizations in DoD

Independent Cost Assessment Organizations

There are four key offices for the preparation of independent cost estimates. Within OSD, the 

office responsible for independent cost estimates reports to the CAPE Director. Within the 

military departments, these offices all report to their Assistant Secretary for Financial 

Management and Comptroller. The following paragraphs give a brief description and overview of 

these key offices responsible for independent cost estimates.

OSD – Deputy Director for Cost Assessment

The CAPE Deputy Director for Cost Assessment performs independent cost estimates for all 

MDAPs and MAIS programs when acquisition oversight has not been delegated to a military 

department or Defense Agency, and it reviews all cost estimates and cost analyses prepared by 

the military departments and Defense Agencies in connection with other MDAPs and MAIS 

programs. 

Army – Deputy Assistant Secretary of the Army for Cost and Economics 

The Deputy Assistant Secretary of the Army for Cost and Economics (DASA-CE) develops 

statutory independent cost estimates and Component cost analyses of weapon and information 

systems. DASA-CE conducts independent reviews and validation of business case analyses, 

economic analyses, and special cost studies of major weapon and information systems, force 

structure, and operating and support cost. DASA-CE serves as the Cost and Economics advisor 

for Army Study Advisory Groups. It chairs and oversees the Army Cost Review Board, develops 

and approves the Army Cost Position for all major acquisition programs, and conducts in-depth 

risk analyses of major Army programs and associated costs. 

Navy – Naval Center for Cost Analysis

The Naval Center for Cost Analysis (NCCA) prepares independent cost estimates for Department 

of the Navy MDAPs and MAIS programs. NCCA coordinates all Department of the Navy cost 

research. Its research includes improved methods for estimating specific cost elements for key 

development phases of acquisition programs. Examples of such cost elements include 

nonrecurring engineering, system integration, and government in-house support. 

Air Force – Air Force Cost Analysis Agency

The Air Force Cost Analysis Agency (AFCAA) supports the Air Force by providing independent 

cost analyses and special studies in support of weapon system programs. AFCAA also conducts 

and coordinates cost research to develop analytical tools, models, and databases.

Additional Field-Level Cost Organizations and Activities

There are several field-level cost organizations. These typically are located at a major product 

center such as the Naval Air Systems Command or the Air Force Electronic Systems Center. This 
A-2

section provides a summary of many of these important organizations; however, this list is not 

complete, and other organizations will need to be added to future editions of this annual report. 

Army

TACOM Life Cycle Management Command (LCMC)

The TACOM LCMC Cost and Systems Analysis organization is responsible for preparation of 

program office estimates, life cycle cost estimates, economic analyses, and combat effectiveness 

modeling that support the development of combat and tactical vehicles. It manages the tools and 

databases to support cost and systems analysis processes for the TACOM LCMC. The major cost 

analysis activities are life cycle cost estimating, cost reporting and EVM, O&S cost baselines, 

support to Analyses of Alternatives (AoAs), source selection evaluations, and cost analyses 

associated with multi-year procurement. 

Aviation and Missile Life Cycle Management Command (AMCOM)

The AMCOM Cost Analysis Division provides cost estimation and analysis support to Aviation, 

Missiles and Space Program Executive Offices and their Program/Project Offices. It manages the

AMCOM Cost Analysis Program and develops, updates, or obtains Cost Estimating 

Relationships, cost factors, and mathematical and computerized cost models for estimating 

purposes. It develops cost estimates to support AoAs, tradeoff studies, and force structure cost 

estimates. It develops and prepares life cycle cost estimates, and it conducts other related studies 

in support of weapon system cost analyses. It performs cost risk analyses and cost risk 

assessments to support weapon system program decisions. It also provides validation/review for 

cost estimates, economic analyses, and business case analyses.

CECOM Life Cycle Management Command (LCMC)

The Communications-Electronics Command (CECOM) Cost Analysis Division provides cost 

estimation and analysis support to CECOM Program Executive Offices and their Program/Project 

Offices. It provides several cost analysis services, including life cycle cost estimating, Earned 

Value Management, economic analysis, modeling and simulation, computer software and 

database support, and review and validation of business case analyses and other cost analyses.

Navy

Naval Air Systems Command (NAVAIR)

The Cost Department of the Naval Air Systems Command provides a wide variety of cost 

analysis products and services. Its primary focus is to provide a clear and comprehensive 

understanding of life cycle cost and attendant uncertainties to be used in developing, acquiring, 

and supporting affordable naval aviation systems. Besides life cycle cost estimates, the Cost 

Department provides source selection cost evaluation support, Earned Value Management 

analysis, cost research and databases, and various cost/benefit studies.

Naval Sea Systems Command (NAVSEA)

The Cost Engineering and Industrial Analysis Division of NAVSEA provides cost engineering 

and industrial base analysis for ships, ship-related combat systems, and weapons. It provides cost 
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estimates in support of the DAB review process, including AoA studies. It also participates in 

contract proposal evaluations and the source selection process for builders and suppliers of ships 

and weapon systems, and it conducts analysis and forecasting of labor, industrial, and technical 

trends as they affect the overall acquisition of ships, combat systems, weapons, and other 

equipment. 

Naval Surface Warfare Center

The Cost and Affordability Group resides within the Warfare Analysis Branch of the 

Requirements Analysis and Advanced Concepts Division of the Warfare Systems Department at 

the Naval Surface Warfare Center, Dahlgren Division. The Group produces cost estimates, costrisk assessments, and affordability analyses for Combat Systems. The Group also develops costestimating methodology in support of systems development and production, AoAs, and strategic 

planning. Particular areas of expertise include model development and maintenance, cost-research 

databases, technology assessments, life cycle cost estimates, budget and force-level analyses, 

performance-based cost models, product-oriented cost models, proposal evaluation, and source 

selection reviews.

Air Force

Electronic Systems Center (ESC)

The ESC Cost Estimating Division supports the ESC by providing independent analysis and 

verification of electronic systems’ cost to the Center’s leadership, with a focus on improving the 

overall quality, objectivity, and credibility of cost estimates. The Cost Division leads the Center’s 

modern, quick-reaction cost tools program and spearheads comprehensive cost training essential 

to cost analysts and program managers throughout the Center. 

Air Force Space Command, Space and Missile Center (SMC)

The SMC Cost Estimating Division supports cost estimates and cost analyses associated with Air 

Force Space Command and the Space and Missile Center’s mission of satellite acquisition, 

launch, and control.

Aeronautical Systems Center (ASC)

The ASC Cost and Economics Division is responsible for training, organizing, and equipping the 

cost analysis workforce at the ASC. This support is accomplished by leading estimates for 

program milestone decisions, managing the annual cost estimate process, supporting pre-award 

activities and source selections, and participating in policy discussions resulting in high-quality 

cost estimates and analysis across the Center. 

Other

National Reconnaissance Office (NRO) Cost Analysis Improvement Group

The NRO Cost Analysis Improvement Group provides independent cost estimating support to the 

NRO. This support covers milestone decisions, budget submissions, EVM, ad hoc program 

support, data collection, methods development, and model/tool development.
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APPENDIX B

Major Defense Acquisition Program Unit Cost Reporting

Since 1982, Congress has required DoD to track and report on the unit cost for most MDAPs. The 

requirement for unit cost reporting may be waived if the program has not entered EMD, a 

reasonable cost estimate has not been established for the program, and the system configuration is 

not well defined. The provisions of the law concerning unit cost reporting, commonly referred to 

as the Nunn-McCurdy provisions, are found in section 2433 of title 10, United States Code. A 

complete description of the Department’s implementation of these provisions is provided in the 

Defense Acquisition Guidebook (https://dag.dau.mil): see Chapter 2, Section 2.1.1 (“The 

Acquisition Program Baseline), Chapter 10, Section 10.9.1.3 (“APB Reporting”) and Section 

10.9.1.5 (“Unit Cost Reports”).

There are two unit cost metrics subject to reporting, Program Acquisition Unit Cost (PAUC) and 

Average Procurement Unit Cost (APUC). PAUC is defined as the total program acquisition cost 

(sum of research, development, test, and evaluation plus procurement plus military construction) 

divided by the total program quantity of fully configured end items. APUC is defined as the 

program procurement cost divided by the procurement quantity. Both unit cost metrics are 

tracked in constant dollars of a base year fixed for each program.

The most current cost estimate for each unit cost metric is tracked relative to two baseline cost 

estimates. The current baseline estimate refers to the most recent baseline approved by the MDA. 

The original baseline estimate refers to the baseline approved at program initiation (usually 

Milestone B). A program is declared to have a unit cost (Nunn-McCurdy) breach when the 

current unit cost estimate exceeds either baseline estimate by more than certain specified 

percentages. Specifically, as shown in Table B-1, a unit cost breach takes place when any of the

following conditions occurs, for either version of program unit cost (APUC or PAUC):

Table B-1. Nunn-McCurdy Breach Thresholds

“Significant” Breach “Critical” Breach

Current Baseline Estimate +15% +25%

Original Baseline Estimate +30% +50%

Note that there are two degrees associated with the severity of the unit cost breach. For significant 

unit cost breaches, the Department notifies the Congress of the breach within 45 days of the unit 

cost report and subsequently submits a program SAR with additional, breach-related information. 

For critical unit cost breaches, in addition to notifying the Congress and submitting the SAR, the 

Department is required to conduct a complete assessment of the program and determine if it 

should be terminated or continued. This assessment is led by USD(AT&L). The Department is 

required to terminate the program unless a letter signed by the USD(AT&L), providing the 

certification that the program currently meets certain criteria established in law (section 2433a of 
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title 10, United States Code), is submitted to the Congress within 60 days of the SAR submission. 

Among other things, USD(AT&L) must certify that the Director, CAPE has determined the new 

unit cost estimates are reasonable. A complete description of the critical unit cost breach 

certification process can be found in the Defense Acquisition Guidebook, Chapter 10, Section 

10.9.1.5.2.2.
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APPENDIX C

Major Automated Information System Reporting

Public law (section 2445c of title 10, United States Code) requires annual and quarterly reports 

from MAIS programs, pre-MAIS programs, and “any other investment in automated information 

system products or services that is expected to exceed the [MAIS] thresholds...” Details about the 

reporting requirements may be found in the Defense Acquisition Guidebook, Chapter 10, Section 

10.9.2. Briefly, a MAIS Quarterly Report is used internally within the Department, and a MAIS

Annual Report is provided to the congressional defense committees 45 days after submission of 

the President’s Budget. The formats of the quarterly report and annual report are similar. The 

reports provide a program description and the latest status regarding schedule, performance 

characteristics, development cost, and life cycle cost.

The reports compare the latest estimates of schedule, performance, and cost relative to the 

program baseline approved at the previous acquisition milestone. This comparison is used to 

determine if the program has a deviation known as either a Significant Change or Critical 

Change. A Significant Change occurs when a program has a schedule delay of more than six

months, but less than one year; there is a significant, adverse change in the expected performance 

of the system; or the estimated development cost or life cycle cost has increased by at least 15 

percent but less than 25 percent. For a program with a Significant Change, the Department is 

required to notify the congressional defense committees of the change within 45 days after 

receiving the report that identified the deviation. A Critical Change occurs when a program has a 

schedule delay of one year or more or fails to achieve a full deployment decision within five

years of when funds for the program were first obligated; there is a change in expected 

performance that will undermine the ability of the system to perform its intended functions; or the 

estimated development cost or life cycle cost has increased by 25 percent or more. For a program 

with a Critical Change, the Department must conduct an evaluation of the program, and then 

submit a report and a formal certification to the congressional defense committees within 60 days 

after receiving the report that identified the deviation. 
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APPENDIX D

DoD Cost Data Collection Systems

Three primary data collection systems are used by DoD as the major sources of cost data for 

major acquisition programs. The CSDR system serves as the primary source of acquisition cost 

data for major contracts and subcontracts associated with MDAPs. The EVM Central Repository 

is used to collect and archive EVM reporting documents (such as Contract Performance Reports, 

Integrated Master Schedules, and Contract Funds Status Reports). The VAMOSC systems collect 

historical O&S costs for major weapon systems.

Cost and Software Data Reporting System

The CSDR system is the primary means that DoD uses to collect actual cost and related data on 

major defense contracts. Program managers support the CSDR system by reporting data on 

contractor development and production costs and resource usage incurred in performing DoD 

programs. Its two principal components are contractor cost data reporting (CCDR) and software 

resources data reporting (SRDR).

CCDR is the primary means within DoD to systematically collect data on the development and 

production costs incurred by contractors. DoD Instruction 5000.02, Operation of the Defense 

Acquisition System, establishes the CCDR requirements for major contracts and subcontracts 

(regardless of contract type) associated with MDAPs.

The SRDR system collects software metrics data to supplement the CCDR cost data to provide a 

better understanding and improved estimating of software-intensive programs. DoD Instruction 

5000.02 establishes SRDR requirements for major contracts and subcontracts (regardless of 

contract type) associated with MDAPs. Data collected from applicable contracts include type and 

size of the software application(s), schedule, and labor resources needed for the software 

development. 

Detailed procedures and other implementation guidance for both CSDR systems are found in 

DoDM 5000.04-M-1, Cost and Software Data Reporting (CSDR) Manual. This manual (as well 

as downloadable report formats and definitions, specific report examples, and other related 

information) can be found at the DCARC web site (http://dcarc.pae.osd.mil). The DCARC is the 

OSD office responsible for administering the CSDR system. Access to CSDR data is provided by 

the DCARC to DoD government cost analysts who are registered users. 

Earned Value Management Central Repository

In collaboration with the staff of USD(AT&L), the DCARC hosts the EVM Central Repository. 

The central repository supports the centralized reporting, collection, archiving, and distribution of 

key EVM data reports (such as Contract Performance Reports, Integrated Master Schedules, and 

Contract Funds Status Reports) for MDAPs and MAIS programs. Information about the central 

repository is available at the DCARC web site (http://dcarc.pae.osd.mil/EVMCR/Index.aspx). 

More general information about EVM reporting is available in the Defense Acquisition 
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Guidebook (https://dag.dau.mil), Chapter 11, Section 11.3.1, and at the DoD Earned Value 

Management web site (http://www.acq.osd.mil/evm).

The central repository supports complete, timely, and secure transfer of electronic data from the 

contractor to the repository; secure and controlled warehousing of the data; and controlled, 

timely, and secure access to the data by authorized users. The main purpose of these data is to 

provide a consistent and timely situational awareness of acquisition execution. 

Both the CCDR and the EVM reporting use a common, product-oriented taxonomy known as a 

Work Breakdown Structure (WBS) that follows the guidelines of the DoD Standard Practice, 

Work Breakdown Structures for Defense Materiel Items (MIL-STD-881C). The WBS is a 

hierarchy of product-oriented elements (hardware, deliverable software, data, and services) that 

collectively constitute the system to be developed or produced. Further information about the use 

of the WBS in cost reporting and cost estimating can be found in the Defense Acquisition 

Guidebook, Chapter 3, Section 3.7.1.1. The most recent WBS standard (dated October 3, 2011) is 

available at http://dcarc.pae.osd.mil/Files/Policy/MIL-STD-881C.pdf.

Visibility and Management of Operating and Support Costs Data System

DoD requires that each military department maintain a system that collects historical data on the 

O&S costs for major fielded weapon systems. The Deputy Director for Cost Assessment provides 

policy guidance on this requirement, known as the VAMOSC program; specifies the common 

format in which the data are to be reported; and monitors its implementation by each of the 

military departments. The National Defense Authorization Act for Fiscal Year 2012, Public 

Law 112-81, contains a provision that calls for strengthened CAPE oversight of the VAMOSC 

program.

Each department has its own unique VAMOSC data system that tracks actual O&S cost 

experience for major weapon systems. The data can be displayed by time frame, at various levels 

of detail, and by functional elements of cost (such as depot maintenance, fuel, consumable items, 

and so forth). Each VAMOSC system provides not only cost data, but related non-cost data (such 

as system quantities and operating tempo) as well. VAMOSC data can be used to analyze trends 

in O&S cost experience for each major system, as well as to identify and assess major cost 

drivers. VAMOSC data systems are managed by each military department as follows: 

• The Navy’s VAMOSC management information system collects and reports U.S. Navy 

and U.S. Marine Corps historical weapon system O&S costs. VAMOSC provides the 

direct O&S costs of weapon systems; some indirect costs (e.g., ship depot overhead); and 

related non-cost information such as flying hour metrics, steaming hours, age of aircraft, 

personnel counts for ships, etc. It is managed by the Naval Center for Cost Analysis.

• The Army’s VAMOSC system, called the Operating and Support Management 

Information System (OSMIS), tracks operating and support information for over 1,400 

major Army weapon/materiel systems and is maintained by the Office of the Deputy 

Assistant Secretary of the Army for Cost and Economics. OSMIS-tracked systems 

include combat vehicles, tactical vehicles, artillery systems, aircraft, electronic systems, 

and miscellaneous engineering systems. 
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• The Air Force’s VAMOSC system, called the Air Force Total Ownership Cost system, is 

managed by the AFCAA. It provides O&S cost information on all Air Force aircraft, 

space systems, and missiles. The O&S cost information collected includes unit-level 

manpower, fuel, depot maintenance overhaul costs, depot-level reparable costs, and 

condemnation costs of major U.S. Air Force aircraft and engines. 
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APPENDIX E

Programs Receiving 2366a/b Certifications

Chapter III explained that by the end of FY 2011, there were a total of 30 MDAPs and 

pre-MDAPs that had been certified as required by sections 2366a/b of title 10, United States Code

(see page 13). A listing of these 30 programs (as of September 30, 2011) is provided in Table 

E-1.
Table E-1. Programs Receiving 2366a/b Certifications

Programs certified by the end of FY 2010 (22 total)

Program Name Acronym

E-2D Advanced Hawkeye E-2D AHE

Joint Precision Approach and Landing System Increment 1A JPALS Inc 1A

Space Fence N/A

Airborne and Maritime/Fixed Station Joint Tactical Radio System AMF JTRS

B-2 Extremely High Frequency SATCOM Capability B-2 EHF

MQ-4C Unmanned Aircraft System Broad Area Maritime Surveillance MQ-4C BAMS

Global Positioning System IIIA Satellite GPS IIIA

Nett Warrior (formerly Ground Soldier Ensemble) N/A

Joint High Speed Vessel JHSV

LHA 6 America Class Amphibious Assault Ship LHA 6

Ship to Shore Connector SSC

Guided Multiple Launch Rocket System/Alternative Warhead GMLRS AW

Integrated Air and Missile Defense IAMD

Standard Missile – 6 SM-6

HC/MC-130 Recapitalization Program HC/MC-130

P-8A Poseidon P-8A

Small Diameter Bomb Increment II SDB II

Wideband Global Satellite Communications (SATCOM) WGS

Advanced Threat Infrared Countermeasures/Common Missile Warning System ATIRCM/CMWS

Virginia Class Submarine SSN 774

C-130 Avionics Modernization Program C-130 AMP

Air and Missile Defense Radar AMDR

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Table E-1. Programs Receiving 2366a/b Certifications (cont.)

Programs certified during FY 2011 (8 total)

Program Name Acronym

KC-46 Tanker Modernization Program KC-46

B-2 Defensive Management System B-2 DMS

DDG 1000 Zumwalt Class Destroyer DDG 1000

Littoral Combat Ship LCS

MQ-1C Unmanned Aircraft System Gray Eagle MQ-1C Gray Eagle

Ground Combat Vehicle GCV

Warfighter Information Network - Tactical Increment 2 WIN-T Inc 2

Ohio Class Replacement N/A

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F-1

ABBREVIATIONS

ACAT Acquisition Category

ACWA Assembled Chemical Weapons Alternatives

ADM Acquisition Decision Memorandum

AFCAA Air Force Cost Analysis Agency

AIM Air Intercept Missile

AMCOM Aviation and Missile Life Cycle Management Command

AoA Analysis of Alternatives

APB Acquisition Program Baseline

APUC Average Procurement Unit Cost

ASC Aeronautical Systems Center

CAIG Cost Analysis Improvement Group

CAPE Cost Assessment and Program Evaluation

CARD Cost Analysis Requirements Description

CCDR Contractor Cost Data Reporting

CECOM Communications-Electronics Command

CSDR Cost and Software Data Reporting

DAB Defense Acquisition Board

DASA-CE Deputy Assistant Secretary of the Army for Cost and Economics

DCARC Defense Cost and Resource Center

DMS Defensive Management System

DoD Department of Defense

DoDCAS Department of Defense Cost Analysis Symposium

DTM Directive-Type Memorandum

ECSS Expeditionary Combat Support System

EMD Engineering and Manufacturing Development

ESC Electronic Systems Center

EVM Earned Value Management

FMR Financial Management Regulation

FYDP Future Years Defense Program

GCV Ground Combat Vehicle

GPS Global Positioning System

HMS Handhold, Manpack, and Small Form Fit

JASSM-ER Joint Air-to-Surface Standoff Missile – Extended Range

JTRS Joint Tactical Radio System

LCMC Life Cycle Management Command

LCS Littoral Combat Ship

MAIS Major Automated Information System

MDA Milestone Decision Authority

MDAP Major Defense Acquisition Program
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MPS Mission Planning System

MYP Multi-Year Procurement

NAVAIR Naval Air Systems Command

NAVSEA Naval Sea Systems Command

NCCA Naval Center for Cost Analysis

NPS Naval Postgraduate School

NRO National Reconnaissance Office

O&S Operating and Support

OMB Office of Management and Budget

OR Ohio Class Replacement

OSD Office of the Secretary of Defense

OSMIS Operating and Support Management Information System

PA&E Program Analysis and Evaluation

PARCA Performance Assessments and Root Cause Analyses

PAUC Program Acquisition Unit Cost

POM Program Objective Memorandum

PPBE Planning, Programming, Budgeting and Execution

SAR Selected Acquisition Report

SMC Space and Missile Center

SRDR Software Resources Data Reporting

TBD To Be Determined

USD(AT&L) Under Secretary of Defense for Acquisition, Technology and Logistics

USD(C) Under Secretary of Defense (Comptroller)

VAMOSC Visibility and Management of Operating and Support Costs

WBS Work Breakdown Structure

WIN-T Warfighter Information Network - Tactical

WSARA Weapon Systems Acquisition Reform Act