Crazy money of Uncle Sam

Major U.S. Acquisition Programs Grow 3%


by Jim Mathews


04/13/00 02:07:41 PM U.S. EDT

Total costs for the Pentagon’s major systems acquisitions programs are up $21.7 billion, or 3%, through the end of December – the most recent figures available – mostly due to higher program estimates, along with engineering changes, stretched-out procurement schedules and simply buying higher quantities.

The figures reported in the December Selected Acquisition Reports (SARs) also got a boost from the inclusion of $5.5 billion in initial procurement and facilities construction costs for the National Missile Defense program. Previous SARs limited the NMD reports to development costs.

Excluding those newly added figures, NMD program costs are up $3.15 billion, or nearly 36%, from original program baselines, the Defense Dept. says, citing “additional weapons for flight tests and additional production facility capability to handle increased missile quantity requirements.” Engineering and test costs also grew, and there was also $407 million in cost growth because “government furnished assets were less mature than the Lead System Integrator contractor had anticipated,” the Defense Dept. says.

Once the new procurement and construction costs are added in – which includes buying 80 additional deployed missiles – total NMD costs are now estimated at $20.2 billion.

In other increases, the Navy’s 72 additional Sikorsky CH-60S utility helicopters helped boost CH-60S program costs $1.15 billion, or 36% from baseline, though the higher production rate helped shave $235.8 million from unit costs. A 56-helo increase in the Navy’s SH-60R multi-mission program added $860.2 million, while the Navy saved $1.63 billion from cutting 65 aircraft from its T45TS fighter trainer system program. Higher labor rates and material costs stung the V-22 Osprey tiltrotor aircraft program to the tune of $1.89 billion. And the U.S. Air Force’s Airborne Laser program costs have jumped $831.6 million, or nearly 31%, thanks in part to a two-year delay in the lethality demonstration to Fiscal 2005. USAF officials are still working out how that will delay the start of engineering and manufacturing development (EMD).


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