DOD bought $73B more in 2003

Department of Defense Selected Acquisition Reports

The Defense Department in 2003 spent $73 billion more on major programs than it did the previous year.

Defense officials this week released the department's annual selected acquisition reports (SARs) detailing the cost differences of major service programs. The report, submitted to Congress on Dec. 31 of last year but not publicly released until April 6 of this year, lists a net annual increase of $73 billion, or 5.8 percent, for the costs of programs that have been in previous reports.

SARs, which summarize the latest estimates of cost, schedule and status of major defense acquisition programs, are prepared annually in conjunction with the President's budget request. According to the department, major defense acquisition programs require an eventual total expenditure in fiscal 2000 dollars of more than $365 million for research, development, test and evaluation — or more than $2.19 billion in procurement. The undersecretary of Defense for acquisition technology and logistics can also designate other initiatives as major defense acquisition programs.

Information technology programs mentioned in this year's acquisition report include:

Force XXI Battle Command Brigade and Below (FBCB2), a vehicle-mounted and soon-to-be handheld device that depicts the locations of friendly forces on the battlefield as blue icons and enemy troops as red ones, reduced program costs by more than $1 billion.

Joint Tactical Radio System (JTRS), the software programmable radio that will be used by each of the services, increased program costs by more than $1.5 billion.

Army's Land Warrior, a wearable software and sensor suite for soldiers, saw its program costs increase by more than $9.5 billion, due largely to the service purchasing more than 40,000 more systems that previously estimated, and upgraded technology.

The Army's Global Combat Support System (GCCS), one of the programs mentioned in the report, was removed from the major defense acquisition program list because the program was restructured to take advantage of available off-the-shelf technology. SAR reporting for GCSS will resume when the restructured program reaches its second milestone in May 2005.

Another program added to the SAR reports is the Warfighter Information Network — Tactical (WIN-T), which won approval for its second milestone in August. The network is meant to provide high-speed communications and real-time voice, video and data services to soldiers in battle.

Removing the GCCS reduced the overall estimated program acquisition costs, but adding the WIN-T drove them back up by more than $10.3 billion. The total current estimate of program acquisition costs was more than $1.25 trillion.

DOD officials also prepare quarterly exception reports that are required for programs that experience cost increases of 15 percent or schedule delays of at least six months.

The $73 billion overall increase in acquisition included:

Higher program estimates — $31.3 billion.

Stretched development and procurement schedules — $14 billion.

Increase of planned quantities to be purchased — $8.4 billion.

Application of higher escalation indices — $7.4 billion.

Higher support costs related to increased quantities — $7.3 billion.

Additional engineering changes (hardware and software) — $4.6 billion.


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