Complexity in an Unexpected Place: Quantities in Selected Acquisition Reports
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Under this system, the main temptation for struggling programs would be to mischaracterize some of their core program cost growth as P3I, so as to avoid an N-M breach on the primary end item. By shedding planned improvements, the program could avoid having an N-M breach on either subprogram. This is not necessarily a bad thing. The oversight challenge would be to align operational test criteria with the phased capabilities to be produced. Unplanned Changes. It is not uncommon for systems already in pro- duction to incorporate signifcant design changes that were not foreseen by the planners and cost analysts. Reasons for this can include urgent oper- ational needs from the feld, correction of defects discovered postfelding, implementation of Value Engineering proposals, or response to changes in the adversary/threat environment. Clearly, requiring PMs to report things they are not yet planning to do is unreasonable. For unplanned changes, the challenge is how to report them as they are discovered and after the fact, inways that transparently describe the reasons for any corresponding cost and schedule changes. It would be ideal if SAR reporting of unplanned changes distinguished clearly between design changes driven by new performance requirements and changes required to meet the original program requirements. One possible way to accomplish this would be to add a new category— “Requirements”—to the list of SAR variance categories. Cost changes due to design changes required tomeet original programrequirements (as of the current APB) would be classifed as engineering variances. Cost changes due to new or modifed performance requirements would be classifed as requirements changes. For a program with a P3I subprogram, the base programand P3I subprogramwould be reported as separate cost variances using the new category, where appropriate. Unfortunately, PMs are unlikely to report these categories accurately. Not only are there strong incentives to categorize all cost growth as being due to new requirements, but genuine confusion often prevails within the program ofce about which requirements are part of the baseline and which have been added during the course of development and production. In theory, the Cost Analysis Requirements Document and other mandatory acquisition documents establish the baseline requirements assumed by the baseline cost estimate. In practice, this is not as clear, especially for programs that have been rebaselined at some point.
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Defense ARJ, January 2020, Vol. 27No. 1 : 28-59
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