REQUIREMENTS APPLICABLE TO MAJOR DEFENSE ACQUISITION PROGRAMS EXCEEDING BASELINE COSTS.

SEC. 802. REQUIREMENTS APPLICABLE TO MAJOR DEFENSE ACQUISITION PROGRAMS EXCEEDING BASELINE COSTS.(a) Specification of Significant Cost Growth Threshold and Critical Cost Growth Threshold.—Subsection (a) of section 2433 of title 10, United States Code, is amended by adding at the end the following new paragraphs:“(4) The term ‘significant cost growth threshold’ means the following:“(A) In the case of a major defense acquisition program, a percentage increase in the program acquisition unit cost for the program of—“(i) at least 15 percent over the program acquisition unit cost for the program as shown in the current Baseline Estimate for the program; or“(ii) at least 30 percent over the program acquisition unit cost for the program as shown in the original Baseline Estimate for the program.“(B) In the case of a major defense acquisition program that is a procurement program, a percentage increase in the procurement unit cost for the program of—“(i) at least 15 percent over the procurement unit cost for the program as shown in the current Baseline Estimate for the program; or119 STAT. 3368“(ii) at least 30 percent over the procurement unit cost for the program as shown in the original Baseline Estimate for the program.“(5) The term ‘critical cost growth threshold’ means the following:“(A) In the case of a major defense acquisition program, a percentage increase in the program acquisition unit cost for the program of—“(i) at least 25 percent over the program acquisition unit cost for the program as shown in the current Baseline Estimate for the program; or“(ii) at least 50 percent over the program acquisition unit cost for the program as shown in the original Baseline Estimate for the program.“(B) In the case of a major defense acquisition program that is a procurement program, a percentage increase in the procurement unit cost for the program of—“(i) at least 25 percent over the procurement unit cost for the program as shown in the current Baseline Estimate for the program; or“(ii) at least 50 percent over the procurement unit cost for the program as shown in the original Baseline Estimate for the program.”.(b) Incorporation of Thresholds Into Unit Cost Report and Related Requirements.—(1) Unit cost report requirements.—Subsection (c) of such section is amended by striking “cause to believe—” and all that follows through “reflected in the Baseline Estimate;” and inserting “cause to believe that the program acquisition unit cost for the program or the procurement unit cost for the program, as applicable, has increased by a percentage equal to or greater than the significant cost growth threshold for the program;”.(2) Determinations of service acquisition executives.—Subsection (d) of such section is amended—(A) in paragraph (1), by striking “by at least 15 percent, or by at least 25 percent, over the program acquisition unit cost for the program as shown in the Baseline Estimate” and inserting “by a percentage equal to or greater than the significant cost growth threshold, or the critical cost growth threshold, for the program”;(B) in paragraph (2), by striking “by at least 15 percent, or by at least 25 percent, over the procurement unit cost for the program as reflected in the Baseline Estimate” and inserting “by a percentage equal to or greater than the significant cost growth threshold, or the critical cost growth threshold, for the program”; and(C) in paragraph (3)—(i) by striking “by at least 15 percent, or by at least 25 percent, as determined under paragraph (1)” and inserting “by a percentage equal to or greater than the significant cost growth threshold or critical cost growth threshold”; and(ii) by striking “by at least 15 percent, or by at least 25 percent, as determined under paragraph (2)” and inserting “by a percentage equal to or greater 119 STAT. 3369 than the significant cost growth threshold or critical cost growth threshold”.(3) Service acquisition reports.—Subsection (e) of such section is amended—(A) in paragraph (1)(A), by striking “by at least 15 percent” and inserting “by a percentage equal to or greater than the significant cost growth threshold for the program”;(B) in paragraph (2)—(i) by striking “percentage increase in the”; and(ii) by striking “exceeds 25 percent” and inserting “increases by a percentage equal to or greater than the critical cost growth threshold for the program”; and(C) in paragraph (3)—(i) by striking “of at least 15 percent” both places it appears and inserting “by a percentage equal to or greater than the significant cost growth threshold”; and(ii) by striking “of at least 25 percent” both places it appears and inserting “by a percentage equal to or greater than the critical cost growth threshold”.(c) Additional Requirements Relating to Certain Unit Cost Increases.—Paragraph (2) of subsection (e) of such section is further amended—(1) by redesignating subparagraph (B) as subparagraph (C); and(2) by striking “the Secretary of Defense” and all that follows through “a written certification, stating that—” and inserting “the Secretary of Defense shall—“(A) carry out an assessment of—“(i) the projected cost of completing the program if current requirements are not modified;“(ii) the projected cost of completing the program based on reasonable modification of such requirements; and“(iii) the rough order of magnitude of the costs of any reasonable alternative system or capability;“(B) submit to Congress, before the end of the 60-day period beginning on the day the Selected Acquisition Report containing the information described in subsection (g) is required to be submitted under section 2432(f) of this title, a written certification (with a supporting explanation) stating that—”.(d) Original Baseline Estimate.—(1) In general.—Section 2435 of title 10, United States Code, is amended—(A) by redesignating subsection (d) as subsection (e); and(B) by inserting after subsection (c) the following new subsection (d):“(d) Original Baseline Estimate.—(1) In this chapter, the term ‘original Baseline Estimate’, with respect to a major defense acquisition program, means the baseline description established with respect to the program under subsection (a), without adjustment or revision (except as provided in paragraph (2)).“(2) An adjustment or revision of the original baseline description of a major defense acquisition program may be treated as the original Baseline Estimate for the program for purposes of 119 STAT. 3370 this chapter only if the percentage increase in the program acquisition unit cost or procurement unit cost under such adjustment or revision exceeds the critical cost growth threshold for the program under section 2433 of this title, as determined by the Secretary of the military department concerned under subsection (d) of such section.“(3) In the event of an adjustment or revision of the original baseline description of a major defense acquisition program, the Secretary of Defense shall include in the next Selected Acquisition Report to be submitted under section 2432 of this title after such adjustment or revision a notification to the congressional defense committees of such adjustment or revision, together with the reasons for such adjustment or revision.”.(2) Conforming amendment.—Section 2433(a) of such title, as amended by subsection (a) of this section, is further amended by adding at the end the following new paragraph:“(6) The term ‘original Baseline Estimate’ has the same meaning as provided in section 2435(d) of this title.”.(e) Effective Date.—(1) In general.—The amendments made by this section shall take effect on the date of the enactment of this Act, and shall apply with respect to any major defense acquisition program for which an original Baseline Estimate is first established before, on, or after that date.(2) Applicability to current major defense acquisition programs.—In the case of a major defense acquisition program for which the program acquisition unit cost or procurement unit cost, as applicable, exceeds the original Baseline Estimate for the program by more than 50 percent on the date of the enactment of this Act—(A) the current Baseline Estimate for the program as of such date of enactment is deemed to be the original Baseline Estimate for the program for purposes of section 2433 of title 10, United States Code (as amended by this section); and(B) each Selected Acquisition Report submitted on the program after the date of the enactment of this Act shall reflect each of the following:(i) The original Baseline Estimate, as first established for the program, without adjustment or revision.(ii) The Baseline Estimate for the program that is deemed to be the original Baseline Estimate for the program under subparagraph (A).(iii) The current original Baseline Estimate for the program as adjusted or revised, if at all, in accordance with subsection (d)(2) of section 2435 of title 10, United States Code (as added by subsection (d) of this section).