10 U.S.C. § 4375 — Breach of significant cost growth thresh-

Page 2752 TITLE 10—ARMED FORCES § 4375 § 4375. Breach of significant cost growth thresh- old or critical cost growth threshold: re- quired action (a) BREACH OF SIGNIFICANT COST GROWTH THRESHOLD; SUBMISSION OF A SELECTED ACQUISI- TION REPORT.— (1) GENERAL RULE.—Except as provided in paragraph (2), whenever the Secretary con- cerned determines under section 4374 of this title that the program acquisition unit cost or the procurement unit cost of a major defense acquisition program or designated major sub- program has increased by a percentage equal to or greater than the significant cost growth threshold for the program or subprogram, a Selected Acquisition Report shall be sub- mitted to Congress for the first fiscal-year quarter ending on or after the date of the de- termination or for the fiscal-year quarter which immediately precedes the first fiscal- year quarter ending on or after that date. The report shall include the information described in section 4351(e) of this title and shall be sub- mitted in accordance with section 4351(f) of this title. (2) Whenever the Secretary makes a deter- mination referred to in paragraph (1) in the case of a major defense acquisition program or designated major subprogram during the sec- ond quarter of a fiscal year and before the date on which the President transmits the budget for the following fiscal year to Congress pursu- ant to section 1105 of title 31, the Secretary is not required to file a Selected Acquisition Re- port under paragraph (1) but shall include the information described in subsection (d) regard- ing that program or subprogram in the com- prehensive annual Selected Acquisition Report submitted in that quarter. (b) BREACH OF CRITICAL COST GROWTH THRESH- OLD.—If the program acquisition unit cost or procurement unit cost of a major defense acqui- sition program or designated major subprogram (as determined by the Secretary under section 4374 of this title) increases by a percentage equal to or greater than the critical cost growth threshold for the program or subprogram, the Secretary of Defense shall take actions con- sistent with the requirements of sections 4376 and 4377 of this title. (c) PROHIBITION ON OBLIGATION OF FUNDS FOR CERTAIN PURPOSES WHEN REQUIRED ACTION NOT TAKEN.— (1) PROHIBITION.—If a determination of an in- crease by a percentage equal to or greater than the significant cost growth threshold is made by the Secretary under section 4374 of this title and a Selected Acquisition Report containing the information described in sub- section (d) is not submitted to Congress under subsection (a), or if a determination of an in- crease by a percentage equal to or greater than the critical cost growth threshold is made by the Secretary under section 4374 of this title and the certification of the Sec- retary of Defense is not submitted to Congress under subsection (b), funds appropriated for military construction, for research, develop- ment, test, and evaluation, and for procure- ment may not be obligated for a major con- tract under the program. (2) TERMINATION OF PROHIBITION.—The prohi- bition under paragraph (1) on the obligation of funds for a major defense acquisition program shall cease to apply at the end of a period of 30 days of continuous session of Congress (as determined under section 8677(b)(2) of this title) beginning on the date— (A) on which Congress receives the Se- lected Acquisition Report under subsection (a) with respect to that program, in the case of a determination of an increase by a per- centage equal to or greater than the signifi- cant cost growth threshold (as determined in section 4374 of this title); or (B) on which Congress has received both the Selected Acquisition Report under sub- section (a) and the certification of the Sec- retary of Defense under section 4376 with re- spect to that program, in the case of an in- crease by a percentage equal to or greater than the critical cost growth threshold (as determined under section 4374 of this title). (d) MATTER TO BE INCLUDED IN REPORTS.—Ex- cept as provided in subsection (e), each report under this section with respect to a major de- fense acquisition program shall include the fol- lowing: (1) The name of the major defense acquisi- tion program. (2) The date of the preparation of the report. (3) The program phase as of the date of the preparation of the report. (4) The estimate of the program acquisition cost for the program (and for each designated major subprogram under the program) as shown in the Selected Acquisition Report in which the program or subprogram was first in- cluded, expressed in constant base-year dollars and in current dollars. (5) The current program acquisition cost for the program (and for each designated major subprogram under the program) in constant base-year dollars and in current dollars. (6) A statement of the reasons for any in- crease in program acquisition unit cost or pro- curement unit cost for the program (or for any designated major subprogram under the pro- gram). (7) The completion status of the program and each designated major subprogram under the program— (A) expressed as the percentage that the number of years for which funds have been appropriated for the program or subprogram is of the number of years for which it is planned that funds will be appropriated for the program or subprogram; and (B) expressed as the percentage that the amount of funds that have been appropriated for the program or subprogram is of the total amount of funds which it is planned will be appropriated for the program or sub- program. (8) The fiscal year in which information on the program and each designated major sub- program under the program was first included in a Selected Acquisition Report (referred to in this paragraph as the ‘‘base year’’) and the date of that Selected Acquisition Report in which information on the program or subpro- gram was first included. Page 2753 TITLE 10—ARMED FORCES § 4375 (9) The type of the Baseline Estimate that was included in the baseline description under section 4214 of this title and the date of the Baseline Estimate. (10) The current change and the total change, in dollars and expressed as a percent- age, in the program acquisition unit cost for the program (or for each designated major subprogram under the program), stated both in constant base-year dollars and in current dollars. (11) The current change and the total change, in dollars and expressed as a percent- age, in the procurement unit cost for the pro- gram (or for each designated major subpro- gram under the program), stated both in con- stant base-year dollars and in current dollars and the procurement unit cost for the program (or for each designated major subprogram under the program) for the succeeding fiscal year expressed in constant base-year dollars and in current year dollars. (12) The quantity of end items to be acquired under the program and the current change and total change, if any, in that quantity. (13) The identities of the military and civil- ian officers responsible for program manage- ment and cost control of the program. (14) The action taken and proposed to be taken to control future cost growth of the pro- gram. (15) Any changes made in the performance or schedule milestones of the program and the extent to which such changes have contributed to the increase in program acquisition unit cost or procurement unit cost for the program (or for any designated major subprogram under the program). (16) The following contract performance as- sessment information with respect to each major contract under the program or subpro- gram: (A) The name of the contractor. (B) The phase that the contract is in at the time of the preparation of the report. (C) The percentage of work under the con- tract that has been completed. (D) Any current change and the total change, in dollars and expressed as a per- centage, in the contract cost. (E) The percentage by which the contract is currently ahead of or behind schedule. (F) A narrative providing a summary ex- planation of the most significant occur- rences, including cost and schedule variances under major contracts of the pro- gram and any designated major subprogram under the program, contributing to the changes identified and a discussion of the ef- fect these occurrences will have on future program costs and the program schedule. (17) In any case in which one or more prob- lems with the software component of the pro- gram or any designated major subprogram under the program significantly contributed to the increase in program unit costs, the ac- tion taken and proposed to be taken to solve such problems. (e) BREACH DUE TO TERMINATION OR CANCELLA- TION OF PROGRAM OR SUBPROGRAM.— (1) LIMITED REPORTING.—If a program acqui- sition unit cost increase or a procurement unit cost increase for a major defense acquisi- tion program or designated major subprogram that results in a report under this subsection is due to termination or cancellation of the entire program or subprogram, only the infor- mation specified in paragraphs (1) through (6) of subsection (d) and the percentage change in program acquisition unit cost or procurement unit cost that resulted in the report need be included in the report. (2) CERTIFICATION NOT REQUIRED.—The cer- tification of the Secretary of Defense under subsection (b) is not required to be submitted for termination or cancellation of a program or subprogram. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1850(a), (h), (i), Jan. 1, 2021, 134 Stat. 4265, 4267, 4269; Pub. L. 117–81, div. A, title XVII, § 1701(c)(4), (d)(12), (o)(6)(E)(iv), Dec. 27, 2021, 135 Stat. 2136, 2137, 2148.) Editorial Notes CODIFICATION The text of subsec. (e) of section 2433 of this title, which was transferred to this section, redesignated sub- secs. (a) to (c), and amended by Pub. L. 116–283, § 1850(h)(1), was based on Pub. L. 97–252, title XI, § 1107(a)(1), Sept. 8, 1982, 96 Stat. 741, § 139b; Pub. L. 98–525, title XII, § 1242(b)(5), Oct. 19, 1984, 98 Stat. 2608; renumbered § 2433, Pub. L. 99–433, title I, § 101(a)(5), Oct. 1, 1986, 100 Stat. 995; Pub. L. 100–180, div. A, title XIII, § 1314(a)(1), Dec. 4, 1987, 101 Stat. 1175; Pub. L. 101–189, div. A, title VIII, § 811(a)(5), Nov. 29, 1989, 103 Stat. 1491; Pub. L. 102–484, div. A, title VIII, § 817(d)(5), Oct. 23, 1992, 106 Stat. 2457; Pub. L. 103–35, title II, § 201(i)(2), May 31, 1993, 107 Stat. 100; Pub. L. 103–355, title III, § 3002(a)(2)(C), Oct. 13, 1994, 108 Stat. 3328; Pub. L. 109–163, div. A, title VIII, § 802(b)(3), (c), Jan. 6, 2006, 119 Stat. 3369; Pub. L. 109–364, div. A, title II, § 213(a), Oct. 17, 2006, 120 Stat. 2121; Pub. L. 110–181, div. A, title IX, § 942(e), Jan. 28, 2008, 122 Stat. 288; Pub. L. 110–417, [div. A], title VIII, § 811(c)(5), Oct. 14, 2008, 122 Stat. 4523; Pub. L. 111–23, title II, § 206(a)(3), May 22, 2009, 123 Stat. 1728; Pub. L. 115–232, div. A, title VIII, § 809(a), Aug. 13, 2018, 132 Stat. 1840. The text of subsec. (g) of section 2433 of this title, which was transferred to this section, redesignated sub- secs. (d) and (e), and amended by Pub. L. 116–283, § 1850(i)(1), was based on Pub. L. 97–252, title XI, § 1107(a)(1), Sept. 8, 1982, 96 Stat. 741, § 139b; Pub. L. 98–94, title XII, § 1268(1), Sept. 24, 1983, 97 Stat. 705; Pub. L. 98–525, title XII, § 1242(b)(6), Oct. 19, 1984, 98 Stat. 2608; renumbered § 2433, Pub. L. 99–433, title I, § 101(a)(5), Oct. 1, 1986, 100 Stat. 995; Pub. L. 100–180, div. A, title XIII, § 1314(a)(1), Dec. 4, 1987, 101 Stat. 1175; Pub. L. 101–189, div. A, title VIII, § 811(a)(6), Nov. 29, 1989, 103 Stat. 1493; Pub. L. 103–355, title III, § 3003(e), Oct. 13, 1994, 108 Stat. 3329; Pub. L. 108–375, div. A, title VIII, § 801(b)(1), Oct. 28, 2004, 118 Stat. 2004; Pub. L. 110–417, [div. A], title VIII, § 811(c)(6), Oct. 14, 2008, 122 Stat. 4523; Pub. L. 111–84, div. A, title X, § 1073(c)(4), Oct. 28, 2009, 123 Stat. 2474. AMENDMENTS 2021—Pub. L. 116–283, § 1850(i)(1), transferred subsec. (g) of section 2433 of this title to this section, struck out subsec. designation, and redesignated pars. (1) and (2) as subsecs. (d) and (e), respectively. Pub. L. 116–283, § 1850(h)(1), transferred subsec. (e) of section 2433 of this title to this section, struck out sub- sec. designation, and redesignated pars. (1) to (3) as sub- secs. (a) to (c), respectively. Subsec. (a). Pub. L. 116–283, § 1850(h)(2)(A), (B), in- serted subsec. heading, redesignated subpars. (A) and Page 2754 TITLE 10—ARMED FORCES § 4376 (B) as pars. (1) and (2), respectively, inserted par. (1) heading, and substituted ‘‘Except as provided in para- graph (2),’’ for ‘‘Except as provided in subparagraph (B),’’ in par. (1). Subsec. (a)(1). Pub. L. 116–283, § 1850(h)(2)(C), as amended by Pub. L. 117–81, § 1701(o)(6)(E)(iv), sub- stituted ‘‘under section 4374 of this title’’ for ‘‘under subsection (d)’’, ‘‘section 4351(e)’’ for ‘‘section 2432(e)’’, and ‘‘section 4351(f)’’ for ‘‘section 2432(f)’’. Subsec. (a)(2). Pub. L. 116–283, § 1850(h)(2)(D), sub- stituted ‘‘paragraph (1)’’ for ‘‘subparagraph (A)’’ in two places and ‘‘subsection (d)’’ for ‘‘subsection (g)’’. Subsec. (b). Pub. L. 116–283, § 1850(h)(3), inserted head- ing and substituted ‘‘section 4374 of this title’’ for ‘‘sub- section (d)’’ and ‘‘sections 4376 and 4377’’ for ‘‘section 2433a’’. Subsec. (c). Pub. L. 116–283, § 1850(h)(4)(A), (B), in- serted subsec. heading, designated first and second sen- tences as pars. (1) and (2), respectively, and inserted par. (1) heading. Subsec. (c)(1). Pub. L. 116–283, § 1850(h)(4)(C), sub- stituted ‘‘section 4374 of this title’’ for ‘‘subsection (d)’’ in two places, ‘‘subsection (d)’’ for ‘‘subsection (g)’’, ‘‘subsection (a)’’ for ‘‘paragraph (1)’’, and ‘‘subsection (b)’’ for ‘‘paragraph (2)’’. Subsec. (c)(2). Pub. L. 116–283, § 1850(h)(4)(D)(i), in- serted heading and substituted ‘‘The prohibition under paragraph (1)’’ for ‘‘The prohibition’’ in introductory provisions. Subsec. (c)(2)(A). Pub. L. 117–81, § 1701(d)(12)(A), struck out ‘‘or (b)(2)’’ after ‘‘subsection (a)’’. Pub. L. 116–283, § 1850(h)(4)(D)(ii), substituted ‘‘sub- section (a) or (b)(2)’’ for ‘‘paragraph (1) or (2)(B)’’ and ‘‘section 4374 of this title’’ for ‘‘subsection (d)’’. Subsec. (c)(2)(B). Pub. L. 117–81, § 1701(d)(12)(B), struck out ‘‘or (b)(2)’’ after ‘‘subsection (a)’’ and substituted ‘‘section 4376’’ for ‘‘subsection (b)(1)’’. Pub. L. 116–283, § 1850(h)(4)(D)(iii), substituted ‘‘sub- section (a) or (b)(2)’’ for ‘‘paragraph (1) or (2)(B)’’, ‘‘sub- section (b)(1)’’ for ‘‘paragraph (2)(A)’’, and ‘‘section 4374 of this title’’ for ‘‘subsection (d)’’. Subsec. (d). Pub. L. 116–283, § 1850(i)(2)(A), (B), in- serted heading, substituted ‘‘Except as provided in sub- section (e), each report under this section’’ for ‘‘Except as provided in paragraph (2), each report under sub- section (e)’’ in introductory provisions, and redesig- nated subpars. (A) to (Q) as pars. (1) to (17), respec- tively. Subsec. (d)(7). Pub. L. 117–81, § 1701(c)(4), substituted ‘‘under the program— ‘‘(A) expressed as’’ for ‘‘under the program (i) expressed as’’ and ‘‘or sub- program; and ‘‘(B) expressed as’’ for ‘‘or subprogram, and (ii) expressed as’’. Subsec. (d)(9). Pub. L. 116–283, § 1850(i)(2)(C), sub- stituted ‘‘section 4214’’ for ‘‘section 2435’’. Subsec. (d)(16). Pub. L. 116–283, § 1850(i)(2)(D), redesig- nated cls. (i) to (vi) as subpars. (A) to (F), respectively. Subsec. (e). Pub. L. 116–283, § 1850(i)(3)(A)–(C), inserted subsec. heading, designated first and second sentences as pars. (1) and (2), respectively, inserted par. (1) head- ing, and, in par. (1), substituted ‘‘paragraphs (1) through (6) of subsection (d)’’ for ‘‘clauses (A) through (F) of paragraph (1)’’. Subsec. (e)(2). Pub. L. 116–283, § 1850(i)(3)(D), inserted heading and substituted ‘‘subsection (b)’’ for ‘‘sub- section (e)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by section 1701(c)(4), (d)(12) of Pub. L. 117–81 to take effect immediately after the amendments made by title XVIII of Pub. L. 116–283 have taken ef- fect, see section 1701(a)(3) of Pub. L. 117–81, set out in a note preceding section 3001 of this title and Effective Date note below. Amendment by section 1701(o)(6)(E)(iv) of Pub. L. 117–81 applicable as if included in the enactment of title XVIII of Pub. L. 116–283 as enacted, see section 1701(a)(2) of Pub. L. 117–81, set out in a note preceding section 3001 of this title and Effective Date note below. EFFECTIVE DATE Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed im- plementation and applicability of existing law, see sec- tion 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title. § 4376. Breach of critical cost growth threshold: reassessment of program; presumption of program termination (a) REASSESSMENT OF PROGRAM.—If the pro- gram acquisition unit cost or procurement unit cost of a major defense acquisition program or designated subprogram (as determined by the Secretary under section 4374 of this title) in- creases by a percentage equal to or greater than the critical cost growth threshold for the pro- gram or subprogram, the Secretary of Defense, after consultation with the Joint Requirements Oversight Council regarding program require- ments, shall— (1) determine the root cause or causes of the critical cost growth in accordance with appli- cable statutory requirements and Department of Defense policies, procedures, and guidance; and (2) in consultation with the Director of Cost Assessment and Program Evaluation, carry out an assessment of— (A) the projected cost of completing the program if current requirements are not modified; (B) the projected cost of completing the program based on reasonable modification of such requirements; (C) the rough order of magnitude of the costs of any reasonable alternative system or capability; and (D) the need to reduce funding for other programs due to the growth in cost of the program. (b) PRESUMPTION OF TERMINATION.— (1) TERMINATION UNLESS SECRETARY SUBMITS CERTIFICATION AND REPORT.—After conducting the reassessment required by subsection (a) with respect to a major defense acquisition program, the Secretary shall terminate the program unless the Secretary submits to Con- gress, before the end of the 60-day period be- ginning on the day the Selected Acquisition Report containing the information described in section 4375(d) and (e) of this title is re- quired to be submitted under section 4351(f) of this title, a written certification in accord- ance with paragraph (2). (2) CERTIFICATION.—A certification described by this paragraph with respect to a major de- fense acquisition program is a written certifi- cation that— (A) the continuation of the program is es- sential to the national security; (B) there are no alternatives to the pro- gram which will provide acceptable capa- bility to meet the joint military require- ment (as defined in section 181(g)(1) of this title) at less cost;