10 U.S.C. § 4376 — Breach of critical cost growth threshold:

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; Page 2755 TITLE 10—ARMED FORCES § 4377 (C) the new estimates of the program ac- quisition unit cost or procurement unit cost have been determined by the Director of Cost Assessment and Program Evaluation to be reasonable; (D) the program is a higher priority than programs whose funding must be reduced to accommodate the growth in cost of the pro- gram; and (E) the management structure for the pro- gram is adequate to manage and control pro- gram acquisition unit cost or procurement unit cost. (3) REPORT.—A written certification under paragraph (2) shall be accompanied by a report presenting the root cause analysis and assess- ment carried out pursuant to subsection (a) and the basis for each determination made in accordance with subparagraphs (A) through (E) of paragraph (2), together with supporting documentation. (c) ACTIONS IF PROGRAM TERMINATED.—If a major defense acquisition program is terminated pursuant to subsection (b), the Secretary shall submit to Congress a written report setting forth— (1) an explanation of the reasons for termi- nating the program; (2) the alternatives considered to address any problems in the program; and (3) the course the Department plans to pur- sue to meet any continuing joint military re- quirements otherwise intended to be met by the program. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1850(a), (j), Jan. 1, 2021, 134 Stat. 4265, 4269; Pub. L. 117–81, div. A, title XVII, § 1701(o)(6)(E)(v), Dec. 27, 2021, 135 Stat. 2148.) Editorial Notes CODIFICATION The text of subsecs. (a) and (b) of section 2433a of this title, which was transferred to this section by Pub. L. 116–283, § 1850(j)(1), was based on Pub. L. 111–23, title II, § 206(a)(1), May 22, 2009, 123 Stat. 1726; Pub. L. 111–383, div. A, title X, § 1075(b)(35), Jan. 7, 2011, 124 Stat. 4371. The text of subsec. (d) of section 2433a of this title, which was transferred to this section and redesignated subsec. (c) by Pub. L. 116–283, § 1850(j)(2), was based on Pub. L. 111–23, title II, § 206(a)(1), May 22, 2009, 123 Stat. 1726. AMENDMENTS 2021—Pub. L. 116–283, § 1850(j)(1), (2), transferred sub- secs. (a), (b), and (d) of section 2433a of this title to this section and redesignated subsec. (d) as (c). Subsec. (a). Pub. L. 116–283, § 1850(j)(3)(A), substituted ‘‘section 4374’’ for ‘‘section 2433(d)’’ in introductory pro- visions. Subsec. (b)(1). Pub. L. 116–283, § 1850(j)(4)(A), inserted heading. Pub. L. 116–283, § 1850(j)(3)(B), as amended by Pub. L. 117–81, § 1701(o)(6)(E)(v), substituted ‘‘section 4375(d) and (e)’’ for ‘‘section 2433(g)’’ and ‘‘section 4351(f)’’ for ‘‘sec- tion 2432(f)’’. Subsec. (b)(2), (3). Pub. L. 116–283, § 1850(j)(4)(B)–(D), realigned margins and inserted headings. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by Pub. L. 117–81 applicable as if in- cluded 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 Ef- fective 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. § 4377. Breach of critical cost growth threshold: actions if program not terminated (a) ACTIONS IF PROGRAM NOT TERMINATED.—If the Secretary elects not to terminate a major defense acquisition program pursuant to sub- section (b) of section 4376 of this title, the Sec- retary shall— (1) restructure the program in a manner that addresses the root cause or causes of the crit- ical cost growth, as identified pursuant to sub- section (a) of that section, and ensures that the program has an appropriate management structure as set forth in the certification sub- mitted pursuant to subsection (b)(2)(E) of that section; (2) rescind the most recent Milestone ap- proval for the program and withdraw any asso- ciated certification under section 4251 or 4252 of this title; (3) require a new Milestone approval for the program before taking any contract action to enter a new contract, exercise an option under an existing contract, or otherwise extend the scope of an existing contract under the pro- gram, except to the extent determined nec- essary by the Milestone Decision Authority, on a non-delegable basis, to ensure that the program can be restructured as intended by the Secretary without unnecessarily wasting resources; (4) include in the report specified in sub- section (b) a description of all funding changes made as a result of the growth in cost of the program, including reductions made in fund- ing for other programs to accommodate such cost growth; and (5) conduct regular reviews of the program in accordance with the requirements of sec- tion 205 of the Weapon Systems Acquisition Reform Act of 2009. (b) IDENTIFICATION OF REPORT FOR DESCRIPTION OF FUNDING CHANGES.—For purposes of sub- section (a)(4), the report specified in this sub- section is the first Selected Acquisition Report for the program submitted pursuant to section 4351 of this title after the President submits a budget pursuant to section 1105 of title 31, in the calendar year following the year in which the program was restructured. (c) INAPPLICABILITY OF CERTAIN SUBSECTION (A) REQUIREMENTS.— (1) CONDITIONS FOR INAPPLICABILITY.—The re- quirements of paragraphs (2), (3), and (5) of subsection (a) shall not apply to a program or subprogram if— (A) the Milestone Decision Authority de- termines in writing, on the basis of a cost assessment and root cause analysis con- ducted pursuant to section 4376(a) of this title, that—