10 U.S.C. § 4371 — Cost growth definitions; applicability of

Page 2748 TITLE 10—ARMED FORCES § 4371 Sec. 4376. Breach of critical cost growth threshold: reas- sessment of program; presumption of pro- gram termination. 4377. Breach of critical cost growth threshold: ac- tions if program not terminated. Editorial Notes PRIOR PROVISIONS A prior chapter 325 ‘‘DEPARTMENT OF DEFENSE LABORATORIES’’, consisting of reserved section 4351, was repealed by Pub. L. 116–283, div. A, title XVIII, § 1841(a)(1)(A), Jan. 1, 2021, 134 Stat. 4242. § 4371. Cost growth definitions; applicability of reporting requirements; constant base year dollars (a) DEFINITIONS.—In this chapter: (1) PROGRAM ACQUISITION UNIT COST; PROCURE- MENT UNIT COST; MAJOR CONTRACT.—Except as provided in section 4203(d) of this title, the terms ‘‘program acquisition unit cost’’, ‘‘pro- curement unit cost’’, and ‘‘major contract’’ have the same meanings as provided in section 4351(a) of this title. (2) SIGNIFICANT COST GROWTH THRESHOLD.— The term ‘‘significant cost growth threshold’’ means the following: (A) In the case of a major defense acquisi- tion program or designated major defense subprogram, a percentage increase in the program acquisition unit cost for the pro- gram or subprogram of— (i) at least 15 percent over the program acquisition unit cost for the program or subprogram as shown in the current Base- line Estimate for the program or subpro- gram; or (ii) at least 30 percent over the program acquisition unit cost for the program or subprogram as shown in the original Base- line Estimate for the program or subpro- gram. (B) In the case of a major defense acquisi- tion program or designated major defense subprogram that is a procurement program, a percentage increase in the procurement unit cost for the program or subprogram of— (i) at least 15 percent over the procure- ment unit cost for the program or subpro- gram as shown in the current Baseline Es- timate for the program or subprogram; or (ii) at least 30 percent over the procure- ment unit cost for the program or subpro- gram as shown in the original Baseline Es- timate for the program or subprogram. (3) CRITICAL COST GROWTH THRESHOLD.—The term ‘‘critical cost growth threshold’’ means the following: (A) In the case of a major defense acquisi- tion program or designated major defense subprogram, a percentage increase in the program acquisition unit cost for the pro- gram or subprogram of— (i) at least 25 percent over the program acquisition unit cost for the program or subprogram as shown in the current Base- line Estimate for the program or subpro- gram; or (ii) at least 50 percent over the program acquisition unit cost for the program or subprogram as shown in the original Base- line Estimate for the program or subpro- gram. (B) In the case of a major defense acquisi- tion program or designated major defense subprogram that is a procurement program, a percentage increase in the procurement unit cost for the program or subprogram of— (i) at least 25 percent over the procure- ment unit cost for the program or subpro- gram as shown in the current Baseline Es- timate for the program or subprogram; or (ii) at least 50 percent over the procure- ment unit cost for the program or subpro- gram as shown in the original Baseline Es- timate for the program or subprogram. (4) BASELINE ESTIMATE.—The term ‘‘Baseline Estimate’’, with respect to a unit cost report that is submitted under this chapter to the service acquisition executive designated by the Secretary concerned on a major defense acquisition program or designated major sub- program, means the cost estimate included in the baseline description for the program or subprogram under section 4214 of this title. (5) ORIGINAL BASELINE ESTIMATE.—The term ‘‘original Baseline Estimate’’ has the same meaning as provided in section 4214(d) of this title. (6) PROCUREMENT PROGRAM.—The term ‘‘pro- curement program’’ means a program for which funds for procurement are authorized to be appropriated in a fiscal year. (b) Reporting under this chapter shall not apply if a program has received a limited report- ing waiver under section 4351(h) of this title. (c) Any determination of a percentage increase under this chapter shall be stated in terms of constant base year dollars (as described in sec- tion 4202 of this title). (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1850(a)–(d), Jan. 1, 2021, 134 Stat. 4265, 4266; Pub. L. 117–81, div. A, title XVII, § 1701(o)(6)(E)(i), (ii), Dec. 27, 2021, 135 Stat. 2147, 2148.) Editorial Notes CODIFICATION The text of subsec. (a) of section 2433 of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1850(b)(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)(1), Oct. 19, 1984, 98 Stat. 2607; renumbered § 2433 and amended Pub. L. 99–433, title I, §§ 101(a)(5), 110(g)(8)(A), Oct. 1, 1986, 100 Stat. 995, 1004; Pub. L. 100–26, § 7(b)(4), (k)(7), Apr. 21, 1987, 101 Stat. 279, 284; 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)(1), Nov. 29, 1989, 103 Stat. 1490; Pub. L. 102–484, div. A, title VIII, § 817(d)(1), Oct. 23, 1992, 106 Stat. 2456; Pub. L. 103–355, title III, § 3003(a)(1), Oct. 13, 1994, 108 Stat. 3329; Pub. L. 109–163, div. A, title VIII, § 802(a), (d)(2), Jan. 6, 2006, 119 Stat. 3367, 3370; Pub. L. 110–417, [div. A], title VIII, § 811(c)(1), Oct. 14, 2008, 122 Stat. 4522; Pub. L. 111–383, div. A, title X, § 1075(b)(34), Jan. 7, 2011, 124 Stat. 4371. The text of subsec. (f) of section 2433 of this title, which was transferred to this section, redesignated sub- sec. (c) and amended by Pub. L. 116–283, § 1850(d), was based on Pub. L. 97–252, title XI, § 1107(a)(1), Sept. 8, 1982, 96 Stat. 741, § 139b; renumbered § 2433, Pub. L. Page 2749 TITLE 10—ARMED FORCES § 4372 99–433, title I, § 101(a)(5), Oct. 1, 1986, 100 Stat. 995; Pub. L. 103–355, title III, § 3003(d), Oct. 13, 1994, 108 Stat. 3329. The text of subsec. (h) of section 2433 of this title, which was transferred to this section, redesignated sub- sec. (b) and amended by Pub. L. 116–283, § 1850(c), was based on Pub. L. 99–500, § 101(c) [title X, § 961(b)(2)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–176, and Pub. L. 99–591, § 101(c) [title X, § 961(b)(2)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–176; Pub. L. 99–661, div. A, title IX, for- merly title IV, § 961(b)(2), Nov. 14, 1986, 100 Stat. 3956, re- numbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273. AMENDMENTS 2021—Subsec. (a). Pub. L. 116–283, § 1850(b)(2), inserted subsec. heading and headings in pars. (1) to (6). Pub. L. 116–283, § 1850(b)(1), transferred subsec. (a) of section 2433 of this title to this section and substituted ‘‘this chapter’’ for ‘‘this section’’ in introductory provi- sions and par. (2). Subsec. (a)(1). Pub. L. 116–283, § 1850(b)(3)(A), as amended by Pub. L. 117–81, § 1701(o)(6)(E)(i), substituted ‘‘section 4203(d)’’ for ‘‘section 2430a(d)’’ and ‘‘section 4351(a)’’ for ‘‘section 2432(a)’’. Subsec. (a)(2). Pub. L. 116–283, § 1850(b)(4), redesig- nated par. (4) as (2) and transferred it to appear in nu- merical order. Former par. (2) redesignated (4). Pub. L. 116–283, § 1850(b)(3)(B), substituted ‘‘section 4214’’ for ‘‘section 2435’’. Subsec. (a)(3) to (5). Pub. L. 116–283, § 1850(b)(4), redes- ignated pars. (5), (2), and (6) as (3) to (5), respectively, and transferred them to appear in numerical order. Former pars. (3) and (4) redesignated pars. (6) and (2), respectively. Subsec. (a)(6). Pub. L. 116–283, § 1850(b)(4), redesig- nated par. (3) as (6) and transferred it to appear in nu- merical order. Former par. (6) redesignated (5). Pub. L. 116–283, § 1850(b)(3)(C), substituted ‘‘section 4214(d)’’ for ‘‘section 2435(d)’’. Subsec. (b). Pub. L. 116–283, § 1850(c), as amended by Pub. L. 117–81, § 1701(o)(6)(E)(ii), transferred subsec. (h) of section 2433 of this title to this section, redesignated it as subsec. (b), and substituted ‘‘under this chapter’’ for ‘‘under this section’’ and ‘‘section 4351(h)’’ for ‘‘sec- tion 2432(h)’’. Subsec. (c). Pub. L. 116–283, § 1850(d), transferred sub- sec. (f) of section 2433 of this title to this section, redes- ignated it as subsec. (c), and substituted ‘‘under this chapter’’ for ‘‘under this section’’ and ‘‘section 4202’’ for ‘‘section 2430’’. 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. COST GROWTH REPORTS FOR MAJOR ACQUISITION PRO- GRAMS THAT ARE HIGHLY SENSITIVE CLASSIFIED PRO- GRAMS Pub. L. 118–159, div. A, title VIII, § 809, Dec. 23, 2024, 138 Stat. 1978, provided that: ‘‘(a) GUIDANCE REQUIRED.—Not later than 180 days after the date of the enactment of this Act [Dec. 23, 2024], the Under Secretary of Defense for Acquisition and Sustainment, in consultation [sic] each Secretary of a military department, shall establish guidance re- quiring that each service acquisition executive (as de- fined in section 101 of title 10, United States Code) sub- mit to the congressional defense committees [Commit- tees on Armed Services and Appropriations of the Sen- ate and the House of Representatives] a cost growth re- port for a covered program each time the estimated unit cost for such covered program has increased by a percentage equal to or greater than any of the signifi- cant cost growth thresholds or critical cost growth thresholds under section 4371 of title 10, United States Code. ‘‘(b) ELEMENTS OF REPORT.—A cost growth report re- quired under this section shall include, with respect to a covered program, the following: ‘‘(1) The name of the covered program. ‘‘(2) The date of the preparation of the report. ‘‘(3) The program phase of the covered program. ‘‘(4) The unit cost estimates for the covered pro- gram in constant base-year dollars and in current dollars. ‘‘(5) A statement of the reasons for cost increases that resulted in the submission of a report under this section. ‘‘(6) A list of major program milestones, including the dates for each program milestone according to the original baseline, current baseline, and current estimate. ‘‘(7) Annualized funding for the program by appro- priation account from the date on which the program commenced to the current estimated year of comple- tion. ‘‘(8) Any actions taken or proposed to be taken to control future cost growth of the covered program. ‘‘(9) Any changes made in the performance or mile- stones of the covered program and the extent to which such changes have contributed to the cost in- crease. ‘‘(c) CRITICAL BREACH.—With respect to a covered pro- gram for which the cost growth meets the threshold for a critical cost growth threshold (as defined in section 4371 of title 10, United States Code), the applicable serv- ice acquisition executive shall— ‘‘(1) treat such covered program as if the unit cost of such a covered program has increased by a percent- age equal to or greater than any of the critical cost growth thresholds for the covered program; and ‘‘(2) follow applicable procedures in sections 4376 and 4377 of title 10, United States Code. ‘‘(d) DEFINITIONS.—In this section: ‘‘(1) The term ‘covered program’ means a Depart- ment of Defense program— ‘‘(A) that is a highly sensitive classified program (as determined by the Secretary of Defense); ‘‘(B) that would be a major defense acquisition program under section 4201 of title 10, United States Code, except for the exclusion from the ap- plicability of that section of such a highly sensitive classified program; and ‘‘(C) that has entered the engineering and manu- facturing design phase, or equivalent phase. ‘‘(2) The term ‘unit cost’ means, with respect to a covered program, as applicable— ‘‘(A) the program acquisition unit cost (as defined in section 4351 of title 10, United States Code); or ‘‘(B) the procurement unit cost (as defined in such section).’’ § 4372. Unit cost reports: quarterly report from program manager to service acquisition ex- ecutive (a) REQUIRED REPORTS.— (1) REQUIREMENT.—The program manager for a major defense acquisition program (other than a program not required to be included in the Selected Acquisition Report for that quar- ter under section 4351(b)(3) of this title) shall, on a quarterly basis, submit to the service ac- quisition executive designated by the Sec- retary concerned a written report on the unit