Team Infidel
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Defense Daily
April 30, 2008 By Emelie Rutherford
The Pentagon has launched a pilot effort to give defense programs fixed and dedicated funding during development that is expected to be used in three emerging Army, Navy, and Air Force programs, a budget official told lawmakers yesterday.
The Capital Funding Pilot Program is an example of ways the Defense Department (DoD) is working to establish a more stable budget environment, said J. David Patterson, principal deputy under secretary of defense (comptroller). He spoke during a House Oversight and Government Reform Committee hearing on a March Government Accountability Office (GAO) report that found 95 major weapons acquisition programs are nearly $300 billion over original budget and 21 months late on average.
Under the Capital Funding Pilot Program, the DoD guarantees a program a prescribed level of funding for a fixed period--from milestone B, or system development and demonstration (SDD), through to initial operating capability (IOC), Patterson said.
"Funding is held at a guaranteed level by avoiding up and down adjustments until the project is delivered," he said. "When industry and program managers know that annual program funding will be provided at a predictable level, and that other aspects of the program--such as unfunded performance or requirements changes--are not allowed, there is an increasing probability that the program will be delivered on schedule and within budget."
This capital funding concept will be applied to the Air Force's Combat Search and Rescue replacement helicopter (after the effort under competition is established as a program of record), the Navy and Army's Joint High Speed Vessel program, and the Army's General Funds Enterprise Business System effort, Patterson said.
"Because these systems are within the (Defense) Department's current authorities, they can be implemented in the near term," he said.
To qualify for capital funding, he said, programs must meet several criteria: each have a Technology Readiness Level of at least six at milestone B; have "well understood funding profiles" from milestone B to IOC; not be used as "bill payers" by the services or DoD; and be "time-definite" programs, Patterson said.
In addition, officials with the qualifying programs must provide bi-annual reports to Congress on cost schedule and performance progress, he said. Capital funding programs will be cancelled "if they fail to meet established cost, schedule, and performance objectives three reviews in a row," he said.
This Capital Funding Pilot Program is co-sponsored by the under secretary of acquisition, technology and logistics and the comptroller, Patterson said.
He pointed out numerous acquisition studies found "that the key elements of successful programs are program stability and funding predictability."
"Instability drives cost growth, schedule slippages, and in some cases, failure of the weapons system to perform as anticipated," Patterson said at the hearing, also attended by James Finley, the Pentagon's deputy undersecretary for acquisition and technology, and Michael Sullivan, director of acquisition and sourcing management at GAO.
Committee Chairman Rep. Henry Waxman (D-Calif.) posed multiple questions on the Marine Corps' Expeditionary Fighting Vehicle (EFV) program, which has seen significant cost increases and schedule delays in recent years. The Marine Corps restructured the program last year and now is negotiating a second system development and design contract worth an estimated $700 to $800 million with contractor General Dynamics [GD].
The committee--which launched an investigating of the EFV program in spring 2007--released an 11-page report yesterday detailing the program's history titled, "The Expeditionary Fighting Vehicle: Over Budget, Behind Schedule, and Unreliable."
Finley took for the record many of the EFV questions Waxman asked--many dealing with accountability for errors made in the program--and said he would provide written answers at a later time.
April 30, 2008 By Emelie Rutherford
The Pentagon has launched a pilot effort to give defense programs fixed and dedicated funding during development that is expected to be used in three emerging Army, Navy, and Air Force programs, a budget official told lawmakers yesterday.
The Capital Funding Pilot Program is an example of ways the Defense Department (DoD) is working to establish a more stable budget environment, said J. David Patterson, principal deputy under secretary of defense (comptroller). He spoke during a House Oversight and Government Reform Committee hearing on a March Government Accountability Office (GAO) report that found 95 major weapons acquisition programs are nearly $300 billion over original budget and 21 months late on average.
Under the Capital Funding Pilot Program, the DoD guarantees a program a prescribed level of funding for a fixed period--from milestone B, or system development and demonstration (SDD), through to initial operating capability (IOC), Patterson said.
"Funding is held at a guaranteed level by avoiding up and down adjustments until the project is delivered," he said. "When industry and program managers know that annual program funding will be provided at a predictable level, and that other aspects of the program--such as unfunded performance or requirements changes--are not allowed, there is an increasing probability that the program will be delivered on schedule and within budget."
This capital funding concept will be applied to the Air Force's Combat Search and Rescue replacement helicopter (after the effort under competition is established as a program of record), the Navy and Army's Joint High Speed Vessel program, and the Army's General Funds Enterprise Business System effort, Patterson said.
"Because these systems are within the (Defense) Department's current authorities, they can be implemented in the near term," he said.
To qualify for capital funding, he said, programs must meet several criteria: each have a Technology Readiness Level of at least six at milestone B; have "well understood funding profiles" from milestone B to IOC; not be used as "bill payers" by the services or DoD; and be "time-definite" programs, Patterson said.
In addition, officials with the qualifying programs must provide bi-annual reports to Congress on cost schedule and performance progress, he said. Capital funding programs will be cancelled "if they fail to meet established cost, schedule, and performance objectives three reviews in a row," he said.
This Capital Funding Pilot Program is co-sponsored by the under secretary of acquisition, technology and logistics and the comptroller, Patterson said.
He pointed out numerous acquisition studies found "that the key elements of successful programs are program stability and funding predictability."
"Instability drives cost growth, schedule slippages, and in some cases, failure of the weapons system to perform as anticipated," Patterson said at the hearing, also attended by James Finley, the Pentagon's deputy undersecretary for acquisition and technology, and Michael Sullivan, director of acquisition and sourcing management at GAO.
Committee Chairman Rep. Henry Waxman (D-Calif.) posed multiple questions on the Marine Corps' Expeditionary Fighting Vehicle (EFV) program, which has seen significant cost increases and schedule delays in recent years. The Marine Corps restructured the program last year and now is negotiating a second system development and design contract worth an estimated $700 to $800 million with contractor General Dynamics [GD].
The committee--which launched an investigating of the EFV program in spring 2007--released an 11-page report yesterday detailing the program's history titled, "The Expeditionary Fighting Vehicle: Over Budget, Behind Schedule, and Unreliable."
Finley took for the record many of the EFV questions Waxman asked--many dealing with accountability for errors made in the program--and said he would provide written answers at a later time.