Management Perspectives Pertaining to Root Cause Analyses of Nunn-McCurdy Breaches: Contractor Motivations and Anticipating Breaches, Volume 6

Abstract : Continuing concern about large cost overruns in a broad range of major defense programs led Congress to pass new laws extending the ambit of the existing Nunn- McCurdy Act, stipulating that the U.S. Department of Defense (DoD) review and report on the factors affecting program costs. In accordance with the revised Nunn- McCurdy Act, the office of Performance Assessments and Root Cause Analysis (PARCA) must provide its root cause explanation as part of a 60-day program review triggered when the applicable military department secretary reports a breach. In March 2010, in view of staffing limitations, the newly created PARCA within the Office of the Secretary of Defense (OSD) elected to rely on federally funded research and development center support in discharging its new responsibilities. Since then, PARCA engaged the RAND Corporation to conduct multiple studies on the root causes of Nunn-McCurdy breaches or other large cost increases in nine major defense acquisition programs: the Wideband Global Satellite, Longbow Apache, the Zumwalt-class destroyer (DDG-1000), the Joint Strike Fighter, Excalibur, the Joint Tactical Radio System Ground Mobile Radio, the Navy Enterprise Resource Planning, Global Hawk, and the P-8A Poseidon.1 In addition to reports on major defense acquisition programs, RAND, at the request of the sponsor, has researched topics related to the management of defense acquisition. These topics include program manager tenure, oversight of acquisition category II programs, framing assumptions, programs with multiple Nunn-McCurdy breaches, and an analysis of the Joint Tactical Radio System Wideband Networking Waveform and Long Term Evolution Waveform developments.2 This report considers two topics in an attempt to enable DoD to be more proactive in avoiding Nunn-McCurdy breaches. The first topic explores the incentives in defense contracts, seeking to determine whether better alternatives exist to the ones presently used. The second topic involves analyzing