Sec. 849. Penalty for cost overruns
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For each fiscal year beginning with fiscal year 2015, the Secretary of each military department shall pay a penalty for cost overruns on the covered major defense acquisition programs of the military department. For the purposes of this section: The amount of the cost overrun or underrun on any major defense acquisition program or subprogram in a fiscal year is the difference between the current program acquisition unit cost for the program or subprogram and the program acquisition unit cost for the program as shown in the original Baseline Estimate for the program or subprogram, multiplied by the quantity of items to be purchased under the program or subprogram, as reported in the final Selected Acquisition Report for the fiscal year in accordance with section 2432 of title 10, United States Code.
Cost overruns or underruns for covered major defense acquisition programs that are joint programs of more than one military department shall be allocated among the military departments in percentages determined by the Under Secretary of Defense for Acquisition, Technology, and Logistics. The cumulative amount of cost overruns for a military department in a fiscal year is the sum of the cost overruns and cost underruns for all covered major defense acquisition programs of the department in the fiscal year (including cost overruns or underruns allocated to the military department in accordance with paragraph (2)).
The cost overrun penalty for a military department in a fiscal year is three percent of the cumulative amount of cost overruns of the military department in the fiscal year, as determined pursuant to paragraph (3), except that the cost overrun penalty may not be a negative amount. Not later than 60 days after the end of each fiscal year beginning with fiscal year 2015, the Secretary of each military department shall reduce each research, development, test, and evaluation account of the military department by the percentage determined under paragraph (2), and remit such amount to the Secretary of Defense.
The percentage reduction to research, development, test, and evaluation accounts of a military department referred to in paragraph
(1)is the percentage reduction to such accounts necessary to equal the cost overrun penalty for the fiscal year for such department determined pursuant to subsection (b)(4). Any amount remitted under paragraph
(1)shall be credited to the Rapid Prototyping Fund established pursuant to section 803 of this Act. A major defense acquisition program is covered under this section if the original Baseline Estimate was established for such program under section 2435(d)
(1)or
(2)on or after the date of the enactment of the Weapon Systems Acquisition Reform Act of 2009 ( Public Law 111–23 ).
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- Pub. L. 111-23
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Sec. 849
Penalty for cost overruns
Pub. L.Pub. L. 111-23
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