Financial Status of Major Federal Acquisitions September 30, 1979

PSAD-80-25: Published: Feb 12, 1980. Publicly Released: Feb 12, 1980.

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Data about the financial status of major acquisitions of the U.S. Government, including acquisitions financed solely with Federal funds and those financed jointly with Federal, State, and other funds was incorporated into a report. Departments and agencies responsible for major acquisitions sent financial data on their projects and systems. The accuracy and completeness of the data in this report has not been verified. Because of the numerous projects involved, explanations of cost growth were obtained only for those weapon systems included on selected acquisition reports of the Department of Defense and for other projects having cost increases of 100 percent or more. In addition, the report does not compare cost increases of the Department of Defense agencies with those of civil agencies because overall comparisons could be misleading for many reasons, including different methods of handling inflation, and a variety of means of establishing baselines. Significantly, acquisitions included in this report are past the planning stage and are in the development, test, production, or construction phases. Completed projects are not included.

Analysis of the data from the Department of Defense indicated that estimated costs for Defense projects increased $45.2 billion. The largest cost increases were attributable to Navy projects, followed by Air Force projects. Some of the more significant items which contributed to the cost increase were the Navy's F-18 aircraft and the Joint Tactical Information Distribution System. However, these increases were offset by reductions to the Navy's Tomahawk Sea Launched Cruise Missile program and to the Army's General Support Rocket System. Total net increases in civil agencies' cost estimates were $30.4 billion. However, this did not include data for two National Aeronautics and Space Administration projects. Civilian agencies and departments provided cost growth analysis for acquisitions that had 100 percent or more increases. Inflation, engineering, and quantity changes were identified as the major causes of cost growth. In addition, the data showed that 64 projects, estimated to cost $16.5 billion, have been in process more than 20 years. Seven are more than 50 years old. Congress may want to review these older projects to see if they are progressing satisfactorily.

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