Report
Root Cause Analyses of Nunn-McCurdy Breaches, Volume 1
Nov 7, 2011
The report contains two analyses. First, the authors examine the cause of a Nunn-McCurdy unit cost breach of the Joint Precision Approach and Landing System Inc. 1A major defense acquisition program. Second, they document a methodology to assess the performance of an acquisition portfolio. The methodology included identifying objectives, selecting data and metrics, and analyzing visualizations of portfolio performance.
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The authors examine the cause of the Joint Precision Approach and Landing System (JPALS) major defense acquisition program Nunn-McCurdy unit cost breach and document a methodology that can assess and summarize the overall performance of an acquisition portfolio at a point in time and over several years. In January 2014, the Navy informed the USD (AT&L) that both the average procurement unit cost and the program acquisition unit cost for the JPALS Inc. 1A program exceeded critical thresholds against both the original baseline and the current baseline, triggering the Nunn-McCurdy process, which is statutorily required by the 2009 Weapon Systems Acquisition Reform Act legislation. The team used official primary source documentation, interviews, and trade literature to assess and document the reasons for the critical cost growth. The methodology developed to assess portfolio performance included identifying objectives, choosing a portfolio type, selecting data and metrics, addressing data anomalies, and calculating and visualizing metrics. The authors applied the methodology to two sample portfolios — helicopter and satellite — from 2002 to 2012. They considered cost and schedule performance over time, reasons for changes in the portfolios' composition and maturity, the drivers and implications of rates of program spending, the percentage of funds remaining, the potential for future cost growth, the effects of rebaselining, and trends in associated Nunn-McCurdy breaches.
Chapter One
Introduction
Part One
Joint Precision Approach and Landing System Increment 1A
Chapter Two
Joint Precision Approach and Landing System Increment 1A
Chapter Three
JPALS Increment 1A Program Overview
Chapter Four
The Milestone B Program: JPALS Increment 1A
Chapter Five
Root Cause Analysis
Chapter Six
Conclusions
Part Two
Assessing the Department of Defense Weapons System Acquisition Portfolio
Chapter Seven
A Methodology for Assessing the Department of Defense Acquisition Portfolio
Chapter Eight
Construction of a Portfolio Analysis: Objectives, Portfolios, Data, Metrics, and Visualization Selection
Chapter Nine
Initial Examination of Defined Metrics: Helicopter and Satellite Portfolios
Chapter Ten
Expanded Narrative of the Helicopter Portfolio
Chapter Eleven
Summary and Way Ahead
Appendix A
JPALS Program History
Appendix B
Assessing the "Test Case" Portfolio
This research was sponsored by the Office of the Secretary of Defense (OSD) PARCA office and conducted within the Acquisition and Technology Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.
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