Air Force Drives Down Weapons Costs By $13.4 Billion; Second Year of Decline

http://breakingdefense.com/2014/02/air-force-drives-down-weapons-costs-by-13-4-billion-second-year-of-decline/



Air Force Drives Down Weapons Costs By $13.4 Billion; Second Year of Decline
By Colin Clark
on February 21, 2014 at 11:13 AM

PENTAGON: The Air Force has substantially driven down its acquisition costs for the second year in a row, doubling its success in cutting cost estimates from $7 billion last year to $13.4 billion this year. But not all is rosy in acquisition land. Schedule problems continue to mount, getting a “poor” rating from the service, with more than 102 months added to major programs between September 2012 and September 2013.

Since it’s a reasonable question to ask: Did they do this just by changing the assumptions underlying the costs? The answer is no. So, just as we report when the cost of a program soars, as in a Nunn-McCurdy breach, we report when those costs come down, especially when the number is repeated and is substantial. (Bear in mind that, as always, we are talking about cost estimates, known in Pentagon acquisition speak as Acquisition Performance Baselines.)

Here’s the meat: 24 of the Air Force’s 32 major programs “have reduced their acquisition program cost estimates by approximately $13.4 billion,” writes Robert Pollock, director of the Air Force’s acquisition excellence and change office.

But the puzzle is, how can programs take so much longer and not cost more? Lt. Gen. Charles R. Davis, the Air Force’s top uniformed acquisition official, was blunt. “There is true cost reduction here to the programs, which is totally counterintuitive to schedule growth in the programs,” he said in an interview in his Pentagon office.