1. U.S. Code
  2. title 10
  3. subtitle A
  4. part V
  5. subpart B
  6. chapter 222
  7. § 3222

Collapse to view only § 3222. Independent cost estimate required before approval

§ 3221. Director of Cost Assessment and Program Evaluation
(a)In General.—The Director of Cost Assessment and Program Evaluation shall ensure that the cost estimation and cost analysis processes of the Department of Defense provide accurate information and realistic estimates of cost for the acquisition programs of the Department of Defense.
(b)Functions.—In carrying out the responsibility of the Director under subsection (a), the Director shall—
(1) prescribe, by authority of the Secretary of Defense, policies and procedures for the conduct of cost estimation and cost analysis for the acquisition programs of the Department of Defense;
(2) with respect to cost estimation in the Department of Defense in general and with respect to specific cost estimates and cost analyses to be conducted in connection with a major defense acquisition program or major subprogram under chapters 321, 324, and 325, subchapter I of chapter 322, and sections 3042, 4232, 4273, 4293, 4321, 4323, and 4328 of this title, provide guidance to and consult with—
(A) the Secretary of Defense;
(B) the Under Secretary of Defense for Acquisition and Sustainment;
(C) the Under Secretary of Defense (Comptroller);
(D) the Secretaries of the military departments; and
(E) the heads of the Defense Agencies;
(3) issue guidance relating to the proper discussion of risk in cost estimates generally, and specifically, for the proper discussion of risk in cost estimates for major defense acquisition programs and major subprograms;
(4) issue guidance relating to full consideration of life-cycle management and sustainability costs in major defense acquisition programs and major subprograms;
(5) review all cost estimates and cost analyses conducted in connection with major defense acquisition programs and major subprograms;
(6) conduct or approve independent cost estimates and cost analyses for all major defense acquisition programs and major subprograms—
(A) in advance of—
(i) any decision to grant milestone approval pursuant to section 4251 or 4252 of this title;
(ii) any decision to enter into low-rate initial production or full-rate production;
(iii) any certification under section 4376 of this title;
(iv) any report under section 2445c(f) 1
1 See References in Text note below.
of this title; and
(v) any decision to enter into a contract in connection with a military construction project of a value greater than $500,000,000; and
(B) at any other time considered appropriate by the Director, upon the request of the Under Secretary of Defense for Acquisition and Sustainment, or upon the request of the milestone decision authority;
(7) periodically assess and update the cost indexes used by the Department to ensure that such indexes have a sound basis and meet the Department’s needs for realistic cost estimation; and
(8) annually review the cost and associated information required to be included, by section 4351(c)(1) of this title, in the Selected Acquisition Reports required by that section.
(c)Staff.—The Secretary of Defense shall ensure that the Director of Cost Assessment and Program Evaluation has sufficient professional staff of military and civilian personnel to enable the Director to carry out the duties and responsibilities of the Director under this chapter.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (b), Jan. 1, 2021, 134 Stat. 4174; Pub. L. 117–81, div. A, title XVII, § 1701(c)(1), (d)(5), (o)(6)(A)(i), Dec. 27, 2021, 135 Stat. 2135, 2136, 2147; Pub. L. 117–263, div. B, title XXVIII, § 2806(b), Dec. 23, 2022, 136 Stat. 2995.)

CITE AS: 10 USC 3221

§ 3222. Independent cost estimate required before approval
(a)Requirement.— A milestone decision authority may not approve entering a milestone phase of a major defense acquisition program or major subprogram unless an independent cost estimate has been conducted or approved by the Director of Cost Assessment and Program Evaluation and considered by the milestone decision authority that—
(1) for the technology maturation and risk reduction phase, includes the identification and sensitivity analysis of key cost drivers that may affect life-cycle costs of the program or subprogram; and
(2) for the engineering and manufacturing development phase, or production and deployment phase, includes a cost estimate of the full life-cycle cost of the program or subprogram.
(b)Regulations.—The regulations governing the span and submission of independent cost estimates required by section 3221 of this title shall require that the independent cost estimate of the full life-cycle cost of a program or subprogram include—
(1) all costs of development, procurement, military construction, operations and support, and trained manpower to operate, maintain, and support the program or subprogram upon full operational deployment, without regard to funding source or management control; and
(2) an analysis to support decisionmaking that identifies and evaluates alternative courses of action that may reduce cost and risk, and result in more affordable programs and less costly systems.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (c), Jan. 1, 2021, 134 Stat. 4174, 4175.)

CITE AS: 10 USC 3222

§ 3223. Director: review of cost estimates, cost analyses, and records of the military departments and Defense Agencies
The Secretary of Defense shall ensure that the Director of Cost Assessment and Program Evaluation—
(1) promptly receives the results of all cost estimates and cost analyses conducted by the military departments and Defense Agencies, and all studies conducted by the military departments and Defense Agencies in connection with such cost estimates and cost analyses, for major defense acquisition programs and major subprograms of the military departments and Defense Agencies; and
(2) has timely access to any records and data in the Department of Defense (including the records and data of each military department and Defense Agency and including classified and proprietary information) that the Director considers necessary to review in order to carry out any duties under this chapter.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (d), Jan. 1, 2021, 134 Stat. 4174, 4175; Pub. L. 117–81, div. A, title XVII, § 1701(c)(2), Dec. 27, 2021, 135 Stat. 2136.)

CITE AS: 10 USC 3223

§ 3224. Director: participation, concurrence, and approval in cost estimation
The Director of Cost Assessment and Program Evaluation may—
(1) participate in the discussion of any discrepancies between an independent cost estimate and the cost estimate of a military department or Defense Agency for a major defense acquisition program or major subprogram of the Department of Defense;
(2) comment on deficiencies in the methodology or execution of any cost estimate or cost analysis developed by a military department or Defense Agency for a major defense acquisition program or major subprogram;
(3) concur in the choice of a cost estimate within the baseline description or any other cost estimate (including the discussion of risk for any such cost estimate) for use at any event specified in section 3221(b)(6) of this title; and
(4) participate in the consideration of any decision to request authorization of a multiyear procurement contract for a major defense acquisition program or major subprogram.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (e), Jan. 1, 2021, 134 Stat. 4174, 4175.)

CITE AS: 10 USC 3224

§ 3225. Discussion of risk in cost estimatesThe Director of Cost Assessment and Program Evaluation, and the Secretary of the military department concerned or the head of the Defense Agency concerned (as applicable), shall each—
(1) issue guidance requiring a discussion of risk, the potential impacts of risk on program costs, and approaches to mitigate risk in cost estimates for major defense acquisition programs and major subprograms;
(2) ensure that cost estimates are developed, to the extent practicable, based on historical actual cost information that is based on demonstrated contractor and Government performance and that such estimates provide a high degree of confidence that the program or subprogram can be completed without the need for significant adjustment to program budgets; and
(3) include the information required in the guidance under paragraph (1)—
(A) in any decision documentation approving a cost estimate within the baseline description or any other cost estimate for use at any event specified in section 3221(b)(6) of this title; and
(B) in the next Selected Acquisition Report pursuant to section 4351 of this title in the case of a major defense acquisition program or major subprogram, or the next quarterly report pursuant to section 2445c 1
1 See References in Text note below.
of this title in the case of a major automated information system program.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (f), Jan. 1, 2021, 134 Stat. 4174, 4176; Pub. L. 117–81, div. A, title XVII, § 1701(o)(6)(A)(ii), Dec. 27, 2021, 135 Stat. 2147.)

CITE AS: 10 USC 3225

§ 3226. Estimates for program baseline and analyses and targets for contract negotiation purposes
(a)Cost Estimates Developed for Specified Purposes Not to Be Used for Contract Negotiations or Obligation of Funds.—The policies, procedures, and guidance issued by the Director of Cost Assessment and Program Evaluation in accordance with the requirements of section 3221 of this title shall provide that cost estimates developed for baseline descriptions and other program purposes conducted pursuant to subsection (b)(6) of such section are not to be used for the purpose of contract negotiations or the obligation of funds.
(b)Cost Estimates Developed for Specified Purposes Not to Be Used for Contract Negotiations or Obligation of Funds.—The Under Secretary of Defense for Acquisition and Sustainment shall, in consultation with the Director of Cost Assessment and Program Evaluation, develop policies, procedures, and guidance to ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are based on the Government’s reasonable expectation of successful contractor performance in accordance with the contractor’s proposal and previous experience.
(c)Program Manager and Contracting Officer.—The program manager and contracting officer for each major defense acquisition program and major subprogram shall ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are carried out in accordance with the requirements of subsection (a) and the policies, procedures, and guidance issued by the Under Secretary of Defense for Acquisition and Sustainment under subsection (b).
(d)Availability of Excess Funds.—
(1) Funds that are made available for a major defense acquisition program or major subprogram in accordance with a cost estimate conducted pursuant to section 3221(b)(6) of this title, but are excess to a cost analysis or target developed pursuant to subsection (b), shall remain available for obligation in accordance with the terms of applicable authorization and appropriations Acts.
(2) Funds described in paragraph (1)—
(A) may be used—
(i) to cover any increased program costs identified by a revised cost analysis or target developed pursuant to subsection (b);
(ii) to acquire additional end items in accordance with the requirements of section 3069 of this title; or
(iii) to cover the cost of risk reduction and process improvements; and
(B) may be reprogrammed, in accordance with established procedures, only if determined to be excess to program needs on the basis of a cost estimate developed with the concurrence of the Director of Cost Assessment and Program Evaluation.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (g), Jan. 1, 2021, 134 Stat. 4174, 4176.)

CITE AS: 10 USC 3226

§ 3227. Guidelines and collection method for acquisition of cost data
(a)Director of Cape to Develop Guidelines and Collection Method.—The Director of Cost Assessment and Program Evaluation shall, in consultation with the Under Secretary of Defense for Acquisition and Sustainment, develop policies, procedures, guidance, and a collection method to ensure that quality acquisition cost data are collected to facilitate cost estimation and comparison across acquisition programs.
(b)Applicability to Acquisition Programs in Amount Greater Than Specified Threshold.—The program manager and contracting officer for each acquisition program in an amount greater than $100,000,000, in consultation with the cost estimating component of the relevant military department or Defense Agency, shall ensure that cost data are collected in accordance with the requirements of subsection (a).
(c)Limitation on Waiver Authority.—The requirement under subsection (a) may be waived only by the Director of Cost Assessment and Program Evaluation.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1812(a), (h), Jan. 1, 2021, 134 Stat. 4174, 4177.)

CITE AS: 10 USC 3227