- § 4321. Development of major defense acquisition programs: sustainment of system to be replaced
- § 4323. Sustainment reviews
- § 4324. Life-cycle management and product support
- § 4325. Major weapon systems: assessment, management, and control of operating and support costs
- § 4328. Weapon system design: sustainment factors
§ 4321. Development of major defense acquisition programs: sustainment of system to be replaced
(a)Requirement for Sustaining Existing Forces.—
(1) The Secretary of Defense shall require that, whenever a new major defense acquisition program begins development, the defense acquisition authority responsible for that program shall develop a plan (to be known as a “sustainment plan”) for the existing system that the system under development is intended to replace. Any such sustainment plan shall provide for an appropriate level of budgeting for sustaining the existing system until the replacement system to be developed under the major defense acquisition program is fielded and assumes the majority of responsibility for the mission of the existing system. This section does not apply to a major defense acquisition that reaches initial operational capability before October 1, 2008.
(2) In this section, the term “defense acquisition authority” means the Secretary of a military department or the commander of the United States Special Operations Command.
(b)Sustainment Plan.—The Secretary of Defense shall require that each sustainment plan under this section include, at a minimum, the following:
(1) The milestone schedule for the development of the major defense acquisition program, including the scheduled dates for low-rate initial production, initial operational capability, full-rate production, and full operational capability and the date as of when the replacement system is scheduled to assume the majority of responsibility for the mission of the existing system.
(2) An analysis of the existing system to assess the following:
(A) Anticipated funding levels necessary to—
(i) ensure acceptable reliability and availability rates for the existing system; and
(ii) maintain mission capability of the existing system against the relevant threats.
(B) The extent to which it is necessary and appropriate to—
(i) transfer mature technologies from the new system or other systems to enhance the mission capability of the existing system against relevant threats; and
(ii) provide interoperability with the new system during the period from initial fielding until the new system assumes the majority of responsibility for the mission of the existing system.
(c)Exceptions.—Subsection (a) shall not apply to a major defense acquisition program if the Secretary of Defense determines that—
(1) the existing system is no longer relevant to the mission;
(2) the mission has been eliminated;
(3) the mission has been consolidated with another mission in such a manner that another existing system can adequately meet the mission requirements; or
(4) the duration of time until the new system assumes the majority of responsibility for the existing system’s mission is sufficiently short so that mission availability, capability, interoperability, and force protection requirements are maintained.
(d)Waiver.—The Secretary of Defense may waive the applicability of subsection (a) to a major defense acquisition program if the Secretary determines that, but for such a waiver, the Department would be unable to meet national security objectives. Whenever the Secretary makes such a determination and authorizes such a waiver, the Secretary shall submit notice of such waiver and of the Secretary’s determination and the reasons therefor in writing to the congressional defense committees.
(Added Pub. L. 108–375, div. A, title VIII, § 805(a)(1), Oct. 28, 2004, 118 Stat. 2008, § 2437; renumbered § 4321, Pub. L. 116–283, div. A, title XVIII, § 1848(b), Jan. 1, 2021, 134 Stat. 4258.)
§ 4323. Sustainment reviews
(a)In General.—The Secretary of each military department shall conduct a sustainment review of each covered system not later than five years after declaration of initial operational capability of a major defense acquisition program, and every five years thereafter throughout the life cycle of the covered system, to assess the product support strategy, performance, and operation and support costs of the covered system. The results of the sustainment review shall be documented in a memorandum by the relevant decision authority. The Secretary concerned shall make the memorandum and supporting documentation for each sustainment review available to the Under Secretary of Defense for Acquisition and Sustainment within 30 days after the review is completed.
(b)Elements.—At a minimum, the review required under subsection (a) shall assess execution of the life cycle sustainment plan of the covered system and include the following elements:
(1) An independent cost estimate for the remainder of the life cycle of the program.
(2) A comparison of actual costs to the amount of funds budgeted and appropriated in the previous five years, and if funding shortfalls exist, an explanation of the implications on equipment availability.
(3) A comparison between the assumed and achieved system reliabilities.
(4) An analysis of the most cost-effective source of repairs and maintenance.
(5) An evaluation of the cost of consumables and depot-level repairables.
(6) An evaluation of the costs of information technology, networks, computer hardware, and software maintenance and upgrades.
(7) As applicable, an assessment of the actual fuel efficiencies compared to the projected fuel efficiencies as demonstrated in tests or operations.
(8) As applicable, a comparison of actual manpower requirements to previous estimates.
(9) An analysis of whether accurate and complete data are being reported in the cost systems of the military department concerned, and if deficiencies exist, a plan to update the data and ensure accurate and complete data are submitted in the future.
(10) As applicable, information regarding any decision to restructure the life cycle sustainment plan for a covered system or any other action that will lead to critical operating and support cost growth.
(c)Coordination.—The review required under subsection (a) shall be conducted in coordination with the requirements of sections 4324 and 4325 of this title.
(d)Submission to Congress.—
(1) Not later than September 30 of each fiscal year, the Secretary of each military department shall annually submit to the congressional defense committees the sustainment reviews required by this section for such fiscal year.
(2) Each submission under paragraph (1) shall be submitted in unclassified form, but may include a classified annex.
(3) For a covered system with critical operating and support cost growth, such submission shall include a remediation plan to reduce operating and support costs or a certification by the Secretary concerned that such critical operating and support cost growth is necessary to meet national security requirements.
(e)Definitions.—In this section:
(1)Covered system.—The term “covered system” shall have the meaning given in section 4324 of this title.
(2)Critical operating and support cost growth.—The term “critical operating and support cost growth” means operating and support cost growth—
(A) of at least 25 percent more than the estimate documented in the most recent independent cost estimate for the covered system; or
(B) of at least 50 percent more than the estimate documented in the original Baseline Estimate (as defined in section 4214(d) of this title) for the covered system.
(Added Pub. L. 114–328, div. A, title VIII, § 849(c)(1), Dec. 23, 2016, 130 Stat. 2293, § 2441; amended Pub. L. 115–91, div. A, title VIII, §§ 816, 836(b)(2), Dec. 12, 2017, 131 Stat. 1462, 1473; renumbered § 4323 and amended Pub. L. 116–283, div. A, title VIII, § 802(c), title XVIII, §§ 1848(c), 1883(b)(2), Jan. 1, 2021, 134 Stat. 3732, 4258, 4294.)
§ 4324. Life-cycle management and product support
(a)Guidance on Life-Cycle Management.—The Secretary of Defense shall issue and maintain comprehensive guidance on life-cycle management and the development and implementation of product support strategies for covered systems. The guidance issued pursuant to this subsection shall—
(1) maximize competition and make the best possible use of available Department of Defense and industry resources at the system, subsystem, and component levels; and
(2) maximize value to the Department of Defense by providing the best possible product support outcomes at the lowest operations and support cost.
(b)Life Cycle Sustainment Plan.—
(1)In general.—Before granting Milestone B approval (or the equivalent), the milestone decision authority shall ensure that each covered system has an approved life cycle sustainment plan for which the milestone decision authority has received views from appropriate materiel, logistics, or fleet representatives. The life cycle sustainment plan shall include—
(A) a comprehensive product support strategy;
(B) performance goals, including key performance parameters for sustainment, key system attributes of the covered system, and other appropriate metrics;
(C) an approved life-cycle cost estimate for the covered system;
(D) affordability constraints and key cost factors that could affect the operating and support costs of the covered system;
(E) sustainment risks and proposed mitigation plans for such risks;
(F) engineering and design considerations that support cost-effective sustainment of the covered system;
(G) an intellectual property management plan for product support, including requirements for technical data, software, and modular open system approaches (as defined in section 4401 of this title);
(H) an estimate of the number of personnel needed to operate and maintain the covered system, including military personnel, Federal employees, contractors, and host nation support personnel (as applicable);
(I) a description of opportunities for foreign military sales; and
(J) major maintenance and overhaul requirements that will be required during the life cycle of the covered system.
(2)Subsequent phases.—Before granting Milestone C approval (or the equivalent) for the covered system, the milestone decision authority shall ensure that the life cycle sustainment plan required by paragraph (1) for such covered system has been updated to include views received by the milestone decision authority from appropriate materiel, logistics, or fleet representatives.
(c)Product Support Managers.—
(1)Requirement.—The Secretary of Defense shall require that each covered system be supported by a product support manager in accordance with this subsection.
(2)Responsibilities.—A product support manager for a covered system shall—
(A) develop, update, and implement a life cycle sustainment plan described in subsection (b);
(B) ensure the life cycle sustainment plan is informed by appropriate predictive analysis and modeling tools that can improve material availability and reliability, increase operational availability rates, and reduce operation and sustainment costs;
(C) conduct appropriate cost analyses to validate the product support strategy and life cycle sustainment plan, including cost-benefit analyses as outlined in Office of Management and Budget Circular A–94;
(D) ensure achievement of desired product support outcomes through development and implementation of appropriate product support arrangements;
(E) adjust performance requirements and resource allocations across product support integrators and product support providers as necessary to optimize implementation of the product support strategy;
(F) periodically review product support arrangements between the product support integrators and product support providers to ensure the arrangements are consistent with the overall product support strategy;
(G) prior to each change in the product support strategy or every five years, whichever occurs first, revalidate any business-case analysis performed in support of the product support strategy;
(H) ensure that the product support strategy maximizes small business participation at the appropriate tiers; and
(I) ensure that product support arrangements for the covered system describe how such arrangements will ensure efficient procurement, management, and allocation of Government-owned parts inventories in order to prevent unnecessary procurements of such parts.
(d)Definitions.—In this section:
(1)Product support.—The term “product support” means the package of support functions required to field and maintain the readiness and operational capability of covered systems, subsystems, and components, including all functions related to covered system readiness.
(2)Product support arrangement.—The term “product support arrangement” means a contract, task order, or any type of other contractual arrangement, or any type of agreement or non-contractual arrangement within the Federal Government, for the performance of sustainment or logistics support required for covered systems, subsystems, or components. The term includes arrangements for any of the following:
(A) Performance-based logistics.
(B) Sustainment support.
(C) Contractor logistics support.
(D) Life-cycle product support.
(E) Weapon systems product support.
(3)Product support integrator.—The term “product support integrator” means an entity within the Federal Government or outside the Federal Government charged with integrating all sources of product support, both private and public, defined within the scope of a product support arrangement.
(4)Product support provider.—The term “product support provider” means an entity that provides product support functions. The term includes an entity within the Department of Defense, an entity within the private sector, or a partnership between such entities.
(5)Covered system.—The term “covered system” means—
(A) a major defense acquisition program as defined in section 4201 of this title; or
(B) an acquisition program or project that is carried out using the rapid fielding or rapid prototyping acquisition pathway under section 804 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 2302 note) 1
1 See References in Text note below.
that is estimated by the Secretary of Defense to require an eventual total expenditure described in section 4201(a)(2).(6)Milestone b approval.—The term “Milestone B approval” has the meaning given that term in section 4172(e)(7) of this title.
(7)Milestone c approval.—The term “Milestone C approval” has the meaning given that term in section 4172(e)(8) of this title.
(8)Milestone decision authority.—The term “milestone decision authority” has the meaning given in section 4211(e)(3) of this title.
(Added Pub. L. 112–239, div. A, title VIII, § 823(a)(1), Jan. 2, 2013, 126 Stat. 1830, § 2337; amended Pub. L. 113–66, div. A, title VIII, § 823, Dec. 26, 2013, 127 Stat. 809; renumbered § 4324 and amended Pub. L. 116–283, div. A, title VIII, § 802(a), title XVIII, §§ 1848(d)(1), (2), 1883(b)(2), Jan. 1, 2021, 134 Stat. 3731, 4258, 4294; Pub. L. 117–81, div. A, title XVII, § 1701(b)(17), (d)(11), Dec. 27, 2021, 135 Stat. 2135, 2137; Pub. L. 117–263, div. A, title VIII, § 806, Dec. 23, 2022, 136 Stat. 2702.)
§ 4325. Major weapon systems: assessment, management, and control of operating and support costs
(a)Guidance Required.—The Secretary of Defense shall issue and maintain guidance on actions to be taken to assess, manage, and control Department of Defense costs for the operation and support of major weapon systems.
(b)Elements.—The guidance required by subsection (a) shall, at a minimum—
(1) be issued in conjunction with the comprehensive guidance on life-cycle management and the development and implementation of product support strategies for major weapon systems required by section 4324 of this title;
(2) require the military departments to retain each estimate of operating and support costs that is developed at any time during the life cycle of a major weapon system, together with supporting documentation used to develop the estimate;
(3) require the military departments to update estimates of operating and support costs periodically throughout the life cycle of a major weapon system, to determine whether preliminary information and assumptions remain relevant and accurate, and identify and record reasons for variances;
(4) establish policies and procedures for the collection, organization, maintenance, and availability of standardized data on operating and support costs for major weapon systems in accordance with section 2222 of this title;
(5) establish standard requirements for the collection and reporting of data on operating and support costs for major weapon systems by contractors performing weapon system sustainment functions in an appropriate format, and develop contract clauses to ensure that contractors comply with such requirements;
(6) require the military departments—
(A) to collect and retain data from operational and developmental testing and evaluation on the reliability and maintainability of major weapon systems; and
(B) to use such data to inform system design decisions, provide insight into sustainment costs, and inform estimates of operating and support costs for such systems;
(7) require the military departments to ensure that sustainment factors are fully considered at key life-cycle management decision points and that appropriate measures are taken to reduce operating and support costs by influencing system design early in development, developing sound sustainment strategies, and addressing key drivers of costs;
(8) require the military departments to conduct an independent logistics assessment of each major weapon system prior to key acquisition decision points (including milestone decisions) to identify features that are likely to drive future operating and support costs, changes to system design that could reduce such costs, and effective strategies for managing such costs;
(9) include—
(A) reliability metrics for major weapon systems; and
(B) requirements on the use of metrics under subparagraph (A) as triggers—
(i) to conduct further investigation and analysis into drivers of those metrics; and
(ii) to develop strategies for improving reliability, availability, and maintainability of such systems at an affordable cost; and
(10) require the military departments to conduct periodic reviews of operating and support costs of major weapon systems after such systems achieve initial operational capability to identify and address factors resulting in growth in operating and support costs and adapt support strategies to reduce such costs.
(c)Retention of Data on Operating and Support Costs.—
(1)In general.—The Director of Cost Assessment and Program Evaluation shall be responsible for developing and maintaining a database on operating and support estimates, supporting documentation, and actual operating and support costs for major weapon systems.
(2)Support.—The Secretary of Defense shall ensure that the Director, in carrying out such responsibility—
(A) promptly receives the results of all cost estimates and cost analyses conducted by the military departments with regard to operating and support costs of major weapon systems;
(B) has timely access to any records and data of the military departments (including classified and proprietary information) that the Director considers necessary to carry out such responsibility; and
(C) with the concurrence of the Under Secretary of Defense for Acquisition and Sustainment, may direct the military departments to collect and retain information necessary to support the database.
(d)Major Weapon System Defined.—In this section, the term “major weapon system” has the meaning given that term in section 3455(f) of this title.
(Added Pub. L. 115–91, div. A, title VIII, § 836(a)(1), Dec. 12, 2017, 131 Stat. 1472, § 2337a; amended Pub. L. 115–232, div. A, title X, § 1081(a)(20), Aug. 13, 2018, 132 Stat. 1984; renumbered § 4325 and amended Pub. L. 116–283, div. A, title XVIII, § 1848(d)(1), (3), Jan. 1, 2021, 134 Stat. 4258.)
§ 4328. Weapon system design: sustainment factors
(a)In General.—The Secretary of Defense shall ensure that the defense acquisition system gives ample emphasis to sustainment factors, particularly those factors that are affected principally by the design of a weapon system, in the development of a weapon system.
(b)Requirements Process.—The Secretary shall ensure that reliability and maintainability are included in the performance attributes of the key performance parameter on sustainment during the development of capabilities requirements.
(c)Solicitation and Award of Contracts.—
(1)Requirement.—The program manager of a weapon system shall include in the solicitation for and terms of a covered contract for the weapon system clearly defined and measurable requirements for engineering activities and design specifications for reliability and maintainability.
(2)Exception.—If the program manager determines that engineering activities and design specifications for reliability or maintainability should not be a requirement in a covered contract or a solicitation for such a contract, the program manager shall document in writing the justification for the decision.
(3)Source selection criteria.—The Secretary shall ensure that sustainment factors, including reliability and maintainability, are given ample emphasis in the process for source selection. The Secretary shall encourage the use of objective reliability and maintainability criteria in the evaluation of competitive proposals.
(d)Contract Performance.—
(1)In general.—The Secretary shall ensure that the Department of Defense uses best practices for responding to the positive or negative performance of a contractor in meeting the sustainment requirements of a covered contract for a weapon system. The Secretary shall encourage the use of incentive fees and penalties as appropriate and authorized in paragraph (2) in all covered contracts for weapons systems.
(2)Authority for incentive fees and penalties.—The Secretary of Defense is authorized to include in any covered contract provisions for the payment of incentive fees to the contractor based on achievement of design specification requirements for reliability and maintainability of weapons systems under the contract, or the imposition of penalties to be paid by the contractor to the Government for failure to achieve such design specification requirements. Information about such fees or penalties shall be included in the solicitation for any covered contract that includes such fees or penalties.
(3)Measurement of reliability and maintainability.—In carrying out paragraph (2), the program manager shall base determinations of a contractor’s performance on reliability and maintainability data collected during the program. Such data collection and associated evaluation metrics shall be described in detail in the covered contract. To the maximum extent practicable, such data shall be shared with appropriate contractor and government organizations.
(4)Notification.—The Secretary of Defense shall notify the congressional defense committees upon entering into a covered contract that includes incentive fees or penalties authorized in paragraph (2).
(e)Covered Contract Defined.—In this section, the term “covered contract”, with respect to a weapon system, means a contract—
(1) for the engineering and manufacturing development of a weapon system, including embedded software; or
(2) for the production of a weapon system, including embedded software.
(Added Pub. L. 115–91, div. A, title VIII, § 834(a)(1), Dec. 12, 2017, 131 Stat. 1469, § 2443; renumbered § 4328 and amended Pub. L. 116–283, div. A, title XVIII, § 1848(e), Jan. 1, 2021, 134 Stat. 4259.)