Navy's OASUW incurred Nunn-McCurdy breach in 2018

The Pentagon's developmental air-launched, anti-surface missile's costs increased 39% in 2018, incurring a statutory breach, the Defense Department announced today.

The Offensive Anti-Surface Warfare Increment 1, also called the Long-Range Anti-Ship Missile, incurred a Nunn-McCurdy breach in 2018 as a result of "purposeful design changes made to address capability gaps with the understanding that per-unit costs would increase," according to summaries of the 2018 selected acquisition reports. The summaries account for changes in the president’s budget since December 2018.

The increased program costs -- from $741 million to between $1.8 billion and $2.6 billion -- were also caused by a "realization of actual costs in Lots 1-3" and "a Secretary of Defense Program Decision Memorandum that increased procurement quantities from 184 (PB 2019) to 374 (PB 2020)."

The department defines a Nunn-McCurdy breach as cost growth that exceeds 15 percent, but is less than 25 percent of the current acquisition product baseline, or growth that exceeds 30 percent, but not more than 50 percent of the original APB. The military is obligated to notify Congress about any program that incurs this breach.

An updated baseline that clears the program to move forward was approved in February. "However, the Navy is reporting the breach for transparency purposes," the document adds.