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    If this approx 30% cut becomes a reality, does that cause a Congressionally reportable significant or critical change now since impact isn't until after FD? If yes, and since the MDA is the USD(ATL), would the Service require MDA approval of the reduction since the reduction would occur until after FD? Could DOD 5000.02 Table 2-1 apply to this situation?


    Answer

    A reduction in Life-Cycle funding will in and of itself will not cause either a Significant or Critical Change. Note that a reduction in funding MAY cause a Significant or Critical Change in either Schedule or Performance.
     
    If we assume that your program will pass all scheduled events including FD and meet all KPP thresholds AND, not be based on COTS in any way (All GOTS), then, a reduction in budget during the sustainment phase might cause some performance degradation in that you will not be able to sustain/fix the software bugs that will come about but once FDD is declared, decreases in costs are not considered critical.  If COTS, the vendor normally would take care of much of the sustainment costs assuming the sustainment cost was included in the license agreement.  However, we do not know enough about your program to make this determination. 
     
    In the event that FDD and FD have not occurred:
    Title 10 (2445C- Reports: Quarterly Reports; Reports on Program Changes) at http://www.law.cornell.edu/uscode/text/10/2445c  states the requirement to report changes i.e. Significant as defined: or a change in expected performance will undermine the ability of the system to perform the functions anticipated.  While there is no discussion about cost reduction, I believe the intent to be that if funding is cut, then the expected performance will degrade.  (This would be our response to DoDI 5000.02 Table 2-1, Notes: 4).
    http://www.law.cornell.edu/uscode/text/10/2445b(b) speaks to elements that might be considered to be discussed.
    The application of this changes when FDD and FD are attained.  The following reporting requirements are set by Chapter 144a of Title 10.
     
      The DAG provides reporting guidelines based on the interpretation of the 144a.  (See MQR 144A_RAQs_as of 17Feb11.docx) It can be found with the other MAIS reference documents at:
    https://acc.dau.mil/CommunityBrower.aspx?id=227820
     
    This is an excerpt from the document:
     
    MAIS Quarterly Reporting:  The MQR supports a congressional reporting requirement.  We believe congressional interest in a MAIS program will have abated (and a close-out MAIS Annual Report (MAR) can be submitted) if one of the following events has occurred:
     
    •  The program does not or no longer meets the Chapter 144A MAIS definition;
    •  The program has been terminated; or
    •  The program has achieved full deployment (FD).
     
    Accordingly, a “close-out” MQR can be submitted which articulates one of the three circumstances above and cites an existing authoritative document (signed by an appropriate authority) as support.  A “close-out” MAR will continue to be required when it is due.
     
    DAES:  The DAES supports the information needs of OSD-level overseers, which can continue past the point when an MQR may be terminated.  DAES report termination can be considered at the time MQRs/MARs are terminated or later when program management believes the oversight information needs have expired.  Program management should suggest DAES cessation to the OSD oversight community, and the OIPT leader will determine on a case-by-case basis whether DAES reports can cease.

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