	Introduction

For 30 years, the Nunn-McCurdy Act (10 U.S.C. Nunn-McCurdy Thresholds

There are two categories of breaches: significant breaches and critical breaches. As shown in Table 1 , a "significant" Nunn-McCurdy breach occurs when the Program Acquisition Unit Cost or the Procurement Unit Cost increases 15% or more over the current baseline estimate or 30% or more over the original baseline estimate. A Program Acquisition Unit Cost is defined as the total cost of development, procurement, and construction divided by the number of units. A Procurement Unit Cost is defined as the total procurement cost divided by the number of units to be procured. Consequences of a Critical Nunn-McCurdy Breach

In the event of a critical breach, the Secretary of Defense is required to conduct a root-cause analysis to determine what factors caused the cost growth that led to a critical breach, and, in consultation with the Director of Cost Assessment and Program Evaluation, assess
1. the estimated cost of the program if no changes are made to the current requirements, 2. the estimated cost of the program if requirements are modified, 3. the estimated cost of reasonable alternatives to the program, and 4. the extent to which funding from other programs will need to be cut to cover the cost growth of this program. For DOD to invoke this exception, the Secretary of Defense must provide Congress (within 60 days of the SAR being submitted to Congress) a written determination, along with an explanation of the basis for the determination, that 
1. based on the root-cause analysis, but for the change in the number of units being acquired, the program acquisition unit cost or procurement unit cost would not have increased by more than 5% of the current baseline estimate or 10% of the original baseline estimate and 2. the change in quantity was not made as a result of increasing costs, a delay in the schedule, or problems with meeting the requirements. How the Nunn-McCurdy Act Has Evolved

The Nunn-McCurdy Act has been amended nine times over the years (see Figure 5 ). One of the most significant changes to the reporting requirements occurred in the FY2006 National Defense Authorization Act ( P.L. The new standard, which prevents DOD from avoiding a Nunn-McCurdy breach by simply re-baselining a program, increased the number of programs breaching Nunn-McCurdy. Another significant change occurred in the FY2009 Weapon Systems Acquisition Reform ( P.L. 111-23 ), when Congress included a requirement that programs with critical breaches be presumed terminated unless the Secretary of Defense certifies the program. For programs that are certified, DOD must (1) revoke the prior milestone approval, (2) restructure the program, and (3) provide Congress a written explanation of the root-cause of the cost growth. These changes were fueled in part over congressional concerns that programs with chronic cost growth and schedule delays were not being terminated and Congress was not being provided specific information on what was causing the cost growth. Nunn-McCurdy Does Not Require Reporting on Operations and Support (O&S) Costs

Some analysts suggest that Nunn-McCurdy is not a sufficiently comprehensive reporting mechanism because it does not apply to all elements of a weapon system's life-cycle costs, such as operations, support, or disposal. However, there have been some exceptions. 109-163 )
The FY2006 National Defense Authorization Act amended Nunn-McCurdy to include the original baseline estimate as a standard against which to measure cost growth.
The Nunn-McCurdy Act (10 U.S.C. §2433) requires the Department of Defense (DOD) to report to Congress whenever a Major Defense Acquisition Program (MDAP) experiences cost overruns that exceed certain thresholds. A program whose cost growth exceeds the statutory thresholds is said to have a Nunn-McCurdy breach.
There are two types of breaches: significant breaches and critical breaches. A significant breach is when the Program Acquisition Unit Cost (the total cost of development, procurement, and construction divided by the number of units procured) or the Procurement Unit Cost (the total procurement cost divided by the number of units to be procured) increases 15% or more over the current baseline estimate or 30% or more over the original baseline estimate. A critical breach occurs when the cost increases 25% or more over the current baseline estimate or 50% or more over the original baseline estimate.
The Nunn-McCurdy Act has been amended nine times. One of the most significant changes to the reporting requirements occurred in the FY2006 National Defense Authorization Act (P.L. 109-163), when Congress added the original baseline estimate as a threshold against which to measure cost growth. The new standard prevents DOD from simply re-baselining a program to avoid a breach. Since 2007, there have been 37 Nunn-McCurdy breaches.
Another significant change occurred in the FY2009 Weapon Systems Acquisition Reform Act (P.L. 111-23), which required programs with critical breaches to be presumed terminated unless the Secretary of Defense certifies the program. For programs that are certified, DOD generally must (1) revoke the prior milestone approval, (2) restructure the program, and (3) provide Congress a written explanation of the root cause of cost growth. These changes were fueled in part over congressional concern that programs with chronic cost growth were not being terminated and Congress was not being provided information on what caused the cost growth.
As a result of the Nunn-McCurdy Act, Congress has increased visibility into the cost performance of the acquisition stage of MDAPs. However, some analysts suggest that Nunn-McCurdy is not a sufficiently comprehensive reporting mechanism because program managers can take steps to avoid reporting a breach; Nunn-McCurdy does not apply to all elements of a weapon system's life-cycle (such as operations and support costs); and the timelines for reporting are such that by the time Congress is notified of a breach, there is little opportunity for Congress to take action.