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Memorandum: Annual SAR Review 1 (August 1989)

handle is hein.congrec/cbo9651 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Robert D. ReInhauer U.S. CONGRESS Director WASHINGTON, D.C. 20515 August 2, 1989 MEMORANDUM FOR THE RECORD From: Mick Miller Bill Myers Ray Hall Ben Wolters Subject: Annual SAR Review The Selected Acquisition Reports (SARs) were submitted to Congress on March 10, 1989 in support of the fiscal year 1990/1991 budget request. As part of our continued efforts to assist the Congressional staff, we have examined these reports in detail. Our examination indicates that the Department of Defense (DoD) projects total program costs about 8 percent above levels of a year ago, but cost projections for individual systems vary widely. This memorandum presents the results of our analysis, highlighting aggregate cost changes and individual weapons system program changes. All costs are in current budget authority, unless otherwise noted. AGGREGATE COST CHANGES The total program costs provided in the SARs include research and development, procurement, military construction, and operation and maintenance appropriations. Total program costs reflect actual and projected costs of selected weapon systems from the development phase through the final buy. This year, the SARs cover 98 programs that have been reported previously and nine additional reports being submitted for the first time, for a total of 107 systems. The systems costs represent nearly 50 percent of the Administration's 1990 request for weapons procurement. Excluding systems that were first included in the SARs in the past year, our analysis shows that DoD projections of total program costs have increased by about 8 percent ($61.7 billion) over the past year, unadjusted for inflation and quantity changes. The Defense Department reports projected cost changes in seven basic categories. The categories and their contribution to this year's cost changes are as follows: o Economic changes are cost changes resulting from a difference between actual and previously projected price growth, and from differences between past and current economic projections. These two differences combine to decrease projected cost in the SARs by about $4.7 billion.

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