Economic System and Performance

U.S. Military Supply Considerations The main adjustment required of the materiel development and acquisition system pertains to the Nunn-McCurdy Breach clause, which is one of the considerations of cost for determining if a materiel solution is feasible. Specifically, this particular clause requires amendments to reflect the concerns of the modern economy and today's world. It was initially implemented 35 years ago, during which time the economy and social order has changed considerably.

Therefore, it is necessary to adjust the specific terms of this clause to reflect those changes, so that cost considerations such as the Nunn-McCurdy Breach can still create the same impact today as it was originally intended. Development Cost is one of the most crucial considerations for any type of materiel choices for the United States Department of Defense. As such, it is necessary to continually reflect on the worth of a particular material development in terms of the financial commitment required to adopt such a solution.

This ongoing fiscal reality is the reason that cost is one of the three principal components of an acquisition program baseline's "objectives, thresholds and exit criteria" 1 for any proposed materiel solutions. The other two determinants in a solution's merit for this baseline are its performance and schedule. Cost is so pivotal to the worthiness of a materiel option because it directly correlates to the utility of such an option.

An option with a low cost and a great yield (specifically in terms of its performance and immediacy in which it can be scheduled) is easily justified. Conversely, the value of a solution with the best performance and an astronomical cost is relatively low because the cost is so extreme. The Nunn-McCurdy Breach clause was first developed to ensure that the latter instance did not occur for acquiring new provisions. However, the changing times have proved influential for today's economic system.

There are many ways in which America is no longer the same superpower that it was during the Cold War when the Nunn-McCurdy Breach was first conceived. As such, the standards that were implemented then -- specifically as they relate to cost -- are too lenient. Some of the specific terms of the Nunn-McCurdy Breach must be reconfigured to reflect today's slumping domestic economy, and the overall decline of the dollar.

Adjusting these terms will make it so that materiel programs that exceed cost considerations and "lead to the wasteful spending of billions of dollars" 2 are not allowed to continue to receive funding. Application There are a couple of different ways in which the Nunn-McCurdy Breach must be reformed to reflect today's modern economic conditions. Firstly, the percentages whereby a program is deemed to have overly excessive cost growth require amendment.

Currently, the "criterion is based on cost growth of more than 15%, and calls for the termination of those programs whose total costs grow by more than 25% over the original estimate" 3. These percentages are too high for today's dire economic times. Instead, they should necessitate Congressional notification for any program exceeding 9% of its original estimate and terminate programs whose cost growth exceeds 19%. Another critical.