Contract for development of a major program; costs; Major Program Annual Report for satellite development program

33 U.S.C. § 878a
in effect
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(a) DefinitionsFor purposes of this section—(1) the term “Under Secretary” means Under Secretary of Commerce for Oceans and Atmosphere; (2) the term “appropriate congressional committees” means—(A) the Committee on Appropriations and the Committee on Commerce, Science, and Transportation of the Senate; and (B) the Committee on Appropriations and the Committee on Science, Space and Technology of the House of Representatives; (3) the term “satellite” means the satellites proposed to be acquired for the National Oceanic and Atmospheric Administration (NOAA); (4) the term “development” means the phase of a program following the formulation phase and beginning with the approval to proceed to implementation, as defined in NOAA Administrative Order 216–108, Department of Commerce Administrative Order 208–3, and NASA’s Procedural Requirements 7120.5c, dated March 22, 2005; (5) the term “development cost” means the total of all costs, including construction of facilities and civil servant costs, from the period beginning with the approval to proceed to implementation through the achievement of operational readiness, without regard to funding source or management control, for the life of the program; (6) the term “life-cycle cost” means the total of the direct, indirect, recurring, and nonrecurring costs, including the construction of facilities and civil servant costs, and other related expenses incurred or estimated to be incurred in the design, development, verification, production, operation, maintenance, support, and retirement of a program over its planned lifespan, without regard to funding source or management control; (7) the term “major program” means an activity approved to proceed to implementation that has an estimated life-cycle cost of more than $250,000,000; and (8) the term “baseline” means the program as set following contract award and preliminary design review of the space and ground systems. (b) Contract requirements for major programs(1) NOAA shall not enter into a contract for development of a major program, unless the Under Secretary determines that—(A) the technical, cost, and schedule risks of the program are clearly identified and the program has developed a plan to manage those risks; (B) the technologies required for the program have been demonstrated in a relevant laboratory or test environment; (C) the program complies with all relevant policies, regulations, and directives of NOAA and the Department of Commerce; (D) the program has demonstrated a high likelihood of accomplishing its intended goals; and (E) the acquisition of satellites for use in the program represents a good value to accomplishing NOAA’s mission. (2) The Under Secretary shall transmit a report describing the basis for the determination required under paragraph (1) to the appropriate congressional committees at least 30 days before entering into a contract for development under a major program. (3) The Under Secretary may not delegate the determination requirement under this subsection, except in cases in which the Under Secretary has a conflict of interest. (c) Reports(1) Annually, at the same time as the President’s annual budget submission to the Congress, the Under Secretary shall transmit to the appropriate congressional committees a report that includes the information required by this section for the satellite development program for which NOAA proposes to expend funds in the subsequent fiscal year. The report under this paragraph shall be known as the Major Program Annual Report. (2) The first Major Program Annual Report for NOAA’s satellite development program shall include a Baseline Report that shall, at a minimum, include—(A) the purposes of the program and key technical characteristics necessary to fulfill those purposes; (B) an estimate of the life-cycle cost for the program, with a detailed breakout of the development cost, program reserves, and an estimate of the annual costs until development is completed; (C) the schedule for development, including key program milestones; (D) the plan for mitigating technical, cost, and schedule risks identified in accordance with subsection (b)(1)(A); and (E) the name of the person responsible for making notifications under subsection (d), who shall be an individual whose primary responsibility is overseeing the program. (3) For the major program for which a Baseline Report has been submitted, subsequent Major Program Annual Reports shall describe any changes to the information that had been provided in the Baseline Report, and the reasons for those changes. (d) Notification to Under Secretary of excess development costs(1) The individual identified under subsection (c)(2)(E) shall immediately notify the Under Secretary any time that individual has reasonable cause to believe that, for the major program for which he or she is responsible, the development cost of the program has exceeded the estimate provided in the Baseline Report of the program by 20 percent or more. (2) Not later than 30 days after the notification required under paragraph (1), the individual identified under subsection (c)(2)(E) shall transmit to the Under Secretary a written notification explaining the reasons for the change in the cost of the program for which notification was provided under paragraph (1). (3) Not later than 15 days after the Under Secretary receives a written notification under paragraph (2), the Under Secretary shall transmit the notification to the appropriate congressional committees. (e) Determination by Under Secretary of excess development costsNot later than 30 days after receiving a written notification under subsection (d)(2), the Under Secretary shall determine whether the development cost of the program has exceeded the estimate provided in the Baseline Report of the program by 20 percent or more. If the determination is affirmative, the Under Secretary shall—(1) transmit to the appropriate congressional committees, not later than 15 days after making the determination, a report that includes—(A) a description of the increase in cost and a detailed explanation for the increase; (B) a description of actions taken or proposed to be taken in response to the cost increase; and (C) a description of any impacts the cost increase, or the actions described under subparagraph (B), will have on any other program within NOAA; and (2) if the Under Secretary intends to continue with the program, promptly initiate an analysis of the program, which shall include, at a minimum—(A) the projected cost and schedule for completing the program if current requirements of the program are not modified; (B) the projected cost and the schedule for completing the program after instituting the actions described under paragraph (1)(B); and (C) a description of, and the projected cost and schedule for, a broad range of alternatives to the program. (f) Completion and transmittal of analysisNOAA shall complete an analysis initiated under subsection (e)(2) not later than 6 months after the Under Secretary makes a determination under subsection (e). The Under Secretary shall transmit the analysis to the appropriate congressional committees not later than 30 days after its completion.

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