H.R. 4372: To amend title 10 to shorten breach reporting timelines, increase program transparency, and improve congressional oversight of Department of Defense cost overruns with respect to the cost growth for major systems, and for other purposes.

This bill aims to make several amendments to Title 10 of the United States Code, which governs the Department of Defense (DoD), focusing on improving accountability, transparency, and efficiency regarding defense acquisition programs. Here are the main components of the bill:

1. Shortening Breach Reporting Timelines

The bill proposes to shorten the timeline for reporting breaches in defense acquisition costs. Specifically, it requires that notifications be sent to Congress no later than 30 days after identifying significant cost overruns in defense projects. This applies to unit cost reports, ensuring that Congress is informed more promptly of potential issues related to program costs.

2. Designation of Major Subprograms

The bill introduces a requirement for the Secretary of Defense to designate certain defense acquisition programs as major subprograms if they involve anticipated expenditures exceeding $500 million for their research, development, testing, and operation. This designation is intended to enhance reporting and oversight on these larger and potentially more impactful projects.

3. Operations and Support Costs

The bill mandates that the life cycle costs, including operations and support for major defense acquisition programs or designated major subprograms, be included in financial assessments. This aims to provide a more comprehensive picture of a program's financial implications over its entire lifespan.

4. Critical Cost Growth Termination

This section focuses on specific circumstances that should lead to the termination of a major defense acquisition program. If a program experiences multiple cost increases that trigger a reassessment, the Secretary of Defense would be required to terminate the program within 90 days. The Secretary is also prohibited from delegating the responsibility of certifying these aspects to another official.

Additionally, this section emphasizes the importance of publicly disclosing cost-related reports so that stakeholders have greater access to information on financial management within the DoD.

5. Evaluation of Termination Plans

The bill requires that when considering the termination of programs, the Secretary of Defense must evaluate several options that maximize the value of any funds expended. This includes provisions for immediate termination without further action or for completing production before stopping a program, among other scenarios.

Relevant Companies

• BA - Boeing: Could be impacted due to its involvement in major defense contracting and potential changes in DoD program management and procurement practices.
• RTX - Raytheon Technologies: May be affected by revised timelines and reporting requirements for defense programs, impacting project management and funding processes.
• LDOS - Leidos Holdings: As a major defense contractor, changes to acquisition processes and oversight could directly affect contract proposals and business strategy.
• NOC - Northrop Grumman: Likely to see an impact on its defense program management activities due to new oversight and reporting standards.