Financial Status of Major Federal Acquisitions, September 30, 1977

Information was included on acquisitions which are past the planning stage and are in the development, test, production, or construction phases. The Department of Defense defined major programs as those with an estimated research, development, test, and evaluation cost exceeding $75 million or an estimated production cost exceeding $300 million. Civil agencies are establishing criteria to define major acquisitions since definitions vary in each agency.

Cost increases of $201 billion, or 72 percent, over baseline estimates were shown for 808 civil and military acquisitions. The acquisitions were expected to cost $281 billion at their early or developmental stages; present agency estimates are $482 billion. For 200 projects, costs increased by $166 billion. Of this amount, $66 billion, or 40 percent, was attributed to inflation. The other increases were attributed to changes in quantities ordered, system characteristics, spare parts or similar types of support needs, delivery dates, and inadequate original cost estimates.