10.11.4. Significant Changes
If, based on the MAIS Quarterly Report (MQR), the Senior Official makes a determination that a Significant Change has occurred, he or she must notify the congressional defense committees in writing of that determination not later than 45 days after the MQR was due.
10.11.4.1. Significant Change Thresholds
A Significant Change is defined as one in which one of the following has occurred:
- There has been a schedule change that will cause a delay of more than 6 months but less than a year in any program schedule milestone or significant event from the schedule submitted as the Original Estimate;
- The estimated total acquisition cost or total life-cycle cost for the program has increased by at least 15 percent, but less than 25 percent, over the Original Estimate, or
- There has been a significant, adverse change in the expected performance from the parameters submitted in the original MAR. The Department, however, has determined that a "significant, adverse change" is defined as a failure to meet a Key Performance Parameter (KPP) threshold value, which is the same definition chosen for a Critical Change in performance (addressed below). Therefore, all such failures will be determined to be Critical Changes.
10.11.4.2. Model Significant Change Process
When a Significant Change is determined, the Senior Official must notify the congressional defense committees in writing that he or she has made such Determination. The Notification should be in the form of a one-to-two page letter signed by the Senior Official and is due to the congressional defense committees not later than 45 days after the date the MAIS Quarterly Report (MQR) was due in the office of the Senior Official.
The Notification should acknowledge that a Significant Change, as defined by the statute, has occurred. Succinctly state the specific factor that has varied in excess of a threshold, the reasons for the variance, and indicate what actions (including reprogramming) the PM has taken or may take to bring the program back within the Original Estimate parameters or to avoid further deviation from the Original Estimate. If known, indicate the projected new cost or schedule.
If a Notification has been sent informing the congressional defense committees of a Significant Change in one element (for example, Milestone C date), and that element’s variance has expanded (but not exceeded a Critical Change criteria) in a subsequent MQR, no additional Notification need be sent to the congressional defense committees. If, however, a subsequent MQR indicates that a different reporting element has an over-threshold variance, another Notification must be sent informing the congressional defense committees of this additional basis for a Determination of Significant Change. When one Significant Change is identified, a prudent Program Manager will examine the entire program for other Significant Changes and report them all in a single Notification letter. One schedule element slip, for example, is likely to cause subsequent elements to slip.
10.11.4.3. Coordination and Transmittal of a Significant Change Notification to Congress
Notifications are drafted by Program Managers and coordinated with their respective Program Executive Officers and Component Acquisition Executives (CAE) for signature by the Senior Official. The Notification must be coordinated with the Under Secretary of Defense (Acquisition, Technology, and Logistics), the Deputy Chief Management Officer, or the DoD Chief Information Officer, as appropriate before sending to Congress. Copies of Notifications should be sent to the cognizant Overarching Integrated Product Team (OIPT) Leader before transmittal to Congress. Example Significant Change Notifications are available.
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