POGO urges overhaul of Nunn-McCurdy Act to rein in defense cost overruns

The Nunn-McCurdy Act, passed in 1982 to curb runaway costs in DOD weapon acquisitions, requires Congress be notified when major programs exceed budget estimates by significant margins. Yet, decades later, the Project on Government Oversight (POGO) points to persistent failures in cost containment, with critical breaches rarely leading to real program terminations. Programs such as the F-35 and the Sentinel ICBM continue despite massive overruns and repeated delays.

According to POGO, Nunn-McCurdy suffers from key weaknesses:

• Reactive reporting: DOD notifies Congress only after breaches have occurred, impeding timely oversight.
• Overbroad waivers: The secretary of defense can almost always recertify programs, rendering termination requirements moot.
• Gaps in reporting: Individual units—especially in complex programs like shipbuilding—often escape scrutiny, and the act fails to address operations and support (O&S) costs, which make up the bulk of life-cycle expenses.

POGO urges the 119th Congress to make four critical changes:

1. Shorten reporting timelines so Congress can intervene before spending spirals out of control.
2. Subject subprograms to oversight by classifying significant individual production units as “major subprograms.”
3. Include O&S costs in baseline estimates to capture total program costs.
4. Require explicit congressional approval before recertifying programs with critical breaches.

The reforms, POGO argues, would restore meaningful oversight and fiscal discipline to US defense acquisitions, helping Congress rein in inefficiencies before costs balloon even further.