The Navy’s air-launched Long-Range Anti-Ship Missile (LRASM) sustained a significant Nunn-McCurdy unit cost breach compared to the acquisition program’s baseline (APB), the Pentagon announced last Thursday.

The Navy is developing an Offensive Anti-Surface Warfare (OASuW) program in two increments. Increment 1 consists of the Lockheed Martin [LMT] LRASM and aims to target near and mid-term high value surface combatants that have an Integrated Air Defense System, meaning they are defended by long-range surface-to-air missiles.

A Lockheed Martin rendering of LRASM. (Image: Lockheed Martin).

A significant breach is when unit costs increase by over 15 percent and less than 25 percent of the current APB, or over 30 percent but under 50 percent of the original APB. The department must notify Congress about programs that breach the Nunn-McCurdy limits.

The OASuW Increment 1 had a significant breach against the baseline approved in March 2016 “as a result of purposeful design changes made to address capability gaps with the understanding that per-unit costs would increase,” the Defense Department’s summaries of Selected Acquisition Report (SARs) cost changes said.

The LRASM cost increased by $741 million or nearly 40 percent from $1.87 billion to $2.6 billion.

The report also said “there was a realization of actual costs in Lots 1-3 and a Secretary of Defense Program Decision Memorandum that increased procurement quantities from 184 (PB 2019) to 374 (PB 2020).”

An updated APB for the program was approved in February, which cleared the SAR breach. However, the Navy noted it is reporting the breach for transparency.

LRASM reached early operational capability (EOC) in early fiscal year 2019 on the Air Force with B-1B bombers and is expected to reach EOC with the Navy’s F/A-18E/F Super Hornets before the four quarter of FY ’19 (Defense Daily, April 15).