The Navy’s Surface Electronic Warfare Program is experiencing significant cost overruns that could put the program behind schedule, a Department of Defense Inspector General report found after complaints to the IG hotline.

The IG report redacted the specific amounts and other related details of the cost overruns, but called them “significant increases” over the budget $5.7 billion for the engineering and manufacturing development phase of SEWIP Block 3’. Of seven allegations toward the program, three were substantiated, two were partially substantiated and two were found to be unsubstantiated.

The SEWIP program upgrades in four increments or “blocks” the AN/SLQ-32 electronic warfare system, which provides early detection, signal analysis, threat warning and protection from anti-ship missiles.

SEWIP Block 3 specifically will provide an improved electronic attack capability. Electronic attack neutralizes anti-access systems; suppresses adversarial integrated air defense systems; denies adversarial battlespace awareness sensors; degrades adversarial offensive capabilities; and denies effective adversarial command, control and communications, the report stated.

Naval Sea Systems Command on Feb. 12, 2015, awarded the SEWIP Block 3 design and development contract to Northrop Grumman with an option for the EMD phase originally valued at $91.7 million.

At least part of the reason behind the cost overruns is that officials from the Program Executive Office Integrated Warfare Systems Above Water Sensors, or PEO IWS 2.0, “did not approve an EMD phase cost baseline estimate,” the report read. “As a result, PEO IWS 2.0 officials may pay up to [redacted] more than the original estimated cost to complete fewer deliverables than agreed to in the original contract during the EMD phase. Additionally, PEO IWS 2.0 officials may complete the EMD phase at least behind schedule and may complete initial production later than planned.”

In response to the report’s findings, NAVSEA officials partially terminated the EMD phase in September and plan to establish a new cost estimate baseline for that phase by Dec. 28.

Furthermore, “PEO IWS will continue to review earned value management data and cost reports on a monthly basis to monitor contract performance.”

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