Average Procurement Unit Cost (APUC) is calculated by dividing total procurement cost by the number of articles to be procured. Total procurement cost includes flyaway, rollaway, sail away cost (that is, recurring and nonrecurring costs associated with production of the item such as hardware/software, Systems Engineering (SE), engineering changes and warranties) plus the costs of procuring technical data (TD), training, support equipment, and initial spares.
NUNN-MCCURDY Unit Cost Breaches
Unit cost reporting is required by 10 USC §2433. A “Nunn-McCurdy” unit cost breach occurs when a Major Defense Acquisition Program (MDAP) experiences an increase of at least 15% in Program Acquisition Unit Cost (PAUC) or APUC above the unit costs in the Acquisition Program Baseline (APB).
AcqLinks and References:
- Defense Acquisition Guidebook (DAG) – Chapter 3
- GAO Cost Estimating and Assessment Guide
- NASA Cost Estimating Handbook – 2008