10 U.S.C. § 3225 — Discussion of risk in cost estimates

The Director of Cost Assessment and Program Evaluation and, as applicable, the Secretary of the relevant military department or head of the relevant Defense Agency^* must each (1) issue guidance requiring cost estimates for major defense acquisition^* programs and subprograms to discuss risk, possible effects of risk on program costs, and ways to reduce risk; (2) ensure estimates are based as far as practical on historical actual costs reflecting demonstrated contractor and government performance and give high confidence the program can finish without major budget changes; and (3) include the guidance-required information (A) in decision documents approving a cost estimate in the baseline description or another estimate for an event listed in section 3221(b)(6), and (B) in the next Selected Acquisition Report for a major defense acquisition program^* or subprogram.