The DoD Office of Inspector General received three Defense Hotline complaints alleging SEWIP Block 3 experienced significant cost increases over original Engineering and Manufacturing Development (EMD) phase estimates. The EMD phase is to develop, build, and test a product to verify that all operational requirements have been met, and to support production or deployment decisions. Within the complaints, we reviewed seven allegations related to cost increases, under bidding, scope increases, and program baseline approval and determined that:
• three of seven allegations were substantiated,
• two of seven allegations were partially substantiated, and
• two of seven allegations were not substantiated.
We address the primary allegation of cost increases over the original EMD phase estimates in the body of this report. See Appendix B for a detailed description of each allegation and whether it was substantiated. )The Program Executive Office Integrated Warfare Systems Above Water Sensors (PEO IWS 2.0) reports to Program Executive Office Integrated Warfare System (PEO IWS) and manages the $5.7 billion SEWIP procurement. SEWIP is an upgrade to the AN/SLQ-32 electronic warfare system (AN/SLQ-32). The AN/SLQ-32 provides early detection, signal analysis, threat warning, and protection from anti-ship missiles. PEO IWS 2.0 is modernizing the AN/SLQ-32 with four incremental upgrades, Blocks 1 through 4. SEWIP Block 3 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. On February 12, 2015, the Naval Sea Systems Command (NAVSEA) awarded a contract to Northrop Grumman to design and develop SEWIP Block 3. The contract included an option for the EMD phase with an original value of $91.7 million.