Major Defense Acquisition Programs: 2025 Thresholds and Nunn-McCurdy

A Major Defense Acquisition Program, or MDAP, is a Department of Defense acquisition program that either the Secretary of Defense designates as one or is expected to cost more than $1 billion for research, development, test, and evaluation, or more than $4.5 billion for procurement, measured in fiscal year 2024 constant dollars. Programs that cross either line move into the highest oversight bracket in the defense acquisition system and take on mandatory congressional reporting, cost-breach reviews, and the possibility of forced termination if spending runs away.

What the Statute Actually Says

The definition sits at 10 U.S.C. § 4201. A program is an MDAP if it is a DoD acquisition program, is not a highly sensitive classified program, and meets one of two conditions: the Secretary of Defense designates it as an MDAP, or its estimated costs exceed the statutory dollar thresholds.¹

The designation path matters as much as the dollar path. The Secretary can label any acquisition program an MDAP regardless of its price if the program carries enough strategic weight or technical risk to justify heightened oversight. It works as a safety valve, so a program cannot slip past scrutiny simply because its cost estimates land just below the triggers.

Two categories sit outside the framework entirely. Highly sensitive classified programs operate under separate oversight channels suited to their security requirements. Automated information systems follow their own classification rules, and the MDAP dollar thresholds do not apply to them.¹

The Dollar Thresholds and the 2025 Change

A program becomes an MDAP automatically if its estimated total RDT&E spending exceeds $1 billion, or if its estimated total procurement cost, including all planned increments, exceeds $4.5 billion. Both figures are stated in fiscal year 2024 constant dollars, which strips out inflation so cost comparisons stay meaningful over a program’s life.¹

These numbers are new. Before December 18, 2025, the triggers were $300 million for RDT&E and $1.8 billion for procurement in fiscal year 1990 constant dollars, which worked out to roughly $525 million and $3.065 billion in FY 2020 dollars. Older DoD policy documents such as DoDI 5000.85 still reference those figures.² Congress replaced them with the current $1 billion and $4.5 billion figures through Section 1804(d) of Public Law 119–60.³

The jump is more than an inflation adjustment. Congress genuinely raised the bar. Some programs that previously qualified as MDAPs may no longer meet the new thresholds, and those falling between the old and new lines could see reduced oversight requirements unless the Secretary uses discretionary authority to keep them classified as MDAPs.

MDAP Versus Major System

Not every large military program is an MDAP. A separate statute, 10 U.S.C. § 3041, defines a lower-tier category called a “major system”: a combination of hardware, equipment, and software functioning together to fulfill a mission need. The financial bar for a major system is $275 million for RDT&E or $1.3 billion for procurement, also in FY 2024 constant dollars.⁴

A program can be a major system without being an MDAP. Major systems still receive structured oversight, but the reporting and review requirements are lighter. The distinction matters because MDAP designation is what pulls in the congressional reporting obligations and cost-breach rules described below.

Decision Authority Under ACAT I

MDAPs sit in Acquisition Category I, the top tier of the DoD acquisition system. ACAT I is split into three sub-levels that determine which official acts as Milestone Decision Authority, the person who approves or rejects a program’s progression through key development stages.⁵

ACAT ID programs are the highest-visibility acquisitions. The Defense Acquisition Executive, currently the Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)), personally serves as Milestone Decision Authority.
ACAT IB programs are decided by the Service Acquisition Executive (the top acquisition official in the Army, Navy, or Air Force) directly under the statute rather than by delegation. If the USD(A&S) later designates a different official, the program reclassifies to ACAT ID.
ACAT IC programs are ones where the USD(A&S) has delegated decision authority to the head of the relevant DoD component, or often to the Component Acquisition Executive below them.

The Milestone Decision Authority is also expected to watch for creeping cost growth. If a program comes within 10 percent of the next ACAT tier’s thresholds, the decision authority should consider reclassifying the program upward.²

Selected Acquisition Reports to Congress

Every MDAP owes Congress regular reports on cost, schedule, and performance. The primary vehicle is the Selected Acquisition Report (SAR), required by 10 U.S.C. § 4351.⁶

The first-quarter SAR each fiscal year is the most detailed. It must include current and original baseline cost estimates with risk analysis, a full life-cycle cost analysis for programs in or past development, significant schedule and technical risks, the history of program acquisition unit cost and procurement unit cost going back to December 2001, and a summary of major developments since the program’s first SAR.⁶

The three remaining quarterly reports are shorter, covering current costs, quantities, reasons for any changes since the last report, and status updates on major contracts. SARs are due within 45 days of the end of each quarter, except the first-quarter comprehensive report, which is due within 45 days after the President submits the annual budget to Congress. The reports establish the baseline numbers against which cost breaches are measured, and they are usually where a program’s trouble first becomes visible to lawmakers.

Nunn-McCurdy Cost Breaches

The Nunn-McCurdy framework is where MDAP oversight has real teeth. The system measures two types of unit-cost growth against two baselines, producing four possible breach triggers and two levels of consequence.⁷

Significant Breaches

A significant breach occurs when a program’s acquisition unit cost or procurement unit cost rises by at least 15 percent over the current baseline estimate or at least 30 percent over the original baseline estimate.⁷ When a program manager has reason to believe a significant breach has occurred, the law requires an immediate unit cost report to the service acquisition executive; the manager cannot wait for the next quarterly filing. Congress then receives a SAR for the quarter in which the breach occurred, together with an explanation of the cost increase and its causes.⁸

Critical Breaches

A critical breach triggers at 25 percent over the current baseline or 50 percent over the original baseline.⁷ A critical breach creates a legal presumption that the program will be terminated. To keep it alive, the Secretary of Defense must personally certify to Congress, within 60 days of the SAR filing, that the program meets all five of the following:⁹

Continuing the program is essential to national security.
No alternative system can deliver acceptable capability at lower cost.
The new cost estimates are reasonable, as independently verified by the Director of Cost Assessment and Program Evaluation.
The program is a higher priority than other programs whose funding would be cut to cover the cost growth.
The program’s management structure is adequate to control costs going forward.

If the Secretary fails to certify within 60 days, the program is presumed terminated. The certification also has to include a root cause analysis, an assessment of alternative systems, and the projected cost to complete the program both with and without modified requirements.⁹

Programs Excluded from MDAP Status

Three categories of acquisition programs are excluded from MDAP designation even when their costs exceed the dollar thresholds.¹

The Middle Tier of Acquisition (MTA) pathway covers rapid prototyping and rapid fielding for capabilities mature enough to be prototyped or fielded within five years of the program’s start.¹⁰ The Software Acquisition Pathway is reserved for custom software developed for DoD; programs on that pathway are not treated as MDAPs regardless of cost, and they are also exempt from the Joint Capabilities Integration and Development System that governs traditional hardware requirements.¹¹ The third exclusion covers defense business systems (internal enterprise systems such as logistics, financial management, and human resources platforms) acquired through their own dedicated pathway.¹

These exclusions are not permanent escape hatches. If an MTA program’s costs are expected to exceed MDAP thresholds, the decision authority must get written approval from the USD(A&S), after consulting the MTA Advisory Board, before obligating funds to continue on the MTA pathway. Without that approval, the program has to shift to a different acquisition strategy. Programs that enter MTA below the MDAP threshold but grow past it must report the cost growth to the full MTA Advisory Board.¹² Congress tolerates streamlined oversight for speed, but not as a permanent way around accountability on high-cost programs.

1
Office of the Law Revision Counsel. 10 USC 4201 – Major Defense Acquisition Programs Definition Exceptions
2
Department of Defense. DoDI 5000.85 Major Capability Acquisition
3
Office of the Law Revision Counsel. 10 US Code 4201 – Major Defense Acquisition Programs Definition Exceptions
4
Office of the Law Revision Counsel. 10 USC 3041 – Major System Definition
5
Defense Acquisition University. Acquisition Categories ACATs
6
Office of the Law Revision Counsel. 10 USC 4351 – Selected Acquisition Reports
7
Office of the Law Revision Counsel. 10 USC 4371 – Cost Growth Definitions Applicability of Reporting Requirements Constant Base Year Dollars
8
Office of the Law Revision Counsel. 10 USC 4375 – Breach of Significant Cost Growth Threshold or Critical Cost Growth Threshold
9
Office of the Law Revision Counsel. 10 USC 4376 – Breach of Critical Cost Growth Threshold Reassessment of Program Presumption of Program Termination
10
Defense Acquisition University. Middle Tier of Acquisition MTA
11
Department of Defense. DoDI 5000.87 Operation of the Software Acquisition Pathway
12
Department of Defense. DoDI 5000.80 Operation of the Middle Tier of Acquisition