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The authors use both descriptive and inferential techniques to investigate average and standard deviation trends in cost estimates for major defense acquisition programs (MDAPs) grouped into decades from the 1970s to 2010s. For total program-cost-growth factors (CGFs), the 2010s exhibited lower CGFs compared to the 1990s. For the program-acquisition-unit cost (PAUC) CGFs, the 2010s appear lower than the 1990s and borderline lower than the 1970s. A statistically significant decreasing trend in the standard deviations of total program CGFs throughout the decades was identified. This lowering variability trend also appeared for PAUC CGFs from the 1980s onward. This finding appears to be the first documented case known to us. This decreasing variability of cost estimates suggests to us that cost estimating and/or the process behind it might be improving over time. [ABSTRACT FROM AUTHOR]

Science and technology (S&T) programs serve an important function in the defense acquisition process as the initial phase leading to discovery and development of warfighting technology. The results of these programs impact the larger major defense acquisition programs, which integrate the technologies in subsequent phases of the life cycle. Despite this important role, little prior research has examined the performance of S&T programs. In this study, the authors investigate the impact of technological maturation as a critical success factor in Air Force S&T programs. The results suggest that S&T programs with mature technologies are more likely to experience above average cost growth and larger contract values while less likely to experience schedule growth. Additionally, the authors find the partnership method between the government and contractor matters for both technological maturation and schedule growth. Lastly, the nature of the S&T program is important, with aerospace programs more likely to technologically mature than human systems programs. [ABSTRACT FROM AUTHOR]

For fixed wing aircraft within the U.S. Air Force, Operating and Support (O&S) costs encompass a large portion of total life cycle costs. O&S costs include fuel, maintenance, and engine upgrades. To the authors' knowledge, no study to date has attempted to empirically quantify the realized effects of new aircraft engines on sustainment costs. Utilizing the Air Force Total Ownership Cost database, they focused on new engines appearing on the C-5s, C-130s, and C-135s. Although narrow in scope, results suggest newer engines have lower fuel costs. Maintenance costs for newer engines were not consistently higher or lower than the engines they replaced, although Contractor Logistics Support was not tracked by engine in this study. We found that savings from improved fuel efficiency tended to be greater than a potential increase in maintenance costs. [ABSTRACT FROM AUTHOR]

Factor Estimating is a technique commonly used by defense acquisition analysts to develop cost estimations. However, previous studies developing factors for the Engineering and Manufacturing Development (EMD) phase of the life cycle are limited. This research expands the current toolkit for cost analysts by developing cost factors in previously unexplored areas. More specifically, over 400 cost reports are utilized to create new standard cost factors that are delineated by five categories: commodity type, contract type, contractor type, development type, and Service. The factors are developed for those elements that are common in a wide array of projects such as program management, systems engineering, data, or training. This new factor dataset provides cost analysts with the information necessary to appropriately identify and select the most relevant factors to use when developing future cost estimates. Through statistical analysis, the research also helps identify those elements in which more analysts' time and energy should be allocated when developing their estimates. [ABSTRACT FROM AUTHOR]

This study uses descriptive and inferential statistics to identify cost growth of military construction (MILCON) at the programmatic level, while bridging the gap between Selected Acquisition Report (SAR) estimates and actual project costs. Findings of this study aid the cost community with appropriate allocation of resources in developing these estimates. Overall, Major Defense Acquisition Programs (MDAP) appear to experience more negative growth (cost savings) in MILCON estimates on reviewed SARs--typically less than 0.2% of the total program cost. SAR estimates became more accurate from the first to last SAR in comparison to the total MILCON programmed for all projects within a program. However, the last SAR's median MILCON cost estimate was approximately $31 million underestimated on projects currently authorized and appropriated for MDAPs. Preliminary research was restricted to 32 programs of which only 10 had authorized and accessible projects for comparison. Initial results suggest building on this exploratory analysis. [ABSTRACT FROM AUTHOR]

This article analyzes how development budget estimates, as reported in the Selected Acquisition Reports, change over time for primarily Air Force space programs. Government acquisition policy emphasizes the importance of developing an accurate point estimate for programs to ensure program budget efficiency; however, statistics imply space programs tend to underspend at the beginning of the program and to overspend at the end of Initial Operational Capability. This suggests new phasing methods that reflect the unique needs of space and perhaps other developmental-type programs by allocating more of the budget in later years rather than at the beginning of the program, which might decrease the possibility of budget and schedule growth. Additionally, budget estimate accuracy to actual budget increases as a program nears a specific fiscal year, indicating that only near-term budgets may be accurate for large Air Force space programs. [ABSTRACT FROM AUTHOR]

This article examines how cost growth factors (CGF) change over a program's acquisition life cycle for 36 Department of Defense aircraft programs. Starting from Milestone B, the authors examine CGFs at five gateways: Critical Design Review, First Flight (FF), the end of Developmental Test and Evaluation (DT&E), Initial Operational Capability, and Full Operational Capability. Each CGF is assigned a color rating based upon the program's cost growth: Green (low), Amber (moderate), or Red (high). Significant findings include dependencies among similar CGF color ratings and cost growth occurring primarily between FF and the end of DT&E during a program's life cycle. [ABSTRACT FROM AUTHOR]

Program managers use prior experience to spot potential programmatic areas of concern. Augmenting this experience, the authors present an empirical procedure to estimate the likelihood of a program not exceeding two schedule and cost thresholds: (a) 15 percent of the initial total acquisition cost estimate from Milestone (MS) B to Initial Operating Capability (IOC); and (b) 15 percent of the estimated length (in months) between MS B and IOC--the second bound being 25 percent of the cost and schedule estimate. Using logistic regression and odds ratios, the authors analyze 49 Department of Defense programs and generally find that electronic system programs, extremely large programs (exceeding $17.5 billion in Base Year 2017 dollars), programs procuring smaller quantities of units, and programs with shorter schedules (less time from MS A to MS B and projected time from MS B to IOC) experience smaller percentages of cost growth and schedule slippage. [ABSTRACT FROM AUTHOR]

This research examines Cost Growth Factors (CGF) at various program stages for 30 Department of Defense aircraft programs. From Milestone (MS) B, the authors determine CGFs at the Critical Design Review (CDR), First Flight (FF), Development Test and Evaluation End, Initial Operational Capability (IOC), and Full Operational Capability. They find developmentCGFs are significantly larger than procurement CGFs. Additionally, cost growth primarily occurs early in the program. At CDR, which occurs on average at the 12 percent completion point of a program, aircraft programs had already experienced on average 15 percent of their total program cost growth. The first spike in percent of total cost growth occurs at FF, 35 months or ~3 years after MS B. Lastly, the analysis shows that by IOC (approximately 6.5 years after MS B or 48 percent of program completion), an aircraft program realizes 91 percent of its total cost growth. [ABSTRACT FROM AUTHOR]

The Department of Defense (DoD) cost estimating methodology traditionally focuses on parametric estimating using ordinary least squares (OLS) regres sion. Given the recent advances in acquisition data collection, however, senior leaders have expressed an interest in incorporating "data mining" and "more innovative analyses" within cost estimating. Thus, the goal of this research is to investigate nonparametric data mining techniques and their application to DoD cost estimating. Using a meta-analysis of 14 cost estimating studies containing 32 datasets that predominantly relate to commercial software development, the predictive accuracy of OLS regression is measured against three nonparametric data mining techniques. The meta-analysis results indicate that, on average, the nonparametric techniques outperform OLS regression for cost estimating. Follow-on data mining research that incor porates DoD-specific acquisition cost data is recommended to extend this article's findings. [ABSTRACT FROM AUTHOR]

The United States has spent more than $23 billion on construction in Afghanistan since 2001. The dynamic security situation created substantial project uncertainty, and many construction projects used cost-plus-fixed-fee contracts (CPFF) instead of the firm-fixed-price (FFP) norm. Using a dataset of 25 wartime construction projects managed by the Air Force Civil Engineer Center, the authors sought to confirm that both contract types yield project outcomes consistent with the established literature. As expected, they found CPFF contracts had greater cost and schedule growth than FFP. However, they did not find differences regarding as-built quality. Additionally, the authors sought to determine whether CPFF contracts exhibited greater construction risks than FFP contracts. They found no significant differences between contract types in terms of security incidents or other environmental factors. This research may be particularly relevant to military owners who contract projects in wartime environments. [ABSTRACT FROM AUTHOR]

Recent legislation, such as the Weapon Systems Acquisition Reform Act of 2009, requires a renewed emphasis on understanding operating and support (O&S) costs. Conventional wisdom within the acquisition community suggests a 70:30 cost ratio with respect to O&S and acquisition of an average weapon system. Using 37 Air Force and Navy programs, the authors estimate the mean overall ratio of O&S costs to acquisition costs to be closer to 55:45, although many weapon systems displayed significant deviation from this 55 percent average. Contributing factors such as life expectancy and acquisition strategy (i.e., new system or modification) affect this variance. Their research advises against using a single "one-size-fits-all" O&S/acquisition cost ratio for all major DoD weapon systems. [ABSTRACT FROM AUTHOR]