Historical Cost Growth of Completed Weapon System Programs PDF Download
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Author: Mark V. Arena
Publisher: Rand Corporation
ISBN: 0833039253
Category : History
Languages : en
Pages : 74
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Book Description
This report is one of a series from a RAND Project AIR FORCE project, "The Cost of Future Military Aircraft: Historical Cost Estimating Relationships and Cost Reduction Initiatives." The purpose of the project is to improve the tools used to estimate the costs of future weapon systems. It focuses on how recent technical, management, and government policy changes affect cost. This report focuses on the accuracy of cost estimates. For our analysis, we used a very specific sample of Selected Acquisition Report (SAR) data, namely only programs that are complete or are nearly so. The analysis indicates a systematic bias toward underestimating the costs and substantial uncertainty in estimating the final cost of a weapon system. In contrast to the previous literature, the cost growth was higher than previously observed. We also found few correlations with cost growth, but observed that programs with longer duration had greater cost growth and electronics programs tended to have lower cost growth. Although there were some differences in the mean cost growth factors among the military departments, the differences were not statistically significant. While newer programs appear to have lower cost growth, this trend appears to be due to factors other than acquisition policies.
Author: Mark V. Arena
Publisher: Rand Corporation
ISBN: 0833039253
Category : History
Languages : en
Pages : 74
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Book Description
This report is one of a series from a RAND Project AIR FORCE project, "The Cost of Future Military Aircraft: Historical Cost Estimating Relationships and Cost Reduction Initiatives." The purpose of the project is to improve the tools used to estimate the costs of future weapon systems. It focuses on how recent technical, management, and government policy changes affect cost. This report focuses on the accuracy of cost estimates. For our analysis, we used a very specific sample of Selected Acquisition Report (SAR) data, namely only programs that are complete or are nearly so. The analysis indicates a systematic bias toward underestimating the costs and substantial uncertainty in estimating the final cost of a weapon system. In contrast to the previous literature, the cost growth was higher than previously observed. We also found few correlations with cost growth, but observed that programs with longer duration had greater cost growth and electronics programs tended to have lower cost growth. Although there were some differences in the mean cost growth factors among the military departments, the differences were not statistically significant. While newer programs appear to have lower cost growth, this trend appears to be due to factors other than acquisition policies.
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Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This report is one of a series from a RAND Project AIR FORCE project, "The Cost of Future Military Aircraft: Historical Cost Estimating Relationships and Cost Reduction Initiatives." The report complements another document from this project, "Impossible Certainty: Cost Risk Analysis for Air Force Systems," and includes a literature review of cost growth studies and a more extensive analysis of the historical cost growth in acquisition programs than appears in the companion report. Overall, most of the studies reviewed reported that actual costs were greater than estimates of baseline costs. The most common metric used to measure cost growth is the cost growth factor (CGF), which is defined as the ratio of the actual cost to the estimated costs. A CGF of less than 1.0 indicates that the estimate was higher than the actual cost -- an underrun. When the CGF exceeds 1.0, the actual costs were higher than the estimate -- an overrun. Studies of weapon system cost growth have mainly relied on data from Selected Acquisition Reports (SARs). These reports are prepared annually by all major defense acquisition program (MDAP) offices within the military services to provide the U.S. Congress with cost, schedule, and performance status. The comparison baseline (estimate) typically corresponds to a major acquisition decision milestone. Prior studies have reported Milestone (MS) II CGFs for development costs ranging from 1.16 to 2.26; estimates of procurement CGFs ranging from 1.16 to 1.65; and total program CGFs ranging from 1.20 to 1.54. Regarding the differences among cost growth due to service, weapon, and time period, prior studies tended to find the following: Army weapon systems had higher cost growth than did weapon systems for the Air Force or Navy; cost growth differs by equipment type; and cost growth has declined from the 1960s and 1970s, after it was recognized as an important problem.
Author: Joseph George Bolten
Publisher: Rand Corporation
ISBN: 0833042890
Category : History
Languages : en
Pages : 117
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Book Description
Previous studies have shown that the Department of Defense (DoD) and the military departments have historically underestimated the cost of new weapon systems. Quantifying cost growth is important, but the larger issue is why cost growth occurs. To address that issue, this analysis uses data from Selected Acquisition Reports to examine 35 mature, but not necessarily complete, major defense acquisition programs similar to the type and complexity of those typically managed by the Air Force. The programs are first examined as a complete set, then Air Force and non-Air Force programs are analyzed separately to determine whether the causes of cost growth in the two groups differ. Four major sources of cost growth were identified: (1) errors in estimation and scheduling, (2) decisions made by the government, (3) financial matters, and (4) miscellaneous sources. Total (development plus procurement) cost growth, when measured as simple averages among the program set, is dominated by decisions, which account for more than two-thirds of the growth. Most decisions-related cost growth involves quantity changes (22 percent), requirements growth (13 percent), and schedule changes (9 percent). Cost estimation (10 percent) is the only large contributor in the errors category. Less than 4 percent of the overall cost growth is due to financial and miscellaneous causes. Because decisions involving changes in requirements, quantities, and production schedules dominate cost growth, program managers, service leadership, and Congress should look for ways to reduce changes in these areas.
Author: Obaid Younossi
Publisher: RAND Corporation
ISBN:
Category : History
Languages : en
Pages : 246
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Book Description
Why have the costs of acquiring space systems been so high? What are the sources of the problems? To answer these questions, RAND undertook an extensive study of two space systems--the Space Based Infrared System-High (SBIRS) and the Global Positioning System (GPS).
Author: Obaid Younossi
Publisher: Rand Corporation
ISBN: 0833041355
Category : Business & Economics
Languages : en
Pages : 142
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Book Description
In recent decades, there have been numerous attempts to rein in the cost growth of U.S. Department of Defense (DoD) acquisition programs. Cost growth is the ratio of the cost estimate reported in a program's final Selected Acquisition Report (SAR) and the cost-estimate baseline reported in a prior SAR issued at a particular milestone. Drawing on prior RAND research, new analyses of completed and ongoing weapon system programs, and data drawn from SARs, this study addresses the following questions: What is the cost growth of DoD weapon systems? What has been the trend of cost growth over the past three decades? To address the magnitude of cost growth, it examines cost growth in completed programs; to evaluate the cost growth trend over time, it provides additional analysis of a selection of ongoing programs. This sample of ongoing programs permits a look at growth trends in the more recent past. Changes in the mix of system types over time and dollar-weighted analysis were also considered because earlier studies have suggested that cost growth varies by program type and the cost of the program. The findings suggest that development cost growth over the past three decades has remained high and without any significant improvement.
Author: Shari Lawrence Pfleeger
Publisher: Rand Corporation
ISBN: 9780833037138
Category : Computers
Languages : en
Pages : 132
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Book Description
Recommends an approach to improving the utility and accuracy of software cost estimates by exposing uncertainty (in understanding the project) and reducing the risks associated with developing the estimates. The approach focuses on characteristics of the estimation process (such as which methods and models are most appropriate for a given situation) and the nature of the data used (such as software size), describing symptoms and warning signs of risk in each factor, and risk-mitigation strategies.
Author: Irv Blickstein
Publisher: RAND Corporation
ISBN: 9780833059277
Category : History
Languages : en
Pages : 148
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Book Description
Congressional concern with cost overruns, or breaches, in several major defense acquisition programs led the authors, in a partnership with the Performance Assessments and Root Cause Analysis Office in the Office of the Secretary of Defense, Acquisition, Technology, and Logistics, to investigate root causes by examining program reviews, analyzing data, participating in contractor briefings, and holding meetings with diverse stakeholders.
Author: Lauren Caston
Publisher: Rand Corporation
ISBN: 0833076264
Category : Political Science
Languages : en
Pages : 185
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Book Description
The authors assess alternatives for a next-generation intercontinental ballistic missile (ICBM) across a broad set of potential characteristics and situations. They use the current Minuteman III as a baseline to develop a framework to characterize alternative classes of ICBMs, assess the survivability and effectiveness of possible alternatives, and weigh those alternatives against their cost.
Author: Gregory G. Hildebrandt
Publisher: Rand Corporation
ISBN: 0833041215
Category : History
Languages : en
Pages : 96
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Book Description
Budget estimating relationships (BERs) for flying depot-level reparables (DLRs) explain the direct effect of specified variables on obligated funds associated with spare parts that directly support the U.S. Air Force (USAF) Flying Hour Program. In FY02, net sales of DLRs to Air Force commands hit historic highs. To provide the Air Force Cost Analysis Improvement Group with a tool to better understand the commands-- budgetary submissions, we develop several explanatory BERs to understand why flying DLRs are at their particular levels. Using longitudinal regression statistical methods, we explain the historical net sales of flying DLRs using estimating models that relate net sales to the contemporaneous values of aircraft characteristics, operational tempo, and time-related variables. This is but one part of a larger project to develop better estimating methods for use by the acquisition community and to examine the impact of Air Force and DoD policies on weapon system costs. The findings will also be of interest to those in the national security community who are involved in analyzing alternative military postures, and to members of the aircraft industry's analytical community.
Author: Stephen B. Johnson
Publisher:
ISBN:
Category : History
Languages : en
Pages : 308
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Book Description
