Posted by NAVAIR Cost Growth Study: A Cohorted Study of The Effects of Era, Size, Acquisition Phase, Phase Correlation and Cost Drivers
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http://www.iceaaonline.com/ready/wp-content/uploads/2017/11/NAVAIR-Cost-Growth-Study-Summerville.pdf
Abstract
The goal of this study was to further analyze Navy programs to determine the
cause of cost growth (technical or cost estimating) and to develop a concept for
estimating future cost growth. This understanding will allow program offices to plan for cost growth (adjust cost estimates and budget with cost risk dollars) and/or mitigate the high risks in the program to minimize cost growth.
A significant advance presented in this paper is the introduction of cohort
tracking. Programs that did have a Dem Val phase are compared to programs that did not. This distinction will be shown to have a significant effect on predicted cost growth in both RDT&E and Procurement appropriations. The mixing of these two types of programs causes significant errors. It will be shown, for example that the growth during E&MD for programs that did have a Dem Val is quite different than the growth during E&MD for programs that did not have a Dem Val. This effect has been completely overlooked in previous studies, and is it is critical to include it.
This paper presents analysis and conclusions on the following topics:
• Does program size affect cost growth? There is a clear trend showing a higher
tolerance for cost growth in smaller programs.
• Does the era of the program effect cost growth? There is convincing evidence that cost growth has decreased over time.
• Does correlation exist? Analysis shows that correlation exists between phases and between appropriations in the EMD phase.
• Does the structure of a program’s life cycle affect cost growth? Analysis of cohorted groups determined that the inclusion of a PDRR phase as well as the maturity of program impacts its cost growth.
• Is cost growth affected by commodity type? Descriptive results from this study suggest that cost growth does differ for various commodities.
Author(s):
Jessica R. Summerville
Ms. Summerville graduated with a B.A. in Mathematics from the University of Michigan in 1994. She received an M.S. in Operations Research from the College of William and Mary in 1995. During her Masters program, she worked as a Programmer/Analyst at SAIC in support of NASA’s Earth Radiation Budget Experiment. Upon graduation, she joined TASC, Inc., where she works as a cost estimator and risk analyst in support of the Ballistic Missile Defense Organization (BMDO), NAVAIR, the intelligence community, and the Cost Development Team for the Gold Team of the Navy’s 21st Century Destroyer Program (DD 21). Her cost estimating duties have involved lead analyst for National Missile Defense (NMD) radar systems and the Patriot Advanced Capability (PAC-3) missile system. In her capacity as Lead Analyst for Cost Risk for several organizations, she oversees the conduct of Schedule and Technical Risk Assessments and Cost Risk Analysis. In addition, she is a key member of multiple teams and working groups that perform research and modeling to advance the development of cost risk analysis.
Megan E. Dameron
Ms. Dameron graduated summa cum laude from the College of William and Mary in 1999 with a B.S. in Mathematics and Economics. Since her graduation, she has been working as a cost analyst at TASC, Inc. She performed cost and risk analysis for the Gold Team 21st Century Destroyer program (DD 21). In addition, she is part of a project team conducting cutting edge cost growth analysis for NAVAIR. She also provides cost and risk support to the intelligence community.
Cari L. Pullen
Ms. Pullen received a B.B.A, cum laude, in Operations Management with minors in Management Science and Computer Information Systems from James Madison University. Since graduation, she worked for McAdams Technologies Inc. where responsibilities included writing a Performance Work Statement for an A-76 study in Fort Carson, Colorado, and analysis for the Program Analysis and Evaluation office for the Department of The Army Surgeon General. More recently she has worked for TASC, Inc. where responsibilities included database development for the Naval Center for Cost Analysis, review and contribution to the cost deliverables in support of the Gold Team 21st Century Destroyer program (DD 21), and a cost growth analysis of Navy programs for NAVAIR.
Richard L. Coleman
Mr. Coleman was commissioned upon graduation from the United States Naval Academy on 5 June 1968, where he received a B.S. in Naval Engineering with a minor in Operations Analysis. He received a Master of Science Degree in Operations Research (With Distinction) from the Naval Postgraduate School in Monterey, California in September 1974. Graduating first in his class, he was the recipient of the Chief of Naval Operations Award for Excellence in Operations Research. In the Navy, his career culminated in tours as Commanding Officer of USS Dewey (DDG 45) and Director, Naval Center for Cost Analysis. His awards include the Legion of Merit, the Meritorious Service Medal with two Gold Stars, and the Navy Commendation Medal with one Gold Star. He retired from active duty as a Captain, U. S. Navy in 1993. Since retirement, he has worked for TASC, Inc. He conducts risk analysis at the Ballistic Missile Defense Office and NAVAIRSYSCOM. He supports the Navy’s Acquisition Reform Office in Cost as An Independent Variable (CAIV) & Total Ownership Cost. He leads the Gold Team in cost analysis of the Navy’s 21st Century Destroyer (DD 21). Additionally, he supports the intelligence community in cost, risk and CAIV. He is a Regional Vice President of the Society of Cost Estimation and Analysis. He was a co-author of two papers at the 1998 ISPA/SCEA International Conference, one on CAIV and Total Ownership Cost, awarded Best Paper in Acquisition Reform, and one on Cost Risk, winning Best Paper Overall, and a co-author of a paper that won Best Paper in CAIV at the 1999 ISPA/SCEA International Conference.
Donna M. Snead
Ms. Snead is the Division Head for Cost Research, Special Studies and Databases for the Naval Air Systems Command. She also held key government positions as Assistant Deputy for Program Operations and Director of Cost Estimating and Analysis at the Ballistic Missile Defense Organization. Previous to her government employment, she was Program Manager at Science Applications International Corporation for BMDO cost analysis. Donna also worked as Cost Estimating and Control Manager at Magnavox in Leesburg, Virginia and was employed at The MITRE Corporation in McLean, Virginia. While at MITRE, she co-authored and published a book, “Downsizing Detroit” which looks at the impact of various government policies on the automobile industry. Donna earned her BS and MA degrees in Economics from George Mason University.