Posted by Schedule and Cost Estimations Through the Decades: Are They Improving?
From the Journal of Cost Analysis and Parametrics: Volume 11 | Issue 1 | April 2023
Downloadable File: JCAPv11i1-ScheduleCostEstimationsDecades-Jones
Abstract: Acquisition professionals strive to provide the best estimation of schedule and cost to deliver war-winning capability. Numerous reforms and improvement initiatives have been implemented towards improving these cost and schedule outcomes in Major Defense Acquisition Programs (MDAPs). This leads to the following question: Are schedule and cost outcomes improving over time? We use both descriptive and inferential techniques to investigate schedule and cost trends in MDAPs from the 1970s to 2010s. We find schedule growth does not exhibit statistically significant improvement across the decades; all decades indicated a consistent schedule slippage for a typical MDAP. In contrast, the analysis of Cost Growth Factors (CGFs) detected statistical differences in some instances. The most novel finding, however, is found in the standard deviations of CGFs. We identified a statistically significant decreasing trend in the standard deviations of total program CGFs throughout the decades. This lowering variability trend also appeared for Program Acquisition Unit Cost (PAUC) CGFs from the 1980s onward. The decrease in variability of cost estimates suggest to us that cost estimators and/or the process behind them might be improving over time.
Authors:
Captain Sammantha Jones, USAF, is a recent graduate of the Air Force Institute of Technology (AFIT) where she earned a Master’s of Science in Cost Analysis. She is currently assigned as a cost analyst for the Air Force Life Cycle Management Center Enterprise IT and Cyber Infrastructure Division at Hanscom AFB.
Dr. Edward D. White is a Professor of Statistics in the Department of Mathematics and Statistics at AFIT. He received his BS in Mathematics from the University of Tampa, MAS from The Ohio State University, and PhD in Statistics from Texas A&M University. His primary research interests include statistical modeling, simulation, and data analytics.
Dr. Jonathan D. Ritschel is an Associate Professor of Cost Analysis in the Department of Systems Engineering and Management at AFIT. He received his BBA in Accountancy from the University of Notre Dame, MS in Cost Analysis from AFIT, and PhD in Economics from George Mason University. His research interests include public choice, the effects of acquisition reforms on cost growth in DoD weapon systems, and economic institutional analysis.
Mr. Shawn M. Valentine is an Operations Research Analyst at AFLCMC/FZCE at Wright Patterson AFB, Ohio. Mr. Valentine graduated from Ohio University with a Bachelor of Science (BS) in Actuarial Science and a Master of Science (MS) in Financial Economics.