Tapping Transaction Costs to Forecast Acquisition Cost Breaches

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Authors
Armey, Laura E.
Angelis, Diana I.
Subjects
systems engineering
program management
survival analysis
Advisors
Date of Issue
2016-01
Date
January 2016
Publisher
Language
Abstract
This article uses transaction costs to predict the probability of incurring a cost breach in a major defense acquisition program (MDAP). As transaction costs are not explicitly measured for MDAPs, the authors use estimates of systems engineering and program management (SE/PM) costs as a share of overall program costs as a proxy for transaction costs. Using survival analysis, a new approach to predicting cost breaches, they also found that an increased share of SE/PM costs in initial program estimates can help predict future cost breaches.
Type
Article
Description
URI
https://hdl.handle.net/10945/50290
Series/Report No
Department
Systems Engineering (SE)
Organization
Naval Postgraduate School (U.S.)
Identifiers
NPS Report Number
Sponsors
Funder
Format
22 p.
Citation
Defense ARJ, January 2016, Vol. 23 No. 1 : 56–76
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.
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