Cost and Time Overruns for Major Defense Acquisition Programs: An Annotated Brief

Download
Author
Berteau, David
Ben-Ari, Guy
Hofbauer, Joachim
Sanders, Gregory
Ellman, Jesse
Morrow, David
Date
2011-04-30Metadata
Show full item recordAbstract
Cost and time overruns in Major Defense Acquisition Programs (MDAPs) have become a high-profile problem attracting the interest of Congress, government, and watchdog groups. According to the GAO, the 98 MDAPs from FY2010 collectively ran $402 billion over budget and were an average of 22 months behind schedule since their first full estimate. President Obama''s memorandum on government contracting of 4 March 2009 also highlighted this issue.
This paper presents findings of research on the root causes of cost and schedule delays for 92 MDAPs active in 2010 and 12 cancelled programs. The results do not establish causality but they do indicate multiple notable correlations. Inaccurate cost estimates are responsible for the strongest correlation with net cost growth changes and are associated with 40% of the accumulated cost overruns. In addition, the start year has little impact on the compound annual growth rate of cost overruns. This suggests that relatively better performance of newer programs may prove illusionary as programs age. Finally, fixed price contracts appear to have relatively smaller overruns, although this may tell us more about which programs are likely to receive fixed price contracts rather than what effect fixed price contracts may have on program performance.
Description
Proceedings Paper (for Acquisition Research Program)
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.NPS Report Number
NPS-AM-11-C8P14R02-053Related items
Showing items related by title, author, creator and subject.
-
An analysis of cost overruns in the development of the Navy's A-12 Avenger aircraft [electronic resource]
McKsymick, Eric M.; McKsymick, Eric M. (Monterey, California. Naval Postgraduate School, 1995-12);This thesis examines the termination of the Navy's A-12 Program. Specifically, the research sought to answer the question: Were the A-12 Program's cost overruns exceptional when compared to other major acquisitions. Prior ... -
Using Earned Value Information to Predict Program Cancellation
Angelis, Diana; Armey, Laura; Hodgson, Sidney W. III (2014-09-02); NPS-AM-14-183Since 2001, 12 major defense acquisition programs (MDAPs) have been cancelled. Although each of these programs had problems with cost or schedule overruns (or both), there were other MDAPs that had similar problems and ... -
Budgetary and programmatic fluctuations during the system development and demonstration phase: a case study of the Marine Corps H-1 Upgrade Program
Polesnak, Stephanie M. (Monterey California. Naval Postgraduate School, 2007-12);Congress and Department of Defense continue their yearly quest to fund the National Defense Acquisition Strategy with a defense budget that finds itself spread across more military acquisition programs and competing with ...