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dc.contributor.authorTate, David M.
dc.date04/30/18
dc.date.accessioned2018-06-12T19:22:34Z
dc.date.available2018-06-12T19:22:34Z
dc.date.issued2018-04-30
dc.identifier.urihttp://hdl.handle.net/10945/58657
dc.description.abstractTo a first approximation, acquisition programs never spend what they originally said they would spend when they began. In fact, the error bars around an initial cost estimate are much larger than is generally understood, once program cancellations, restructurings, truncations, and block upgrades have been accounted for. Worse yet, all of this uncertainty arises in a context where programs must fit within annual budgets;it is not enough to only spend as much as you said you would; you must also spend it when you said you would, or problems ensue. We have developed a methodology that uses historical program outcomes to characterize the year-by-year budget risk associated with a major acquisition program. This methodology can be applied to both development costs and procurement costs and can be extended to understand the aggregate affordability risk of portfolios of programs. The method allows Resource Managers to estimate annual budget risk levels, required contingency amounts to achieve a target probability of staying within a given budget, and many other relevant risk metrics for programs. It also allows policy makers to predict the impact on program affordability of proposed changes in how contingency funds are managed.en_US
dc.description.sponsorshipNaval Postgraduate School Acquisition Research Programen_US
dc.publisherMonterey, California. Naval Postgraduate Schoolen_US
dc.rightsThis 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.en_US
dc.titleQuantifying Annual Affordability Risk of Major Defense Programsen_US
dc.typePresentationen_US
dc.contributor.corporateNaval Postgraduate School (U.S.)en_US
dc.contributor.corporateNaval Postgraduate School (U.S.)
dc.identifier.npsreportSYM-AM-18-127


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