Developing Standard EMD Cost Factors For Major Defense Acquisition Program (MDAP) Platforms

Abstract

This paper creates standard cost factors that more accurately reflect observed outcomes in the development stages of major programs. Specifically, this effort creates 443 new cost factors that are delineated by five categories: commodity type, contract type, contractor type, development type, and service. The factors are developed for those elements that are “common” in a wide array of projects such as program management, systems engineering, data, or training. This paper establishes factor values at the Work Breakdown Structure (WBS) element level for each subcategory of the five identified categories. Coefficient of Variation (CV) values were found to be high (71.86% to 179.87%) in each subcategory. In a refined subset of the dataset, the CV decreased, indicating that the average percent estimating error improved when more detailed information was available. The outcome of this research is that cost estimators will have a reference tool of 443 unique factors for creating estimates and conducting the iterative process of refining cost estimates.