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Contract Type Case History of the CVN-78 and CVN-79 Portfolio Acquisitions

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[Technical Report, Graduate Research Project]

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Analyzing whether a correlation existed between these two acquisition portfolios, we proposed and answered our four research questions. Our primary research questions and answers determined the advantages and disadvantages of contract type and whether policy initiatives shaped the acquisition strategies for the Ford-class aircraft carriers. Also, we wanted to determine how the selection of contract type can shape future acquisitions, especially when acquiring new and immature technologies. From our research, we discovered that the major difference between the acquisitions of CVN-78 and CVN-79 occurred during the detail design and construction contracts. For CVN-78, a hybrid cost type contract was awarded and was composed of multiple cost reimbursable type contracts. On the other hand, the contract selected for detail design and construction of CVN-79 was fixed price incentive fee. Additionally, policy initiatives like Better Buying Power BBP highly encouraged the use of incentive type contracts, especially fixed price contracts. From our research, we determined one of the reasons for the schedule and cost overruns experienced by the Ford-class aircraft carrier occurred during the acquisition of advanced yet immature technologies. MDAPs must strategically align contract type selection with technical and developmental risk in order to mitigate cost and schedule overruns. However, it must be noted that the selection of contract type alone does not indicate causation.


Subject Categories:

  • Marine Engineering
  • Naval Surface Warfare
  • Logistics, Military Facilities and Supplies

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[A, Approved For Public Release]