An Analysis of the Cost Estimating Process in Air Force Research and Development Laboratories.
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH SCHOOL OF SYSTEMS AND LOGISTICS
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Within Air Force laboratories estimating costs for new projects can be a difficult task for the project manager. This is due to the uncertain nature of the exploratory development projects, which predominate in Air Force laboratories, and the lack of standardized guidelines or procedures to assist in the estimating. The objectives of this thesis were to 1 Identify the techniques which are commonly used in estimating costs for exploratory development projects 2 Identify factors which contribute to the variance between the project managers cost estimate and the offerors proposed costs and 3 Identify weaknesses or limitations in the current cost estimating procedures and develop recommendations for improvement. The results indicate laboratory project managers rely almost exclusively on historical data from past projects or recent cost proposals andor their own experience to estimate new project costs. Four major factors were identified as contributing to the variance between estimates 1 Project managers underestimate manpower 2 Project managers underestimate overhead 3 Project managers are constrained by initial estimates or the availability of funds and 4 potential offerors misinterpret the Statement of Work. Two of the major recommendations for improvement were 1 to establish a computerized data base of past projects and 2 to decrease the acquisition lead time. Author
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