Statistical Evaluation of the Effects of Should Cost on Contract Negotiations for Air Force and Army Weapons Systems
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH SCHOOL OF SYSTEMS AND LOGISTICS
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This research effort is a statistical comparison of the percentage cost reductions during negotiations for contracts in which Should Cost was used and contracts where conventional cost estimating techniques were used. Should Cost contracts from the Air Force are compared with Army Should Cost contracts to detect any difference between the two diverse applications of the concept. Three hypotheses are tested. The first two are designed to determine if Should Cost has resulted in significant cost reductions for Air Force or Army acquisitions. The third attempts to detect any difference in the effectiveness of Air Force and Army Should Cost efforts. A Wilcoxon and a Mann-Whitney test both show no substantial increase in percent cost, reductions, during negotiations resulting from the Air Forces application of Should Cost. Army Should Cost analyses, on the other hand, seem to yield positive results, though the data available was insufficient to permit a quantitative test. A Mann- Whitney test indicates that Army Should Cost analyses yield better results than those conducted by the Air Force.
- Administration and Management
- Economics and Cost Analysis