The Accuracy of Independent Estimates of the Procurement Costs of Major Systems
Final rept. Jul 2004-Aug 2005
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
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This paper reports the results of an assessment of the accuracy of the independent estimates of procurement costs the Department of Defense uses in milestone reviews of major acquisition programs. IDA initially examined 63 major programs that received authorization to begin Engineering and Manufacturing Development during the years 1985 through 1998. The data needed to evaluate the accuracy of the independent procurement cost estimates could be located for only 25 of these programs. IDA found that the independent cost estimate was reasonably accurate for 18 of those 25 cases. In the remaining cases, the independent estimate was sometimes substantially too high and sometimes substantially too low.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies