Developing Standard Production Cost Factors for Major Defense Acquisition Program (MDAP) Platforms

Cost estimators commonly use the analogy and factor method when developing Major Defense Acquisition Program MDAP estimates. Previous studies discussing and developing factors for the production life-cycle phase have been limited in scope and statistical analysis efforts. This research significantly expands the currently available toolkit for Department of Defense cost analysts by updating the current database of historical data and exploring potential relationships through statistical testing. Specifically, 3,462 unique factors were created across nine level II Work Breakdown Structure WBS elements broken down into four categories commodity type, contract type, contractor type, and service. The production cost factors were created using data points from 145 MDAPs spanning from 1953 to 2018. Calculated factors were statistically tested for significant differences in their respective WBS element by category using non-parametric methods. The updated database and findings will aid analysts in quickly identifying categories that may impact their cost estimate. The practical and statistical analysis performed provide cost estimators with guidance and an improved production cost factor toolkit.