An Exploratory Study of the Use of Parametric Estimating in Department of Defense Contracting

An initiative to expand the use of parametric estimating in government contracting has enjoyed only marginal success. Some reasons for the slower pace of implementation are the lack of availability of historical data, training, acquisition rules, utility, and accuracy concerns. Those associated with the Parametric Cost Estimating Initiative PCEI have a higher perception of parametric utility and accuracy than those not associated with the initiative. The PCEI advocates using parametric techniques in any situation, not just the conceptdevelopment phases advocated by most literature. Parametric estimating is a catch all term for several different types of statistically based methodologies, ranging from simple CERs to complex models. Each type has different implementation requirements. Using the single term parametrics can be very deceiving, making it difficult for management to allocate resources necessary for implementation. PCEI and non-PCEI acquisition groups have similar perceptions of accuracy and utility for CERs, but different perceptions for more complex parametric models. The PCEI has been successful expanding the use of parametrics, though not significantly enough to be persuasive. Most of the PCEI successes have been related to CERS, not complex models. Advances in complex model use has occurred with contractors who routinely develop state of the art hardware.