Cost and Time Overruns in Major Defense Acquisition Programs

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Abstract:

Cost and time overruns in Major Defense Acquisition Programs MDAPs have become a high-profile problem attracting the interest of Congress, government and watchdog groups. According to the GAO, the 96 MDAPs from FY2008 collectively ran 296 billion over budget and were an average of 22 months behind schedule. President Obamas memo on government contracting of 4 March 2009 also highlighted this issue. This paper presents interim findings of research on the root causes of cost growth and schedule delays for MDAPs. The paper analyzes a series of variables -- namely, realism of baseline program cost estimates, government management and oversight, quantity and schedule changes, the role of prime contractors and lead military services, extent of competition, and contract structure -- to determine what factors might contribute to the observed cost overruns in the execution of MDAPs. The research draws on four primary data sources Selected Acquisition Reports SARs, Federal Procurement Data System FPDS, and Department of Defense Budget Documents. This research is ongoing and will incorporate the 2010 SAR data. The final findings and policy recommendations will be presented at the May 2011 Naval Post Graduate School annual Acquisition Symposium. The presentation includes 11 briefing charts.

Author(s):
Berteau, David ; Hofbauer, Joachim ; Sanders, Gregory ; Ben-ari, Guy
Author Organization(s):
CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES WASHINGTON DC DEFENSE INDUSTRIAL INITIATIVES GROUP (DIIG)
Descriptive Note:
Conference paper
Supplementary Note:
Published in the Proceedings of the Seventh Annual Acquisition Research Symposium, Acquisition Research: Creating Synergy for Informed Change, v1 p12-24, 30 April 2010. Presented at the Annual Acquisition Research Symposium (7th), Acquisition Research: Creating Synergy for Informed Change, held in Monterey, CA on 12-13 May 2010. The original document contains color images.
Pagination:
0034

Security Markings

DOCUMENT & CONTEXTUAL SUMMARY

Distribution:
Approved For Public Release
Distribution Statement:
Approved For Public Release; Distribution Is Unlimited.

RECORD

Collection: TR
Identifying Numbers
Report Number(s):
NPS-AM-10-026
Monitor Series:
AM-10-026, NPS-GSBPP
 Subject Terms
Joint Capability Areas:
JCA_4.5_Operational Contract Support; JCA_4.2_Supply; JCA_4.2.1_Manage Supplies and Equipment; JCA_5_Command and Control; JCA_4.5.1_Contract Support Integration; JCA_5.3_Planning; JCA_6.4.1_Secure Information Exchange; JCA_4.5.2_Contractor Management; JCA_1_Force Support; JCA_6_Net Centric; JCA_3_Force Application; JCA_6.4_Information Assurance; JCA_8_Building Partnerships; JCA_3.1_Maneuver; JCA_1.2_Force Preparation; JCA_5.5_Direct; JCA_3.1.1_Maneuver to Engage; JCA_5.5.1_Communicate Intent and Guidance; JCA_8.2_Shape; JCA_1.2.3_Educating; JCA_1.2.5_Lessons Learned
Communities of Interest:
Human Systems
Descriptor(s):
*DEPARTMENT OF DEFENSE, *COST OVERRUNS, *MILITARY PROCUREMENT, *DELAY, *SCHEDULING, *MANAGEMENT PLANNING AND CONTROL, NAVY, GRAPHS, CONTRACTORS, COST ESTIMATES, MILITARY BUDGETS, AIR FORCE, ARMY, COMPETITION, SYMPOSIA, PROJECT MANAGEMENT, CONTRACTS
Field(s)/Group(s):
Administration and Management, Economics and Cost Analysis, Military Forces and Organizations, Logistics, Military Facilities and Supplies
Keyword(s):
*TIME OVERRUNS, SCHEDULE DELAYS, COST GROWTH, TIME COST CORRELATION, COMPOUND ANNUAL GROWTH RATE, LEAD SERVICE, PRIME CONTRACTOR, COMPETITION TYPE, CONTRACT TYPE, CONTRACT STRUCTURE, MDAP(MAJOR DEFENSE ACQUISITION PROGRAMS), BRIEFING CHARTS
Report Date:
2010 Apr 30
Creation Date:
2010 Oct 20