Cost Growth, Acquisition Policy, and Budget Climate. Revision

Abstract

Abstract : This document summarizes the results of research on whether changes in Department of Defense (DoD) acquisition policy and process had a discernible effect on growth of Program Acquisition Unit Cost (PAUC) of major defense acquisition programs (MDAPs). Examination of PAUC growth data for 150 MDAPs that passed Milestone II or B during 1970 2007 does not reveal any substantial or consistent effect of changes in acquisition policy and process. Changes in budget climate, however, are found to have a large influence on PAUC growth. These findings have three implications for acquisition reform. First, the underlying cause of persistent high PAUC growth is not, as is commonly asserted, a deeply established culture of the DoD acquisition organizations and their professional employees. Second, it seems unlikely that further changes in the acquisition process will have a major effect on PAUC growth. Third, the relevant context for understanding PAUC growth is the interface between the acquisition process and the program/budget process.