Predicting engineering and schedule procurement cost growth for major dod programs

Abstract

Previous research by Moore and White (2005) demonstrated the validity of a two-step regression approach to estimate total procurement cost growth. Although this study produced statistically significant findings, the resultant regression models relied on a predictor variable, First Unit Equipped, that appeared from a historic standpoint to be marginally populated in the database. To mitigate this limitation, this study addresses just two components of possible procurement cost growth for major DoD acquisition programs. These two areas consist of cost growth due to either physical changes to the system or program slippage or acceleration. In narrowing the scope of procurement cost growth, this study discovers more universal explanatory variables that can be used to predict whether specific types of cost growth will occur, and if so, by what expected percentage.