Tapping Transaction Costs to Forecast Acquisition Cost Breaches

Abstract

This article uses transaction costs to predict the probability of incurring a cost breach in a major defense acquisition program (MDAP). As transaction costs are not explicitly measured for MDAPs, the authors use estimates of systems engineering and program management (SE/PM) costs as a share of overall program costs as a proxy for transaction costs. Using survival analysis, a new approach to predicting cost breaches, they also found that an increased share of SE/PM costs in initial program estimates can help predict future cost breaches.

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Document Details

Document Type
Technical Report
Publication Date
Jan 01, 2016
Accession Number
AD1015739

Entities

People

  • Diana I. Angelis
  • Laura E. Armey

Organizations

  • Defense Acquisition University

Tags

Communities of Interest

  • Air Platforms
  • Biomedical
  • Human Systems
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Contractors
  • Contracts
  • Cost Estimates
  • Cost Overruns
  • Costs
  • Department Of Defense
  • Electronically Scanned Array
  • Engineering
  • Governments
  • Military Acquisition
  • Program Management
  • Radar
  • Radio Equipment
  • Reconnaissance Satellites
  • Systems Engineering
  • Weapon Systems

Fields of Study

  • Computer science

Readers

  • Computational Modeling and Simulation
  • Defense Acquisition Program Management
  • Government Contracting/Procurement.