Financial Condition of Government Contractors and Control of Production Costs in the Procurement of Major DoD Aircraft Weapon Systems
Abstract
The thesis identifies conditions associated with production cost overruns or underruns on major weapon systems. The analysis used U.S. military fighter/attack aircraft. First, relying on techniques developed in prior studies, measures of the technology embodied in aircraft and the cost of producing those aircraft were developed. Next, relationships between technology and cost were examined to create measures of should costs, for each aircraft based on technology in the aircraft. These estimates of should costs were compared to actual costs to determine situations of cost overruns and underruns. Analyses of financial ratios of each aircraft's prime contractor were used to determine if financial condition could explain the cost overruns or underruns experienced during production, by using several forms of regression analysis. This yielded models relating financial ratios to cost overruns or underruns. Major findings indicate that financial condition does partially explain production cost overruns and underruns, but the relationship is small.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 1989
- Accession Number
- ADA212486
Entities
People
- John S. Hicky
Organizations
- Naval Postgraduate School