Cost Impact of DoD Budget Reductions

Abstract

Increased unit costs resulting from reductions in Department of Defense (DoD) procurement are the major cost drivers in the current and future acquisition of weapons systems. This finding was initially reached in the Independent Cost Estimate (ICE) conducted on the Titan IV Program by the Cost Analysis Division of the Air Force Space and Missile Systems Center. The estimating team commenced its efforts in October 1991 and submitted its report in August 1992. Similar findings have been reached in estimates developed for the following programs: F-22; Milstar; Inertial Upper Stage; and Defense Meteorological Satellite Program. The conclusions drawn from these analyses are that the impact of DoD procurement reductions; results in a 10-15% increase in program cost; affects all major defense programs; and is long term. It is recommended that: DoD should reevaluate its understanding of this phenomenon: review the coordination of government agency oversight on indirect cost expense; and estimate and review program cost from a total cost perspective.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1993
Accession Number
ADA275787

Entities

People

  • Michael J. Peters

Organizations

  • Space Systems Command

Tags

Communities of Interest

  • Biomedical
  • Space
  • Weapons Technologies

DTIC Thesaurus Topics

  • Accounting
  • Acquisition
  • Air Force
  • Contractors
  • Contracts
  • Cost Analysis
  • Cost Estimates
  • Cost Reductions
  • Costs
  • Databases
  • Department Of Defense
  • Governments
  • Indirect Costs
  • Management Personnel
  • Meteorological Satellites
  • Organizational Structure
  • Procurement

Readers

  • Government Contracting/Procurement.
  • Life Cycle Cost Analysis
  • Missile Defense Systems.

Technology Areas

  • Space