Contract Over Target Baseline (OTB) Effect on Earned Value Management's Cost Performance Index (CPI)

Abstract

Cost growth is a problem in U.S. Department of Defense (DoD) acquisitions. A particular component of cost growth is a cost overrun or Over Target Baseline (OTB). In 2009, Trahan found that the Gompertz growth curve better predicted program Estimates at Completion (EAC) for OTB contracts. In 2010, Thickstun studied "the relationships between overruns and a variety of factors," but found OTB occurrences "random" and questioned the benefit of the OTB process (Thickstun, 2010). In this research, we study OTB's ability to effect improved program cost performance; we examine OTB's effect on the cumulative Cost Performance Index (CPI) slope after an OTB intervention. We find there is no statistically significant change in cumulative CPI slope after OTB. For the data studied, an OTB investment does not significantly improve management's ability to earn cost value as reflected in the cumulative CPI slope.

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Document Details

Document Type
Technical Report
Publication Date
Jun 17, 2010
Accession Number
ADA524080

Entities

People

  • Dennis E. Jack

Organizations

  • Air Force Institute of Technology

Tags

Communities of Interest

  • Biomedical
  • Materials and Manufacturing Processes

DTIC Thesaurus Topics

  • Acquisition
  • Air Force
  • Business Administration
  • Computer Programs
  • Contracts
  • Cost Analysis
  • Cost Overruns
  • Costs
  • Databases
  • Department Of Defense
  • Governments
  • Information Retrieval
  • Information Science
  • Investments
  • Probability Distributions
  • Procurement
  • Statistical Tests

Readers

  • Life Cycle Cost Analysis
  • Regression Analysis.