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A Two-Pronged Approach to Estimate Procurement Cost Growth in Major DoD Weapon Systems

Abstract This study builds on the research previously conducted by White et al. (2004), who demonstrated the use of a two-step logistic and multiple regression methodology to predict research and development cost growth. This research uses compiled programmatic data from the Selected Acquisition Reports (SARs) between 1990 and 2002 for programs covering all defense departments. The analysis concentrates on cost growth in the procurement appropriations of the Engineering and Manufacturing Development phase of acquisition. This study investigates and confirms the usefulness of using logistic and multiple regression models to predict whether or not cost growth will occur in a major DoD weapon system program and if so how much cost growth will occur. The analysis focuses on the estimating and support SAR cost variance categories within the procurement appropriations and develops predictive models for each.