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Cost Growth in Major Defense Acquisition: Is There a Problem? Is There a Solution? : Defense Acquisition Research , 2011


Defense Acquisition Research

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From the report: “The reasons for concern about cost growth in terms of its influence on Department of Defense (DOD) programs were succinctly reviewed by Mark F. Cancian (2010). In this article, I address cost growth in defense acquisition both as a problem in its own right and as a part of the larger phenomenon of programs that fail to perform as intended or desired. I show in turn that: (a) it is a limited but persistent phenomenon, which has not improved in any material respect over at least the past four decades; (b) it is not unique to defense; (c) cost growth may flow from a variety of causes—including errors in the management or contracting process—but defects in the original concept are a very common cause; (d) a limited group of similar remedies have repeatedly been tried but achieved very little success due to lack of clear analysis of underlying causes; and (e) research by social and management scientists points to a corrective technique, “taking the outside view” or “reference class forecasting,” which has a sound theoretical basis and a limited but significant record of success in nondefense applications as well as specific defense areas.”



O’Neil, William D.


Defense Acquisition Research


Journal #59


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