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.
A Review of Estimate at Completion Research
Abstract The cancellation of the Navy's A-12 program has increased interest in forecasting the completed cost of a defense contract, termed “Estimate at Completion” (EAC). In addition, popular software packages and electronic spreadsheets allow users to quickly compute a range of EACS. Analysts and managers are left with the task of deciding which EAC or range of EACs is most accurate. Although there have been many studies that either compare existing EAC formulas and models, or propose new ones, few have been published in journals or magazines and there is little guidance regarding which formula or model is most accurate. This paper reviews 25 studies which either propose or compare EAC formulas and models. Each study is briefly described. Tables which summarize research results are provided. Results show that no one formula or model is always best. Additional research with regression-based models is needed.
Biodiversity, conservation, and sustainable development
This important book highlights the conflicts between economic growth and the conservation of nature in the context of sustainable development. It places particular emphasis on biological diversity and examines possible policies for resolving conflicts which arise from the contrasting goals of conserving the natural environment and economic growth.