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.
An Analysis of the Implementation of Acquisition Reform Initiatives and Contract Cost Variance
Abstract : This thesis examines the impact of acquisition reform initiatives implemented since 1993 on contract cost performance. Many initiatives implemented during the 1990s focused on saving the government money in procuring weapon systems. For decades, cost overruns have plagued Department of Defense weapons systems development and procurement costing the government money. The passage of the Federal Acquisition Streamlining Act (FASA) of 1994 and the Clinger-Cohen Act of 1996, marked significant congressional action on aiding the Department of Defense develop and procure systems cheaper. Conclusions drawn in this thesis may aid leadership in supporting current initiatives and drafting new changes.
An Application of Rayleigh Curve Theory to Contract Cost Estimation and Control
Abstract : Cost growth is a major problem in defense systems acquisition. Since 1969 the DoD has underestimated the ultimate costs of major systems by more than 50 percent. Consequently, the importance of contract costs has risen greatly in recent years to the point that costs are now officially equated to technical performance in importance. A body of knowledge of the structure and models of the behavior of contract costs and contract performance within DoD is desired. This paper develops a simplified methodology for the systematic analysis and prediction of cost and schedule variables from an existing data base. The methodology is applied to actual DOD contract data using the interactive computing system MINITAB. (Author)