Finance and Financial Management Commons^™

An Analysis Of Estimate Variance In Program Office Estimates, Benjamin J. Bonenfant

Theses and Dissertations

Past research has shown that predicting the cost growth within DoD systems is an important topic. Total program cost growth and predictors of program cost growth have been studied. Kozlak (2017) studied cost growth at four major reviews: Critical Design Review, First Flight, Development Test and Evaluation End, and Initial Operating Capability. This research attempts to assess cost growth and cost variance at similar points in a program life cycle. In the past the majority of studies have been done identifying programs as either: Acquisition Category (ACAT) I and non-ACAT I programs, or Major Defense Acquisition Programs (MDAP) and non-MDAP …

Developing Standard Emd Cost Factors For Major Defense Acquisition Program (Mdap) Platforms, Matthew R. Markman

Theses and Dissertations

This research involves the creation of standard factors that more accurately reflect observed outcomes in the development stages of major programs. Traditionally, estimation techniques such as analogy, parametric, engineering build-up, and factors are utilized to develop budgets and serve as the baseline for measuring project progress. This effort accomplishes the development and creation of 443 new standard cost factors that are delineated by five categories: commodity type, contract type, contractor type, development type, and service. The factors are developed for those elements that are "common" in a wide array of projects such as program management, systems engineering, data, training or …

An Analysis Of Profit Margin In Relation To The Better Buying Power Initiative, Jerry (Trey) L. Baker Iii

Theses and Dissertations

Recent Better Buying Power (BBP) initiatives have sought to better contractually align contractor profit with performance. Profit should incentivize efficiency in cost and schedule and only be awarded when earned. The current research seeks evidence that BBP has been effective in improving performance. The first part of the research examines the trends of profit margin and cost growth both before and after the implementation of the first BBP initiative. BBP recommended the use of incentive type contracts over award fee contracts, where appropriate. This research found an increased use of incentive type contracts and a reduced use of award fee …

Comparing Estimated To Actual Development Budgets For Air Force Space Programs, Christopher J. Elworth

Theses and Dissertations

The accuracy of budget estimates is vital in ensuring cost efficiency and decreasing the possibility of budget and schedule growth. The goal of this study was to determine when budget estimates increase and what may cause those increases. Percent schedule and linear interpolation was used to analyze the budget changes. Space program budget growth does not increase at a constant rate between Milestone B (MS B) and Initial Operational Capability (IOC). When an exponential curve was fit to the deviations in budget growth, the mean and median R2 for the programs in this study were .83 and .91, respectively. Many …

A Case Study Of Epa Clauses As They Apply To Fixed Price Contracts, Trevor A. Enos

Theses and Dissertations

Adjusting fixed price contract prices over long periods of performance is vital to protect both the government and contractor from market price fluctuations. This is accomplished via an Economic Price Adjustment (EPA) clause which currently utilize forecasts of producer price indexes (PPI) as a baseline. There is currently a lack of research on if the use of these forecasts as a baseline for calculating EPAs is the best alternative. This research involves determining the validity of using Global Insight (GI) forecasts for the purpose of calculating EPAs in fixed price contracts. Two EPA clauses are examined as a case study …

Delineating Operating And Support Costs In Aircraft Platforms, Garrett B. O'Hanlon, Jonathan D. Ritschel, Edward D. White, Gregory E. Brown

Faculty Publications

As the costs of Department of Defense (DoD) Weapon Systems increase, the ability to estimate the Operating and Support (O&S) costs accurately for the various weapon systems has become vital to long-term affordability. This research focuses on the O&S costs of the Air Force fixed-wing arsenal (i.e., platforms) for 1996–2016. First, the Cost Element Structure (CES) for 52 aircraft platforms and seven operational mission categories is analyzed to derive the descriptive statistics per aircraft category through examination of actual historical costs. Second, testing to identify statistical differences within the O&S CES construct across various Air Force aircraft categories is conducted. …

Analysis Of Influences Of Separation Decisions In The Financial Management Career Field, Shauna Young

Theses and Dissertations

The purpose of this research was to analyze influences on separation decisions of active duty Air Force financial management officers. Researchers tested nine variables to determine their separation implications. The tested variables were major command, age, prior enlisted service, spouse, commissioning source, AFIT cost analysis master’s degrees, engagement, crystallization of job alternatives, and exhaustion. Results proved that age, prior enlisted service, having a spouse, and being an Air Force Academy or AFIT graduate correlates to whether a financial management officer will separate from the Air Force. In addition, the engagement level or having a defined list of job alternatives readily …

A Cost Benefit Analysis Of Emerging Led Water Purification Systems In Expeditionary Environments, Alicia D. Binggeli

Theses and Dissertations

The Air Force is a rapid mobile force responsible for national defense and reaction to calls for humanitarian aid across the globe. Rapid Global Mobility is a major tenant of the Air Force strategy. It provides the nation its global reach, underpins its role as a global power, and ensures that tomorrow, just as today, the United States can respond quickly and decisively to unexpected challenges to its interests. The ability to produce or acquire potable water is an essential piece of this tenant. Reverse Osmosis Water Purifications Units (ROWPUs), the workhorse for all military units, provide all the necessary …

Using Multiple And Logistic Regression To Estimate The Median Will-Cost And Probability Of Cost And Schedule Overrun For Program Managers, Ryan C. Trudelle

Theses and Dissertations

The main concern of a program manager is to manage the cost, schedule, and performance triad of a program. Historically, programs tend to meet the performance aspect at the expense of cost or schedule, or both. This research gives the acquisition community a set of tools that enables them to impartially analyze the cost and schedule of their programs, helping to mitigate these issues. Five regression models encompass this toolset; one to estimate the median program cost and four to identify the probability of realizing a given overrun. The cost model explains 81% of the variation in program acquisition using …

Engineering Change Orders And Their Impact On Dod Acquisition Contracts, Ian S. Cordell

Theses and Dissertations

Cost growth is a problem DoD wide. Cost Estimators attempt to remedy this problem by accounting for uncertainty in the estimates they complete. They use tools such as Engineering Change Orders (ECO’s) to account for the uncertainty, by applying a percentage to the final amount estimated. The following research gives the acquisition community a more precise tool to predict whether a DoD Acquisition Contract will have an Engineering Change Order, which can then be used also during programmatic cost estimating, and also a method for predicting the proper amount of ECO to apply when certain variables are present. The study …

A Longitudinal Study And Color Rating System Of Acquisition Cost Growth, Cory N. D'Amico

Theses and Dissertations

different angles have been looked at to try and discover how to better estimate cost, what causes cost growth, and how to mitigate it. This research addresses this through examining cost growth from a longitudinal perspective, evaluating cost growth factors at major program reviews, and assessing the cost growth by applying color rating metrics. The results of this analysis show that breaking cost growth into longitudinal segments of a programs lifecycle allows the true behavior of cost growth to be seen, when it can often be masked in the traditional approach of evaluating lifecycle cost growth. Additionally, when applying the …

Determining The Optimal Work Breakdown Structure For Government Acquisition Contracts, Brian J. Fitzpatrick

Theses and Dissertations

The optimal level of Government Contract Work Breakdown Structure (G-CWBS) reporting for the purposes of Earned Value Management was inspected. The G-Score Metric was proposed, which can quantitatively grade a G-CWBS, based on a new method of calculating an Estimate At Completion (EAC) cost for each reported element. A random program generator created in R replicated the characteristics of DOD program artifacts retrieved from the Cost Analysis Data Enterprise (CADE) system. The generated artifacts were validated as a population, however validation at the demographic combination level using an artificial neural network was inconclusive. Comparative WBS forms were created for a …

Predicting Schedule Duration For Defense Acquisition Programs: Program Initiation To Initial Operational Capability, Christopher A. Jimenez

Theses and Dissertations

Accurately predicting the most realistic schedule for a defense acquisitions program is an extremely difficult task considering the inherent risk and uncertainties present in the early stages of a program. We use a multiple regression analysis to predict schedule duration in a defense acquisition program. The prediction scope of our research is limited to predicting schedule duration from program initiation to initial operation capability (IOC).We use the data from 56 programs across all services, which was acquired from a SAR database created by RAND. We were able to achieve an R2 of 0.429 and an Adjusted R2 of 0.384 in …

Cost Analysis Reform: Where Do We Go From Here? A Delphi Study Of Views Of Leading Experts, Thomas W. Lamb

Theses and Dissertations

The Department of Defense (DOD) has faced many fiscal challenges in recent years, and these challenges have driven cost saving initiatives across all services and career fields. Many improvement initiatives or new policies aimed at better estimating, controlling, and reducing costs have been initiated to meet fiscal challenges. The senior leaders within the cost analysis workforce are faced with the challenge of managing change within their organizations to improve cost analysis processes and practices, while continuing to provide key decision support in the form of ongoing quality cost estimates.

This purpose of this research is to generate applicable research thrust …

Predicting Cost Growth Using Programs Reviews And Milestones For Dod Aircraft, Scott J. Kozlak

Theses and Dissertations

Past research shows predicting cost growth is an important topic with DoD systems. Researchers have attempted to predict total program cost growth as well as identify predictors of program cost growth. Our research addresses this through examining cost growth at reviews and milestones along an aircrafts schedule. We assess cost growth factors at four major reviews, Critical Design Review, First Flight, Development Test and Evaluation End, and Initial Operating Capability. The first portion of the analysis focuses on identifying cost growth factors and percent of total cost growth at the four program reviews. The second portion identifies predictors of cost …

Earned Value Reporting On Agile Software Development Programs Within The Department Of Defense, Elizabeth G. Hodson

Theses and Dissertations

The correct measurement of earned value on agile software development programs has recently been identified as a concern by software developers implementing agile development methods. This research attempts to address the difficulties in reporting earned value on agile development programs, and the differences between the measures of completion in agile development versus earned value reporting. The major difference was identified to be in translating between the work originally planned and the work that was “recently” planned as part of the agile development process. This difference, if not transparent, leads to different measurements of earned value and inconsistent reports of a …

The Influence Of Operational Resources And Activities On Indirect Personnel Costs: A Multilevel Modeling Approach, Bradley C. Boehmke, Alan W. Johnson, Edward D. White, Jeffery D. Weir, Mark A. Gallagher

Faculty Publications

Indirect activities often represent an underemphasized, yet significant, contributing source of costs for organizations. In order to manage indirect costs, organizations must understand how these costs behave relative to changes in operational resources and activities. This is of particular interest to the Air Force and its sister services, because recent and projected reductions in defense spending are forcing reductions in their operational variables, and insufficient research exists to help them understand how this may influence indirect costs. Furthermore, although academic research on indirect costs has advanced the knowledge behind the modeling and behavior of indirect costs, significant gaps in the …

Unmanned Aerial Vehicle Flight Test Approval Process And Its Implications: A Methodological Approach To Capture And Evaluate Hidden Costs And Value In The Overall Process, Tuan U. Tran

Theses and Dissertations

The advancement in small unmanned aerial vehicle (SUAV) technology has brought a new revolution in the military domain. Their uses have become more synonymous with intelligence, surveillance, and reconnaissance missions. Concerns over their flight test safety and accountability have been addressed in multiple policies to mitigate mishaps and increase proper accountability. However, current DoD and FAA mandated regulations and policies concerning UAV flight tests are sometimes considered slow and time-consuming, which may lead to delays in UAV research and development. This study explores the quantitative and qualitative measure of benefits associated with an abbreviated flight test process for SUAVs. Specifically, …

An Evaluation Of The Argentinean Basic Trainer Aircraft Domestic Development Project, Guillermo A. Stahl

Theses and Dissertations

The Argentine Air Force (AAF) is facing increasing challenges in maintaining and sustaining trainer aircraft. The current trainer aircraft used by the AAF face obsolescence issues and decreased serviceability. Argentina used to have the largest aircraft industry among the Latin America countries, but a number of factors such as not maintaining objectives and policies over time undermined its consolidation and were instrumental in Argentina losing its leadership position. To meet AAF requirements and revive Argentina's domestic aircraft industry, an indigenous basic trainer aircraft project is proposed. The purpose of this thesis is to evaluate the project's viability using a multi-criteria …

Acquisition Program Problem Detection Using Text Mining Methods, Trevor P. Miller

Theses and Dissertations

This research provides program analysts and Department of Defense leadership with an approach to identify problems in real-time for acquisition contracts. Specifically, we test the abilities of statistical algorithms using text mining techniques to detect unusual changes in acquisition programs’ cost estimates at the completion of the programs. Currently, the government purchases monthly written reports, an informational tool on status of an acquisition program, but has not been integrated into problem prediction analysis. We center our research on the following two questions: First, can we quantify the qualitative written reports? Second, can we use these quantifications of the texts to …

Minuteman Iii Cost Per Alert Hour Analysis, Allen R. Miller

Theses and Dissertations

This thesis analyzes the cost associated with the Minuteman III (MM III) weapon system. The research develops three models for determining MM III costs per alert hour (CPAH). The first model is based on the Air Force Cost Analysis Improvement Group cost per flying hour model. The model is modified to include depot level reparables, consumables, and personnel costs. The second model is based on the Office of the Secretary of Defense, Cost Analysis Improvement Group cost per flying hour model and is formulated using service-wide data from the Air Force Total Ownership Cost tool. The third model is a …

Smoking In The United States Air Force: Trends, Most Prevalent Diseases And Their Association With Cost, Michail Gkoutouloudis

Theses and Dissertations

This research focuses on the smoking rates among the Active Duty Air Force (ADAF) personnel and the association of smoking and cost of hospitalization because of diseases related to smoking. Three types of analyses were used in this research. The Contingency Analysis was based on the data taken from the Air Force Web HA questionnaire. The Pivot Table Analysis and the Regression Analysis were based on a second data set associated with the cost of hospitalization. The Contingency Analysis showed that smoking in the U.S. Air Force is more prevalent among the enlisted, males, and the younger age groups. The …

Alternative Active Duty Military Retirement Plan, Amy L. Schmidt

Theses and Dissertations

No abstract provided.

Virtualness Of The Cost Estimating Community, Whiticar S. Darvill

Theses and Dissertations

Many researchers have sought to identify the sources for cost and schedule growth, most researchers failed to analyze the resource utilization of the cost community. This research explores how the cost community allocates its time. Furthermore, by examining how resources are spent, this research will juxtapose the desires of recent Congressional and Department of Defense policies against the current demands of the cost community. A thorough understanding of resource allocation requires research into the inherent virtualness of the community. Early virtualness predicated the notion of extremes, either virtual or not. However, recent literature expands virtualness into gradients and explains that …

Using Earned Value Data To Detect Potential Problems In Acquisition Contracts, C. Grant Keaton

Theses and Dissertations

Government contractors report earned value (EV) information to government agencies in monthly Contract Performance Reports (CPR). Though major differences may exist in the data between subsequent CPRs, we know of no government effort to detect these occurrences. The identification of major changes may locate and isolate problems and thus prevent million and billion dollar cost and schedule overruns. In this study, we develop an approach to identify changes in the Cost Performance Index (CPI) and the Schedule Performance Index (SPI) that may indicate problems with contract performance. We find the detection algorithm indentifies changes in the CPI and the SPI …

An Econometric Analysis Of The Effectiveness Of Compensation To Retention, Juan Jose Guzman

Theses and Dissertations

In July 2001, Lieutenant General Donald L. Peterson, Deputy Chief of Staff, Personnel, United States Air Force, testified before Congress that adverse retention rates were senior leadership’s number one concern. Military compensation sustains "defense manpower policies that in turn support the nation's defense strategy." Defense spending must be allocated efficiently to maintain the optimal mix of forces and weapon systems to respond to national security objectives. The President requested $149.9 billion for military pay and healthcare for Fiscal Year 2009, or 29 percent of the total proposed defense budget. When military compensation constitutes nearly one-third of department expenses, its impact …

Analysis Of The Military Medical Retirement System, Joseph M. Barnum

Theses and Dissertations

The purpose of this research was to evaluate the 60 year old military medical retirement system. Specifically, this thesis answered three research questions regarding a comparison of pay between the current system and the societal standard for injury and illness, identification of current segments of the military population disproportionately affected by the current system, and establishment of a minimal standard for medical retirement compensation. Previous research established the societal standard for compensation as the Value of Statistical Life. This thesis compared the current military medical retirement system with the Value of Statistical Life and identified several segments of the military …

Cost Forecasting Models For The Air Force Flying Hour Program, Tyler J. Hess

Theses and Dissertations

The fiscally constrained environment in which the Air Force executes its mission places great emphasis on accurate cost estimates for planning and budgeting purposes. Inaccurate estimates result in budget risks and undermine the ability of Air Force leadership to allocate resources efficiently. This thesis evaluates the current method used by the Air Force and introduces new methods to forecast future Flying Hour Program costs. The findings suggest the current forecasting method’s assumption of a proportional relationship between cost and flying hours is inappropriate and the relationship is actually inelastic. Prior research has used log-linear least squares regression techniques to forecast …

The Correlation Of Human Capital On Costs Of Air Force Acquisition Programs, Stephen E. Gray

Theses and Dissertations

Previous studies have linked human capital with performance. The studies have shown performance, measured as output, of a firm can be increased by adding more personnel and/or increasing education levels. This research uses the Cobb-Douglas Production function to build upon that relationship of inputs to outputs. The output in this study is the average cost overrun of Aeronautical Systems Center research, development, test, and evaluation contracts managed from 1994 to 2008. The inputs are the numbers of military/government employee financial managers, program managers, engineers, rated personnel, and military/government employees in those career fields possessing a graduate degree or higher. A …

Modeling U.S. Occupational Health Costs, Joseph M. Bauer

Theses and Dissertations

The primary purpose of this research was to improve the effectiveness of cost comparison analyses for the 75th Aerospace Medicine Group, Hill Air Force Base, Utah. Bioenvironmental engineers sought a more robust cost comparison tool, allowing engineers to quickly determine the viability of proposed occupational health-related expenditures. To justify the funding of potential projects, engineers must quantify the expected cost savings. Improved cost comparison analysis enables personnel to better justify worthy projects or filter out uneconomical solutions. A secondary purpose of this research was to validate Department of Defense (DoD) occupational illness cost factors. This research effort focused on cost …