Are Changes in Acquisition Policy and Process and in Funding Climate Associated With Cost Growth?

Abstract

This paper reports the results of research on whether changes in Department of Defense (DoD) acquisition policy and process have had a discernible effect on the growth of Program Acquisition Unit Cost (PAUC) of major defense acquisition programs (MDAPs). Examination of PAUC growth data for 151 MDAPs that passed Milestone II or B during fiscal year (FY) 1970-FY 2007 does not reveal any substantial or consistent effect of changes in acquisition policy and process. Changes in funding climate, however, are found to have a large influence on PAUC growth. These findings have three implications for acquisition reform. First, the relevant context for understanding PAUC growth is the interface between the acquisition process and the program/funding process. Second, it seems unlikely that further changes in the acquisition process will have a major effect on PAUC growth. Third, the underlying cause of persistent high PAUC growth is not, as is commonly asserted, a deeply established culture of the DoD acquisition organizations and their professional employees.