Have Changes in Acquisition Policy Influenced Cost Growth of Major Defense Acquisition Programs?

Abstract

This paper is part of a series, several previous papers of which explored whether unit cost growth for major defense acquisition programs (MDAPs) is statistically associated with changes in acquisition policy over the period FY 1965 FY 2009. The project is now substantially completed and is being assembled into a final report. This paper presents the project's three main conclusions on the effects of changes in acquisition policy on MDAP cost growth. First, changes to the acquisition process implemented in 1969 reduced average growth in unit cost. These changes remained in place through the end of the period considered in this study (FY 2009) and, taking changes in funding climate into account, average unit cost growth remained at about the lower level stemming from the 1969 reforms. Second, the OSD-level oversight process has not been fully successful in responding to the increased pressures on cost growth during bust as opposed to boom funding climates. Third, again taking account of bust and boom funding climates, the experiments undertaken post-1969 on different contract types and relaxation of acquisition regulations seem not to have reduced either the cost of systems or growth in unit costs.