Maturing Cost Estimation in a Rapid Acquisition Environment

Abstract

Agencies are increasingly pursuing means to introduce new technology and capabilities as quickly as possible to counter emerging threats. For critical capabilities, warfighters cannot wait for new technology or capability to work its way through a rigid and time-consuming acquisition process. Agencies are using rapid acquisition methods to help achieve these goals. Rapid acquisition approaches have challenged the acquisition community's ability to generate credible cost estimates. Ad-hoc and disparate processes have been used over the past decade, leading to poorly defined assumptions, inadequate data collection, inappropriate estimating methodologies, and inadequate assessments of risk and uncertainty. This guidance provides an easily usable and adaptable set of findings and recommendations aimed at strengthening the ability of the cost and acquisition communities to produce credible cost estimates for capabilities that require rapid acquisition methods. The recommendations guide program offices that are implementing rapid acquisitions to help mature their cost estimating processes and align them with best practices; decrease the variance seen today across rapid acquisition cost estimating processes; and help the cost community establish repeatable, proven processes for operating in rapid environments. The recommendations are linked to the GAO cost estimating best practices that, when implemented, help ensure that credible, reliable, and confident cost estimates are delivered even within the constraints of rapid acquisition timelines. Ultimately, a credible cost estimate helps improve a program office's ability to make better informed, data driven decisions (at the program and portfolio levels).