Organization Analytics: Taking Cost-per-Dollar-Obligated (CPDO) Measures to the Next Level in Defense Contracting

Abstract

Procurement efficiency measures were calculated for nine defense contracting organizations over three fiscal years. Cost per Dollar Obligated (CPDO) efficiency assessments were completed for the Air Force, Navy, Marine Corps, and non-military staff defense organizations. Trends were identified in various U.S. regions and in different military services. Efficiency measures were then compared to performance measures for cycle time (Procurement Administrative Lead Time [PALT]) and compliance (protests received and sustained). Comparison of these measures and CPDO provides insight into the relationships between cost efficiency and the quality and timeliness organization workload completion. In addition, the demographic makeup of organizations was captured to identify identified relationships between the performance measures and organization size, proportion of contracting officer warrants, percentage of military personnel, and average civilian pay level. This study provides acquisition leaders with actionable insight regarding organization efficiency, performance, and staff composition. An emerging typology is identified indicating different types of contracting organizations based on the characteristics of the portfolio they execute.