Acquisition Risks in a World of Joint Capabilities: A Study of Interdependency Complexity

Abstract

Environmental uncertainty has particular ramifications for programs that seek the benefits of interdependent coordinated action. This research examined the influence of a number of interdependencies on major defense acquisition program (MDAP) performance. The analysis found that interdependencies, when defined by joint status,number of program elements, or number of data connections, do not appear to exhibit any ill-toward effects. However, the results of the analysis illustrated that programs exert cascading influences on neighboring programs. The examination of whether MDAPs that share a program element influence each other was supported. Upstream program acquisition unit cost (PAUC) growth appeared to influence both downstream PAUC growth and downstream engineering cost variance. The upstream program's engineering cost variance influence was mixed, demonstrating positive results in one network but negative results in the other. Upstream average procurement unit cost (APUC) growth exerted negative influences on downstream PAUC percent growth in one network and negative influences on engineering cost variance in the other network, thereby suggesting some type of economies of scale benefits. The finding that upstream PAUC growth had a consistent and positive influence on downstream PAUC growth was especially revealing. These findings illustrate that interdependent organizations are susceptible to the performance shortfalls of their partners.