Dynamic Contracting of Verification Activities by Applying Set-based Design to the Definition of Verification Strategies

Abstract

This report describes recent research in support of acquisition programs that use verification activities to elicit evidence of contractual fulfillment. Thus, the importance of adequately defining verification activities in any acquisition program is unquestionable. Its significance extends beyond contracting though. The biggest portion of the development financial budget is spent in executing verification activities and verification activities are the main vehicle in discovering knowledge about the system, which is key to reduce development risk. In current practice, a verification strategy is defined at the beginning of an acquisition program and is agreed upon by customer and contractor at contract signature. Hence, the resources necessary to execute verification activities at various stages of the system development are allocated and committed at the beginning, when a small amount of knowledge about the system is available. However, contractually committing to a fixed verification strategy at the beginning of an acquisition program fundamentally leads to suboptimal acquisition performance. Essentially, the uncertain nature of system development will make verification activities that were not previously planned necessary and will make some of the planned ones unnecessary. Therefore, dynamic contracting of verification activities is necessary to guarantee optimality of acquisition programs in this area.