Developing Standard EMD Cost Factors For Major Defense Acquisition Program (MDAP) Platforms

Abstract

Major Defense Acquisition Program (MDAP) cost estimators use factors as one of their common estimating techniques. However, previous studies developing factors for the Engineering and Manufacturing Development (EMD) phase of the lifecycle are limited and it is not precisely known where cost analysts should allocate their time and effort. Therefore, this research creates 443 new standard cost factors that are delineated by five categories: commodity type, contract type, contractor type, development type, and Service. The factors are developed for those elements that are “common” in a wide array of projects such as program management, systems engineering, data, or training. Coefficient of Variation (CV) values were found to be high (71.86% to 179.87%) in each subcategory. But in a refined subset of the data, the CV decreased, indicating that the average percent estimating error improved when more detailed information was available. Through non-parametric statistical analysis, differences in the subcategories are identified. The results provide effort allocation guidance for the cost analyst to perform the iterative process of refining the data and applying statistical and/or practical analysis to develop a more defensible cost estimate.