Examining the Institutional Factors Affecting Cost Growth in Defense Acquisition: Additional Insights May Yield More Effective Policy Interventions

Abstract

The US Defense Department suffers from persistent, but not certain, cost growth within major acquisition programs. Over the past few decades, scores of empirical studies have examined the causes and consequences of cost growth and have shed light on characteristics of programs that fail to meet cost-performance goals. They have looked at factors such as the size of the program, its phase in the development cycle, the type of weapon being purchased and organizational structure. Other studies have taken a more qualitative view and have considered the interplay of actions within a program office and between a program office and its environment. Both types of studies have provided countless recommendations to fix defense acquisition. Yet, problems persist. The question motivating the present study is: given the materiality of the problem (hundreds of billions of dollars), the number of times it has been studied, the attention of the highest levels of government, and numerous attempts to reform acquisition, why does the problem persist? What have the studies and policy prescriptions missed?