An Overview of Acquisition Reform Cost Savings Estimates

by Mark A. Lorell, John C. Graser

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A number of analyses have recently been conducted in efforts to update technical cost models and cost estimating relationships for fixed-wing combat aircraft, particularly in light of the numerous cost-saving measures that have been initiated over the past decade. This report focuses specifically on acquisition reform (AR), or the institution of changes either in government acquisition processes or in the relationship between the government and Department of Defense (DoD) primes. Its objective is to study relevant literature and conduct interviews with government and industry officials to determine whether estimates made on the efficacy of AR measures are sufficiently robust to be of predictive value. The literature examined covered three types of AR reform measures: reductions in DoD regulation and oversight compliance; pilot programs seeking to emulate commercial efforts; and multiyear procurements. Interviews were conducted with a wide variety of government officials responsible for acquisition policy and operations as well as available industry personnel. The report concludes that there is insufficient evidence in the current literature to support the development of accurate adjustment factors for use in predictive cost models for military combat aircraft. It also suggests, however, that at least in some categories of AR, rules of thumb for potential AR cost savings can be developed that may be of some use in limited circumstances.

Table of Contents

  • Chapter One

    Introduction and Acquisition Reform Measures Taxonomy

  • Chapter Two

    DoD Regulatory and Oversight Compliance Cost Premium

  • Chapter Three

    Commercial-Like Program Structure

  • Chapter Four

    Three U.S. Air Force Acquisition Reform Pilot Munitions Programs

  • Chapter Five

    Three U.S. Air Force Acquisition Reform Pilot Munitions Programs

  • Chapter Six

    Multiyear Procurement

  • Chapter Seven

    Conclusions on AR Cost Savings Estimates

  • Appendix A

    Subjects of the Three RAND Studies on Industry Initiatives Designed to Reduce the Cost of Producing Military Aircraft

  • Appendix B

    Acquisition Reform Cost Questions

Research conducted by

The research described in this report was performed under the auspices of RAND's Project AIR FORCE.

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