Report
Relative Contractor Risks
Feb 4, 2022
Early identification of risks or problems in contract execution is critical for proactive acquisition management. The authors describe a new way to apply data science to disparate and disjointed government and external data sources to highlight the relative contractor performance risks and provide earlier indicators of performance issues in Department of the Air Force acquisition contracts and programs than current sources and metrics do.
A Data-Analytic Approach
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Getting early indication of potential contractor performance risks and contract execution issues is critical for proactive acquisition management. When contractors are in danger of not meeting contractual performance goals, Department of the Air Force (DAF) acquisition management may not be fully aware of the shortfall until, for example, a schedule deadline is missed, government testing indicates poor system's technical performance, or costs exceed expectations.
Concerns continue to be raised about cost and schedule growth in acquisition and experts postulate about a lack of knowledge about the status of acquisition programs. In this report, the authors focus on metrics to identify emerging execution problems earlier than traditional acquisition oversight systems to enable more-proactive risk and performance management. They summarize their findings, which include a taxonomy of contractor relative risks, leading indicators of performance, relevant data sources, risk measures and equations, and a prototype that implements some of these findings using real data sources. This research should be of interest to acquisition professionals and leadership who are searching for ways to improve acquisition performance through early identification of potential relative contractor risks and execution problems to inform active program management and mitigation of risks. The prototype should be of interest to acquisition officials (from program managers to milestone decision authorities) to help them access more data in an easy-to-understand way so they can focus their limited time on areas that require increased management attention. This approach should be useful during any phase of the acquisition process.
Chapter One
The Challenge: Early Identification of Contractor Execution Problems in Acquisition
Chapter Two
Indicators of Performance
Chapter Three
Prototype Structure and Approach
Chapter Four
Insights, Conclusions, and Next Steps
Appendix A
Sentiment Modeling and Analysis and Modeling of Free-Text Assessments and Associated Ratings
Appendix B
Assessing Final Cost and Schedule Using a Rayleigh Function
This research was commissioned by the Deputy Assistant Secretary for Acquisition Integration, Office of the Assistant Secretary of the Air Force for Acquisition, Technology, and Logistics (SAF/AQX) and conducted within the Resource Management Program of RAND Project AIR FORCE (PAF).
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