An Evaluation of Department of Defense Contractor's Cost Performance

This study examines the cause of cost overrun recoveries within Department of Defense (DoD) contracts. In this time of extremely limited congressional funding, it is crucial the DoD avoid cost overruns. Information provided to contracting officers and contractors which would help avoid cost overruns...

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Bibliographic Details
Main Authors: Pletcher, John M, Young, Jane C
Format: Report
Language:English
Subjects:
Administration and Management
ANALYSIS OF VARIANCE
CONTRACT ADMINISTRATION
CONTRACTORS
COST EFFECTIVENESS
COST OVERRUNS
DEPARTMENT OF DEFENSE
Economics and Cost Analysis
MANAGEMENT PLANNING AND CONTROL
MILITARY PROCUREMENT
NORMALITY
STATISTICAL TESTS
THESES
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Summary:This study examines the cause of cost overrun recoveries within Department of Defense (DoD) contracts. In this time of extremely limited congressional funding, it is crucial the DoD avoid cost overruns. Information provided to contracting officers and contractors which would help avoid cost overruns would prove extremely valuable to the DoD. This study attempts to address this problem in two ways: determine the cause of overrun recoveries; determine whether a statistical difference in cost and schedule performance exists among DoD contractors. Interviews, document reviews, and a two-sample t- test were used to analyze the contracts that recovered from early cost overruns. One-Way Analysis of Variance, along with normality tests and equality-of- variance tests were used to analyze the contractors' cost and schedule performance. The specific contract reviewed for contract recovery actions revealed no specific management action that led to the recovery. Additionally, more than 300 contracts across 49 contractors revealed no significant statistical difference between contractors in the areas of cost and schedule performance. Cost overrun, Contractors, Recovery, Contractor performance, Cost variance, Schedule variance, Cost effectiveness