Authors: Capt Ryan Hoff, USAF, Maj Gregory Hammond, USAF, Lt Col Peter Feng, USAF, and Edward White
The United States has spent more than $23 billion on construction in Afghanistan since 2001. The dynamic security situation created substantial project uncertainty, and many construction projects used cost-plus-fixed-fee contracts (CPFF) instead of the firm-fixed-price (FFP) norm. Using a dataset of 25 wartime construction projects managed by the Air Force Civil Engineer Center, the authors sought to confirm that both contract types yield project outcomes consistent with the established literature. As expected, they found CPFF contracts had greater cost and schedule growth than FFP. However, they did not find differences regarding as-built quality. Additionally, the authors sought to determine whether CPFF contracts exhibited greater construction risks than FFP contracts. They found no significant differences between contract types in terms of security incidents or other environmental factors. This research may be particularly relevant to military owners who contract projects in wartime environments.
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Authors: Capt Gary Jones, USAF, Edward White, Lt Col Erin T. Ryan, USAF, and Lt Col Jonathan D. Ritschel, USAF
Recent legislation, such as the Weapon Systems Acquisition Reform Act of 2009, requires a renewed emphasis on understanding operating and support (O&S) costs. Conventional wisdom within the acquisition community suggests a 70:30 cost ratio with respect to O&S and acquisition of an average weapon system. Using 37 Air Force and Navy programs, the authors estimate the mean overall ratio of O&S costs to acquisition costs to be closer to 55:45, although many weapon systems displayed significant deviation from this 55 percent average. Contributing factors such as life expectancy and acquisition strategy (i.e., new system or modification) affect this variance. Their research advises against using a single “one-size‑fits-all” O&S/acquisition cost ratio for all major DoD weapon systems.