Tag Archives: Laura E. Armey

Tapping Transaction Costs to Forecast Acquisition Cost Breaches

To print a PDF copy of this article, click here.

Authors: Laura E. Armey and Diana I. Angelis

This article uses transaction costs to predict the probability of incurring a cost breach in a major defense acquisition program (MDAP). As transaction costs are not explicitly measured for MDAPs, the authors use estimates of systems engineering and program management (SE/PM) costs as a share of overall program costs as a proxy for transaction costs. Using survival analysis, a new approach to predicting cost breaches, they also found that an increased share of SE/PM costs in initial program estimates can help predict future cost breaches.

Continue reading