Measuring Cost Growth in Weapon Systems

• Activity Number: 14
• Type: Topic Contributed
• Date/Time: Sunday, August 1, 2010 : 2:00 PM to 3:50 PM
• Sponsor: Section on Statistics in Defense and National Security
• Author(s): Nancy L. Spruill*+
• Companies: Office of the Secretary of Defense
• Keywords: DoD ; Acquisition ; Cost Growth ; GAO

Abstract

Is cost growth in the Department of Defense's major weapons system out of control or can one see improvements over the past few years? This paper examines one important measure of how well DOD's acquisition system is performing--the amount of cost growth in major weapon systems, such as aircraft, ships, tanks, etc. However, since it takes years to acquire these systems and since DoD is continually making changes to the acquisition process, there is debate about how to measure cost growth to learn about the performance of today's process. The Government Accountability Office (GAO), who produces widely-quoted statistics, measures growth since the initiation of the weapon system. In some cases the systems began in the 1990s. This paper argues that the time frame should be reduced and that some widely quoted statistics are misleading.