Extreme Cost Growth

This report identifies and characterizes conditions present in six U.S. Air Force Major Defense Acquisition Programs (MDAPs) experiencing extreme cost growth, using case study analysis. This report is a companion to Air Force Major Defense Acquisition Program Cost Growth Is Driven by Three Space Programs and the F-35: Fiscal Year 2013 President's Budget Selected Acquisition Reports (RR-477-AF, 2014), which analyzed cost growth trends in current U.S. Air Force MDAPs using Selected Acquisition Report (SAR) data. The case study analysis provided in this document is based on government program documentation and publically available open source materials, as well as interviews with program officials and subject matter experts. The authors find that the key common attributes among the six programs with extreme cost growth can be grouped into two broad areas: (1) premature approval of Milestone B and (2) suboptimal acquisition strategies and program structure. They offer two broad recommendations for improving cost and schedule outcomes for Air Force MDAPs: (1) Establish credible baseline cost estimates at MS B to provide realistic baseline metrics for accurately measuring real cost growth, and (2) develop, refine, and implement robust evolutionary or incremental acquisition strategies and policies that reduce and control technological and programmatic risk, unless timely operational need has clear priority over cost savings.