An Analysis of the Estimate at Complete for Department of Defense Contracts

When contractors provide timely and reliable information on the status of a contract, both contractors and government program offices can provide an accurate estimate of a contract’s completion costs. This research shows that the cumulative cost performance indices provided by contractors and program offices are high and less accurate than those of previous years and/or that a significant amount of ACWP is being documented in the final portion of a contract. The high performance indices resulted in EACs that were low-balled during the majority of a contract’s life which shows a need to improve the use of EVM metrics for effective project and program management. This research replicates Christensen’s findings in 1996 which proved that using the SCI was a more accurate indicator of EAC vice the CPI. Consistent with Christensen’s research, SCI is still a more accurate indicator of CAC according to this study but not by a significant amount. When SCI is used to predict the final cost on contracts from the 21st century, a 5% deviation from the final cost starts at the 70% complete point when using both CPI and SCI as the performance indicator