Investigation into Risk and Uncertainty: Identifying Coefficient of Variation Benchmarks for Air Force ACAT I Programs

Previous DoD cost growth studies found typical cost growth in defense acquisitions is around forty-six to sixty percent of the original estimate. The research in this study addresses the identification of risk and uncertainty benchmarks by providing decision makers with coefficient of variation ranges for cost estimates. The study recommends coefficient of variation (CV) ranges for Air Force Acquisition programs, determines if different CV ranges should be used based on platform type, and determines if CV decreases over the course of the program\u27s acquisition lifecycle. The analysis found that the Air Force should enhance the CV review process to ensure cost estimates have CVs between 41-74% during Milestone A, 31-54% during Milestone B, and 23-32% during Milestone C. It is recommended that Selective Acquisition Reports include the CV utilized to develop the current estimate. The analysis found CVs are analogous among platform types. Lastly, the research found that CVs decrease as a program matures through the acquisition lifecycle