The Air Force's Experience with Should-Cost Reviews and Options for Enhancing Its Capability to Conduct Them

Abstract : This research on pricing capability was motivated by the long-standing problems of cost growth of major weapon system acquisition programs and the high costs in general of Department of Defense (DoD) equipment.1 The problem of cost growth has plagued DoD for several decades. Many studies have documented the amount of the growth, and some have looked at the causes of the growth. Many of these studies have used data from Selected Acquisition Reports prepared by DoD and sent to Congress on major defense acquisition programs. The most recent RAND Corporation study of this type that measured the amount of the growth and analyzed the sources of growth examined 35 mature programs (Bolten et al., 2008). The study found an average cost growth of 57 percent in development and 34 percent in production (after adjusting for changes in quantity) (pp. 28 29). More recent RAND research has explored in more depth the root causes of cost growth in acquisition programs (Blickstein et al., 2011).