Creating Cost Growth Models for the Engineering and Manufacturing Development Phase of Acquisition Using Logistic and Multiple Regression

Cost growth is a concern for all parties involved in the DoD acquisition process. These parties include cost analysts, program managers, senior DoD decision-makers, Congress, and even the American public. All of these people have a vested interest in the cost of DoD programs and most would like to see those costs decrease; as such, Congress has enacted multiple laws and reforms over the past three decades in an attempt to curb cost growth within DoD acquisition. Previous research creates the foundation for the use of a two-step methodology to help predict cost growth, which we follow closely. First, utilizing logistic regression we analyze whether specific program characteristics predict cost growth within the Engineering and Manufacturing Development (EMD) phase for combined RDTE and procurement budgets. The second step uses this answer (i.e., a positive response) to find cost growth predictor variables. Specifically, we perform a multiple regression analysis and determine the amount of cost growth incurred by these DoD programs.