Sources of Weapon System Cost Growth

This analysis uses data from Selected Acquisition Reports to determine the causes of cost growth in 35 mature major defense acquisition programs. Four major sources of growth are identified: errors in estimation and scheduling, decisions by the government, financial matters, and miscellaneous. The analysis shows that more than two-thirds of cost growth (measured as simple averages) is caused by decisions, most of which involve quantity changes, requirements growth, and schedule changes.Cost growth in major weapon-systems programs results from errors in estimation and scheduling, government decisions, financial matters, and miscellaneous sources, with decisions involving changes in requirements, quantities, and production schedules the dominant cause.