Systems Engineering and Program Management: Trends and Costs for Aircraft and Guided Weapons Programs

Stem, David E.; Boito, Michael; Younossi, Obaid

doi:10.7249/mg413

Cited by 12 publications

(14 citation statements)

References 4 publications

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“…-11 -k~î~ä=mçëíÖê~Çì~íÉ=pÅÜççä= sometimes across contracts within the same MDAPs, is due to subjective interpretations among contractors (and program managers) about the definition of SE/PM costs and non-uniform standards regarding which costs qualify to be categorized as SE/PM costs (Stem, Boito, & Younossi, 2006). This study analyzes the SE/PM cost ratio of MDAPs looking for potential correlation between the SE/PM ratios and cost breaches.…”

Section: The Se/pm Cost Ratiomentioning

confidence: 99%

See 1 more Smart Citation

Transaction Costs and Cost Breaches in Major Defense Acquisition Programs

Biggs¹,

Angelis²,

Armey³

et al. 2014

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Transaction costs associated with program management are a component of acquisition cost that is often overlooked when estimating the total costs of a DoD program. This research explores the possibility that transaction costs may be related to major defense acquisition program (MDAP) cost breaches. We examine the two questions: (1) Is there a relation between MDAP transaction costs and cost breaches? and (2) Are cost breaches related to the amount, or percentage of total costs, spent on MDAP transaction costs? Using systems engineering and program management (SE/PM) costs as a proxy for transaction costs, we analyze the level of SE/PM expenditures in MDAPs to determine whether a relationship exists between transaction costs and cost breaches. Contract type and program maturity are also considered. Logistic regression models are used to examine the occurrence of program breaches in MDAPs. We find a positive relationship that is significant at the 5% (p = .05) level between the likelihood of a cost breach occurring and estimate at completion SE/PM cost ratio. On average, for a 1% increase in the SE/PM cost ratio, there is a corresponding 0.8% increase in the likelihood that a cost breach will occur. When maturity and contract type are included in the model, the average effect of the SE/PM cost ratio on the likelihood of a cost breach increases to 1% for cost-plus contracts at a significance level of 10% (p = .10). Although SE/PM cost ratio and cost breaches are shown to be related, it cannot be assumed that transaction costs are a causal factor for cost breaches.

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Section: The Se/pm Cost Ratiomentioning

confidence: 99%

“…A 2006 RAND study established that MDAP SE/PM costs vary between programs depending on the program type (Stem et al, 2006), and Angelis et al (2008) suggested using the SE/PM cost as a proxy for transaction costs to examine the relationship between transaction costs and cost overruns.…”

Section: Hypothesismentioning

confidence: 99%

Transaction Costs and Cost Breaches in Major Defense Acquisition Programs

Biggs¹,

Angelis²,

Armey³

et al. 2014

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show abstract

“…Figure 5 shows some of the SE/PM functions that comprise this category. Stem, et al (2006) reported that the average SE/PM costs for major aircraft programs had increase from 8% in the 1960s to about 16% in the 1990s of the total development costs. The SE/PM components are significant to controlling costs, schedule, and quality during product design.…”

Section: Systems Engineering/project Management Costsmentioning

confidence: 99%

“…These also are significant for upgrades and supportability issues. According to Stem et al (2006) of Rand there is about roughly a 50/50 split of systems engineering and project management costs for most large defense programs. An as shown in Figure 6, these costs can be significant and depending upon maturity, oversight, complexity, etc., can account for about 20% of the development costs.…”

Section: Systems Engineering/project Management Costsmentioning

confidence: 99%

Life Cycle Cost Considerations for Complex Systems

Farr¹

2012

Systems Engineering - Practice and Theory

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“…A standard WBS is a necessary step in a consistent and mature engineering process. More importantly, organizations must rely on a standard structure to categorize costs in order to provide required reports to the government (Stem, Boito & Younossi 2006).…”

Section: Modeling Strategymentioning

confidence: 99%

2.2.1 Towards a Holistic, Total Engineering Cost Model

Gan

Turnidge

Shernoff

et al. 2009

INCOSE International Symp

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Abstract. In this paper, we explore a new approach for a unified and interdisciplinary parametric model for estimating the total engineering effort in developing and delivering a software-intensive complex system. We begin by reviewing some of the limitations of using existing engineering discipline-focused tools for estimating total engineering cost and by articulating the benefits of such a holistic model. Applying a two step method combining heuristic analysis and data validation, we propose three hypotheses to expand the basic cost estimating relationship of COSYSMO, a systems engineering model, to the total engineering scope by including software size drivers. The implementation of the hypotheses and the validation approach are also discussed. We conclude the discussion by outlining the future work required to realize such a model and to apply it to supporting successful system development endeavours.

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Systems Engineering and Program Management: Trends and Costs for Aircraft and Guided Weapons Programs

Cited by 12 publications

References 4 publications

Transaction Costs and Cost Breaches in Major Defense Acquisition Programs

Transaction Costs and Cost Breaches in Major Defense Acquisition Programs

Life Cycle Cost Considerations for Complex Systems

2.2.1 Towards a Holistic, Total Engineering Cost Model

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