Use of Factors in Development Estimates: Improving the Cost Analyst Toolkit

Abstract

Factor Estimating is a technique commonly used by defense acquisition analysts to develop cost estimations. However, previous studies developing factors for the Engineering and Manufacturing Development (EMD) phase of the life cycle are limited. This research expands the current toolkit for cost analysts by developing cost factors in previously unexplored areas. More specifically, over 400 cost reports are utilized to create new standard cost factors that are delineated by five categories: commodity type, contract type, contractor type, development type, and Service. The factors are developed for those elements that are common in a wide array of projects such as program management, systems engineering, data, or training. This new factor dataset provides cost analysts with the information necessary to appropriately identify and select the most relevant factors to use when developing future cost estimates. Through statistical analysis, the research also helps identify those elements in which more analysts’ time and energy should be allocated when developing their estimates.