That’s a question that members of the cost estimating community will try to answer at next week’s 43rd Annual DoDCAS symposium. The conference is centered around the “theory and implementation” of the WSARA 2009 (Weapons System Acquisition Reform Act). Simply put, the cost estimating community needs to first and foremost understand what the real-life implications of the WSARA will be. At least in theory that is.
According to GAO, nearly 70% of the Pentagon’s 96 biggest weapons programs were over budget in 2008 and another government report found $295 billion in waste and cost overruns in defense contracts. Clearly things need to change.
As the Deputy Secretary of Defense, William Lynn, correctly states, overly optimistic estimating is at the root of cost overruns.
“We rely on overoptimistic cost estimates. These estimates are success oriented…they assume every step in the development process will go as planned. To produce weapon systems efficiently, it is critical to have budget stability. But it is impossible to attain stability in our modernization budgets if we underestimate the cost of our weapons systems from the start.”
Lynn also states the need to bolster personnel by 20,000 positions over the next five years with a heavy focus on cost estimators, systems engineers, and acquisition managers.
Naturally, PRICE®, is eager to support the acquisition community as it attempts to implement the key initiatives of the WSARA. We will have our some of our cost research experts on hand to present and discuss best practices in cost estimating and they will be reporting back on what they learned and observed at the conference.