Applying Insights from Transaction Cost Economics (TCE) to Improve DoD Cost Estimation

Report Number: NPS-AM-07-033

Series: Acquisition Management

Category: Transaction Cost Economics (TCE)

Report Series: Proceedings Paper

Authors: Raymond (Chip) Franck, Diana Angelis, Francois Melese, John Dillard

Title: Applying Insights from Transaction Cost Economics (TCE) to Improve DoD Cost Estimation

Published: 2007-04-01

Sponsored By: Acquisition Research Program

Status: Published--Unlimited Distribution

Research Type: NPS Faculty

Full Text URL: http://acquisitionresearch.org/files/FY2007/NPS-AM-07-033.pdf

Keywords: Systematic Bias in Initial Cost Estimates

Abstract:

There is mounting evidence of a systematic bias in initial cost estimates of new weapon systems. A comprehensive 2006 RAND report on major weapons programs concludes: