Defense Acquisition Research Journal Issue 95

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

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subcategory comparison. The definition of statistical significance used throughout the analysis will be in reference to an α = 0.05 level. This means that in order for the results to be deemed statistically significant, there is less than a 5% chance of concluding that a difference exists where there is no actual difference. Results Factor development in stage one of the analysis applies Equation 1 to the dataset. More specifically, the eight level two WBS elements identified in Table 1 are combined with the final 102 program dataset. For example, a factor for ST&E (one of the WBS elements identified in Table 1) is developed for the C-17 program (one of the 102 programs identified in Appendix A) uti lizing Equation 1. It is important to note that within an individual program, there may be multiple Cost Data Summary Reports (CDSR) reported in the CADE database. These reports serve as the primary means within the DoD to collect actual data reported by contractors in performing acquisition contracts. Therefore, the 102 programs used for analysis expands to 443 individual cost reports from which new, unique cost factors are created across the eight common WBS elements.

TABLE 4. FACTORS BY CATEGORY TYPE