Evidence on the Effect of DoD Acquisition Policy and Process and Funding Climate on Cancellations of Major Defense Acquisitions Programs

May, 2015
IDA document: P-5218
FFRDC: Systems and Analyses Center
Division: Cost Analysis and Research Division
David L. McNicol, Sarah K. Burns, Linda Wu See more authors
This paper examines whether changes in Department of Defense (DoD) acquisition policies and processes and the boom-bust funding cycle had a discernible effect on the rate of cancellations of major defense acquisition programs (MDAPs). Two different frames for viewing cancellations are explored: (1) the cancellation rates for the cohort of MDAPs that entered System Design and Development during successive periods; and (2) the average number of cancellations over a span of years. The evidence is found to support two main conclusions. First, most changes in acquisition regimes have not been significantly associated with changes in either cohort cancellation rates or annual cancellation rates. This suggests that further adjustments of acquisition policies and processes, of the same general sort as those made in the past, will not have a significant influence on cancellations. Second, funding climate is strongly associated with annual cancellation rates, although it has little or no association with cohort cancellation rates. These conclusions primarily are useful because they direct attention to changes in funding levels and the resource allocation process, whose centrality has not been recognized in discussions of acquisition reform.