Influences on the Timing and Frequency of Cancellations and Truncations of Major Defense Acquisition Programs

March, 2017
IDA document: P-8280
FFRDC: Systems and Analyses Center
Type: Documents
Division: Cost Analysis and Research Division
David L. McNicol See more authors
A previous paper in this series examined whether changes in acquisition policy and funding climate had statistically discernible associations with cancellations of Major Defense Acquisition Programs (MDAPs). It did not provide any statistical analysis of truncations—that is, MDAPs that bought fewer units of a system than was intended at Milestone (MS) B. This paper extends the earlier one; it provides parallel analyses of both cancellations and truncations, has more observations (especially on truncations), and provides an improved analysis of cancellations. The paper finds that cancellations of MDAPs are concentrated in the two periods during which DoD procurement funding was declining, often sharply. With one possible exception, cancellations and truncations are (1) not associated with the acquisition policy and process configuration in place when they passed MS B, given funding climate; and (2) not consistently associated with the funding climate prevailing at MS B, given the acquisition policy and process configuration. The paper also finds that, while cancelled programs on average had higher cost growth than programs not cancelled, most programs with unit cost growth of more than 50 percent were not cancelled.