January 2020
performancemay follow. This is exacerbatedwhen penalties are associated with data reporting. Generally, people would prefer to report accurate data, but when the data will be used to justify punishment, the reporters are incentivized to either change the facts that lead to the data—possibly in creative and unproductive ways—or to provide incorrect data.
Our military goes to great lengths to provide our warfghters with the best possible equipment, and we should not
forbid that just tomake bookkeeping easier. The statute that defines the N-M breach specifies PAUC and APUC thresholds that infuence program behavior. Since N-M reviews impose costs on programs, and can trigger cancellation of a program, many people in defense acquisition, including PMs, try to avoid them. This likely accounts for some of what we see in data reporting today. Any changes made to the system need to be considered in this light. If people’s careers will depend on what data they report, at times those data are more likely to refect what is needed to satisfy the checker rather than reality. Furthermore, people will bend reality to make the data look “right” even if that will not yield the best actual result for national security. Monitoring Changes over Time If we accept that the units produced during the course of a programwill change over time, PMs should be given useful and standardized ways to describe (and ideally quantify) those changes, both for past units produced and planned future production. The current taxonomy of SAR Variance Categories recognizes seven possible reasons for cost growth. Cost growth due to design changes must always be categorized as “Engineering,” lumping together planned and unplanned changes, as well as optional versus necessary changes. For oversight and analysis, it would be useful to be able to distinguish at least
three subcategories of “changes over time”: • Pre-Planned Product Improvements • Unplanned changes (necessary and unnecessary) • Block upgrades or evolutionary acquisition
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Defense ARJ, January 2020, Vol. 27No. 1 : 28-59
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