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Capt Kyle P. Marquis, USAF, Edward D. White, Brandon M. Lucas, Robert D. Fass, Jonathan D. Ritschel, and Shawn M. Valentine This article analyzes and investigates the distribution of cost growth of the Estimate at Completion (EAC) for the Work Breakdown Structure (WBS) elements of approximately 60 historical United States Acquisition Category I Research, Development, Test and Evaluation aircraft programs. Using the method of maximum likelihood in conjunction with the Akaike Information Criterion, the authors suggest that both the lognormal and Weibull distributions provide relatively good fit to EAC cost growth, with the lognormal slightly edging out the Weibull. As a summarized finding, the authors present their empirical results for the mean, coefficient of variation (CV), the 15th and 85th percentiles by WBS element. With an overall mean of 1.36, 0.80, and 3.1 for the mean, CV, and 85th percentile, respectively, these results suggest a high likelihood of cost growth in budgets. To account for this possible underestimation, the authors propose higher cost factors to consider or to use as a crosscheck.
Defense ARJ , Spring 2025, Vol. 32 No. 1 DOI: https://doi.org/10.22594/dau.24-925.32.01 Keywords: Estimate at Completion, EAC, ACAT I, lognormal, cost factors, budget growth
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