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example, experienced EAC variances between reporting months with a multibillion change for System Development and Demonstration. Thus, the potential impacts to large dollar amounts highlight the importance of monitoring and taking action when EAC variations are detected.
At and above 70% complete, however, EVM and ES become another tool for program managers to accurately estimate final cost as opposed to being a tool solely for monitoring performance and cross-checking estimates.
Additionally, the results of this article serve as a caution to program managers when EAC variations are detected early in a long duration program. The stability rule from Christensen (1996) suggested program managers were somewhat powerless due to a very small window (the first 20% of the program) to effect change. However, the historical data in this article on long duration programs paint a different picture. Our results suggest that these variations are unlikely to subside without aggressive government action. The program manager who detects EAC variations at 20%, 30%, etc., can still effect change and is cautioned that in some instances, the variations may even become worse. Therefore, it is recommended that program managers utilize analogous historical data on EAC variances, such as those provided in Figure 3, to gauge the need for lesser or greater managerial actions early on. At and above 70% complete, however, EVM and ES become another tool for program managers to accurately estimate final cost as opposed to being a tool solely for monitoring performance and cross-checking estimates. The key, then, is program managers must be cognizant that long duration development programs behave differently and plan accordingly. The statistical results presented here regarding long duration development stability properties corroborate both the broader defense cost growth literature (Younossi et al., 2007) and intuition. Long development periods in public sector defense programs are typically a result of cutting- edge, novel technologies. It is intuitive to believe these programs may experience successes and failures along the way that make estimating cost and schedule with great precision during the early stages of the program difficult. Additionally, while this article focuses on U.S. defense programs, the results have relevance for other countries’ public sector
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Defense ARJ , Spring 2025, Vol. 32 No. 1
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