Date of Award

9-1991

Document Type

Thesis

Degree Name

Master of Science

First Advisor

David S. Christensen, PhD

Abstract

This study examines approaches currently used to determine when Cost Performance Index (CPI) stability occurs. The CPI indicates the cost performance efficiency of the work the contractor has accomplished to date; however it has value as a predictor of future contractor cost performance given that the CPI can be declared stable. Knowing that the CPI is stable allows government personnel to project the final cost of the contract and, if a cost overrun is projected, to determine the likelihood that the contractor can recover. The range method was used to test for stability of cumulative and non-cumulative (three month, six month, and six month moving average) CPI values. The method measured the range of the CPI values that occurred after the 50 percent contract completion point. The results (range method sensitivity analysis) indicated that the cumulative CPI is more stable than the other CPIs examined, stabilizing from the 20 percent completion point. As a caveat however, the method of least squares showed that the cumulative CPI does tend to decline within the allowable range limit as the contract proceeds. Thus the final cumulative CPI value can be expected to be lower than the cumulative CPI value observed at the 20 percent contract completion point.

AFIT Designator

AFIT-GSM-LSY-91S-12

DTIC Accession Number

ADA246621

Comments

Presented to the Faculty of the School of Systems and Logistics of the Air Force Institute of Technology, Air University, in Partial Fulfillment of the Requirements for the Degree of Master of Science.

The author's Vita page is omitted.

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