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The phenomenon of cost overruns in Department of Defense acquisition programs has been a problem for decades. In fact, regulations to control defense procurements extend as far back as the 1940's. However, these policies have accomplished little in controlling or reducing the problem. A 1993 Rand Corporation study discussed the extent of cost growth in the DoD and indicated that cost growth has fluctuated around 20 percent since the mid 1960's and that little improvement has occurred over time (Drezner and others, 1993:2). Other research indicates that the average cost overrun on DoD acquisition contracts is approximately 40 percent (Gansler, 1989:4). However one measures the unplanned cost increases (growth or overruns to be explained later in this thesis) is academic; the magnitude of the problem persists and is readily seen as 20 to 40 percent can represent a notable loss.
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