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Evaluating Program Risk for Department of Defense Acquisition Programs Using Performance Risk Indices Open Access

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The U.S. Department of Defense (DoD) Major Defense Acquisition Programs (MDAPs) continue to provide engineering managers challenges in meeting cost, schedule and performance targets. To better identify acquisition programs that are at risk of failure, numerous studies have called for an expanded set of program performance metrics that bridge the gap between the cost and schedule measures of earned value management (EVM) and those measures focused solely on technical performance risk. The System-level Performance Risk Index (SPRI) bridges that gap by combining acquisition program EVM data with a program maturity assessment measure to assess an MDAP’s failure risk. This study examined the SPRI’s ability to assess the program performance of acquisition programs during the Engineering & Manufacturing Development (EMD) phase of the DoD acquisition cycle. The results demonstrate the SPRI’s capacity to distinguish programs that exceeded their established cost, schedule or performance baselines from those programs that did not. Further, the SPRI was able to differentiate between programs that performed within baselines from those programs that were ultimately canceled, and serve as a predictor for programs exceeding their acquisition baselines. Based on these findings, this research concludes the SPRI model provides a step forward in the development of program risk metrics that integrate measures of cost, schedule and technical performance risk.

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