Phasing Risk in Aircraft Development Programs

Abstract

This article analyzes the timing of cumulative cost growth over the planned development schedule, with the goal of utilizing the pattern of historic cost growth to phase the risk dollars for new aircraft development programs. Using data from Selected Acquisition Reports for 21 completed programs, a polynomial regression model is fit to cost growth. The polynomial indicates that 85% of cost growth occurs in the second half of the planned development schedule, on average. These results suggest that risk dollars for new programs should be “backloaded,” or phased later in the program schedule. Backloading risk dollars could improve early program execution and provide greater budget flexibility in the event of schedule delays or schedule growth.