An Analysis of the Federal Acquisition Streamlining Act and the Clinger-Cohen Act and Their Effect on Cost Overruns in Department of Defense Contracts

This thesis examines the impact of the Federal Acquisition Streamlining Act (FASA) of 1994 and the Clinger-Cohen Act on cost overruns in Department of Defense (DoD) contracts. Many officials believe that we must change the way we do business to meet the new post-Cold War national security challenges. Changing the way we do business means reforming the acquisition process to deliver weapons systems faster and cheaper. The FASA and the Clinger-Cohen Act made more changes to the acquisition process than any other policy had in the ten years proceding. This research effort studied 220 contracts completed between December 31,1993 and December 31,2001 to determine if cost overruns on contracts completed before the implementation of the FASA and the Clinger-Cohen Act were different than cost overruns on contracts completed after the implementation of the FASA and the Clinger-Cohen Act. The contracts were also subdivided to determine if the results were sensitive to acquisition lifecycle phase, branch of service, or contract type. The results indicate that cost overruns decreased on completed contracts after the implementation of the legislation. The results were sensitive to the branch of service responsible. Air Force contracts experienced no change in cost overruns after the implementation of the FASA and the Clinger-Cohen Act, while cost overruns in Army and Navy contracts decreased. The results were not sensitive to lifecycle phase or contract type.