The paper "Key Factors That Contributes to the Cost Overruns " is a wonderful example of an assignment on business.
From the second and third e-Activities, analyze whether the Coast Guard’s management and execution of the program was a cause or a symptom of the cost overruns and resulting delays of the Deepwater program. Support your position.
From the information presented in the U.S. Government Accountability Office (2011) report, it could be deduced that Coast Guard’s management and execution of the program was contributory to the cause or manifestation of symptoms of the cost overruns and resulting delays of the Deepwater program. There were mitigating factors that contributed to the cost overruns which started with the September 2001 terrorist attack (U.S. Government Accountability Office, 2011). As emphasized, the performance gap analysis of the program revealed capability gaps which were only evident from the effect of the terrorist attack. As such, the incorporation of intensified capability resources necessitated a revision of the mission of the program be revised, as well as replacement of the Integrated Coast Guard Systems (ICGS) as a systems integrator of the program (U.S. Government Accountability Office, 2011). Therefore, a recomputation of the program costs revealed that the previous costs provided by the ICGS were already inappropriately understated. As emphasized, the Coast Guard “had relied too heavily on contractors to do the work of the government and that government and industry had failed to control costs” (U.S. Government Accountability Office, 2011, p. 4).
2. Identify and discuss the key factors that contributed to the cost overruns in the situation in Part 1 of this discussion. Suggest the strategies you would employ to avoid such cost overruns. Support your suggestion.
As identified above, the primary factor that contributed to the cost overrun in the situation falls under an excusable delay which was beyond the control of the ICGS and of the government: the terrorist attack of September 2001. From the event that ensued, the Department of Homeland Security (DHS) was entrusted to intensify defense efforts of the United States to prevent future drastic incidents, like this, to happen in the near future. As such, the previous cost estimates made by the ICGS were considered grossly understated and lacking.
In this particular situation, Congress should have closely monitored and evaluated the competencies of both, the ICGS and the Coast Guard in providing cost estimates and proposals for assets, resources, and capabilities required from the Deepwater program. It was initially confirmed that understanding of the accurate and exact requirements for the program was an evolving nature. Therefore, it is understandable that the costs would continue to increase. As emphasized, “cost and schedule estimates that are not based on current and comprehensive information do not provide an effective basis for assessing the status of acquisition programs” (U.S. Government Accountability Office, 2011, p. 49). To avoid the overruns, the recommendation noted was the creation of working group which would “review the results of multiple studies—including fleet mix analysis phases 1 and 2 and DHS’s cutter study—to identify cost, capability, and quantity trade-offs that would produce a program that fits within expected budget parameters” (U.S. Government Accountability Office, 2011, p. 49). The group should be composed of people who are most knowledgeable on determining the needed requirements for the program, as well as making cost estimates in the most current or even justifiably forecasted manner, to make these costs and schedule estimate viable and enforceable.