Article by David S. Christensen, 2004, published in the Journal of Cost Analysis and Management

 

This article discusses several methods to evaluate the predicted final cost of a defense acquisition contract, the Estimate at Completion (EAC) using an EAC derived from the cumulative Schedule Cost Index (SCI) as a potential upper bound to the final cost of a defense contract. Previous articles by Christensen discussed how a CPI-based EAC is a good method to verify the lower bounds of an EAC – it is not overly optimistic. The Schedule Cost Index is calculated as the Schedule Performance Index (SPI) times the Cost Performance Index (CPI). The conclusion from the analysis of the data determined the average cumulative SCI-based EAC is not an upper-bound to EAC, it is a lower bound. More realistic estimates of final cost can be achieved by using the cumulative SCI-based EAC as a lower bound.