Design and analysis of US Navy shipbuilding contract architecture

Contracting for US Navy ship procurement is complex due several factors such as budgetary and political concerns, sole or near sole source environments, and long lead-time construction. In the current climate of shrinking budgets, it is especially important to set programs up for financial success. One potential area for cost management improvement in acquisition programs is with the initial contract and incentive structure. If shipbuilding contracts could be described in engineering architectural terms, then perhaps that architecture could provide better clarity of contract options. Further, if contracting can be described as an engineering architecture, then perhaps that architecture could be optimized for a given result. These are the central questions of this thesis. To answer them, interviews were conducted with several experienced individuals from both industry and the government. Additionally, past shipbuilding contracts in both the US and Canada were examined. These insights were then used to form a contract architecture concept in accordance with the Tradespace engineering paradigm. From the concept definition came the design vector definition which included variables such as shareline definition, incentives, and contracted profit percentage. The tradespace was then populated by manipulating the design vector parameters. The Palisade tool [at]Risk was used to conduct the design vector manipulation and tradespace population. [at]Risk is an excel plug in that allows uncertain variables to be defined by probability distributions. The tradespace of contract outcomes was then evaluated against utilities such as cost, profit, and risk. Although the factors affecting the contracting environment are complex, and not all are modeled, quantitative modeling allows the architect to roughly evaluate different approaches, vice just basing the contract on past models. It also gives the government the ability to check whether shipbuilder furnished predicted costs are reasonable for a given contract structure.

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Mechanical Engineering.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2015

Author dc:creator

• McCoy, Kathleen Marie, LCDR

Advisor dc:contributor.advisor

• Eric Rebentisch and Joe Harbour.

• Mechanical Engineering.
• Engineering Systems Division.
• System Design and Management Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/100110

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/100110