Estimation of ship construction costs

Abstract

Since the end of the Cold War naval procurement for the US Navy has seen a dramatic decrease. This decrease in defense spending has placed existing programs under more scrutiny than previous years. As a result there is less tolerance on the part of taxpayers and Congress for procurement cost growth. This Thesis attempts to examine the current method that the Navy conducts ship cost estimates and suggests changes in order to improve the confidence level and accuracy of the forecasts. An examination of how industry is conducting cost estimates was used as a comparison to the current Navy practices. Finally using only a weight based approach to ship cost estimating is insufficient. It is necessary to develop and use a model that incorporates other cost driving factors in order to develop estimates of sufficient quality at the preliminary design level.