CASE STUDY or LESSONS LEARNED
By Wayne Abba
Michigan, USA
This paper is adapted from my term paper for the Politics, Policy-Making and Public Administration course in the Key Executive program in the American University School of Public Affairs, where I earned my Master of Public Administration in 1991. I chose the cost overrun on the Navy’s A-12 Avenger II carrier-based stealth bomber as my subject, as it was a current topic of interest. I was the Department of Defense’s senior analyst for contract performance management.
INTRODUCTION
When the Department of Defense Inspector General (DoDIG) reported that Mr. John Betti, the Under Secretary of Defense (Acquisition) (USD(A)) had erred in managing the A-12 cost overrun, Betti’s fate was sealed. His resignation, accepted by the Secretary of Defense on December 12, 1990, came just two days after the DoDIG testified before the House Armed Services Committee on the A-12 matter. This paper examines the proximate cause of Betti’s resignation – the seemingly sudden revelation that the Navy’s A-12 Advanced Tactical Aircraft program was in serious cost and schedule difficulty – and the role played by my supervisor, a career Senior Executive Service member. Quotes and data are from the A-12 Administrative Inquiry, approved by the Secretary of the Navy on November 29, 1990.
Betti’s position was not enviable from the beginning. He was rumored to have been about the thirtieth person offered the USD(A) “acquisition czar” position, all earlier candidates having declined. With his resignation effective at the end of 1990, he served only seventeen months following his confirmation. Ironically, my supervisor and I considered Betti to be the most effective appointee to have served as USD(A).
My office played a central role in the A-12 revelation. We were responsible for DoD policy and procedures governing adequacy of contractor cost and schedule management control systems. We also routinely reviewed data from those systems on large contracts and provided our assessments of cost at completion to senior managers. However, in the A-12 case, routine oversight was denied because the program was highly classified. To understand how this issue evolved, it is important to review briefly DoD policy for contract cost and schedule management.
COST AND SCHEDULE OVERSIGHT
Contract cost and schedule policy in DoD has remained essentially unchanged since 1967. When large contracts involve substantial cost risk, contractors must demonstrate that their earned value management control systems meet minimum acceptable standards. This technique – not a how-to system but rather evaluation by the government of contractors’ existing systems against reasonable guidelines – enjoys broad support from industry. It ensures that contractor and government managers have reliable performance data to manage contracts, estimate costs at completion and revise cost and schedule plans as needed. By itself, the technique cannot prevent overruns. Managers must use the data effectively. That they do not always do so is evident in recurring overruns on Defense programs, often revealed when it is too late to react.
Such recurring surprises led in the mid-1970s to my office’s other major responsibility, independent data analysis. It began collecting summarized contractor cost performance data from the military departments, made independent assessments and reported to senior management, frequently spotting problems before they were identified (or revealed) by the departments. However, from the 1960s until September 1989, the office was in the DoD Comptroller’s office. While that assured independence from program advocates in the various acquisition organizations, it distanced the analyses from key program decision-makers. As a result, the analyses were not always acted on effectively.
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How to cite this article: Abba, W. (2026). The A-12 Cost Overrun, PM World Journal, Vol. XV, Issue VII, July. Available online at https://pmworldjournal.com/wp-content/uploads/2026/07/pmwj166-Jul2026-Abba-The-A-12-Cost-Overrun.pdf
About the Author
Wayne Abba
Michigan, USA
Wayne Abba is an independent consultant in program and project management, specializing in Earned Value Management. For 17 years before retiring in 1999, he was the senior program analyst for contract performance management in the Office of the Under Secretary of Defense (Acquisition & Technology). He is a volunteer expert advisor to the US Government Accountability Office team that published the “Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs,” and “Schedule Assessment Guide: Best Practices for Project Schedules.” He is (twice) Past President, College of Performance Management.
Wayne serves on the board of the Graduate School Japan, a nonprofit organization that provides training and consulting services to Japan government ministries, including planning for management of the Fukushima nuclear plant decommissioning. His voluntary work with the US National Science Foundation includes membership on several project review panels ranging from conceptual through final design reviews and advising on policies and procedures for managing mid-scale projects.
Wayne can be contacted at wayneabba@aol.com
