Acquisition War-Gaming Technique for Acquiring Future Complex Systems: Modeling and Simulation Results for Cost Plus Incentive Fee Contract

Abstract

This paper provides a high-level discussion and propositions of frameworks and models for acquisition strategy of complex systems. In particular, it presents an innovative system engineering approach to model the Department of Defense (DoD) acquisition process and offers several optimization modules including simulation models using game theory and war-gaming concepts. Our frameworks employ Advanced Game-based Mathematical Framework (AGMF) and Unified Game-based Acquisition Framework (UGAF), and related advanced simulation and mathematical models that include a set of War-Gaming Engines (WGEs) implemented in MATLAB statistical optimization models. WGEs are defined as a set of algorithms, characterizing the Program and Technical Baseline (PTB), technology enablers, architectural solutions, contract type, contract parameters and associated incentives, and industry bidding position. As a proof of concept, Aerospace, in collaboration with the North Carolina State University (NCSU) and University of Hawaii (UH), successfully applied and extended the proposed frameworks and decision models to determine the optimum contract parameters and incentives for a Cost Plus Incentive Fee (CPIF) contract. As a result, we can suggest a set of acquisition strategies that ensure the optimization of the PTB.

Keywords

• game theory
• Bayesian games
• incentives
• contract parameters
• Cost plus Incentive Fee (CPIF)
• mathematical modelling
• simulation
• program and technical baseline (PTB)
• acquisition strategy
• space systems