Monitoring Contractor Performance

The Electronic Systems Division (ESD) of the United States Air Force hired Ventana to create a model for contract management and control. The objective was to make accurate forecasts of project outcomes using only the limited contract data provided to the Government by private contractors. In its first application, the Ventana model accurately predicted that an important development project would be completed on schedule and only slightly over budget, an unusual outcome for an innovative defense project. Key to Ventana’s success was the use of normal monthly program reports to infer the amount of rework that the contractor would later discover.

ESD verified the model’s effectiveness by successfully applying it to additional projects. In one case, Ventana’s forecast of a critical program’s schedule was markedly different from the program plan and from all other expert forecasts. The Ventana forecasts proved highly accurate. This success prompted a visit from the contractor’s headquarters to find out how Ventana, using only data released to the Government, had managed to beat the in-house forecasts that used full information. Most importantly, the Ventana model also revealed, for each project, how adjustments to deadlines and budgets could save both time and money.