Model Process Validation: An Analysis of Performance-Based Pricing Programs

摘要

An objective of the Government Performance and Results Act of 1993 and the President's Management Agenda of 2002 has been to integrate performance measurement with resource allocation (budget) decisions. The Department of the Navy has made the use of performance-based pricing models a central part of its efforts to meet these objectives. Using a comparative case methodology, this thesis examines the three models in the Department of the Navy that have been fully accredited. The formulation of these models, the verification, validation AND accreditation (VV AND A) process, and their actual use in resource allocation decision making were analyzed against the standards of Navy guidance and industry best practices. In addition to 15 recommendations to strengthen the VV AND A process, the research concludes that problems with integration prevent the department from reaching the goal of performance-based budgeting. Improvements can be made in (1) creating conditions to allow the models to better incorporate the effects of naval transformation, (2) assuring knowledge about these models transfers across the organization and over time, and (3) linking the budget justification material with the justification used for programming decisions.