A defense department assigned its highest priority to develop an advanced aircraft usingmaterials not previously used and untested technologies. A firm fixed-price contract wasawarded to a qualified vendor. Controls were in place at all levels, and progress reports-noting challenges-were sent to top officials. Top officials reported that progress wasexcellent, but the project failed due to enormous expenditures with no aircraft developed.Which risks were not adequately considered?I. Because the requirements were not specific, the use of a firm fixed-price contract madethe project risky.II. The personnel at many levels sent false reports forward on cost incurred and progressmade.III. The contractor lacked adequate technical skills to deal with technology that was stllevolving.IV. Top procurement officials did not act on "red flags" due to a "can do" mentality on ahigh priority of the program.O l only

Which risks were not adequately considered? I- Because the requirement was not specific, the use of…

Answered: A defense department assigned its…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 26P

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