Army cost review board office mort anvari mort anvari@us army mil 703 601 4150
This presentation is the property of its rightful owner.
Sponsored Links
1 / 81

Army Cost Review Board Office Mort Anvari [email protected] (703) 601-4150 PowerPoint PPT Presentation


  • 80 Views
  • Uploaded on
  • Presentation posted in: General

Army Cost Review Board Office Mort Anvari [email protected] (703) 601-4150. Cost Analysis for Non-Costers. HQDA. SA. CSA. UNDER. VCSA. ASA (I&E). ASA (ALT). ASA (CW). ASA (MR&A). ASA(FM&C). DASA-CE. RB. FO. Budget. Situation.

Download Presentation

Army Cost Review Board Office Mort Anvari [email protected] (703) 601-4150

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Army cost review board office mort anvari mort anvari@us army mil 703 601 4150

Army Cost Review Board Office

Mort Anvari

[email protected]

(703) 601-4150

Cost Analysis for Non-Costers


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

HQDA

SA

CSA

UNDER

VCSA

ASA

(I&E)

ASA

(ALT)

ASA

(CW)

ASA

(MR&A)

ASA(FM&C)

DASA-CE

RB

FO

Budget


Situation

Situation

  • You have just been tasked to develop a cost estimate, that is, a professional opinion about the cost of an item, a service or a thing.

  • Let’s discuss a process for organizing and developing this cost estimate.


Cost estimating process

Cost Estimating Process

  • Definition & Planning

    • Purpose of the Estimate

    • Defining the System and Schedule

    • Ground rules & Assumptions

    • Estimating Approach

    • Estimating Team

  • Data Collection and Analysis

  • Estimate Formulation

  • Review and Presentation

  • Final Documentation


Definition and planning

Definition and Planning

  • Influences the success of the estimate

  • Understanding the requirements and how you approach the process will establish the guidelines and procedures for the estimate.

  • Ask lots of questions…They help you understand the requirement.


Questions

Questions

  • Why is this cost estimate needed?

  • What decisions are pending on the results of this estimate?

  • Will the estimate be briefed and to whom?

  • Will the results be incorporated into some document?

  • What does the recipient expect to have included or excluded?

  • What excursions or variations from the baseline are anticipated?


Questions continued

Questions Continued

  • What are the program and funding constraints especially if the program is a Joint Program?

  • What are the time constraints for this estimate?

  • What is the acquisition phase of the program?

  • Is the program definition mature?

  • Does technology exist today to design, develop, test and manufacture the system?

  • What is the interrelationship with other systems?

  • Are there previous contracts? How many? What type?

  • How have the contractors performed to date?


Definition and planning know purpose of the estimate

Definition and PlanningKnow Purpose of the Estimate

  • Main purposes of estimates:

    • Budget Formulation

    • Comparative Studies

    • Source Selection


Purpose of estimate budget formulation estimates

Purpose of EstimateBudget Formulation Estimates

  • Program Office Estimate (POE)

  • Component Cost Analysis (CCA)

  • Independent Cost Estimate (ICE)

  • What-if exercises

  • Rough Order of Magnitude (ROM)

  • Should Cost Estimates

  • CAIV


Purpose of estimate comparative studies estimates

Purpose of EstimateComparative Studies Estimates

  • Making cost & benefit comparisons between alternatives

    • Economic Analysis (EA)

    • Analysis of Alternatives (AoA)

    • Force Structure

    • Trade-off Studies

    • Source Selection

    • Prioritization


Definition and planning defining the system

Definition and PlanningDefining the System

  • Adequate description of the technical and program characteristics of the system

  • What are the physical and performance characteristics?

  • What are the development, production, and deployment schedules?

  • How many systems are to be produced?

  • How will the systems be supported: contract, in-house, two or three levels of maintenance?


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System

Integrated System Schedule


Defining the system work breakdown structure wbs

Defining the System Work Breakdown Structure (WBS)

  • WBS defined in MIL-HDBK-881 as:

    • product-oriented breakdown of hardware, software, services, data and facilities that define the system.

  • WBS breaks a total job down into manageable pieces & portrays the way work is to be done.

  • WBS displays a company’s reporting structure.

  • Program managers may cite MIL-HDBK-881 “for guidance only” in contract solicitations.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

MIL-Handbook-881 (WBS)


Defining the system work breakdown structure wbs1

Defining the System Work Breakdown Structure (WBS)

1.0 Research Development Test & Evaluation (RDT&E)

2.0 Production

3.0 Military Construction (MILCON)

4.0 Military Pay and Allowances (MPA)

5.0 Operating and Maintenance Army (OMA)


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System COST ELEMENT STRUCTURE – 1.0 RDT&E

CES#ELEMENT:FY00C$MTY$M

1.01 DEV. ENG.

1.02 PEP

1.03 DEV. TOOL.

1.04 PROTO MFG.

1.05 SEPM

1.06 SYS T&E

1.07 TRAINING

1.08 DATA

1.09 SUPP EQUIP.

1.10 DEV. FACILITIES

1.11 OTHER

$ 39.039M$38.260M

0.408 0.386

0.457 0.450

110.421 107.724

78.266 76.363

11.112 10.927

1.989 1.954

3.439 3.413

4.897 4.758

0.0 0.0

0.968 0.928


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System COST ELEMENT STRUCTURE – 2.0 PROCUREMENT

CES#ELEMENT:FY00C$MTY$M

2.01 NON REC PROD.

2.02 REC. PROD

2.03 ENG. CHG

2.04 SEPM

2.05 SYS T&E

2.06 TRAINING

2.07 DATA

2.08 SUPP. EQUIP.

2.09 OPER./SITE/ACT.

2.10 FIELDING

2.11 TRAIN. AMMO/MSLS

2.12 WAR RESV.

2.13 MODS

2.14 OTHER

$ 16.110M $ 16.583M

1,169.348 1,312.377

0.0 0.0

116.637 132.258

12.564 14.437

28.880 31.499

2.073 2.300

146.460 158.304

0.0 0.0

89.525 101.635

59.001 79.482

0.0 0.0

236.619 280.729

51.739 64.129


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System COST ELEMENT STRUCTURE – 3.0 MILCON

CES#ELEMENT:FY00C$MTY$M

3.01 DEVELOP. CONSTRUCTION

3.02 PRODUCT. CONSTRUCTION

3.03 OPERATION/SITE ACTIVATION

3.04 OTHER MILCON


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System COST ELEMENT STRUCTURE – 4.0 Military Pay&Allowances (MPA)

CES#ELEMENT:FY00C$MTY$M

4.01 CREW

4.02 MAINTENANCE

4.03 SYSTEM SPECIFIC SUPPORT

4.04 SEPM

4.05 REPLACEMENT PERSONNEL

4.06 OTHER MPA


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System COST ELEMENT STRUCTURE – 5.0 Operating & Maintenance Army (OMA)

CES#ELEMENT:FY00C$MTY$M

5.01 FIELD MAINT., CIV LABOR

5.02 SYS. SPECIFIC BASE OPS

5.03 REPLENISHMENT DLRs

5.04 REPLEN. CONSUMMABLES

5.05 POL

5.06 END ITEM MAINTENANCE

5.07 TRANSPORTATION

5.08 SOFTWARE

5.09 SEPM

5.10 TRAINING

5.11 OTHER OMA


Defining the system cost analysis requirements description card

Defining the System Cost Analysis Requirements Description (CARD)

  • Source of a system’s description

  • Describes important features

  • Is provided to other groups preparing cost estimates

  • Helps ensure all groups are costing out the same “program.”

  • Prepared by program office; approved by

    DoD Component Program Executive Officer


Defining the system cost analysis requirements description card1

Defining the System Cost Analysis Requirements Description (CARD)

  • Divided into a number of sections, each focusing on a particular aspect of the program being assessed.

  • 1.1.1 System Description

  • 1.1.4 Government-Furnished Equipment and Property

  • 1.2.1 Technical and Physical Description

  • 1.2.1. x (..x..) Subsystem Description

  • 1.2.1.x.3 Material, Processes, and Parts

  • 1.2.2 Software Description.


Defining the system cost analysis requirements description card continued

Defining the System Cost Analysis Requirements Description (CARD) Continued


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System

CARD Continued


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Defining the System

Sample CARD


Definition and planning ground rules assumptions

Definition and PlanningGround Rules & Assumptions

  • State the conditions which must take place in order for the estimate to be valid

  • Ground rules and assumptions must be documented since changes in these areas provide an audit trail for changes in the cost estimate.


Definition and planning select the estimating approach

Definition and PlanningSelect the Estimating Approach

  • Techniques available

    • Analogy

    • Parametric

    • Engineering

    • Extrapolation

    • Expert Opinion

      Select the technique that is most applicable to a specific WBS element


Definition and planning estimating methods

Definition and PlanningEstimating Methods

  • Analogy

    • Basic Comparison

    • Factors

  • Parametric

    • Regression Analysis

  • Engineering

    • Detailed

  • Expert Opinion

    • Committee

    • Delphi


Cost estimating methods analogy method

Cost Estimating MethodsAnalogy Method

  • Based on direct comparison with historical information of similar existing activities, systems, or components.

  • Compares new system with one or more existing similar systems where there is accurate cost and technical data.

  • Analyst must show validity of comparison.


Cost estimating methods analogy method1

Cost Estimating MethodsAnalogy Method

  • Based on known costs of a similar program

  • Adjustments for complexity, technical, physical

  • Strengths

    • Based on representative experience

    • Less time consuming than others

    • Can be used as a check on other techniques

  • Weaknesses

    • Small sample size

    • Heavy reliance on judgment

    • Sometimes difficult to identify analogy and associated costs


Analogy estimating with factors

Analogy Estimating with Factors

Cost(New) = Cost(Old) x Adjustment Factor


Cost estimating methods parametric method

Cost Estimating MethodsParametric Method

  • Known as Statistical Method or Top Down Method

  • Relates cost to physical attributes or performance characteristics

  • Uses database of elements from similar systems

  • Uses multiple systems

  • Most beneficial in earlier stages of the system or project life cycle


Cost estimating methods parametric method1

Cost Estimating MethodsParametric Method

  • Statistical relationships between cost and physical or performance parameters of past systems.

  • Strengths

    • Captures major portion of cost

    • Quick what if type estimates

  • Weaknesses

    • Less detailed

    • Getting accurate data


Cost estimating methods parametric method extrapolation

Cost Estimating MethodsParametric Method(Extrapolation)

  • Use historical values to establish a trend for the future.

  • Example problem: Given the actual productivity and labor rates in the given table. How much will it take to complete a 3-year software development project of 10K lines of code, if 50% is completed in the second year and 25% is completed in first and third years?


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Learning Curve Theory

As the quantity of a product produced doubles, the man-hours- per-unit expended to produce the product decreases at a fixed rate or constant percentage (usually 10% to 20%).


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Learning Curve Theory

Factors Contributing to Efficiency

  • Job familiarization by both production workers and supervisory personnel.

  • Changes in product design which do not materially affect the product, but result in increased ease and speed of production.

  • Changes in tooling, machinery, and equipment which simplify or speed up the production process.

  • Improved production planning and scheduling, and improvements in production techniques and operational methods.

  • Improvements in shop organization, engineering coordination and liaison.

  • Improvements in the handling and flow of materials, and in the materials and parts supply systems


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

TABLE FOR FIGURESF-1-1 and F-1-2

Unit No.

Unit Person-hours

1

100.00

2

80.00

4

64.00

8

51.20

16

40.96

32

32.77

64

26.21

Learning Curve Theory

  • The table is based on the assumption that the first unit required 100 person-hours to produce. The table indicates a constant rate of reduction of 20% for each doubling of the unit number; the value of the second and each succeeding item in the table is 80% of the value of the preceding item.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Learning Curve Theory

80% Unit Curve on Arithmetic Paper


Learning curve theory

Learning Curve Theory


Learning curve theory uses

Learning Curve TheoryUses

  • Evaluating contract production costs.

  • Assessing impact of production interruptions, product changes and production rate change.

  • Rate of improvement experienced by a particular contractor on a prior product may be indicative of rate of improvement expected on new product of similar size, complexity, and construction.

  • Improvement curve pattern experienced in the production of past item can be extended to calculate costs of future items.


Cost estimating methods engineering method

Cost Estimating MethodsEngineering Method

  • Known as bottom up method

  • Requires extensive knowledge of system characteristics

  • Divide into segments; estimate costs for each segment

  • Combine segments plus integration cost

  • Uses a combination of cost estimating methods

  • Detailed knowledge of new technologies may not be available.


Cost estimating methods engineering method1

Cost Estimating MethodsEngineering Method

  • Strengths

    • Detailed

      • Best when long stable production process

  • Weaknesses

    • Requires a lot of time

    • Cost

    • Cannot be used until system well defined


Cost estimating methods expert opinion method

Cost Estimating MethodsExpert Opinion Method

  • Subjective judgment of an experienced individual or group

  • Use if time does not permit a more thorough analysis

  • Document source(s) of opinion of experts

  • List attributes of the source(s)

    Example: Delphi Technique


Cost estimating methods expert opinion method1

Cost Estimating MethodsExpert Opinion Method

  • Consulting with one or more experts who use their knowledge and experience to arrive at an estimate

  • Group techniques include

    • Consensus (Committee)

    • Delphi

  • Strengths and weaknesses


Expert opinion method delphi technique

Expert Opinion MethodDelphi Technique

  • Query expert opinion from group

  • Seek information from each expert

  • Summarize the results

  • Send report to each expert

  • Gather second opinion after each individual reviews report

  • Summarize results

  • Iterative process continues until the experts reach a consensus, or near‑consensus.


Expert opinion method example

Expert Opinion Method Example


Cost estimating methods laying out the estimating approach

Cost Estimating MethodsLaying Out the Estimating Approach

Aircraft System – sum of level II elements (cross-check with analogy)

Air Vehicle – sum of level III elements

Airframe – CERs

Air Vehicle Software – Expert Opinion

Propulsion – CERs

Avionics – Analogy

Armament – Catalog Price

System Eng/Program Mgt – Factor of Air Vehicle

System Test & Evaluation – Factor of Air Vehicle

Training – Factor of Air Vehicle

Data – Factor of Air Vehicle

Peculiar Support Equipment – Factor of Air Vehicle

Initial Spares – Factor of Air Vehicle


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Cost Analysis (CA) Working-level

Integrated Process Team (WIPT)

C&E

PM

Co-Chairs

DCSOPS

ASA(I&E)

CRB-WG

TRADOC

DCSLOG

PA&E

Army

Materiel

Command

(AMC)

ArmyBudget

Office

DISC4

ASA(ALT)

AMCOM

AMC’s MSCs

CECOM

TACOM

STRICOM


Data collection and analysis

Data Collection and Analysis

  • The direction we take in collecting historical data will be determined by our choice of estimating methodologies.

  • This step may also dictate a change in estimating approach due to the availability or non-availability of certain data.

  • Data collection is not limited to cost data. We must also collect technical and program data if we want the total picture of the historical systems. This will help us ensure the comparability of the systems that we are collecting data on with the system we are estimating.


Data collection and analysis most difficult task in cost estimating

Data Collection and AnalysisMost Difficult Task in Cost Estimating

  • Data Sources

    • Data Types: Cost/Resource, Technical, Program

    • Categories: Primary, Secondary

  • Data Problems

    • Wrong Format – Matching up – Definition

    • Temporal Factors - comparability

  • Normalization

  • Data Location


Data collection and analysis1

Data Collection and Analysis

  • Collection and analysis represent a significant amount of the overall estimating task in terms of time. The analysis will include decisions on what programs to include in the data set to whether to truncate lot data on a program for which you are calculating a learning curve.

  • Document data in your analysis, and any assumptions you make


Estimate formulation

Estimate Formulation

  • We have defined our tasks, planned the estimate, assigned cost responsibilities, and performed data collection and analysis.

  • Here we apply our estimating methodologies and tools: develop the factors, analogies, CERs, and learning curves.

  • We will aggregate the various cost elements into development, production, and O&S estimates, fiscally spread the costs, and apply inflation.


Estimate formulation life cycle cost lcc

Estimate FormulationLife Cycle Cost (LCC)

Total cost to the Government of a system over its

entire life. LCC:

Serves as cost input for decisions whether

or not to continue, modify, or terminate

development, production, and fielding

Provides basis for budget requests to

Congress


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Total Ownership Cost (TOC)

Total Ownership Cost Includes All Costs Associated With the Research, Development, Procurement, Operation, Logistical Support and Disposal of an Individual Weapon System Including the Total Supporting Infrastructure That Plans, Manages and Executes That Weapon System Program Over Its Full Life. 

And: "The Cost of Requirements for Common Support Items and Systems That Are Incurred Because of Introduction of That Weapon System." 

But: "Excludes Indirect "Non-linked" Infrastructure Costs That Are Not Affected by Individual Weapon Systems' Development, Introduction, Deployment or Operations.“

Generally, TOC Is Synonymous With Life Cycle Costs.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Army Tools for

Total Ownership Cost Estimating

Life Cycle Cost Management Tools


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Automated Cost Estimator (ACE)

  • Automated Cost Estimator (Ace)—is a Model-building Tool. Part Spreadsheet, Part Database, It Incorporates Enough Structure to Eliminate Most of the Automation Tasks You Would Have to Perform If You Used a Spreadsheet, Yet It’s Flexible Enough to Perform Nearly Any Kind of Analysis. The Analyst’s Productivity Is Increased Through Built-in Inflation, Learning, Time Phasing, Documentation, Sensitivity/what-if, and Other Analysis Capabilities.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Automated Cost Data Base (ACDB)

ACDB Is ACEIT’s Automated Cost Database. Just As ACE Is a Model-building Tool, ACDB Is a Database- Building Tool. It Contains Powerful Database Entry and Administration Tools to Enable Any Site/office to Create Its Own Tailored Database. When You Populate It, ACDB Lets You Search and Retrieve Cost, Schedule, Technical, and Programmatic Data.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Operating Support (O&S) Costing

Operating & Support Management Information System (OSMIS)

Installation Cost

(Base Operations / Real Property Maintenance)

Force Cost

Model(s)


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Force Costing / Models

FORCES: Unit Operations & Support

  • Updated Annually

  • Provides Input to 5 Defense Models

  • Supports 9 Separate Study Groups

  • Avg 25 Major Estimates Per Year


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Database

OSMIS

U.S. Army

Cost & Economic

Analysis Center

OSMIS

Operating & Support Management Information System

  • Parts (NSN Level) & Fuel

  • Ammunition

  • Intermediate Maintenance

  • Depot Maintenance

  • Activity Data (miles/Hours)

  • Year of Manufacture


Review and presentation

Review and Presentation

  • We want to ensure that the estimate is reasonable, realistic, and complete.

  • Reasonableness addresses areas such as: using appropriate and acceptable methodologies; presenting methodologies systematically; the use of relevant data; and ensuring that assumptions are valid and clearly stated.


Review and presentation continued

Review and Presentation (Continued)

  • The realism test checks to see if the assumptions and ground rules are consistent with the statement of work and if the costs are in line with historical data.

  • We evaluate completeness by determining whether the estimate includes all the work stated in the request for proposal and whether the costs are traceable and reconcilable.


Final documentation

Final Documentation

  • Provide the means for other analysts to get the same results that we have in our cost estimate.

  • Providing good directions and a clear trail to follow are essential in having an estimate that can be replicated.

  • Provide step-by-step documentation of the methodologies, supporting data, ground rules, and assumptions, equations, examples, etc.,

  • Ability to interpret or evaluate someone else’s cost documentation is as important as ability to prepare good cost documentation.


Cost estimating process1

Cost Estimating Process

Data Collect

Normalize

Estimate

Formulation

Final

Document

Definition

Planning

Review/ Presentation

DOCUMENTATION


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Cost Analysis Model

Data/CERs

LCC Estimates

Cost Drivers

Develop Cost

EstimateStructure

and WBS

EstablishGround

Rules and

Assumptions

Prepare Cost

Estimatesfor Each

Element

Test TotalSystem

Estimate

Prepare

Documentation

Start

CompileData Base/

CERs/Models

Engineering

Analogy

Parametrics

Expert Opinion

Reasonableness

SensitivityAnalysis

Cost-RiskAssessment


Cost review board crb process overview

PM - develops

Program Office

Estimate (POE)

Recommended

ACP Briefed to

CRB Principles

CEAC - develops

Independent

Cost Estimate

Cost Review Board (CRB) Process Overview

Cost Review Board is a quality assurance built in the

Cost Analysis Process in support of decisions and PPBES

  • ASARC

  • OSD

  • PPBES

  • APB

  • CAIV

  • AOA

ASA(FM&C)

Approves

Army

Cost Position

CRBWG -

Reconciles &

Recommends

ACP to CRB

  • OSD CAIG develops ICE for ACAT ID programs as part of the DAB process

  • CEAC develop ICE for ACAT IC programs


Cost estimating process questions

Cost Estimating ProcessQuestions

  • We have talked about a process for estimating the project as well as various techniques for estimating specific cost elements.

  • Questions?

  • Let’s talk about the current scenario of cost estimating for SMART.


What is smart

What is SMART?

  • SMART is a framework to accomplish the vision of using M&S to reduce the cycle time of providing solutions for Army needs, hopefully at cost savings.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Army’s SMART EXECUTION PLAN

Army Cost & Economic Analysis Center’s M&S Architecture

  • Objective 2.1: Develop and implement an integrated, interoperable Total Ownership Cost analysis capability

    • 2.1.1: Establish & fund an appropriate process that directs research in cost estimation and emerging technologies.

    • 2.1.2: Establish a means of developing CERs for software intensive platforms.

    • 2.1.3-2.1.4: Identify and assess the range and types of cost estimating tools current available in government, industry and academia.

    • 2.1.5: Based on results, determine the delta between Army needs and the tools available from industry and academia.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Review

Review

Review

C

A

B

Cost Analysis Requirement

MS I

MS II

MS III

MS 0

O

L

D

Program Definition

&

Risk Reduction

Engineering &

Manufacturing

Development

(EMD)

Production,

Fielding/

Deployment

Concept

Exploration

Cost Estimates Needed

Concept

Exploration

Component

Advanced

Development

System

Integration

System

Demo

Production

Readiness & LRIP

Rate Production &

Deployment

N

E

W

Support

Concept & Technology

Development

System Development&

Demonstration

Production & Deployment

Sustainment

Pre-Systems

Acquisition

Systems Acquisition

(Engineering and Manufacturing

Development, Demonstration, LRIP &

Production)


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Inputs (Descriptions)

Process (Models)

Outputs (Costs)

ASARC

CAIG, DAB

APB

PPBES

AOA

Requirements

Acquisition Assumptions

Design Parameters

Risk Assessment

Cost Analysis Process

Databases, Tools, & Models

Cost Analysis Domain

Types of Cost Studies

Performance Based and Design Based Cost Models Currently do not Exist


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Top Level Tool Requirement Models

Army Cost & Economic Analysis Center’s M&S Architecture

  • 1. Cost tools to communicate with engineering and requirements models.

  • 2. Component level to assist engineers and designers with cost capability.

  • 3. Integrated Performance-Based Cost Model


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Top Level Tool Requirement Models

Cost Tools

ACEIT

Interface

Protocols

ACDB

Engineering Tools

Interface Protocols

Pro-E

SEER

CAD

PRICE

CAI*

Auto-CAD

Databases

Others

Others

*Composite Affordability Initiative


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Army Legacy Cost Models / Tools

Army Cost & Economic Analysis Center’s M&S Architecture

Cost

Data Mart

ACDB

AMCOS

PRICE

ACE-IT

SEER

OSMIS

FORCES

Gather

Component Level

Cost Model

Performance-Based

Cost Models

Refine

Cost Data

Acquisition Layer

Aggregate

Archive

Cost Data Warehouse

Cost Synthesis

process

Cost Information

Store Layer

Cost Analysts

Cost

Data Mart

Acquisition

CEAC

KM

Requirements

Engineers

Feeder Systems to

Army Enterprise System

Cost Knowledge

Delivery Layer


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Cost As An Independent Variable

(CAIV)

  • Best time to reduce cost is early in the process.

  • Involves the stakeholders in the process.

  • Cost tradeoffs must be addressed early in the acquisition process and embedded in program requirement documents, Request For Proposals (RFPs), contract provisions, and source selection process.


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

CAIV Process

Set realistic but aggressive cost objectives

early in acquisition program

Manage risks

Track progress using appropriate metrics

Motivate Government and industry

managers to achieve program objectives

Incorporate incentives to reduce O&S costs

for fielded systems


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

Analysis of Alternatives

Set realistic, aggressive cost objectives early

in development

Manage risks

Track progress with appropriate metrics

Motivate government/industry managers

to achieve program objectives

Incorporate incentives to reduce O&S costs

for fielded systems.


Benefits of smart

Benefits of SMART

  • SMART expected to yield 4 significant benefits..vital to Army transformation:

    • Reduce time to field new or upgraded systems

    • Increased military worth of fielded systems

    • Concurrent fielding of systems & training devices

    • Reduce total ownership cost & sustainment burden


Reduce total ownership cost toc sustainment with m s

Reduce Total Ownership Cost (TOC) & Sustainment with M&S

  • Link Cost/Performance Models to Engineering Design Models to reduce TOC & Sustainment

  • Optimize performance/cost of system by addressing in early design phase


Army cost review board office mort anvari mort anvari us army mil 703 601 4150

M&S

Plan

Cost

Analysis:

Art or Science??

The Coster's Challenge


  • Login