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Fuel and Water for OEF Towards Developing “Fully Burdened Costs”

Fuel and Water for OEF Towards Developing “Fully Burdened Costs”. Headquarters Marine Corps P&R, PA&E Edward Blankenship, PA&E Randal Cole, Ph.D., CNA Presented at: MORS Power and Energy Workshop November 30, 2009. BLUF. TASK

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Fuel and Water for OEF Towards Developing “Fully Burdened Costs”

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  1. Fuel and Water for OEFTowards Developing “Fully Burdened Costs” Headquarters Marine Corps P&R, PA&E Edward Blankenship, PA&E Randal Cole, Ph.D., CNA Presented at: MORS Power and Energy Workshop November 30, 2009

  2. BLUF • TASK • To determine Fully Burdened Cost of Fuel (FBCF) and Fully Burdened Cost of Water (FBCW) for Afghanistan (OEF) for the GOS • Fallback: Develop a methodology and data elements needed • OUTCOME • Assured Delivery Prices (ADPs) for both Fuel and Water were calculated, sent to Col Moore at DARPA, presented at GOS

  3. Past Studies • 2001 OSD AT&L Study • Fuel - $13(FEBA)-$25(FEBA+100km)/gallon • $400/gallon for air delivery • 2006 AEPI Study (Contingency Ops, SWA) • Fuel - $4.40-11.54/gal or $2.6K-7K/soldier/yr • H2O - $3.06-10.84/gal or $3.5K-12.5K/soldier/yr • 2008 NDIA FBCF Workshop • Fuel - $14.13 (Iraq), $17.44 (Immature Theater) Putting these into FY10$s: • Fuel – $4.79-$30.82/gal or $2.8K-18.7K/soldier/yr ($493/gallon for air delivery) • H2O - $3.33-$11.81/gal or $3.8K-13.6K/soldier/yr

  4. Methodology • DoD Cost Analysis Symposium (DoDCAS) • Step 1 - Commodity Cost of Fuel • Step 2 - Primary Fuel Delivery Asset O&S Cost • Step 3 - Depreciation Cost of Primary Fuel Delivery Assets • Step 4 - Direct Fuel Infrastructure O&S and Recapitalization Cost • Step 5 - Indirect Fuel Infrastructure O&S Cost • Step 6 - Environment Cost • Step 7 – Other Service & Platform Delivery Specific Costs JLTV Pilot FBCF Results - $7.50/gallon (07$s), $7.97/gallon in FY10$s Mixed Contingencies

  5. New DefinitionsFBCF/FBCW and now also ADP Note: Tactical Delivery includes Force Protection and combat offloading

  6. Caveats/Assumptions • Calculations are for the price at one particular FOB only using the delivery method observed at the time • No aerial delivery needed to the FOB • No Air Support considered—only convoy delivery • FOB is at an austere location (35 miles one-way) • Convoy utilized elsewhere when not delivering to a certain FOB • Pumping/Loading cost estimated at $0.13/gal • Water is in individual plastic bottles, not in bulk • No hostilities encountered / No attrition

  7. Fuel: $9.20-$11.81/gal H2O: $4.60-$4.90/gal OEF Example • Based on September 2009 Afghanistan Assessment to one FOB Factor in Demand ADP USMC Contractor FBCF/FBCW Retail Point of Sale Camp Dwyer FOB Fuel: $2.19/gal H2O: $1.42/gal Fuel: $6.39/gal H2O: $3.36/gal This fits in with earlier studies showing an ADP range of $4.79-$30.82/gallon for fuel $3.33-$11.81/gallon for water

  8. OEF Calculations(Spreadsheet Approach)

  9. FBCF Model • Fully Burdened Cost of Fuel (FBCF) Calculator v 6.1 • Provided to us by OUSD (AT&L) DDR&E/DT&E • Original structure—calculating FBCF for ship delivery • Adapted with OUSD (AT&L) help for land-based delivery • Categorizes costs according to 7 DoDCAS components • Mathematical estimate • Based on range and distribution of input parameters • Weighted average of many sample estimates (we present the mean) • Not all data we received was suitable for model input • Had to “stretch” the model for air delivery only

  10. OEF Calculations(Model Approach) * Operational Parameter (OP) Fully Burdened Cost of Fuel (FBCF) Calculator v 6.1, OSD (AT&L) DDR&E/DT&E

  11. Model Data (Fuel)

  12. Model Data (Water)

  13. Air Support Excursion • Additional Inputs • AH-1s, 5 hour Dedicated Mission • $4,500 cost per flight hour per AH-1 • Results • Adds roughly $6.43-$6.78/gal (Fuel), $1.50-$1.52/gal (H2O) • In the model, most of this adds to force protection costs • Revised Assured Delivery Price (ADP) with Air Support • Fuel: $15.63-$18.59/gallon • Water: $6.10-$6.42/gallon

  14. Air Delivery Excursion • Inputs/Assumptions • CH-53Es, 3.3 hour Dedicated Mission • AH-1Ws, 3.3 hour Escort Mission • $10.4K/flight hour per CH-53E, $4.5K/flight hour per AH-1 • Travel less than 4,000 ft. altitude • No ground vehicles used • Results • Spreadsheet method • Removes Convoy costs of approx $2.27/gal (Fuel) and $1.01/gal (H2O) • Adds approximately $19.62-$23.85/gal (Fuel), $4.54-$7.95/gal (H2O) to Camp Dwyer price of $6.39/gal (Fuel) and $3.36/gal (H2O) • Revised Assured Delivery Price (ADP) to the FOB by Air • Fuel: $28.94-$30.78/gallon • Water: $8.43-$11.54/gallon

  15. Summary

  16. Way-Ahead • Follow the Marine Corps Expeditionary Office lead • Established October 2009 • Continue collecting data and exploring methodologies (approaches are evolving) • Continue to adapt methodologies for USMC • Calculate more refined ADPs and FBCF and FBCW as we get “smarter”

  17. Contact Information • Ed Blankenship edward.r.blankenship@usmc.mil (703) 692-5452 • Randal Cole randal.cole.ctr@usmc.mil (703) 697-5034

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