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Changes in Cost Estimating. John Cargill, GS-1515 AFCAA/FMAE ASMC RPDI March 8, 2012 Version 1.0.2. Climate. Times they are a’changing There is a s trong movement towards data driven estimates require databases

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slide1

Changes in Cost Estimating

John Cargill, GS-1515

AFCAA/FMAE

ASMC RPDI March 8, 2012

Version 1.0.2

climate
Climate
  • Times they are a’changing
    • There is a strong movement towards
      • data driven estimates require databases
      • increased use of CERs (cost estimating relationships) in addition to analogies and engineering estimates
        • All three serve as independent crosschecks to each other
        • Depending upon the center, one may be favored over the others
    • Defense Cost Analysis and Resource Center (DCARC) has become the big data repository in the sky
      • MilStd 881 Work Breakdown Structure
      • Quality of data in the 1921’s and 1921-1’s have greatly improved
acknowledgements collaboration
Acknowledgements:Collaboration
  • Thanks to
    • Kristy Golden (AFCAA/FMAE) for her letting me take on the Missile Sufficiency Review Handbook and Database update
    • Dr. Lew Fichter and Jeff McDowell, of Tecolote Research, for providing extensive input for potential improvements to the previous editions of the MSSRHbk and accommodated most of my “druthers.”
    • John Odum (AAC/EBJ) and Bill Bolen (AAC/FMC) for their “wouldn’t it be nice if…” comments during the JASSM/JASSM-ER cost estimate. They will notice some of their wishes have been incorporated
    • Ron Forch (AAC/FMC) for spending three months digging through Air Force technical manuals for specifications, weights and exploded diagrams
example databases that can be queried
Example Databases That Can Be Queried

Parametric query

In a nutshell, we want something like this for costing missiles

  • Unmanned Spacecraft Cost Model – now up to USCM9
  • NASA-Air Force Cost Model – NAFCOM
  • Civil Engineers have many cost models and databases
  • Realtors have updated models for various neighborhoods all around the country – independent variables:
    • Neighborhood
    • Bedrooms
    • Sqft
    • Age
    • Number of cars in garage
fearlessly going where no man has gone before
Fearlessly Going Where No Man Has Gone Before

Database

& Viewer

Outcomes

Bucketing, spreading & splitting

Happy, happy, happy

Hollering, yelling, swearing & going blind

Fewer sleepless nights

Purifying, inflating & normalizing

Relatively easy access to structured data

Multiple sources of conflicting data

Structured query capability

background building the database
Background:Building the Database

MSSRHbk is no longer a local product – it has become the standard with the U.S. Army and the U.S. Navy as well will us at AAC in the Air Force

  • History:
    • CR-1147 July 2002
    • CR-1461 “Missile Systems Sufficiency Review Handbook” January 2010
    • CR-1461/1 “Missile Systems Sufficiency Review Handbook” October 2011
acknowledging the graphics
Acknowledging the Graphics
  • Where you see pretty pictures, I got them from my Tecolote cohorts in the MSSRHbk update project
  • Where you see ugly pictures, those are mine
nothing in isolation
Nothing in Isolation!
  • All the Acronyms you’ll ever need:
  • DCARC – Defense Cost & Resource Center (DoD)
  • JCARD – Joint Cost Analysis & Research Database( NAVAIR)
  • CRUAMM – Air Force Cost Risk and Uncertainty Metrics Manual (AFCAA)
  • ACDB Automated Cost Database (AFCAA)
acquisition phases
Acquisition Phases
  • Each Development phase data point is named using the current DoD 5000 series phase terminology of the respective period
    • Efforts typically performed between Milestones B and C (SDD, EMD, FSED, FSD, Engineering Development, etc.) represent costs of an EMD/SDD phase
    • Efforts typically performed between Milestones A and B (Dem Val, PDRR, Risk Reduction, Advanced Development, etc.) are deemed to represent the cost of a Technology Development phase
    • Efforts typically performed beyond Milestone C (P3I and ECP) are deemed to represent the cost of a P3I phase
    • Schedules referenced to CDR
database
Database
  • The work breakdown structure was significantly expanded to increase the granularity of hardware subsystems
    • New data incorporated
      • Air vehicle
        • weight
        • Length
        • Diameter (U.S. Army has found high correlation between diameter and cost)
        • Fly-out Range
        • Speed
      • “Box-level” “SWAP” and cost
    • Data to support analogies, CERs, and output based simulation
    • Schedule database
database continued
Databasecontinued
  • Continued alignment with typical Air Force estimating structures
  • Completely mapable to MilStd 881
  • Meets the requirements for electronic transfer to the Navy’s Joint Cost Analysis Research and Database (JCARD)
  • Viewer supports many sort, search, conversion and other functions
    • Automatically creates an extensive series of statistical summaries
    • Supports easy benchmarking by programs
    • Creates schedule graphs referenced to CDR for programs selected
    • Exports charts to MS Word
the magic tool
The Magic Tool

Contains most all the goodness known to man

Better than sliced bread

program selection
Program Selection

Allows asking parametric questions like:

What would a 1000lb class subsonic air to ground cruise missile that can go 300 miles cost?

  • Programs to be included in the data set for analysis can be selected on the basis of
    • Weight, length, diameter, range, speed
    • Platform
      • Air
      • Surface
    • Mission
      • Air
      • Surface
      • Missile Defense
program selection by type of guidance
Program SelectionBy Type of Guidance
  • Laser
  • EO
  • Passive Radar
  • Laser
  • IIR
  • Pre-programmed
  • Semi-active Radar
  • Command
  • Guidance
    • Multi-mode
    • TERCOM
    • INS
    • Active Radar
    • Semi-active Laser
    • INS/GPS
    • IR
    • EO
    • Passive Radar
program selection by type of warhead
Program SelectionBy Type of Warhead
  • Warhead
    • Blast/Frag
    • Nuclear
    • HE
    • Bomblets
    • Non-nuclear kill vehicle
    • Modular
    • General Purpose Bombs
    • Direct Frag
    • Penetration HE Blast
    • HETSC
    • HE Blast/Frag Penetrator
  • HE Tandom Shaped Charge
  • Varies
  • Penetrating Blast Frag
  • Penetrator
  • HESC
  • Shaped Charge
  • Explosively Formed Penetrator
  • Multi-effects
  • HEBF
program selection by propulsion lead service control
Program SelectionBy Propulsion, Lead Service, Control
  • Control
    • TVC
    • Aero Surfaces
    • None
    • Gas Reaction Control
    • TVC and Aero Surfaces
    • Fluid-injection Jet Vanes
  • Lead Service
    • Navy
    • Air Force
    • Army

Selecting:

1. No propulsion

Air Force yields

Aero surfaces

GBU-15, JDAM, SDB I and SDB II

  • Propulsion
    • Engine/Solid
    • Engine
    • Solid
    • None
program selection from program list
Program SelectionFrom Program List

Fair warning: You MUST see a program in the “Systems to Include” list BEFORE you hit “Save Picks…” or no program will be selected.

of course you can choose any base year you want
Of Course You Can Choose Any Base Year You Want

Caveat: Currently, only DoD Inflation is

automatically supported for 3600 and 3020

air to surface selection rdte burn rate
Air-To-Surface SelectionRDTE Burn Rate

Synthesized Data

  • A good bench-marking chart
    • Compare program of interest against other programs in the database
    • Compare program of interest against programs selected
    • If your program is an outlier on burn rate, maybe you have ramped up too slowly, two quickly or have an extraordinary schedule
    • Compare by RDT&E Phase
air to surface selection rdte factor of system pmp cost
Air-To-Surface Selection:RDTE Factor of System PMP Cost

Synthesized Data

Toggled for RDTE Factor of System PMP Cost

Can toggle for RDTE Factor of Air Vehicle PMP Cost

air to ground selection production non recurring factor of recurring cost1
Air-To-Ground Selection:Production Non Recurring Factor of Recurring Cost

Synthesized Data

Toggled for Production Factor of Air Vehicle PMP Cost

Can toggle for Production Factor of System PMP Cost

air to surface selection production unit cost t1 uc1000
Air-To-Surface Selection:Production Unit cost (T1-UC1000)

Since T1 is often greatly affected by minor changes in CIC, options are provided for Unit Costs at 100, 500, 1000 or User Entered

air to surface selection production unit cost t1
Air-To-Surface Selection:Production Unit cost (T1)

Synthesized Data

Toggled for Production Unit Cost (T1)

Can toggle for Production Unit Cost Several Other Ways

air to surface selection production unit cost per pound t1 uc1000
Air-To-Surface Selection:Production Unit Cost per Pound (T1-UC1000)

Synthesized Data

Toggled for Production Unit Cost (T1)

Can toggle for Production Unit Cost Several Other Ways

air to surface selection rdte nonrecurring cost per pound t1 uc1000
Air-To-Surface Selection:RDTE Nonrecurring Cost per Pound (T1-UC1000)

Synthesized Data

Toggled for RDTE Nonrecurring Cost per Pound (T1)

Can toggle for RDTE Nonrecurring Cost per Pound Several Other Ways

air to surface selection rdte nonrecurring cost per t1 t1000
Air-To-Surface Selection:RDTE Nonrecurring Cost per T1-T1000

Synthesized Data

Toggled for RDTE Nonrecurring Cost per T1

Can toggle for RDTE Nonrecurring Cost Several Other Ways

air to surface selection crosschecks
Air-To-Surface Selection:Crosschecks

Synthesized Data

Toggled for Default CIC Options and Default RDTE Phase Options

air to surface selection crosschecks continued
Air-To-Surface Selection:Crosschecks continued

Synthesized Data

Toggled for Default CIC Options and Default RDTE Phase Options

air to surface selection crosschecks continued1
Air-To-Surface Selection:Crosschecks continued

Synthesized Data

Toggled for Default CIC Options and Default RDTE Phase Options

air to surface selection production phase cost improvement curves
Air-To-Surface Selection:Production Phase Cost Improvement Curves

Synthesized Data

Note for Regression Experts: Coefficient of Variation is greater for rate slope than learning – implies that economic order quantities are not being followed historically, or possibly there is multicollinearity between the rate and cumulative quantity.

  • Cost Improvement Curves
    • “Learning Curve” -- database uses unit theory
    • “Rate Surface” -- combination of learning and rate which is very important with lot buys of varying sizes
air to surface selection production phase proportions
Air-To-Surface Selection:Production Phase Proportions

Synthesized Data

Yes, Virginia! There are Non-Recurring costs during production, especially for the first lot

schedule analysis
Schedule Analysis

It will not be explained why this button is called “Bonus Schedule Analysis”

  • This iteration of the MSSRHbk with its Database Viewer is
    • First version to reference program events to how much before or how much after CDR
    • CDR has the highest correlation with other events
    • Milestones and PDR move around a lot
    • New DoD guidance is that PDR will occur before MS B, whereas in the past it usually occurred after MS B
  • Program picking (selection) is separate from the programs picked for costs and the other metrics because it may be necessary to eliminate some programs for cost variances resulting from funding vagaries, etc., yet the schedule might be appropriate to retain
schedule analysis air to surface
Schedule AnalysisAir-To-Surface

Same Air-To-Ground program picks as in the cost examples but with a slight twist: You get to select whether you want to work with Median, Mean or Lognormal Mean schedule durations

schedule
Schedule

Synthesized Data

PDR

MS A

MS B

schedule1
Schedule:

Synthesized Data

CDR

CDR is a real point in time independent of acquisition and milestone strategy – it is a time when most of the engineering drawings are complete and we are ready to start “bending tin”

schedule cdr reference
Schedule:CDR Reference

Synthesized Data

schedule analysis ms b referenced
Schedule Analysis:MS B Referenced

It will not be explained why this button is called “Bonus Schedule Analysis”

  • For planning, comparison and cost estimating purposes it is still important to be able to estimate times from MS B, even though the requirements to enter MS B have changed
    • Be careful how you use the MS B reference as it is more applicable for reviewing historic programs where PDR and CDR occurred after MS B
    • For modern programs where risk reduction efforts result in System-level PDR and Component-level CDR, you should use the CDR-referenced times
    • MS B referenced time lines can serve as a rough estimate of the ceiling, as one would expect modern programs to take less time post MS B because more is accomplished before MS B
schedule ms b reference
Schedule:MS B Reference

Synthesized Data

exporting summary statistics
Exporting Summary Statistics
  • One of the new features of the viewer is the ability to export the entire set of summary statistics charts to MS Word, which may be subsequently pasted to MS Power Point briefing charts
  • Cell B2 of the Analysis tab has a button that causes exporting the summary charts to MS Word
  • One feature of this export is that tables are produced for the entire database and for the programs selected
conclusions
Conclusions
  • User friendly database and viewer
    • More time analyzing and thinking
    • Less time grunting
  • With viewer, it is convenient to make comparisons and talk to Program Office
  • Ideally, database and viewer would be Oracle or Access based, however, Excel works reasonably well in the interim
take home message
Take Home Message

Early adoption of this database technology has brought us closer to our information sources and is allowing us to work smarter, not harder

Working smarter, not harder

Closer to data sources

Early Adoption of Technology

questions and point of contact
Questions and Point of Contact

John Cargill GS-1515

Air Force Cost Analysis Agency

Operating Location Eglin AFB, FL

850-883-3460(w)

703-371-0891(c)

john.cargill@eglin.af.mil