SECNAV Instruction 5223.2 “Department of the Navy Cost Analysis” Presented to Service Forum at DODCAS 2009 by Mr. John McCrillis, NCCA

Background SECNAV directed ASN(FM&C) and ASN(RDA) – Jan 2008 Too much “in the news” regarding program’s cost growth Review the Department's cost estimating organizations Improve the DON's cost and budget credibility Emphasized the Department's major ACAT ID programs Cost community completed detailed gap analysis study – Jan-Apr 2008 Inconsistencies across SYSCOM resources, core functional cost support Lack of central authority/advisory to SECNAV, CNO across all programs Contractor/outsourcing of some key government functions, perception issue Inconsistent cost reporting and visibility/insight across programs/ACATs Disconnect between budget and official cost estimates Inconsistent application of non-advocate/independent cost reviews OPNAV N813F independent assessment functions lost Cost data collection not applied or endorsed consistently across programs NCCA is supporting these DON and joint acquisition programs by providing independent cost estimates or by-request cost analysis. We previously developed approximately seven full independent estimates each year. Average contractor cost was $300K per estimate.

Background SECNAV directed ASN(FM&C) and ASN(RDA) to “expedite” changes SECNAV MEMO signed 2 May 2008 SECNAV INST signed 16 December 2008 SYSCOMs and NCCA responding to new resources required ASN(FM&C) supported immediate transition ramp-up & funds for NCCA Varying responses by SYSCOMs, but all seeing increased demand

So...what’s changed? Senior leadership directed to use SYSCOM/NCCA cost information Milestone decisions, programming, budgeting SYSCOM Commanders and FM&C to resource performance required by this SECNAVINST SYSCOMs directed to provide more cost functions and support NAVAIR 4.2 informally identified as “role model”, standard for SECNAVINST EVM support, O&S cost estimating, support beyond just ACAT ID programs Working capital-funded model used as a preferred option at SYSCOMs Not just cost, but TECHNICAL/engineering review of CARD, program docs Approval and oversight of any PM “outsourcing” for cost estimating support honest broker Mr. Young (AT&L) – all PMs should seek to obtain an independent estimate and budget to the independent estimate. CAMS – Civilian sub-community within Scientist & Engineering NAVAIR 4.2 NAVSEA 05C SPAWAR NELO MARCORSYSCOM

Service Cost Position ACAT 1 PLCCE On-going Sys Com Review Prior NCCA Review, Output: PLCCE Gate Review ~4-wks prior DAB, Output: SCP ICE or ICA 6-mo prior DAB and/or GR, Input: CARD & PLCCE NCCA Review ~1-wk prior GR, Output: ICA All ACAT 1 programs ACAT-1D only OSD CAIG ~2-wks prior DAB, Output: CAIG Memo ICE 6-mo prior DAB, Input: CARD DAB Output: ADM, APB, … SCP required for all programs SYSCOMs and NCCA work together Collaboration with PEO to present “fully funded” program DCGS-N first program

So...what’s changed? Program Managers, Resource/Programmers formally directed Use cost estimates developed by cost organizations for planning/budgeting Document decisions counter to cost org estimates Required to get SYSCOM-level technical/programmatic review of CARD Need SYSCOM approval before outsourcing for cost support NCCA as “Principal Advisor” on Cost and Economic issues for HQ staff NCCA Director now designated “DASN (C&E)” Increased role in Gate Reviews, joint programs, non-program analyses Independent assessments of SYSCOMs for ACAT IDs, Nunn-McCurdys Absorbs N813F’s “independent assessment” functions honest broker Mr. Young (AT&L) – all PMs should seek to obtain an independent estimate and budget to the independent estimate. CAMS – Civilian sub-community within Scientist & Engineering NAVAIR 4.2 NAVSEA 05C SPAWAR NELO MARCORSYSCOM