Sustainment Issues Affecting the Cost Community ICEAA 2018 Tom Henry thomas.m.henry2.civ@mail.mil 703-692-8037 April 11, 2018 OSD CAPE Cost Assessment

Agenda Congressional Direction Policy Updates Sustainment Cost Data Efforts Examples of Impacted Programs Challenges for the Future

Congressional Direction: NDAA 2017 Section 807 requires SECDEF to establish sustainment cost goals, among other goals, before program funds are obligated Section 842 amends 10 USC Section 2334 to require that ICEs be full LCCEs, including all costs to operate, maintain, and support a program upon full operational deployment, without regard to funding source or management control Section 844 directed a review and report on sustainment planning in the acquisition process, with focus on the weighing of sustainment considerations in acquisition decision-making Section 849 requires “Sustainment reviews” of each major weapons system NLT 5 years after declaration of IOC; result is a requirement to maintain ICE for remainder of each program House Report 114-537 required D/CAPE to conduct a comprehensive review of the military Services’ O&S cost data collection efforts and systems and provide a briefing on the results to the HASC.

Congressional Direction: NDAA 2018 Major emphasis on “assessment, management, and control of operating and support costs” Section 834 requires SECDEF to ensure that the defense acquisition system gives ample emphasis to sustainment factors, particularly reliability and maintainability factors affected by weapon system design Section 835 requires the DoD to negotiate prices for tech data to support the product support strategy of a weapons system prior to EMD or production contract award Section 836 requires SECDEF to issue and maintain guidance to assess, manage, and control DoD O&S costs for major weapons systems: Repeals Sec. 832 of NDAA ‘12; places nearly identical language into Title 10 USC Includes requirements on retention, maintenance, and analysis of O&S cost estimates Includes policy guidance for “collection, organization, maintenance, and availability” of O&S cost data Directs D/CAPE’s responsibility for developing and maintaining the DoD’s O&S cost database solution Primary result of this section is to emphasize this language by placing it into Title 10.

Sustainment Cost Policy Update D/CAPE Cost Data Analysis Improvement Memo (signed January 9, 2017): Requires annual update to program CARDs, using CAPE templates Implementation of Sustainment Functional Cost Hour Report Data collection on government-performed efforts exceeding CSDR thresholds Serves as underlying guidance/requirement for CAPE sustainment cost data initiatives: CARD submissions with O&S and software maintenance tabs Creation of the DD Form 1921-5 VAMOSC Task Force Organic industrial base cost IPT with the Army

Sustainment Portion of CARD Programmatic and Phasing Data Unit Operations Data Maintenance work distribution (organic v. contracted) Depot maintenance planning data, by subsystem Example metadata from “O&S” Tab

Sustainment FCHR (DD Form 1921-5) Similar to the 1921-1, but focuses on unique sustainment labor cost categories: -program management -touch maintenance -support maintenance

VAMOSC Task Force Initiatives Consists of representatives from the 4 VAMOSC program offices Army OSMIS, Navy VAMOSC, Air Force AFTOC, and OSD CADE systems Purpose is to improve O&S data availability, transparency, and integration across the Department of Defense Provides forum for CAPE to monitor and guide O&S cost data improvement Initiatives VAMOSC website linkage VAMOSC Integration Business Case Analysis (Ongoing-IDA Supported) Depot maintenance cost data improvement O&S Future Data Vision

Army OIB Cost Data IPT Led by Army’s DASA-Cost and Economics Goal: fulfill organic cost data requirements by mapping the conversion of depot maintenance data from the Army’s ERP system into its VAMOSC database Synopsis: Cost community compiled list of depot data requirements DASA-CE is conducting site visits to Army depot maintenance facilities Categorizing cost requirements by degree of data transformation required Categorization informing ERP resource decisions

Impacts: GCV Milestone A US Army's GCV Program Downgraded To Study Project Jan. 18, 2014 - 03:45AM | By PAUL McLEARY | defensenews.com Recent OMA Chart highlighting GCV replacing Bradley WASHINGTON —Congress has cut $492 million from the White House’s request for the US Army’s Ground Combat Vehicle (GCV) program for fiscal 2014, effectively ending the program as a major acquisition initiative for the ground service. The White’s House’s original request was $592 million, which was winnowed to $100 million in the omnibus appropriations bill the Senate passed last week and sent to the White House for the president’s signature….. GCV Bradley Army To Sacrifice GCV To Stave Off ‘Creeping Hollowness’ By Sydney J. Freedberg Jr. on November 14, 2013 at 11:36 AM Army delays GCV program By Michael Hoffman Wednesday, January 23rd, 2013 11:49 am Army acquisition leaders moved Jan. 16 to delay its top modernization program, the Ground Combat Vehicle, in hopes of making it more viable in the face of expected defense budget cuts. GCV O&S would have caused significant growth in the Army’s Combat Vehicle Portfolio.

Impacts: CRH Milestone B Air Force Combat Rescue Helicopter (CRH) Intended replacement for HH-60G Milestone B O&S ICE demonstrated: A relatively flat O&S cost trend for the legacy system Estimated CRH O&S costs well above pre-EMD Caps (>40%) Impact of price escalation on platform affordability Comparison with Pre-EMD Caps CRH would have delivered limited additional capability, while increasing long-run O&S costs. O&S Affordability Profiles: HH-60G v. CRH

Challenges for the Future USD (R&E) / USD (A&S) divide Organic O&S data collection and management O&S Cost Estimate vs. Budgets vs. Actuals

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