Division Director, O&S Cost Analysis

Slides:



Advertisements
Similar presentations
Acquisition Planning and Adequate Market Research National Oceanic and Atmospheric Administration Acquisition and Grants Office Oversight and Compliance.
Advertisements

Contract and Project Management: A Field Perspective Moderator Michael Peek, PE CCE CFM Office of Engineering and Construction Management.
Global Congress Global Leadership Vision for Project Management.
Policies and Procedures for Proper Use of Non-DoD Contracts Revised April 19, 2005 Deidre A. Lee Director, Defense Procurement and Acquisition Policy Office.
TARGET AFFORDABILITY AND CONTROL COST GROWTH David G. Ahern Portfolio Systems Acquisition Office of the Assistant Secretary of Defense (Acquisition) April.
Maryland’s Budget Process & FY 2016 Education Budget Outlook.
JHP Case Study Introduction 1 UNCLASSIFIED notional data for notional program.
Center for Health Care Quality Licensing & Certification Program Evaluation 1 August 2014 rev.
Introduction to Cost management
Trini Torres-Carrion. AGENDA Overview of ED 524B Resources Q&A.
TopicHouseSenate AH-64 TransferDuring FY15 the SECDEF and SECARMY may not: Transfer AH-64s from the ARNG to the Active Army None of the funds authorized.
Process Engineer’s Role in Project Management Dr Abdullah Malik.
Improving ERP Cost Estimating
A SOUND INVESTMENT IN SUCCESSFUL VR OUTCOMES FINANCIAL MANAGEMENT FINANCIAL MANAGEMENT.
Procurement Engineering and Review Team (PERT) PEER REVIEW PROGRAM Patrick Marmo 2/7/2012 Independent Peer Review Program for Contractor’s Purchasing Systems.
Unclassified. Program Management Empowerment and Accountability Mr. David Ahern Director, Portfolio Systems Acquisition AT&L(A&T) 14 April 2009 The Acquisition.
1 Contractors on the Battlefield Mr. Gary Motsek Assistant Deputy Secretary of Defense (Program Support) November 12, 2009.
The Key Process Areas for Level 2: Repeatable Ralph Covington David Wang.
Sustainability and Total Cost of Ownership Strategies for Higher Education.
1 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN.
Cost 101 for Life Cycle Logisticians R&D Cost: program costs primarily associated with the development of a new or improved capability to the point where.
DoD Acquisition Domain (Sourcing) (DADS) Analysis of Alternatives (AoA) E-Business/SPS Joint Users’ Conference November 15-19, 2004 Houston, TX.
Effective Management and Compliance 1 ANA GRANTEE MEETING  FEBRUARY 5, 2015.
Mr. Frank J. Anderson, Jr. President, Defense Acquisition University Acquisition Education Challenges and the Human Capital Strategic Plan.
1102 Contract Specialist as a Business Manager Debbie Bartlett Defense Acquisition University.
Earned Value Management Systems (EVMS) Defense Support Team (DST) and Report to Congress Mr. Richard Ginman OUSD(A&T)/DPAP Presentation to National Defense.
REPUBLIC of MOLDOVA The MILITARY REFORM. The necessity of military reform is determined by: imperfection of presentimperfection of present state security.
1 Earned Value Management (EVM) Center ‘Moving Forward’ Presented by Mr. David Kester Director, Program Integration Division April 25, 2007.
1 13 Feb 2004 Army Performance Management and Integration Programs & Strategy Directorate (SAFM-CE) New Horizons in Costing and Performance.
Comprehensive Educator Effectiveness: New Guidance and Models Presentation for the Virginia Association of School Superintendents Annual Conference Patty.
OSD CAIG 1 Walt Cooper OSD Cost Analysis Improvement Group (CAIG) August 13, 2008 Weapon System Sustainment: Collection of Contractor Costs.
Earned Value Management Presented By: Steve Krivokopich May , 2006.
Monitoring Region 3 Discretionary Roundtable May 20 – 23, 2008 Mary Evans And Conyers Garrett EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT.
OCFO - Financial Status of USPTO May 7, FY 2010 Status Authorized level of $1,887.0 million Mid-year Budget Execution Review currently underway.
Earned Value Management Update Nancy L. Spruill Director, Acquisition Resources and Analysis Office of the Under Secretary of Defense (Acquisition, Technology.
DOE ASSET MANAGEMENT PLAN
Strategic Vision Life Cycle Logistics Functional IPT Mrs. Sue Dryden DASD(Materiel Readiness) January 13, 2012.
1 1 Defense Acquisition Guidebook Progress Update March 27, 2012.
APEX 39 CAPE Priorities & Opportunities
THE APPROPRIATIONS PROCESS RITA MARTIN CSAVR DEPUTY DIRECTOR.
Evaluate Phase Pertemuan Matakuliah: A0774/Information Technology Capital Budgeting Tahun: 2009.
Life Cycle Cost Savings by Improving Reliability Dr. Charles E. McQueary Director, Operational Test and Evaluation January 15, 2009.
| 1 Weapon System Acquisition Reform- Product Support Assessment DAU SYMPOSIUM 13 April 2010 Presented by: Basil Gray Where Innovation.
Info-Tech Research Group1 Manage the IT Portfolio World Class Operations - Impact Workshop.
OSD CAIG 1 OSD Cost Analysis Improvement Group and ODUSD (L&MR)/LPP and MR&MP April 26, 2007 Weapon System Sustainment: A Project to Identify Requirements.
Info-Tech Research Group1 Manage IT Budgets & Cost World Class Operations - Impact Workshop.
Small Business Programs Tatia Evelyn-Bellamy Director Small Business Division Small Business Center February 2016.
Implementing Program Management Standards at Duke Energy.
aSSIstant secretary of the army ACQUISITION LOGISTICS AND TECHNOLOGY.
The Day in the Life of OFPSI staff By: Dr. Shawnrell Blackwell Director of Federal Programs & School Improvement (OFPSI) Petersburg City Public Schools.
Environment, Safety, and Occupational Health Opportunities in DoD Business Transformation May 4, 2006.
Hot Topics 18 March 2016 DoD Instruction : Defense Acquisition of Services 1.
UNCLASSIFIED PSM Support to Cost Reporting 1. UNCLASSIFIED PSM Help Required 2 DoDI requires cost reporting on ALL Sustainment Contracts over.
Ms. Rebecca Beck Deputy Site Director DFAS Columbus March 18, 2016.
Small Business and Subcontracting. Subcontracting for Small Business 6 steps to successful subcontracting 6. Report Contractor performance 1. Consider.
Role Responsibilities
State Coordinator Intervention
Sheryl Loesch Swakopmund, Namibia October 17, 2017
PSM Lessons Learned Background
Small Business and Subcontracting.
Purpose Provide an update on recent major changes to law, policy, and guidance that affect the way we conduct IA&E activities National Defense Authorization.
Army Financial Management HON Mary Sally Matiella
Sustainment Reporting CADE Sustainment Reporting
Agency SFY IT Strategic Plans: Training
Phase 1 Tollgate Review Discussion Template
Sustainment Issues Affecting the Cost Community ICEAA 2018
Project Management Process Groups
FlexFile 101 MARCH 2019.
Uniform Guidance and Grants Accounting
Purpose Provide an update on recent major changes to law, policy, and guidance that affect the way we conduct IA&E activities National Defense Authorization.
Presentation transcript:

Division Director, O&S Cost Analysis O&S Cost Estimating 13 January 2015 Division Director, O&S Cost Analysis OSD CAPE Cost Assessment

Agenda Introduction to WSARA 2009 & CAPE Law and Policy O&S Cost Estimating Guide O&S Cost Data O&S Cost Estimate Use JSF Example GCV Example Summary

WSARA & CAPE Weapon Systems Acquisition Reform Act of 2009 Appointment of a Director of Cost Assessment and Program Evaluation (CAPE), who will communicate directly with the Secretary of Defense and Deputy Secretary of Defense, and issue policies and establish guidance on cost estimating The Director, CAPE is the principal staff assistant to the Secretary of Defense for Cost Assessment and Program Evaluation. The Director's principal responsibilities include:* Analyze and evaluate plans, programs, and budgets in relation to U.S. defense objectives, projected threats, allied contributions, estimated costs, and resource constraints. Review, analyze, and evaluate programs, including classified programs, for executing approved policies. Provide leadership in developing and promoting improved analytical tools and methods for analyzing national security planning and the allocation of resources. Ensure that the costs of DoD programs, including classified programs, are presented accurately and completely. Assess effects of DoD spending on the U.S. economy, and evaluate alternative policies to ensure that DoD programs can be implemented efficiently. Cost Assessment ASCAD - WSCAD EMAD - OSCAD (new) Program Evaluation

Law and Policy Compliance with Section 832 of the 2012 National Defense Authorization Act can be found in two main documents DoDI Interim 5000.02 (25 November 2013), Enclosure 10: Cost Estimating and Reporting. CAPE retain O&S cost data; estimates, supporting documentation and actual costs; and Military departments (MDs) retain all O&S estimates and supporting documentation MDs make periodic update of estimates with variance explanations MDs make full consideration of sustainment factors in early design stage 5000.04 update (in coordination). Detailed instruction for all cost estimating activities – including O&S Standard requirements for O&S data collection (VAMOSC revision as necessary) Standard requirements for collection of contractor support cost data Retention of VAMOSC data and estimates MDs collect and retain DT/OT R&M data and evaluations and use of such data for sustainment decisions MDs conduct independent logistic assessment prior to key acquisition decisions for identifying key cost factors and cost reduction alternatives Include reliability metrics and their drivers & adapt strategies for affordable cost MDs conduct periodic reviews of O&S costs after IOC to identify and address factors causing cost growth

O&S Cost Estimating Guide O&S cost-estimating process (published March 2014) Uses of O&S cost information at milestone reviews Common data and analytic methods Cost Assessment review process Presentation formats with sample briefing charts Standardized cost terms and definitions Organized as a taxonomy (i.e., O&S cost element structure) Working with L&MR to synchronize with AT&L O&S Cost Management guide

O&S Cost Data: VAMOSC DoD 5000.04-M provides guidance for VAMOSC data systems (being updated – will change to a DoDI) Establishes requirement for historical data collection system that supports well-defined, standard presentation formats for all major fielded systems Flexible level of detail (platform, subsystem, component) CAPE provides policy and conducts oversight Military departments are allowed considerable latitude in implementation Army: OSMIS Navy: Navy VAMOSC Air Force: AFTOC Naval VAMOSC Study underway to ensure it is the authoritative source for O&S Cost Data

O&S Cost Data: Cost & Software Data Reporting (CSDR) CAPE collects cost data on O&S contracts via the CSDR System Actual costs incurred on DoD contracts Both prime contracts and subcontracts All contract types, including firm fixed price Reporting against the OSD standard O&S cost element structure defined in O&S Cost Estimating Guide Labor and materials Number of units Contract profit/loss or fee and G&A CAPE’s Defense Cost and Resource Center (DCARC) office administers the CSDR policy It is the PM/PSM’s responsibility to put the CSDR requirement on contract

O&S Cost Data: PM’s role in CSDRs PM/PSM must contact DCARC office ~ 6 months before the RFP to initiate CSDR planning process PM/PSM and DCARC will develop contract-specific CSDR plan, CDRLs, and SOW language for RFP PMs/PSMs are responsible for putting the requirement on contract and ensuring contractor fulfills contractual requirement DCARC POC: Ms. Sandi Enser Sandra.B.Enser.ctr@mail.mil, 571-372-4272.

Uses of O&S Cost Estimates Stage Focus MS A Enhanced visibility of O&S costs and key cost drivers Support to trade-off studies Support to Analysis of Alternatives MS B Early influence on system design Adequate attention and investment in logistics engineering efforts Support to Product Support Strategy analysis (aka Business Case Analysis) Organic versus CLS Goals for Performance Based Logistics, Reliability/Maintainability/Availability Establish benchmarks for subsequent assessment of performance over the life cycle MS C Track and assess current estimates relative to prior benchmarks Early use of T&E data Provide insights into sustainability shortfalls and help identify appropriate mitigation actions Update Product Support Strategy analysis Provide foundation for budgetary requirements (manpower, major O&M elements) FRP DR Early use of O&S cost actual experience Refine Product Support Strategy analysis Update estimates of budgetary requirements Post-IOC Assess and manage O&S trends for legacy systems Assess needs for continuing system improvements/modifications Assess funding adequacy

Sensitivity of JSF ICE TY $ Sensitivity Excursions CAPE conducted sensitivity excursions for several assumptions associated with the O&S cost estimate Changing assumptions generally increases annual costs but are relatively insignificant when compared to the issue of fleet affordability +10.7% +0.5% +6.4% +3.5% +1.4% +10.8% -2.1% -3.5% -2.5% - 4% 2% 0% 6% 8% 10% 12% F22 like MODS Reliability (20% decrease) Fuel Costs (+/ $1.00/gal) Core Repair Costs (3rd qtr v. LM rates) Personnel Costs (OSD indices + 1%) Partner Reduction (2 yrs & 2/3 buy) Reduced Manning (90% fill) Sensitivity Excursions (% change relative to CAPE O&S ICE) TY $

Actual cost of legacy O&S from VAMOSC in FY10 JSF Affordability O&S costs could exceed what DoD spent in FY10 to operate and sustain the legacy fleet beginning as early as 2017 –if cost growth above inflation (CGAI) is considered Legacy F-15C/D F-16C/D AV-8B F/A-18A-D Actual cost of legacy O&S from VAMOSC in FY10 FY10 $B

GCV Milestone A Cost Estimates 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.

Summary We are working to improve O&S cost estimating O&S Cost Guide published March 2014 Data collection being improved O&S cost information being considered at all Milestone reviews and we are having an impact

BACKUPS

CSDR Policy References DFARS (Defense Federal Acquisition Regulation Supplement) Clause 252.234-7003 Clause 252.234-7004 Clause 242.503-2(b) DoDI 5000.02 Enclosure 1 Table 7 Establishes CSDR requirement for contracts greater than $50M DoDM 5000.04-M-1 Primary requirements document for the development, implementation, and operation of the CSDR system

Basic O&S Cost Estimating Structure for an Independent Cost Estimate (ICE) 1. Unit-Level Manpower 1.1 Operations 1.2 Unit-Level Maintenance 1.3 Other Unit-Level 2. Unit Operations 2.1 Operating Material 2.2 Support Services 2.3 Temporary Duty 2.4 Transportation 3. Maintenance 3.1 Overhaul of End Items 3.2 Depot-Level Reparables 3.3 Consumables and Repair Parts 3.4 Other Maintenance 4. Sustaining Support 4.1 System Specific Training 4.2 Support Equipment Replacement and Maintenance 4.3 Sustaining/Systems Engineering 4.4 Program Management 4.5 Information Systems 4.6 Data and Technical Publications 4.7 Simulator Operations 4.8 Other Sustaining Support 5. Continuing System Improvements 5.1 Hardware Modifications 5.2 Software Maintenance 6. Indirect Support 6.1 Installation Support 6.2 Personnel Support 6.2.1 Personnel Administration (Personnel Management, Acquisition of New Personnel, Individuals Overhead Accounts) 6.2.2 Personnel Benefits (Family Housing, Commissaries and Exchanges, Dependent Support Programs) 6.2.3 Medical Support 6.3 General Training and Education 6.3.1 Basic & Initial Skill Training 6.3.2 Professional Military Education 6.3.3 Other Professional and Skill Training

O&S Cost Data: Contractor Sustainment Cost Reporting DD Form 1921-4 was approved April 2012 Corresponding data item description (DID), DI-FNCL-81831, was approved May 2012 After eighteen months of implementing DD Form 1921-4, the following realizations have come to light: Little to no visibility into: Labor hours and dollars Overhead Material dollars Units Profit/Loss or Fee In order to collect desired data, CSDR plans implementing DD Form 1921-4 require many clarifying remarks Adds complexity to data preparation and validation Results in non-standard data reporting across programs and contracts Adding lower-level elements requires modification of DD Form 1921-4, resulting in non-standard format

O&S Cost Data: CSDR Implementation Collect sustainment costs using DD Form 1921 Use OSD standard O&S cost element structure as basis for CSDR reporting structure Add children to reporting structure where lower level detail is desired Roll up reporting structure if lower-level detail is not applicable and/or not needed Include summary elements (G&A, UB, MR, FCCM, and Profit/Loss or Fee) Collect functional data via a sustainment-specific 1921-1 (referred to as 1921-5 here out) Not all 1921-1 functional categories apply to sustainment efforts 1921-5 captures functions that span across O&S activities Obtain contract-specific definitions of effort against reporting structure via CWBS dictionary Reports required for each FY of appropriation