lMethodology for Technology Selection for Department of Defense Research and Development Programs by Michael L. Nair S. B., Mechanical Engineering (2003) Massachusetts Institute of Technology Submitted to the System Design and Management Program in Partial Fulfillment of the Requirements for the Degree of Master of Science in Engineering and Management at the ARC IVES Massachusetts Institute of Technology OF TECHNOLCO.y January 10, 2011 MAR 08 2012 © 2011 Michael Nair All Rights Reserved LiBrRARIES The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium no known or hereafter created. Signature of Author Michael L. Nair System Design and Management January 04, 2011 Certified by Ricardo Valerdi Research Associate, Engineering Systems Division Thesis Supervisor Certified by Patrick Hale System Design & Management Program Director Methodology for Technology Selection for Department of Defense Research and Development Programs by Michael L. Nair Submitted to the System Design and Management Program on 14 January, 2011 in partial fulfillment of the requirements for the Degree of Master of Science in Engineering and Management Abstract In recent years, many of the Department of Defense's major acquisition programs have experienced significant budget overruns and schedule delays. Closer examination of these programs reveals that in many cases, technologies were selected for these programs that did not meet expectations to enable the overall weapons system to achieve its intended goals. A methodology is proposed to extend systems analysis techniques to individual technologies to utilize a rational basis for technology selection. An example of this methodology is shown based on selecting technologies for the US Army's Active Protection System. The example demonstrates that use of this methodology can provide decision makers with a clear understanding of the effects choosing particular technologies. Thesis Supervisor: Ricardo Valerdi Title: Research Associate, Engineering System Division Disclaimer The views expressed in this thesis are solely the personal views of the author and in no way reflect the position of the United States Government, Department of Defense, or Department of the Army. Table of Contents Table of Figures .................................................................................................................. 5 T able of T ables ......................................................................................................................... 6 Chapter 1-Introduction.................................................................................................... 7 Chapter 2- Background .................................................................................................. 10 Current Practices ........................................................................................................................... Legacy Projects ............................................................................................................................... 14 19 Futu re Com b at System ............................................................................................................................... jo in t Strik e F ighter.......................................................................................................................................2 Airborne Laser (ABL)/Airborne Laser Test Bed (ALTB) ...................................................... Legacy Program Sum m ary.......................................................................................................... 19 3 29 32 Chapter 3- Proposed Technology Selection Approach ......................................... 38 Chapter 4- Methodology.................... ..... ... .......... 47 Simulation Description ...... ................... ....................... ................... Technology Cost Analysis Modeling..............__ ................................................. Development Cost_....................... ..................... .......................... Chapter 5- Results _.....-__............................... Chapter 6- Discussion -.................. Chapter 7- Conclusion......._ Bibliography ............. ........................ ....... ........ 67 ....... ...74 .......................................... ............ ....... .. ......... 47 47 58 81 ....... 82 Table of Figures Figure 1: US DoD budget - adjusted for inflation (from NY Times) ............................ 10 Figure 2: Delays in Program Initial Operating Capability (GAO, 2009) ......................... 15 Figure 3: Cost Increases in Major DOD Acquisition Programs (GAO, 2009)...........16 Figure 4: Weapons Systems Quality Problem Source (GAO, 2008)............................ 17 Figure 5: US Army Future Combat System (FCS) Artists Conception (GAO, 2009).. 20 Figure 6: F-35A Joint Strike Fighter (PEO JSF).................................................................... 24 Figure 7: F-35 Variants (PEO JSF).............................................................................................. 25 Figure 8: General Dynam ics F-111............................................................................................. 28 Figure 9: Airborne Laser Aircraft (GAO, 2010).................................................................... 29 Figure 10: DOD Schedule Delays as of December 2007 (GAO, 2009)........................ 33 Figure 11: JLTV Prototypes (PM JLTV)..................................................................................... 35 Figure 12: Average RDTE&E Cost Growth in GAO Study (GAO, 2009)...................... 39 Figure 13: Artist's Conception of Iron Curtain APS (Crane, 2009).............................. 45 Figure 14: Tracking Time Development Cost Models....................................................... 50 Figure 15: Launch Time Delay Development Cost Models .............................................. 51 Figure 16: CM Minimum Range Development Cost Model............................................. 51 Figure 17: APS Model System Probability of Detection .................................................... 54 Figure 18: Convergence of Monte Carlo Simulations......................................................... 56 Figure 19: APS Effectiveness - Baseline Case....................................................................... 57 Figure 20: Return on Investment for Launch Time Delay............................................... 58 Figure 21: Return on Investment for CM Velocity............................................................... 59 Figure 22: Return on Investment for CM Minimum Range ........................................... 59 Figure 23: APS System Effectiveness ....................................................................................... 61 Figure 24: APS Effectiveness as a function of Launch Time Delay.............................. 62 Figure 25: APS Effectiveness as a function of CM Velocity.............................................. 63 Figure 26: APS Effectiveness as a function CM Minimum Range................................ 63 Figure 27: Tracking Tim e Cost Models..................................................................................... 65 Figure 28: Launch tim e Delay Cost Models ............................................................................ 65 Figure 29: APS Effectiveness as a Function of Investment Cost................................... 67 Figure 30: System Effectiveness as a Function of Tracking Time................................. 68 Figure 31: System Effectiveness as a Function of Launch Time Delay.......................69 Figure 32: Cost-effective Variable Combinations .............................................................. 70 Figure 33: Launch Time Delay Development Path............................................................ 71 Figure 34: Tracking Time Development Path........................................................................ 71 Figure 35: CM Minimum Range Development Path............................................................ 72 Figure 36: Cost-Effective Development Path....................................................................... 73 Figure 37: Optimal Development Path with Cost/Requirement Limits ................... 75 Figure 38: Notional Technology Development Cost......................................................... 78 Table of Tables Table 1: 2003 FCS Cost Estimates (GAO, 2005) .......................... Table 2: 2004 FCS Cost and Schedule Estimate (GAO, 2005), (GAO, 2009), (GAO, 2 0 1 0 ) .................................................................................................................................................. Table 3: JSF Program Changes (Sullivan, 2010)................................................................. Table 4: JSF Schedule Changes (Sullivan, 2010).................................................................. Table 5: Changes in Cost and Acquisition Quantities (GAO, 2009)............................. Table 6: Threat Munition Specifications.................................................................................. Table 7: Baseline case results...................................................................................................... Table 8: Baseline Simulated Variable Values....................................................................... Table 9: Simulation Variable Values.......................................................................................... Table 10: Simulation Cost Matrix.............................................................................................. 20 21 26 26 34 53 58 60 64 66 Chapter 1-Introduction In an increasingly complex world, the US Department of Defense (DoD) Project Managers (PMs) frequently find themselves faced with decisions to select among various technologies to develop capabilities for future weapons systems. Oftentimes, these technologies are in their infancy and it is difficult for PMs to clearly determine which technologies provide the optimal choice when years of development remain prior to their inclusion in a fielded weapons system. The current government-contractor model encourages PMs to compare various contractor proposals and make award decisions based on which is likely to deliver the required capability at the lowest cost. This decision-making process implicitly decides whether a given technology is included in weapons system or not, even if no explicit decision is made specifically regarding the technology. For example, in the Army's upcoming Manned Ground Vehicle (MGV) solicitation, BAE Systems announced it would submit a proposal utilizing a hybrid-electric powertrain (Clark, 2010). While the Army's decision will be based on the capabilities of the whole MGV system, its selection of a prime contractor will determine whether or not this hybrid technology will be developed for a military application. Unfortunately, this approach has led to problems over the years as many contractors have over-promised and under-delivered on performance, cost, and schedule on numerous weapons systems such as the Marine Corps Expeditionary Fighting Vehicle (GAO, 2008), the Army's Future Combat Systems (GAO, 2009), and the Department of Defense's Joint Strike Fighter (Ackerman, 2010). While this thesis is intended to address challenges faced by the US Department of Defense, the challenge of technology selection is not unique to DOD. Modern industry is constantly challenged by technology selection decisions that could also benefit from improvements to the process. Just a handful of examples include Boeing's selection of composite technologies for the 787 commercial airplane, General Motor's hybrid technology for the Chevrolet Volt, and even the computer industry's development of tablet devices. Each of these systems requires the program manager to select different technologies to be included as the system is developed. In many cases, technologies have been selected that required significantly more resources than planned in order to achieve the maturity needed for fielding. These challenges have delayed and even cancelled weapons systems resulting in significant expenditures of funds that could have been better utilized if a more systematic approach to technology selection was undertaken during the initial phases of the system engineering. To address this shortfall, this thesis answers the following question: How can a decision-makerdetermine which technology should be selectedfor investment to increasethe capabilitiesof a given weapons system? Typically, programs can be viewed from a cost, performance, and schedule perspective. As many weapons system programs have very long schedules (years or decades), for the purposes of this research, it will be assumed that the development schedule for different technologies is not materially different and that two technologies could be developed in the same timeframe by applying additional resources. Additionally, performance will be considered as a single variable even though many variables (size, weight, durability, reliability, etc.) would need to be considered in a real-world case. Therefore, for the purposes of this thesis, technology evaluation will be based exclusively on a cost-performance comparison. This thesis presents the current methods for technology selection, examples of how the current approach is failing, a methodology for technology selection, a discussion of the merits and shortfalls of the proposed methodology, and recommendations for future technology selection decisions. In this thesis, a casestudy of the US Army's Active Protection System will be utilized to apply the proposed methodology and test its utility with numerical simulations. Because of the narrow scope, the proposed methodology may not be universally applicable to all technology selection decisions but should be considered as a tool that can be utilized to provide a systematic approach to a multi-attribute decision. Chapter 2- Background Beginning in 2003, the United States government embarked on one of the largest expansions in military spending since World War II. The increase in funding has been justified as a response to the September 11th attacks of 2001 but has included funding for virtually all aspects of the United States Department of Defense (DoD) budget. The increase in defense spending is depicted in Figure 1 showing the inflation adjusted military spending since 1940. WA*k0M00 MAy 23, 2010 Tho War Chest The UnMte StteS currenly spends about two-Iowds as mci money now On the matay as Atdod dunng 000 he pea spnlng yew inVWWld V40 i FYISO 1960 90 170 soee congessaRnc sence Cote 00MangmeWt and Confe Or Strategc "Ad eerr Asmet -Nge low 1 2010 3 300 * %I o Figure 1: US DoD budget - adjusted for inflation (Shanker & Drew, 2010) a:n Caryl describes the magnitude of the Fiscal Year 2011 defense budget as follows: In February the Pentagon requested $708.2 billion for fiscal year 2011 -- which would make the coming year's defense budget, adjusted for inflation, the biggest since World War II.As one analysis of the budget points out, that would mean that total defense spending -- including the wars in Afghanistan and Iraq -- has grown 70 percent in real terms since 2001. Defense spending now accounts for some 20 percent of federal discretionary spending. That's even more than Social Security. (Caryl, 2010) Since the worldwide economic downturn in 2008, a growing minority has begun to question the wisdom of allocating such a large portion of the US discretionary spending to the DoD. While few engaged in this discussion seriously advocate slashing defense spending, comparisons to other countries certainly suggest that cuts could be accomplished without jeopardizing American military supremacy. Caryl continues: As a consequence, every year the United States accounts for just under half of the entire world's military spending. (By way of comparison, China spends about 8 percent; Russia, 5 percent.) As Benjamin Friedman, a research fellow at the libertarian Cato Institute, recently noted in one report: "The closest thing the United States has to state enemies -- North Korea, Iran, and Syria -- together spend about $10 billion annually on their militaries -- less than one-sixtieth of what we do." (Caryl, 2010) With this perspective, some politicians have begun testing the waters of defense cuts with their constituents as they begin tackling how to reduce the growing US budget deficit. House Majority Leader Steny Hoyer, D-Md was quoted as saying "Any conversation about the deficit that leaves out defense spending is seriously flawed before it begins." (Sahadi, 2010) In response to these challenges, the Secretary of Defense Robert Gates has begun an effort to head off defense cuts while trying to increase the efficiency of the DoD. "Military spending on things large and small can and should expect closer, harsher scrutiny," Mr. Gates said. "The gusher has been turned off, and will stay off for a good period of time." (Shanker &Drew, 2010) While Secretary Gates challenges the need to cut the DoD budget, and in fact has called for slight increases in the DoD budget each year, he has recognized that "the Department of Defense cannot expect America's elected representatives to approve budget increases each year unless we are doing a good job; indeed, everything possible to make every dollar count." (Gates, 2010) Despite Secretary Gates wishes, others disagree on the future of the US Defense Budget. After years of unfettered growth in military budgets, Defense Department planners, top commanders and weapons manufacturers now say they are almost certain that the financial meltdown will have a serious impact on future Pentagon spending." (Shanker &Drew, 2008) Among the areas that Secretary Gates has attempted to make more efficient is DoD Research and Development (R&D) and Acquisition. This effort began in 2009 by "reforming the department's approach to military acquisition, curtailing or canceling about 20 troubled or excess programs, programs that, if pursued to completion, would have cost more than $300 billion. Additional program savings have been recommended in the budget we submitted this year." (Gates, 2010) As part of that effort, the US military has terminated the following programs because they "were over cost, behind schedule, no longer suited to meet the warfighters' current needs, or based on a single service, instead of a joint solution" - VH-71 Presidential Helicopter, Combat Search and Rescue Helicopter (CSAR), NextGeneration Bomber, Future Combat System - Manned Ground Vehicles, Transformational Satellite, Ballistic Missile Defense- Multiple Kill Vehicle, and recommended ending production of the C-17 Cargo Aircraft, DDG-1000 Destroyer, and the F-22 Fighter. (GAO, 2010) While these programs were terminated or curtailed, the requirement for the capabilities offered by some of these systems still exist. For example, while the CSAR program was cancelled, the Air Force still has a requirement to replace 112 HH-60J rescue helicopters, In the case of the DDG-1000 destroyer; the Navy is now considering building new Arleigh Burge class destroyers as a cheaper alternative. Efforts have already begun to start replacement programs for the Future Combat Systems, Manned Ground Vehicles, the VH-71 helicopter, the Multiple Kill Vehicle, and the Next Generation bomber. Upon examining the DOD's acquisition plan, the Government Accountability Office stated that: "DOD's portfolio of major defense acquisition programs grew to 102 programs in 2009-a net increase of 6 since December 2007. Eighteen programs with an estimated cost of over $72 billion entered the portfolio, while 12 programs with an estimated cost of $48 billion, including over $7 billion in cost growth, left the portfolio. When the Future Combat System is added to the programs leaving the portfolio, the total cost of these programs increases to $179 billion, including over $47 billion in cost growth." (GAO, 2010) No matter how DOD juggles the acquisition plan for these systems, a significant amount of money will be spent on these weapons systems regardless of whether or not a given system is terminated, curtailed, or replaced. As Secretary Gates stated in August 2010, "the current and planned defense budgets, which project modest but steady growth, represent the minimum level of spending necessary to sustain a military at war and to protect our interests and future capabilities in a dangerous and unstable world." (Gates, 2010) If these vast sums of money are going to be spent on weapons system development and acquisition, the alternative is to make such costs more efficient to provide the Warfighter with the capability needed at the lowest possible cost. Few in the defense industry would argue that weapons acquisition is an efficient and well-run process. The US Congress has passed a number of acquisition reform acts, including the latest Weapon Systems Acquisition Reform Act of 2009, in an attempt to make the process more efficient and effective but to date these efforts have appeared largely unsuccessful. Despite legislative acts, changing contractor models, and recent threats of program terminations, the cost of developing and acquiring weapons systems has grown tremendously over the last several years. While the GAO has consistently recommended the use of systems engineering practices to help control costs, these practices have not been widely applied and do not include all practices that could reduce the never-ending cost growth (GAO, 2008). This report will outline the current limited use of systems engineering practices in weapons systems development and acquisition and present a case study of how modern systems modeling practices, specifically Monte Carlo simulations, can help program managers to control costs while delivering a capable weapons system on time and on budget. CurrentPractices In 2010, the US Government Accountability Office (GAO) conducted a review of a number of DOD acquisition programs to study the effect of various acquisition reforms. GAO reported a number of successes primarily that more recently started programs have performed better in terms of cost, schedule, and performance. GAO concluded that "for 42 programs GAO assessed in depth in 2010, there has been continued improvement in the technology, design, and manufacturing knowledge programs had at key points in the acquisition process. However, most programs are still proceeding with less knowledge than best practices suggest, putting them at higher risk for cost growth and schedule delays" (GAO, 2010). Despite these improvements, most major weapons systems are currently exhibiting significant cost increases and schedule delays. GAO reports that of 72 programs only 20 (28%) are achieving Initial Operating Capability (IOC) within one month of the intended IOC date as illustrated in Figure 2. GAO further reports that 14% of these programs have experienced IOC delays of more than 48 months (GAO, 2010).. Programs planning to achieve 1OC on time (or less than i month iate) (20 programs 28% 14% 24% * -14%8is% \between Programs planning to achieve between 1 to 12 months late (17 programs) IOC Programs planning to achieve 13 to 24 months late (13 programs IOC Programs planning to achieve between 25 to 48 months late (12 programs) IOC Programs planning to achieve IOC more than 48 months late (10 programs Note lnitiaJ operalonal capabsty JOC i is goreralty aclheo wihen sorne urats or orgarztions that We sce0ue to lecere a system have rceived itand have the aary to employ ard enantain it Figure 2: Delays in Program Initial Operating Capability (GAO, 2009) Further, GAO also reported the cost increases for 10 major programs, shown in Figure 3. Note that the Future Combat System, the F-22A Raptor, and the C-17 Globemaster III programs have been terminated or halted by Secretary Gates. Total cost (fiscal year 2009 d0lrs In mllions) Progam Joint Strike Fighter Future Combat System First full Current estimst estliAte 206,410 89,776 Acquisition unit cost Total quantity First full Current *stlmatsestmat 244,772 2,866 2,456 change 38 15 15 45 30 30 40 648 184 195 Virginia Class Submanrne F-22A Raptor C-17 Globemaster Ill 58,378 88,134 129,731 81.556 73,723 51,733 73,571 210 190 57 V-22 Joint Services Advanced Vertical Lilt Aircraft F/A-i 8E/F SuperKornet Trident If Missile CVN 21 Nuclear Aircraft Class Carner P-8A Poseidon Multmission Maritime Aircraft 38,726 55,544 913 458 186 78,925 49,939 34,360 51.787 49,614 29,914 1.000 493 561 3 33 845 3 50 -13 29,974 29,622 115 113 1 se'e -C (eAO Woemo f'I CM 4M Figure 3: Cost Increases in Major DOD Acquisition Programs (GAO, 2009) Of these 10 programs, 5 (F-22, F/A-18 E/F, Trident II,CVN 21, P-8A) experienced cost decreases from the first full estimate to the current estimate as of the GAO report. However, at the same time, 4 of these 5 programs had significant reductions in the total acquisition quantity resulting in significantly higher unit costs for these 4 programs. For the four, the percentage change in unit acquisition cost ranged from 1% to 195%. Of the other 5 programs, the total program costs increased from 19% to 45% and 3 of these 5 also had reduced quantity purchases resulting in unit acquisition cost increases from 38% to 186%. However, despite the general trend towards improvement, GAO also identified numerous specific problems on a host of weapons systems such as "a laser jammer that did not work as intended, peeling coating on ships, deficient welding, and nonconforming parts" (GAO, 2008). In this review, GAO attributed a number of quality and performance issues to "defense contractors' poor practices for systems engineering activities as well as manufacturing and supplier quality problems" (GAO, 2008) GAO identified 11 weapons systems that suffered quality problems and categorized the source of the problems as Systems Engineering, Manufacturing, and/or Supplier Quality. These quality problems, with associated cost and schedule increases are identified in Figure 4: Weapons Systems Quality Problem Source (GAO, 2008)Figure 4. S enginnedn AdVncd SEAL DelhtrY Maraufcturing iSUPPOie / Ad&eoed Ttveaftntrataed Counterwneaue Coman AssIe Warn-g / t e qenal"y pVobtm ,or o Quolfty probn Quality I datArs n frolsons I Schedule $1 Progam Ka~d *1~~ Expeoditoary r9"hhg Ve"Kai / ~1 a-e~r delay I A Joint At-icSuza 6-mnC 1 esus V-22 LPOi JAAhtS Irshopon DoiW p AApIfl C' d3o* S846 11 I MH4OSfFteetCwuMat / No cost impart 10 programi Pt~nT1tth-Ta Capatty-3 Inht Catng V-22 JOIN! 50fvice Amafexod Vtca tLt Adw(Aft rat patns SATCOM - I I 'AD80'-1 ' - -1, .' L%,!, Figure 4: Weapons Systems Quality Problem Source (GAO, 2008) While the table does not separate out the cost and schedule impact from each of the three quality problem sources, two programs, the Expeditionary Fighting Vehicle (EFV) and the V-22 Joint Services Advanced Vertical Lift Aircraft suffered quality problems resulting from only Systems Engineering shortfalls. These two programs alone had a net cost effect of $915 Million and a delay to the EFV four years and a halt of Flight Operations for the V-22 for 17 months. It can safely be assumed that the other programs exhibited significant cost and schedule effects due to poor implementation of systems engineering practices. Over the years, the GAO has highlighted the benefits of early use of systems engineering practices. In 2008, GAO stated that: Systems engineering is a key practice that companies use to build quality into new products. Companies translate customers' broad requirements into detailed requirements and designs, including identifying requisite technological, software, engineering, and production capabilities. Systems engineering also involves performing verification activities, including testing, to confirm that the design satisfies requirements. Products borne out of a knowledgebased approach stand a significantly better chance to be delivered on time, within budget, and with the promised capabilities. (GAO, 2008) Additionally, GAO defined systems engineering in the same report as A sequence of activities that translates customer needs into specific capabilities and ultimately into a preferred design. These activities include requirements analysis, design, and testing in order to ensure that the product's requirements are achievable and designable given available resources, such as technologies. (GAO, 2008) GAO further claims that poor systems engineering contributed to problems on the specific DoD development and acquisition programs including the EFV, the Threat Infrared Countermeasure/Common Missile Warning System, and Joint Air-toSurface Standoff Missile (JASSM). (GAO, 2008) To further understand the cause of the numerous problems seen with DOD acquisition programs, a detailed examination of three legacy programs was conducted. The three systems selected are the Army's Future Combat System (FCS), the Air Force, Navy, and Marine Corps F-35 Joint Strike Fighter (JSF), and the Missile Defense Agency's Airborne Laser Test Bed (ALTB - formerly the Airborne Laser). Legacy Projects In this section, the Future Combat System, the F-35 Joint Strike Fighter, and the Airborne Laser Test Bed programs are described and the cost, capability, and schedule challenges are described followed by a summary of the cause of these challenges. Each of these three programs has suffered from poor systems engineering practices, including poor technology selection, poor program management, poor requirement definition, and poor systems architecture. Most notably, many of the challenges encountered in these three programs relate to the selection of immature technologies as critical components of the programs. Future Combat System In the mid-1990s, the US Army embarked on a major reorganization to build a "networked" brigade-centered force structure. The concept was based on the premise that timely information flow up and down the command structure would allow for destruction of enemy targets prior to the enemy engaging American troops. This assumption prompted the Army to develop a new generation of armored vehicles that were much lighter than the current M-1A1 main battle tank and the M-2/M-3 Bradley Infantry/Cavalry Fighting Vehicle. An "integrated family of advanced, networked combat and sustainment systems; unmanned ground and air vehicles; and unattended sensors and munitions" formed the Future Combat Systems (FCS) program initiated in May of 2000 (GAO, 2009). An artist's conception of all of these subsystems in shown in Figure 5. ft* u~. - 4 I I #4 I. 4 Figure 5: US Army Future Combat System (FCS) Artists Conception (GAO, 2009) When development started of the FCS in May of 2003, the GAO reports that initial cost (in 2005 dollars) and schedule estimates were as shown in Table 1. Table 1: 2003 FCS Cost Estimates (GAO, 2005) Category Estimate (5/2003) R&D Cost Procurement Cost Total Program Cost Program Unit Cost Total Quantities (brigades) Acquisition Cycle Time (Months) $18.6B $60.6B $79.8B $5.32B 15 91 Up to 2009, surprisingly little progress was made on the FCS program despite spending billions of dollars in R&D costs. In 2005, the GAO conducted a review of the FCS program and reported that only "one of the FCS program's 54 critical technologies is currently mature. Overall, the program's current technology maturity is slightly less than it was in May 2003 when the program began development" (GAO, 2005). As development continued, cost estimates increased significantly. Table 2 shows two FCS program cost and schedule estimates in 2009 dollars. Table 2: 2004 FCS Cost and Schedule Estimate (GAO, 2005; 2009; 2010) Category R&D Cost Procurement Cost Total Program Estimate (09/2004) 2005 dollars $20.9B $68.2B $89.8B Estimate (12/2007) 2009 dollars $28.8B $100.1B $129.7B Estimate (03/2010) 2009 Dollars $29.0B $129.3B $159.3B 5.99B 15 $8.65B 15 $10.62B 15 139 147 147 Cost Program Unit Cost Total Quantities (brigades) Acquisition Cycle Time (Months) I From the program start in 2003 until September of 2004, total program cost increased 35% (approximately 18 billion dollars) and the expected acquisition time increased by 48 months. Then in the following years up to 2009, the total program cost increased further and the schedule slipped significantly. GAO reported that the primary source of much of these problems was poor systems engineering practices, described as follows: The program is not appropriately applying best practices to maturing its critical technologies. It considers technical risk acceptable as long as it can estimate that the technologies will be demonstrated in a relevant environment before design review. Also, it does not consistently include form or fit in technology maturation because it views sizing the technology as an integration risk, not a technology risk. In addition, the program could assess a technology as mature simply because it is part of another program. (GAO, 2005) Despite the fact that the GAO determined that some technologies were actually less mature in 2005 than when the program started, the Army Project Manager still expected that all technologies would be mature by 2008 (GAO, 2005). However, in 2009, the GAO reported that Of the FCS program's 44 critical technologies, 3 are fully mature and 27 are nearing maturity.... Since 2003, the Army has not advanced the maturity of 11 technologies. Two others, which are central to the Army's plans to replace armor with superior information, are now rated less mature than when the FCS program began. (GAO, 2009) Based on these cost and schedule challenges, Secretary of Defense "Robert Gates boldly slashed several high-profile, big-ticket weapons programs, including the Army's $160 billion Future Combat Systems" (Caryl, 2010). Despite cancellation of the FCS program, the Army reinitiated development of new manned ground vehicles following the FCS cancellation to fulfill a standing requirement that the Army has for new vehicles to replace the Bradley Infantry Fighting Vehicle. However, in August of 2010, the US Army cancelled the solicitation for the Ground Combat Vehicle. This decision was based on a "Red Team" analysis which compared the current battlefield threats to the submitted vehicle proposals. Unfortunately, the official announcement noted that "the Army determined that it must revise the acquisition strategy to rely on mature technologies in order to reduce significant developmental risk" (Grant, 2010). This description seems to follow closely to some of the challenges the Army faced in the cancelled FCS program. While some credit must be given to the Army for realizing the problem and cancelling the program prior to beginning development, the fact that this problem is recurring suggests that the Army Acquisition Corps has not learned all of the lessons from the failed FCS program. In summary, the FCS program collapsed under never ending technology development programs. Systems engineering practices were never brought to bear against the requirements to determine whether or not the current technology was actually capable of providing the capability required. Sadly, the GAO had been accurately reporting these shortfalls for years but the Program Managers chose to let the warnings fall to the wayside. Joint Strike Fighter The F-35 Joint Strike Fighter (JSF), shown in Figure 6, is a fifth generation multi-role aircraft that is intended to replace legacy Air Force F-16 and A-10 aircraft, Navy F/A-18 aircraft, Marine Corps F/A-18 and AV-8B aircraft, as well as a host of foreign aircraft, most notably the UK's Harrier fleet. Figure 6: F-35A Joint Strike Fighter (PEO JSF) Three different variants of the F-35 are planned, one for each service, shown in Figure 7. The F-35A is the baseline aircraft designed for the Air Force. The F-35B is a short take off vertical landing (STOVL) version that uses a complex series of ducts, doors, and a lift fan to redirect engine thrust downwards to permit Marine Corps operations on amphibious assault ships. The F-35C is a large wingspan version of the F-35A with longer-range and a strengthened structure to withstand operations on Navy aircraft carriers. F-35 Conventional Take Off O& Landing (CTOL) Span (ft) 35 Length (ft) 50.5 Wing Area (ft2) 460 Internal Fuel (Ib) 18,498 Short Take Off/Vertcal Landing (STOVL) Span (ft) 35 Length (ft) 50.5 Wing Area (ft2) 460 Internal Fuel (Ib) 13,326 Carrier Variant (CV) Span (ft) 43 Length (ft) 50.8 Wing Area (ft2) 620 Internal Fuel (Ib) 19,624 Figure 7: F-35 Variants (PEO JSF) The Joint Strike Fighter had its origins in a number of research programs in the 1980s and 1990s. In 1997, the DoD selected Lockheed Martin and Boeing to participate in a concept demonstration effort. Each manufacturer built several flying demonstrators culminating in a selection of Lockheed Martin as the prime contractor for the Joint Strike Fighter in 2001. Since then, the JSF program has faced significant challenges as described by Michael Sullivan of the GAO: The F-35 Lightning II, also known as the Joint Strike Fighter (JSF), is the Department of Defense's (DOD) most costly and ambitious aircraft acquisition, seeking to simultaneously develop and field three aircraft variants for the Air Force, Navy, Marine Corps, and eight international partners. The JSF is critical for recapitalizing tactical air forces and will require a long-term commitment to very large annual funding outlays. The current estimated investment is $323 billion to develop and procure 2,457 aircraft. (Sullivan, 2010) In the same report, the GAO laid out the schedule, cost, and acquisition quantity changes to the JSF program outlined in Table 3 and Table 4. As shown in the table, the JSF program has been replanned and restructured several times resulting in significant cost increases, reduction in aircraft purchases, and delays in aircraft deliveries. Table 3: JSF Program Changes (Sullivan, 2010) October 2001 (system December 2003 deveopment start) (2004 Replan) March 2007 (Approved Basewn.) Fiscal Year 2011 Budget Expected quantites Development quantities Procurement quantiies (U.S only) Total quantities Cost estimates (then-year dollars in taions) Development Procurement Total progm Acquialoei ae note) unit cost estimates (then-year doas A rnabans) Program acquisition Average procurement Estimated defvery dates First operational aircralt debvery initial operational capaotmy 14 2,852 2,166 14 2.443 2.457 $34.4 196.6 5231.0 S44.8 199.8 $244.6 $81 69 $100 82 2008 2010-2012 15 14 2.443 2.458 2443 2.457 S44.8 S49 3 231 7 3276.5 5322.6 $113 95 2009 2012-2013 273.3 $131 112 2010 2010 2012-2015 2012-2015 Table 4: JSF Schedule Changes (Sullivan, 2010) Program of record December 2007 Program of record December Restructure 2006 February 2010 Development testng complete October 2012 October 2013 March 2015 Irdial opeational test and evalualion compeete System development and demonstration phase October 2013 October 2014 January 2016 October 2013 October 2014 April 2016 October 2013 October 2014 April 2016 Major miestonea complete Fu#-rale productbon decasion To date, the JSF program is still struggling to meet their new schedules for test flights and test milestones. In September, Graham Warwick reported that Thanks to the performance of the F-35A development jets, the JSF test program is running well ahead of plan of the year... But that disguises the fact that STOVL testing is well behind schedule, because of reliability issues with the F-35B test jets, with 122 26 flights by the end of August against a plan of 153. (Warwick, F-35's Unequal Progress, 2010) Surprisingly, many of the reliability issues with the F-35B variant are with seemingly simple components. Lockheed Martin CEO Bob Stevens states that "the components that are failing are more of the things that would appear either smaller or more ordinary like thermal cooling fans, door actuators, selected valves or switches or components of the power system" (Wall, 2010). Further, Stevens notes that "in some cases, we've had to remove the engine to get access to the component" in order to conduct the repair or replacement (Wall, 2010). Bill Sweetman, Editor in Chief of Defense Technology International and frequent JSF critic, sarcastically notes: You design a jet with seven medium-to-large doors that all have to open in a combination of high airflow, vibration, noise and heat. Ifthey don't close perfectly after take-off, the aircraft is no longer stealthy. Ifone of them won't open for transition, the jet can't recover to the carrier. Who could possibly have anticipated problems with that? (Wall, 2010) In fact, many of the programmatic challenges encountered in the JSF program could have easily been foreseen by studying the history of the TFX fighter program which resulted in the F-111 Fighter/Bomber shown in Figure 8. Similar to the JSF, the F-111 program was initially intended to develop versions for both the Air Force and Navy but the Navy withdrew from the program as it floundered. In 1961, Secretary of Defense Robert S. McNamara asked the Air Force to determine with the Army and Navy if the TFX could provide close air support (CAS) to ground troops; air defense of the fleet; as interdiction of enemy logistics- the Air Force's primary objective. Army and Navy CAS objections to the TFX finally prevailed in May. Notwithstanding, Secretary McNamara remained convinced that the TFX could satisfy other Navy and Air Force needs. In June he instructed the Air Force to 'work closely' with the Navy in trying the two services' requirements in a new, cost-effective TFX configuration. (Knaack, 1978) Figure 8: General Dynamics F-111 As the TFX program progressed, the Air Force and Navy both ended up with versions of aircraft that did not fully meet their requirements. In addition, the designs continued to diverge as the Air Force and Navy versions of the aircraft reached flight readiness. In 1968, the Navy's version, the F-111B was cancelled as the aircraft weight did not meet requirements and the crew capsule did not have sufficient visibility for carrier operations. (Knaack, 1978) Similar challenges are seen in the JSF program. As the JSF has progressed, each service is dealing with the fact that the aircraft is a combination of compromises. Despite the fact that the F-35B STOVL version just took off on its first flight, the rumor mill is already discussing whether or not the version may be cancelled since the UK has now cancelled its order of STOVL aircraft. (Sweetman, 2010) In summary, the JSF program is suffering from problems occasioned by poor systems architecture and unrealistic project management. By attempting to merge the requirements of the three services, the DoD has demanded the construction of an aircraft that is overly complex whose technology has not matured sufficiently for high reliability. Coupled with this, the contractor has exhibited poor management of the program resulting in the significant cost overruns and schedule slips. Despite PEO JSF's claim that "the F-35 Lightning II Program is the Department of Defense's focal point for defining affordable next generation strike aircraft weapon systems" (PEO JSF) the current program leaves a lot to be desired. Unfortunately, the prognosis is not improving as media reported in November 2010 report that "the $382 billion stealth plane might get pushed back as much as three years, with an added $5 billion price tag." (Ackerman, 2010) Airborne Laser (ABL)/Airborne Laser Test Bed (ALTB) The Airborne Laser is a modified Boeing 747 aircraft carrying several high power lasers intended to shoot-down ballistic missiles in the boost-phase portion of flight. The ABL "employs a battle management subsystem to plan and execute engagements, a high-energy chemical laser to rupture the fuel tanks of enemy missiles, and a beam control/fire control subsystem to focus the high-energy laser beam on the target." (GAO, 2010) Figure 9: Airborne Laser Aircraft (GAO, 2010) In concept, the ABL is intended to orbit a given area to detect and then destroy ballistic missiles during powered flight. Because of the short duration of a ballistic missile's powered flight and the ABL's range of 50-100 miles, the ABL would need to orbit within close proximity to a launch site to await the launch of missiles in order to be in position to destroy them during powered flight (Schachtman, Raygun 747 Botches Another Test, 2010). This requirement proved to be the programs undoing. The Missile Defense Agency describes the ABL functionality during a test as follows: Within seconds, the Airborne Laser Test Bed [ALTB] used on-board sensors to detect the boosting missile and used a low-energy laser to track the target. The ALTB then fired a second low-energy laser to measure and compensate for atmospheric disturbance. Finally, the ALTB fired its megawatt-class High Energy Laser, heating the boosting ballistic missile to critical structural failure. The entire engagement occurred within two minutes of the target missile launch, while its rocket motors were still thrusting. (Missile Defense Agency, 2010) In 1996, the Air Force and Missile Defense Agency planned to build two prototypes and then have the Air Force purchase 5 operational aircraft with a development cost of $2.5B. (Duffy, 2006) However, by 2006, costs had risen to $7.3B causing further scrutiny of the program. (Schachtman, Laser Jet's Toxic Interior, 2006). In 2009, Secretary of Defense Gates reviewed the MDA portfolio and made the following statement, highlighting one of the shortfalls of the ABL concept. "Idon't know anybody at the Department of Defense who thinks that this program should, or would, ever be operationally deployed," Gates told Congress last year. "The reality is that you would need a laser something like 20 to 30 times more powerful than the chemical laser in the plane right now to be able to get any distance from the launch site to fire. "So, right now the [jet] would have to orbit inside the borders of Iran in order to be 30 able to try and use its laser to shoot down that missile in the boost phase. And if you were to operationalize this you would be looking at 10 to 20 747s, at a billion-and-ahalf dollars apiece, and $100 million a year to operate. And there's nobody in uniform that I know who believes that this is a workable concept." (Schachtman, Video: Laser Jet Blasts Ballistic Missile in Landmark Test, 2010) Similar to FCS and JSF, the ABL program was envisioned prior to the maturation of the requisite technologies to make it operationally useful. The GAO stated in 2010 that: None of ABL's seven critical technologies are fully mature. Program officials assessed one of ABL's seven critical technologies-managing the high- power beam-as fully mature, but the technology has not yet been demonstrated in a flight environment. The remaining six technologies-the six-module laser, missile tracking, atmospheric compensation, transmissive optics, optical coatings, and jitter control-were assessed as nearing maturity. (GAO, 2010) In the same report, the GAO reported that "the program currently estimates that the cost of the ABL through the first lethality demonstration is nearly $5.1 billion, almost five times the approximate $1 billion estimated for the original contract in 1996." (GAO, 2010) Based on the operational limitations, technology maturity levels, and program challenges, the DoD decided to halt the procurement of further ABL aircraft after the purchase of the initial YAL-1A prototype aircraft. Instead, the DoD has decided to utilize the YAL-1A aircraft as a testbed for directed energy applications pertaining to missile defense resulting in the new Airborne Laser Test Bed (ALTB) designation. Since that time, the ALTB has had mixed success in its ability to track and destroy boosting ballistic missiles in test events. Since the decision to make the ABL a testbed system, the aircraft has successfully destroyed only one of three ballistic missile targets. (Schachtman, Raygun 747 Botches Another Test, 2010). As with both the FCS and JSF program, the ABL/ALTB program exhibited poor program management with a high reliance on immature technology that did not advance at a rate anywhere close to that anticipated at the beginning of the program. Despite nearly 14 years of development, the GAO still reported that zero of the seven critical technologies were mature by 2010. This either suggests that the original program management did not have sufficient understanding of the required effort or severely mismanaged the programs during the 14 years resulting in significant schedule delays and cost overruns. Legacy Program Summary In all three of these cases, a significant source of the programmatic challenges are reliance on immature technologies that cost much more than expected and take much longer than expected to develop. This challenge calls into question the selection of these particular technologies as key parts in each program. The GAO summarizes the status of DOD program delays as follows: In addition to delivering fewer quantities than expected, DOD continues to experience delays in delivering new or modified weapon systems to the warfighter as promised. Acquisition delays can lead to loss of program credibility with stakeholders, increased acquisition costs, new systems not being available to meet the needs of warfighters during combat operations, and the continued use of less capable systems with questionable reliability and high operating costs. The average delay in delivering initial capabilities to the warfighter increased to 22 months for programs in DOD's 2008 portfolio, compared with 21 months for programs in the 2007 portfolio (see table 1). Only 28 percent of DOD's major defense acquisition programs currently estimate that they will deliver on time or ahead of schedule, while just under one- half report they will have a delay of 1 year or more in delivery of an initial operational capability (see Figure 10). (GAO, 2009) Programs planning to achieve IOC on time (or less than I month late) (20 programs) 28% 14% 24% Programs planning to achieve IC between I to 12 months late 17 programs) * Programs planning to achieve IOC between 13 to 24 months late (13 programs) 18% Programs planning to achieve IOC - between 25 to 48 months late (12 programs) Programs planning to achieve 10C more than 48 months late (10 programs) No: uata operational capabaty 0IOCI is gr*ralty achmve, *hn sone urlts or organzalions thai we seneue0 Io recewe a system have received It and av te th abity to emply and raintain it Figure 10: DOD Schedule Delays as of December 2007 (GAO, 2009) As mentioned by the GAO, the cost overruns have had a significant effect on the final purchase quantities of many of DODs major programs. These effects are summarized in Table 5. Table 5: Changes in Cost and Acquisition Quantities (GAO, 2009) Total cost (fscal year 2009 Acquisition dotm In millions) Total quantlity unit cost First full Current estimate estirate 206,410 244.772 Program Joint Stnke Fighter First futl Current estinate eathmate 2,866 2.456 Percentage change 38 Future Combat System 89,776 129,731 15 15 45 Virginia Class Submarne F-22A Raptor 58,378 88,134 81,556 73,723 30 648 51,733 73,571 210 30 184 190 40 195 57 38,726 55,544 913 458 186 78,925 49,939 34,360 51,787 49,614 29,914 1,000 845 3 493 561 3 33 50 -13 29,974 29,622 115 113 1 C-17 Globemaster ll V-22 Joint Services Advanced Vertcal Lilt Aircraft F/A-1861F Super Hornet Trident If Missile CVN 21 Nuclear Aircraft Class Carrier P-BA Poseidon Mulbmission Maritime Aircraft As shown, of the 10 programs, only one showed a reduction in per unit cost and eight of the programs showed a unit cost increase of greater than 30%. Of perhaps greater significance, the planned acquisition quantity declined in many of these programs, most significantly in the case of the F-22A Raptor where the acquired quantity declined by 70%. One must assume that originally the Air Force conducted an analysis to determine that 648 Raptors were required to accomplish the air superiority mission required by DOD. Instead, because of rising costs, the Air Force was only able to purchase 184 of the aircraft. However, all is not doom and gloom in DOD acquisition. In several of the more recent programs, the DOD appears to have taken steps to reduce the likelihood of cost overruns and schedule slips. These changes are part of a DOD level plan to alter several aspects of their acquisition strategy. In December 2008, DOD revised its policy for major defense acquisition programs to place more emphasis on acquiring knowledge about requirements, technology, and design before programs start and maintaining discipline once they begin. The policy recommends holding early systems engineering reviews; includes a requirement for early prototyping; and establishes review boards to monitor requirements changesall positive steps. (GAO, 2009) One of the best examples of this new approach is the Joint Light Tactical Vehicle (JLTV). This program is a joint Army/Marine Corps effort to design and acquire a new tactical vehicle to replace the venerable High Mobility Multi-Wheeled Vehicle (HMMWV). As part of this program, the DOD selected three vendor teams for Technology Development (TD) contracts to build representative prototypes, shown in Figure 11, that are currently undergoing evaluation at the Army's Aberdeen Proving Ground. Upon completion of the TD phase, the Army intends to contract with two vendor teams for the engineering, manufacturing, and development (EMD) phase. Figure 11: JLTV Prototypes (PM JLTV, 2010) Even the GAO, normally known for critical look at DOD acquisition programs had this to say about the JLTV program. "At this point, it is a well-structured program with desirable features like a competitive technology development phase" (GAO, 2011). While this approach does reduce the risk to the program by developing critical technologies prior to the EMD phase, the JLTV program is still suffering from challenges. In October, the DOD Buzz reported "the Marines, who have voiced concerns for some time about the program, appear ready to abandon or seriously curtail their purchase of the Joint Light Tactical Vehicle (JLTV)... The Army has already voiced concerns about the program's rising price and may substantially scale down its buy to around 50,000 vehicles" (Clark, JLTV Sinking, EFV Wobbly, 2010). According to the Congressional Research Service, the DOD was initially planning on replacing approximately 160,000 vehicles with JLTVs (Feickert, 2010). The GAO's report on Tactical Wheeled Vehicles supports this perspective: JLTV's affordability will be a key determination at the Milestone B decision point. The services and DOD will have to balance the cost of the JLTV against other service needs. The cost could determine whether to continue with the program as planned, look at other ways of meeting the requirements, or buy fewer vehicles. (GAO, 2011) While this new approach does show some promise, it is not perfect. Additional steps are needed to improve the DOD's acquisition capabilities to select technologies that will be developed on-time and on-budget to allow systems to reach the Warfighter on schedule. Without improvement to the DOD acquisition cycle, many programs are doomed to continue the death spiral where increasing costs leads to reduced quantity purchase which in turn leads to increasing unit costs. The next chapter describes a proposed methodology to better select technologies for inclusion in research, development, and acquisition programs. This methodology is intended to reduce the likelihood that a technology can be selected for a program and then have the same technology derail the program, as it proves incapable of meeting the requirements that led to the technology's selection. Chapter 3- Proposed Technology Selection Approach The GAO has frequently recommended the use of systems engineering processes in DOD acquisitions. As exemplified by the JLTV, the use of some of these practices has helped improve the DOD acquisition process. However, as described previously, even the JLTV program, described by GAO as "well-structured," is still struggling with cost challenges that may result in the familiar death spiral. GAO describes the benefits as systems engineering as follows: Early system engineering has proven helpful to programs that have employed it. Early systems engineering, ideally beginning before a program is initiated and a business case is set, is critical to ensuring that a product's requirements are achievable and designable given available resources. Before starting development, programs should hold systems engineering events such as the system requirements review, system functional review, and preliminary design review to ensure that requirements are defined and feasible and that the proposed design can meet those requirements within cost, schedule, and other system constraints. As evidence of the benefits of early systems engineering, we found that the programs in our assessment that conducted these systems engineering events prior to development start experienced, on average, over 20 percent less research and development cost growth than programs that conducted these reviews after development start. These programs also often experienced a shorter delay in delivery of initial operational capability. On average, the programs that conducted a system requirements review or a system functional review prior to development start experienced delays in the delivery of initial operational capabilities that were, respectively, 8 and 9 months shorter than programs that held these reviews after development start. (GAO, 2009) In contrast, GAO sums up the problems occasioned by ignoring systems engineering practices below: For example, in March 2007 we reported that only 16 percent of the 62 DOD weapon system programs we reviewed had mature technologies to meet requirements at the start of development. The prime contractors on these programs ignored best systems engineering practices and relied on immature technologies that carry significant unknowns about whether they are ready for integration into a product. (GAO, 2008) GAO quantifies the benefits of systems engineering as shown in Figure 12. GAO defines the System Requirements Review, System Design Review, and Preliminary Design Review events as follows: System Requirements Review (SRR) - "ensure that the system under review can proceed into system development and that all system and performance requirements are consistent with cost, schedule, risk, and other system constraints" (GAO, 2009) System Functional Review (SFR) - "ensure that the system can proceed into preliminary design and that all system and functional performance requirements are defined and are consistent with cost, schedule, risk, and other system constraints" (GAO, 2009) Preliminary Design Review (PDR) - "ensure that the system under review can proceed into detailed design, and can meet the stated performance requirements within cost, schedule, risk, and other system constraints" (GAO, 2009). Purcent 60 50 40 a) S30O 0 0 U 20 to 0 SAR - P'g.rme that "wdthe 9F4 evew PogsvIwmMat f*ethe ".vne POR orwesopment stari alter d4m a Figure 12: Average RDTE&E Cost Growth in GAO Study (GAO, 2009) Note that the sample size for each of the three categories shown in Figure 12 is 31, 23, and 36 for SRR, SFR, and PDR respectively. Even for programs that have conducted some of the key systems engineering practices still suffer from significant cost overruns. For example, programs that conducted a system functional review (SFR) prior to program start still experienced more than 25% growth in RDT&E during the life of the program. While GAO calls for the use of systems engineering to drive down system development costs, GAO's definition of systems engineering is fairly limited. GAO concentrates primarily on requirements definition and proper testing activities described as translating "customers' broad requirements into detailed requirements and designs, including identifying requisite technological, software, engineering, and production capabilities" (GAO, 2008). However, modern systems engineering includes many other techniques and capabilities that can be brought to bear on the problems of program cost overruns and schedule delays. The International Council on Systems Engineering (INCOSE) defines modern systems engineering as Activities involving the technologies, processes, and systems management approaches needed for: definition of systems, including identification of user requirements and technological specifications; development of systems, including conceptual architectures, tradeoff of design concepts, configuration management during system development, integration of new systems with legacy systems, and integrated product and process development; and deployment of systems, including operational test and evaluation, maintenance over an extended lifecycle, and reengineering. (International Council on Systems Engineering, 2009) The differences between the GAO's description of systems engineering and INCOSE's definition allows for significant steps in improving DOD acquisition by incorporating the practices described by INCOSE. Instead of simply using systems engineering to incorporate appropriate requirements analysis, systems engineering also promotes lowering acquisition costs be conducting design tradeoffs, systems architecting, and probabilistic simulations among other methodologies. The use of these methodologies can enable further improvements over the use of basic systems engineering as defined by the GAO. As demonstrated in Chapter 2, one of the significant problems encountered in DOD product development programs is the selection of technologies that do not seem to bring the capabilities expected to the overall program. This is the case in both programs begun from scratch or technology insertion programs where a new technology is inserted into legacy programs such as the Air Force's C-5 reengineering program. Utilizing the system engineering methodologies mentioned by INCOSE, a more rigorous approach can be applied to the technology selection process. In 1961, Robert McNamara and his aides introduced "systems analysis" to the Department of Defense. "Systems analysis centered on intensive study of problems and options, with examinations of costs, benefits, and risks of potential decisions" (Chivers, 2010). One of the first examples of the use of systems analysis in DOD was the selection of the M-16 rifle. Unfortunately for the reputation of system analysis, it was poorly executed and heavily influenced by politics resulting in the fielding of an inferior rifle. However, in a properly executed systems analysis, this approach would have clearly guided decision makers to the optimal decision based on the particular variables considered in the analysis. This approach has been widely utilized since the 1960s and has now become part of the regular DOD analysis of weapons systems. Unfortunately, these analyses are often conducted at the macro level resulting in missed opportunities at the micro level. One recent example is in the ongoing Air Force KC-X competition for new refueling tankers. As part of the criteria used in the 2008 evaluation the Air Force utilized a modeling tool to support their decision-making process. The Combined Mating and Ranging Planning System (Cmarps) was designed for the Strategic Air Command in the 1980s and is now used by planners in Air Mobility Command. It helps operators assess how many tankers are required for a variety of missions, where they can be based and how many receivers -- fighters and intelligence aircraft, for example -- can be serviced by the available refuelers. It is one of various modeling systems used by the Air Force. (Butler, 2008) These types of tools may be utilized to determine required number of aircraft to fulfill a mission or how many submarines the Navy may need but do not serve to identify particular technologies that could be most cost-effective to improve the performance of a particular weapon system. However, using some of the methodologies of systems engineering, this same approach can be applied at the micro level and used to analyze the effects of different technologies on a weapons system. Returning to the M-16 program, when the rifle was first introduced it suffered from serious reliability problems caused by a number of problems resulting in extraction failures that jammed the weapon (Chivers, 2010). A micro-level analysis could have been used to determine the costbenefit ratios of all the different possible solutions such as chrome-plated receivers, heavier buffers, better corrosion protection, and so on. A methodology can be devised to utilize the "systems analysis" approach at the technology level for both new weapons systems and legacy systems that are being upgraded. This capability will become increasingly important with the growing number of programs that use spiral development approaches that push out systems with the intention of upgrading them in the future. To develop such an analysis methodology, a system level model of the particular system can be created based on known or assumed performance metrics of individual subcomponents. This model should determine the system performance across the primary dimensions of performance. The inputs to the model should correspond to the different components or technologies included in the system. After creating a system model with all of the relevant parameters, other systems engineering practices can be brought to enhance the utility of the model. With the cheap availability of modern computing power, Monte Carlo techniques can be utilized to conduct a probabilistic analysis to determine the likely outcomes of each of the possible technologies considered for insertion. By combining cost estimates of developing and introducing each technology into a system, one can then determine the cost-benefit ratio for a given technology. Using the M-16 jamming problems as an example, a model could be created that determines the probability of a failure to extract as the output. The inputs could include the amount of gas from each round fired traveling back to the bolt carrier, the probability of a round having a misshapen cartridge, the probability of pitting in the barrel, and so on. After conducting a baseline simulation, the model could then be optimized to reflect the affects of reducing the fouling from the propellant gas, improving the cartridge manufacturing, or chroming the barrels to reduce plating. Accompanying these optimizations would be estimated costs for these design improvements. By determining the change in the likelihood of a jam, one could decide which, or which combination, of these optimization options is the most cost effective. While outside of the scope of this thesis, it bears mentioning that accurate cost estimates are critical to any attempt to quantify the cost-benefit ratio of any technology selection. Many volumes could be written on estimating development costs and significant research has been done on why estimates are often inaccurate. A prime example of this is the recent controversies regarding the estimated cost of the Joint Strike Fighter. The JSF program has resulted in numerous cost studies and estimates performed by Lockheed Martin (the prime contractor), the Program Executive Office (PEO) that manages the program, and the Department of Defense's Joint Estimating Team (JET). The JET was requested to create an independent cost estimate because Pentagon leadership was losing confidence in both Lockheed Martin's and the PEO's ability to accurately predict development costs (Warwick, 2009). While cost estimating is controversial and oftentimes wrong, for the purposes of this simulation, it will be assumed that all cost information is accurate and that the selected development costs are correct. The next chapter of this thesis presents such an example applied to the US Army's Active Protection System (APS). The APS is an outgrowth of one of the FCS initiatives. In purpose, APS is a suite of technologies that is able to detect, track, and then shoot-down incoming munitions that are aimed at a tactical vehicle. A graphical illustration of one company's system is shown in Figure 13. Figure 13: Artist's Conception of Iron Curtain APS (Crane, 2009) Several countries have developed various versions of APS with varying levels of capability. Some systems are focused exclusively on rocket-propelled grenades (RPG) while others are attempts at full spectrum coverage to cover all types of threats such as RPGs, anti-tank guided missiles, and kinetic energy rounds. The United States has begun efforts at developing its own version of APS managed by Program Executive Office (PEO) Integration: The FCS Active Protection System is being developed by Raytheon. Raytheon won the contract from the FCS program after participating in an open competition that involved other key competitors and competitor systems. A team of 21 technical experts from various U.S. government agencies, the Army and private-sector industry evaluated competing Active Protection Systems. According to the Government Accountability Office, the team reached "a clear consensus... [that] Raytheon's Quick-Kill system was the best alternative." Army officials said that one key advantage of the Raytheon APS is its vertical launch system, which protects against top-attack rounds. They said this gives Soldiers true 360-degree hemispherical protection." (Guardiano, 2008) However, to date, Raytheon appears to be struggling to meet the required timelines for fielding on schedule. Despite APS' initial association with the Army's failed Future Combat Systems, its development is still eagerly awaited by the Army to include in the new Ground Combat Vehicle. "[GEN] Chiarelli said the new vehicle (GCV) would be able to incorporate some kind of active protection - the ability to detect and shoot down incoming rocket-propelled grenades or anti-tank guided missiles." (Hodge, 2010) The following chapter describes the application of the proposed methodology to the Active Protection System. The methodology provides a framework to a decision maker for selecting technologies to be included in the program. The selection is based on system analysis applied at the micro-level to determine which technologies have the most benefit to the performance metrics chosen by the decision maker. 46 Chapter 4- Methodology Simulation Description A technology assessment cost model of the Active Protection System (APS) was created in MathWorks Matlab* R2009A. The model uses several cost models to determine the effects of each possible technology. As part of the model, the Matlab Statistical Toolbox determines a launch range of the threat munition and a flight velocity based on a normal distribution, searches for the incoming round with an increasing probability of detection as the munition approached the vehicle, and then determines whether or not to launch a counter-measure. After modeling the baseline case, a sensitivity analysis was conducted to determine the effects on total system effectiveness as a function of changing several of the input variables. In combination with these variables, a development cost was associated with changes to the variables. Instead of determining the system effectiveness of the selected variables, the system effectiveness was determined as a function of development cost. The following portions in this chapter detail construction of the model and how the technology cost analysis model can be applied to a real world situation. Technology Cost Analysis Modeling The Technology Cost Analysis Model is formed by the following steps: 1- Determine measures of performance for technology comparison 2- Select technologies to be considered 3- Develop cost models for technologies to be analyzed 4- Develop weapons system or sub-system model 5- Conduct Monte Carlo analysis of weapons system performance given technology cost models 6- Compare measures of performance across different technologies 1. Determine measures of performance This step will allow a decision maker to select the variables that are of importance for selecting a technology over another. In the APS case, the two measures of performance considered are system effectiveness, defined by percentage of threat munitions destroyed, and development cost. Other parameters that could be considered are weight, size, reliability, and others. Additionally, some programs will benefit from considering acquisition costs, life-cycle costs instead of just the development cost. 2. Select Technologies For a given program, the decision maker must determine which technologies should be included for analysis. In a real-world case, this step may require significant research to select the most relevant technologies for consideration. Technologies may be excluded for maturity, cost, or other reasons. For this thesis, three different variables are considered: 1-the time it takes for the APS system to track an incoming threat (tracking time), 2- the time it takes to launch a counter-measure munition after the firing solution is determined (launch delay), and 3 - the minimum range at which a counter-measure can function (CM min range). Initially, instead of using tracking time, the counter-measure velocity was used. However, as the baseline analysis case was developed, it was discovered that the velocity had virtually no impact on overall system performance and this variable removed from consideration for this analysis. Similarly, it was discovered that the CM min range had limited affects on the overall system performance so it was not considered for technology comparison. For the remaining two technologies, tracking time and launch delay, two notional technologies will be considered for each. 3. Develop Cost Models Cost models must be developed for each technology under consideration. These models should represent the best assessment of the required funding necessary to achieve a given level of performance for the variable that they affect. For the APS analysis, the two sets of technologies for tracking time and launch delay both impact how fast the system is able to react so the cost models determine the tracking time or launch delay as a function of development cost. The models for the tracking time are shown in Figure 14, the cost models for launch delay and CM Minimum Range are shown later. Development Cost for Tracking Time 120000000 -Cost 1 -Cost 2 S100000000 3 80000000 -- 60000 -*40000000 20000000 0 0 0.2 0.4 0.6 0.8 1 1.2 Tracking Time Duration (sec) Figure 14: Tracking Time Development Cost Models The two cost models are intended to represent two different technology cases. The first case, Cost 1, represents a technology that is limited in capability as its performance increases towards the upper bound. This case requires stretching the technology to its limits as the performance increases to its limit. This case would be similar to the increasing levels of performance from microprocessors. A marginal increase in performance can be made without substantive changes to the chip architecture but as the performance increases, the current architecture reaches a limit. The second case, Cost 2, represents a technology that has a higher initial development cost but once it is working it is able to be developed further without significantly stretching the technology. This again could be exemplified by the microprocessor example where a vendor may decide to change the manufacturing process to increase the microprocessor performance. In such as case the initial development cost is higher but once begun, the incremental cost to increasing performance is less. Similarly, the cost models for the launch time delay are shown in Figure 15 Development Cost for Launch Time Delay 120000000 100000000 80000000---60000000 40000000 Q20000000 0 0.2 0.4 0.6 0.8 1 1.2 Time Delay (s) Figure 15: Launch Time Delay Development Cost Models Finally, the cost model for the CM Minimum Range is shown in Figure 16. Because the baseline case showed that the changing the CM Minimum Range value had virtually no effect on overall system performance, only one cost model was used. Cost for CM Minimum Range Reduction 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 P 20,000,000 0~ 0 10 20 30 40 50 CM Range (m) Figure 16: CM Minimum Range Development Cost Model 4. Develop Weapons System or Sub-System Model The decision maker then needs to have a system or sub-system model created for the weapons system to be analyzed. The complexity of the models can vary significantly depending on the weapons system in question. For this analysis, a simplified system model of the Active Protection System was constructed. The most significant simplification was that the probability of intercept, assuming a countermeasure was launched, was represented by a constant instead of a function of to all of the complexities of a live engagement between an incoming threat munition and the counter-munition. In this particular model, this simplification is appropriate given that the technologies under consideration do not directly impact the intercept engagement, instead they impact the likelihood of counter-measure launch. The system level model of the APS system was developed to simulate its effectiveness against a variety of threat devices. In order to keep the simulation and resulting data releasable to the public, all input parameters are either based on documents in the public domain or are notional. The model assumes that there are four classes of threat munitions and utilizes one example of each class. These four classes are Anti-Tank Guided Missiles (ATGM), rocket propelled grenades (RPG), armor-piercing fin-stabilized, discarding sabot (APFSDS) or kinetic energy penetrator, and high-explosive anti-tank round (HEAT). The specific munitions selected for this analysis are: ATGM - AT-15 RPG - RPG-7 APFSDS - 3BM42 HEAT - 3BK14M The input specifications for each of these munition types are shown in Table 6. Note that the maximum range and average velocity are taken from the sources listed, all other values are notional. Using a random number generator, each threat munition was determined to form a given percentage of the likely threat. These percentages are listed in the second column of Table 6, such that out of 100 likely engagements, the AT-15 would be encountered 23 times, the RPG-7 40 times, and so on. Table 6: Threat Munition Specifications Threat Percent Min. Range Max. Range Avg. launch (m) (m) Range Std Dev Avg. Velocity Range (m) (m/s) (M) (30%) Vel. Std Dev (20%) (60%) AT-15(Pike, 2006) 23.05 250 6000 3600 900 400 20 RPG-7(South African Army, 2008) 40.33 50 500 300 75 300 15 3BM42 APFSDS (Jane's, 2010) 22.63 400 3800 2280 580 1700 85 3BK14M-HEAT (Jane's, 2010) 13.99 350 1500 900 225 905 45 The simulation then uses the Statistics Toolbox to determine the likelihood of a successful engagement of the APS system using Monte Carlo methods according to the following steps. I. Determines what type of threat is being launched at the host vehicle according to the percentages in Table 6. II. Determine the launch range and the threat munition velocity via normal distribution with input values from Table 6. III. Calculate the probability that the APS tracking radar detects the incoming round according to the likelihood shown in Figure 17. The radar is assumed to have a sampling rate of 5 Hz. Each .2 seconds, the system is given the opportunity to detect the incoming round based on the probability below. APS Probability of Detection 1 0.9 C 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.10 - 8 -- 0 500 - -- 1000 1500 2000 2500 3000 3500 - 4000 4500 Range to Inconing Munition (m) Figure 17: APS Model System Probability of Detection IV. Once the round is detected, the system determines a firing solution during the tracking time. After this time has elapsed, the system decides whether or not to launch a countermeasure based on the calculated intercept position which accounts for the threat munition velocity and the counter-measure munition velocity. If the calculated intercept position is less than the CM minimum range or greater than the CM maximum range, the system will elect not to fire a counter-measure munition V. Once the system elects to launch a counter-measure, there is a time delay from the time the launch command is issued to when the counter-measure is in flight towards the incoming threat round. VI. For the purposes of this simulation, it is assumed that the Counter-Measure will have a 70% probability of intercept of the incoming round. Therefore, for this simulation, the highest system effectiveness possible is 70%. A summary of the input variables in the model are listed below: Note that the variables that were optimized in the simulation are listed in bold. Probability of Defeat (assuming CM launch): Pdf =. CM minimum range: cmmin = 6 to 40 meter CM maximum range: cmmax = 850 meter CM average velocity: cmvel = 1000 to 2500 meter/second CM velocity standard deviation: cmvelstd 10 meter/second Tracking time duration: tracktime = 1 to .1 second Launch Time Delay: launchdelay = 1.05 to .15 second Radar Sample Rate: samplerate= 5 Hz Probability of Detection: Pet = r Initial trial runs were conducted to determine the number of iterations needed for the results to converge. Several truncated simulations were conducted with run numbers from 1000 to 2500 at 500 run increments for the first eight combinations of variables. Each truncated simulation was conducted three times and the standard deviation for the overall effectiveness was calculated. The standard deviation is plotted as a function of the number of runs shown in Figure 18. Simulation Convergence U.U2 0.02 "S 0.015 . 0.01 * 0.005 0 0 500 1000 1500 2000 2500 3000 Number of Runs Figure 18: Convergence of Monte Carlo Simulations Based on the convergence simulations, 2000 runs are sufficient for convergence and the following simulations utilize 2000 runs for each combination of variables. Given these previously described inputs, a baseline case was run to ensure that the simulation worked as intended. The baseline runs had the following parameters as inputs: Time Delay = 1 Sec CM Velocity = 1000 m/sec CM Minimum Range = 40m Tracking Time = 1sec The results of the baseline case are presented in Figure 19. APS Effectiveness Base4ine Samulaton Results No Launch cmvel=1000 de4ay=1 n 46 Intercepts zn=87 n=280 Misses cnmnin=40 n=53 n=2001 HEAT Total 0.8 0.6 0.4 0.2 0 ATIS RPG7 APFSDS Figure 19: APS Effectiveness - Baseline Case Shown in Figure 19 are the calculated percentages of the attacks for each threat class that would result in no launch of the counter-munition, successful intercept, and the number of misses of the counter-munition. Using this methodology, a successful engagement would only be scored for those listed as intercepts. If the APS system did not launch a counter-measure or if the counter-measure missed, the engagement could result in casualties to the vehicle crew. A summary for all of the threats is presented in the right of the figure. The numeric percentages shown in Figure 19 are listed in Table 7. Note that the routine calculates the required number of runs for each threat class based on the percentages assigned in Table 6 and then rounds up to the nearest integer. For the baseline case, this resulted in 2001 runs instead of 2000 as intended. Table 7: Baseline case results % No Runs Launch Intercepts % Misses AT-15 461 0.0% 66.6% 33.4% RPG-7 APFSDS 807 280 90.1% 85.7% 6.6% 10.4% 3.3% 3.9% HEAT 453 59.8% 28.7% 11.5% Total 2001 61.9% 25.9% 12.2% Development Cost As stated in the previous section, an initial case was run with the following investment curves for Launch Time Delay (Figure 20), CM Velocity (Figure 21), and CM Minimum Range (Figure 22). Cost for Reduced Launch Time Delay $120,000,000 _ $100,000,000 $80,000,000 $60,000,000 $40,000,000 $ $20,000,000 $0 0 0.2 0.4 0.6 0.8 1 1.2 Time Delay (s) Figure 20: Return on Investment for Launch Time Delay Cost for CM Velocity Increase $120,000,000 E" $100,000,000 - $80,000,000 $60,000,000 g $40,000,000 $ $20,000,000 - $0 0 / 1 1 1 500 1000 1500 2000 2500 3000 Average CM Velocity (m/s) Figure 21: Return on Investment for CM Velocity Cost for CM Minimum Range Reduction 120,000,000 100,000,000 * 80,000,000 60,000,000 40,000,000 20,000,000 2 0 0 10 20 30 40 50 CM Range (m) Figure 22: Return on Investment for CM Minimum Range A series of simulations were conducted with each of the possible combinations listed in Table 8. For each simulation, the estimated development cost was then calculated based on the cost curves presented previously, baseline values are shown in bold. The total number of variables summed up to 2880 combinations. Table 8: Baseline Simulated Variable Values Simulated Variables CM Min Range (m) 40 38 36 34 32 30 28 26 24 CM Velocity (m/s) 1000 1100 1200 1300 1400 1500 1600 1700 1800 22 20 18 16 14 12 10 1900 2000 2100 2200 2300 2400 2500 Delay (sec) 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 Based on the cost curves in Figures 14 through 16, the possible development cost could vary from zero (baseline case) to $249M. After completing the simulations, the total system performance was plotted as a function of cost to determine if the changes to these variables had an effect on overall APS system effectiveness. The system effectiveness as a function of cost is shown in Figure 23. APS System Effectiveness Simulaton I 0.75 0.7 0.65 0.6 0.55 0.5 0.45 0.4 0.35 0,3 0.26 0 0.5 1 1.5 2 Development Cost (Dollars) 2.5 x 106 Figure 23: APS System Effectiveness The system effectiveness was then plotted as a function of each variable and is shown in the following figures. Figure 24 shows that as the launch time delay decreases from one second to .1 seconds, the overall system effectiveness increases from between .25 and .33 to .68 to .73. APS Effectiveness Effect of Launch Delay 0. 75 0 0. 0 5I 0 0 0 I 4 0 0 T 5! 0.2 0 0-2 0.4 0.6 Launch Time Delay (s) 0.8 1 Figure 24: APS Effectiveness as a function of Launch Time Delay In contrast, Figure 25 and Figure 26 show the system effectiveness as a function of the CM average velocity and the CM minimum range. In both of these figures, the independent variable (CM average velocity or CM minimum range) shows no clear correlation to the overall system performance. In contrast to Figure 24, the overall system performance does not appear impacted by the independent variable; for each value of the independent variable, the system effectiveness can still vary from .27 to .73. 0.6 0.55 wi OS 0.45 0-4 1000 1200 1400 1600 1800 2000 2200 2400 2600 CM Average Velocity (m/s) Figure 25: APS Effectiveness as a function of CM Velocity APS Effectiveness Effect of CM Minumwi Range 0.75 1111111 iIIII! 07 0.6 06 0.55 w 0.6 0.46 0.34 0.3 5 10 15 20 25 30 3S 40 CM Miimum Range (m) Figure 26: APS Effectiveness as a function CM Minimum Range Based on these results, it is shown that neither the CM Minimum Range or CM Velocity variables had any meaningful impact on the system effectiveness. Therefore, the simulation was modified to replace the CM Velocity variable with the tracking time duration variable. Four simulations were run with two cost models each for the Time Delay and the Tracking Time variables, shown in Figure 20 and Figure 21. The cost model for CM Minimum Range was carried over from Figure 22 for all four simulation configurations. The values for the simulated variables are listed in Table 9. Table 9: Simulation Variable Values Launch Time Delay (S) Tracking Time (s) CM Minimum Range (m) 1.05 1 40 0.95 0.85 0.75 0.65 0.55 0.45 0.35 0.25 0.15 0.95 0.9 0.85 0.8 0.75 0.7 0.65 0.6 0.55 0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 For simplicity, the cost models for the Tracking Time and the Launch Time Delay are repeated in Figure 27 and Figure 28. For each cost curve, Cost 1 represents the use of an existing technology that is stretched towards its theoretical limit. Cost 2 represents a new technology that requires further upfront investment to operate in a real-world environment. Development Cost for Tracking Time 120000000 -Cost i 1 100000000 W 800Cost02 o 80000000 60000000 40000000 O 20000000 0 0.2 0.4 0.6 0.8 1 1.2 Tracking Time Duration (sec) Figure 27: Tracking Time Cost Models Development Cost for Launch Time Delay 120000000 100000000---Cs1 ~8O000OO-Cost -- Cost 22 80000000 60000000 40000000 20000000 0 0 0.2 0.4 0.6 0.8 1 1.2 Time Delay (s) d Figure 28: Launch time Delay Cost Models The cost models used for each simulation are shown in Table 10. Table 10: Simulation Cost Matrix Simulation Tracking Time Launch Time Delay 1 2 3 4 Existing Technology New Technology Existing Technology New Technology Existing Technology Existing Technology New Technology New Technology Chapter 5- Results The results for the four simulations described above are shown in Figure 29. Simula tion Results Samiation I 08 0.7 07 0.6 0-6 0.5 05 0.4 0.4 0-3 E 0 S0 3 0.2 02 011 0 0.5 1 1-5 Development Cost ($) 2 0,1 2. x 106 Sanutation 2 - 4 0 0.5 1 1.5 Development Cost (S) Simlation 3 ^o.- 2 2! x 10" Sinulation 4 0' 07 0.6 0.5 0.4 E 0.3 02 0 1.5 Development Cost () 0.5 1 2 2.5 01 0 i 05 1 1.5 Development Cost (S) 2 25 x le Figure 29: APS Effectiveness as a Function of Investment Cost As each of the four plots shown in Figure 29 varies in shape, the system effectiveness varies based on the cost models utilized for the tracking time and the launch delay time. In comparison, if the cost models did not impact the system effectiveness, the four plots would appear the same. Plotting the system effectiveness as a result of the tracking time is presented in Figure 30. System Effectiveness - Tracking Time Simulation I 0.8 7 0.7 0 06 0.6 0.5 0's 04 0.4 0.3 0.3 0.2 0.2 0 0.5 1 Tracking Time (sec) 15 Simulation 3 01 Simulation 2 01 0 0.8 07 0-7 jO4 0.6 0.6 0's 0-4 04 0-3 0.3 0.2 02 0.1 0 0.5 1 Tracking Twme (sec) 15 0-1 0 0.5 1 Tracking Time (sec) 15 Simulation 4 0.5 Tracking Time (sec) IS Figure 30: System Effectiveness as a Function of Tracking Time Figure 30 shows that as the tracking time is reduced, the possible system effectiveness is altered. While decreasing the tracking time does not necessarily constitute a significant increase in overall system effectiveness, the tracking time must be reduced from the starting value of one second to increase the system effectiveness. Conversely, if the tracking time is not reduced from one second, the system effectiveness will never rise above approximately .32. Similarly, Figure 31 shows the overall system effectiveness for the four simulations as a function of Launch Time Delay. As is the case with Tracking Time, the Launch Time Delay must be reduced from the system effectiveness to rise above approximately 30%. System Effectiveness - Launch Time Delay Smuahion 1 Samutaion 2 0.8 08 0.7 07 Ii 0.6 0.5 SA 0,6 0.4 ~ 0OA 015 1 S301 0.3 02 0.10 0 Lun Launc h Time Delay (sec) 1 1. 0 0 Simulafion 4 Simutation 3 0.7 0-7 0.6 06 06 A 06 0.4 0.4 EE 0.3 0.5 Launch Time Delay (sec) 02 02 01 1 0.5 Launch Time Delay (sec) 0 1.5 0 0.5 1 Launch Time Delay (sac) 15 Figure 31: System Effectiveness as a Function of Launch Time Delay To understand the cost effectiveness of each of the four cost development models, the results shown in Figure 29 were then binned into 5% effectiveness increments and the most cost effective combinations of the three variables was selected representing the preferred investment option for achieving a given system effectiveness. These selected combinations of variables are plotted on the system effectiveness results as red "+"signs shown in Figure 32. In essence, the red "+" indicate the cheapest combination of variables that results in a given level of system effectiveness. Simulaton 1I 0.8 Simulation 2 0.8 e0.8 08 00 0O.3 0. 0.2 0-2 0.1 0.60.5 0 S0.4 1 1.5 0.5 02 Development Cost ($) lbu 013 00-0.5 2.5 x 10a 1 15 0.5 Development Cost ($) 2 2.5 x 10 0.4 3 Siao ereon 0.8 0 simulation 4 0,8 0.70. j-. 0.5 O 0.4 U) (fl 0-2 0.2 01' -0.5 0 1 1.5 0.5 Deve~opment Cost 4$) 2 0.1 -056 2.5 x1,Development 0 0.5 1 156 Cost 4S) 2.5 2 x1 Figure 32: Cost-effective Variable Combinations Each of the preferred investment options for the four simulations was plotted as a function of system effectiveness. These points represent an ideal investment plan for each of the four simulations. The following three figures describe the optimal combinations of variables for each of the four simulations. Figure 33 shows the development path for launch time delay, Figure 34 the tracking time, and Figure 35 the CM minimum range. Optimal Development Path - Launch Time Delay Samulation 1 aek---- Simulation 2 Simulation 3 Simulation 4 0 06r 0.4 ~ % 4> 0,2 0L 0 0-1 0,2 0.6 0.4 0,3 System Effectiveness(%) 0,7 0.6 Figure 33: Launch Time Delay Development Path Optmal Development Path - Tracking Time - Simulation Simulation Simulation Simulation I 2 3 4 0.8 O6 0L 0.2- 0 0.1 02 0.5 0.3 0-4 System Effectiveness(%) 0.6 0-7 Figure 34: Tracking Time Development Path 0.8 Optimal Development Path - CM MAnimum Range 40, 230L 0 Simulation 1 26. 0. ,W Simulation 2 Simulation 3 Simulshon 4 2 0.6 0.3 CI System" Effectivenea(%) 06 0,7 018 Figure 35: CM Minimum Range Development Path Taken together, these three plots show a decision maker the level of performance required from each of the three variables to achieve the required level of performance for the least investment. Utilizing these three plots, the decision maker could decide what level of system effectiveness is required and then select the required performance for each of the three variables utilized in the analysis. Finally, Figure 36 shows the development cost as a function of system effectiveness for the four different simulations. Cost Optimal Development Path - Development x 107 12 10/ 6- 2 Simoulation 1 0 0.1 0,2 -20 03 0.4 05s System Effectiveneaa(%) 0.6 Simutation 2 Simulation 3 Simulation 4 017 8 0,8 Figure 36: Cost-Effective Development Path Combined, these curves show the development cost needed for achieving different levels of system effectiveness, providing an easy method for comparison of the different technologies reflected by the cost curve for the simulations. This analysis shows that applying the proposed methodology to a specific example results in meaningful results that can form the basis for a decision maker to select technologies for a program. The following chapter further describes the implications of this methodology and how a decision maker can utilize it to improve technology selection. Chapter 6 - Discussion The APS system model illustrates that using a technology cost analysis model can help guide investment decisions that result in the most cost-effective development program. Of most significance, the simulation showed that changes in the estimated development costs alters the most cost-effective development strategy. If one assumes that the cost model and system model are accurate, then a sensitivity analysis can be used to determine which technology investments should be made to increase overall system effectiveness. For most acquisition programs, there are two criteria for making a selection: cost and requirement. For a given system, a decision maker may intend to develop a particular capability where cost is the dependent variable, capability is the dependent variable, or where there may have to find a compromise between the two. The most notable feature of the four simulations conducted is that the majority of combinations of the different investment options wasted money. For the results shown in Figure 29, only those results to the left of each plot represent an efficient use of investment dollars. For all other combinations of investments, money is spent on improving technologies that do not improve the overall system performance. This result suggests that the technology cost analysis model can indicate which options are efficient uses of investment dollars and which are not. Returning to the APS simulation, these different approaches are shown in Figure 37 where the two vertical lines marked as X1 and X2 represent two different capability requirement thresholds, X1 at 30% effectiveness and X2 at 67% effectiveness. Similarly, the two horizontal lines represent two different development cost limits, Y1 at $30M and Y2 at $80M. Optmal Development PaM - Developmen Cost XW1 X1 X2 10 9 Y2 0 SImulation 2 SImulation 3 Simulation 4 0o 01 Simulation 1 0.2 0-3 0.4 0.5 System Effectivenesst'o) 06 07 0.8 Figure 37: Optimal Development Path with Cost/Requirement Limits Using the results from the previously described simulation, a decision maker focusing entirely on providing a given capability could utilize lines X1 and X2. To provide the capability at 30% effectiveness, the cheapest technology selection would be that represented by Simulation 1 at approximately $35M. In comparison, to provide an effectiveness of 67%, the cheapest technologies are those represented by Simulation 2 at approximately $80M. The lines Y1 and Y2 can represent a cost-constrained approach. If the decision maker can spend $30M to develop the capability, then Simulation 1 represents the highest capability for that level of funding at approximately 35%. Similarly, Y2 represents a development budget of $80M which would lead the decision maker to select Simulation 2 providing a system effectiveness of approximately 67%. However, as previously described there are occasions where the decisionmaking criteria are not quite so clear-cut. In such a case, the decision maker would need to apply their own preference for creating a trade-off between cost and effectiveness. If desired, it would be possible to create rule-based criteria to help the decision maker evaluate and select among alternatives. Lastly, if the program in question is utilizing a spiral type development, it may be more complicated. In spiral development programs, the system is fielded prior to meeting all requirements and as the system is improved, these improved versions are introduced into the field. In such a case, it may be cost-effective to keep the final requirements of a program in mind while making a decision. For example, in the results of the simulation presented above, if Spiral 1 was required to have an overall effectiveness of 50%, then the logical choice would be the technologies represented by Simulation 1. However, if a later spiral is supposed to reach an effectiveness of closer to 70%, then it may be better to pick the technologies represented by Simulation 2. Such a selection would allow selection of technologies that will meet both current and future requirements but may require more funding early on in the program's life. While each case is different, in most cases it would be prohibitively expensive to switch technologies in the midst of system development. Given these different approaches, a sub-system model with probabilistic analysis can help the decision maker make a rational decision about which set of technologies can be the most cost-effective based on the attributes established when the model was created. While there are still difficult decisions to make, the modeling serves to provide the decision maker with data that is able to predict possible outcomes of the decision. An additional application of the simulation is that it can also help plan for system improvements. For example, if a particular program is budget constrained and is unable to achieve the desired level of performance, it may be preferential to pick a lower-capability design in order to plan for future upgrades when funding is available. Such a decision could be based on picking particular technologies even if they do not lead to the most capable system up front. For example, the US Army is currently in the demonstration phase of the Joint Air to Ground Missile (JAGM). It is expected that the complete program will end up totaling more than $5 billion dollars in R&D and acquisition. Two teams are currently testing their prototype designs for a down-select decision in the near future. The JAGM missile utilizes three separate seeker modes, infrared (IR), millimeter wave (MMW), and semi-active laser (SAL) for all-weather targeting. Lockheed Martin's design utilizes a cooled IR seeker, which "provides 50% greater visibility and range." In contrast, the Raytheon-Boeing team claims that their uncooled IR seeker is superior because of "lower costs, less weight, fewer parts, and less chance of leaks." (Clark, 2010) In such a case, the cheaper technology (uncooled IR) may possibly provide the level of performance initially required but in the long run could prove to be a limiting factor if the Program Manager chooses to upgrade the system later on. Such a situation could be represented as shown in Figure 38. Note that while using the JAGM seeker as an example, the figure shown is purely notional. In the figure, the probability of detection of the two technologies is represented as a function of the development cost with the initial required capability shown. Technology Comparison UncooedIR ooled IR -- . Required Capabdlity - FutureReirement DeV-WWofP"M"nt Cost(S Figure 38: Notional Technology Development Cost As shown, if meeting the "Required Capability" shown in the figure is the only consideration, then the Uncooled IRtechnology is the cheaper method to meet the requirements. However, the program manager could foresee a future requirement for higher probability of detection for the IR seeker which could be illustrated as the "Future Requirement" shown in Figure 38. In such a case, it may be in the best interest of the program to pay the initial cost up front for the cooled IR technology to allow for future upgrades without having to change seeker technologies to meet the future requirement. To better understand the situation, the decision maker could commission a system model with probabilistic analysis to better understand the trade-offs in picking each option. In addition to just looking at the seeker head, the model could include other contributing sub-systems. For example, perhaps a higher-fidelity sensor on the aircraft platform could makeup for limitations in the missile seeker and the model could take into account the cost-benefit comparison of the cheaper missile-seeker combined with a more expensive aircraft sensor. This model could then offer solid data to the decision maker who could make an informed decision based on the cost and performance of the total system as opposed to just focusing on the missile itself. While the previously described system modeling and probabilistic analysis does offer significant benefits to decision makers, it does have its limitations. The adage "garbage in, garbage out" applies to this approach. If the cost estimates or the system model itself are flawed, the outputs from the analysis will similarly be flawed. For this reason, this tool will become more useful as a program advances through the development process. This is because as the system is developed, development test results of the sub-systems or system can be used to validate the model. Similarly, as the program progresses, the initial cost estimates of various technologies will have further fidelity as some of the challenges for each technology can be better understood as they are attempted to be overcome. Improving the fidelity in cost estimating is worthy of significant effort as this is a reoccurring problem in many programs. However, any discussion of this is beyond the scope of this thesis. However, it should be noted that improving the fidelity of cost estimating will have a significant impact on the accuracy and utility of the system modeling with probabilistic analysis. The technology cost analysis model described previously can have a beneficial effect in many R&D projects to better understand the results of selecting various technologies for inclusion in the program. The simulations show that the approach can be used to glean a number of different conclusions such as whether a particular technology or technologies improve overall system performance. Similar application to other R&D projects will likely result in improved decision making in selecting technologies for a given system. Chapter 7- Conclusion This thesis has described in detail the current method of technology selection in many DOD projects and has also described in detail the ill-effects of poor technology selection in three legacy programs. The shortfall in technology selection has cost the United States' taxpayers billions of dollars over the last several decades and has delayed numerous programs by years. As shown in the included simulation, technology cost analysis modeling can be used to determine the cost-benefit ratio of a given technology. This same analysis can also be used to determine which variables will have a greater affect on the overall system capabilities. By implementing such an analysis, a decision maker can be given a more rational basis for selecting technologies than previously employed. However, to better utilize such a method, further efforts should be made to improve the fidelity of cost estimating in order to make the outputs from the analysis as accurate as possible. While this methodology does require additional effort and cost on the part of program managers, it will have a significant benefit on the overall success of the programs. However, application of this methodology does require the addition of a new skill set for those supporting the project manager. For this approach to work, it is likely that such a capability needs to reside within the government project managers requiring that engineers, cost analysts, or others in the program manager office need to develop the capability to conduct technology cost analysis modeling. Based on the results of this simulation, it is recommended that decision makers utilize this approach to selecting technologies. Once utilized in an R&D program to select a technology, it is recommended that the model and inputs be continually updated to reflect changes to the system model and cost-benefit inputs to ensure that they reflect the most accurate information. It is further recommended that this approach be utilized in a number of systems to compare the effectiveness of this tool relative to the whole of DOD acquisition to enable validation of its utility. As mentioned in Chapter 1, challenges faced by DOD program managers in selecting technologies for defense programs are similar to those faced by program managers in the commercial world. While this approach was developed primarily for DOD development programs it would likely work in non-DOD applications as well. It is also recommended that commercial program managers consider the application of this methodology to their programs to determine if this approach could benefit the commercial sector as well. Bibliography Ackerman, S. (2010, Nov 1). 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