Cost and Affordability approach at
Development Planning stage
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Significant Technical Issues Pre-MS A
ISSUE
POTENTIAL IMPACTS
• Lack of consistent technical engagement with
the operational user to ensure:
• Awareness of potential solutions
• Understanding of user performance needs
• Opportunities for incremental capability
delivery
• Narrow AoA scope, missed solution
opportunities
• Acquisition cost/schedule growth
due to lack of understanding of the
CONOPS
• Program-focused analysis, when solutions will
impact broad sets of systems and SoS
• Delivery of capability that will not
integrate, or that has reduced benefit
because of external system issues
• Lack of consistent technical engagement prior to
and following the AoA
• Immature alternatives enter the AoA
• Lack of engineering on preferred
solutions to prepare for MS A and TD
Phase
MDD
Strategic
Guidance
Joint Concepts
CBA
ICD
Analysis of
Alternatives
Engineering
Analysis
Materiel Solution
Analysis
ASR
A
Technology
Development
NDIA SE Division Meeting February 17, 2010
Mr. Michael Duffey Deputy Director, Development Planning Office of the Director for Systems Analysis
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Affordability analysis:
Analysis can focus on the subsystem, system, and mission levels
and is performed for the entire program life cycle. Typical
products of an affordability analysis include cost-effectiveness
analyses, risk analyses, and total ownership cost estimates. An
affordability analysis synthesizes information from three basic
areas: mission analysis, technical analysis, and cost analysis.”
Affordability Analysis for DARPA Programs, William M. Kroshl and Peter P. Pandolfini Johns Hopkins
APL Technical Digest
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Affordability Process:
Mission–
Operational
Context
Missions,
Scenarios, &
Capabilities
Needed
Value Framework (KPP- MOE-TPM)
Completed
Iterative Cycle
Cost Analysis
Risk Analysis
Architecture
(PBS – Tech Baseline
Performance
Analysis
Schedule Analysis
Trade-Off
Analysis
Best
Value
Yes
No
Modify Baseline
Analyze Issues
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System Cost Drivers:
• Project Management
– Assembly
• System Components : H/W, S/W, IT and others
Development
Production
O&S
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Project Management: Systems Engineering on a
project
• Project Initiation and Planning
• Project Management and Control
Systems Engineering
e.g. is consumed by
these activities
• Quality Assurance Management
• Configuration Management
• Vendor Management
• Documentation
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Project Management Cost Drivers:
• Operating Specification
• # of Requirements
• Multiple Site Development
• Requirement Stability
• Vendor Interface Complexity
• # of Interfaces
• Project Complexity factor
• # of Vendors
• # of Operational Scenarios
Quantities / Schedule
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Cost
Cost
Project Management Cost Drivers Sensitivity:
Operating Specification
. Reliability
. Portability
. Security
. Documentation
. Testing
Multiple Site Development
. Single Location
. Multiple Locations
. International Locations
. Quality of Communication
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Assembly cost Drivers
•
Software External Integration
•
Hardware External Integration Complexity
•
Hardware Platform Stability
•
Engineering Complexity
•
Hardware Platform Availability
•
Development Engineering for Structure
•
Number of Unique Hardware
Platforms
•
Development Engineering for Electronics
•
System Complexity
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What information is available?
•
System Capability Required
Technology Opportunities & Resources
– Speed , Range, Weight?
User Needs
A
Strategic
Guidance
Joint
Concepts
Capabilities - Based
Assessment
OSD/JCS COCOM
ICD MDD
Materiel
Solution
Analysis
•
Historical analogues system costs?
•
Organizational/Contractor
performance data?
FCB
JCIDS
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Capability based estimation
1. Historical Data
2. Input for analysis
3. Best fit analysis
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SoS consideration
Cost of SoS Program Management
and Requirements
Cost for interlinking and interfacing
multiple constituent systems
Fraction or whole of constituent
system cost
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Cont.. SoS consideration
Cost for development,
production and
maintenance of
Integration equipment
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Risk Methodology:
“Immature” Technology
“Known” Technology
“Established” Technology
Pre-Concept
Concept
Pessimistic
Design
Implementation
Most Likely
Optimistic
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Cost Uncertainty
Variance Analysis on Regression
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Performance Analysis:
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Schedule Analysis:
• Estimated schedule : derived from effort estimates
• Schedule compression and expansion effects
• Schedule Uncertainty
• Acceptable levels of uncertainty (cost, schedule and cost &
schedule) at different phases
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What MDA needs for decision making?
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What is expected from Systems Engineering on
Cost and Affordability at Development
Planning?
• Trade studies?
• Material trades
• Design trades
• Country of manufacturing
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Value Proposition:
• Cost is only one side of coin, other side is benefits
• Benefits consideration to include KPPs
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