Cost Estimating Modeling (CEM)

Abstract

Cost Estimating Modeling (CEM) provides and enhances Air Force-wide cost estimating capabilities by developing and modernizing current cost data and estimating models, methods, and tools. These products will improve the quality, timeliness, and effectiveness of the acquisition program cost estimates required by statute (e.g., 10 USC 2366, 2433, 2434) and regulation (e.g., DoDI 5000.02) in support of Air Force and Department of Defense acquisition decisions, programming and execution decisions, and Congressional mandates. The Air Force has several requirements for research and development of new and modernized cost estimating capabilities for each weapon system type (aircraft, ballistic missiles, electronics and aircraft modifications, ground stations and automated information systems, cross cutting databases, satellites and launch vehicles, tactical missiles and munitions). In addition, unanticipated requirements often emerge due to changing acquisition laws, regulations, initiatives; changing technologies; and evolving warfighter requirements which drive the need for cost tool updates or expanded capability. For example, current shortfalls in capability reflect efforts needed to fill gaps in response to the laws and regulations such as the FY06 NDAA report {PL 109-163--Provisions relating to Major Defense Acquisition Programs (MDAPs)}, Weapon System Acquisition Reform Act (WSARA) {provisions related to improving cost estimating quality, especially earlier in the program life-cycle and affordability analysis}, Secretary of the Air Force (SECAF) Acquisition Excellence Plan {priorities to improve cost estimating capability and affordability analysis and improved cost estimating support to requirements process}, and new Office of the Secretary of Defense (OSD) policy {better buying power initiatives on enhanced trade-off analysis, affordability analysis, and will versus should cost analysis}. This project will perform knowledge-based studies (KBS) and develop cost estimating databases, methods, models, and tools across hundreds of product work breakdown structure (WBS) elements and functional cost elements within each weapon system type. Breaking the effort down further, the activities for each WBS or cost element will include data collection, data cleansing and normalization, data archiving and database development, and data analysis to include creation of methods, cost estimating relationships, and models and tools. The different weapon system types are: Aircraft, Ballistic Missiles, Electronics and Aircraft Modifications, Ground Stations and Automated Information Systems (AIS), Cross-Cutting Databases, Satellite and Launch Vehicles (Space Systems), and Tactical Missiles and Munitions. Some areas of cost modeling efforts that are cross-cutting within all weapon system types are: cost risk metrics, methods development, tool enhancements; software cost database, metrics, tool development; contract or engineering change order analysis tools; other government cost elements (e.g., program office manning, administration, government test); and commodity area price escalation analysis and tools. The resulting cost estimating processes and centrally available standardized tool sets from this effort will enable more effective cost and risk analyses in support of program decisions. These improved cost capabilities are sorely needed to address continuing congressional concerns with Air Force acquisition and cost estimating credibility; concerns that are driven by an average of approximately 50% total program cost growth on major Air Force programs and the multitude of programs exhibiting cost growth.

Document Details

• Document Type: Project
• Publication Date: Oct 01, 2014
• Source ID: 675177_0901538F_7_3600_PB_2014

Tags

Fields of Study

• Engineering

Readers

• Civilian Systems Systems Program Capability Development and Upgrade Support Activity Expense and Pay Management.
• Life Cycle Cost Analysis

Technology Areas

• Microelectronics
• Space