MSIAC's M&S Journal Online: Volume 4, December 2006. Capabilities-Based Costing: Approaches to Pre-Milestone-A Cost Estimating
Abstract
The issue of early, rigorous evaluation of program costs is becoming more important as defense funding comes under greater scrutiny. Often at this point in the life cycle, a requirement or desired capability is known, but the manifestation of the solution is unknown or described only at a high level. Can capabilities alone be used to produce a cost estimate? If so, how can we link the proposed solution to existing systems if only a particular solution?s general capability set is known? This work submits that better strategic decisions within fiscal constraints could be made if rough order of magnitude (ROM) estimates were available for proposed materiel or non-materiel solutions, based on that solution?s capability set. This project further proposes the use of a knowledge base to provide support for these estimates; it is known as the joint Capabilities Knowledge Base (CKB). By using the relevant entities extracted from CKB, a ROM cost estimate may be developed using a wide spectrum of techniques. According to Department of Defense (DoD) guidance dated June 19, 2006, the [2006] Quadrenniel Defense Review (QDR) report called upon senior departmental leaders to ?better integrate the processes that define needed capabilities, identify solutions and allocate resources to acquire them in order to enable corporate decision-making that cuts across traditional stovepipes?. In response to this directive, DoD leaders are evaluating a new early lifecycle decision-making framework that includes a Concept Decision (CD) Review (supported by an Evaluation of Alternatives or EoA). The CD Process has been set forth as a way to combine requirements, capabilities portfolio evaluation, and resource allocation considerations in the pursuit of joint, efficient, and well-informed decision-making early in the acquisition life cycle. The Concept Decision will either replace or occur in conjunction with Milestone A to decide which of the prospective solutions provided by the EoA will best en
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 2006
- Accession Number
- ADA506952
Entities
People
- Martha Roper