Choosing Defense Project Portfolios: A New Tool for Making Optimal Choices in a World of Constraint and Uncertainty
Abstract
The U.S. Budget Control Act of 2011 presents the U.S. Army and the rest of the Department of Defense (DoD) with unprecedented fiscal challenges. Austerity will be the watchword, while the need for mission-capable weapon systems will continue. Army and other DoD decision makers thus face increased urgency in their attempts to reap savings through improved efficiency and cost-effectiveness. Among those attempts, they will have to follow a 2006 directive from the Deputy Secretary of Defense that all DoD agencies use capability portfolio management to optimize investments and minimize risk in meeting needs across the defense enterprise. With these needs and guidance in mind, the RAND Arroyo Center in 2006 began developing a methodology for selecting and managing portfolios of projects in the acquisition process. The application of PortMan, RAND's new portfolio analysis and management methodology, enables finding the optimal portfolio of projects out of billions or trillions of possibilities. The optimal portfolio here is the one that maximizes the probability of filling a desired set of requirements while restraining costs. Using PortMan, decision makers can also identify the optimal total remaining life cycle budget to complete the science and technology (S&T) activities for the optimal portfolio and to develop and field their future systems. Further, PortMan provides the optimal budget split between S&T and system implementation.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2012
- Accession Number
- ADA565670
Entities
People
- James Chiesa
Organizations
- RAND Corporation