2.2 Flashcards
Overarching policies all DOD Acquisition
- Flexibility 2. Responsiveness 3. Innovation 4. Discipline 5. Streamlined effective management
More specfic acquisition directorate est milestones
DOD Directive 5000.02
Overarching defene acquisition policy directive
DOD Directive 5000.01
Acquisition Categories are established to determine
level of management review 2. decision authority 3. reporting requirements
MDAP
Major Defense Acquisition Program (ACAT 1)
ACAT I
Highest level; Based of FY14 CONSTANT dollars; RDTE $480M+, procurement $2.79B+
ACAT ID
“Defense” MDA is Defense Aquistion Executive (DAE)
ACAT IC
“Component” MDA is Component Aquisiton Executive; OSD allows authority to be lower at component
MDA
Milestone Decision Authority in aquistion process
ACAT IA
Major Automated Information System Program
ACAT IAM
M indicated “Defense” MDA is DAE or CIO, Major Automated Information System Program
ACAT IAC
Major Automated Information System Program MDA is Component Aquistion Executive (CAE)
Acquisition Program Baseline (APB)
Documents the cost, schedule, and performance OBJECTIVES and THRESHOLDS at program initiation
DOD 5000.02 requires every program establish a
Acquisition Program Baseline; guidance on the AOA (Assessement of Alternatives)
Performance parameters set in APB
- Objectives - the specific parameters that the user desires 2. Thresholds - The minimum parameters the user is willing to accept
Joint Chiefs of Staff draft for aquistion
Initial Capabilities Document, apporved in JROC meeting
The primary purpose of the AOA
Assess the potential material solutions to satisfy the capability need documented in the approved Initital Capabilites Document (ICP)
AOAs for ACAT I and ACATIA
DOD 5000.02 requires AOA at major milestone decision points, at the full rate production decision point, and at such other times in the acquisition cycle that MDA requires
Where do you find requirements for AOA
DOD 5000.02
What is an AOA
Analysis of Alternatives: Analytical comparison of 1. operational effectiveness 2. suitability 3. life cycle cost alternatives that satisfy the capability needs in the APPOROVED ICD
Total Systems Approach
Cradle to Grave
Life cycle cost
total cost to governemnt from R&D to disposal
Constant year $ vs then year $base year $ vs current year
Constant Year dollars, also base year dollars are NOT adjusted for inflation. Then year and current year ARE (Constant/Base)(Current/Then)
Three ways of grouping life cycle costs
- Work Breakdown Structure 2. Appropriation Category 3. Life Cycle Cost Categories (R&D, Investment, O&S, Disposal)
Acquisition Programs tailored IAW
MIL-STD-881C
_____ requires use of ______ for ACAT I programs
DCAPE, Cost Analsyis Requirements Description (CARD)
Who prepares and approves the CARD
prepared by Program Manager (PM) and approved by Program Executive Officer (PEO)
CARD draft must be delivered to ______ and _____ ; _____ days before each Milestone decision in draft and ____ days in final
DCAPE and DOD Cost estimator component; 180 and 45
Development Cost
RDT&E
Flyaway Cost
Procurement of prime equipment; just purly the machine, nothing else with it
Weapons system cost
Flyaway cost and support items (like an APU or something else needed to “flyaway”)
Initial Spares
Just the first spares that come with the machine
Procurement Cost
Flyaway, support and initial spares
Facilities associated with acquisition (cost category)
MILCON
Program Acquisition Cost
Procurement Cost + MILCON + Development Cost
PAUC
Program Acquisition Unit Cost (MILCON + RDTE + Procurment)/Units INCLUDING RDTE
APUC
Average Procurement Unit Cost (Procurement only/Units) don’t include RDTE units.
Independent cost estimate required for
ACAT I except for ACAT IC because component level
Three types of cost estimates
Program, Component (done at Component), Independent (done at DCAPE). ACAT II, ACAT III and ACAT IC only need first 2
WBS
Work Breakdown Structure provides common thread for Earned Value Management System; breaks down products and services that constitute a program rather than the organizations that do the work
Cost as an Independent Variable (CAIV)
Best time to reduce cost is early in the process; also deals with “tradeoffs” - such as reduce performance to counter cost increase elsewhere. Aggressive cost objetives, appropriate metrics
Analogy Approach
Compare with ONE existing similar system with accurate cost data
Analogy Approach strength/weak
Stren: Quick,inexpensive,easy to change Weak: Subjective, Imprecise
Parametric Approach
“Statistical method” “top down” uses cost esimating relationships (CERs), uses database of MANY similar systems, and pulls parts. Performance characteristics linked to cost
Parametric Approach Strength/weak
STRENGTH: Uses CERs, easy to do “what if” drills, inexpensive WEAK: Moderate subjective, only as good as data validated
Engineering Approach
“Bottom up” method, each WBS elemented is costed
Engineering Approach Strength/weak
Stren: Very accurate in EMD phase, limited subjectivity Weak: Expensive and time consuming, no what-if
Actual Cost estimate Approach
After you have built one, go back and determine what it cost
Actual Approach Strength/weak
Strength: Very Accurate Weak: Budget may be already submitted
Expert Cost estimate Approach
Use if time doesn’t permit more thorough analysis, subjective judgement of experienced ind or group
Learning Curve Theory
As quantity DOUBLES, man-hours expended decreases by CONSTANT rate. LCR = Cost 2N / CostN
Fixed Price Contract
Contractor takes on risk
Cost-reimbursement cotracts
government takes on the risk
Earned Value Management
- Relates technical performace to its associated cost and schedule 2. measures the work progress in objective terms 3. states the value of the work in completed dollars
EVM sets a cohesive contract baseline called ____ or also known as
Performace Measurement Baseline (PMB) or Budgeted Cost of Work Scheduled (BCWS)
EVM need to use thresholds
Less than $20M - Optinal; $20M-$100M - Contractor self certifies EVM compliance; $100M+ Defense Contract Management Agency (DCMA) certifies
EVMS is deiscouraged for
Firm Fixed price contracts and subcontracts of any value
Cost variance
BCWP - ACWP
Schedule Variance
BCWP - BCWS
Cost and Schedule variances are ranked as
favorable or unfavorable
Can Schedule variance say if your ahead or behind schedule
NO
When calculating CV or SV always start with…
BCWP
Steps to make PERT chart
- Identify activites 2. determine proper sequence 3. estimate time for each 4. construct network diagram
What is the critical path
longest path on PERT chart from start node to end node
What does PERT do better than GANTT
display the critical path and interdependency of tasks
Advantage of GANTT chart over PERT
Displaying the schedule and resources used in a project
Ecomonic Analysis
Systematic approach to problem, choosing best method of allocating scare resources to achieve objective (best value for best cost)
Economic analysis recommended at what threshold
$2M
Ecominc analysis policy and provides
OMB circular A-94 discount rates, inflation rates(publised every january), economic analysis steps
Removes effects of inflation
net present value
What kind of dollards is economic analysis done in
constant year or base year. Inflation removed
Steps to Economic analysis
- Establish Objective 2. For Assuptions 3. ID Constraints 4. Determine alternatives 5. Cost/benefits of alternatives 6. Compare 7. sensitivity anaylsis 8. Report Results
Quantifyable benefits
- Cost Savings 2. Cost Avoidance (FUTURE cost) 3. Productivity Improvement
1 STD, 2 STD, 3 STD
68.27, 95.45, 99.73
In correlation coefficient what is considered strong/weak
Strong: .8 Weak:.5
Correlation coefficient
R
Coefficeint of determination
R squared, larger number, closer to one means more predictible
Coefficient of variation
smaller number means more predictible, how far datapoints are from best fit line
Coefficient of variation formula
(STD/average)*100
PVF
1/(1+d) raised to t
PV trick
100 minus (DR+DR+DR) * dollar amount. Number of DR’s is # of years
