Scoping Framework: Scoping Projects for Easier Cost Estimating
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1 Scoping Framework: Scoping Projects for Easier Cost Estimating Darrin DeReus, Ph.D. Air Force Cost Support Project Manager Senior Cost Analyst 25 July 2014
2 Purpose Show a current project Discuss the current requirements Discuss the current scope Discuss the impacts of scope on cost estimating Scope Cost Estimate Budget Execution
3 Agenda Current Requirements Scope Guidance Where are we now?
4 Current Requirements Purpose: Enable warfighters to exploit full spectrum of missions capabilities within LVC environments Minimize mission risk Improve AF readiness at lower costs How: Perform analytical comparisons of suitability, risk and life cycle costs of material solutions Focus is to close or mitigate an attainable portion of the capability gaps Specific Gaps: Representation, Security, and Interoperability Air Force Responsibility: Lead AoA, drafting study plan, conducting analysis, and deliver final report
5 Current Defined Scope Alternatives focused on operational training and architecture integration for Space and Missile Defense Focused on Modeling and Simulation Environment All other environments: Capabilities of the interconnecting transport system will be analyzed Using detailed, operational scenarios for analysis
6 Scope (cont) Identify: Where joint and interagency efforts can be leveraged Considering availability, cost to integrate, military utility, etc Non-material approaches Doctrine, organization, training, leadership and education policy and facilities (DOTLPF) for each alternative Current fiscal realities rule out a complete redesign of a new space and missile defense architecture and is omitted from this effort.
7 Alternative Descriptions Alt I Baseline Utilize existing software, hardware, systems, and networks with current sustainment practices Alt II Modified Baseline Modify current software, hardware, systems, and networks with operationally relevant technology that could migrate into an enterprise-wide application Alt III Emerging Technology Adapt emerging technology and opportunities to the LVC architectures and environments as an enterprise to share LVC capabilities throughout LVC communities
8 Alt I Baseline Our Focus Utilize existing software, hardware, systems, and networks with current sustainment practices Alt II Modified Baseline Modify current software, hardware, systems, and networks with operationally relevant technology that could migrate into an enterprise-wide application Alt III Emerging Technology Adapt emerging technology and opportunities to the LVC architectures and environments as an enterprise to share LVC capabilities throughout LVC communities
9 Scoping Plan Collect Requirements Define Scope Create WBS Verify Scope Control Scope
10 Scoping Plan Collect Requirements Define Scope Create WBS Verify Scope Control Scope
11 Key Questions Guidance At a minimum: To what extent does each alternative address scalability, interoperability, integration, and latency to meet operational requirements? To what extent does each alternative address the capability gaps and at what cost and risk including informational assurance and security? What is the military utility (operational benefit) of each alternative? What is the cost-effectiveness of each alternative?
12 Threats and Scenarios Scenarios and use cases will be used Operational, Space and Missile Defense environment training requirements will come from experts Study team will develop two scenarios that collectively exercise the full range of mission tasks to train realistically on space assets Apply assets to train in the detection; tracking and assignment of target, and render outcomes that are quantifiable in terms of their derived measures.
13 Effectiveness Analysis Will improvements in air and space combat readiness be realized through increases in information and simulation fidelity? If so, how much, and at what cost? Will findings contribute/comply with the mandatory Training Key Performance Parameters for current and future weapon systems? Will these efforts translate to legacy weapon systems at affordable/appropriate times? Will modifications to increase information and simulation fidelity present new/additional Information Assurance risk? Identify them and recommend potential mitigation options.
14 Cost Analysis Life Cycle Cost Estimates (LCCEs) will be expressed in Base Year (BY) 2014 and Then Year (TY) dollars Will include uncertainty and risk analysis LCCEs will include RDT&E, procurement, operations and support, and disposal costs Will also include the integration costs necessary to achieve the desired capability for each system included in the study Manpower cost estimates should include government civilian, military, and contactor personnel AoA team will work with the Air Force Cost Analysis Agency and coordinate the LCCE with the OSD Cost Assessment Group
15 Sensitivity and Risk Analysis The AoA will conduct sensitivity analyses to identify variables that may change the relative cost-effectiveness among the alternatives. Report shall identify the variables, assess their impact, and document underlying assumptions Report shall conduct sensitivity analysis on any applicable minimum value in the IA-ASLVCE AoA that appears to be significantly influencing the design and/or cost of any of the alternatives Report will identify the risks (i.e., programmatic, operational, technical) associated with the various alternatives
16 Sufficiency AoA will be judged for sufficiency by OSD CAPE To be determined sufficient, the AoA must provide quantitative assessments of: Cost, effectiveness, and risk for each alternative as specified in this guidance AoA must highlight capability advantages as well as disadvantages, consider joint operational plans, and discuss key variables and sensitivity to changes in them Programmatic, operational, and technical risks of each alternative will be identified Sufficiency will be determined within 60 days after the completed AoA report is delivered to the Director.
17 Items to Address Enablers Logistics, Intelligence, Human Systems Integration, and Communications Impacts of the above on cost, risk and effectiveness for each alternative Key study questions sufficiently to inform decision makers Appropriate operational performance parameters Include threshold/objective values Alternatives capabilities to mitigate gaps Performance, cost and risk drivers Trade-space explored Trade-offs between performance, cost and risk Sensitivity analysis results Affordability constraints identified at MDD
18 Where are we? Scope - Gaps Remain Must understand the following: Capability gaps and any identified prioritization Mission areas and tasks Operational concepts and environment Threats and Scenarios Measures and standards Approaches and alternative concepts, including baseline Maturity of the technologies Operational risk Timeframes Ground rules, constraints and assumptions Science and Technology (S&T) activities, and DOTLPF-P Change Recommendations
19 Key Overarching Questions How well does each alternative close the capability gaps? How does each alternative compare to the baseline? What are all the enabling capabilities? What are the risks? What is the life cycle cost estimate for each alternative? What are the significant performance parameters? What are the trade-offs between effectiveness, cost, risk and schedule for each alternative?
20 Additional Analysis Requirements Identify Ground Rules, Constraints and Assumptions (GRC&A) Define Alternative Concepts Identify Stakeholders Determine level of effort Determine level of support (Gov t and Contractor support)
21 Effectiveness Analysis Mission Task Attributes Several Joint Capability Areas (JCA s) Measures Levels of Analysis Engineering, Engagement, Mission/Battle, Theater/Campaign Study Risk
22 Cost Analysis Total cost to the Federal Government Annual breakdown of costs Trade-offs/Cost As an Independent Variable (CAIV) Cost drivers for all alternatives Cost of enablers and operational support for capability LCCE for each alternative Projected costs for each decision expected for each alternative Uncertainty and risks associated with each cost estimate
23 Cost Considerations Sunk Costs Prior and those expected prior to implementation of chosen alternative R&D Costs Investment Costs O&S Costs Disposal Costs Baseline Extension Costs Life Cycle Time Frame Pre-fielding Costs
24 Way Ahead IMS for program and AoA WBS for baseline and alternatives as they are defined Scope Alt I (Baseline) & Alt II (Modified) Establish ground rules and assumptions Data collection plan Phasing/timeline plan Start data collection and create cost methodologies Establish Cost/Benefit/Capability Gap assessment methodology Coordinate with AFLCMC and AFCAA continuously Currently developing Rough Order of Magnitude (ROM) for budget submission For???
25 Recommendation Follow your PM training Scope, Estimate, Budget, Execute, Monitor Understand your project/program Creating a cost estimate prior to understanding scope will flex your change management process experience Great ways to help scope the unknown? Request for Information (RFI) Outside help? (Industry Day) Attend professional conferences (stay current on trends) 25
26 Questions? Darrin L. DeReus, Ph.D. Air Force Cost Support Project Manager
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