BBP Focus Areas Focus Area: Control Costs Throughout the Product Lifecycle

 

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The ability to understand and control future costs from a program’s inception is critical to achieving affordability requirements.

 

Initiative: Implement "should cost" based management
    • Should cost, the concept that our managers should set cost targets below independent cost estimates and manage with the intent to achieve them, is well on its way to becoming part of the DoD culture. This effort is fundamental to cost control and deserves continued emphasis. Proactively controlling cost is everyone’s business. Savings will continue to be applied as close to their origin as Service and Department priorities allow. Successful should cost management should be recognized and rewarded by the chain of command and by personnel systems.

 

 

DocsRelated Documents:

 

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Should Cost DAB Template (Memo, 08/06/2013)

Should Cost Management in Defense Acquisition (Memo, 08/06/2013)

Joint Memorandum on Savings Related to “Should Cost” (Memo, 4/22/2011)

• Air Force: Implementation of Will-Cost and Should Cost Management (Memo, 6/15/2011)

• Navy: Implementation of Should-Cost Management (7/19/2011)

• Should-cost and Affordability (Memo, 8/24/2011)

• Target Affordability and Control Cost Growth; Drive Productivity Growth Through Will Cost/Should Cost Management (Presentation, 8/25/2011)

Should Cost PEO Template - DAES Review (USD AT&L approved, 6/7/2013)

Should Cost PM Template - DAES Review (USD AT&L approved, 6-7/2013)

 

Initiative: Eliminate redundancy within Warfighter portfolios
  • Duplicate or redundant efforts occur at the program level due to constraints in the component requirements process. The Department will identify synergies for existing and planned programs across the Services during MDD reviews, Program Budget Reviews (PB build), and across all levels of the buy.

 

Initiative: Institute a system to measure the cost performance of programs and institutions and to assess the effectiveness of acquisition policies
    • The Department will become more data-driven in assessing its own and industry’s performance at achieving improved productivity. The Department will develop metrics for the programs and institutions (government and non-government) within the acquisition system and assess performance to better understand best practices in industry and government. The first set of data derived from this initiative will be published in early 2013.

 

Initiative: Build stronger partnerships with the requirements community to control costs
    • This is an area of continuing emphasis in which good progress has been made, but more needs to be done. More than anything else, requirements drive costs. The requirements and acquisition communities must cooperate more closely and continuously to ensure that requirements are technically achievable and affordable so that operational and Service leadership can make informed decisions about the costs associated with varying levels of performance. For Major Programs, the DAE is working closely with the VCJCS and the JROC, and each Service has taken steps in the right direction. However, more needs to be done to ensure well informed requirements decisions that balance cost and performance throughout product lifecycles.

 

Initiative: Increase the incorporation of defense exportability features  in initial designs
    • Foreign sales of and cooperation on US defense products provide a range of win-win benefits: reduced costs, improved US competitiveness, stronger ties to friends and allies, and improved interoperability. Rather than waiting until products are fully designed and in production for US use, we should assess and incorporate exportability design features and any needed anti-tamper features early in the acquisition process. This will reduce the cost of exportable versions of US systems and ensure that they are available for sale sooner, benefiting all concerned.