Challenge the Estimate

1. Challenge the Estimate PresentedbyMort AnvariSteve Loftus23 June 05

2. The Cost Review Board • Professional Adversarial Relationship • Determine the Cost • Challenge the Schedule • Conduct Risk Analysis History shows again and again how nature points out the folly of men

3. Agenda • Historical Program Growth • Program Schedule • Software Schedule & Productivity • Question the Data Sources Systems • Sources of Data

4. 142 Systems 80% 70% 60% 50% 40% Percent Cost Growth 30% 20% 10% 0% Aircraft 42 C4I 24 Missile 34 Ship 19 Space 9 Ground Combat 14 Total CG by Commodity

5. RDT&E CG by Commodity

6. 138 Systems 60% 50% 40% Percent Cost Growth 30% 20% 10% 0% Aircraft 42 C4I 21 Missile 34 Ship 19 Space 9 Ground Combat 13 Procurement CG by Commodity

7. 142 Systems 200% 180% 160% 140% 120% 100% Percent Cost Growth 80% 60% 40% 20% 0% -20% Missile STS 5 Missile ATA 8 Missile ATG 7 Ship Carrier 6 Missile STA 4 C4I Sensor 10 Ship Support 7 Aircraft UAV 2 Space Rocket 2 Missile Cruise 4 Aircraft Large 5 Space Ballistic 3 Space Satellite 4 Aircraft Trainer 3 Ship Combatant 3 Ship Submarine 3 Aircraft System 6 Missile Projectile 4 Aircraft Tactical 11 Aircraft Electronic 6 Aircraft Helicopter 9 C4I Communication 6 Missile Man Portable 2 Ground Combat Tank 5 C4I Command and Control 8 Ground Combat Transport 2 Ground Combat Ordance Delivery System 7 Total CG by Subcommodity

8. Program Schedule

9. MSC MSB IOC The Program Schedule • Backwards Planning FY04 FY05 FY06 FY08 FY09 FY10 FY11 IOTE HW/SW Dev Dev Testing Full Rate Production LRIP

10. Historical Missile DevelopmentEffort Durations SOURCE: SAR and JSOW POE

11. Missile Development Effort Durations And Joint Common Missile Estimates So, it can be done in 42 months?

12. Software estimating parameters Software Lines of Code (KSLOC) Effort for Reuse Effort for Modified Growth Productivity (KSLOC per Staff Month) Labor Rate Software to Hardware Integration Used to calculate Effective Lines of Code (ESLOC) Software Development

13. Growth: 40% Reuse Effort: 5% to 30% Modified Effort: 30% – 70% COTS: 5% to 30% Software to Hardware integration: 30% Software Maintenance: 60% to 70% of SW Total Life Cycle Estimate Software Estimating Rules of Thumb

14. Size Growth

15. SW Productivity (SLOC/SM) by Application Domains • Based on 500 projects from a database of 1,500 (Reifer Consultants, Inc) projects. • Scope extends from SW requirements review to SW/SW Integration • Does not include SW/HW Integration, Quality Assurance, System, or Operational Test, & Beta Test Personnel • Different Languages were used (ie Web projects employed Java & Visual C while military projects used Ada & C/C++

16. Software Estimate Given: Labor rate - $145 per hour (fully burdened with fee) 152 hours per staff month Aviation Program Staff Months: 3543 (372000 / 105) Staff Month Labor Rate: $22,040 ($145 * 152) SW Development: $78M (3543 * $22,040) SW to HW Integration: $23M ($78M * 30%) Total SW Development: $101M ($78M + $23M) SW Maintenance: $168M ($101M/.6) Total SW Life Cycle Cost Estimate: $269M ($101M + $168M)

17. Adv Proc FRP CA LRIP 1 LRIP 2 Missile/Seeker Software FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 PDR IPR CDR DRR FRP MS B MS C AH-64D IOC RAH-66 IOC w/JCM AH-1Z EOC F/A-18E/F EOC MH-60 R EOC Phase 1 INCREMENT 1 Phase 2 CA Test Support EDT PPT (System Qual) DT SHOTS LUT DT IOT&E CCA $101M SW Dev before DT ($101M) SW Dev before DT ($74M) Test-Analyze-Fix ($23M) POE $97M November, 2003

18. Missile Test Shots Missile Qualification Comparison • How does program compare to analogous programs?

19. 4,500 4,000 3,500 3,000 2,500 FY 2003, $M 2,000 1,500 1,000 500 0 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY2015 Comparison of Estimated Resource Requirements

20. Sources of Data

21. Army Tools for Total Ownership Cost Estimating Life Cycle Cost Management Tools

22. Automated Cost Estimator (ACE) • Automated Cost Estimator (Ace)—is a Model-building Tool. Part Spreadsheet, Part Database, It Incorporates Enough Structure to Eliminate Most of the Automation Tasks You Would Have to Perform If You Used a Spreadsheet, Yet It’s Flexible Enough to Perform Nearly Any Kind of Analysis. The Analyst’s Productivity Is Increased Through Built-in Inflation, Learning, Time Phasing, Documentation, Sensitivity/what-if, and Other Analysis Capabilities.

23. Automated Cost Data Base (ACDB) ACDB Is ACEIT’s Automated Cost Database. Just As ACE Is a Model-building Tool, ACDB Is a Database- Building Tool. It Contains Powerful Database Entry and Administration Tools to Enable Any Site/office to Create Its Own Tailored Database. When You Populate It, ACDB Lets You Search and Retrieve Cost, Schedule, Technical, and Programmatic Data.

24. Operating Support (O&S) Costing Operating & Support Management Information System (OSMIS) Installation Cost (Base Operations / Real Property Maintenance) Force Cost Model(s)

26. Force Costing / Models FORCES: Unit Operations & Support • Updated Annually • Provides Input to 5 Defense Models • Supports 9 Separate Study Groups • Avg 25 Major Estimates Per Year

27. Database OSMIS OSMIS Operating & Support Management Information System • Parts (NSN Level) & Fuel • Ammunition • Intermediate Maintenance • Depot Maintenance • Activity Data (miles/Hours) • Year of Manufacture

28. Summary Costs Analysis: It’s more than just Cost • Challenge the schedule through use of historical programs • Software costing and metrics identifies schedule risk