An Analysis Of Operating And Support Costs In The Department Of Defense PDF Download

The Military Departments and defense contractors have for some time been actively concerned about rising life cycle costs (LCC) of Defense weapon systems. Over the past two years, the Department of Defense (DoD) has placed new emphasis on examining the projected operating and support (O and S) costs of planned weapons and finding ways to reduce those costs. O and S cost analyses are now a major part of the cost review conducted at each weapon procurement decision meeting by the Defense Systems Acquisition Review Council (DSARC) and the DSARC's principal advisor on new system costs--the Cost Analysis Improvement Group (CAIG). This report recommends guidelines for preparing estimates of the support investment (SI) and O and S costs of ship acquisition programs and presenting them to the DSARC. It provides a framework for objective comparison of SI and O and S costs of program, design, or support alternatives, using consistent methodologies and terminology. A general methodology for SI and O and S cost estimating is described, a standard cost element structure for ships is defined, and specific requirements for presentation of SI and O and S cost estimates to the DSARC are proposed. Standards for the presentation and documentation of these cost estimates are also recommended. These guidelines are intended to achieve consistent and effective preparation and documentation of SI and O and S cost estimates for major weapon systems, and to facilitate the DSARC's and the CAIG's examination of important SI and O and S cost issues.