On Setting Avionic Subsystem Unit Production Cost Goals
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA COST ANALYSIS GROUP
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Major avionics subsystems for candidate aircraft developed under the Design-to-Cost DTC acquisition concept were analyzed to gain additional insight into the critical production cost goal-setting process. The candidate aircraft sample consisted of the Air Force F-16 and A-10, the Navy F-18 and the Army Advanced Attack Helicopter. A total of 23 avionics subsystems assigned to the candidate aircraft were investigated. It was found that only six of the 23 subsystems met Department of Defense criteria for authentic DTC programs. The other subsystems were developed and acquired by airframe prime contractors on a competitive fixed-price basis with priced options for production. In these programs, competitive pricing replaced DTC goal-setting. Based upon limited research findings, it was concluded that subcontractor goal-setting was usually masked by competitive pricing practices the resulting development programs did not have the schedule, cost, and design tradeoff flexibility to properly pursue the cost goal. It also was concluded that the goal establishment process, as observed for those 6 subsystems examined, was effective and did include appropriate important criteria for goal selection. Final conclusions relating to goal establishment were a the absence of life-cycle cost goals did not appear to impact the production cost goal selection b competitive pricing was not an effective methodology for realistic goal-setting and c without OSD or Service policy guidance, inconsistent application of goal-setting criteria and inconsistent cost goal implementation for similar type systems are likely to continue.
- Flight Control and Instrumentation
- Administration and Management
- Economics and Cost Analysis