Cost As an Independent Variable (CAIV): Front-End Approaches to Achieve Reduction in Total Ownership Cost
NAVAL POSTGRADUATE SCHOOL MONTEREY CA GRADUATE SCHOOL OF BUSINESS AND PUBLIC POLICY
Pagination or Media Count:
Analyze the underlying causes for poor Total Ownership Cost performance within weapon systems acquired through the DoD Acquisition Management System. Reduction in Total Ownership Costs R-TOC is the current initiative to manage costs over the entire life of a weapon system. Cost as an Independent Variable CAIV is the front-end focus of R-TOC. CAIV is the collection of practices, process, and tools by which system developers and other stakeholders control Lifecycle Costs LCC. CAIV includes setting affordability goals, technical versus cost tradeoffs, cost and performance architectures that include production and sustainment costs, and a range of specific practices. Recent research into R-TOC suggests that CAIV efforts may not be taking full advantage of new JROCJCIDS processes nor engendering full leadership support to reduce OS costs. The Program Manager PM is responsible for developing and managing a TOC planwith input from key stakeholders such as the sponsor and other users, the Joint Requirements Oversight Council JROC, and DoD Component and OSD leadership. Early incentives to encourage focus on affordability, in conjunction with emphasis on warfighting capability, will be examined. This study will examine the critical issues associated with understanding and implementing CAIV and provide recommendations for PMs and other TOC stakeholders.
- Economics and Cost Analysis