Naval Aviation Budgeting: Cost Adjustment Sheets and the Flying Hour Program
RAND NATIONAL DEFENSE RESEARCH INST SANTA MONICA CA
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In this report, we examine Cost Adjustment Sheets CASs that modify the Navy s Flying Hour Program FHP budget to assess whether process reforms may be appropriate. CASs modify the FHP baseline budget of a Type Model Series TMS. There are two ways in which a TMS baseline budget is formulated For a newer aircraft lacking representative historical data, the TMS managers develop a budget more than a year in advance of the budgetary execution year based on expert insight and judgment including experiences with analogous aircraft. For older aircraft, prior annual costs or expenditures per flying hour CPH serve as the foundation of the baseline budget. After formulation of each TMS baseline budget but before commencement of the year of budgetary execution program managers, Integrated Weapons System Team leads, and fleet class desk representatives are responsible for researching relevant aircraft support issues and, if necessary, developing CASs that modify what then becomes the execution budget XB, the last budget formulated before a fiscal year commences. CAS usage varies considerably across TMSs. The FA-18 makes much greater proportional use of CASs than other TMSs, relative to its share of the Navy aviation budget or Navy aviation expenditures. Use of CASs may not suggest anything unusual about a TMS cost structure or growth as much as it suggests delays in ascertaining a change to the TMS CPH. CASs can be submitted to reflect initiatives that are projected to reduce costs they are also submitted to reflect modifications to in-service aircraft that are expected to incur operating and support costs, as well as transitions from one source of repair such as interim contractor support to another source such as organic repair. The report has three major sections.
- Military Aircraft Operations
- Economics and Cost Analysis