Implementing Effective Affordability Constraints for Defense Acquisition Programs
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
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Assuring affordability for Department of Defense DOD acquisition programs has been an enduring goal that has seldom been reached. The consequences are cancellation or down-scaling of unaffordable programs with much attendant waste. Building on previous IDA work, this research focuses on implementing the Better Buying Power initiatives of the Under Secretary Defense for Acquisition, Technology, and Logistics regarding affordability. Efforts to control acquisition program affordability in DOD are not new. Two initiatives of the past, Design to Cost DTC and Cost as an Independent Variable CAIV, were both similar in many ways to current efforts to implement affordability constraints however, there are also key differences. Using historical data and previous IDA analyses, this research drew on the lessons learned from these past experiences that are applicable today. The second topic addressed is implementing affordability constraints for operating and support OS costs. OS costs are more difficult to control because they are more difficult to estimate accurately during system development and their impacts begin later. The key finding of the research is that past failures to control costs, both in investment and in OS, resulted primarily from lack of persistent and rigorous enforcement of policies by DOD acquisition management.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies