Suitability... at what cost?
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- Derek Nicholson
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1 Suitability... at what cost? 5-minute warm-up act for the T&E Service Exec Panel Talk about 3 things: 1. New Materiel Availability KPP 2. DAU Suitability Research Project 3. Announce NDIA/DAU TST All-Star Team! 1
2 2
3 JROC Memo: 17 Aug 2006 (Subj: Key Performance Parameters Study Recommendations and Implementation) 1. Endorsed Mandatory MATERIEL AVAILABILITY Key Performance Parameter (KPP) for all MDAPs and Select ACAT II and III With 2 Supporting Key System Attributes (KSAs): A. Materiel Reliability KSA B. Ownership Costs KSA 2. Endorsed ENERGY EFFICIENCY KPP for selected programs, as appropriate 3. Endorsed TRAINING KPP for selected programs, as appropriate 4. Did not endorse requirement for mandatory KPPs for these criteria: COST TIME and/or SCHEDULE SUSTAINMENT COALITION INTEROPERABILITY 3 FORCE PROTECTION AND SURVIVABILITY
4 JROC Approved* Mandatory Sustainment KPP and KSAs Single KPP: Number of End Items Operational Materiel Availability (= ) Mandatory KSAs: Total Population of End Items Total Operating Hours Materiel Reliability (MTBF)(= ) Total Number of Failures Ownership Cost (O&S costs associated w/materiel readiness) For mission success, Combatant Commanders need: Correct number of operational end items capable of performing the mission when needed Confidence that systems will perform the mission and return home safely without failure Ownership Cost provides balance; solutions cannot be availability and reliability at any cost. *JROC Approval Letter JROCM Signed 17 Aug 06; 4 Revised CJCS 3170 will put into Policy
5 LCC Distribution LIFE-CYCLE COST SYSTEM ACQUISITION O&S SYSTEM RESEARCH AND DEVELOPMENT 10% PRODUCTION 30% 60% 20 YEARS 5
6 Life Cycle Management Design For Sustainment Sustain The Design A B (Program Initiation) C 65-80% of the Life Cycle Cost Concept Refinement Concept Decision Technology Development System Development & Demonstration Design Readiness Review Production & Deployment LRIP/IOT&E FRP Decision Review Operations & Support (O&S) Pre-Systems Acquisition Systems Acquisition Sustainment O&S Costs Are Determined Early In The Acquisition Phase USD(AT&L) FY 07 Strategic Goals (#4) Emphasize Sustainment Outcomes Throughout The Life Cycle Management Process 6
7 Defense System Life Cycles HEMTT 44 yrs SSN yrs F yrs F yrs CH yrs M yrs UH-1 69 yrs KC yrs AIM-9 72 yrs C yrs 2.5 Ton Truck 67 yrs B yrs SOURCE: John F. Phillips DUSD (L) 7
8 Life Cycle Costing Considerations As Government expenditures, those due to broken down chariots, worn- out horses, armor and helmets, arrows, and crossbows, lances, hand and body shields, draft animals and supply wagons will amount to 60% of the total. Sun Tzu (The Art of War, 6 th Century B.C.) 8
9 Suitability... at what cost? Dr. Paul Alfieri, Director of Research Defense Acquisition University (703) DAU Research Project: STRYKER Suitability Analysis Dr. Don McKeon, Professor of Engineering Management Defense Acquisition University (586)
10 Suitability... at what cost? Typical IOT&E Evaluation Results: EFFECTIVENESS: approximately 90% success rate SUITABILITY: approximately 60-75% success rate Typical Decision after IOT&E: Begin fielding ASAP, even before.... Suitability problems are addressed Reliability is improved Maintenance procedures are mature Training is complete Why field before addressing these problems? Urgent Combat Need The QUESTION: How much does it cost us to do business this way? 10
11 Suitability... at what cost? DAU Research Study Proposal Investigate various types of systems Total of 5 or 6, several from each service Criteria: Recently fielded Evaluated to be Effective but not fully Suitable Examine performance of systems wrt suitability Determine suitability cost drivers Evaluate suitability trends Sponsor Decision: Start with one program, work from there..... First Program Selected: STRYKER Family of Vehicles Additional Study Candidates: TBD 11
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13 Results to date: Analysis of CDRL data ongoing Established process and methodology Developed parametric models GOAL: independent CPM determination 13
14 Cost Per Mile (CPM) Estimates CPM estimate - $17.19 (GAO , including labor, parts & repair) CPM estimate - $18.78 (Stryker R-TOC Brief) CPM estimate - $18.23 (based on M113 methodology w/stryker adjustments) CPM estimate - $14.53 (based on initial 4 month deployment data) Current: CPM estimate (GDLS) - $13.52 garrison $ 8.88 deployed DAU CPM estimate $ garrison $ 7.95 deployed 14
15 Recommendations Continue Research Complete Stryker analysis Feedback from sponsor Feedback from community Determine path ahead Develop methodology for conducting suitability studies on other systems Look at other programs for comparison Other services, other types of systems 15
16 NDIA/DAU TST All Stars 1B Mr. Steve Whitehead, (COMOPTEVFOR) 2B Col Mike Bohn, USMC (MCOTEA) 3B Joe Wascavage, (NAVAIR) SS Brian Simmons, (ATEC) LF Rick Lockhart, (DTRMC) CF Dave Duma, (DOT&E) RF Steve Zink, (OSHKOSH TRUCKS) C Dr. Ernest Seglie, (DOT&E) P Jim O Bryon, CIVLANT (NDIA) Pinch Hitters: COL Sam Kyle, USAF (AFOTEC) CAPT Rick Scudder, USN (formerly OP-091) Mr. Pete Nolte, (AT&L) Mr. Larry Leiby, (TEMA) Mr. Fred Myers, (AT&L) 16
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