Dau Cost Analysis Iia - Cost Estimating Review Process

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ACAT

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Acquisition Category

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MDAP programs

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ACAT I Major Defense Acquisition Programs

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MAIS programs

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ACAT IA Major Automated Information System

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AoA

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Analysis of Alternatives
“What is the most cost-effective way to meet this mission need?”

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IPT

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Integrated Product Team

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Enclosure 3 to DoD Instruction 5000.2 specifies that ACAT I programs must prepare or update the CARD in support of:

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Milestone B, Milestone C, and the Full Rate Production Decision Review.

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All teams preparing life-cycle cost estimates must generally be provided with a draft CARD at least:

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180 days prior

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final CARD to a planned DoD Overarching IPT or DoD Component review prior to:

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45 days

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Every ACAT I acquisition program office is required to prepare a LCCE (sometimes referred to as a Program Office Estimate)

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Life-Cycle Cost Estimate

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The LCCE serves as the source of the cost information included in the program’s APB and should also be used as the basis for budget requests.

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Acquisition Program Baseline

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The EA is prepared by the program office for ACAT IA (Major Automated Information System) programs at program initiation (usually Milestone B).

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Economic Analysis

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The CCA is a life-cycle cost estimate prepared by a DoD component independently from the program office and the acquisition decision chain.

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Component Cost Analysis

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For ACAT ID programs, the ICE is prepared by the OSD CAIG.

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Independent Cost Estimate; Cost Analysis Improvement Group

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Up to three cost estimates may be prepared for an ACAT ID program approaching a major milestone: the program LCCE, an optional CCA, and an ICE.

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Up to three cost estimates may be prepared for an ACAT ID program approaching a major milestone: the program life-cycle cost estimate (LCCE), an optional Component Cost Analysis (CCA), and an Independent Cost Estimate (ICE).

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Any affordability issues that cannot be resolved at the OIPT level are referred to the DAB for resolution. The DAB makes final recommendations to the...

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Any affordability issues that cannot be resolved at the OIPT level are referred to the Defense Acquisition Board (DAB) for resolution. The DAB makes final recommendations to the Milestone Decision Authority (Defense Acquisition Executive).

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OIPT

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OSD Overarching Integrated Process Team (OIPT)

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An EA and a CCA are prepared for an ACAT IAM program approaching a major milestone.

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An Economic Analysis (EA) and a Component Cost Analysis (CCA) are prepared for an ACAT IAM program approaching a major milestone.

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Any affordability issues not resolved at the OIPT level are referred to the ITAB for resolution before milestone approval is granted by the DoD CIO or, if the ACAT IAM program qualifies as a Major Defense Acquisition Program, the Defense Acquisition Executive.

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Any affordability issues not resolved at the OIPT level are referred to the Information Technology Acquisition Board (ITAB) for resolution before milestone approval is granted by the DoD CIO or, if the ACAT IAM program qualifies as a Major Defense Acquisition Program, the Defense Acquisition Executive.

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Program Management Office (PMO)

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Program Management Office (PMO)
The PMO prepares the Life-Cycle Cost Estimate (LCCE) or Economic Analysis (EA), as well as the Cost Analysis Requirements Description (CARD). The PMO must ensure that costs are estimated as accurately as possible for budgeting purposes.

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Component Cost Agency

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Component Cost Agency
Some DoD Components have established their own agencies to serve as their lead organization for cost analysis and cost estimating actions and to act as liaison between the Component and the OSD Cost Analysis Improvement Group (CAIG).

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Service Assistant Secretary (Financial Management & Comptroller)

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Service Assistant Secretary (Financial Management & Comptroller)
The Service’s Assistant Secretary (Financial Management & Comptroller) reviews the program life-cycle cost estimate (ACAT I), Economic Analysis (ACAT IA), and Component Cost Analysis (CCA) for early identification of program funding issues.

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Service Assistant Secretary (Financial Management & Comptroller)

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Service Assistant Secretary (Financial Management & Comptroller)
The Service’s Assistant Secretary (Financial Management & Comptroller) reviews the program life-cycle cost estimate (ACAT I), Economic Analysis (ACAT IA), and Component Cost Analysis (CCA) for early identification of program funding issues.

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OSD Cost Analysis Improvement Group (OSD CAIG)

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OSD Cost Analysis Improvement Group (OSD CAIG)
The OSD CAIG acts as the principal advisory body to the Defense Acquisition Board (DAB) and the Secretary of Defense on matters relating to cost. The Deputy Director for Resource Analysis, Program Analysis & Evaluation (DD/PA&E(RA)) is dual-hatted as the CAIG chair. The CAIG membership consists of the CAIG Chair, one member appointed by each permanent DAB member, and ad hoc representatives as appointed by the CAIG Chair. Members of the CAIG represent their functional areas. DoD Directive 5000.4 specifies the functions of the OSD CAIG, which include preparing independent life-cycle cost estimates for ACAT ID and some ACAT IC programs, analyzing the Program LCCE and the CCA as applicable, and establishing guidance on preparing cost estimates.

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OSD Office of Program Analysis and Evaluation (PA&E)

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OSD Office of Program Analysis and Evaluation (PA&E)
PA&E is responsible for assessing Analyses of Alternatives (AoAs) for comprehensiveness, objectivity, and compliance with applicable laws; and providing these assessments to the responsible DoD Component Head or OSD Principal Staff Assistant. PA&E is also responsible for assessing the Economic Analysis prepared for an ACAT IA program for: reasonableness of cost and benefits estimates; realism of cost; schedule and performance goals; reliability of the return on investment calculation; and traceability of estimated benefits. This assessment is provided to both the Program Manager and the Milestone Decision Authority.

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