Cost Estimating Requirements for Defense Acquisition Programs

Life Cycle Cost Composition Life Cycle Cost Program Acquisition Cost Development Cost RDT & E Development Costs of PME & Support Items Systems Engineering Program Management RDT & E Development Costs of PME & Support Items Systems Engineering Program Management Test & Evaluation Test & Evaluation Operating and Support MILCON Facilities Operations & Support O&M, MILPERS O&M, MILPERS (or others as appropriate) Procurement Cost Weapon System Cost Disposal O&M (or others as appropriate) Flyaway Cost PROCUREMENT Prime Mission Equipment (PME) PROCUREMENT Initial Spares PROCUREMENT SupportItems

Cost Estimating Requirements ACAT IC & ID (MDAP) ACAT IA (MAIS) POE CARD Program initiation & all subsequent milestones, including FRP DR Program initiation & all subsequent milestones - Includes Economic Analysis MS A & all subsequent milestones including FRP DR - Draft 180 days prior to OIPT/milestone - Final 45 days prior to OIPT/milestone MS A and all subsequent milestones including FRP DR MS A & whenever Economic Analysis is required - Draft 180 days prior to OIPT/milestone - Final 45 days prior to OIPT/milestone CCE ICE - Prepared by component cost agency (AFCAA, DASA-CE, NCCA) for ACAT IC (if no CAPE estimate) - In advance of any certification under Title 10, USC, Section 2366a (MS A) and Section 2366b (MS B) - In advance of any decision to enter low-rate initial production (LRIP) (MS C) or full-rate production (FRP DR) - In advance of any certification of MDAPs that experience critical cost growth (Title 10, USC, Sec 2433a) - In advance of any report of Critical Program Changes for MAIS (Title 10, USC, Sec 2445c(f)) MS A and whenever an Economic Analysis is required Required by law for all MDAP programs * - Prepared by OSD CAPE for ACAT ID, and ACAT IC at discretion of USD (AT&L) *ICE statutory requirement (Title 10, US Code, Sec 2434) and P.L. 111-23, May 22, 2009 Source: DoDI 5000.02, January 2015 and Weapon Systems Acquisition Reform Act of 2009 ACAT II & ACAT III: POE (and, at MDA discretion, an independent cost estimate prepared by the component cost agency) at program initiation and all subsequent milestones AFCAA = Air Force Cost Analysis Agency ACAT = Acquisition Category CAPE = Cost Assessment & Program Evaluation CARD = Cost Analysis Requirements Description CCE = Component Cost Estimate DASA-CE = Dep Asst Sec of Army (Cost & Economics) FRP DR = Full Rate Production Decision Review ICE = Independent Cost Estimate MAIS = Major Automated Information System MDA = Milestone Decision Authority MDAP = Major Defense Acquisition Program NCCA = Naval Center for Cost Analysis OIPT = Overarching Integrated Product Team POE = Program Office Estimate USD(AT&L) = Under Secretary of Defense (Acquisition, Technology, & Logistics)

PPBE Planning Phase - Led by USD (P) YEAR 1 FEB/MAR YEAR 2 APR/MAY Elapsed Time: 15-16 Months CIA Central Intelligence Agency COCOM Combatant Commander CPR Chairman s Program Recommendation DIA Defense Intelligence Agency DPG Defense Planning Guidance DSR Defense Strategy Review formerly known as the Quadrennial Defense Review JCS Joint Chiefs of Staff NDS National Defense Strategy NMS National Military Strategy NSS National Security Strategy OSD Office of the Secretary of Defense USD(P) Undersecretary of Defense (Policy) President National Security Council CIA/DIA/JCS/OSD NSS Every 4 Years Guidance for POM/BES submission and OSD Program & Budget Review OSD Level DSR NDS DPG JCS Level Planning Phase focus: NMS CPR Threat vs. Capabilities Update strategy Guidance for Programming & Budgeting (JCS, COCOMs, SERVICES)

PPBE - Program Review JUN JUL AUG SEP OCT NOV DoD Large Group 3-Star Group CAPE Issue Resolution Issue Teams POM SECDEF / DEPSECDEF SLRG & DMAG PDM CPA JCS Components/ Defense Agencies CAPE Cost Assessment & Prgm Evaluation CPA Chairman s Program Assessment DEPSECDEF Deputy Secretary of Defense DoD Department of Defense DMAG Deputy s Management Action Group DPG Defense Planning Guidance FYDP Future Years Defense Program POM Program Objectives Memorandum PDM Program Decision Memoranda SLRG Senior Leader Review Group SECDEF Secretary of Defense FYDP Update Program Review focus: Compliance with DPG

PPBE Budget Review DEC JAN FEB Components/ Defense Agencies PBDs USD(C) & OMB PB Adv Questions/ OSD/OMB Budget Hearings BES MBI FYDP Update FYDP Update Services / PEO / PM Answer / Reclama BES Budget Estimate Submission FYDP Future Years Defense Program MBI Major Budget Issues OMB Office of Management and Budget OSD Office of the Secretary of Defense PEO Program Executive Officer PB President s Budget PM Program Manager PBD Program Budget Decision USD(C) Undersecretary of Defense (Comptroller) Budget Review focus: Pricing Funding policies Phasing Budget execution

Resource Allocation Process Budget. FY 18 Budget. FY 19

Congressional Enactment Timetable JAN FEB MAR APR MAY JUN JUL AUG SEP OCT ^ 15 15 PRES BUDGET TARGET FISCAL YEAR COMMITTEE INPUTS FLOOR HRNGS MARKS FLOOR HOUSE BUDGET RESOLUTION RESOLUTION CONF FLOOR^ HRNGS MARKS FLOOR SENATE BILL / RPT HASC HRNGS MARK-UP FLOOR FLOOR HOUSE CONF /RPT ACT AUTHORIZATION ^ SASC HRNGS MARK-UP FLOOR SENATE FLOOR BILL / RPT BILL / RPT HAC HRNGS MARK-UP FLOOR FLOOR HOUSE CONF /RPT ACT APPROPRIATION ^ FLOOR SAC HRNGS MARK-UP FLOOR SENATE BILL / RPT

Below Threshold Reprogramming Amounts are Cumulative Over Entire Period of Obligation Availability APPRN MAX INTO MAX OUT LEVEL OF CONTROL OBL AVAIL Lesser of + $10 M or + 20% Lesser of - $10 M or - 20% RDT & E Program Element 2 Years Lesser of - $20 M or - 20% Lesser of + $20 M or + 20% 3 Years Line Item PROC SCN: 5 Years Budget Activity (or Defense Agency) Some Sub-Activity Limitations on Decreases (see reference below) O & M 1 Year - $15 M + $15 M No Specific Congressional Restriction 1 Year MILPERS + $10 M Budget Activity Lesser of + $2 M + 25 % No Specific Congressional Restriction MILCON 5 Years Project Reference Sources: DoDFMR 7000.14-R, Volume 3, Chapter 6 (Sep 2015) and Chapter 7 (Mar 2011)

Appropriation Life Cycle Years 1 2 3 4 5 6 7 8 9 10 11 O&M RDT&E Procurement Ships MILCON MILPERS Current Period: Available for new obligations, obligation adjustments, expenditures, and outlays Expired Period: Available for obligation adjustments, expenditures, and outlays Cancelled: Unavailable for obligations, obligation adjustments, expenditures, and outlays