Acquiring Weapon Systems In A Period Of Rising Expenditures

Author : Andrew Lanning Keller
Publisher :
ISBN 13 :
Total Pages : 97 pages
Book Rating : 4.:/5 (882 download)

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Download or read book A Cost-effective Comparison of Missile Weapon System Maintenance Concepts written by Andrew Lanning Keller and published by . This book was released on 2014 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of the study was to compare the cost/effectiveness of maintaining a missile system using conventional means (government personnel, material, facilities, equipment, and so forth) versus a program where the private sector, primarily the missile prime contractor, provides the required maintenance services to keep the missile weapon system operational. For several years the Department of Defense (DoD) has been getting a smaller portion of the Federal Budget. Social agencies have been getting more, and that trend will likely continue. Also, with the all-volunteer military, the portion of DoD spending going into pay for personnel and related costs has been going up. Operation and Support costs have been rising in parallel, so money available for acquisition of new weapons systems has been going down. Compounding this problem is the increase in costs of new systems over old, as technology advances. Successive weapons systems cost several times more than the earlier systems they replace. This has led the Department of Defense policy makers to conclude that some drastic action must be taken. The cost of new systems has to be pushed down and controlled. Searching for ways to reduce costs, DoD planners found that only a small portion of the money spent during the life cycle of a weapons system is spent during development. On a typical Defense System, only 3 percent of the total cost of the system is expended in the Validation Phase and only about 12 percent of the Life Cycle Costs in the Full Scale Development phase. Most of the money is allocated to Production and Operation and Support, approximately 35 percent is spent building the system for the military services to use, leaving about half the cost, 50 percent, spent in the Operations and Support phase. Obviously, Production and Operations and Support are major targets for cost cutting. However, it has been found that waiting until the production phase, or until the system is in operation, before taking action regarding the reduction of costs, is too late.Cost reduction planning requires an earlier start in the process. Early decisions determine Life Cycle Costs. The decisions on design features, configuration, production methods, and operation and maintenance concepts that are made very early in the program determine the cost that will be incurred for the whole program. Thus, on a typical program, by the end of the concept studies, about 70 percent of the Life Cycle Costs are set by the design decisions already made. Before Full Scale Development begins about 85 percent of the Life Cycle Costs are locked up, but only about 3 percent of the money has been spent. By the end of Full Scale Development, when the production go-ahead decision is made, approximately 95 percent of the Life Cycle Costs are frozen. After that it is too late to make changes that will affect more than about 5 percent of the overall systems costs. Clearly, effort directed at reducing cost must be initiated in the earliest stages of a program. Projected defense budget levels and rising costs of acquiring, operating, and supporting defense systems and equipment have created the need to make cost a principal design parameter. Several cost/effective weapon systems have recently been developed which, because of their cost, were not affordable in adequate numbers to satisfy mission requirements, necessitating additional lower cost developments. Emphasis in the past has been placed primarily on "unit production cost" with "consideration" of life cycle cost impacts. The reason was the inability to predict, or in fact measure, total operating and support costs. This has provided little motivation to the responsible Program Manager and subsequently to the development contractors to trade off lower predicted savings in operating and support cost in the future for near term "known" higher unit production costs. Recent acquisition strategies, however, have made in roads to addressing the operating and support cost portion of life cycle cost. The approach has been to look at that portion of the operating and support costs which are design dependent, reasonably predictable, and verifiable during the initial period of system operation. While only a part of the total operating and support costs meets these criteria, most important part, the part that the Department of Defense Program Manager and the contractors can affect and control during the acquisition cycle. The study derives its significance not only from the fact that costs are growing while budgets are cut. Severe shortages are being experienced by the armed forces for qualified and trained personnel. Today's modern sophisticated weapons can no longer be operated or maintained without proper training. In addition, the more highly specialized personnel require a more sophisticated and complex management support system. This form of management is uncommon to the armed forces, and other cost/effective options must be considered.