FOR REDUCING RISK
- If the all-important design and engineering effort is to be funded
adequately, provide a reasonable proportion of total RDT&E funds in
the early years. Figure 2-1. is a representation of an idealized RDT&E
Figure 2-1. What We Should
Do (RDT&E Funding Profile)
Rarely, however, are funds provided on this type of schedule. Early dollars are hard to find and the profile shown in figure 2-2. is a much more typical situation. This condition is aggravated when programs are started on short notice.
A significant initial subset of this profile is the RDT&E funding spent
on production preparations. If this funding profile is changed, the impact on
transition must be assessed.
Figure 2-2. What We Do
(RDT&E Funding Profile)
Figure 2-3. combines these idealized and actual funding profiles, and the shaded area represents a "design and engineering gap" from which the program cannot recover by application of later funds.
The first type of funding risk, therefore, can be ascertained by comparison of a programís funding profile with those of figures 2-1. and 2-2.
Figure 2-3. -- The "Design and
- The second type of risk reduction involves the early commitment of
production funds-while development is still ongoing-for tooling, long
lead materials, and production line startup. Figure 2-4. shows a graphic
representation of the needed buildup of production funds during RDT&E
phase down. The "fly before buy" school of acquisition policy tends to drive
the "too late" line. Excessive concurrency can result in unwise commitments
indicated by the "too early" line. For all programs there will be an optimum
middle ground that results in low RDT&E risk and a controlled
"transition to production" (shaded area).
Figure 2-4. --
Funding Profiles (RDT&E and Production)