E6. ENCLOSURE 6

RESOURCE ESTIMATION

E6.1. Cost Analysis Improvement Group (CAIG) Independent Life-Cycle Cost Estimates (LCCEs). The OSD CAIG shall prepare independent LCCEs per 10 U.S.C. 2434 (reference (ah)). The CAIG shall provide the MDA with an independent LCCE at major decision points as specified in statute, and when directed by the MDA. The MDA shall consider the independent LCCE before approving entry into SDD or into Production and Deployment. The CAIG shall also prepare an ICE for ACAT IC programs at the request of the USD(AT&L) or the ASD(C3I). A CAIG ICE is not required for ACAT IA programs. (DoD Directive 5000.4, (reference (bb)))

E6.2. Cost Analysis Requirements Description (CARD). For ACAT I and IA programs, the PM shall prepare, and an authority no lower than the DoD Component Program Executive Officer (PEO), shall approve the CARD. DoD 5000.4-M, reference (bc), specifies CARD content. For joint programs, the CARD shall cover the common program as agreed to by all participating DoD Components, as well as any DoD Component-unique requirements. The teams preparing the program office LCCE, the component cost analysis, if applicable, and the independent LCCE shall receive a draft CARD 180 days, and the final CARD 45 days, prior to a planned OIPT or DoD Component review, unless the OIPT leader agrees to other due dates.

E6.3. CCDR System. The CCDR system is the primary DoD means of collecting data on the costs and resource usage that DoD contractors incur in performing DoD programs. The Chair, CAIG, shall prescribe a format for the CCDR and the SRDR, and establish reporting system policies in DoD 5000.4.M-1, reference (aw). The Chair shall monitor the implementation of policy to ensure consistent and appropriate application throughout the Department of Defense. The Chair may waive the information requirements of Table E3.T3. of enclosure 3.

E6.4. CAIG Procedures. The DoD Component responsible for acquisition of a system shall cooperate with the CAIG and provide the cost, programmatic, and technical information required for estimating costs and appraising cost risks. The DoD Component shall also facilitate CAIG staff visits to the program office, product centers, test centers, and system contractor(s). The process through which the ICE is prepared shall be consistent with the following policies (reference (aw)):

E6.4.1. The CAIG shall participate in IPT meetings (Cost Working-level IPTs/Integrating IPTs/OIPTs);

E6.4.2. The CAIG, DoD Components, and PM shall share data, models and use the same CARD;

E6.4.3. The CAIG, DoD Components, and PM shall raise and resolve issues in a timely manner and at the lowest possible level;

E6.4.4. The CAIG shall brief the preliminary, independent, LCCE to the PM 45 days before the OIPT, and the final estimate 21 days before the OIPT;

E6.4.5. The CAIG, DoD Component, and PM shall address differences between the independent LCCE and the PM/Service estimate; 

E6.4.6. The PM shall identify issues projected to be brought to the OIPT to the Chairman, CAIG, in a timely manner.

E6.5. Analysis of Alternatives Procedures. For potential and designated ACAT I and IA programs, the Director, Program Analysis & Evaluation (D,PA&E) shall direct development of the analysis of alternatives by preparing initial guidance, reviewing the analysis plan, and reviewing the final analysis products. The guidance shall be issued to the DoD Component, or for ACAT IA programs, to the office of the PSA responsible for the mission area. The DoD Component or the PSA shall designate responsibility for completion of the AoA, but it may not be assigned to the PM. An analysis plan shall be provided to the Office of the D,PA&E for review prior to the start of the AoA and the final AoA shall be provided to the D,PA&E not later than 60 days prior to the DAB or ITAB meeting for milestone reviews. The D,PA&E shall evaluate the AoA and provide an assessment to the Head of the DoD Component or PSA and to the MDA. In this evaluation, the D,PA&E shall assess the extent to which the AoA:

E6.5.1. Illuminated capability advantages and disadvantages;

E6.5.2. Considered joint operational plans;

E6.5.3. Examined sufficient feasible alternatives;

E6.5.4. Discussed key assumptions and variables and sensitivity to changes in these;

E6.5.5. Assessed technology risk and maturity; and

E6.5.6. Calculated costs.