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I was afforded the opportunity to attend Secretary of Defense Leon Panetta’s Armed Forces Farewell Tribute.  The preparation for the event was significant with numerous hours invested by every aspect including the training of each Military Services’ Honor Guard (Army, Marine Corps, Navy, Air Force, and Coast Guard).  It even included this segment performed by the Old Guard Fife and Drum Corps.

All that said and with the perspective from the video… can you find me in the image below?

Secretary of Defense Leon Panetta's Armed Forces Farewell Tribute

[Full Speechs of CJCS General Dempsey, President Obama, SECDEF Panetta’s]

 

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So if you’ve never heard of OSD-Cost Assessment & Program Evaluation (CAPE) before here is their introduction:

“The office of CAPE provides independent analysis and advice to the Secretary of Defense and other senior officials on a wide range of issues concerning

  1. cost estimation and cost analysis for major Department of Defense (DoD) acquisition programs (both Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) programs);
  2. the DoD Planning, Programming, Budgeting, and Execution (PPBE) system;
  3. resource decisions relating to military requirements;
  4. analysis of alternatives to ensure that DoD considers the full range of program and non-materiel solutions;
  5. evaluations of alternative military force structure, plans, and systems; and
  6. the development of improved analytical skills and competencies within the cost assessment and program evaluation workforce of the Department.

This report is concerned with the first topic—cost estimation and cost analysis.”  I’ve provided a few pointed excerpts I found throughout the FY 2011 Annual Report on Cost Assessment Activities from OSD-CAPE.

Interesting Tidbits:

“The Materiel Solution Analysis phase presents the first substantial opportunity to influence design through trade-off studies that balance requirements, performance, technology choices, schedule, and cost considerations. The CAPE independent cost estimate is now an important element of this process.  For MAIS programs, due to resource constraints, OSD CAPE involvement in cost estimates has been limited to those programs that experience a “Critical Change,” as defined in statute (described in Appendix C), when the USD(AT&L) is the MDA. In addition, cost reporting for the MAIS programs currently is poor, and both quality and compliance need to be improved. There remains much work to be done to improve the management and preparation of cost estimates for the approximately 46 MAIS and pre-MAIS programs now in the DoD portfolio.

“Similarly, OSD CAPE had only limited involvement in cost estimates prepared for major defense agency acquisition programs this year. For example, the Missile Defense Agency remains exempt from DoD acquisition regulations. Therefore, CAPE does not normally prepare independent cost estimates for the Missile Defense Agency’s major acquisition programs.”

Status of Major Programs (page 19-21)

LCS Comments:

“CAPE prepared an independent cost estimate for the Littoral Combat Ship (LCS) program in support of the Milestone B DAB review held on April 1, 2011. CAPE did not concur with the draft LCS Acquisition Program Baseline (APB) or the Acquisition Decision Memorandum (ADM). These documents were subsequently approved by the MDA. The ADM directed the Navy to fund the program to the Service Cost Position, which CAPE argued would result in insufficient funding in FY 2016. This in turn would have an adverse impact on the average unit procurement cost and run the risk of requiring additional resources to complete the ship builds. Also, CAPE recommended that the LCS Mission Module program, which provides tailored warfighting capability to the LCS seaframes, should be established as distinct subprograms for each mission area in order to more readily assess unit cost metrics and track cost performance.”

It is extremely important to understand how the Navy Budget is developed.

DoD Critical Unit Cost (Nunn-McCurdy) Breaches in FY 2011 (Table 2, page 24; page B-1 for severity levels):

  • Excalibur (US Army)
  • Chemical Demilitarization-Assembled Chemical Weapons Alternatives (DoD)
  • Global Hawk (US Air Force)

List of the Cost Analysis Organizations in DoD (Appendix A):

Independent Cost Assessment Organizations (4)

  • OSD – Deputy Director for Cost Assessment
  • Army – Deputy Assistant Secretary of the Army for Cost and Economics
  • Navy – Naval Center for Cost Analysis
  • Air Force – Air Force Cost Analysis Agency

Additional Field-Level Cost Organizations and Activities

U.S. Army

  • TACOM Life Cycle Management Command (LCMC)
  • Aviation and Missile Life Cycle Management Command (AMCOM)
  • CECOM Life Cycle Management Command (LCMC)

U.S. Navy

  • Naval Air Systems Command (NAVAIR)
  • Naval Sea Systems Command (NAVSEA)
  • Naval Surface Warfare Center

U.S. Air Force

  • Electronic Systems Center (ESC)
  • Air Force Space Command, Space and Missile Center (SMC)
  • Aeronautical Systems Center (ASC)

Other

  • National Reconnaissance Office (NRO) Cost Analysis Improvement Group

[via OSD-CAPE]

*need Abbreviation or Acronym help?

Defense Systems has a decent summary of the major military programs affect by the recent FY13 budget submission.  Titled “Winners and losers in the fiscal 2013 budget” it highlights the following for each service:

Navy/Marine Corps:

  • Small Tactical Unmanned System (UAV) will receive $32 million in FY13, and $300 million in FY13-FY17.
  • Fire Scout vertical take-off and landing aircraft, the service will instead procure a larger Fire Scout based on a larger Bell Helicopter air frame.
  • Medium-Range Maritime Unmanned Aerial System was terminated based on the Fire Scout changes.

Army:

  • Warfighter Information Network-Tactical (WIN-T) will receive $900 million in FY13, and $6.1 billion from FY13 through FY17. FY13 includes purchase of net-centric warfare IP modems and low-rate initial production (LRIP) to support testing.
  • Modification of Stryker vehicles to incorporate command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) systems to facilitate mission command-on-the-move.

Air Force:

  • Cyber capabilities take precedence for U.S. Cyber Command is $3.4 billion in FY13, and  $18 billion from FY13 through FY17.
  • Advanced Extremely High Frequency (AEHF) satellites (fully funded part of $8B FY13 and $40.1B through FY17).
  • Space-Based Infrared System (SBIRS) for surveillance (fully funded part of $8B FY13 and $40.1B through FY17).
  • Operationally Responsive Space program will be restructured to provide “more responsive and timely space capabilities to the warfighter.” Included in $8B FY13 and $40.1B through FY17.
  • (3) NATO Alliance Ground Surveillance (AGS) systems $200M in FY13.  Based on Global Hawk Block 40.
  • Global Hawk Block 30 is cancelled as previously discussed in the initial Defense Budget Priorities post. Will continue to use U-2 through FY25.  Reducing $800 million in expenditures for fiscal 2013, and $2.5 billion from fiscal 2013 through fiscal 2017.
  • Reduce MQ-9 Reaper armed unmanned aerial vehicles (UAV) purchase by 24.  But the funding will still be expended for ground stations.
  • Predator will be utilized for a longer period then initially planned to fence funding for the Army’s Gray Eagle.

The hardest part about all of these changes is the adjustment.  The Defense Industrial Base must flex in order to ensure those programs that are designated to provide capability longer must be examined to ensure fatigue and extended failure does not adversely limit their mission up time ability.  Likewise those entities with program that were cut will immediately request reassessment and ultimately reduce their workforce or reorganize and retask. This is not an easy task but it is the contractor’s role.  The intention when utilizing contractors is for this very purpose.  The entities within the Government and Military will also require retasking which is much harder to effectively achieve.

This reexamination is not much different then when I strive to get more and more effective dollar out of my diesel VW Jetta.  At 150,000 miles there is maintenance to be done but there is no need to purchase a new vehicle when the current one is providing all the capabilities required.  The difference is the human element and that should always be handled with care.

In the end there are no “Winners” or “Losers” but the goal is better efficiency and effectiveness.  If this is achieved at least you can look a taxpayer in the eye with confidence you maximized every dollar they provided.

[via Defense Systems]

 

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