2013-MG115

Sailing Blind: Data-Driven Estimating at the Concept Phase, a Case Study of Canada’s Joint Support Ship Project

Management Track

MG1-15_Presentation_SailingBlindCanadasJointSupportShipProjectCaseStudy_Barkel MG1-15_Paper_SailingBlindDataDrivenEstimatingAtTheConceptPhaseACaseStudyOfCanadasJointSupportShipProject_Barkel

Abstract:

Canada’s lack of recent experience in naval shipbuilding and the unique nature of the National Shipbuilding Procurement Strategy (NSPS) present unique estimating challenges. A methodology was needed that was at once data-driven and defendable while at the same time able to address shipbuilding realities at a very high level conceptual stage. This paper outlines a case study where PRICE Systems and the Canadian Parliamentary Budget Officer (CPBO) developed a methodology and model to address these challenges for the Joint Support Ship (JSS) project.

In 2004, the Royal Canadian Navy announced the Joint Support Ship (JSS) project to acquire replacement ships for two Protecteur-class Auxiliary Oiler Replenishment ships. Early on, however, the project encountered difficulties; feedback from bidders indicated that it would not be possible to design, build, and launch the ships within the $2.1B budget allocation. In response, in 2010, the Canadian Government re-baselined the JSS project with a more modest statement of requirements and a new budget of $2.6B.

By the time the project was re-baselined, Canada’s naval shipbuilding industry had well and truly disappeared. The country’s last major naval shipbuilding project was for the Halifax-class frigate. The shipyard that constructed the fleet had been closed down in 2003, and the senior naval officers involved in the project had long since retired. In order to revitalize the industry, Canada announced the National Shipbuilding Procurement Strategy (NSPS) — a plan to develop “strategic relationships” with Canadian shipyards in order to rebuild Canada’s Navy and Coast Guard fleets, thereby reinvigorating Canada’s latent shipbuilding industry. The JSS was included within the “non-combatant” package of the NSPS and, in 2011, the contract for construction was awarded to Seaspan Marine Corp based out of Vancouver.

The case study outlines those challenges, provides insight into the strategic and analytical approaches adopted to respond to the parliamentary request, and presents the team’s findings. In addition, the case study will cover:
• Developing a data-driven, defendable estimate at the concept phase;
• Addressing multi-national productivity issues through high level calibration;
• Shipyard Analysis of Alternatives considering productivity;
• High level estimating under uncertainty including design and production; and
• Sensitivity analysis of key modeling assumptions.

Author(s):

Tolga R. Yalkin
Canadian Parliamentary Budget Officer
Tolga R Yalkin is Senior Financial Advisor to the Canadian Parliamentary Budget Officer. In addition to his role with the Parliamentary Budget Officer, he currently holds the position of Professor of Law at the University of Ottawa.
Tolga is admitted to the Supreme Court of New South Wales, holds an honours degree in Commerce from the University of British Columbia, an honours degree in law from the University of Sydney, and a Bachelor of Civil Law and a Masters of the Philosophy of Law both from the University of Oxford.
Prior to joining the Office of the Parliamentary Budget Officer, he practiced law in banking and financial regulation, held academic appointments at various international universities, worked under the auspices of the Attorney-General of New South Wales, was as Editor-in-Chief of the Oxford University Commonwealth Law Journal, and chaired various NGOs.
His analytical work focuses on defence and criminal justice costing. In addition, he provides strategic and policy advice. Complementing his quantative work, he has published in areas of constitutional, administrative, international, criminal, and immigration law.

Erin K. Barkel
Parliamentary Budget Office, Canada
Erin Barkel is a Financial Analyst on the Expenditure and Revenue Analysis team at the Parliamentary Budget Office (PBO) in Canada. Since joining the PBO, her work has included analyses of government spending plans and expenditures, as well as the costing of defence acquisitions. Erin co-authored the PBO’s report on the “Feasibility of Budget for Acquisition of Two Joint Support Ships”.
Prior to joining the PBO, Erin was a Policy Analyst at the Treasury Board Secretariat, providing policy advice on investment plans and projects undertaken by government departments in the social and cultural portfolio. She has also worked in healthcare as a Patient Safety Specialist, completed an internship at PRIO, and published research on quality assurance for policing.
Erin holds a BASc in Industrial Engineering from the University of Toronto and a MBA from the Ted Rogers School of Management at Ryerson University (Toronto). She is (slowly) pursuing a PhD in Management at the Sprott School of Business at Carleton University (Ottawa).