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Life Cycle Cost Normalization for Comparability

Models Track

Downloadable Files:

MOD-1 Hoy Paper Normailization


System concept contractors are increasingly being tasked to formulate life cycle cost (LCC) estimates on their respective offerings. These estimates are often started during the concept development stage of the system acquisition life cycle. From the US Government standpoint, comparability of LCC data among competing vendors and its own internal LCC modeling is a fundamental goal. One way to accomplish this is through early creation and publication of detailed cost groundrules and assumptions that structure the LCC data/estimates being provided to simplify the comparisons and reduce much of the guess work. Summit Engineering Group has crafted such a document for several programs, most recently for the Department of Homeland Security (DHS) Counter-MANPADS concept demonstration effort for protecting US commercial aircraft. This presentation provides the basic contents, approach, and lessons learned in developing a comprehensive cost groundrules and assumptions document.


Kirk Hoy
Mr. Hoy has over twenty-two years of professional hands-on experience in conducting and managing projects associated with analyzing and estimating the cost implications of developing, procuring, operating, fielding, maintaining and disposing of primarily advanced technology systems. Included are entire systems or selected subsystems of Aircraft, Unmanned Aerial Vehicles (UAVs), Missiles, Ships, Submarines, Unmanned Underwater Vehicles (UUVs), Electronics [for example, Radar, EW, EO/IR, ECM, sonar, and Command, Control, Communication, Computer, Intelligence, Surveillance, and Reconnaissance (C4ISR) elements], Satellites, and Ground/Surface Support Equipment and Facilities. Mr. Hoy remains a key analyst in developing Life Cycle Cost estimates, cost proposal analysis, and source selection support teams.

Kirk has an MS in Systems Engineering from the Virginia Polytechnic and State University (Va Tech) as well as a BS in Industrial Engineering and BA in Economics from Lehigh University. He spent the past ten years as the owner and principal analyst of Summit Engineering Group and previously worked for MCR, US Navy, and TASC. He is a CCA/CE with SCEA and affiliated with AIAA, ASNE, SNAME, INFORMS, INCOSE, AUVSI, NDIA, AOC, Air Force Association,
Army Association, Navy League, and Transportation Research Board (on the Aviation Economics and Forecasting Committee). In addition, Kirk (with Dr. Hudak) won Best Paper in Industry, Quantifying Schedule/Technical Risk, Annual DoD Cost Analysis Symposium (1994)

In addition to his professional pursuits, Kirk spends considerable time with his wife and two kids as well as volunteering as Sunday school teacher, building committee member, soccer coach and supporting those running for political office. He is an avid beach bum, tehnology-phile and enjoys crossword puzzles, Sudoku and reading.

Andy Campbell
Mr. Campbell has over four years of experience in the areas of cost modeling and effectiveness modeling, integrating the two to support rational acquisition decisions. Work experience includes research for and development of cost models, budget development, tracking status of various programs, cost proposal analysis, strategic planning, and direct involvement in program reviews.

Andy has a BS in Mathematics and a BA in Economics from Rhodes College in Memphis, TN. He is currently pursuing his Masters in Operations Research, having completed 20% of the course requirements thus far. He is a Certified Cost Estimator and has been involved with both SCEA and the Military Operations Research Society (MORS).

In addition to his professional pursuits, Andy spends considerable time going on runs, playing tennis, and enjoying other outdoor activities with his beautiful wife Carla.