Capabilities-Based Costing: Approaches to Pre-Milestone-A Cost Estimating
The issue of early, rigorous evaluation of program costs is becoming more important as defense funding come under greater scrutiny. Often at this point in the life cycle, a requirement or desired capability is known, but the manifestation of the solution is unknown or described only at a high level. Can capabilities alone be used to produce a cost estimate? If so, how can we link the proposed solution to existing systems if only a particular solution’s general capability set is known?
This work submits that better strategic decisions within fiscal constraints could be made if rough order of magnitude (ROM) estimates were available for proposed materiel or non-materiel solutions, based on that solution’s capability set. This project further proposes the use of a knowledge base to provide support for these estimates; it is known as the joint Capabilities Knowledge Base (CKB). By using the relevant entities extracted from CKB, a ROM cost estimate may be developed using a wide spectrum of techniques.
Ms. Roper is a Senior Operations Research Analyst for the Office of the Deputy Assistant Secretary of the Army for Cost and Economics (ODASA-CE). She is a member of the Weapons Systems Costing Division and leads early life cycle cost initiatives. Prior to her arrival at Army headquarters, Ms. Roper conducted intelligence studies for the National Ground Intelligence Center, which investigates foreign military technologies development. Ms. Roper graduated with highest honors as a Bachelor and Master of Science in Industrial and Systems Engineering (ISyE) from the Georgia Institute of Technology.