A Method for Estimating the Development and Production Cost of Advanced Radar Systems at the Subsystem and Component Level
Budget constraints and high development and production costs have combined to limit the deployment of sensor systems needed for ballistic missile defense and other important military applications. To reduce the cost of new radar systems, designs must be based on reuse of components and subsystems. Similarly, in-service radars are being modified and upgraded to extend system performance and enhance supportability and sustainability. This shift in emphasis has created a need for a procedure to estimate radar modification costs and radar development and production programs where components and subsystems are reused in the early stages of the planning and budgeting cycle.
Parametric radar cost models have existed since the early 1980s, but they were hardware oriented, generally provided estimates at an aggregated system level, and were insensitive to issues related to design reuse or modification strategies. Since the creation of those early cost models, radar technology has evolved. The emergence of transmit/receive module technology, electronically steered arrays, and the insertion of COTs based signal and data processing elements have changed the nature and distribution of radar costs. Large software suites are now required to generate and process multiple waveforms and to perform sophisticated target characterization and discrimination operations. The premise of this study was that it might be possible to develop a radar cost model that operated at a lower WBS level for the prime mission equipment, included provisions for a robust software element, and relied on simple input variables that would always be available at early stages of the requirements definition process. Twenty one radar systems were selected to provide a foundation for the study, based upon the availability of cost data and technical characteristics. Seven airborne, seven ground-based, and seven sea-based systems comprised the data set. In a few instances (radome, T/R modules, and others) data from additional programs was employed.
The study was conducted within the Missile Defense Agency and in cooperation with the Navy Engineering and Logistics Office, the Air Force Cost Analysis Agency, and a major U.S. radar contractor. The detailed development and production cost data used as points of departure were obtained from a number of research documents prepared by MCR Federal, Tecolote Research, Technomics, Science Applications Incorporated, RAND, the internal program documents and resources of the Missile Defense Agency, and other sources. Techniques were developed to parse historical cost information into a standard subsystem and component work breakdown structure. The costs were normalized to constant FY2001 dollars and combined with a common set of technical characteristics. Statistical analysis was used to create a family of cost estimating relationships (CERs) that could be combined to create cost models oriented toward estimating dish, planar array, or modular radar systems. The cost models that resulted are not simple or deterministic. Using these tools requires considerable informed judgment as well as a detailed knowledge of specific program plans and technical strategies. For these reasons, the study provides an estimating procedure rather than a mathematical model. The relationships and structure of the cost models provide a rational approach to understanding and estimating conceptual radar system costs problems, but they do not constitute a general solution to the radar cost analysis problem.
David Stamm is senior cost analyst with the Missile Defense Agency in Arlington, VA. He has over 30 years of Air Force, DoD and private consulting experience with electronics, aircraft, munitions, boosters, ICBMs, unmanned spacecraft and C4ISR systems. Of that total time he has spent 8 years in Operations and Support at operational bases from Okinawa to Egypt and 17 years in Acquisition (5 years in system program offices, 5 years at division or center headquarters level, and 7 years at Air Staff and major command headquarters level). In the private sector, working for Tecolote Research Inc, Booz | Allen | Hamilton and Management Consulting and Research, LLC he has provided acquisition and cost analysis support to a variety of DoD, Navy, Air Force, Army and Joint Service clients. He holds a bachelors degree in business administration from The Citadel, and a master of arts in business administration and management from Webster University. He is also a graduate of the Program Manager’s Course at Defense Systems Management College, Air War College, Air Command & Staff College and Squadron Officer’s School. Mr. Stamm holds DAWIA Level III certifications in Program Management and in Business, Cost Estimating & Financial Management. He has been a member of SCEA for 14 years, and has served as programs chair, vice president and president of the Greater Dayton Chapter, National Treasurer and as a Director on the National Board of Directors. He is currently Vice President for Region 2. He is also a member of the Air Force Association, the American Society of Military Comptrollers, Armed Forces Communications & Electronics Association and the American Institute of Aeronautics and Astronautics.
Greg Bell is a senior affordability engineer, conducting life cycle cost analyses and developing conceptual cost models for Systems Analysis organizations. His specialty is the preparation of life cycle cost figures in conceptual and preliminary design environments, development of CAIV studies in conjunction with other engineering disciplines, and creation of design to cost targets and should cost estimates based upon industry benchmarks. He has been involved with large military and civil aircraft programs, sensor and C4ISR aircraft, ground electronic systems, missiles, manned and unmanned spacecraft, and logistics services and information systems. His background includes over 30 years in the cost modeling and industrial engineering fields. From 1995 through 1997, he worked for the Institute for Defense Analyses (IDA) and developed a network of expert friends and associates that continues to provide support and insight. Bell has also worked on international programs (Greece, Taiwan, Malaysia, and the Netherlands) and has provided international aerospace cost models to the National Air Intelligence Center at Wright Patterson Air Force Base.
Office of the Chief Procurement Officer, Undersecretary of Management Directorate, Department of Homeland Security – Senior Cost Estimator in the Cost Analysis Division Paul Grim is a Senior Cost Estimator in the Cost Analysis Division, Office of the Chief Procurement Officer, Undersecretary of Management Directorate, Department of Homeland Security. Previous to joining the Department of Homeland Security, he was the Assistant Director and Sensors and Battle Management, Command, Control and Computers Division Chief for the Cost Estimating and Analysis Directorate of the Missile Defense Agency. He supervised the cost estimators supporting MDA’s Sensors Directorate, Command and Control, Battle Management and Communications Directorate, Space Systems Directorate, and Advanced Systems Directorate. Prior to assuming his position with the Missile Defense Agency’s Cost Estimating and Analysis Directorate in 2006, Mr. Grim spent nine years as a contractor supporting the Ballistic Missile Defense Organization and Missile Defense Organization. He served in the United States Army for 20 years prior to his 1997 retirement. Mr. Grim has a Bachelor of Science Degree in Computer Sciences from the United States Military Academy and a Masters of Science Degree in Operations Research from Stanford University. He is a member of the DoD Acquisition Corps, Level III Certified in Business, Cost Estimating, and Financial Management, and is a Society of Cost Estimating and Analysis (SCEA) Certified Cost Estimator/Analyst. He lives with his wife, to whom he owes all of his success, and five children in Leesburg, Virginia.