Posted by Designing a Conceptual Framework for Estimation and Analysis of Total Ownership Cost
Life Cycle Cost Track
LCC10_Presentation_DesigningaConceptualFrameworkforEstandAnalysisofTotalOwnershipCost_Thompson
LCC10_Paper_DeisgningaConceptualFrameworkforEstandAnalysisofTotalOwnershipCost_Thompson
Abstract:
In recent years, the push for greater efficiency and productivity in Defense spending has yielded an increased focus on affordability analysis. Understanding and estimating Total Ownership Costs (TOC) is key in assessing affordability, and the cost community must adapt to support TOC estimation. This paper discusses the development of a conceptual framework for estimating TOC in support of a broader audience, from the acquisition community to program managers and even as a decision support tool for entities such as Congress, DoD Financial / budgetary community, and G-8 Program Analysis & Evaluation. In developing this framework, we examined cost element structures and relevant organizational factors of the Army, Navy, Air Force, NASA, UK MoD and others. We then looked at the different use cases of a TOC estimate in an affordability analysis, and studied the various roles and personas involved. This examination provided useful insights, including how various structures (cost element structure, organizational structure, and work breakdown structure) combine to influence the execution of a TOC estimate. Our analysis led us to the development of a generic TOC estimating methodology. The approach is complete, can be tailored for multiple use cases, maps well to standard cost element structures, and aligns well with current acquisition-specific estimating practices.
Author(s):
F. Gurney Thompson III
PRICE Systems LLC
F. Gurney Thompson III is a cost research analyst at PRICE Systems LLC. With progressive experience in mathematical modeling and a strong conceptual mind, Gurney is ideally suited for research and development of cost methodologies and analysis. Most recently, he was the primary architect of solutions for estimating total ownership cost at PRICE Systems. Gurney was a major contributor to the US Army Software Lifecycle Affordability Management study in 2009-2010, where he analyzed cost implications of Service Oriented Architecture. Gurney graduated with a B.S. in Systems Engineering from the University of Virginia in 2007.
Robert Koury
PRICE Systems LLC
Mr. Koury is currently a Senior Cost Research Analyst at PRICE Systems L.LC. of Mount Laurel New Jersey. His early career consisted of 21+ years as a US Army Infantry Officer / Operations Research Analyst. While on active duty with the US Army assigned to the US Army Concepts Analysis Agency Mr. Koury conducted research and analysis in combat weapon systems affordability and trade-off analyses. He was a primary author of the US Army’s Value Added Analysis process and techniques for the prioritization of the acquisition portion of the Army’s Program Objective Memorandum. Upon retirement from the US Army he accepted a position with Texas Instruments (TI) Defense. While at TI he continued to execute affordability and performance analysis of US Army systems. In 1999 Mr. Koury took a position with Lockheed Martins Maritime Systems and Sensor (MS2) Division. While at Lockheed Martin he was the manager of the Sea Based Missile Defense Studies and Analysis group conducting concept, performance, and affordability analyses. He progressed through various staff and individual contributor positions ultimately holding the position of Chief Scientist for System of Systems Engineering for MS2. Currently working at PRICE Systems L.L.C. he is responsible for technical support to customers. Mr. Koury has an MS in Systems Management from the University of Southern California and a Masters of Art in National Defense and Strategic Studies from the Naval War College. He is currently on the Board of Directors for the Military Operations Research Society and active with the NDIA Systems Engineering Division.