Cost Operational Effectiveness Analyses (COEA). The COEA done for the major Army projects are of spotty quality and in some cases non-existent. What should be done?
During interview with several key Army managers it became apparent that great dependence was being placed on COEA to assist them in making decisions between alternatives… We concur with this in principle but sound this tocsin-the Army may be developing a preoccupation with COEA…. When, however, someone depends too much on poorly known cost and equally unknown indications of effectiveness, the whole process becomes a dangerous liability in making a decision. The fundamental problem is that studies can be (and have been) wickered to show that the new and complex equipment better.
This is called the “Silver Bullet Syndrome” in the trade. Example: Postulate a $1 million tank that is 2056 more effective than a $500k tank. After all, a $1 million anything ought to be at least 20% better than a $500k anything. Do a ten-year cost run-out, accepting claims by developer of $1 million item that it will not require additional logistic support. Result is that the $1 million tank is always a better buy, until, of course, one gets into battle and needs lots of reliable and maintainable tanks. This “silver bullet” analysis has been particularly effective in the case of missiles, airplanes and helicopters. A World War II fighter took a total of 10 man-years of labor to produce. (Incidentally, so did a tank.) The newest generation of fighters take 1000 man-years to produce…
Conclusions [from COEA] can also be distorted in presenting results. The question is how can such fudging of results and prejudiced application be exposed or avoided.
That was from “Report of the Army Materiel Acquisition Review Committee (AMARC): Volume II Committee Reports” 1 April 1974, pp. I-15-16.
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