Sustainment cost estimating update

The increased capability and complexity of weapon systems has been accompanied by a decline in reliability and availability and a corresponding increase in O&S [Operating & Support] costs of fielded systems. As summarized in Chapter One, multiple directors of OSD DOT&E have documented the decline in reliability of tested systems since the 1980s. Although public information on the availability rates of weapon systems is scarce, recent DOT&E reports document availability rates lower than goals for recently tested systems, such as LCS and F-35. Both programs are immature, and their availability will likely improve as they mature. Our examination of weapon system availability rates for these and several other MDAPs with large fleets reveals availability rates much lower than were planned during development and lower than current established goals for the systems…

 

We found that CAPE’s four O&S cost analysts cannot perform all the cost activities mandated in law or do them with the requisite analytical rigor. The analysts accomplish roughly one-half of the workload MDAP reviews generate. In addition, a reasonable interpretation of the requirements added in the FY 2016 and FY 2017 NDAAs that address planning for sustainment, establishing cost goals, and life-cycle estimates during sustainment reviews could double the previous historical workload.

 

The number of additional CAPE O&S analysts needed to fulfill all statutory requirements depends on the rigor with which the tasks are done. Assuming a level of rigor consistent with historical CAPE ICEs, we estimate that CAPE needs between ten and 16 O&S analysts.

That was from a very excellent RAND report form Michael Boito et al. on Operating and Support costs.

Note the common pattern in the featured image. The F-22 O&S cost estimate didn’t budge much, despite recognizing big cost growth in R&D and Production, until 2009. It reached Initial Operational Capability in 2005, and then almost tripled over a couple years. So basically, don’t admit problems until too many sunk costs have been realized.

So the whole O&S argument is, can we see that cost coming earlier to make program tradeoffs? Does this mean we need more oversight at the OSD level? I recently heard about efforts to cut 200,000 out of the 700,000 DOD civilians because “no one would miss them,” I was told.

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