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CCA - Industry Engagement

Cost Capability Analysis Cost Capability Analysis

Cost Capability Analysis

Industry Engagement
Transformational Innovation
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Project Title: Cost Capability Analysis
Status: Transitioned

Problem Statement:
The Air Force requires a better understanding of the effects of requirements on cost and cycle time to inform affordability decisions.  In June 2012, the Secretary and Chief of Staff of the Air Force signed the Continuous Process Improvement 2.0 Plan which mandated cost/schedule capability/design trade-off curves throughout the life of Air Force acquisition programs.  The production and evaluation of these curves constitute a Cost Capability Analysis (CCA).  Six pilot programs were approved to be used as trial programs to determine what resources it will take to institutionalize CCA.  A key finding from the pilot programs was that insight at the right time from industry on program requirement cost drivers and requirement trade space can be extremely beneficial in helping define capability requirements and affordability for our Air Force programs. 

Project Description:
The Air Force would like to develop new processes, procedures, and policies to achieve the objectives listed above.  The BTCC Round 2 CCA project will include a new series of industry engagements (telecons and workshops) to identify the opportunities and challenges related to formalizing and demonstrating a CCA process within the Air Force and in Industry and to define boundaries for industry participation.  Specific industry skillsets are desired to participate in this process, including:  systems engineering, tradespace analysis, cost estimating, mission effectiveness analysis, operations research, and contracting.  Information gathered from industry will be used to develop and demonstrate new processes, with the intent to define policies and procedures for future weapon systems and services. The anticipated deliverables from this project are policy updates in the following areas:  Statement of Work language, contract structures, acquisition strategy, and tech baseline agility and recommendations on how to address conflict of interest considerations and proprietary data concerns.

Lessons Learned:
Lessons learned indicated there were strong benefits from engaging industry to conduct CCA, including:

  • Broader materiel solution trade space options were possible when industry insights were incorporated;
  • Industry may understand solution space more completely, which can improve requirements definition;
  • Contractor-developed design configurations can be used to adjust technical requirements to reduce costs;
  • Contractor-provided cost data allow the government to better understand the top cost drivers for designs; and
  • Involving industry early and often for input into CCA allows programs to obtain the necessary information to adjust technical requirements to meet affordability targets.