Challenge the Estimate Presented by Mort Anvari Steve

Challenge the Estimate Presented by Mort Anvari Steve Loftus 23 June 05

The Cost Review Board Ø Professional Adversarial Relationship Ø Determine the Cost Ø Challenge the Schedule Ø Conduct Risk Analysis History shows again and again how nature points out the folly of men 2

Agenda Ø Historical Program Growth Ø Program Schedule Ø Software Schedule & Productivity Ø Question the Data Sources Systems Ø Sources of Data 3

Total CG by Commodity 142 Systems 80% 70% Percent Cost Growth 60% 50% 40% 30% 20% 10% 0% Aircraft 42 C 4 I 24 Missile 34 Ship 19 Space 9 Ground Combat 14 4

RDT&E CG by Commodity 5

Procurement CG by Commodity 138 Systems 60% Percent Cost Growth 50% 40% 30% 20% 10% 0% Aircraft 42 C 4 I 21 Missile 34 Ship 19 Space 9 Ground Combat 13 6

d ro un G C om ce rd an O 4 I C D 4 I C at ic l 8 tro 2 r 3 ne on 6 5 11 AV U C un m d ft ai Tr ra an om C d ft rc Ai an m om C al ic ct Ta em st Sy 6 r 9 rg e La te c Se io n ns 6 el G iv or ro e G ro und ry S 10 un y C d om ste C om ba m 7 ba t T an k ra ns 5 M po is rt si 2 le AT M is A s 8 M ile A M is TG is si si le 7 le M Cru an is M Po e 4 is rta si le bl e Pr 2 oj ec M til is e si 4 le ST M is A si 4 le ST Sh S Sh ip C 5 ar ip rie C r Sh om ba 6 ip Su tan bm t 3 Sh ar in ip Su e 3 Sp pp ac or e Ba t 7 Sp l ac listi c e 3 R Sp oc ac ke e Sa t 2 te llit e 4 ba t 4 I C ft ra rc Ai ft ft ra ra ra rc Ai rc op ni tro ic el H ec El -20% Ai ft ft ra ra rc Ai Percent Cost Growth Total CG by Subcommodity 200% 142 Systems 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 7

Program Schedule 8

The Program Schedule Ø Backwards Planning FY 04 FY 05 FY 06 MSB FY 08 FY 09 FY 10 MSC HW/SW Dev FY 11 IOC IOTE Dev Testing LRIP Full Rate Production 9

Historical Missile Development Effort Durations SOURCE: SAR and JSOW POE 10

Missile Development Effort Durations And Joint Common Missile Estimates So, it can be done in 42 months? 11

Software Development Software estimating parameters Ø Ø Software Lines of Code (KSLOC) Effort for Reuse Effort for Modified Growth Used to calculate Effective Lines of Code (ESLOC) Ø Productivity (KSLOC per Staff Month) Ø Labor Rate Ø Software to Hardware Integration 12

Software Estimating Rules of Thumb Growth: 40% Reuse Effort: 5% to 30% Modified Effort: 30% – 70% COTS: 5% to 30% Software to Hardware integration: 30% Software Maintenance: 60% to 70% of SW Total Life Cycle Estimate 13

Size Growth 14

SW Productivity (SLOC/SM) by Application Domains Application Domain Number Projects Size Range (KSLOC) Avg Productivity (SLOC/SM) Range (SLOC/SM) Example Applications Automation 55 25 to 650 245 120 to 440 Factory automation Command & Control 43 35 to 4, 500 225 95 to 330 Command centers Data Processing 36 20 to 780 330 165 to 500 Business systems Environment/Tools 75 15 to 1, 200 260 143 to 610 CASE tools, compilers, etc Military-Airborne 38 20 to 1, 350 105 65 to 250 Embedded sensors Military-Ground 52 25 to 2, 125 195 80 to 300 Combat information center Military-Missile 14 22 to 125 85 52 to 165 Guidance, Nav & Control Sys Military-Spaceborne 18 15 to 465 90 45 to 175 Attitude control systems Scientific 33 28 to 790 195 130 to 360 Seismic processing systems Telecommunications 48 15 to 1, 800 250 175 to 440 Digital switches and PABX Trainer/Simulations 24 200 to 900 224 143 to 780 Virtual reality simulators Web 64 10 to 270 275 190 to 975 Client/server sites • Based on 500 projects from a database of 1, 500 (Reifer Consultants, Inc) projects. • Scope extends from SW requirements review to SW/SW Integration • Does not include SW/HW Integration, Quality Assurance, System, or Operational Test, & Beta Test Personnel • Different Languages were used (ie Web projects employed Java & Visual C while military projects used Ada & C/C++ 15

Software Estimate Given: Labor rate - $145 per hour (fully burdened with fee) 152 hours per staff month Aviation Program Staff Months: 3543 (372000 / 105) Staff Month Labor Rate: $22, 040 ($145 * 152) SW Development: $78 M (3543 * $22, 040) SW to HW Integration: $23 M ($78 M * 30%) Total SW Development: $101 M ($78 M + $23 M) SW Maintenance: $168 M ($101 M/. 6) Total SW Life Cycle Cost Estimate: $269 M ($101 M + $168 M) 16

Missile/Seeker Software 1 FY 04 2 3 4 1 FY 05 2 3 PDR IPR MS B 4 1 CDR FY 06 2 3 4 1 FY 07 2 3 4 1 DRR FY 08 2 3 MS C 4 1 FY 09 2 3 AH-64 D IOC AH-1 Z EOC Phase 1 CA INCREMENT 1 EDT FRP F/A-18 E/F EOC 4 1 LRIP 1 LUT LRIP 2 MH-60 R EOC FRP CA DT IOT&E SW Dev before DT ($101 M) SW Dev before DT ($74 M) 4 RAH-66 IOC w/JCM Test Support PPT (System Qual) DT SHOTS POE $97 M 1 FY 11 2 3 Phase 2 Adv Proc CCA $101 M 4 FY 10 2 3 Test-Analyze-Fix ($23 M) November, 2003 17

Missile Qualification Comparison Missile Test Shots Ø How does program compare to analogous programs? 18

Comparison of Estimated Resource Requirements 4, 500 4, 000 3, 500 FY 2003, $M 3, 000 2, 500 2, 000 1, 500 1, 000 500 0 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 19

Sources of Data 20

Army Tools for Total Ownership Cost Estimating Life Cycle Cost Management Tools 21

Automated Cost Estimator (ACE) • Automated Cost Estimator (Ace)—is a Model-building Tool. Part Spreadsheet, Part Database, It Incorporates Enough Structure to Eliminate Most of the Automation Tasks You Would Have to Perform If You Used a Spreadsheet, Yet It’s Flexible Enough to Perform Nearly Any Kind of Analysis. The Analyst’s Productivity Is Increased Through Built-in Inflation, Learning, Time Phasing, Documentation, Sensitivity/what-if, and Other Analysis Capabilities. 22

Automated Cost Data Base (ACDB) ACDB Is ACEIT’s Automated Cost Database. Just As ACE Is a Modelbuilding Tool, ACDB Is a Database- Building Tool. It Contains Powerful Database Entry and Administration Tools to Enable Any Site/office to Create Its Own Tailored Database. When You Populate It, ACDB Lets You Search and Retrieve Cost, Schedule, Technical, and Programmatic Data. 23

Operating Support (O&S) Costing Installation Cost (Base Operations / Real Property Maintenance) Operating & Support Management Information System (OSMIS) Force Cost Model(s) 24

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Force Costing / Models FORCES: Unit Operations & Support • Updated Annually • Provides Input to 5 Defense Models • Supports 9 Separate Study Groups • Avg 25 Major Estimates Per Year 26

OSMIS Operating & Support Management Information System • • • Database Parts (NSN Level) & Fuel Ammunition Intermediate Maintenance Depot Maintenance Activity Data (miles/Hours) Year of Manufacture 27

Summary Costs Analysis: It’s more than just Cost Ø Challenge the schedule through use of historical programs Ø Software costing and metrics identifies schedule risk 28