DoD Contractor Estimating Systems Deficiencies Can Withhold 10%
A draft rule for business systems has been posted by the Government�allowing the withholding of 10% of payments for each of six systems, with a maximum of 50% withholdings. These systems include contractor business systems including 1) estimating, 2) purchasing, 3) accounting, 4) earned value, 5) property and 6) material management.
In 2009 the congressionally chartered Commission on Wartime Contracting stated in its June 2009 interim report to Congress that:
“Weak control systems increase the risk of unallowable and unreasonable costs on government contracts”
Comments will be accepted until March 16, 2010. Email to dfars@osd.mil with subject DFARS Case 2009-D038.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Improving Earned Value With Statistics
I attended a very interesting session presented by Eric Druker and Dan Demangos of Booz Allen Hamilton and Richard Coleman of Northrop Grumman Information Systems, at the Department of the Navy Cost Analysis Symposium (DONCAS) last week covering improving Earned Value (EVM) analysis with statistics. The speakers covered many of the common points regarding EVM weaknesses and showed some work they had done in helping solve some of these issues.
I found it interesting that SEER-SEM’s Parametric Progress analysis solves the same problems by looking at EVM type data and parametrics in concert.
The Problem Statement from the briefing included:
- Currently, the traditional Earned Value Management calculations suffer from several shortcomings that lessen their viability as a cost estimating tool
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
More Resources For Cost Engineering
1. The Association for the Advancement of Cost Analysis (AACE) has a cost estimating library of publications that may be purchased.
2. NAVSEA Cost Estimating Handbook, 2005.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
DoD Releases Reliability, Availability, Maintainability, and Cost Rationale Report Manual
I received notification of the new manual including Cost Rationale along with reliability, availability, and maintainability. This revision adds cost to the previous reliability, availability, maintainability document. Here is the email announcement:
The Office of the Secretary of Defense and the Joint Staff collaborated on the Reliability, Availability, Maintainability-Cost (RAM-C) Report Manual to assist combat developers, project managers, and engineers to design RAM into systems early in a program. The manual supports life cycle implementation of the Sustainment metric, for which the Chairman of the Joint Chiefs of Staff (CJCS) issued new guidance in May 2007. The Sustainment metric consists of an Availability Key Performance Parameter (KPP) and two supporting Key Systems Attributes (KSAs): Reliability and Ownership Cost. The CJCS guidance requires programs under development to create a balance between RAM performance in the field and the related costs of providing that performance-a distinct paradigm shift within the acquisition community that, once fully implemented, should result in improved value for major acquisition programs.
http://www.acq.osd.mil/sse/docs/DoD-RAM-C-Manual.pdf
Additionally the manual discusses ownership cost as summarized below:
“Ownership Cost KSA. Ownership Cost provides balance to the sustainment solution by ensuring that the Operations and Support (O&S) costs associated with availability (e.g., maintenance, spares, fuel, support.) are considered in making program decisions. For consistency and to capitalize on existing efforts in this area, the Cost Analysis Improvement Group O&S Cost Estimating Structure will be used in support of this KSA. (See the structure at the following website: http://dcarc.pae.osd.mil/reference/osd_ces/ ndex.aspx). Appropriate sections of this document cover the specific elements involved in cost estimation.”
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
Project Prediction Infographic
