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Systems Engineering and Program Management Trends and Costs for Aircraft and Guided Weapons Programs

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Systems Engineering and Program Management Trends and Costs for Aircraft and Guided Weapons Programs THE ARTS This PDF document was made available CHILD POLICY from www.rand.org as a public service of CIVIL JUSTICE the RAND Corporation. EDUCATION ENERGY AND ENVIRONMENT Jump down to document6 HEALTH AND HEALTH CARE INTERNATIONAL AFFAIRS The RAND Corporation is a nonprofit NATIONAL SECURITY research organization providing POPULATION AND AGING PUBLIC SAFETY objective analysis and effective SCIENCE AND TECHNOLOGY solutions that address the challenges SUBSTANCE ABUSE facing the public and private sectors TERRORISM AND HOMELAND SECURITY around the world. TRANSPORTATION AND INFRASTRUCTURE WORKFORCE AND WORKPLACE Support RAND Purchase this document Browse Books & Publications Make a charitable contribution For More Information Visit RAND at www.rand.org Explore RAND Project AIR FORCE View document details Limited Electronic Distribution Rights This document and trademark(s) contained herein are protected by law as indicated in a notice appearing later in this work. This electronic representation of RAND intellectual property is provided for non- commercial use only. Permission is required from RAND to reproduce, or reuse in another form, any of our research documents. This product is part of the RAND Corporation reprint series. RAND reprints reproduce previously published journal articles and book chapters with the permission of the publisher. RAND reprints have been formally reviewed in accordance with the publisher’s editorial policy. Systems Engineering and Program Management Trends and Costs for Aircraft and Guided Weapons Programs David E. Stem, Michael Boito, Obaid Younossi Prepared for the United States Air Force Approved for public release; distribution unlimited The research reported here was sponsored by the United States Air Force under Contract F49642-01-C-0003. Further information may be obtained from the Strategic Planning Division, Directorate of Plans, Hq USAF. Library of Congress Cataloging-in-Publication Data Stem, David E. Systems engineering and program management trends and costs for aircraft and guided weapons programs / David E. Stem, Michael Boito, Obaid Younossi. p. cm. Includes bibliographical references. “MG-413.” ISBN 0-8330-3872-9 (pbk. : alk. paper) 1. United States. Air Force—Procurement—Costs. 2. Airplanes, Military— United States—Costs. 3. Guided missiles—United States—Costs. I. Boito, Michael, 1957– II. Younossi, Obaid. III. Title. UG1123.S75 2006 358.4'162120973—dc22 2005030589 The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. U.S. Air Force photo by Kevin Robertson © Copyright 2006 RAND Corporation All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from RAND. Published 2006 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213 RAND URL: http://www.rand.org/ To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Preface Although systems engineering and program management (SE/PM) have long been part of aircraft and weapons systems development and production costs, there has not been a comprehensive, focused study that has addressed the issue of developing cost estimates for SE/PM. This report specifically focuses on techniques that can be used to es- timate SE/PM costs. It also describes various functions within SE/PM and investigates possible cost drivers of SE/PM. Through extensive interviews with government and industry personnel, a literature search of past studies regarding SE/PM cost analysis, and analysis of actual SE/PM data, the authors characterize trends in SE/PM costs and general estimating methodologies. This study should be of interest to government and industry cost analysts, the military aircraft and weapon acquisition community, and others concerned with current and future acquisition policies. Because of its proprietary nature, the cost information for the relevant programs is provided in a supplementary RAND Corpora- tion report (TR-311-AF), which is not available to the general public. Inquiries regarding the supplement should be directed to the Office of the Technical Director, Air Force Cost Analysis Agency at (703) 604-0387. This report is one of a series of reports from a RAND Project AIR FORCE study entitled “The Cost of Future Military Aircraft: Historical Cost-Estimating Relationships and Cost-Reduction Initia- tives.” The purpose of the study is to improve the cost-estimating tools used to project the cost of future weapon systems and to investi- iii iv SE/PM: Trends and Costs for Aircraft and Guided Weapons Programs gate the effects of recent management initiatives and government policies on cost. The study is being conducted within the RAND Project AIR FORCE Resource Management Program. The research is sponsored by the Principal Deputy, Office of the Assistant Secre- tary of the Air Force (Acquisition), and by the Office of the Technical Director, Air Force Cost Analysis Agency. Other RAND Project AIR FORCE reports that address military aircraft cost estimating issues are the following: • Military Airframe Acquisition Costs: The Effects of Lean Manufac- turing, Cynthia R. Cook and John C. Graser (MR-1325-AF, 2001). This report examines the package of new tools and tech- niques known as “lean production” to determine if it would en- able aircraft manufacturers to produce new weapons systems at costs below those predicted by historical cost estimating models. • An Overview of Acquisition Reform Cost Savings Estimates, Mark A. Lorell, John C. Graser (MR-1329-AF, 2001). In this report, the authors examine relevant literature and conducted interviews to determine whether estimates on the efficacy of acquisition re- form measures are sufficiently robust to be of predictive value. • Military Airframe Costs: The Effects of Advanced Materials and Manufacturing Processes, Obaid Younossi, Michael Kennedy, John C. Graser (MR-1370-AF, 2001). This report examines the effect of the use of advanced materials, such as composites and titanium, on military aircraft costs. The report provides cost es- timators with useful factors for adjusting and creating estimates based on parametric cost-estimating methods. • Military Jet Engine Acquisition: Technology Basics and Cost- Estimating Methodology, Obaid Younossi, Mark V. Arena, Rich- ard M. Moore, Mark A. Lorell, Joanna Mason, John C. Graser (MR-1596-AF, 2002). This report updates earlier studies in the area of propulsion cost analysis, discusses recent engine tech- nologies, and provides methods and techniques that can be used to estimate the costs of future engine programs. • Test and Evaluation Trends and Costs for Aircraft and Guided Weapons, Bernard Fox, Michael Boito, John C. Graser, Obaid Preface v Younossi (MG-109-AF, 2004). This report examines the effects of changes in the test and evaluation (T&E) process used to evaluate military aircraft and air-launched guided weapons dur- ing their development programs. It also provides relationships for developing estimates of T&E costs for future programs. • Software Cost Estimation and Sizing Methods: Issues and Guide- lines, Shari Lawrence Pfleeger, Felicia Wu, Rosalind Lewis (MG- 269-AF, 2005). This report recommends an approach to im- prove the utility of software cost estimates by exposing uncer- tainty and reducing risks associated with developing software es- timates. • Lessons Learned from the F/A-22 and F/A-18E/F Development Programs, Obaid Younossi, David E. Stem, Mark A. Lorell, Frances M. Lussier (MG-276-AF, 2005). This reports evaluates the history of the F/A-22 and F/A-18 E/F programs to under- stand how costs and schedules changed during their develop- ment. The study derives lessons that the Air Force and other services can use to improve acquisition. RAND Project AIR FORCE RAND Project AIR FORCE (PAF), a division of the RAND Corpo- ration, is the U.S. Air Force’s federally funded research and develop- ment center for studies and analyses. PAF provides the Air Force with independent analyses of policy alternatives affecting the development, employment, combat readiness, and support of current and future aerospace forces. Research is performed in four programs: Aerospace Force Development; Manpower, Personnel, and Training; Resource Management; and Strategy and Doctrine. Additional information about PAF is available on our Web site at http://www.rand.org/paf. Contents Preface ...................................................................... iii Figures ...................................................................... xi Tables .......................................................................xv Summary.................................................................. xvii Acknowledgments .........................................................xxv Acronyms and Abbreviations............................................ xxvii CHAPTER ONE Introduction .................................................................1 Study Background and Purpose .............................................1 Comparison
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