DoD Buzz

DoD's cost-control guinea pigs


Top Pentagon weapons-buyer Ash Carter has identified 15 programs that will be the first to use a new management approach that he hopes will make for lower costs and better performance, writes Nick Schwellenbach of the Project On Government Oversight. The notion is called Should-Cost and Will-Cost, and Carter has instructed the managers of these programs to use them and get him new projections about their costs by Nov. 1.

This New Math approach to program management seems to work like this: Managers are supposed to develop Should-Cost calculations to figure out, based on detailed reviews, what they should reasonably expect to pay as they go forward. They should draw up their budgets based on Will-Cost calculations, a hard-nosed, no-kidding look at real numbers going forward, based if possible on prior experiences.

With all the number-crunchatation and spreadsheetery taken care of, Schwellenbach writes:

You use independent cost estimate will-cost to help plan budgets over the long run, tame unreasonable expectations at the onset, and control for the contractors’ and military services’ rosy expectations of technological performance, integration, and cost. You use should-cost to help negotiate better contracts with a relatively uncompetitive defense industry. Ideally, you beat the will-cost expectations, but there are risks.

This is the theory, at least. While it’s good that there’s some high-level emphasis on both should-cost and will-cost, in Washington it almost always comes down to implementation.

Quite so. And, forgive a silly question, but -- doesn't DoD already do this? Could the key to the Pentagon's survival in Austerity America be as simple as reasonable expectations, tough negotiating, and competent management? Maybe so -- Michael Gilmore, DoD's director of test and evaluation, told House lawmakers in March that "the Department of Defense still is the department of wishful thinking, in many ways." Another reminder about hard-headedness can't hurt.

Still, this seems like the equivalent of trying to train a big-league pitcher by handing him a ball and saying, "Look, it's simple: Just throw this past that man with the bat so he can't hit it." This stuff is a little more complicated.

Per Schwellenbach's post, here are the first programs that will owe reports to Carter this fall:

Air Force: F-35A; Global Hawk blocks 30 & 30; Space-Based Infrared System; Evolved Expendable Launch Vehicle; Advanced Extremely High Frequency Satellite.

Army: Joint Air-Ground Missile; UH-60M Black Hawk; Ground Combat Vehicle; Paladin Product Improvement; NETT Warrior.

Navy: F-35B and C; E-2D Advanced Hawkeye; the presidential helicopter; the Littoral Combat Ship; and SSBN(X).


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