Sign In
  • Question

    In which product support BCA section would the assessment of the alternatives against the financial and non-financial criteria be found?


    Answer

    Assessing your alternatives against both the financial and non-financial criteria is the crux of performing a best value analysis, and they are addressed throughout the BCA process – not just in any one section alone. In the Product Support BCA Guidebook (https://www.dau.mil/tools/t/Product-Support-Business-Case-Analysis-(BCA)) Section 4.4.3, Evaluation, it states:  One of the most critical and difficult components of a BCA is analyzing benefits in addition to cost, and thus making a final recommendation based on a set of evaluation criteria that enables a best value assessment. Best value is often defined as the intersection of performance and cost, based on specific criteria. The Product Support BCA team will establish the evaluation criteria for both financial and non-financial factors early in the process after conducting background research and obtaining approval from the governance body.”

    The key in this statement is that the BCA team will establish the evaluation criteria for financial and non-financial factors early on such that they are an integral part of the entire process. Once included in the iniital evaluation factors, then team then needs to determine the relative values related to the Warfighters’ and Sponsors’ desired outcomes and requirements, and ultimately measure the alternatives developed against these weighted factors.

    In looking at the BCA process flow in sectin A.2 of the Product Support BCA Guidebook, you will see that the initial financial and non-financial factors are typically addressed in in the preparation portion of the effort during the BCA kick-off, and then approved by the Governance Body. Once the team is conducting the BCA, the selected financial and non-financial factors are included in each step, and then addressed as appropriate in the draft recommendation. When in the conclusion portion of the analysis, validation feedback may lead to changes in some of the factors, followed by adjudication prior to implementation of the selected BCA alternative.

    For a good example of a Product Support BCA, as well as the analytical approaches used to assess criteria, recommend you look at the Performance Based Logistics (PBL) Guidebook (https://www.dau.mil/tools/t/Performance-Based-Logistics-(PBL)-Guidebook). Section 2.6 on product support value analysis is particularly germane to your question, stating “Value analysis of potential product support alternatives evaluates three primary criteria:  Costs (2.6.2.2), Benefits (2.6.2.3.), and Risks (2.6.2.4.). The decision for how to value the potential tradeoff between costs and benefits, benefits and risks, and costs and risks is one that the Product Support Management Integrated Product Team – and ultimately the PM/PSM – will need to make based on the unique requirements and characteristics of their program.This section provides a methodology to quantify the weight of each criterion to reflect its relative importance for the PM in defining the product support strategy. Regardless of the relative importance each is given, the expected costs, benefits, and risks of each potential product support alternative should be considered."

    The PBL Guidebook then goes on to list analytical approaches for each criterion, beginning with the weighted criteria or utility approach (2.6.2.1), followed by cost, benefit, and risk analyses. There are other methods for performing a product support value analyses, but the methods outlined provide a straightforward, comprehensive approach for quantifying the potential value from each alternative.

    Open full Question Details