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  • Question

    Is the intent of the Ownership Cost KSA to address only the O&S costs of the system, or to address all system life cycle costs, with particular attention to the O&S costs because it has frequently not been addressed? If O&S cost is the intent, isn't "Ownership Cost" misleading/confusing?


    Answer

    Ownership Cost is often called Program Life Cycle Cost , but in the context of establishing an Ownership Cost KSA, they are not the same. The life-cycle cost consists of research and development costs, investment costs, operating and support costs, and disposal costs over the entire life cycle. These costs include not only the direct costs of acquisition program, but also include indirect costs that would be logically attributed to the program.  
    As one of the four key Sustainment metrics defined in Deputy Undersecretary of Defense for Logistics & Materiel Readiness "Life Cycle Sustainment Outcome Metrics" Memo, dated 10 March 2007, "Ownership Cost" focuses on Operations and Support (O&S) costs associated with materiel readiness.

    The establishment of Ownership Cost as a mandatory KSA for ACAT I programs was intended to focus attention on O&S costs in making materiel readiness decisions. DUSD AT&L’s memo specifies the use of the Cost Analysis Improvement Group’s (Cost Assessment & Program Evaluation" (CAPE)) O&S Cost Estimating Structure. Only the following cost elements are required:

    ·  2.0 Unit Operations (2.1.1 (only)) Energy (fuel, petroleum, oil, lubricants, electricity))
    ·  3.0 Maintenance (All)
    ·  4.0 Sustaining Support (All except 4.1, System Specific Training)
      ·  5.0 Continuing System Improvements (All)

    Although the use of Ownership Cost might seem misleading, the memo is very clear on the specific costs that should be included.   A copy of the memo is included at

    https://acc.dau.mil/CommunityBrowser.aspx?id=461757.




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