U.S. flag

An official website of the United States government

Dot gov

Official websites use .gov
A .gov website belongs to an official government organization in the United States.

Https

Secure .gov websites use HTTPS
A lock () or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Breadcrumb

  1. Home
  2. Product Support Business Case Analysis (PS BCA)

Product Support Business Case Analysis (PS BCA)

DAU GLOSSARY DEFINITION

A structured methodology and document that aids decision making by identifying and comparing alternatives by examining the mission and business impacts (both financial and non-financial), risks, and sensitivities. BCAs may be somewhat different from other decision support analyses through their emphasis of the enterprise wide perspective of stakeholders and decision makers and assessment of the holistic effects impacted by the decision. Other names for a BCA are Economic Analysis, Cost-Benefit Analysis, and Benefit-Cost Analysis. Broadly speaking, a BCA is any documented, objective, value analysis exploring costs, benefits, and risks. Used by the Product Support Manager (PSM) in identifying the Product Support Strategy that achieves the optimal balance between Warfighter capabilities and affordability.

General Information

Requirements

DoD Instruction (DoDI) 5000.91, Product Support Managment for the Adaptive Acquisition Framework, states that the Life Cycle Sustainment Plan (LCSP) "is the primary program management reference governing operations and support planning and execution from program inception to disposal." It also states that an LCSP is required "for all covered systems and is the principal document establishing the system’s product support planning and sustainment" pursuant to Title 10 USC 4324Life-cycle management and product support. Further, DoDI 5000.91 states that a tailored LCSP may be used for non-covered systems, as approved by the LCSP signature authority. In both cases, the plans will include results of the PS BCA. 

Specifically, 10 USC 4324 calls for the PSM to "conduct appropriate cost analyses to validate the product support strategy, including cost-benefit analyses as outlined in Office of Management and Budget (OMB) Circular A–94" and "prior to each change in the product support strategy or every five years, whichever occurs first, revalidate any business-case analysis performed in support of the product support strategy."  To support a program's initial business case analysis (e.g., for Milestone B), particularly before a system design is selected, PSMs should collaborate with their cost estimating team to leverage results of earlier cost analysis, such as that performed in support of the Analysis of Alternatives (AoA), prepared in accordance with the Cost Assessment and Program Evaluation (CAPE) AoA Cost Estimating Handbook.

Also per DoDI 5000.91, the PSM will implement the PSS via the LCSP through arrangements with various public and/or commercial Product Support Integrators (PSI) and/or Product Support Providers (PSP). The PSM will use Product Support Analysis (PSA) to support the PS BCA, PSS, and LCSP.  The instruction adds that the PSM will conduct a PS BCA to assess courses of action being considered and document the recommended course of action in the LCSP that achieves readiness goals, manages risks, and is cost-effective. The PSM will collaborate with users, systems engineers, cost analysts, and other stakeholders to develop risks and assumptions unique to the systems. The LCSP will be reviewed and updated as necessary, following approval or revalidation of the PS BCA and before Sustainment Reviews (SRs) are conducted, to incorporate program bed-down plans through retirement and disposal of the system, and other updates as warranted.

Preparation Instructions

Specific instructions on the PS BCA completion process, product template, and authoritative data sources are contained in the DoD Product Support BCA Guidebook. If the program is a legacy program and does not have a current BCA, the PSM should initiate a cost and performance baseline that addresses each portion of the standard PS BCA to economically and effectively understand the program's current status and to enable future BCAs.

Determining System Support

A PS BCA is performed to determine how the system will be supported across the Integrated Product Support (IPS) elements. The PS BCA identifies which alternative support options provide optimum mission performance given cost and other constraints, including qualitative or subjective factors. Developing the PS BCA will help determine:

  • The methods and rationale used to quantify benefits and costs
  • The impact and value of performance/cost/schedule/sustainment tradeoffs
  • Data required to support and justify the sustainment strategy
  • Sensitivity of the data to change
  • Analysis and classification of risks
  • A recommendation and summary of the implementation plan for proceeding with the best value alternative
  • The relative cost vs. benefits of different support strategies

PS BCA Format

The outline of the PS BCA, per the DoD PS BCA Guidebook, is as follows:

  1. Executive Summary
  2. Introduction
  3. Desired Outcomes and Requirements
  4. Assumptions and Methods
  5. Alternatives
  6. Mission and Business Impacts
  7. Risk Analysis and Mitigation Plans
  8. Sensitivity Analysis
  9. Conclusion
  10. Recommendations

 

Objectives and Approach

PS BCA objectives and approach are dictated to a significant degree by the point at which they are accomplished within the weapon system life cycle. Acquisition and early operational fielding BCAs are primarily used to select a PSS. Later life cycle PS BCAs (e.g., out of production legacy systems) are generally used to assess changes from the current PSS. In that sense, the process is simplified by the following characteristics:

  • Early life-cycle PS BCAs are used to determine the best value portfolio of strategic sourcing and support alternatives to address each IPS element in a program from a set of candidate alternatives. They are iterative, in that they evolve and mature as the data, support infrastructures, and availability of support providers and alternatives evolve.
  • Later life cycle PS BCAs are used to identify the best value alternative product support solution as compared against the current product support solution and to determine whether a change in PSS is beneficial. They are characterized by mature cost, performance, and supportability data and readily available, in-place product support infrastructure(s).

PS BCAs during the Life Cycle

As mentioned above, PS BCAs are accomplished throughout the life cycle. The data, factors, alternatives, and purpose of the BCA evolve consistent with the point at which the analysis is performed within the life cycle. A Milestone (MS) B PS BCA, is necessarily constrained by the lack of real world performance, supportability (reliability, availability, and maintainability), and cost data, making it highly reliant on analogous data, if available. As a result, there are few "alternatives" available for consideration in a MS B BCA, and it is inappropriate to characterize this BCA as a life cycle product support strategy decision analysis. The value in completing a MS B BCA is to initiate and institutionalize the resources, skills, and process infrastructure to collect, compile, update, and analyze the requisite data as it grows and matures after MS B. Each iterative BCA update will improve the ability of the PSM to identify and compare viable product support strategies. In that context, a MS B BCA will utilize the same format and section content as subsequent BCAs but will contain much less detail and will include "placeholder" data to be replaced with actual system, subsystem or component supportability data, as appropriate, as it becomes available.

A MS B BCA will establish the BCA framework and process for a program. Alternatively, a MS C BCA, with requisite test and evaluation data, will begin to identify the viable sourcing and support alternatives. This latter BCA should enable an analysis of sustainment alternatives sufficient to develop the scope of the product support framework and the identification of the key performance and supportability outcomes. The BCA is the primary means by which best value workload sourcing decisions can be implemented.

Potential Support Alternatives

Given that the product support alternatives vary as the life cycle evolves, there is no standard set of support provider alternatives for a PS BCA. Best value product support often includes some mix of organic (e.g. "Government") and contractor support, as well as Public-Private Partnerships (PPP). The potential alternatives, to a great degree, will materialize through the execution of the BCA process. The merits of various sourcing and partnering options will be identified as system support capabilities are analyzed across the IPS elements, and various support alternatives are weighed against desired support requirements and outcomes.

Additional Resources

For additional resources on BCAs, please consult the Life Cycle Logistics Professional Reading List.