Program Office Estimate (POE)

A Program Office Estimate (POE) is a life cycle cost estimate (LCCE) developed by the PMO or by a government cost estimating organization on behalf of the PMO. Each DoD Component will establish policy to determine how its POEs are developed and what role the POE plays in the establishment of a CCP (Component Cost Position).

All Department of Defense (DoD) Military Departments and Defense Agencies (DoD Components) prepare LCCEs in support of their acquisition programs. A LCCE attempts to identify and to properly phase, or spread, all the costs of an acquisition program, from its initiation through disposal of the resulting system at the end of its useful life.

LCCEs for DoD systems serve two primary purposes:

1. They are used at acquisition program milestone and decision reviews to assess whether the system’s cost is affordable, or consistent with the DoD Component’s and DoD’s overall long-range investment and force structure plans.
2. LCCEs form the basis for budget requests to Congress. LCCEs are prepared in terms of base-year dollars (also known as constant dollars) for a selected base year (usually the year of program initiation or last major milestone review). Thereafter, the estimate escalated to then-year dollars for inflation and outlay patterns and used as the basis for input to the programming and budgeting phases of the Planning, Programming, Budgeting and Execution process (PPBE).

DoDI 5000.73 manadates that CAPE, DoD Components, and SCAs must be provided timely access to any records and data in the DoD (including the records and data of each military department and defense agency, to include classified, unclassified, and proprietary information) they consider necessary to review cost analyses and conduct ICEs and cost analyses. This includes all data that was used to create the Program Office Estimate (POE).