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The DoD PSM’s Role in Cost Estimating

Two of the nine statutory responsibilities of DoD Product Support Managers (PSMs) relate to the cost and affordability of weapon systems, including: (1) use of predictive analysis and modeling tools…

The DoD PSM’s Role in Cost Estimating

The DoD PSM’s Role in Cost Estimating
Shawn Harrison

Two of the nine statutory responsibilities of DoD Product Support Managers (PSMs) relate to the cost and affordability of weapon systems, including: (1) use of predictive analysis and modeling tools to reduce operations and sustainment costs; and (2) use of cost analyses to validate the Product Support Strategy (PSS) and Life Cycle Sustainment Plan (LCSP). Both activities, which span the system life cycle, require collaboration with the cost estimating community and the use of cost estimating methodologies and tools.

The program’s cost estimating team maintains the Cost Analysis Requirements Description (CARD), which documents the technical and programmatic features of the program and serves as a source document to prepare various estimates such as the Life Cycle Cost Estimate, Program Office Estimate, Component Cost Estimate, and Independent Cost Estimate. These estimates support Milestones and other acquisition decision points, certifications, Independent Logistics Assessments (ILAs) for major weapon systems, and Sustainment Reviews (SRs) for covered systems. The PSM and PM also utilize the CARD and resulting cost estimates in executing the Product Support Business Case Analysis (PSBCA), which examines costs, benefits, and risks of various sustainment alternatives. The PSBCA supports Milestones and decision points, and when revalidated every five years, is the principal means to validate the cost-effectiveness of the PSS and LCSP.

A best practice is for the PSM to assign product support SME(s) to the cost estimating team to ensure the entire product support scope (across all cost estimating elements and appropriations) is included in the CARD, and that cost estimates reflect the approved LCSP plus any fact-of-life changes. The DoD PSM Guidebook, Table 3, identifies product support funding requirements across the five major appropriations. The DoD LCSP Outline Section 9 documents program funding and cost estimates, including Operating & Support (O&S), disposal costs, and affordability constraints. The PSM assists the cost estimating team in identifying Product Support Integrator and Product Support Provider points of contact to support CARD and cost estimate updates. Finally, the PSM should continuously seek to identify “should cost” opportunities for cost reduction.

To explore further, consider completing BCE 1000, Fundamentals of Cost Estimating or CLCL 012, Product Support O&S Cost Management Credential, as well as checking out the DoD O&S Cost Management Guidebook and the DoD Product Support Manager Guidebook.