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Affordability - Systems Engineering Trade-Off Analyses


Affordability 

Affordability is a determination that the Life Cycle Cost (LCC) of an acquisition program is in consonance with the long-range investment and force structure plans of the DoD or individual DoD components. Conducting a program at a cost constrained by the maximum resources that the DoD or DoD component can allocated to that capability. SE trade-off analyses for affordability, a special application of the Decision Analysis process (see Systems Engineering Guidebook, Section 4.1.2), should:  

  • Support the establishment of realistic affordability caps as documented in the program’s APB.  
  • Serve as inputs for the will-cost estimate and should-cost targets, including related should-cost initiatives. 
  • Enable continuous monitoring of program life cycle costs with respect to affordability caps across the system life cycle.  

The SE trade-offs are conducted among cost, schedule, and performance objectives to ensure the program is affordable. The PM should identify the design performance points that are the focus of trade-off analyses to establish cost and schedule trade space. The PM presents the results of the trade-off analyses at program milestone/technical reviews, showing how the system’s life cycle cost varies as a function of system requirements, major design parameters, and schedule. The results are used to identify cost and affordability drivers and to demonstrate how the cost-effective design point is established for the system. 

See the Systems Engineering Guidebook, Section 5.2 for more information on Affordability in Defense acquisition. 


 


 
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