Activity based costing efforts: related to advances in total ownership cost management for aircraft carriers - Navy Acquisition

Program Manager, Nov-Dec, 2002 by Stephen J. Moretto

Renewed Interest in TOC Resulting in Improved Cost Analysis

Aircraft Carrier cost analysis has progressed dramatically over the past several years. This is the result of the renewed emphasis now placed on ownership cost reduction along with the realities of tight fiscal constraints. It is imperative that all elements of cost be well understood and that this understanding be manifested in cost-conscious decision making. This should start with the requirements setters and carry through to every aspect of program management and execution.

Moreover, advances in the relationship between the shipbuilder, the aircraft carrier program office, the engineering community and the Naval Sea Systems Command cost analysis group working as a team have set the stage for continued improvement in our collective understanding and awareness of ship costs and program objectives. This affords maximum opportunity to leverage the collective knowledge and interests of the stakeholders toward a common objective.

A carefully thought out life cycle cost structure with supporting data is an invaluable tool in identifying cost drivers and providing essential information for investment alternatives. Timely, comprehensive, and meaningful life cycle cost information can enlighten the management of ship design, acquisition, construction, and ownership of naval warships.

Editor's Note: Moretto welcomes questions of comments on this article. Contact him at morettosj@navsea.navy.mil.

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FIGURE 2. Government/Industry Integrated Product Cost Team

NNS

* Configuration Data

* Design & Construction Costs

* Manning Costs by ESWBS

* Cross-Reference(s)

* Data Integration

NAVSEA

* Navy Cost Focal Point

* Acquisition Costs

* Time-Value-Of-Money

* Total LCC Baseline Compilation

NCCA

* Ship-Level VAMOSC

* O/I/D-Level VAMOSC

* Navy Billet Sailor Costs

PERACV

Depot Cost:

* Overhauls

* Availability

* Ship Alts & Mods

NSWCCD

Organizational &/Intermediate Costs:

* 3M Data

* Parts & Labor

* EIC Data

Newport News Shipbuilding

* Configuration Databases

- NIMITZ Class In-Service Carriers

- ESWBS / WCRE / APL Qty / Weight/Complexity Factors

* New Construction Cost Data

- CVN 71,72,73,74 Costs (NNS Labor & Material)

- NNS Cost Class Number-to-ESWBS Conversion

* Ship's Manning -to-System Baseline Cost Determination

- Analysis of CVN72 SMD (Officer & Enlisted)

- ESWBS, Grade, Rate, Dept / Div, Work Center, Admin Function(s)

* LCC Baseline Data Compiler (Integrator)

* Refueling Complex Overhaul Data

NAVSEA 017/PMS 312

* Navy Ship Cost Authority/Acquisition/Total Ownership Cost

* Carrier Cost IPT Leader & Facilitator

* PMS 312 (RCOH) & PMS 378 (Future Carriers) Cost Estimating and Analysis Servicing Office

* Affordability Analysis & Analysis of Alternatives Naval Center for Cost Analysis (NCCA)

* Visibility and Management of Operation & Support Cost (VAMOSC) Database

* Direct and Indirect Manpower Cost Determination (Cost of a Sailor)

* Developers of OSCAM (O&S) & COMET (Manpower) Models

* Navy Fleet O&S Database Planning, Estimating, & Repair Activity (CV)