Transcript ACostE HVR Presentation

Delivering Cost Data to the MoD
to Support Business Cases
Paul Duvall
Deputy Team Manager
HVR Practice – Through Life Cost Modelling
Association of Cost Engineers
3 Nov 09
© Copyright QinetiQ Limited 2009
1
Contents slide
1 Process and Requirements
2 Modelling Examples
© Copyright QinetiQ Limited 2009
2
1
Process and Requirements
© Copyright QinetiQ Limited 2009
3
Generic Process?
•
•
•
•
SME Cost Assessments
Supplier Cost Data
Equipment Reliability Data
DLOD Base Assumption
•
MDAL
(Master Document
Assumptions List)
Whole Life Cost Model
(Deterministic)
Captures
Uncertainty
SME Risk Assessments
Risk Register
£
£
£
£
£
Whole Life Cost Model
(Probabilistic)
Probabilistic Risk Model
Captures
Risk
Provides 10, 50, 90%
Confidence Figures
© Copyright QinetiQ Limited 2009
4
Risk Modelling Terminology
Uncertainty
Current Potential Variation in project cost or duration which will
not be “firm” until contract sign-up
= 3pt Range
Risk
Event which may or may not happen
which would add to assumed project cost or duration
= Probability * Impact
Opportunity
Event which would reduce the assumed project cost or duration
= Probability * Impact
© Copyright QinetiQ Limited 2009
5
Measuring Confidence/Optimism Bias
Probability of Occurrence
90%
SPE
-
Uncertainty & Pre
Mitigated Risks
Uncertainty
50%
-
Uncertainty &
Post Mitigated
Risks
Uncertainty & Post
Mitigation Risks +
Mitigation Cost
10%
Whole Life Cost
© Copyright QinetiQ Limited 2009
6
CMTL
Allocation of Cost
• Input
− Defence Lines of Development
− TEPIDOIL (I)
−
Training, Equipment, Personnel, Infrastructure, (Concepts &) Doctrine, Organisation, Information, Logistics…………………
(Interoperability).
− Cost Resource Breakdown Structure (CRBS)
− PBS/WBS/BOM etc
• Output
− Budget Holder
− EPP/ESP
− RDEL/CDEL
− TLF
− Procurement, Upkeep, Update, Upgrade, Capital Spares, Fuels, Other Costs
© Copyright QinetiQ Limited 2009
7
Current Issues
Allocation of Uncertainty
• Use of Global Uncertainty Factors
− Impact:
− uncertainty applied across ALL elements of model
− Does not reflect increasing uncertainty as estimate extends into the future
• Identification of Uncertainty
− Annualised or Totals?
Allocation of Risk
− Foreign Exchange Risk
− Correlation?
© Copyright QinetiQ Limited 2009
8
Global Uncertainty
100%
resultSingle
90%
resultTwenty
resultHundred
80%
70%
60%
50%
40%
30%
20%
10%
0%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
© Copyright QinetiQ Limited 2009
9
2
Modelling Examples
© Copyright QinetiQ Limited 2009
10
Through Life Costing Capability (Case Study)
Concept
Assessment Demonstration
Costing Requirements
BOI Studies
Cost of Ownership
Trade Studies
Options Analysis
Affordability Analysis
Risk Assessment
IG
Cost Forecasting Tools
FACET
OSCAM
Portfolio
Costing Requirements
BOI Studies
Cost of Ownership
Trade Studies
Options Analysis
Strategies
Risk Assessment
Manufacture
Cost Requirement
Earned value Measurement
Whole Life Costs
Cost of Ownership
Trade Studies
Support Strategies
MG
Cost Forecasting Tools
FACET
OSCAM
Portfolio
Bespoke WLF models
CRBS, DLODS
In-Service
Disposal
Costing Requirement
Earned Value Measurement
Cost of Ownership
Upkeep Strategies
Cost Forecasting Tools
FACET
OSCAM
EVM tools
Portfolio
Bespoke WLF models
CRBS, DLODS
© Copyright QinetiQ Limited 2009
11
Concept Phase - Exemplar
Exemplar: Assessment of Options for Auxiliary Warship
• Family of Advanced Cost Estimating Tool (FACET) used to generate the
acquisition cost for the development and manufacture of 6 ships.
• Using the established performance criteria key Design inputs were identified
and agreed.
• Excursions:
− reduced displacement
− smaller helicopter or fewer larger helicopters
− fewer (vertical) replenishment points
© Copyright QinetiQ Limited 2009
12
Through Life Costing Capability (Concept)
FACET provides the capability of generating iterations
against variations in performance and design rapidly
Programme cost (2009 prices)
Budget £1100 m
Iteration 1
1220
Iteration 2
1078
1166
1310
1400
1254
Budget
Iteration 3
940
753
Iteration 4
£0M
£500M
£700M
838
£800M
1027
1114
Budget Line clearly indicates the
difficulty of procuring 6 Auxiliary
warships to meet the original KURs
923
£900M
£1000M
£1100M
£1200M
£1300M
£1400M
© Copyright QinetiQ Limited 2009
13
Historic Trend Analysis - FACET
© Copyright QinetiQ Limited 2009
14
In-Service Phase Exemplar
OSCAM Operational Support
Cost Analysis Model
Can provide detailed
analysis of support costs
Can provide rapid cost
assessment
Can show effect of running
options and allows
comparison
© Copyright QinetiQ Limited 2009
15
In-Service Cost Option Analysis
Running Options (Exemplar)
• Baseline: aircraft maintenance based on three lines of maintenance
• Excursion: actions previously handled by the intermediate level are split
between Govt (Organic) and Contractor Depots
© Copyright QinetiQ Limited 2009
16
© Copyright QinetiQ Limited 2009
17