• The initiative to provide affordability caps for unit production cost and sustainment costs was put in place two years ago and will continue. Affordability caps force prioritization of requirements, enabling cost trades and ensuring that programs which are currently too expensive in future budgets to be affordable from continuing.

 

 

Related Documents:

 

 

• Target Affordability and Control Cost Growth; Mandate Affordability as a Requirement (PDF, 1/12/2012)
• Life-Cycle Sustainment Plan: Sample Outline (Document, 8/10/2011)
• Systems Engineering Plan: Outline (Document, 4/14/2011)
• Technology Development Strategy (or) Acquisition Strategy for [Program Name] (Document, 4/18/2011)

 

• This has been implemented on a case-by-case basis as programs have entered the acquisition process. This initiative will make long-term capital investment analysis covering product lifecycles of 30 or 40 years a standard part of the acquisition process under DoDD 5000.02. Service and component resource managers and leadership will conduct portfolio analysis to limit future investment limitations on a capital investment portfolio of products, e.g., ground combat vehicles or surface combatants.

 

• After two years of imposing affordability caps, we are now at the point where this initiative will have to be enforced if it is going to be successful at preventing spending on products that will be too expensive to be procured in meaningful quantities. This task falls to senior leadership, including the DAE, SAEs, and CAEs, who must work with the Service and Component leadership to halt programs that will not be within the established cap unless tradeoffs to reduce cost are implemented. Unless this is done, the Department will continue to spend billions on development and initial production of programs that are ultimately canceled or curtailed.