Enclosure 7 -- Resource Estimation

1. CAIG Independent LCCEs
2. CARD
3. Cost Reporting
4. CAIG Procedures
5. Analysis of Alternatives Procedures
6. Energy Considerations

1. CAIG INDEPENDENT LCCEs. The OSD CAIG shall prepare independent LCCEs per section 2434 of Reference (k). The CAIG shall provide the MDA with an independent LCCE at major decision points as specified in statute, and when directed by the MDA. The MDA shall consider the independent LCCE before approving entry into the EMD Phase or the Production and Deployment Phase. The CAIG shall also prepare an ICE for ACAT IC programs at the request of the USD(AT&L). A CAIG ICE is not required for ACAT IA programs. (DoD Directive 5000.04 (Reference (bc)))

2. CARD. For ACAT I and IA programs, the PM shall prepare, and an authority no lower than the DoD Component PEO shall approve, the CARD. DoD 5000.4-M (Reference (bd)) specifies CARD content. For joint programs, the CARD shall cover the common program as agreed to by all participating DoD Components, as well as any DoD Component-unique requirements. The teams preparing the DoD Component LCCE, the component cost analysis (if applicable) and the independent LCCE shall receive a draft CARD 180 days, and the final CARD 45 days, prior to a planned OIPT or DoD Component review, unless the OIPT leader agrees to other due dates. The PM shall synchronize preparation of the CARD with other program documents so that the final CARD is consistent with other final program documentation. At Milestone B, the program described in the final CARD(s) shall reflect the program definition achieved during the Technology Development Phase. If the PDR is conducted before Milestone B, the final CARD(s) at Milestone B shall reflect the results of the PDR.

3. COST REPORTING. Standardized cost data procedures and formats support credible cost estimates for current and future programs. Reference (bc) authorizes the CAIG Chair to establish procedural guidance for cost data collection and monitoring systems. Reference (at) identifies procedural and standard data formatting requirements for the CSDR system.

1. The two components of the CSDR system are the CCDR and SRDR. PMs shall use the CSDR system to report data on contractor costs and resource usage incurred in performing DoD programs. Proposed CSDR plan(s) for ACAT I programs shall be approved by the CAIG Chair prior to the issuance of a contract solicitation. The Chair, CAIG, may waive the information requirements of Table 4 in Enclosure 4.
2. On ACAT I programs, the sustainment contracts or organic Inter-/Intra-Service agreements (such as Memorandums of Understanding) shall provide tailored cost reporting that can facilitate future cost estimating and price analysis. If the logistics support falls under a performance-based life-cycle product support strategy, the contracts or organic agreements shall also include an agreed-to set of performance metrics that can be used to monitor performance.

4. CAIG PROCEDURES. The DoD Component responsible for acquisition of a system shall cooperate with the CAIG and provide the cost, programmatic, and technical information required for estimating costs and appraising cost risks. The DoD Component shall also facilitate CAIG staff visits to the program office, product centers, test centers, and system contractor(s). The process through which the ICE is prepared shall be consistent with the following policies (Reference (bd)):

1. The CAIG shall participate in Integrated Product Team (IPT) meetings (Cost Working-level IPTs/OIPTs);
2. The CAIG, DoD Components, and PM shall share data and models and use the same CARD;
3. The CAIG, DoD Components, and PM shall raise and resolve issues in a timely manner and at the lowest possible level;
4. The CAIG shall brief the preliminary, independent, LCCE to the PM 45 days before the OIPT, and the final estimate 21 days before the OIPT;
5. The CAIG, DoD Component, and PM shall address differences between the independent LCCE and the DoD Component cost estimate; and
6. The PM shall identify issues projected to be brought to the OIPT to the Chairman, CAIG, in a timely manner.
7. For a joint program, the DoD Component's cost estimate shall be prepared by the lead DoD Component or Executive Agent.

5. ANALYSIS OF ALTERNATIVES PROCEDURES. For potential and designated ACAT I and IA programs, the DPA&E shall draft, for MDA approval, AoA study guidance for review at the Materiel Development Decision. Following approval, the guidance shall be issued to the DoD Component designated by the MDA, or for ACAT IA programs, to the office of the Principal Staff Assistant responsible for the mission area. The DoD Component or the Principal Staff Assistant shall designate responsibility for completion of the study plan and the AoA; neither of which may be assigned to the PM. The study plan shall be coordinated with the MDA and approved by the DPA&E prior to the start of the AoA. The final AoA shall be provided to the DPA&E not later than 60 days prior to the DAB or ITAB milestone reviews. The DPA&E shall evaluate the AoA and provide an assessment to the Head of the DoD Component or Principal Staff Assistant and to the MDA. In this evaluation, the DPA&E, in collaboration with the OSD and Joint Staff, shall assess the extent to which the AoA:

1. Illuminated capability advantages and disadvantages;
2. Considered joint operational plans;
3. Examined sufficient feasible alternatives;
4. Discussed key assumptions and variables and sensitivity to changes in these;
5. Calculated costs; and,
6. Assessed the following:
   1. Technology risk and maturity;
   2. Alternative ways to improve the energy efficiency of DoD tactical systems with end items that create a demand for energy, consistent with mission requirements and cost effectiveness; and
   3. Appropriate system training to ensure that effective and efficient training is provided with the system.

6. ENERGY CONSIDERATIONS. The fully burdened cost of delivered energy shall be used in trade-off analyses conducted for all DoD tactical systems with end items that create a demand for energy.