1. SECNAV Instruction “Department of the Navy Cost Analysis” Presented to Service Forum at DODCAS by Mr. John McCrillis, NCCA

2. Background SECNAV directed ASN(FM&C) and ASN(RDA) – Jan 2008
Too much “in the news” regarding program’s cost growth
Review the Department's cost estimating organizations
Improve the DON's cost and budget credibility
Emphasized the Department's major ACAT ID programs
Cost community completed detailed gap analysis study – Jan-Apr 2008
Inconsistencies across SYSCOM resources, core functional cost support
Lack of central authority/advisory to SECNAV, CNO across all programs
Contractor/outsourcing of some key government functions, perception issue
Inconsistent cost reporting and visibility/insight across programs/ACATs
Disconnect between budget and official cost estimates
Inconsistent application of non-advocate/independent cost reviews
OPNAV N813F independent assessment functions lost
Cost data collection not applied or endorsed consistently across programs
NCCA is supporting these DON and joint acquisition programs by providing independent cost estimates or by-request cost analysis. We previously developed approximately seven full independent estimates each year. Average contractor cost was $300K per estimate.

3. Background
SECNAV directed ASN(FM&C) and ASN(RDA) to “expedite” changes
SECNAV MEMO signed 2 May 2008
SECNAV INST signed 16 December 2008
SYSCOMs and NCCA responding to new resources required
ASN(FM&C) supported immediate transition ramp-up & funds for NCCA
Varying responses by SYSCOMs, but all seeing increased demand

4. So...what’s changed?
Senior leadership directed to use SYSCOM/NCCA cost information
Milestone decisions, programming, budgeting
SYSCOM Commanders and FM&C to resource performance required by this SECNAVINST
SYSCOMs directed to provide more cost functions and support
NAVAIR 4.2 informally identified as “role model”, standard for SECNAVINST
EVM support, O&S cost estimating, support beyond just ACAT ID programs
Working capital-funded model used as a preferred option at SYSCOMs
Not just cost, but TECHNICAL/engineering review of CARD, program docs
Approval and oversight of any PM “outsourcing” for cost estimating support
honest broker
Mr. Young (AT&L) – all PMs should seek to obtain an independent estimate and budget to the independent estimate.
CAMS – Civilian sub-community within Scientist & Engineering
NAVAIR 4.2
NAVSEA 05C
SPAWAR
NELO
MARCORSYSCOM

5. Service Cost Position ACAT 1
PLCCE
On-going
Sys Com Review
Prior NCCA Review, Output: PLCCE
Gate Review
~4-wks prior DAB, Output: SCP
ICE or ICA
6-mo prior DAB and/or GR, Input: CARD & PLCCE
NCCA Review
~1-wk prior GR, Output: ICA
All ACAT 1 programs
ACAT-1D only
OSD CAIG
~2-wks prior DAB, Output: CAIG Memo
ICE
6-mo prior DAB, Input: CARD
DAB
Output: ADM, APB, …
SCP required for all programs
SYSCOMs and NCCA work together
Collaboration with PEO to present “fully funded” program
DCGS-N first program

6. So...what’s changed?
Program Managers, Resource/Programmers formally directed
Use cost estimates developed by cost organizations for planning/budgeting
Document decisions counter to cost org estimates
Required to get SYSCOM-level technical/programmatic review of CARD
Need SYSCOM approval before outsourcing for cost support
NCCA as “Principal Advisor” on Cost and Economic issues for HQ staff
NCCA Director now designated “DASN (C&E)”
Increased role in Gate Reviews, joint programs, non-program analyses
Independent assessments of SYSCOMs for ACAT IDs, Nunn-McCurdys
Absorbs N813F’s “independent assessment” functions
honest broker
Mr. Young (AT&L) – all PMs should seek to obtain an independent estimate and budget to the independent estimate.
CAMS – Civilian sub-community within Scientist & Engineering
NAVAIR 4.2
NAVSEA 05C
SPAWAR
NELO
MARCORSYSCOM