1. 8-1 Establish Cost/Schedule Performance Impacts Program Requirements Assess Risks Evaluate Risk Handling Options Evaluate Subcontractor Risks Establish Cost Schedule/ Perf Impacts Manage Risks Identify Key Ground Rules Identify Risk Factors Estimate Effect On Cost Establish Management Reserves Estimate Effect On Schedule

2. 8-2 Changing Acquisition Environment Aeronautics Systems Center has implemented a new proposal evaluation process. What’s In - New low cost criteria termed “Most Probable Life Cycle Cost.” What’s Out - Credibility of “single point estimate” in contractor bid.

3. 8-3 Who Is “Low Cost” In the Example Below? Contractor A Contractor B Contractor C 8M* 10M 12M 15M 14M* 15M 20M 18M 16M* Contractor Bid ASC Assessment of Most Probable Cost (i.e., 50%) ASC Assessment of 90% Cost Confidence

4. 8-4 What is Most Probable Cost Based On? Answer - The 90% cumulative probability span time in the government’s Most Probable Schedule. How does the government prepare a “Most Probable Schedule”? They perform a risk assessment of our proposal and map the risk into our proposed schedule.

5. 8-5 What Are The Impacts Of the New ASC Source Selection Process? 1. Schedules will need to be prepared early in the proposal development cycle. 2. Risk should be identified and mapped to the proposed schedule. 3. A Most Probable Schedule should be developed and “pushed” to the left to help squeeze out cost.

6. 8-6 OUTLINE What is a Scheduled Risk? What is the purpose of Assessing Schedule Risk? How can an assessment of Schedule Risk be Performed? Examples of Schedule Risk Assessments(SRA) How can we use SRA during: Pre-Proposal Discussions Proposal Development Contract Implementation What are the tools with which to perform SRA?

7. 8-7 Definition What is a Schedule Risk? The likelihood of a schedule delay and the magnitude of the delay. Note:Schedule risk can be characterized as high, medium, or low depending on the level of disruption to the program schedule.

8. 8-8 Purpose of Assessing Schedule Risk Verify that schedule risk drivers have been accounted for (i.e., concurrency of design/test/production, interrelations between tasks and teams, requirements stability, etc.). Provide basis to evaluate worth of schedule risk abatement options.

9. 8-9 Common Schedule Risk Factors Concurrency (Design/Test/Production) Interrelations (between IPD Team/Functions) Funding (Timely Turn-On) Requirements Availability Requirements Stability Degree of state-of-the-art Commonality with previous systems Number/historical performance of subcontractors Lead times (materials, etc.) Amount and complexity of software required Number and complexity of engineering drawings Testing requirements (Timely Development) Tests (number of hours\ required or number of successful flights) Amount of new materials being used Facilities Availability Manpower Availability Equipment Availability Producibility Improvements Urgency/priority of the program Contractual incentives for meeting program schedule

10. 8-10 Schedule Risk Assessment Methods 1. Experience Based Reviews - Recollection of lessons learned from similar work. 2. Technical Content Assessment - Analysis of empirical data on specific tasks. 3. System Level Modeling/Simulation - Computer-based representation of schedule.

11. 8-11 Technical Content Assessment Example 1 What is the expected schedule duration for a 500 hour durability life test on an avionic subsystem given that a large number of spare subsystems are available? 500 hr 8 hr/day =62.5 days ? ?

12. 8-12 Technical Content Assessment Example 1 (Cont.) Analysis of data on a similar avionic subsystem test shows that when: Mean time between maintenance action is 3.5 hr Mean time to remove and restore is 19 hr, and Test facility availability is 80% Schedule Duration is 502 days!! What if the number of spares is limited?

13. 8-13 Technical Content Assessment Example 2 Simulation Flow Compute run time to failure  Run Times Met 500 hour req’t? Spare available ? Compute remove and restore times Compute remove repair and restore times  Down times &  # failures Running this simulation flow repeatedly and plotting the results in a histogram format is a Monte Carlo simulation technique for estimating the calendar time and generating a final schedule estimate for conducting a durability test. NY N Y Stop Start

14. 8-14 Technical Content Assessment Example 2 (Cont.) 0 120 100 80 60 40 20 # of Occur- rences 376 399 421 444 466 489 512 534 557 580 602 648 Test Duration (Days) Assumptions: 500 hour Dur. Test No Spares Limitation 3.5 hour MTBMA

15. 8-15 Technical Content Assessment Example 2 (Cont.) 800 750 700 650 600 550 500 450 400 Test Duration (Days) ($) # Equivalent Ship Sets ($) (1000 Monte Carlo runs) 0 12 3 4 5 6 7 8 90% Mean 10%

16. 8-16 Show Schedule Risk Presentation

17. 8-17 How to Leverage Applications of SRA Experienced Based Reviews Technical Content Assessment System Level Modeling/Simulation Pre-Proposal Discussions Proposal Development Contract Implementation High Risk Tasks As Required to Defuse Complex Issues Discretion of P.M.

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21. 8-21 Risk + - Add-on tool for Microsoft Project @Risk – Add-on tool for Microsoft Excel

22. 8-22 Cost-Schedule Containment Chart