6. PRESENTATION REQUIREMENTS

6.1    INTRODUCTION

    The presentation formats described in this section provide both the analyst and the CAIG a standard framework for displaying, documenting, and reviewing O&S estimates. Although the formats establish uniform procedures for presenting costs, they should not preclude good judgment in providing additional cost information that may be pertinent to the program being evaluated. Furthermore, depending on the reference system used, the number of alternatives considered, and the purpose of the review, not all of the formats may be applicable. The analyst must select and/or modify those formats that are most appropriate for presenting the estimate results.

6.2    PRESENTATION FORMATS

    The formats provided at the end of this section (Exhibits 6-1 through 6-6) are designed to assist the analyst in presenting and documenting the results of O&S estimates. Although Exhibits 6-1, 6-2, and 6-3 are recommended for use in the O&S briefings for DAB reviews, the actual exhibits used should be discussed with the CAIG representative at the pre-CAIG planning meetings. The other formats may be used as necessary to provide further documentation of the results of an estimate. The formats cover four types of presentations:

• Annualized Steady-State Estimate. This format presents annualized costs for a typical deployable unit or single operational system. Data are presented by cost element for the reference system and the alternative(s). In addition, a detailed cost matrix portrays the costs of the elements and associated subelements. (Exhibit 6-1)
• Life-Cycle O&S Estimate. These formats show life-cycle costs by alternative. They compare the current program office estimate (POE) with the independent cost estimate (ICE) or with the prior POE estimate. (Exhibits 6-2 and 6-5)
• Cost Driver Analysis. This format identifies program cost drivers and shows how changes in them affect life-cycle costs. (Exhibit 6-3)
• Time-Phased O&S Estimate. These formats show costs over time relative to the deployment schedule and operating concept. (Exhibits 6-4 and 6-6)

    Cost presentations for the CAIG should be developed in accordance with DoDD 5000.4. Exhibits 6-1 through 6-6 show the recommended formats and information requirements for each. The generic O&S cost element structure (Appendix B) is used in exhibits for illustrative purposes only. The CES for the weapons category in question (Appendices C through G) should be substituted in the materials presented to the CAIG. All costs should be expressed in constant dollars of the present fiscal year unless otherwise specified.

• Annualized Steady-State Deployable Unit O&S Cost (Exhibit 6-1)
  • General: Compares typical deployable unit (or single operational system) annual recurring O&S costs for the reference system and proposed alternative(s). If more than one alternative is being considered, a separate format should be prepared for each alternative. (NOTE: Revise the title of the proposed alternative column accordingly.)
  • Columns: Reference System and Proposed Alternative. A Delta column shows the differences in cost between the alternative and the reference system. The Note column provides reference numbers for tracking explanations of differences.
  • Rows: The section labeled Deployable Unit Data shows system quantities, mission personnel, and operating hours per system per year. The Cost Elements section gives annualized steady-state costs by cost element for the reference system and the proposed alternative.
• Life-Cycle O&S Cost Comparison: POE and ICE (Exhibit 6-2)
  • General: Compares the results of the POE and the ICE. If the preferred alternative has not been selected, this format should be completed for each alternative under study.
  • Columns: POE, ICE, Delta, and Note Ref. #. The Delta column identifies cost differences between the estimates. The Note column provides reference numbers for tracking explanations of differences.
  • Rows: Provide breakouts, by cost element, of the POE and the ICE. Differences are identified by cost element. Reference numbers in the Note column identify those differences that warrant further explanation.
• Life-Cycle O&S Cost Driver Analysis (Exhibit 6-3)
  • General: Identifies the main cost drivers of the proposed system. (The specific cost drivers will vary depending on the weapon system.) The sensitivity of costs to changes in cost-driver parameters is calculated as a percentage change (+/-) in the expected life-cycle O&S cost. If the preferred alternative has not been selected, this format should be completed for each alternative under study.
  • Columns: O&S Cost columns for High, Expected, and Low total life-cycle O&S cost estimates. Non-Cost Parameter columns for High, Expected, and Low non-cost-driver data by element and a corresponding column for Percentage (+/-) of Expected Life-Cycle O&S Cost.
  • Rows: Enter the high, expected and low total life-cycle O&S cost in the first row. The remaining rows identify specific elements that drive system costs. Enter high, expected, and low uncertainty range non-cost values for each element. Show the percentage change (+/-) from the expected life-cycle O&S cost produced by the high/low range values.
• Time-Phased Life-Cycle O&S Costs (Exhibit 6-4)
  • General: Presents prior fiscal year costs; time-phased O&S costs for the deployment, steady-state, and phase-out periods; total life-cycle O&S costs; and annualized steady-state recurring costs. If the preferred alternative has not been selected, a separate format should be completed for each alternative.
  • The annualized steady-state recurring cost represents average annual operating costs over the cumulative steady-state period. A steady-state period does not necessarily mean that O&S costs will be identical each year. Programmed depot maintenance overhaul cycles, modifications, a change in failure rates, and cyclic sustaining investment costs may produce differences in annual O&S costs. To document these differences, an expanded time-phased exhibit may also be prepared, identifying the costs for each fiscal year in the O&S period.
  • Columns: FY__ & Prior, Deployment Period FY__, FY__,... (by fiscal year), Cumulative Steady-State FY__ to FY__, Phase-Out Period FY__, FY__,... (by fiscal year), Total Life-Cycle O&S Costs, and Annualized Steady-State Recurring Cost.
  • Rows: Schedule of cumulative systems deployed by fiscal year and average number of operating hours per system per year. O&S costs by cost element for each time period.
• Life-Cycle O&S Cost Comparison: Prior POE and Current POE (Exhibit 6-5)
  • General: Compares the Prior POE and Current POE. At Milestone I, these estimates are usually identical. For subsequent milestones, the Prior POE is the service-approved POE submitted (with approved DAB changes) for the previous milestone. If the preferred alternative has not been selected, this format should be completed for each alternative under study.
  • Columns: Prior POE, Current POE, Delta, and Note Ref. #. The Delta column shows differences between the Prior POE and Current POE. The Note column provides reference numbers for tracking explanations of differences.
  • Rows: Provide breakouts, by cost element, of the Prior POE and Current POE. Differences are identified by cost element. Reference numbers in the Note column identify cost differences that warrant further explanation.
• Time-Phased Life-Cycle O&S Costs by Appropriation Category (Exhibit 6-6)
  • General: Presents prior fiscal year costs and time-phased O&S costs over the FYDP period and for the remainder of the system's life (the "To Complete" period). If the preferred alternative has not been selected, a separate format should be completed for each alternative. Costs should be expressed in both constant and then-year dollars.
  • Columns: FY___ & Prior, FYDP Period Requirements (by fiscal year), and To Complete FY___ to FY___.
  • Rows: Estimated O&S costs by fiscal year (or fiscal year period) and appropriation category in constant and then-year dollars.

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