Report
Systems Engineering and Program Management: Trends and Costs for Aircraft and Guided Weapons Programs
May 26, 2006
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The U.S. Air Force relies on sound cost estimates to make budgetary and policy decisions regarding the acquisition of aircraft and guided weapon systems. As new programs are fielded and as acquisition management techniques change, there is a constant need to improve the tools available to cost estimators. Previous work by RAND Project AIR FORCE (PAF) has helped the Air Force improve its techniques for estimating the costs of military airframes and engines. Now, PAF is extending its work to look at "below-the-line" costs, which include items not directly associated with the development and production of the final product.
Systems engineering and program management (SE/PM) is one of the more costly below-the-line items for military aircraft and guided weapon systems. PAF studied the factors that drive SE/PM costs, surveyed government and industry personnel regarding current techniques for estimating these costs, collected historical data from several aircraft and missile development and production programs, and investigated the effects of new acquisition approaches on SE/PM costs. Major findings include the following:
Based on these findings, PAF developed a set of cost-estimating relationships (CERs) that can be used to estimate the specific SE/PM cost element for development and production of both aircraft and weapons programs. These CERs are most useful in the early stages of a program's life cycle, when little is known about the program. When more detailed information is available, other techniques (such as drawing analogies from historical programs) could be used to develop more-accurate SE/PM estimates.
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