Project Concept
CASI 2003 Program
2003 CASI Project Concept
A project concept submitted to the OC-ALC TTA for funding consideration in CASI Program.
Systems and Economic Analyses for Commodities Modernization
Submitted by: Project Sponsor Sam George OC-ALC/LGIR E-mail address (405)-739-8561 1.0 2.0 3.0 4.0 5.0 6.0 Technical Thrust Area Lead Name Organization E-mail Address Phone Number
Background......................................................................................................................................... 1 Problem Statement .............................................................................................................................. 2 Anticipated Methodology/Tasks ......................................................................................................... 2 Anticipated Schedule .......................................................................................................................... 4 Anticipated Deliverables .................................................................................................................... 5 Anticipated Benefits ........................................................................................................................... 5
1.0 Background
The age of many commodities managed by OC-ALC/LG is 40 years with an average age of 20 years. Many of the commodities installed are exhibiting characteristics associated with old age. The many failures reported by aircrews result in a large number of on-aircraft maintenance actions consuming many labor hours. Approximately one-half of these maintenance actions result in a removal of one or more line replaceable units (LRUs) from the aircraft. Once removed, 15-30% of the LRUs are found to have no defect. Often supply is unable to immediately fill the requisition and has to back order the replacement, resulting in decreased mission capability and a cannibalization rate averaging between 25 to 40 % of the failed items. As systems age and failures appear to be increasing, many analysts, managers and commanders have concluded that these items are approaching the end of their useful service life. While this may be a valid conclusion in many cases, it is not always the case. An Air Force data system, the Air Force Total Ownership Cost (AFTOC), collects data from many different Air Force feeder systems including the Standard Base Supply System (SBSS) and the Core Automated Maintenance System (CAMS)/REMIS. Every transaction in these systems has a date and transaction number. When these data are correlated with the daily/monthly flying hours by aircraft tail number, it is possible to determine a variety of reliability, maintainability, and availability parameters at levels ranging from the wing to the complete Air Force. In peacetime, military aircraft operated by a wing (and Major Command) are assigned a number of flying hours to fly each month. When the flying hour program for a wing is increased above the planned rate, the number of failures expected would increase if the assumption of a constant failure rate were true. Analysis of AFTOC data over multiple years indicates that the number of commodities failures often goes down with increased flying hours. The average flying hours for a military aircraft is 20 hours per month over many years. Many military aircraft sit for days between flights, with the systems inoperative, and subject to temperature and humidity changes. During this inoperative period, condensation may occur within the connectors and LRU. When the power is turned on, failures may occur due to the conductive properties of water. More frequent operation results in heat that drives the moisture from the system, and hence reduces failures. Comparison of failures per flight hour for an item that is common to a transport aircraft (many sorties and flight hours per month) and a bomber (fewer sorties and flying hours than a transport) confirms that more frequent operation results in fewer failures per time period. Operating and support costs include labor, material, support equipment, and in many cases software engineering costs. Analysis of alternatives to high cost of ownership commodities involves determining the baseline costs, and comparing the future costs of an alternative to that baseline. This permits determining the payback period (the time from the investment of the first dollar to the time the cumulative costs of the
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Project Concept
CASI 2003 Program
2003 CASI Project Concept
A project concept submitted to the OC-ALC TTA for funding consideration in CASI Program.
alternative are less than those of the baseline). It also provides the return on investment and the life cycle cost savings for the selected time period. The USAF spent $444M in FY01 for Material Support Division costs associated with LG managed Items. FSG 66 and 16 costs were $314M of the $444M. Commodities such as servo cylinders, horizontal situation indicators and displacement gyros are included in the top fifty. Previous studies have shown that significant acquisition and logistics cost savings could be achieved by applying technology insertion and the use of common open system architecture standards to replace LRUs that exhibit low Mean-TimeBetween-Failure (MTBF), high total ownership and cost per operating hour. The existing systems are installed in approximately 6000 aircraft representing 26 different Mission Design Series (MDS). Replacement of high total ownership cost commodities with new technology items should provide significant life cycle cost savings by reducing the technical data maintenance, spare parts inventory, support equipment and training costs.
2.0 Problem Statement
The purpose of this CET is to analyze alternatives to high cost items, compare them with the baselines extracted from AFTOC database and develop budget requests with supporting documentation to obtain funds for OC-ALC/LG to replacement high cost, obsolete items with new technology that can be upgraded. This will permit development and maintenance of a strategic plan for use as a roadmap for commodities managed by OC-ALC/LG. The objective of the strategic roadmap is to accomplish the MAJCOM requirements while minimizing cost. This strategic roadmap will include hardware and software, and the support equipment needed at the flight line, intermediate shop, and depot to communicate with the subsystems, Line Replaceable Units (LRUs) and Shop Replaceable Units (SRUs). The usual definition of common items is components used on more than one Mission Design Series (MDS). The definition used in this document extends that definition to common functions, such as attitude sensing, where different hardware devices performing identical functions are used on different MDS 1. Common modules2 (hardware and software) can be used to implement these functions across multiple MDS.
3.0 Anticipated Methodology/Tasks
The contractor shall provide all services required to perform the following tasks in a timely and efficient manner to support OC-ALC/LG and the MAJCOMs budgeting cycle. 1. Phase One: Develop and Maintain USAF Commodities Total Ownership Cost Baselines. 1.1 Develop and Maintain Baseline. Develop the Commodities Strategic Roadmap using systems engineering processes and economic analysis tools. The contractor shall develop a measurable Commodities baseline that shall include the total ownership cost of all commodities managed by OC-ALC/LG. The total ownership cost includes investment funds (3600), acquisition funds (3010), and the Operating and Support costs (for all major commands) expended for personnel, hardware, software, and support equipment (including automatic test equipment) where applicable and measurable extracted from the Air Force Total Ownership Cost (AFTOC) data warehouse. This database will provide historical expenditures for all OC-ALC/LG managed commodities by Major Command (MAJCOM) wing and MDS they operate for the past four fiscal years and the current fiscal year to date. It will also include planned obligations for commodities modification and acquisition in future years.
1
2
Hitt, Ellis F., Sveinsson, Hjalmar, Aber, Ken, and Hess, Nolan, “Common Functions and Electronics Characteristics”, Battelle, Contract F04606-87-0055-RJ01, April 1, 1988. Hitt, Ellis F., and Schenk, Steve, “Common Modules (Hardware/Software) Cost Effectiveness”, Battelle, Contract F04606-89-D-0034, QP01, May 25, 1990.
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Project Concept
CASI 2003 Program
2003 CASI Project Concept
A project concept submitted to the OC-ALC TTA for funding consideration in CASI Program.
The sources of these data will be: COARS (HO69S) data for cost expenditures including the EEIC, and CAIG formats SBSS data for Material Support Division (MSD) budget code 8 and General Support Division (GSD) budget code 9 expenditures and outstanding backorders and obligations CAMS/REMIS for maintenance transactions and flying hours ABIDES P1 and P3-X from the Presidential Budget R-2 from the USAF RDT&E portion of the Presidential Budget AFMC Validated MSD Engineering Projects Commercial Operations and Support Savings Initiative Projects. These data will be used to develop baselines using forecast inventory and flying hours for the aircraft the systems are currently installed in. From the baseline a High Cost Drivers list will be developed from which the government will select the top X items, determined by the high cost commodities, for analysis of alternatives to determine economic feasibility. 1.2 Document Requirements. Document requirements for the replacement commodities equipment and software for high cost items. Collect requirements from the Major Commands that use the high cost commodities and support equipment, and the system program offices that are responsible for modifications to the MDS the commodities are installed in. Enter information into a database to permit examination of common and unique requirements. The contractor shall analyze the data to determine weapon systems that have high cost items performing functions common to those in another weapon systems with high cost items that may not be common currently, but could be common when replaced with new technology items and identify replacement equipment candidates while avoiding duplication of investment costs, and lower acquisition costs. 1.3 Identify Alternatives. Using readily available sources from previously sponsored Air Force studies, online databases of vendors’ products, quotations and information from vendors, and estimates by USAF engineers, identify alternatives to the high cost items and enter them into a database to ensure consistency in analyses. 1.4 Perform Economic Analyses to Support Budgeting Process. Analyze the alternative initiatives to determine the investment, return on investment (ROI), and payback period. This requires development, acquisition, installation, and operation and support (O&S) scenarios for each MAJCOM that may be an end user of the alternative. These scenarios must be developed, coordinated with the MAJCOMs, and entered into the database that the Economic Analysis Tool 3 uses. Determine the cost savings as a function of the schedule. For each initiative, the following is required: RDT&E expenditures by FY Acquisition quantity by FY Installation quantity by FY Predicted failure rate Automatic Test Equipment (ATE) hardware and software costs by FY Operational Flight Program (OFP) development and support costs by FY Evaluate and rank alternatives in terms of their economic criteria, e.g., largest cost savings, investment costs, and O&S costs for review with the appropriate MAJCOMs to determine if changes are needed to satisfy MAJCOM priorities. If a preferred alternative can potentially impact
3
Economic Analysis, Air Force Manual 65-506
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Project Concept
CASI 2003 Program
2003 CASI Project Concept
A project concept submitted to the OC-ALC TTA for funding consideration in CASI Program.
mission effectiveness, an analysis of the impact on mission effectiveness can be made using a mission effectiveness analysis tool such as the Avionics Evaluation Program. The contractor shall perform an analysis for the items required to replace the OC-ALC/LG selected NSN. This analysis shall be used to provide the following data needed for economic analyses of the alternatives: Predicted reliability for existing item or allocated reliability of item requiring development Maintenance concept and maintainability Applicability across multiple MDSs Logistics support requirements Support equipment and software Producibility (DI-MISC-80508, Technical Report)
A final analysis for each high cost driver selected by the MAJCOMs and OC-ALC/LG will be performed to provide an output to the budgeting process. 2. Phase Two. This phase would begin twelve months after receipt of order.
2.1 Track Costs. Track funded programs for comparison to the budget inputs including investment, acquisition (including test and installation), and operation and support. The O&S costs of the items being removed will be tracked for comparison against the analyses, along with the O&S costs of the selected alternatives after installation. Software costs, and support equipment costs will also be tracked. 2.2 Technical Data Package Database. 2.3 Input/Output Database. The contractor shall design and populate the database for each NSN selected by OC-ALC/LG. It shall contain all of the input/output signals organized by connector, pin, and signal. Each signal shall be classified by signal type (analog, digital, discrete, synchro, etc.), signal limits, rate of change, and other relevant timing data. Serial data bus signals must list the contents of each message including word sequence, word format, and update rate. The contractor shall then analyze the collected data to develop logical grouping of signals that could be provided by either existing circuit cards (determined through survey of industry and supplier databases (e.g.www.vita.com)), or require development of new circuit cards. The contractor shall recommend items that could be replaced by a common item, such as power supplies, transmitter module, receiver module, graphics processor, etc. 2.4 Mechanical Database. In many cases, the Government does not have the drawings or specifications needed to procure or manufacture a replacement mechanical item. The contractor shall, as directed by OC-ALC/LG develop the data packages needed to procure or manufacturer these mechanical items. The Government shall furnish the contractor the items for analysis, and the contractor shall reengineer the item and document the results. The documentation should be in the form of drawings, and include lists of materials, manufacturing processes, and software required for Computer Numerically Controlled (CNC) machines.
4.0 Anticipated Schedule
For the 2003 CASI program, the following schedules/periods of performance are allowed (you may wish to include this list and check all of the periods of performance that you would accept, i.e.,): [ ] Execution and Completion of Project between June 1 and August 31, 2003. [ ] Execution and Completion of Project between June 1 and May 31, 2004 [ ] Executed as a single project, or
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Project Concept
CASI 2003 Program
2003 CASI Project Concept
A project concept submitted to the OC-ALC TTA for funding consideration in CASI Program.
[ ] Executed in two or more phases with an intermediate set of deliverables and successful completion of the intermediate deliverables required before funding successive phase(s). NOTE: CASI research phases will normally have completion dates that correspond to the academic researcher’s semester schedule, i.e., August 15 or December 31. [ X ] Execution and Completion of Project between August 15, 2003 and May 31, 2004 [ ] Executed as a single project, or [ ] Executed in two or more phases with an intermediate set of deliverables and successful completion of the intermediate deliverables required before funding successive phase(s). NOTE: CASI research phases will normally have completion dates that correspond to the academic researcher’s semester schedule, i.e., August 15 or December 31. [ ] Execution as the first phase of a multi-year project. NOTE: Due to funding mechanisms, only the effort between June 1, 2003 and May 31, 2004 can be funded by the 2003 CASI program. The project must produce a set of intermediate deliverables at the end of the 2003 funding cycle and funding of successive phases/years is contingent upon funding availability, project priority, and performance.
5.0 Anticipated Deliverables
Program Plan and Schedule. The contractor shall develop a program plan and schedule for accomplishing the tasks defined in this CET. This plan and schedule shall be submitted to the Air Force for approval. When required, specific GFE items shall be identified in this plan with sufficient lead-time for Air Force scheduling. (DI-MGMT-80277) Contract Award Meeting and Technical Interchange Meeting. The contractor shall hold a Contract Award Meeting (CAM) 10 days after receipt of order (ARO) and Technical Interchange Meetings (TIMs) as required. The contractor shall coordinate the agenda with the COTR. The contractor shall provide minutes for each meeting. (DI-ADMN-81249, DI-ADMN-81250) Monthly Status Reports. The contractor shall provide written monthly status reports on program progress. (DI-MGMT-80368) Final Report. The contractor shall provide a written final report at the conclusion of the contract. (DIMISC-80508)
6.0 Anticipated Benefits
Engineering services to analyze LG managed items, develop historical total ownership cost (TOC) and provide forecasts of TOC to provide TOC baselines. Perform economic and reduction in TOC (R-TOC) business case analyses for support of Presidential Budgeting Process and Cost Savings Modernization Initiatives (CSMI) for LG selected high TOC items including identifying requirements and mandates for replacement of high cost items, analysis of alternatives for replacement of high cost items, assisting OCALC/LG and the Major Commands in development of inputs to the budgeting process and developing and maintaining a commodities strategic roadmap and plan for OC-ALC/LG managed items.
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