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Risk Radar Template

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									      The Radar Cost Model

              Presented To:
The Society of Cost Estimating & Analysis
        2004 National Conference
             15-18 June 2004
      Manhattan Beach, California

             Presented by:
        Peter Meisl & Kyle Ratliff
           MCR Federal, LLC

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•   Background
•   Model Development
•   Model Methodology
•   Risk Assessment
•   Key Cost Drivers
•   User Input Sheet
•   LCC Breakdown
•   Radar Cost Model Uses
•   Future Plans
•   Summary
•   Published Sources

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• Radar Cost Model
  – Parametric cost engineering model
  – Estimates the contractor and government Life Cycle Cost
    (LCC) of ground, sea, and airborne radars
  – Evolved from the need to estimate a variety of radar
    programs within the Missile Defense Agency (MDA) and
    Marine Corps Systems Command (MCSC)
  – Consists of Cost Estimating Relationships (CERs),
    analogies, and cost-to-cost factors tailored to a generic radar
    system Cost Element Structure (CES)
  – Model ensures three critical user requirements are met:
      • Current program compatibility
      • Flexible cost breakout
      • Emphasis on technical detail

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                        Model Hierarchy

                                          Radar System

      O&S           Software           Contractor            Government     Risk

              Beam                                                    Other
Antenna/                Exciter/        Signal             Data                              Auxiliary
             Steering                                                Hardware      IA&T
Pedestal                Receiver       Processor         Processor                          Equipment

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    Model Development Approach
• Developed a generic CES
    – Consistent with OSD MIL-STD Handbook 881B
• Populated CES with estimating methodologies from other
  sources (I.e., models, studies, planning factors, etc.)
    – CERs
    – Analogies
    – Cost-to-Cost Factors
• Captured all input variables
    – Identified 33 key parameters
    – 14 are technical characteristics of radar
•   Selected primary and alternate methodologies
•   Developed new CERs as needed
•   Populated model with THAAD-like parameters
•   Successfully tested output against THAAD CDSRs

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                    Model Flow
• Production CERs and Analogies yield Production T1
   – Learning Curves used for projecting Recurring Manufacturing
   – Below the Line (BTL) costs based on cost-to-cost factors
   – Manpower estimate drives government costs
• Step Factor yields Prototype T1 (Dev T1)
• DevEng CER calculates Developmental Engineering cost
  based on:
   – Burn Rate (function of Dev T1)
   – Dev Time (function of Dev T1 or user-entered)
• Software Development based on MCR CER
• O&S costs
   – A function of recurring manufacturing costs (Maintenance)
   – A manpower build up for military personnel
• Schedule and Technical (S/T) scoring used to calculate risk by

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           Methodology Selection
• Four main methods:
    – CERs selected based on a set of criteria described below
         • Most hardware other than electrical components
    – Analogies to similar programs (SBX, GBRP, THAAD)
         • Mostly for electrical components
    – In-house models (e.g. T/R modules)
    – Fit equations from other models (e.g. software based on SEER output)
• Use of cost-to-cost factors for BTL items requires source
    – Different sources use different WBSs, normalization techniques
    – Necessary to ensure that percentages sum properly
• CER selection based on the following set of criteria:
    –   Makes sense (signs correct)
    –   Good statistical fit
    –   Uses commonly known input variables
    –   Contains all (and only) logical cost drivers
    –   Distinguishes between types of radar, if appropriate
    –   Based on data taken from relevant systems

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           Risk Assessment

• Risk evaluated by scoring in key areas
  against a Schedule and Technical Risk Matrix
  – Hardware
  – Software
  – IA&T
• Mapping equations then translate scores into
  a distribution of expected outcomes through
  Monte Carlo simulation.

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Hardware Risk Scoring Matrix

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        Mapping Risk Scores
• Once we have risk scores we must translate
  them into cost growth
• We achieve this through a set of mapping
• The dependent variable in these equations is
  the mean of the symmetrical triangular S/T
• The low and high endpoints are derived from the
  variance of a regression on historical programs

                MIN            MEAN               MAX

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          Key Cost Drivers

•   Number of Transmit/Receive (T/R) modules
•   Peak power per T/R module
•   Aperture
•   Development time
•   Duty cycle
•   SLOC and E SLOC
•   Radar quantity
•   Military Personnel
•   Contractor Support

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User Input Sheet

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LCC Breakdown

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        Radar Cost Model Uses
       Estimator or Cross-Check
• Radar-specific inputs (based on the CARD or
  analyst knowledge) can be entered into the model
• Perform drills for various radar excursions
   – S/N/Poet Group
   – STSS/SASC Radar/Sensor Study
   – National Team Excursions
   – Sensitivity analyses for changing antenna
   – Cost impact of tradeoffs suggested by Radar Range
   – SLOC growth and New vs Used CSCI percentages
• Values may also be compared to Program Office or
  CCM estimates for total cost, or by line item

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      Radar Cost Model Uses
         CER Repository

• Model contains hundreds of CERs
• Up to 29 CERs per line item
• Analysts can discretely select CERs and use
  them in (independent) cost models

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        CER & Data Sources

• MCR CER Database
• MCR Unified Missile/Radar CCDR Database (MS
• MEADS Cost Sensor Briefing (Tecolote, 2002)
• Raytheon Company CPR DAS660-92-C-0184, D&D
  for GBR-P, 3/25/99
• Raytheon Company CPR DASG60-92-C-0101 for
  THAAD, 9/96
• Program Level Cost Factors for Radar Production
• Vendor Quotes

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               Future Plans
• Main objectives:
   – Populate and test model with parameters of various radars
   – Keep several CERs, and eliminate baseless ones, for each
     CES item
   – Improve user interface to allow for CER selection
• Other possibilities:
   – Create “spinoff” models based on different types of radars
     (e.g. fixed site, ship-based)
   – Develop CES correlation matrix to further reduce number of
     required input variables (if necessary)
   – Use radar model as a template for future cost models (e.g.
     Missile Cost Model)
   – Improve on “weak” areas of model
       • Government costs
       • O&S costs
       • Time phasing
   – Migrate from MS Excel to ACEIT
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• Effective parametric LCCM for estimating a variety of
  radar systems
   – Consists of a repository of CERs, analogies, and Cost-to-Cost
   – Simple interface based on user inputs
   – Includes top and lower level outputs
• Flexible for running what-if drills, baseline excursions,
  ROMs, and LCCEs
   – Capable of supporting DTC and CAIV efforts
• Successfully used on MDA and MCSC programs
• Evolving tool with enhancements in progress

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                        Published Sources
•   Boehm, Barry. Software Engineering Economics. (1981)
•   Frederick, Brad C. and Vokokek, Alan S. CR-0074, Updated Cost Estimating Relationships
    For ABM Radars. (Tecolote, 1985)
•   Cost Methodology Improvement for System Hazardous Waste/Disposal Costs. Contract
    Number SDIO84-93-C-0026, Task Order 001, Sequence No. A049, CDRL # A004. (SAIC, 1994)
•   Program Level Cost Factors for Radar Programs in Production. (MCR, 1990)
•   Radar CERs: Development and Production.
•   Radar Hardware Cost Estimating Relationships Database. Seq # A097, CRDL #A005. (SAIC,
•   Radar (Surface Based) Development Engineering Cost Estimating Relationship. (MCR,
•   Recurring Production Support Factors. (Applied Research, 1993)
•   Reinsenleiter, Vern. TN 00-02, Estimating Relationships for Development Engineering and
    Development Time. (MCR, 1999)
•   TN-94-016. Updated R&D Producibility Engineering & Planning (PEP) CERs for Missile,
    Radar, and Other Types of Programs. (MCR, 1994)
•   TN 98-05, BMD Radar Systems Cost Estimating Relationships. (MCR, 1998)
•   TR-8740-2, Electro-Optical, Missile, Radar and Avionics System Cost Research Cost
    Analysis Techniques Report Volume 1: Radar Production Cost Model. (MCR, 1988)
•   TR 9001-1, Development Engineering & Below-The-Line Development Cost Models. (MCR,
•   Yates, Edward H.; Waller, W. Eugene; and Vaughan, Lern G. A Parametric Approach to
    Estimating the Cost of Development Engineering. ARI/87 TM-387, Contract No. DASG 60-
    84-C-0061. (Applied Research, 1987)

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Back-Up Charts

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         The Mapping Equation
  • The Mapping Study produced separate equations
    for both RDT&E and Procurement

For RDT&E:                              For Procurement:

CGF = 1 + .057x                         CGF = 1 + .032x

X = Risk Score

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