Posted by Modeling Potential Cost Savings by Synchronizing Commercial Derivative Acquisition & Lifecycle Programs
Methods and Models I Track
Abstract:
Synergy is defined as “the combined or cooperative action of two or more stimuli for an enhanced effect” (Razzetti, 2009). As Department of Defense (DoD) system acquisition costs continue to grow and commercial derivative programs becoming more accepted, it is critical that the Air Force look for ways to create cost savings in every possible way. With commercial derivative programs becoming more popular in defense acquisition, there may be acquisition programs running concurrently that have system commonalities and could benefit from synchronizing acquisition efforts. By leveraging commonalities in requirements, the Air Force and the Department of Defense may be able to “obtain cost savings through acquisition and logistics planning” (Poulin, 2010).
The purpose of this study was to answer whether there are synergy opportunities with Air Force commercial derivative aircraft lifecycles and if combining these areas of opportunities will create significant cost savings for the Air Force. This study focused on two acquisition programs that are early in the acquisition process and could possibly benefit from recommendations offered by this study. The research questions were answered through a comprehensive assessment of recent analysis of alternative studies and common cost estimating techniques. In addition, subject matter experts representing the Air Force and industry provided detailed input to the analysis. The research analyzed each element of a commercial derivative’s acquisition and sustainment lifecycle and identified areas of cost savings that can be achieved by combining two commercial derivative aircraft lifecycle efforts. The research found that the synergy savings achieved in the acquisition programs analyzed are not substantial compared to the programs’ total lifecycle costs and do not warrant a synergy effort.
Key findings in this study include the identification of primary areas of synergy with commercial derivative aircraft lifecycles and the cost savings associated. Included are recommendations on additional analysis the Air Force and DoD could perform to identify substantial synergy savings.
Author:
Bradley C. Boehmke
Booz Allen Hamilton
Brad Boehmke is an Associate at Booz Allen Hamilton and is currently the lead cost analyst for the aircrew and maintenance training systems that will serve the new Air Force KC-46 tanker aircraft. He has also recently served clients as the lead cost estimator to develop the life cycle cost estimate for the Presidential Aircraft Recapitalization program, E-4B National Airborne Operations Center Replacement program, VC-25 (current Air Force One) Analysis of Alternatives, and Global Hawk Business Case Analysis.
Brads primary client focus is the Air Force Materiel Command at Wright Patterson Air Force Base in Dayton, Ohio. His capability offerings include life cycle cost estimating, analysis of alternatives, sustainment and business case analysis, statistical and cost risk analysis, supply chain mapping, and program efficiency analysis.
Brad received his bachelors from North Dakota State University, holds a Masters degree in Cost Analysis from the Air Force Institute of Technology (AFIT) and is currently pursuing his Doctorate in Logistics and Supply Chain Management with a focus on cost analysis from AFIT. Brad has four years of active duty service as a Financial Management Officer for the Air Force before joining Booz Allen and has his C/CEA certification with the Society of Cost Estimating and Analysis.
Brad has been married for 8 years to his wife Kate and they have two beautiful daughters – Alivia (3 years) and Jules (6 months). Apart from daily cost analysis activities, Brad is an active real estate investor closing over 100 deals since 2006.