Att_3_TTP_Schedule_Based_Estimating_doc_v1.0.pdf

TTP for Schedule- Based Estimating v1.0

22 July 2014

AIR FORCE TACTICS,

TECHNIQUES AND PROCEDURES

TTP FOR SCHEDULE-BASED ESTIMATING V1.0

22 JULY 2014

VERSION 1.0

UNCLASSIFIED

THIS PAGE INTENTIONALLY LEFT BLANK

Support

For additional information or questions about this document refer to:

https://cs.eis.af.mil/afdbt/afee/

Series

This series of Air Force (AF) Tactics, Techniques and Procedures (TTP) includes:

https://cs.eis.af.mil/afdbt/afee/

Version Management

Name and Rank Date

Summary of Changes

Name of Change Author Approval Date

Table of Contents

Support

Series

Version Management

Summary of Changes

Table of Contents

Table of Figures

1. Introduction

2. SDDP Applicability

3. Schedule-Based Estimating Steps

3.1 Step 1: Plan the Schedule-Based Estimate

3.2 Step 2: Generate the Schedule-Based Estimate

3.3 Step 3: Validate and Consolidate the Estimate

3.4 Step 4: Update and Maintain the Estimate

References

Appendix – Alternative Estimation Methods Overview

Acronym List

Glossary

Table of Figures

Figure 1: Schedule Based Estimating Is Used When Detailed Schedules Are Available

Figure 2: TTP for Schedule-Based Estimating SDDP Applicability

Figure 3: Developing Schedule-Based Estimate – Steps 1-4

Figure 4: Project IMS with Tasks and Durations

Figure 5: Resources Are Allocated to the Tasks in the IMS

Figure 6: Adjusting Resource Allocation in the Resource Usage Sheet

Figure 7: Rates for Each Resource are Included on the Resource Sheet

Figure 8: Microsoft Project Calculates Resources Costs against Task Durations

Figure 9: BOE Capture Form

Figure 10: Project Cost Rollup

Figure 11: The Task Usage Sheet Is Tailored to Show FY and Budget Codes

Figure 12: Consolidated Estimate Chart https://programs.bluecanopy.com/AF-EE/AF%20EE%20Documents/Best%20Practices/Schedule%20Based%20Estimating/Schedule_Based_Estimating_TTP.docx#_Toc393786529 https://programs.bluecanopy.com/AF-EE/AF%20EE%20Documents/Best%20Practices/Schedule%20Based%20Estimating/Schedule_Based_Estimating_TTP.docx#_Toc393786537

1. Introduction

This Schedule-Based Estimating Tactics, Techniques and Procedures (TTP) document provides step-by-step instructions to produce an estimate by loading resources against a schedule. The

Schedule-Based Estimate does not replace existing acquisition cost estimating processes, but provides a management tool for leaders to associate costs with scheduled activities. Schedule-

Based Estimates provide a lower-bound cost target that can be used to improve management and performance.

2. SDDP Applicability

The Air Force (AF) Service Development and Delivery Process (SDDP) generates necessary and sufficient project requirements, documentation, and planning to support user-centric solutions to

Warfighter needs. Schedule-Based Estimating techniques are used to develop a lower-bound estimate that serves as the program management goal during an SDDP-driven initiative. The

SDDP generates increasingly detailed information that improves the estimating accuracy throughout the initiative lifecycle. When sufficient detail is not available to support the Schedule-

Based Estimating process, other estimating methods are used, as shown in Figure 1.

In support of the Doctrine, Organization, Training, Materiel, Leadership, Personnel, Facility, and Policy

(DOTMLPF-P) Implementation Plan required in SDDP Step 2, DOT_LPF-P actions are identified that implement the reengineered business processes captured in the Business Reference Model (BRM).

Schedule-Based Estimates for the

DOT_LPF-P actions are produced by applying the estimating steps described in

Section 3. The Materiel (M)-Solution schedule is less well-defined at this stage, so estimating techniques for the M component of the DOTMLPF-P solution follow alternative methods, such as those in Appendix A. Once the Course of Action (COA) has been selected and a detailed schedule has been produced, Schedule-Based Estimating techniques are also applied to the M-Implementation Plan components to the maximum extent possible.

The TTP for Schedule-Based Estimating is initiated and completed during SDDP Step 2 for the

DOTMLPF-P Implementation work plan, is revisited in Step 3 for the M-Implementation work plan, and is conducted for the acquisition program against the program IMS in Step 4, as illustrated in Figure 2. The black arrows representing the TTP for Schedule-Based Estimating touch points to other outputs, and the bidirectional arrows feed into the Risk Register and Impact Analysis

TTPs.

SDDP

Step 2

SDDP

Step 3

SDDP

Steps 4-6

Schedule-Based Estimates

Schedule-Based Estimating Other Estimating

Methods M-Solution

DOT_LPF-P

Activities

Figure 1: Schedule Based Estimating Is Used When Detailed

Schedules Are Available

Figure 2: TTP for Schedule-Based Estimating SDDP Applicability

3. Schedule-Based Estimating Steps

A clear and consistent methodology for developing and validating a Schedule-Based Estimate is a four-step process, which is depicted in Figure 3 and detailed in the following sections. Following the estimating steps results in a reliable planning estimate for use by the Integrated Project Team

(IPT)/Integrated Program Office (IPO).

Estimating Step Description

Step 1: Plan the Schedule-

Based Estimate

Plan the Schedule-Based Estimate by forming an Estimating Team and preparing project artifacts.

Step 2: Generate the

Schedule-Based Estimate

Generate the estimate by applying methods to each schedule activity. This step includes completion of structured Basis of

Estimate (BOE) forms (Figure 9) to capture assumptions and rationale for the lower level estimates that aggregate into the project estimate.

Step 3: Validate and

Consolidate the Estimate

Validate and Consolidate the Estimate in a Future Years Defense

Program (FYDP)/appropriation-based format.

Step 4: Update and

Maintain the Estimate

Update and maintain the estimate as risk mitigation activities are initiated; risks occur or are avoided; scheduled tasks are executed;

or other project changes occur.

Figure 3: Developing Schedule-Based Estimate – Steps 1-4

Entry Criteria

Schedule-Based Estimating requires detailed information about the project or initiative and its activities. General requirements include:

An up-to-date Work Breakdown Structure (WBS) that describes the project or initiative component products

A detailed schedule, work plan, or Integrated Master Schedule (IMS), relevant to the WBS, that includes the tasks (schedule activities1) necessary to deliver each component, as shown in Figure 4. The detailed schedule must include the expected duration and sequencing (to include predecessor-successor relationships) of the schedule tasks

Additional technical project documentation used to develop the BOE’s include but are not limited to the requirements that drive the project complexity such as:

o COTS out-of-the-box vs. customized development o Complexity of interfaces o Number of users o Potential deployment sites o System complexity o Data size

Figure 4: Project IMS with Tasks and Durations

3.1 Step 1: Plan the Schedule-Based Estimate

The Estimating Lead identifies the specific project areas that require functional/technical expertise, assembles the Team, and assigns responsibilities to the appropriate Team member(s). A key factor in generating a successful Schedule-Based Estimate is choosing individuals with the requisite experiences and skill sets who will properly implement the process. Trained and experienced estimators, if available, are included on the Team.

With the initial data gathered, the Team validates the completeness and accuracy of the WBS, schedule, and additional technical project documentation prior to proceeding further with the

Schedule-Based Estimate. Team members obtain missing elements through consultation with the

IPT/IPO staff as necessary. Clarifications on WBS and Schedule development are provided in the

TTP for Work Breakdown Structure and the TTP for Integrated Master Schedule, respectively.

The IMS tasks provide detail for corresponding WBS elements. This detail includes activities that are clearly defined, appropriately sequenced, and generally 20 to 44 days in duration. Appropriate risk mitigation activities are also included in the IMS.

When the updated schedule remains insufficiently detailed to apply the resource loading described below, the team must determine other methods of generating estimates. The Appendix identifies alternative methods. The team must be able to obtain the tools, data, and expertise to apply

1 Schedule activities are referred to throughout, even though these “activities” may be material purchases which are included for estimation purposes.

alternative methods. The use of Microsoft Project is assumed, because it is generally available throughout the AF, but other tools can also be applied.

3.2 Step 2: Generate the Schedule-Based Estimate

With the appropriate documentation and personnel assembled the Team begins estimating using the IMS. The Estimating Team ensures that the resources sufficient to achieve each task in the duration described are included in the resource column. When resources are used less than full time, adjustments are made in the resource column by applying percent utilization (as seen in

Figure 5) or in the resource usage tab by editing hours directly (see Figure 6). In cases where the

IMS is not sufficiently comprehensive to provide detailed resource inputs, the Team will select appropriate estimating methodologies, such as those listed in the Appendix, and enter the estimates directly into the schedule.

Figure 5: Resources Are Allocated to the Tasks in the IMS

Figure 6: Adjusting Resource Allocation in the Resource Usage Sheet

Before costs are automatically calculated and summed, resource rates must be applied to each resource as shown in Figure 7. Resources can be categorized as labor, material, or other (“Cost”

Apply Resources to the Schedule

Adjust Resources in Resource Usage Sheet is used as the other category in Microsoft Project). Cost other than labor or material may include travel, program office support costs, etc. Labor rates are hourly rates; material and other rates are included based upon how those costs are incurred. Microsoft Project allows one-time purchases or use rates. For government personnel, the Estimating Team uses fully loaded rates provided by the Financial Management (FM) community.

Figure 7: Rates for Each Resource are Included on the Resource Sheet

The Team assigns an appropriation code to each task as shown in Figure 8 and explained in the directions for the Basis of Estimate Capture Form (see Figure 9). A text column is added to the project file for the appropriation codes. This text column can be renamed from the default column header to “appropriation” for clarity and ease of use. Tasks should be separated such that each task has a single resource type and appropriation whenever possible. Analysts use these codes to provide the totals by appropriation when the estimate is consolidated. At this point the Task Sheet shows the calculated cost for each task as seen in Figure 8.

Figure 8: Microsoft Project Calculates Resources Costs against Task Durations

The Estimating Team uses a BOE Capture Form to record all of the information used to produce an estimate for each IMS activity while concurrently placing data into the schedule (see Figure

9). Capturing and maintaining the BOE at the lowest level of the IMS provides audit trails and tracks the evolution of the estimate over time. The BOE Capture Form consolidates information about the schedule activity from multiple sheets and sources, as well as recording the detail associated with calculating each activity estimate. The schedule activities include information about the duration and resource level of effort, along with the appropriation used to fund the

Input Rates into the Resource Sheet

ID WBS # Task Name Cost Appropriation Resource Names

218 3.6.2 Revised Business Rules for Optimized Mx Supportability $201,026.40

219 3.6.2.1 Identify New Business Rules from Re-engineered Business Processes

$32,004.40 O&M KTR,GS-13[25%],GS-12

220 3.6.2.2 Review Existing Business Rules $32,004.40 O&M KTR,GS-13[25%],GS-12 221 3.6.2.3 Identify Changes Required $32,004.40 O&M KTR,GS-13[25%],GS-12 222 3.6.2.4 Draft New/Revised Business Rules $32,004.40 O&M KTR,GS-13[25%],GS-12 223 3.6.2.5 Revise Maintenance Procedures According to Business

Rules

$64,008.80 O&M KTR,GS-13[25%],GS-12

224 3.6.3 Equipment $9,000.00 Procurement laptop[5],blade server[1]

Appropriation Calculated Estimates activity. The resource usage sheet shows any rates applied to those resources. The necessary BOE risk information that applies to the activity is contained in the Risk Register. Assumptions clarify any rules that were used in the BOE calculations. The Estimating Lead must maintain BOE

Capture Forms for each activity, and retain all of the updated BOE Capture Forms each time that an estimate is required:

Project: Enter the name of the Project or initiative. All BOE forms should consistently state the project name.

Date: Enter the date the BOE Capture Form was completed, or the date the revision was completed.

Schedule Activity Name and Reference Number: Enter the schedule activity number in the format “X.X.X.” and the schedule activity title exactly as it appears in the project schedule. The schedule must be at a low enough level of decomposition to apply resources, and a BOE Capture

Form must be prepared for each corresponding level schedule activity. If, for reasons explained on the BOE Capture Form, the project did not complete an estimate for that schedule activity, then the Calculated Costs are shown as NSP (Not Separately Priced) and the Capture Form identifies which schedule activity contains those costs.

Author: Enter the name of the Estimating Team member responsible for completing the BOE

Capture Form for this schedule activity.

Base Year (BY): Enter the BY for the costs entered. Usually the BY is the current fiscal year (FY). All

BOE Capture Forms must use the same BY, though some BOE

Capture Forms may calculate costs in a different year and adjust them into BY dollars.

Phase: Enter the Project Phase identifying the latest approved

SDDP Step, acquisition milestone, lifecycle step, etc. In the initial estimate, for example, the Phase field is entered as “Identify Mission

Processes, SDDP Step 2.”

Methodology: Enter the estimating methodology used to generate this specific schedule activity estimate.

Appropriate inputs for this field include: “Parametric,”

“Analogous,” “Bottom-Up,”

“catalog quotes” or “Schedule-

Based.” If a combination of methods is used, enter the predominant method. All methods are also described in the “Estimate

Calculation” block on the BOE

Capture Form.

Estimate Calculations: Enter the formulas and calculations that generated the schedule activity estimate (e.g. Labor = 100 hours * $80/hour = $8,000.00). The Estimating Team also includes the methods used to determine labor hours and (potentially multiple) rates. For material or other costs show the detailed calculations that sum to the total materials cost for this activity. This information is especially critical when costs are entered directly into the schedule. Tables and detailed calculations that are too extensive to fit directly on the BOE form may be attached, as necessary.

Calculated Costs: Enter as Material, Labor or Other:

Material: Enter the estimated cost of materials required to complete the work task. The material costs may include equipment, services and facilities to be used or consumed during the work tasks and directly/indirectly attributable to the project. Do not include material that is accounted for in rates applied elsewhere in the estimate.

Labor: Enter the calculated total labor required to execute the work in the task. The total labor costs are calculated using task durations and fully loaded labor rates. Government rates are provided by the FM community.

Other: Enter any expenses other than for Labor or Material.

Figure 9: BOE Capture Form

BY Cost: Enter the sum total of the Material, Labor, and Other costs in BY funds used for the entire estimate.

Appropriation and Budget: Enter the types of appropriated funds that apply to the schedule activity funding. Some appropriations are: “3600 Development (Software),” “3400 System

Operations and Maintenance (O&M),” or “3080 Other Procurement.” To the extent practical, avoid mixing fund types within a schedule activity. For example, if an element includes development work and the need to purchase equipment, create a separate schedule activity for the equipment purchase.

Assumptions: Enter the assumptions the estimator used to generate the estimate. This narrative is the most important field on the BOE Capture Form and must be complete enough to explain the logic and rationale for the estimate to subsequent reviewers. The narrative identifies key information sources for benchmarking input and analogous projects. Assumptions identify the similarities which justify the selected benchmarks or analogous projects. The assumption narrative describes how key differences are accounted for when using the benchmark/analogous project information. Also enter the information gaps in the project planning that have a material effect on the schedule activity estimate. When the Estimating Team determines the use of a parametric model, the Team assembles solution sizing parameter inputs such as:

Business requirements/Use cases/Function points

Estimated:

o Storage o Service requirements (levels of response) o Criticality and reliability of systems o Number of transactions per second o Capability Maturity Model Integration (CMMI) level o User base o Workload o Other

There is no limit to this information, and reference attachments can be included in the

Assumptions section.

Identified Risks and Impacts: Enter the known risks associated with the schedule activity. The estimator includes the consequence that the identified risk could have on the schedule activity

(e.g. Double the cost) if the risk were realized, and the likelihood of the risk occurring. Risks should be evaluated after the effects of any risk mitigation activities that are included in the schedule. Any newly identified risks should be added to the Risk Register. If there are no schedule activity risks identified, enter “NO IDENTIFIED RISKS” in this field. Each risk identified in the Risk Register should apply to at least one schedule activity.

In summary, the consistent use of full documentation on the BOE Capture Form is sufficient to allow other analysts to recreate the estimate, and supports easy updates to the estimate over time.

BOE Capture Form collection and maintenance provides a documented history of program and assumption changes as well as an auditable estimate. Once the BOE Capture Forms are complete and the IMS is fully annotated, the team can produce the total Schedule-Based Estimate by rolling up lower level tasks into costs at the parent level as shown in Figure 8 and Figure 10.

Figure 10: Project Cost Rollup

3.3 Step 3: Validate and Consolidate the Estimate

Validation is an ongoing process as the Estimating Team considers cross-checks and comparative estimates while performing the previous steps. Once the estimate file has been updated, the

Schedule-Based Estimate consists of a point estimate developed from the best estimate of durations, resources, and resource costs. A final review ensures that the cost estimate is validated against four characteristics:

1. The total estimated costs are reviewed, ensuring that no costs were omitted or double-counted, and that documentation explains key assumptions

a. The project is defined, aligned to the current schedule, and the BOE contains technically sound assumptions

b. The estimate applies the correct schedule activities incorporating the complete technical scope of the work to be performed

2. The estimate is documented and can easily be repeated or updated and traced to original sources

a. BOE documentation identifies data sources, justifies all assumptions, and describes all estimating methods (including relationships) for all schedule activities

b. Schedule milestones and deliverables can be traced and are consistent with the documentation

3. The estimate is reasonable

a. Schedule activity estimates are validated so that calculations are accurate and account for all costs

b. Issues associated with estimating techniques are resolved to enhance the estimate accuracy

4. Limitations in information or bias are identified and resolved, and alternative results are compared

a. Major assumptions are reviewed

b. Risk mitigation activities are included in the estimate

Once the team is satisfied with the quality of the estimate, it is consolidated into a concise data display by year and appropriation. The Team tailors the Microsoft Project Task Usage Sheet to show costs by FY and schedule activities, including budget and appropriation codes, as shown in

Figure 11. The Team filters the data in Microsoft Project or Excel, to produce the consolidated estimate shown in Figure 12. The analyst must take care to ensure that costs are not double counted in both parent and child schedule activities, and that multiple appropriations are not incorrectly rolled up within parent elements. The final estimate, consisting of the Project file and the BOE Capture Forms, is maintained as a configuration managed project artifact. The project costs allocated to FY serve as input to the Return on Investment (ROI) and the Business Case

Analysis (BCA) performed by the Program Manager (PM).

Figure 11: The Task Usage Sheet Is Tailored to Show FY and Budget Codes

Figure 12: Consolidated Estimate Chart

3.4 Step 4: Update and Maintain the Estimate

The Schedule-Based Estimate is a configuration-managed project artifact that can be audited to determine the source of cost variance against the project plan and is maintained and used throughout the project lifecycle. The Schedule-Based Estimate is used at critical project decision points, where the IPT/IPO will need an ROI calculation based on the estimate, and to track project execution and evaluate the performance against the planned project costs. As with any project, an established estimate is not immune to the impacts of changes that occur and accumulate over time.

Changes may result from:

Cost realization in terms of task duration and actual rates

Additional risk mitigation activities

Risk realization and retirement

Project changes

Expanded IMS detail

The impacts caused to a project due to changes are addressed using the Impact Analysis process

(see the TTP for Impact Analysis) and include changes such as new or reduced requirements, budget changes, or unforeseen project execution problems. The resulting Impact Analysis documentation supports all configuration-managed estimate changes, and generates new or updated BOE Capture Forms, which are then subject to a configuration management process. As

Base Year Cost Estimate FY14 FY15 FY16 FY17 FY18 FY19-27 Total

3600 RDT&E BY14 -$ 11,186,745$ 12,869,583$ 13,234,321$ 14,021,757$ -$ 51,312,407$

WCF Procurement BY14 451,885$ 2,428,206$ 4,564,385$ 4,862,397$ 5,551,125$ -$ 17,857,997$

3080 Procurement BY14 1,003,707$ 4,028,318$ 4,073,550$ 4,204,494$ 4,624,649$ -$ 17,934,719$

3400 O&M BY14 -$ 4,765,230$ 7,047,235$ 4,650,841$ -$ 95,095,387$ 111,558,694$

Total project BY14 1,455,592$ 22,408,500$ 28,554,753$ 26,952,053$ 24,197,532$ 95,095,387$ 198,663,817$ the project matures, actual costs replace projected costs. The financial manager captures actual costs and records them in the Schedule-Based Estimate. New opportunities for risk mitigation may be recognized over time, and these tasks are included in the Risk Register, IMS, and Schedule-

Based Estimate.

Exit Criteria The completion of the Schedule-Based Estimate process provides:

A fully resource-loaded IMS with auditable documentation

A lower-bound cost for the initiative

A time phased estimate by appropriation

The completed Schedule-Based Estimate is tied to a realistic schedule, and is available to compare project activity costs against their projections. The estimating process provides confidence in the estimate, and gives an understanding of its limitations based on the identified uncertainties and risks. Overall, the Schedule-Based Estimate serves as a basis for minimizing project execution costs, and provides higher confidence that key objectives are achievable based on specified project scope and planned timeline.

References

Air Force Service Development and Delivery Process (SDDP)

Air Force Cost Analysis Agency (AFCAA) Cost Risk and Uncertainty Risk Analysis Handbook

AFI65-508: Cost Analysis Guidance and Procedures

AFI65-509: Business Case Analysis

AFCAA Software Cost Estimation Metrics Manual

GAO-09-3SP: Government Accountability Office (GAO) Cost Estimating and Assessment

Guide

Institute of Electrical and Electrical Engineers (IEEE), Inc. Software Engineering Standards

Process Standards Project Cost Management

Joint Cost Schedule Risk and Uncertainty Handbook

Naval Center for Cost Analysis (NCCA) AFCAA, Software Development Cost Estimating

Handbook

TTP for Impact Analysis

TTP for Integrated Master Schedule

TTP for Integrating Risk into Program Plans Management

TTP for Work Breakdown Structure

UFC 3-701-01: Unified Facilities Criteria (UFC) DoD Facilities Pricing Guide http://pattaya.usc.edu/wiki/index.php/Main_Page http://www.wbdg.org/ccb/DOD/UFC/ufc_3_701_01.pdf

Appendix – Alternative Estimation Methods Overview

The Schedule-Based Estimating approach uses program planning processes that include:

Developing a WBS

Preparing a resource-loaded schedule

This approach is considered a “Bottom-Up” estimate. The AF implementation of the SDDP allows for increased use of a Bottom-Up approach and improved estimates by leveraging the work from the Project Team. A consistent and defined sequence of processes results in the collection of more meaningful historical performance data, yielding better estimates over time.

Estimates for AF SDDP projects use a Schedule-Based Estimating method to enable a Bottom-Up estimate. In the event another type of estimate is required, alternate methods can be applied singularly, and or in conjunction with each other at the WBS or task level. The estimating technique chosen is dependent on the best information available at the time the estimate is developed. The available methodologies are clarified here.

Analogous Estimating

Analogous Estimating, also known as “Top-Down” estimating, is a method where an estimate is developed using actual results from a finished project that are similar to the new project being planned. For example, if Organization A has designed and developed a case management system previously, Organization B could use the actual cost for the design and development as the basis for their estimate for a new case management system. The accuracy of analogous estimating is highly dependent on the similarities between the two projects, and adjustment factors are typically applied. In the early stages of a project, when little is known about the actual design, analogous estimates are frequently used.

Parametric Estimating

Parametric Estimating uses a software model or tool that takes historical information as the input, includes project specific assumptions, and then extrapolates the information to compute an overall resource estimate and duration. Many parametric models have been developed to aid in estimating resources and schedule. These models are based on historical project data that may or may not be pertinent to the current project, so care must be taken to match an appropriate model with the specific project to be estimated. Using more than one method or model can ensure a higher level of confidence in the estimate. The accuracy of parametric estimation is highly dependent on the assumptions made and provided as input into the model. The Parametric Estimate can form the basis of a project’s cost estimate once initial characteristics of the project have been defined.

Bottom-Up Estimating

The Bottom-Up estimating technique aligns directly with the SDDP and increases accuracy when iterated through detailed planning within the SDDP steps. The Bottom-Up estimate can be used when a detailed WBS and schedule loaded with estimated resources and timeframes to the task level are available. The task level is generally to the third (or lower) level of the project WBS or

IMS. The Bottom-Up estimate can be performed at higher levels of the WBS when the detailed tasks are not yet developed, but the estimate reflects the uncertainty and variability associated with the less well-defined activities. Individual estimates for each element in the WBS are aggregated to the higher level on the WBS. The Estimating Team then calculates the sum for all elements.

Since the basis of Bottom-Up estimation comes from each task level, it is paramount to make accurate low-level task estimates. Best practices include:

Establish and document the estimate scope within the BOE

Implement a product-oriented WBS that identifies work tasks in terms of their relation to delivering end products

Involve Subject Matter Experts (SMEs) throughout the estimation process

Leverage the personnel to be involved in the design and development of the system

Apply industry practices, such as the Delphi Method, for greater accuracy

Acronym List

Acronym/Term Definition

AF Air Force

AFCAA Air Force Cost Analysis Agency

AFI Air Force Instruction

BCA Business Case Analysis

BOE Basis of Estimate

BRM Business Reference Model

BY Base Year

COA Course of Action

CMMI Capability Maturity Model Integration

DoD Department of Defense

DOT_LPF-P

Doctrine, Organization, Training, Leadership, Personnel, Facility, and

Policy

DOTMLPF-P

Doctrine, Organization, Training, Materiel, Leadership, Personnel, Facility, and Policy

FM Financial Management

FY Fiscal Year

FYDP Future Years Defense Program

GAO Government Accountability Office

IEEE Institute of Electrical and Electronics Engineers

IMS Integrated Master Schedule

IPO Integrated Program Office

IPT Integrated Project Team

IT Information Technology

M Materiel

MIL-STD-881C Military Standard 881C Work Breakdown Structures

NCCA Naval Center for Cost Analysis

NSP Not Separately Priced

O&M Operations and Maintenance

PM Program Manager

ROI Return on Investment

SDDP Service Development and Delivery Process

TTP Tactics, Techniques and Procedures

UFC Unified Facilities Criteria

WBS Work Breakdown Structure

Glossary

Term Definition

Analogous

Estimating

An estimate of costs based on historical data of a similar (analogous) item.

Base Year

(dollars)

The constant year chosen for performing the estimate. Constant dollars are evaluated at the Base Year.

Basis of

Estimate

The means used to determine the estimated value. This includes the ground rules, assumptions, data, methodologies, and risks associated with the estimated product/activity. BOE results are captured on a BOE Capture

Form.

Bottom-Up

Estimate

Also called an engineering build-up estimate, it is developed from the smallest building blocks of the project. A Schedule-Based Estimate is ideally a Bottom-Up estimate.

Business

Reference Model

A function-driven framework used to describe the lines of business and sub-functions performed by the federal government independent of the agencies that perform them. IT investments are mapped to the BRM to identify collaboration opportunities. (Source: OMB Circular A-11, Section 53)

Course Of

Action

A planning and decision process that culminates in a sponsor decision. It principally refers to the decision whether to proceed with development of one or more prospective M-Solutions.

Engineering build-up estimate

Also called a Bottom-Up estimate, it is developed from the smallest building blocks of the project. A Schedule-Based Estimate is ideally an engineering build-up estimate.

Function Point Analysis metric used for predicting the total size of a software system. FPs measure software size by quantifying the system functionality provided to the estimator based primarily on the system logical design.

Integrated

Master Schedule

A time-based schedule containing the networked, detailed tasks necessary to ensure successful program/contract execution. The IMS is traceable to the integrated master plan, the contract WBS, and the statement of work.

The IMS is used to verify attainability of contract objectives, to evaluate progress toward meeting program objectives, and to integrate the program schedule activities with all related components.

Materiel

Implementation

Plan

The plan for developing/acquiring and delivering the M-Solution. The plan should include all activities needed across skill sets (e.g., architecture, system engineering, acquisition, funding, contracting, governance, testing and evaluation, and compliance).

Materiel

Solution

Correction of a deficiency, satisfaction of a capability gap, or incorporation of new technology that results in the development, acquisition, procurement or fielding of a new item (including ships, tanks, self-propelled weapons, aircraft, etc., and related software, spares, repair parts and support equipment, but excluding real property, installations and utilities) necessary to equip, operate, maintain and support military activities without disruption as to its application for administrative or combat purposes. (Source: DoD

4630.05) Within the context of the SDDP, the M-Solution is focused on the

Term Definition acquisition or development of Information Technologies, specifically software.

Parametric

Estimating

A cost-estimating methodology using statistical relationships between historical costs and other program variables such as system physical or performance characteristics, contractor output measures, or manpower loading.

Point Estimate An estimate that represents only one value from a range of possibilities. In most cost estimating applications, the relationship of the point estimate to the range of possibilities is unknown until after the risk analysis has been performed.

Return On

Investment

A measurement of performance used to compare the effectiveness of different investments. ROI is calculated by taking the benefit, or return, from an investment and dividing it by the cost of the investment. ROI is expressed as a percentage or a ratio.

Risk Mitigation A systematic reduction in the extent of exposure to a risk and/or the likelihood of its occurrence through active measures.

Risk Register A Risk Management tool commonly used in Project Management and organizational risk assessments. It acts as a central repository for all risks identified by the project or organization.

Schedule-Based

Estimating

Cost estimating using a schedule as the basic Cost Element Structure (CES).

Service

Development and Deployment

Process

The end-to-end process, by which capability-supporting mission processes are identified, described, developed and deployed.

Work

Breakdown

Structure

An exhaustive, hierarchical tree structure of deliverables and activities that need to be performed to complete a project. A WBS is a common project management tool and the basis for much project planning.