Original Post Date: Thursday, May 19, 2011

I was recently asked by a client to provide a synopsis of what TruePlanning offers in response to the Ashton Carter Memorandum – Implementation of Will-Cost and Should-Cost Management. In the memo, the Undersecretary of Defense AT&L listed “Selected Ingredients of Should Cost Management”. It was interesting to note how much capability is provided by TruePlanning to effectively support efficient should cost management. In this month’s blog, I will share with my response to our client with you.

Selected Ingredients of Should Cost Mgmt

(Ashton Carter Memorandum)

TruePlanning “Should Cost” Capability

Scrutinize each contributing ingredient of program cost and justify it…

Can model size, technology and schedule parameters and understand the interaction of each on cost.

Benchmark against similar DoD programs and commercial analogues…

Benchmarking using cost research knowledge databases based on both military and commercial programs. Can also include specific program history.

Promote Supply Chain Management to encourage competition and incentivize cost performance at lower tiers.

Can model the entire supply chain to analyze and understand impact of competition and cost incentives.

Identify opportunity to breakout GFE vs. prime contractor-produced items

Contains models for both GFE vs. CFE allowing including estimating new development vs. modification

Identify items or services contracted through a second or third party vehicle. Eliminate unnecessary pass-through costs by considering other contracting options.

Ability to model different vendor scenarios using True Planning's System Level Cost Model.

Identify an alternative technology/material that can potentially reduce development or life cycle costs for a program. Ensure the prime product contract includes the development of this technology/material at the right time.

Robust capability to quickly select alternative technologies/materials and quantify impact on lifecycle costs.