by Bob Koury
| January 22, 2015
What are the implications of this need upon the cost estimating community? Clearly there is a requirement to make choices between competing priorities. The defense budget has nearly doubled since September 11, 2001. However, this increase has not been mostly tied to combat forces and force generation but to non-military purposes. For example military Health-care costs have gone from $19 billion to $51 billion in the same time period now accounting for almost 10% of the entire defense budget. Given this situation the department of defense will need to justify every allocation of resource both old and new. PEOs, / PMs will be required to make a business case for their programs. However, unlike the cold war era, in which this case is made only against the need to create a combat capability, these initiatives will need to show value added over such things as family quality of life, MILCON, or pay increases. This prioritization between disparate goals will require a more robust set of data and costing tools. It will also require a well defined, effective, and agile Business Case Analysis capability.
Senior Cost Research Analyst, PRICE Systems