by John Swaren
| November 15, 2016
Affordability is an abstract term that most people think they understand but have difficulty articulating.
The United States Department of Defense defines affordability as the degree to which the life-cycle cost of an acquisition program is in consonance with the long-range investment and force structure plans of the Department of Defense or individual DoD Components. However, the Department of Defense acquisition regulations require program managers to address affordability, detail affordability constraints, and achieve affordability during the procurement of new systems without providing a clear idea of what affordability means. How then should defense contractor view affordability?
From the contractor’s point of view, affordability is that characteristic of a product or service that:
Affordability Analysis from our perspective is an iterative process which tries to rationalize a systems development across four areas simultaneously. The areas of interest are cost, risk, performance and schedule. The process and work flow associated with Affordability Analysis is facilitated by the use of a family of tools and models. Traditionally these tools and models have been stand-alone. PRICE believes and has demonstrated that there is value and a competitive edge for those companies that can integrate their tools and data into a coherent Affordability Analysis approach.
The PRICE® Cost Analytic Framework provides the infrastructure and flow to allow a company to create its own Affordability Analysis environment. By using the capabilities of the framework, a company can combine its data, and unique tools to conduct comprehensive Affordability Analysis. It is this customized environment that will allow the organization to meet the four characteristics listed above.
Success can be accelerated by the PRICE® Predictive Cost Analytics (PCA) integration of business, engineering, and program management objectives in order to produce competitive solutions.
TruePlanning immediately facilitates objective quantitative assessment of customer needs/requirements, winning-business solutions, and project lifecycle cost management.
Contact me for a demonstration, either in person or via telecon. We’ve had many success stories here. You can be next!