Course CDFM - Certified Defense Financial Manager

CDFM-A Module 4 - Chapter 3 verified answers What is an affordability assessment? An assessment of the degree to which the life cycle cost of an acquisition program is in consonance with the long-range modernization, force structure, and manpower plans of the individual DoD components, and the department as a whole. Affordability assessments are typically conducted: By resource Analysts in the DoD Component Headquarters of supporting organization. For MDAS and MIAS, Affordability Assessments are required at: Milestones B and C MDAP Major Defense Acquisition Programs MIAS Major Information Acquisition Programs Joint Affordability Assessments are conducted by The lead DoD Component Full Funding Inclusion of the dollars and manpower needed for all current and future efforts to carry out the acquisition and support strategies. CAIV Cost as an Independent Variable Full Funding is Part of the entrance criteria for the transition into the Engineering and Manufacturing Development Phase (at milestone B) Full Funding is Assessed By the Milestone Decision Authority at each decision point. Cost As an Independent Variable is covered in what directive? DoD Directive 5000.01 Cost as an Independent Variable All participants in the acquisition system are expected to recognize the reality of fiscal constraints, and to view cost as an independent variable. Cost As an Independent Variable refers to what type of cost? Lifecycle cost Total Ownership Costs Other infrastructure or business process costs not necessarily attributable to the program Life Cycle costs are made up of what 4 cost categories? Research and Development Costs, Investment Costs, Operations and Support Costs, and Disposal Cost Research and Development covers development costs incurred from the beginning of the conceptual phase through engineering and manufacturing development, and potentially into LRIP. Investment covers production and deployment costs incurred from the beginning of low rate initial production through completion of deployment Operating and Support covers Sustainment costs incurred from the initial system deployment through the end of system operations. Disposal covers costs associated with demilitarization and disposal of a military system at the end of its useful life. AoA Analysis of Alternatives When is an Analysis of Alternatives required? For ACAT 1 or above acquisition programs at major milestone decision points and at the full-rate production decision What is an AoA? An analytical comparison of the operational effectiveness, suitability, and life-cycle cost of alternatives that satisfy established capability needs. What is the purpose of an AoA? To assess the potential material solutions to satisfy the capability needs in the approved Initial Capabilities Document. D, CAPE Director, Cost Assessment and Program Evaluation What does D, CAPE provide? basic policies and guidance associated with the AoA process. What is the first major step leading to a successful AoA The creation and coordination of a well-considered analysis plan. ICE Independent Cost Estimate Who prepares the ICE for a Major Defense Acquisition Program? the Director of Cost Assessment and Program Evaluation (D, CAPE) When is the Independent Cost Estimate to be completed? Before the approval to proceed with technology development, system development, and demonstration, and production and deployment stages OSD Office of the Secretary of Defense CARD Cost Analysis Requirements Description What is the CARD? A comprehensive formal written document which defines the program office's program WBS Work Breakdown Structure What are the two earliest cost estimating techniques? Analogy and Parametric Techniques Analogy A technique used to estimate a cost base on historical data for an analogous (similar) system or subsystem Parametric Technique Use regression or other statistical methods to develop Cost Estimation Relationships (CER's) Engineering Method The system being costed is broken down into lower level components each of which is costed seperately Actual cost Actual costs or trends are used to project estimates of future cost for the same system Risk Analysis the aggregate variability in the overall estimate due to the variability in each input probability distribution, typically through Monte Carlo simulations.