Cost Estimating

Step 3 Define Program Characteristics

Key to developing a credible estimate is having an adequate understanding of the acquisition program, the Acquisition Strategy, technical definition, characteristics, system design features, and technologies to be included in its design. The cost estimator can use this information to identify the technical and program parameters that will bind the cost estimate. [1]

The objective of the Technical Baseline is to provide in a single document a common definition of the program; including a detailed technical, program, and schedule description of the system, from which all Life-Cycle Cost Estimates (LCCE) will be derived; that is, program and Independent Cost Estimates (ICE). [1]

For more information see: GAO Cost Estimating and Assessment Guide – Chapter 7

Tasks and information that should be understood from a technical baseline description include: [1]

  • Identify the program’s purpose and its system and performance characteristics and all system configurations;
  • Any technology implications;
  • The program acquisition schedule and acquisition strategy;
  • The relationship to other existing systems, including predecessor or similar legacy systems;
  • Support (manpower, training, etc.) and security needs and risk items;
  • System quantities for development, test, and production;
  • Deployment and maintenance plans

The technical baseline must be available in time for all cost estimating activities to proceed on schedule. This often means that it is submitted as a draft before being made final. The necessary lead time will vary by organization. One example is the CAIG in the Office of the Secretary of Defense, which requires that the Cost Analysis Requirements Description (CARD) be submitted in draft 180 days before the Defense Acquisition Board milestone and in final form 45 days before the milestone review.

Since the technical baseline is intended to serve as the baseline for developing LCCEs, it must provide information on development, testing, procurement, installation and replacement, operations and support, planned upgrades, and disposal. In general, a separate technical baseline should be prepared or each alternative; as the program matures, the number of alternatives and, therefore, technical baselines decreases.

AcqLinks and References:

Updated: 7/29/2017

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