Major Capability Acquisition (MCA)
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Analysis of Alternatives
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Analysis of Alternatives
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Reference Source: DAG CH 2-2.3 Analysis of Alternatives
An AoA is an analytical comparison of the operational effectiveness, suitability, and life-cycle cost of alternatives that satisfy established capability needs. After the Materiel Development Decision, the AoA is initiated to examine potential materiel solutions with the goal of identifying the most promising option, thereby guiding the Materiel Solution Analysis phase.
Reference Source: DODI 5000.85 Section 3.6.b
The MSA phase will be guided by the ICD and the AoA study plan. Phase activity will focus on identification and analysis of alternatives, measures of effectiveness, key trades between cost and capability, life-cycle cost, schedule, concepts of operations, and overall risk. The AoA will inform and be informed by affordability analysis, sustainment considerations, early systems engineering analysis, threat projections, and coalition interoperability as identified in the ICD.
Reference Source: DODI 5000.84 Section 4
DoD Component AoA Preparation
DoD Components should engage ODCAPE once the Component knows they will likely need an AoA. Ideally this should begin as the DoD Component initiates analysis for determining requirements, such as a capabilities based assessment. Early collaboration and dialogue helps expedite issuance of study guidance, and minimizes the time needed to arrive at an approved study plan. DoD Components should program funding needed to conduct AoAs so that funds are available to conduct these analyses. If contract support is needed to conduct an AoA, DoD Components should initiate the contracting process in sufficient time to begin the AoA in a timely manner. DoD Components should identify and begin the process of obtaining long lead items needed to conduct the AoA so the analysis can begin in a timely manner. Examples of long lead items include: security clearances (including clearances for any special access program(s) necessary for performance of the AoA); technical and threat data to support combat simulations and modeling; scenarios; methods of employment; and tactics, techniques, and procedures.
To ensure an efficient AoA, DoD Components should:
- Identify their lead for the AoA study, and charter that lead to identify study team members (organizations and individuals), the oversight structure, team responsibilities, and any external support the team is likely to require.
- Establish an executive steering body within the DoD Component or joint community, as appropriate, to help prepare for and guide the AoA. (Ideally, ODCAPE should be included in that body.) The steering body should be interdisciplinary and include material developers, acquisition experts, the requirements community, people with operational experience, people with analytical expertise, intelligence community experts, cost experts, and financial experts from the programming and budgeting community.
- Ensure that the requirement document used to help initiate the AoA has prioritized and quantified the capabilities sought. Specifically, metrics that measure and quantify each capability gap are essential.
DoD Component heads should establish affordability goals before the AoA.
Conduct of the AoA
DoD Components should ensure the AoA is conducted in a transparent manner. The transparency facilitates understanding of the analysis and enables leadership to focus on the implications of the analytical work because the pedigree of the analysis is understood. Additionally, it enables Components to address possible concerns before time and effort is invested and rework required.
- ODCAPE staff and other staff that support the SAG principals should conduct site visits to the centers conducting the analysis.
- DoD Components should ensure open analyst interaction during the AoA.
DoD Components should conduct the analysis in an intellectually honest manner. The study team’s products (SAG briefings, written AoA report) should properly articulate the limitations and uncertainty of its findings and represent the level of precision warranted by the data and its study methods. DoD Components should ensure that the AoA quantifies the physical performance of the options and the effect the options have on the mission accomplishment of the units supported (e.g., time to complete the mission, enemy destroyed, number of friendly forces remaining operational).
DoD Components should leverage existing analysis where possible. In doing so, DoD Components should provide the existing analysis to the SAG for:
- Confirmation that the previous analysis provides the information needed for the AoA.
- Guidance on what is needed to supplement or modify the existing work to meet the AoA’s needs.
DoD Components should conduct the analysis in a balanced manner, balancing precision, neatness, and parsimony, adding complexity only when it provides needed explanatory power. The study team must apply the appropriate level of analytical fidelity that best informs decisions in a timely manner. The AoA study team should consider cost and affordability as early in the analysis as possible.
As facts warrant, the DoD Component and its study team should seek prompt updates to SAG direction.
- For example, if analysis indicates an option is infeasible, it may not be justifiable to continue additional exploration of that option, and the Chairman of the SAG may limit the scope or waive further analysis.
- Alternatively, the study team may find that some aspect of the study will not discriminate between the alternatives, and the Chairman of the SAG may limit or waive work in that area.
The DoD Components should ensure that the AoA study team conducts sensitivity analysis to identify the dependence of results on key parameters of the analysis. This enables decision makers to understand whether the solutions examined are robust.
Reference Source: DAG CH 2-2.3 Analysis of Alternatives
The Analysis of Alternatives (AoA) is an important element of the defense acquisition process. An AoA is an analytical comparison of the operational effectiveness, suitability, and life-cycle cost of alternatives that satisfy established capability needs. After the Materiel Development Decision, the AoA is initiated to examine potential materiel solutions with the goal of identifying the most promising option, thereby guiding the Materiel Solution Analysis phase. Subsequently, an update to the AoA is initiated when necessary or mandated by the DAE at the start of the Technology Maturation and Risk Reduction phase and is reviewed at Milestone B (which usually represents the first major funding commitment to the acquisition program). The update to the AoA is used to refine the proposed materiel solution, as well as to reaffirm the rationale, in terms of cost-effectiveness, for initiation of the program into the formal systems acquisition process. For Major Defense Acquisition Programs at Milestone A, the Milestone Decision Authority (MDA) must certify in writing to the Congress that the Department has completed an AoA consistent with the study guidance developed by the Director, Cost Assessment and Program Evaluation (DCAPE), in addition to meeting other certification criteria. For Major Defense Acquisition Programs at Milestone B, the MDA must certify in writing to Congress that the Department has completed an AoA with respect to the program, in addition to meeting other certification criteria. The AoA is updated as needed at Milestone C.
Role of AoA in Materiel Solutions Analysis Phase
The AoA process plays a key role in support of the Materiel Solution Analysis Phase. After a program has an approved Materiel Development Decision, the AoA process is necessary to better define the trade space across cost, schedule, and performance to enable the DAE and Service Sponsor to select a preferred materiel solution that addresses the capability gaps documented in the approved Initial Capabilities Document (ICD).
The DCAPE develops and approves study guidance for MDAP AoAs. The guidance is developed in consultation with other DoD organizations, as necessary. Prior to the MDD review, DCAPE provides the AoA study guidance to the DoD Component designated by the MDA. Following receipt of the AoA study guidance, the DoD Component prepares an AoA study plan that describes the intended methodology for the management and execution of the AoA. The AoA study plan is coordinated with the MDA and approved by DCAPE prior to the MDD review. A suggested template for the AoA study plan is provided in Section 2.3.2.
The study guidance requires, at minimum, full consideration of possible trade-offs among cost, schedule, and performance objectives for each alternative considered. The study guidance also requires an assessment of whether or not the joint military requirement can be met in a manner consistent with the cost and schedule objectives recommended by the JROC. The AoA study guidance and resulting AoA study plan should build on the prior analyses conducted as part of the Joint Capabilities Integration and Development System (JCIDS). The JCIDS analysis process that leads to an approved Initial Capabilities Document (ICD) is built upon the analysis known as the Capabilities-Based Assessment (CBA). The CBA provides recommendations (documented in the ICD) to pursue a materiel solution to address an identified capability gap. The CBA does not provide specific recommendations as to a particular materiel solution, but rather provides a more general recommendation as to the type of materiel solution (such as Information Technology system, incremental improvement to an existing capability, or an entirely new “breakout” or other transformational capability). In this way, the ICD can be used to establish boundary conditions for the scope of alternatives to be considered in the subsequent AoA. The AoA study guidance should be crafted to ensure that the AoA considers a sufficiently robust set of alternatives, given program cost, schedule, and performance constraints.
AoA Study Plan
Reference Source: DAG CH 2-2.3.2 Analysis of Alternatives Study Plan
The first major step leading to a successful AoA is the creation and coordination of a well-considered analysis plan. The study plan establishes a road map of how the analysis will proceed, and who is responsible for doing what. At a minimum, the study plan facilitates full consideration of possible trade-offs among cost, schedule, and performance objectives for each alternative considered, as well as an assessment of whether or not the joint military requirement can be met in a manner consistent with the cost and schedule objectives recommended by the JROC.
A recommended outline for the AoA study plan may resemble the following (but note that the study plan specifics will depend on the scope of the analysis and the criteria outline in the study guidance):
- Ground Rules
- Constraints, Limitations, and Assumptions
- Description of Alternatives
- Nonviable Alternatives
- Operations Concepts
- Sustainment Concepts
- Determination of Effectiveness Measures
- Mission Tasks
- Measures of Effectiveness
- Measures of Performance
- Effectiveness Analysis
- Effectiveness Methodology
- Models, Simulations, and Data
- Effectiveness Sensitivity Analysis
- Cost Analysis
- Life-Cycle Cost Methodology
- Additional Total Ownership Cost Considerations (if applicable)
- Fully Burdened Cost of Delivered Energy (if applicable)
- Models and Data
- Cost Sensitivity and/or Risk Analysis
- Cost-Effectiveness Comparisons
- Cost-Effectiveness Methodology
- Displays or Presentation Formats
- Criteria for Screening Alternatives
- Organization and Management
- Study Team/Organization
- AoA Review Process
As every AoA is unique, the above outline should be tailored to support the analytic scope outlined in the respective study guidance. Each point in the above outline is discussed further in the next several sections.
Analysis of Alternatives Study Plan-Introduction
The introduction to the AoA plan describes the developments that led to the AoA, including prior relevant analyses (such as the Capabilities-Based Assessment). It should reference the applicable capability-needs document(s) and other pertinent documents, and highlight the capability gaps being addressed through the applicable capability needs. The introduction should describe the applicable AoA study guidance and any other terms of reference. It also should provide a broad overview of the planned AoA, which describes in general terms the level of detail of the study and the scope (breadth and depth) of the analysis necessary to support the specific milestone decision.
Analysis of Alternatives Study Plan-Ground Rules
The ground rules described in the analysis plan include the scenarios and threats, as well as the assumed physical environment and any constraints or additional assumptions. The scenarios are typically derived from defense-planning scenarios and associated joint operational plans, augmented by more detailed intelligence products such as target information and enemy and friendly orders of battle. Environmental factors that impact operations (e.g., climate, weather, or terrain) are important as well. In addition, environment, safety, and occupational health factors associated with the use of chemical and/or biological weapons may need to be considered as excursions to the baseline scenario(s).
The study plan should describe what future timeframe, or timeframes, will be considered in the analysis. Often, the time period(s) selected will be determined by the time period(s) assumed in the DoD-approved planning scenario. However, there is some flexibility on this point, especially if something significant — such as the deployment of a new capability, or the retirement of a legacy system — is projected to occur one or two years after one of the time periods in the scenario. A common and desirable practice is to consider two time periods of interest, say “near-term” and “far-term,” separated by a decade or so.
The AoA study plan should describe the planned analytic excursions to the baseline scenarios and other major ground rules. Such excursions are strongly encouraged in order to explore any impact of changing threat levels, warning times, involvement of allied forces, and political constraints on basing or overflights, just to name a few issues. These excursions can be used to see if any major issues are critical to the relative cost-effectiveness of the alternatives considered in the AoA.
Analysis of Alternatives Study Plan-Range of Alternatives
The analysis plan also should document the range of alternatives to be addressed in the analysis. In many cases, there will be a minimum set of alternatives required by the initial analysis guidance. Additional direction during subsequent AoA reviews may insert yet other alternatives. Practically, the range of alternatives should be kept manageable to ensure that the acquisition trade space is sufficiently well analyzed, while keeping the study schedule within a reasonable allotment. The number of alternatives can be controlled by avoiding similar but slightly different alternatives and by early elimination of alternatives (due to factors such as unacceptable life-cycle cost or inability to meet Key Performance Parameters). In many studies, the first alternative (base case) is to retain one or more existing systems, representing a benchmark of current capabilities. An additional alternative based on major upgrades and/or service-life extensions to existing systems also may be considered.
For each alternative, evaluation of system performance, unit effectiveness, and estimation of its life-cycle cost (or total ownership cost, if applicable) requires a significant level of understanding of its operations and support concepts. The operations concept describes the details of the peacetime, contingency, and wartime employment of the alternative within projected military units or organizations. It also may be necessary to describe the planned basing and deployment concepts (contingency and wartime) for each alternative. The sustainment concept for each alternative describes the plans and resources for system training, maintenance, and other logistics support.
It is important that the alternatives considered in the AoA should address alternative concepts for maintenance, training, supply chain management, and other major sustainment elements. In this way, the AoA can identify the preferred materiel solution not only in terms of traditional performance and design criteria (e.g., speed, range, lethality), but also support strategy and sustainment performance as well. In other words, the AoA should describe and include the results of the supportability analyses and trade-offs conducted to determine the most cost-effective support concept as part of the proposed system concept.
Analysis of Alternatives Study Plan-Effectiveness Measures
The analysis plan should describe how the AoA will establish metrics associated with the military worth of each alternative. Military worth often is portrayed in AoAs as a hierarchy of mission tasks, measures of effectiveness, and measures of performance. Military worth is fundamentally the ability to perform mission tasks, which are derived from the identified capability needs. Mission tasks are usually expressed in terms of general tasks to be performed to correct the gaps in needed capabilities (e.g., hold targets at risk or communicate in a jamming environment). Mission tasks should not be stated in solution-specific language. Measures of effectiveness are more refined and provide the details that allow the proficiency of each alternative in performing the mission tasks to be quantified. Each mission task should have at least one measure of effectiveness supporting it, and each measure of effectiveness should support at least one mission task. Typically, a measure of performance is a quantitative measure of a system characteristic (e.g., range, weapon load-out, logistics footprint, etc.) chosen to enable calculation of one or more measures of effectiveness. Measures of performance are often linked to Key Performance Parameters or other parameters contained in the approved capability needs document(s). Also, measures of performance are usually the measures most directly related to test and evaluation criteria.
Analysis of Alternatives Study Plan-Effectiveness Analysis
The analysis plan spells out the analytic approach to the effectiveness analysis, which is built upon the hierarchy of military worth, the assumed scenarios and threats, and the nature of the selected alternatives. The analytic approach describes the level of detail at various points of the effectiveness analysis. In many AoAs involving combat operations, the levels of effectiveness analysis can be characterized by the numbers and types of alternative and threat elements being modeled. A typical classification would consist of four levels: (1) system performance, based on analyses of individual components of each alternative or threat system; (2) engagement, based on analyses of the interaction of a single alternative and a single threat system, and possibly the interactions of a few alternative systems with a few threat systems; (3) mission, based on assessments of how well alternative systems perform military missions in the context of many-on-many engagements; and (4) campaign, based on how well alternative systems contribute to the overall military campaign, often in a joint context. For AoAs involving combat support operations, the characterization would need to be modified according to the nature of the support. Nevertheless, most AoAs involve analyses at different levels of detail, where the outputs of the more specialized analysis are used as inputs to more aggregate analyses. At each level, establishing the effectiveness methodology often involves the identification of suitable models (simulation or otherwise), other analytic techniques, and data. This identification primarily should be based on the earlier selection of measures of effectiveness. The modeling effort should be focused on the computation of the specific measures of effectiveness established for the purpose of the particular study. Models are seldom good or bad per se; rather, models are either suitable or not suitable for a particular purpose.
It also is important to address excursions and other sensitivity analyses in the overall effectiveness analysis. Typically, there are a few critical assumptions that often drive the results of the analysis, and it is important to understand and point out how variations in these assumptions affect the results. As one example, in many cases the assumed performance of a future system is based on engineering estimates that have not been tested or validated. In such cases, the effectiveness analysis should describe how sensitive the mission or campaign outcomes are to the assumed performance estimates.
Analysis of Alternatives Study Plan-Cost Analysis
The AoA plan also describes the approach to the life-cycle cost estimate. The cost analysis normally is performed in parallel with the operational effectiveness analysis. It is equal in importance as part of the overall AoA process. The cost analysis estimates the total life-cycle cost of each alternative, and its results are later combined with the operational effectiveness analysis to portray cost-effectiveness comparisons. It is important to emphasize that the cost analysis will be a major effort that will demand the attention of experienced, professional cost analysts.
The principles of economic analysis apply to the cost analysis in an AoA. Although the cost estimates used in an AoA originally are presented in constant dollars, they should be adjusted for discounting (time value of money), accounting for the distribution of the costs over the study time period of interest. In addition, the cost estimates should account for any residual values associated with capital assets that have remaining useful value at the end of the period of analysis. Further guidance on economic analysis is provided in DoDI 7041.3, “Economic Analysis for Decisionmaking.”
The cost analysis should also describe the planned approach for addressing the Fully Burdened Cost of Energy for those AoAs where this issue is applicable.
Analysis of Alternatives Study Plan-Cost-Effectiveness Comparisons
Typically, the next analytical section of the AoA plan deals with the planned approach for the cost-effectiveness comparisons of the study alternatives. In most AoAs, these comparisons involve alternatives that have both different levels of effectiveness and cost, which leads to the question of how to judge when additional effectiveness is worth additional cost. Cost-effectiveness comparisons in theory would be best if the analysis structured the alternatives so that all the alternatives have equal effectiveness (the best alternative is the one with lowest cost) or equal cost (the best alternative is the one with the greatest effectiveness). Either case would be preferred; however, in actual practice, in many cases the ideal of equal effectiveness or equal cost alternatives is difficult or impossible to achieve due to the complexity of AoA issues. A common method for dealing with such situations is to provide a scatter plot of effectiveness versus cost. Figure 2 presents a notional example of such a plot.
Note that the notional sample display shown in Figure 2 does not make use of ratios (of effectiveness to cost) for comparing alternatives. Usually, ratios are regarded as potentially misleading because they mask important information. The advantage to the approach in the figure above is that it reduces the original set of alternatives to a small set of viable alternatives for decision makers to consider.
Figure 2: Sample Scatter Plot of Effectiveness versus Cost
Analysis of Alternatives Study Plan-Organization and Management
Finally, the AoA plan should address the AoA study organization and management. Often, the AoA is conducted by a working group (study team) led by a study director and staffed appropriately with a diverse mix of military, civilian, and contractor personnel. Program offices or similar organizations may provide assistance or data to the AoA study team, but the responsibility for the AoA may not be assigned to a program manager, and the study team members should not reside in a program office. In some cases, the AoA may be assigned to an in-house analytic organization, a federally funded research and development center, or a similar organization.
The AoA study team is usually organized into panels along functional lines, with a chair for each panel. Typical functional areas for the panels could be threats and scenarios, technology and alternatives (responsible for defining the alternatives), operations and support concepts (for each alternative), effectiveness analysis, and cost analysis. In many cases, the effectiveness panel occupies the central position and integrates the work of the other panels. The study plan also should describe the planned oversight and review process for the AoA. It is important to obtain guidance and direction from senior reviewers with a variety of perspectives (operational, technical, and cost) throughout the entire AoA process.
The analysis plan is fundamentally important because it defines what will be accomplished, and how and when it will be accomplished. However, the plan should be treated as a living document, and updated as needed throughout the AoA to reflect new information and changing study direction. New directions are inevitably part of the AoA process, so the analysis should be structured so as to be flexible. Frequently, AoAs turn out to be more difficult than originally envisioned, and the collaborative analytical process associated with AoAs is inherently slow. There are often delays in obtaining proper input data, and there may be disagreements among the study participants concerning ground rules or alternatives that lead to an increase in excursions or cases to be considered. Experience has shown that delays for analyses dealing with Special Access materials can be especially problematic, due to issues of clearances, access to data, storage, modeling, etc. It is often common for the study director to scale back the planned analysis (or at least consider doing so) to maintain the study schedule.
AoA Final Results
Reference Source: DAG CH 2-2.3.3 Analysis of Alternatives Final Results
Analysis of Alternatives Final Results and Assessment
Normally, the final results of the AoA initially are presented as a series of briefings. For potential and designated major defense acquisition programs (Acquisition Category (ACAT) I, the final AoA results are provided to the Office of the Director, Cost Assessment and Program Evaluation (CAPE), no later than 60 days prior to the milestone decision meeting (Defense Acquisition Board or Information Technology Acquisition Board review). Providing emerging results to CAPE prior to the final briefing is wise to ensure that there are no unexpected problems or issues. For other programs, the AoA results should be provided to the DoD Component entity equivalent to CAPE, if applicable. In any case, the AoA final results should follow all of the important aspects of the study plan, and support the AoA findings with the presentation. In particular, all of the stated AoA conclusions and findings should follow logically from the supporting analysis.
Having received the final AoA briefing(s), the CAPE evaluates the AoA and provides an independent assessment to the Head of the DoD Component (or the Principal Staff Assistant) and to the Milestone Decision Authority. CAPE, in collaboration with the OSD and Joint Staff, shall assess the extent to which the AoA:
- Illuminated capability advantages and disadvantages
- Considered joint operational plans
- Examined sufficient feasible alternatives
- Discussed key assumptions and variables and sensitivity to changes in them;
- Calculated costs
- Assessed the following:
- Technology risk and maturity
- Alternative ways to improve the energy efficiency of DoD tactical systems with end items that create a demand for energy consistent with mission requirements and cost effectiveness
- Appropriate system training to ensure that effective and efficient training is provided with the system
Analysis of Alternatives Final Report
Usually, in addition to a final briefing, the AoA process and results are documented in a written final report. The report typically is not published formally by the time of the program milestone decision review, due to schedule constraints. However, the report nevertheless may be important to the historical record of the program, since the report serves as the principal supporting documentation for the AoA. The report also may serve as a reference source for analysts conducting future AoAs. The final report can follow the same format as the study plan, with the addition of these sections:
- Effectiveness Analysis
- Effectiveness Results
- Cost Analysis
- Life-Cycle Cost Results
- Cost-Effectiveness Comparisons
- Cost-Effectiveness Results
By following the same format, much of the material from the (updated) study plan can be used in the final report.
Reference Source: DAG CH 8-3.5.2 Analysis of Alternatives
The Analysis of Alternatives (AoA) is an analysis that assesses potential materiel solutions that could satisfy validated capability requirement(s) documented in the ICD, and supports a decision on the most cost-effective solution to meeting the validated capability requirement(s). In developing feasible alternatives, the AoA identifies a wide range of solutions having a reasonable likelihood of providing the needed capability.
AoAs provide a foundation for the development of documents at the milestones, starting at Milestone A. The AoA is used when developing the T&E strategy for the preferred solution(s). The following are some areas in the AoA for the Chief Developmental Tester to consider when developing the T&E strategy:
- Scenarios, threats, environment, constraints and assumptions, timeframe, and excursions.
- Description of alternatives, non-viable alternatives, operations concepts, and support concepts.
- Mission tasks, MOE, MOP, effectiveness analysis, effective methodology, and effectiveness sensitivity analysis.
- Operational risk assessment.
- Technology/manufacturing risk assessment.
- Current/proposed schedules, designs, suppliers, operational employments, resources, dependencies, etc.
- Critical Technology Elements (CTEs).
For potential and designated ACAT I programs, and for each Joint military or business requirement for which the Chairman of the JROC or the Investment Review Board is the validation authority, the Director of Cost Assessment and Program Evaluation (CAPE) develops and approves study guidance for the AoA.
The CAPE provides the AoA Study Guidance to the DoD Component or organization designated by the MDA prior to the Materiel Development Decision and in sufficient time to permit preparation of the AoA Study Plan prior to the decision event. Programs coordinate the study plan with the MDA and gain approval from CAPE prior to the Materiel Development Decision. The designated DoD Component or other organization, or the principal staff assistant designates responsibility for completion of the study plan and the AoA.
At the Materiel Development Decision, the CAPE (or DoD Component equivalent) presents the AoA Study Guidance, and the AoA lead organization presents the AoA Study Plan. In addition, the Component provides the plan to staff and fund the actions preceding the next decision point (usually Milestone A) including, where appropriate, competitive concept definition studies by industry. If the Materiel Development Decision is approved, the MDA designates the lead DoD Component; determines the acquisition phase of entry; and identifies the initial review milestone, usually, but not always, a specific milestone as described in one of the program models.
The PM provides the final AoA to CAPE not later than 60 calendar days prior to the Milestone A review (or the next decision point or milestone, as designated by the MDA). Not later than 15 business days prior to the Milestone A review, CAPE evaluates the AoA and provides a memorandum to the MDA, with copies to the head of the DoD Component or other organization or principal staff assistant assessing whether the analysis was completed consistent with CAPE study guidance and the CAPE-approved study plan.
Within the memorandum, CAPE assesses:
- The extent to which the AoA:
- Examines sufficient feasible alternatives.
- Considers trade-offs among cost, schedule, sustainment, and required capabilities for each alternative considered.
- Achieves the affordability goals established at Materiel Development Decision and with what risks.
- Uses sound methodology.
- Discusses key assumptions and variables, and sensitivity to changes in these.
- Bases conclusions or recommendations, if any, on the results of the analysis.
- Considers the fully burdened cost of energy (FBCE), where FBCE is a discriminator among alternatives.
- Whether additional analysis is required.
- How the AoA results are used to influence the direction of the program.
Reference Source: DAG CH 4-3.1.2 Analysis of Alternatives
Life Cycle Logistians (LCLs) participate in the AoA to influence technology trade-offs and provide subject matter expertise to identify risks and opportunities in cost, maintainability, and readiness that may be driven by technology options and the operational environment.
The LCLs should ensure that the AoA Study Plan considers sustainment in the study’s ground rules, alternatives, and cost analysis. The ground rules should include assumptions relative to the operating environment that may impact supportability and warrant explicit planning and execution consideration.
Reference Source: DAG CH 4-184.108.40.206.2 O&S Cost
During development of the Study Plan, the LCL should ensure that Operating and Support Cost (O&S Cost) is a criterion in the AoA. O&S Cost may be a critical factor in selecting between multiple sustainment strategies. The cost estimators consider the specific sustainment differences between the AoA alternatives to be sustainment discriminators.
Cost estimates during the AoA often consider the life cycle cost (sum of acquisition, O&S, and disposal costs). The cost estimator focuses on the sustainment discriminators that yield relative cost differences among the alternatives. The LCL supports the AoA cost estimating team by identifying and specifying
sustainment specific discriminators as assumptions in the AoA alternatives. Common sustainment discriminators in the AoA cost estimate may include but are not limited to:
- Maintenance strategy
- System/component weights
- Number of systems to be sustained
- Fuel usage/energy consumption
- System complexity
- Operational Tempo (OPTEMPO) constraints
- Required manning to operate/maintain/support
- Transportation requirements, including storage and environmental requirements
- Planned/required future upgrades
- Software refresh schedules/licensing agreements
- Hardware refresh cycles
- Projected service life
LCLs may also help identify legacy or analogous systems to use as sources of reference data. Legacy/analogous systems are those that perform the same (or similar) mission or share technical characteristics with the potential new system. Typically, little (if any) data is available on potential new systems considered as alternatives, but legacy/analogous system costs may offer useful insight as the basis of O&S Cost estimates during the AoA.
In the course of conducting the AoA, cost estimators identify and highlight areas of risk, the realization of which could lead to increased costs. These risk areas are often useful starting points for the LCL or PM to identify O&S Should Cost initiatives. While the O&S phase may be years or even decades in the future, the O&S Should Cost that influence system design typically yields the greatest long-term performance and cost benefits. Should Cost is covered more in Section 220.127.116.11.3.
- DODI 5000.84 Analysis of Alternatives
- AoA Handbook, Office of Aerospace Studies