applied cost practices for sw intensive projects at nato · applied cost practices for sw intensive...

Classification: UNCLASSIFIED

Why ACCS?

Galorath Event08 December 2011

Eindhoven, Netherlands

Applied Cost Practicesfor SW intensive projects at NATO

René Berghuijs

NACMA Senior Cost Expert

[email protected]

+32 (0)2707 8856

mailto:[email protected]

208 Dec 2011 CLASSIFICATION: UNCLASSIFIED 2

Presentation Highlights

1. The North Atlantic Treaty Organization2. The Air Command & Control System

(ACCS) program3. Applied Cost Practices at NATO4. Cost associations ISPA and DACE




(ACCS) program3. Applied Cost Practices at NATO4. Cost Associations ISPA and DACE


NATO Facts

• Military and political alliance established in 1949• NATO mission: peace and security• Goals & Objectives:

– Smart Defense: spend money more efficiently– Transformation: more flexibility and mobility

• Decision making by consensus • Open door policy:

– Now 28 member nations and growing– Partnerships (Russia, Ukraine, Scandinavia,

Mediterranean etc.)• More facts about NATO on www.nato.int


NATO Figures

• Financial volume about 2.5 Billion €/year :– NATO Security Investment Program ~900 M€/yr

· Common investment in communications and information systems, radars, pipelines, airports, HQ’s, ports etc.

· Ceiling annual spending– Military Budget ~1,400 M€/yr

· Operations & Maintenance costs for large NSIP investments· Capital costs of NATO military HQ’s

– Civil Budget ~200 M€/yr· NATO personnel costs

– Notes:· Missions to Afghanistan, Iraq and recently Libya are NSIP

funded· Flexible funding arrangements allow multinational programs

under NATO umbrella


NATO Aerospace & Defense programs:

AWACs: airspace control

C-17 air cargo

Global Hawk: Aerial Ground Survey


andere NAVO programma’sceps / cepa

Network of some 5,000 kilometer pipelines for transportation of a.o. jetfuel.

In peacetime also civil use.

Strategic significance: bypasses a possible blockade of the Strait of Gibraltar

www.cepma.int

Classification: UNCLASSIFIED

Why ACCS?Why ACCS?

Integrated NATO AirCommand & Control

Interoperability among NATO Air AssetsDeployable Capability

Foundation for NATO Extended Air Defense

SingleAir-C2 System

Multitude of National SystemsLimited Functional and Operational Integration

SIMCA

POACCS

SCCOA

UKADGE

ICC

NEC CCIS

(M)ASE

AEGIS/NADGE

GIADSARKONAGAFCCIS

ASOC

DUNAJSEKTOR


Integrated NATO Air C2 system for planning/tasking and executing all air operations at the tactical level

Commonality and Interoperability between NATO Air C2 Assets

Deployable CapabilityCombined Joint Task ForcesNATO Response Force

Foundation for future NATO Air C2 capabilities including Ballistic Missile and Cruise Missile Defence

SingleNATO Air C2

System

ACCS - NATO’s Unified Air C2 System for the Future


The NATO ACCS Program

• The NATO ACCS program comprises:– Core Software for Mission Planning, Mission Execution

and Database. The Service Oriented Architecture (SOA) allows easy integration of future capabilities

– ACCS entities such as Validation sites (4 nations), Replication sites (CAOC, ARS) and Deployable units

– Associated projects such as L16@29,000 ft and deployable radars

– In the future ACCS SW Based Elements (ASBE or ‘ARS Light’)


ACCS Facts & Figures

• Contractor: Air Command Systems International (ACSI), set up by ThalesRaytheonSystems, France/US

• Software: >12 million lines of code• Hardware: mostly COTS• Program investment cost ~ 1,500 M€• Missile Defense: ACCS is chosen as the

vehicle for the AirC2 part of MD in theatre and at static sites


Program Status

• Core SW– Factory testing September 2011 successful– Provisional Site Acceptance planned late 2012

• Validation phase– ACCS LOC1 SW and DARS– 4 Validation sites (BEL, FRA, DEU & ITA),

implementation 1999 - 2012• Replication phase (ARS)

– 12 sites in 12 nations, implementation 2009 – 2015• Replication phase (ASBE)

– ACCS SW Based Elements for ‘new’ NATO nations– 10 sites in 10 nations, implementation 2013 - 2018


ACCS Entities after Replication

ARS

ARS

ARS

CARSARS

ARS

ARS

ARS

DARS

ASBE

CARS

ARS

STVF

ARS

CARS

CARS

ARS

CAOC

DCAOC

ARS

ASBE

ASBEASBE

ASBE

ASBE

ASBEASBE

ASBE

DARS

DCAOC

ASBE

ASBE

5 CAOC (inc. CARS)15 ARS (inc. CARS)11 ASBE (ARS Functionality)2 DCAOC2 DARS(1 STVF)




(ACCS) program 3. Applied Cost Practices at NATO4. Cost associations ISPA and DACE


Applied Cost Practices

• Activities:– Independent cost estimates– Cost analysis & negotiation preparation– Price analysis

• Governing business principles:– Competitive bidding / lowest compliant bid by

default; optional Best Value or Sole Source· ACCS Block Upgrades sole source to ACSI

– International Business Sharing· Compensation orders for national industries


ICE practice

• Starting point: – New capability requirements for ACCS

· e.g. Air-to-Air Refuelling, or Missile Defense• Preparation of Independent Cost Estimate:

– SW size estimation· Function Point Analysis, tools, metrics

– Determine SW effort / cost· SEER-SEM (pref.), or metrics

– SW + HW costs, Schedule & Risk· Unit rates, tools, Monte Carlo Risk Analysis

– Other costs:· Existing SW (regression testing), maintenance, IPR

• Validation and review of ICE:– Validation, e.g. by CER’s– Review meetings >> improved confidence

• Benefits:– Determined by GAO as best practice– Used for budget authorizations and negotiations– Expectation management


ICE practice cont’d

• Contractor proposal (sole source):– Technical & commercial proposal– Basis Of Estimate

· What it is: a summary of activities and / or deliverables· What it not is: summary of (E)kSLOC, reused SW, complexity, estimating

method or model – no obvious or easy fit with ICE· Processes and tools used not shared

• Bid Evaluation & Negotiation:– Input: technical evaluation (Materials & Labor)– Cost Analysis: audited labour rates, learning curve, contingencies, profit,

etc.– Output: 2 evaluation positions: ‘going-in’ and ‘most likely / objective’– Validation by an updated independent cost estimate– Negotiations >> contract award

• Benefits:– Good proposal understanding and thorough cost analysis enable

confidence in defined negotiation positions– Sometimes huge savings on original proposal values


Summary

• Best Practices:– Are structured, repeatable processes– Propagate the use of parametric modelsthat use historic cost data

· Top-down· Early stages· Reliable

– Are profitable to the organization– Can be found on-line: e.g. GAO Cost Estimating &

Assessment Guide: “Best practices for developing and managing capital project costs”

· http://www.gao.gov/new.items/d093sp.pdf


ISPA & DACE

• International Society Parametric Analysts:– About 400 members in 13 countries– Each year 3 day conference incl. training– Cost Engineering Handbook 4th Ed.– Magazine & Journal– Certification– $55/jaar of $550 for life– www.ispa-cost.org

• Dutch Association of Cost Engineers:– About 150 individual members and 200 companies– 4 * per year thematic meetings– Certification– Bulletin– €120/year individually or 400 €/year company– www.dace.nl

• ISPA & DACE: Special Interest Group Parametric Analysis / ISPA BeNeLux Chapter:

– Established 2010, 4 * workshops parametric analysis per year

http://www.ispa-cost.org/

http://www.dace.nl/


Brussels 14 -15-16 May 2012


Back-up slides


Parametrische Analyse

• Voordelen:– Top-down estimate– Betrouwbare estimates binnen korte tijd– Modellen zijn commercieel verkrijgbaar


Higher Tactical (Tasking) Level

Lower Tactical (Execution) Level

Operational Level

Strategic Level

ACCS Entities

System Test & Validation Facility

(STVF)

ACCSEntities

Combined AirOperations

Centre

CAOC/Deployable CAOC

(DCAOC)

ACO/ACT

JFHQ/Air HQ

Wing OperationsCentre (WOC)

Sqn OperationsCentre (SQOC) SAM Operations

Centre (SAMOC)

Air OperationsControl Centre

(AOCC)

Air ControlCentre (ACC)

RAP ProductionCentre (RPC)

Sensor FusionPost (SFP)

ARS/Deployable ARS

(DARS)


First Level of Capability (LOC1)Validation Sites Under Contract

CAOCARS

CARSCAOC + DCAOC

STVF

CARSLyon-Mt. Verdun

ARS Glons

CAOC & DCAOC 1

Uedem

CARSPoggio

Renatico

DARS 1Nieuw Milligen

DARS

System Test & Validation Facility

(STVF) Glons


Estimate Validation by CERSource: “Journal of Parametrics”


CAOC

ARS

CARS

CAOC + DCAOC

STVF

DARS

ARSN. Milligen

CARSKarup

ARSSørreisa

ARSMonsanto

ARS + DARS

ARSTorrejón

ARSC.M. La Pile

CARSLarissa

ARSS. Boleslav

ARSKrakow

ARSVeszprem

ARSEskisehir

CARS + DCAOC

ACCS LOC1 REPLICATION11 Sites Under Contract


Case Study Defense Design System Independent Cost Estimate

• Input: 229 A-level requirements• SW grootte:

– SLOC Generator Tool (Price Systems): 100 kSLOC nominaal– Plus 15% contingency: 115 kSLOC (minimale groei verwacht)– Aanname: 33 kSLOC nieuw, 33 kSLOC hergebruik, 33 kSLOC aangepast >> ~ 70

EkSLOC– NB: geen FPA wegens tijdgebrek, geen metric beschikbaar

• Kosten / uren:– Price True S: 100 duizend h, exclusief onderhoud, most likely; pessimistisch 200

duizend h, optimistisch 55 duizend h• SW + HW kosten, Schedule, Risk:

– Unit rates (labour, COTS): Price True S cost catalogue >> 11 M$– Schedule: 29 maanden ongecomprimeerd

• Overig:– Regressie testen n.v.t.– IPR: o.b.v. inschatting– Validatie: mogelijk m.b.v. CER’s bv DM = (6.990*10-3) * SLOC + 41.39 – zie

volgende slide

NB: alle cijfers en bedragen in dit voorbeeld zijn fictief!


CAOC

ARS

CARS

CAOC + DCAOC

STVF

DARS

ARSN. Milligen

CARSKarup

ARSSørreisa

ARSMonsanto

ARS + DARS

ARSTorrejón

ARSC.M. La Pile

CARSLarissa

ARSS. Boleslav

ARSKrakow

ARSVeszprem

ARSEskisehir

CARS + DCAOC

ACCS LOC1 REPLICATION11 Sites Under Contract


Integrated Planning/Tasking andExecution

Common Database

Alert Services TimeServices

Messaging

InformationManagement

Network Services

Display Services

Recording & Reduction

Security Services

LinkServices

System Mgmt.

Simulation Control

Common Services and Support

Execution FrameworkPlanning Framework

Mission Planning (CAOC) Mission Execution (ARS)

Benefits of an Integrated Air C2

System:

Common Database

Improved situational awareness

Shortened decision cycles

Guaranteed interoperability between ACCS entities

Adaptable to changing missions

TaskingDirectives

ATOACO

C2 planComm Plan

Unit StatusJEP

Msn Reports

CAOCPlanning

andTasking

CurrentOps

Mission Monitoring

ARSAir Mission

Control SAM Control

ATC

Surveil-lance

Data LinksIdentification

ARSAir Mission

Control SAM Control

ATC

Surveil-lance

Data LinksIdentification

ARSAir Mission

Control SAM Control

ATC

Surveil-lance

Data LinksID


ACCS and NATO Network Enabled Capability (NNEC)

• ACCS LOC1 is being procured under a fixed price contract in accordance with detailed specifications that meet the Minimum Military Requirement

• ACCS went on-contract in a pre-NNEC/Service-Oriented Architecture (SOA) era

• ACCS has a secure ‘closed’ service-based architecture with internal data transfer protocols

• Bespoke “external” interfaces have been contracted with all known sensors, secure systems and unclassified systems to which the ACCS must connect


36 Potential Entitiesin ACCS "Closed" Community

ARS

ARSARS

ARS

CARS

ARS

ARS

ARS

ARS

ARS

ARS

DARS

ARS

ARS

CARS

ARS

STVFARS

CARS

CARS

ARS

ARS

ARS

CAOC

DCAOC

ARS

ARS

ARSARS

ARS

ARS

ARSARS

ARS

DARS

DCAOC


Capabilities

C2 Resource Mgmt.Configuration Planning,Tasking & Monitoring

Ensure Integrity of NATO Air Command & Control

Air Mission ControlAir Policing Mgmt.

Aircraft & SAM Control

Air Space Mgmt.Planning & UtilizationMission Preparation

Air Traffic ControlIncl. Integration with

Civilian Services

SurveillanceAir Picture ProductionAsset Management

Force ManagementAllocation Planning &Tasking (A/C & SAM)

Seamless Air-Space IntegrationSensors Platforms Information Decision-making


BP: Price Analysis

• Starting point: – Proposals from many bidders (usually COTS items)

• Bid evaluation:– Determination of lowest bid price

· Lowest bid has usually the highest risk, but this is not recognized in this evaluation

– Price realism verification· Any items included at too low or nil cost?

– Bid unbalancing verification· Unit rates for same items in different line items should not differ in price

by more than 10%• Benefits:

– Protects NATO from contractors underbidding the project (through price realism clause)

– Protects NATO from overpaying in case of changing quantities (through unbalancing clause)

applied cost practices for sw intensive projects at nato · applied cost practices for sw intensive...

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