AFFORDABILITY DECISION-MAKING MODEL

Department of Defense (DOD) senior leaders are chartered to make decisions on proceeding or canceling programs based on cost data. Affordability is one of the biggest reasons for the DOD to cancel programs. When making affordability decisions, DOD leaders weigh the life cycle costs from research and development, technology maturation, system testing, procurement and operations, and support. The authors developed an affordability decision model to be used to make affordability decisions for Acquisition Category I vehicle programs. While developing the model, the following questions were answered: What are the primary elements to address in an affordability decision model for a 'proceed or cancel' decision? Are there any external parameters that need to be considered prior to using the affordability decision model? The model was applied to two affordable programs: the High Mobility Multipurpose Wheeled Vehicle (HMMWV) and the Mine Resistant Ambush Protected All-Terrain Vehicle (M-ATV) to verify it. Based on the results, the authors recommended that changes be made to the model in order to increase the accuracy of the model. After updating the model, the authors applied the model to the Joint Light Tactical Vehicle (JLTV) program. The model was within 5% of the JLTV program objective unit cost. However, the authors concluded that the model cannot be used by itself to make a proceed or cancel decision but to support the decision.Civilian, Department of the ArmyCivilian, Department of the ArmyApproved for public release. distribution is unlimite