The Costs of Commonality: Examination of the JLTV as a Case Study

Abstract

In the 21st century, Major Defense Acquisition Programs (MDAPs) have become increasingly joint service efforts. The concept of a single materiel solution that can meet the requirements of multiple services is the fundamental principle of joint programs, with a concurrent objective of attaining economies of scale. But this trend has also led to expanding program complexities and interdependencies. The resulting cost, schedule, and performance risks often counterbalance, and potentially outweigh, the efficiencies gained through inter-service program designs. Even more important, perhaps, are the eventual, less obvious costs to attain unmet service requirements across a broader portfolio. We define these risks as the costs of commonality. Such costs are unquantified in cost benefit and cost-informed trade analyses. Thus, they remain concealed in the defense acquisition process. Additionally, in order to capture these hidden costs, we propose a unique cost-effectiveness model that examines the value of joint programs from a broader portfolio perspective. We apply this Joint Value Model to the Joint Light Tactical Vehicle (JLTV) program as a case study to validate the concept. We conclude from our analysis that the Joint Value Model has useful applicability for assessing value in joint and intra-service MDAPs. It provides a means for managers to evaluate cost-effectiveness in the portfolio context and compare meaningful differences among program alternatives. We recommend use of this model as a tool for program analysis at all stages of system development.