Estimating Return on Investment and Valuing Real Options in Acquisition: Market Comparables�

Abstract

In this presentation, we will discuss on-going research into a proof-of-concept application of market comparables to analyze the value of undertaking an open-architecture (OA) approach to the development of combat systems suites. The Program Executive Office, Integrated Warfare Systems (PEO IWS), OA Division is charged with implementing the Navy's OA plans, policies and initiatives. One of these initiatives is the development of an open-architecture approach to implementing a situational awareness (SA) system for the DD(X) project. To accomplish this, PEO IWS has looked at both the AEGIS and SSDS platforms to determine specific elements of each track management system that could be reengineered using an OA approach for placement into the DD(X) program. In doing this, metrics must be looked at to determine the best modules that might be candidates for open architecture.