Cost Estimating and Affordability Case Study: Air-to-Ground Missile Program

Abstract

This case study is written to produce an active learning environment to increase the capability of acquisition and program management professionals regarding cost estimating and the program decision-making. The Joint Common Missile is the program of record used for the case study due to the variance of its program office estimate and the independent cost estimate (ICE). Both estimates were developed in preparation for program decision review, and were critical to the decision-making process used by the milestone decision authority and the program manager. Affordability is always a major factor in development and procurement decisions for defense acquisition programs. All programs procured with taxpayer dollars for use within the Department of Defense are constrained by budgeted dollars. Cost estimates aid in decision-making along a program’s timeline at key program milestones with a prediction of future program costs and inform milestone decision authority about the program’s affordability.