Overcoming Cost-Estimating Challenges for Navy Combat Systems

The Department of Defense has established guidelines and processes that have evolved over several decades for its acquisition community to ensure affordability of Navy ship and combat systems. A common challenge within the Navy combat systems cost-estimating community is the ability to utilize many of the guidelines and processes put in place by experienced entities such as the Government Accountability Office and the Naval Center for Cost Analysis because of the evolving environment associated with past, present, and future Navy combat systems. The purpose of this paper is to give a detailed insight on the challenges Naval Surface Warfare Center, Dahlgren Division (NSWCDD) cost estimators encounter when building cost models and estimates for the Navy. Many challenges include limited program definition because of emerging threats, new technologies, and collection and utilization of data to produce valid and credible estimates. Through combined knowledge, expertise, and evolving practice of incorporating lessons learned, the NSWCDD Cost Group has overcome many cost-estimating challenges. This paper will share the NSWCDD Cost Group's insights with the larger Navy community. Owing to the sensitive nature of cost, no specific estimates or project names are referenced. This paper is philosophical in nature and does not discuss mechanics of cost estimation in detail.