Defense Acquisition Research Journal Issue 95

Use of Factors in Development Estimates: Improving the Cost Analyst Toolkit

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expert opinion (subject matter expert) (Department of the Air Force, 2007). While each technique represents a different approach to cost estimating, with associated benefits and drawbacks, the merit of using multiple strate gies to achieve greater confidence in an estimate cannot be overstated. The introduction of more than one estimating technique provides cost analysts with the ability to triangulate a point estimate that considers levels of detail not fully captured by individual techniques or estimates. Furthermore, this approach serves as a cross-check to ensure that estimates fall within percentage bounds set by the analyst. Cost factor creation necessitates an understanding of Work Breakdown Structures (WBS). The WBS concept in MDAPs has remained relatively constant over the past several decades (DoD, 2005). It is a decomposition of a project into smaller, more manageable components, sometimes referred to as the management blueprint for the project (Mislick & Nussbaum, 2015). The WBS is mandated and governed by MIL-STD-881D, ultimately fulfill ing broader requirements set forth in DoD Instruction 5000.2; this DoD publication aims to maintain uniformity in definition and consistency of approach for programs developing a WBS (DoD, 2018). For the sake of con sistency, the DoD has revised and updated guidance regarding the WBS only when major technological advances or changes in the acquisition process warranted such action (DoD, 2005). The WBS consists of three primary hierarchical levels, with a fourth and fifth sometimes included in expanded forms; for this article, only the second level is addressed. Level two of the WBS captures major elements subor dinate to the system identified by level one and consists of prime mission products, including all hardware and software elements. Level two also includes combinations of system-level services applicable to the program, including the following elements common to most programs: integration and assembly, system test and evaluation (ST&E), systems engineering/pro gram management (SE/PM), common support equipment (CSE), peculiar support equipment (PSE), training, data, operational/site activation, and initial spares and repair parts (DoD, 2018). These common elements at level two of the WBS are the focus for developing factors in this article. Benefits the merit of using multiple strategies to achieve greater confidence in an estimate cannot be overstated. While each technique represents a different approach to cost estimating, with associated benefits and drawbacks,

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Defense ARJ, January 2021, Vol. 28 No. 1 : 40-70