NEW TECHNOLOGIES AND COST MANAGEMENT ISSUES

Cost estimators and engineers are deep in a fast-changing world of new concepts and high technology and their assigned tasks are undergoing an irreversible and often turbulent change. While change has always been a part of experience, its scope and velocity are much greater than at any time in the past, making analytical versatility a prerequisite for keeping pace in this environment. Generally, cost estimating techniques have been based on solving estimating problems associated with previous and current technologies using historical program cost and technical data. It is mutually perceived by the DOD and industry that there is a lack of cost data and estimating methodologies to meet these new and emerging technologies and acquisition strategies. Cost estimators are experiencing cost management impacts of such circumstances now, but in the 1990s will experience the full impact of more detailed costing demanded for this advanced technology. This paper addresses the sequential steps necessary to prevent being overwhelmed by the evolution of this new environment. The DOD and industry are moving toward new definitions of design requirements, "user" satisfaction and weapon system performance; cost management issues will have major impacts on the size, shape, and effectiveness of the future Armed Forces. In our definition of hostile military threat environments, the efforts to advance the state-of-the-art technologies for aircraft systems continue to accelerate and, at the same time, defense budgets are leveling and becoming more restrictive. To compete successfully for restricted resources, the accuracy and credibility of the cost estimates for these new systems sometimes exceeds the level we are capable of achieving now with existing methodologies. With these circumstances, how is the role of the cost estimator evolving? Overall, today's emphasis continues to be for quality products and for innovative "new" state-of-the-art techniques and methodologies, a demand that must be approached in a logical manner. One of the first steps is to develop capability to estimate the new technologies if we are to attain cost credibility in today's environment. The technology keeps changing and we're not changing fast enough with it. Many new technologies have been identified and many new concepts are underway. What that means is that we're going to see the expenditure of hundreds of millions of dollars devoted to making sure that new technology comes about, that it will be fielded and that it can be incorporated in aircraft systems. We are aware that we are now into a new age of manmade materials and that already flowing from the labs is a stream of such things as glass that bends without breaking, plastics as tough as steel, metals that stretch, optical fibers--materials with a vast range of applications. The question is, "What can we do as cost estimators to get ready to handle these estimating chores"? There is very limited cost data available, true, and the computer models that we have to extend the cost cannot handle the new technology which demands looking at ways of reducing costs.