Notes from the deputy assistant secretary, Cost and Economics.

ANOTHER YEAR HAS COME AND GONE and I believe the initiatives we accomplished in 2007 mark the greatest improvement to the cost estimating process the Air Force has seen in 20 years. In July, the Air Force Cost Analysis Agency (AFCAA) opened operating locations (OLs) at ASC-Wright Patterson AFB, ESC-Hanscom AFB, AAC-Eglin AFB, and SMC-LA AFB. These AFCAA OLs will work hand-in-hand with the product centers to strengthen the quality and objectivity of our cost estimates as well as increase the number of programs we are able to estimate.

8 August, 2007 marked another significant event for cost estimating when the Undersecretary of the Air Force, the Service Acquisition Executive, and Air Force Comptroller signed guidance that man dates cost estimates and non-advocate cost assessment be prepared and updated annually and used in milestone decisions, PPBE deliberations, source selections, Nunn-McCurdy Cost Breaches, and Analysis of Alternatives expected to meet major program thresholds. Together these events mean improved collaboration and result in better informed decisions and fiscal strategy. Below arc a couple examples of how collaboration has paid off.

The AFCAA Aircraft Division developed collaborative cost estimates with ASC for the B-2 Extremely High Frequency (EHF) program and the C-5 Reliability Enhancement and Re-engining Program (RERP). Although the teams initially worked independently, to fulfill statutory requirements, they worked in a non-advcrsarial environment and were able to collaborate on the AF service cost position. Working with the program offices early enabled the team to combine best methodologies from each office and resulted in complete transparency, reduced approval time, and unified support at the OSD, OMB, and Congressional levels.

In a similar fashion, the AFCAA Space Division worked closely with the MILSATCOM program office and SMC/FM to develop a joint independent cost and schedule estimate for the USAF multi-billion dollar Transformational Communications Satellite (TSAT) development and acquisition. The AFCAA and SMC teams each developed their own independent estimates, while at the same time working closely with each other to share crucial program information, thus ensuring that both teams developed quality estimates to the same program baseline. The teams worked so well together that estimate reconciliation was completed in just two days. The quality of the estimates, as well as the open dialog caused MILSATCOM Systems Wing Commander BGen Pawlikowski to say, "A good thing for TSAT! Your efforts will go a long way in building confidence in future SMC-AFCAA cooperative efforts!"

I'm certain this momentum will carry forward into 2008. AFCAA is already engaged in at least 10 major collaborative cost estimates in support of the FY10 Program Objective Memorandum. This is ground breaking. Never before has cost estimating been so closely linked with the planning and programming community. We will continue to develop the operating locations, strengthen Air Force cost estimating policy, and execute other parts of our cost transformation plan to include improved training and certification programs, and cost estimating standards and templates. I EXPECT GREAT THINGS IN 2008.