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Deputy assistant secretary.

First, I'd like to say it's great to be back! I'm excited to be back at the Department of the Air Force and especially honored to be serving as Deputy Assistant Secretary (Cost and Economics), or SAF/FMC. This is a wonderful opportunity for me and I'm fully committed to doing the best job possible. This means working diligently to achieve the world's premier cost and economic analysis capability, becoming a key player at all levels of the Air Force and Department of Defense (DoD) decision making process, and advancing the Air Force cost analysis career field to its highest potential. I'm returning after nearly six years as Director, National Reconnaissance Office (NRO) Cost Group (NCG). My time at the NRO was challenging, exhilarating, and rewarding, and I'm undeniably grateful for having had the opportunity to be part of an effort to build what I consider one of the best space cost estimating capabilities in the business. As Director, NCG, I prepared independent cost estimates for major NRO programs, long-range planning cost estimates for corporate-level programming and budgeting exercises, and program office cost estimates for affordability assessments, preacquisition, source selections, and estimates-at-completion. In addition, I administered the NROs principal cost and technical database and estimating toolkit and chaired the Cost Integrated Process Team (CIPT), a one-of-a-kind forum for government and industry space systems cost estimating organizations to discuss current cost estimating issues and exchange key information. Prior to my time at the NRO, I worked for the Department of the Air Force, serving in various positions in the Cost Directorate, Office of the Deputy Assistant Secretary (Cost and Economics), SAF/FMCC, and the Air Force Cost Analysis Agency (AFCAA). At SAF/FMCC, I led teams responsible for establishing Air Force-wide cost analysis policy and preparing planning estimates for the Air Force long-range plan, budget estimates, and the Air Force Service Cost Position for major acquisition programs. At AFCAA, I was responsible for preparing the Component Cost Analysis (CCA) for major space programs. Preceding that, I served in the Naval Air Systems Command's Cost Analysis Division where I was responsible for providing matrix cost estimating support to various program offices. I hope that my experience working the spectrum of cost analysis--from program office, to independent, to quick-turn cost estimates--brings the proper balance to help me effectively serve as Deputy Assistant Secretary (Cost and Economics).

My goals as SAF/FMC are to enhance the organization, make cost analysis a key component of the Air Force decision process, and refresh the Air Force cost analysis career field. I hope to enhance the organization primarily by improving its credibility throughout, and value to, the Air Force. Making cost analysis a key component of the Air Force decision process will require improving communication, increasing involvement and responsiveness, better tools and resources, and enhanced credibility and accountability. To accomplish this, I plan to collaborate with other functional components of the Air Force and increase cooperation between headquarters and field cost estimators, as well as other cost estimating groups outside the Air Force. Refreshing the cost career field may be the most difficult task. Currently, we are undermanned and overworked. Unfortunately, we're not the only ones in the Air Force in this situation. To determine the severity of this problem, I plan to form a steering committee comprised of Air Staff, Major Command, and Product Center representatives to (1) review changes proposed by the Acquisition Decision Support Transformation team, (2) suggest new changes, (3) endorse a plan, and (4) aid in implementing this plan throughout the Air Force. In short, this group will be tasked to develop and implement a short and long term strategy to address a shortage of cost analysis capability in the Air Force. Providing the right levels of training, feedback, opportunity, and mentoring to our cost analysis careerists, and having a personnel replacement planning strategy will undoubtedly be part of the solution.

In order to achieve these goals, I have laid out the following focus areas--personnel, data collection and methods development, standardization, relevance, credibility and accountability, communication, and transformation.

A decade of downsizing has put us in a precarious personnel situation. Many cost analysis organizations are at bare-bones staffing levels and there is a small pipeline for developing future talent. The situation is compounded by the fact that there is currently enormous competition for cost analysts. The push to increase the rigor of intelligence community cost analysis capability, combined with competition from industry and government support contractors, has made experienced cost analysts a scarce commodity. Potential solutions to this complex problem include additional government or contractor support, refocusing existing cost coded positions, better use of contractor support, increased FM oversight of government and contractor resources dedicated to cost analysis, improved training (including training non-FM resources in cost analysis), and making cost analysis a career field of choice. Putting concerted effort into data collection and methods development activities is absolutely critical to any cost estimating organization. Unfortunately, these infrastructure activities are too often put on the back burner when out-prioritized by cost estimating tasks. Over the past ten years, this all too common scenario has been worsened by downsizing and acquisition reform pressures, pressures that limited the resources and focus applied to data and methods. I hope to reverse this trend by applying additional resources and refocusing existing resources to these critical tasks. Moreover, I see tremendous opportunity associated with increasing the levels of synergy applied to data collection and methods development efforts, efforts that are now far too disparate. A focus on increasing the level of cooperative efforts within and outside the Air Force will greatly increase the effectiveness and efficiency of our data collection and methods development efforts by reducing the number of inconsistent, duplicative efforts. Additionally, current and future plans to continue to improve Air Force Total Ownership Cost (AFTOC) will enhance an already tremendously valuable data source.

I firmly believe the cost analysis field can reap enormous benefits through increased standardization. Currently, we lack standard processes (or, at a minimum, guidelines) for many of the key components of a cost analysis. Examples include risk analysis, cost estimate content, inflation, time-phasing cost estimates, and, as stated above, data collection. This promotes inefficiency, inconsistency, and redundancy, too often making reconciling cost estimates from different sources painfully difficult. I plan to work aggressively to increase the number of common, cooperative efforts within and outside the Air Force in the hope of making available more universal cost estimating processes and guidelines.

To enhance the role of Air Force cost analysis throughout the DoD, we must keep ourselves relevant. To do this, I plan to increase current levels of involvement with other Air Force and DoD functionals, improve responsiveness by sharpening our quick-response capability, and more actively engage in professional societies and government/industry forums. This will also require increased credibility and accountability. Key to achieving higher levels of credibility are visible performance metrics, quality data and estimating tools, and cost estimator, program manager, and acquisition community accountability for performance. We are currently working to implement key performance metrics such as a cost estimate track record, where we compare cost estimates to actual program costs. These metrics will be used to substantiate performance and take corrective action.

Another key ingredient to becoming a key player in any decision making process is effective communication. Communicating the results of usually complex cost analysis is often difficult. Unfortunately, ineffective communication can ruin an otherwise flawless analysis. To ensure we effectively communicate our products to customers, I plan to increase levels of awareness of the importance of communication, provide training, and increase our analysts' exposure outside the cost field.

Lastly, I am fully committed to the FM vision and firmly believe cost analysis is key to achieving FM transformation goals. Cost analysis can provide timely information directly to decision makers and greatly improve FM capabilities and services ... making FM a strategic partner in decision making. Representatives from SAF/FMC and AFCAA currently lead three FM transformation initiatives: Reengineering Acquisition Decision Support, Expanding Activity Based Costing within the Air Force, and Reengineering Analytical Education and Training. Furthermore, the focus areas I identified above--increased involvement/ responsiveness, data/methods standardization, credibility/accountability, and improved communication--provide numerous opportunities to transform the current state of cost analysis in the Air Force.

Given the current dynamics of world affairs, the DoD, and the Air Force, cost and economic analysis will no doubt continue to be critical to the success of the Air Force. Fiscal constraints require exceptional stewardship of taxpayer dollars and Air Force leadership has emphasized the need to have reliable information available to make the decisions that shape the future. As such, our work will continue to become more and more crucial to ensure constrained Air Forces budgets are spent wisely. Our best chance to influence the decision process is early, analysis after the decision has been made is obviously too late--we must be on the field and in the game from the start. Accordingly, I'm aggressively working with senior Air Force leadership to garner their support in bringing cost analysis into the decision process as early as possible. This will ensure we can provide the most timely, accurate analysis possible to help make sound decisions.

In conclusion, I plan to work diligently to improve the Air Force's cost and economic analysis capability and enhance our relevance as a strategic partner in the Air Force decision-making process. Mentorship, training and recruiting, and cooperative efforts with organizations within and outside the Air Force, including industry, will be critical to the future success of not only cost analysis in the Air Force, but the Air Force as a whole. I firmly believe that our people are our key to success and I look forward to working with each of you as we build the best cost and economic analysis capability in the world.
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Title Annotation:Cost & Economics
Author:Hartley, Richard K.
Publication:Air Force Comptroller
Geographic Code:1USA
Date:Jan 1, 2004
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