Making Sense of Ballistic Missile Defense An Assessment of Concepts and Systems for U.S. Boost-Phase Missile Defense in Comparison to Other Alternatives (2012) / Chapter Skim
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Appendix E: System Cost Methodology
Appendix E: System Cost Methodology
Pages 198-282
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From page 198... ...
Procurement cost also includes the costs of integrating the applicable systems noted above 1 The breakout and definition of the three categories of cost, especially as they relate to the life-cycle cost of ballistic missile interceptors are consistent with recent Congressional Budget Office (CBO) reports on missile defense.
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3 RELATIONSHIP OF LIFE-CYCLE COST ESTIMATES TO MDA BUDGET For the purposes of this study, LCC are separated into development, production, and sustainment costs to enable assessing relative costs across system options for improving missile defense. It should be pointed out that through the DOD FY 2011 President's Budget (PB)
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From page 200... ...
"Will" Cost Guidance for Bounding the Range Estimates Consistent with the Memorandum for Secretaries of the Military Departments and Directors of the Defense Agencies issued on November 3, 2010, and effective November 15, 2010, the committee made a concerted effort to incorporate the guidance on developing "should cost" targets as one of its "sound" estimating techniques.4 The committee generated 20-yr LCC range estimates for each of the committee's recommended systems and those recently initiated by MDA systems based on first assessing the current technical and manufacturing maturity of all the systems and then generating "should cost" estimates as the lower bound (or minimum) costs based on the following: • Scrutinizing every element of program cost, • Assessing whether each element can be reduced by, for example, challenging the learning curves of similar systems, and • Applying other recently implemented or proposed industry productivity improvements as part of reducing the total costs of doing business with the government, including, for example by reducing overhead rates, indirect costs, and other contractor cost-cutting measures.
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Observations on System "Should Cost" Comparisons In looking at previously stated $71 million to $85 million average unit procurement cost for the current and projected ground-based interceptor all up round, the committee wondered how that cost compared with the cost for other weapons of comparable capabilities and complexity. It extracted costs and quantities from DOD Selected Acquisition Reports (SARs)
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From page 202... ...
The lower bound, or minimum AUPC estimate for producing 52 three-stage GBIs at $71 million (based on continued funding through FY 2016) , is 32 percent higher than the comparable average unit cost of 54 Trident II D-5 missiles (without the warheads)
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From page 203... ...
The testing budget includes funds for Joint Warfighter exercises and war games but does not include funds for modeling and simulation, which were considered to be part of the development phase. TABLE E-2 MDA FY 2011 Major Development Programs of Record Ballistic Missile Defense (BMD)
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. Approximately 14 percent of the funds are for BMD Enabling programs, which are focused on developing critical processes needed to integrate standalone missile defense systems into a layered BMD system to achieve cost and operational efficiencies by improving protection performance within increased defended areas and minimizing force structure costs.
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From page 205... ...
in FY 2012. As displayed in Figure E-3, FY 2012 procurement funding as a portion of the total MDA budget is 10 percent higher than in FY 2011, owing primarily to a 7.5-fold increase in the Aegis FY 2011 program budget.
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For purposes of this study, the resulting LCC estimates for the minimum or the lower bound of the range estimates represent the projected "should cost" estimates6 and are computed based primarily on the data sources and cost estimating methods described later in this appendix. Since the system options for improving U.S.
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From page 207... ...
KEY BALLISTIC MISSILE BENCHMARK DATA SOURCES To the greatest extent possible and where the systems were technically similar to previous systems, development and production cost estimates were based on adjusting analogous costs from data from (1) historical programs of record supplied by MDA, (2)
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3 stage) , contractor and MILPERS fields, details booster avionics sustainment costs utilities and module (BAM)
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Cost) Annual O&S Cost Cost PAC-3 MDA and Army RDT&E and procurement budgets and latest N/A selected acquisition report NOTE: MDIOC, Missile Defense Integrated Operations Center; NMD, National Missile Defense; EKV, exoatmospheric kill vehicle; GBI, ground-based interceptor; IA&T, assembling, integrating, and testing; GSE, general support equipment; CFE, contractor furnished equipment; PSE, particular support equipment; O&S, operation and support; TFCC, THAAD Fire Control and Communications; AWS, Aegis weapon system.
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This approach relied on parametric cost models when needed or on a cross-check to ensure the overall reasonableness of the estimates. The parametric cost estimates used for both development and production cost estimates is summarized in Table E-4.
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10 The average unit procurement costs computed for multiple interceptors reflects the impact of total manufacturing labor hours and of cost efficiencies of discounts on material quantities on the cost of the first interceptor or other system firsts. Costs would decrease as a function of the quantity produced within an assumed continuous single manufacturing run or of the inefficiencies of reopening and restarting a manufacturing line to procure more replacement interceptors.
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Sustainment Costs Except for space-based interceptors (SBIs) , the majority of the sustainment cost estimates are based on average annual O&S system costs provided by MDA and military services' program offices.
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The average unit cost of the SM-3 Block IIA missile round was listed in FY 2014 at $24.3 million. bThe procurement cost included in the development estimate is based on a force quantity buy of 48 operational SM-3 Block IIA missiles and an additional 8 test interceptors.
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BMD advanced technology development funds that were transferred to this program beginning in FY 2012, and (3) additional projected cost the committee estimated for extending the development phase for the lower bound, or minimum, total cost to FY 2019 and the upper bound, or maximum, total cost with the development program extended to FY 2021 and beyond.
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In addition, the development range estimates includes the cost of designing, integrating, and testing five fully configured flight test articles at a lower bound, or minimum, average unit procurement cost (AUPC) of $21.5 million for Reaper MQ-9Bs configured with an as-designed MTS-B sensor coming off the production line or at an upper bound, or maximum, AUPC of $24.5 million for a slightly modified MTS-B.
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From page 216... ...
The committee based the procurement maximum cost estimate for the same ABIR sensor AUPC integrated on a Reaper MQ-9B airborne vehicle configured with a notional repackaged, smaller, lighter, reduced-power-version of the pod-mounted Heimdall sensor as an alternative candidate IR sensor, also integrated on a Reaper MQ-9 airborne vehicle with a minimum AUPC estimate of $37.9 million for a higher force-level quantity of 17 systems. (The modified Heimdall sensor unit cost is based on a further weight, volume, and power reduction over the envisioned modifications needed for the Global Hawk RQ-4B.
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From page 217... ...
then reengage if necessary."16 In addition, to potentially leverage the relevant airborne IR and optics technology from the ABS program, MDA had prior to February 2010 "demonstrated the ability of IR sensors carried aboard Navy Reaper unmanned aerial systems to observe ballistic missiles in-flight at long distance during the "Stellar Daggers" test in Hawaii and the Delta II launch in California. The impressive results of 14 Ibid.
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culminate in Aegis intercept flight tests using primarily airborne sensors for fire control at the Pacific Mis sile Range Facility in Hawaii [planned for] the summer of 2012.
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The BAI-assigned ABIR systems are configured with the same airborne IR sensor as the PAA aircraft and are needed to maintain persistent operational coverage and used for replacing PAA-designated systems either in transit from the CAP back to the forwarddeployed squadron or not operationally available until field maintenance is completed. Finally, based on a notional surge capability of three continuous CAPs on station for between 90 days and 270 days per year, the minimum and maximum range estimates of the total force-level quantity of ABIR systems is also based on procuring anywhere from one to six additional aircraft designated as attrition 19 Ibid.
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Table E-8 provides the ABIR system force-level quantity range estimates based on an average cruise speed of 175 mph at 40,000 ft and an average operational endurance of 24 flight hours per sortie. System Acquisition Costs Table E-9 summarizes the committee's estimate of the ABIR System T1 recurring cost of the first of five airborne systems used during the development phase through FY 2015 for flight testing demonstrations and the projected
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For the follow-on production phase beginning after FY 2015, Table E-10 lists the ABIR AUPC range estimate for the force-level quantity of between 12 and 17 airborne systems. The committee based its range estimate of the ABIR sensor average unit cost on a modified MTS-B sensor as a lower bound for the lower bound force size of 12 airborne systems.
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The upper bound estimate is also based on the higher force-level quantity of 17 systems. The committee also estimated the average unit cost of five sets of Reaper
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The MCS includes the hardware and software interfaces to enable Reapers' ground operators to monitor the health and status of the airborne C2BMC downlinks and to ensure the integrity and timely transmission of the airborne IR sensor missile tracking data to the nearest C2BMC and the designated interceptor's fire control radar. System O&S Costs Finally, Table E-11 provides a rough order-of-magnitude range estimate for the steady-state annual O&S costs on a per CAP basis for operating and sustaining the ABIR systems and the ground segment operations centers out of a forward-deployed OCONUS base for force sizes of 12 systems (for an average annual surge of CAP operations for 90 days)
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From page 224... ...
The total launch cost during the development phase is based on launching the two prototype PTSS satellites on one Atlas V EELV-class booster capable of lifting both, each with an estimated satellite total wet mass of 1,550 kg, which includes 30 percent weight margins for the both the PTSS bus and the payload. bThe procurement cost range estimate of $4.4 billion to $6.9 billion is based on the follow-on build of an additional 9 to 12 satellites (which includes two on-orbit spares)
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From page 225... ...
The O&S cost range estimate also includes the cost of producing and launching the additional replacement satellites needed for sustaining the constellation size, where (1) the lower bound, or minimum, cost estimate is based on sustaining the 9-ball constellation based on satellites with an expected average on-orbit life of 7 years and (2)
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From page 226... ...
The program budget request for FY 2012 at the time was still under development so the budget had yet to be determined. The PTSS Phase I annual program budget estimates through FY 2016 consist of all nonrecurring development and recurring cost estimates for the space segment bus, the optical tracking and communications payloads, the ground segment, the launch vehicle (LV)
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MDA's May 2010 PTSS Phase I annual program budgets submitted to the committee also included a program launch cost estimate of $145 million (in FY 2010 dollars) based on launching the two prototype PTSS satellites on an Atlas V based on a total wet mass estimate of 1,550 kg, which includes 30 percent weight margins for the bus and the two payloads.
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From page 228... ...
aThe cumulative average unit costs for the space segment bus are based on first starting with a stepdown cost of 10 percent from the second prototype satellite cost to the first production unit cost, and then projecting forward a cumulative average unit cost for a total of 11 satellites based on a 95 percent representative cost improvement factor for bus production. The same 10 percent step-down factor is applied to the first production unit cost for both PTSS payloads, and then a cumulative average unit cost is projected for a total quantity of 11 satellites based on a slightly higher 98 percent learning curve factor for payload production.
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From page 229... ...
The magnitude of the estimates for development cost and recurring retrofit cost of each mix of airborne platform and interceptor candidates is driven by the following characteristics of the air vehicle: • Carriage capacity and maximum load (i.e., distributed total missile mass) ; 25 Linton Wells III, MDA/DE, and Lt Col Jordan Thomas, USAF/A5XS, "Air Launched Hit-to-Kill in Ballistic Missile Defense Study," presentation to the committee, July 16, 2010.
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From page 230... ...
cThe total O&S marginal cost range estimate for sustaining 100 retrofitting multimission F-15Cs over the 20-yr service life of between $116 million and $966 million is based on an average marginal annual O&S cost estimate per CAP of between $0.2 million and $1.3 million. • Aerodynamic concerns raised by drag penalties, center-of-gravity related issues, reduced range, increased fuel consumption, and the like; and • Overall launching capability at the optimal altitude, for each platform and each interceptor.
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Manned bombers can carry the largest magazine (up to 24 on a B-1) but will require more significant changes to onboard sensors and fire control for performing independent ballistic missile defense missions.
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They could range from revalidating and using the same previously designed modification kits for installing the LITENING G4 system to modifying the existing SNIPER XR ATP system and the newly designed modification kits for installing the SNIPER surrogate system on the F-15C. For both IRST systems, integration and testing with F-15C flight test articles will be required to ensure that the unique ballistic missile performance tracking requirements have been met before proceeding with production.
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over 12- and 15-yr time frames for going forward from technology development through the SDD phases, along with the time frame range estimates for each phase for the two ALHK interceptor missile options summarized in Table E-15. As part of the SDD phase estimate, the development cost includes the procurement and flight testing of two advanced targeting pods installed on two F-15C test bed fighters configured with the existing onboard AN/APG-63(V)
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From page 234... ...
cConsistent with the minimum development cost estimates, the minimum time frames listed for the technology development and SDD are consistent with the Air Force and MDA schedule estimates. The concurrent F-15C and ALHK activities during the SDD phase minimum total time frames of between 8.5 or 9 years includes approximately 6 years to fully configure and integrate the first F-15C test bed platform.
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From page 235... ...
However, the committee assumed, consistent with Air Force and MDA, that additional development time to complete an advanced KV extends the overall minimum SDD schedule by at least 6 months. dThe SDD range estimates unique to the F-15C airborne platform are for the cost of designing in airframe design modification for retrofitting at least two F-15Cs as flight test articles to accommodate the weapons carriage loads of each missile option; designing modifications to the fighter's existing stores management system; and the additional system design engineering required to accommodate, integrate, and test either the LITENING G4 or SNIPER surrogate pods on the two test bed fighters.
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1,000 8.3 100 8.3 29.4 9.1 11.2 booster with advanced KV aFor each of the two options, the committee based the AUPC estimates on the same ALHK missile interceptor buy quantity of 1,000 and weight-based cost estimates as specified in the Air Force/ MDA briefing. The lower bound, or minimum, average recurring cost range estimates per fighter are based on, as needed, retrofitting and installing the latest LITENING or SNIPER targeting pods discussed above, associated modification kits, and system testing for 100 F-15C fighters, which is the same quantity also previously specified by the Air Force and MDA study team.
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. Given the uncertainty in the CONOPS and varying percentage use of the force of retrofitted F-15Cs to perform ballistic missile tracking and intercept missions along with other fighter missions, the committee considered this a lower bound estimate of the marginal O&S cost of sustaining this fighter force as it operates these missions over a 20-yr service life.
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From page 238... ...
Minimum 51 0.2 116 Maximuma 426 1.3 966 aThe maximum marginal cost is based on an eightfold increase over the minimum average marginal annual O&S cost per retrofitted F-15C, which equates to an increase in the marginal cost of up to 10 percent of the average annual cost of F-15C/Ds over the minimum estimate based on 1.2 percent. 60 percent for 30-sec decision time; the midcourse capability would be used to deal with the leakage.
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From page 239... ...
LCCs included these: • Development, • Production, • Life jacket mass computed at 50 percent of SBI (booster plus KV mass) , • Learning curve assumptions for the average unit cost of the SBI satellite as a function of the total production buy quantity, • Average 7-yr SABI satellite on-orbit lifetime and two replacements launches over the 20 years of system sustainment, • Launch costs, and • Sustainment costs for operating and maintaining the constellation size and fixed number of SBI satellites on-orbit over a 20-yr period.
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(kg) Nsat Minimum Maximum Decision time td = 0 sec Case 1: BPI solid + 10 164 2.5 1,978 1,000 296 500 liquid BPI Case 2: BPI liquid + 20 149 2.0 1,796 400 119 200 midcourse Decision time td = 30 sec Case 3: BPI solid + 10 164 2.5 1,978 2,000 581 978 liquid Case 4: BPI liquid + 20 149 2.0 1,796 650 187 311 midcourse Case 5: Midcourse only 20 81 0.6 977 200 43 73 TABLE E-19 SBI Life-Jacket Subsystems and Hardware Propulsion Hall effect ion engine and controls (apogee kick motor)
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From a launch lift readiness best-case perspective, EELV-class Delta IV H (heavy) launch vehicles could lift up to 14 SBI satellites (with life jackets)
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From page 242... ...
The maximum total time of the KV operation can also be extended up to 400 sec. Table E-20 shows SBI system 20-yr LCC range estimates for acquiring and launching an SBI constellation of about 1,000 satellites and sustaining this fully operational capability over a 20-yr period.
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From page 243... ...
The total value of the award includes the costs of the rockets, "plus additional [launch services] under other contracts for payload processing; launch vehicle integration; and tracking, data and telemetry support."33 Launch Service Costs per Launch Lift Mass to Lower Earth Orbit The committee bounded the cost per launch lift mass to LEO using two different candidate EELV Delta IV configurations based on the computed SBI total mass launch lift performance values up to an altitude of approximately 330 km.
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From page 244... ...
The recurring cost of producing the two prototype SBI satellites is based on an assumed increase of 50 percent over the first unit, or T1, production cost estimate calculated as the basis for the procurement cost estimates. This step-back factor of 1.5 is based on a best engineering judgment assumption of higher first-time labor costs due to the inefficiencies of producing the hardware with hands-on engineering compared to a more fully automated manufacturing environment and a higher one-time cost of buying the space-qualified parts needed only for the two prototypes.
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fThe projected uncertainty in the recurring SBI satellite integration and testing cost estimates is accounted for by applying a 15 percent factor to the sum of the recurring cost of the two-stage booster, the KV, the seeker, and the life jacket as the minimum estimate and a 30 percent factor for the maximum estimate. gThe SBI satellite production cost range estimates are based on computing the first unit, T1, production cost and then calculating the cumulative average unit costs based on learning curve or CIC slope values to account for manufacturing labor efficiencies and discounts on parts costs as a function of the quantity being produced.
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The Delta IV Heavy is configured with a 5-m diameter fairing with two additional core common boosters as strap-on motors to the primary launch vehicle. The minimum and maximum estimates of cost per total mass lift to LEO 34 The launch services cost and performance information for this Delta IV Heavy and Medium class of vehicles is from S.J.
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0.9 2.0 Subtotal 4.0 8.7 Production Two-stage booster 21.0 28.7 Kill vehicle 12.5 17.1 Seeker 1.2 1.7 Life jacket 63.4 86.5 Integration and test 14.7 53.6 SBI satellites 112.9 187.6 Launch services 90 153 Subtotal 202.6 340.9 Operations (over 20 years) Satellite and mission operations 4.1 8.2 Replacement SBI satellites 225.8 375.2 Launch services 144.8 245.3 Subtotal 374.8 628.7 Total 581.3 978.3 NOTE: Case 2 has vbo = 5 km/sec, Kv divert = 2.5 km/sec, 10-cm optics on the KV, boost-phase liquids, 70 percent solids.
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From page 248... ...
0.9 1.9 Subtotal 4.0 8.1 Production Two-stage booster 1.4 1.8 Kill vehicle 0.9 1.1 Seeker 0.1 0.1 Life jacket 4.4 5.6 Integration and test 1.0 3.5 SBI satellites 7.8 12.1 Launch services 4.7 8.0 Subtotal 12.5 20.1 Operations (over 20 years) Satellite and mission operations 4.1 8.2 Replacement SBI satellites 15.5 24.3 Launch services 7.6 12.8 Subtotal 27.2 45.3 Total 43.7 73.5 NOTE: Case 3 has vbo = 5 km/sec, Kv divert = 2.0 km/sec, 20-cm optics on the KV, boost-phase liquids + midcourse.
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From page 249... ...
0.9 1.9 Subtotal 3.8 8.2 Production Two-stage booster 6.6 8.8 Kill vehicle 4.1 5.4 Seeker 0.4 0.6 Life jacket 20.4 27.0 Integration and test 4.7 16.7 SBI satellites 36.2 58.4 Launch services 26.8 45.8 Subtotal 63.0 104.2 Operations (over 20 years) Satellite and mission operations 4.1 8.2 Replacement SBI satellites 72.5 116.7 Launch services 43.3 73.3 Subtotal 119.9 198.3 Total 186.7 310.7 NOTE: Case 4 has vbo = 5 km/sec, Kv divert = 0.6 km/sec, 20-cm optics on the KV, midcourse only.
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From page 250... ...
Second, the orbital motion of the satellites and the rotation of Earth result in requirements for very large numbers of satellites to ensure that at least one would be close enough to intercept a single missile before it achieved enough velocity to deliver its munitions to the United States. This coverage requirement, in turn, results in constellations with masses that are between 650 and 2,000 SBI satellites.37 The total launch lift mass to orbit of even the lower end of the constellation size calls for a significant effort and would require at least a threefold increase in the current launch capacity of the United States.
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From page 251... ...
GMD Evolved CONUS-Based Systems The GMD-E cost estimates were based on the committee's recommended interceptor baseline design that would be half the size and weight of the current GBI and should be designed to be either silo emplaced at a CONUS-based site in the Northeast or, as described in the next section, to be carried in a canister on a transporter/erector/launcher (TEL) at a prepositioned fixed site or sites in Europe.
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From page 252... ...
One of the key assumptions driving the nonrecurring and recurring estimates for the CONUS-based GMD-E booster was leveraging the previous MDA Kinetic Energy Intercept (KEI) program and taking advantage of relevant heritage designs and MDA's sunk investment cost of $5.1 billion (in FY 2010 dollars)
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From page 253... ...
The 20-yr LCC range estimates for this CONUS-based GMD-E system are summarized in Table E-24. Forward-Based GMD-E Systems As part of the committee's evaluation of the gain in effectiveness to defend against ballistic missile attacks from our allies within Europe and others, it TABLE E-24 Estimated LCC for CONUS-Based GMD-E System Total (FY 2010 billion dollars)
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From page 254... ...
and destroy them by force of the impact."40 This mission and the programs that followed have since evolved, beginning with the GMD incremental block development of a midcourse interceptor system in 2002. During this 8-yr period from FY 2002 through FY 2009, the MDA total annual investment was approximately TABLE E-26 GMD System Investment Costs Through FY 2009 (FY 2010 dollars)
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The enhanced EKV addresses the parts "obsolescence issues and provides additional processor throughput to support systemwide [advanced] TABLE E-27 GMD Three-Stage GBI Average Unit Procurement Costs (FY 2010 million dollars)
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43 See MDA, FY-2011 FYDP Research, Development, Test & Evaluation, President's Budget, Exhibit R-2, RDT&E Budget Item Justification, BA 4: Advanced Component Development & Prototypes (ACD&P) , PE 0603882C: Ballistic Missile Defense Mid-Course Segment, February 2010.
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Minimum Maximum Developmenta 10.6 14.5 Procurement 10.6 14.5 Force quantity buyb 12 GBIs MILCONc 1.10 1.10 20-yr O&Sd 5.8 5.8 Total 16.4 20.3 aThe FY 2012 MDA GMD system program RDT&E budget for development and procurement was not broken down by MDA. The total acquisition cost range estimate listed above consists of the total requested funds from FY 2010 through FY 2016 of $6.8 billion plus costs projected forward for the (1)
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Program Time Total Investment Average Annual Investment Cost Element Frame (billions) (millions)
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As reported in the MDA FY 2011 FYDP budget, Table E-31 provides the cumulative AUPC estimate of $9.6 million for SM-3 Block IA interceptors based TABLE E-31 Aegis SM-3 Average Unit Procurement Costs (FY 2010 million dollars) Cumulative Total Fiscal Annual Lot Average Unit Average Unit Cost Quantity Year Quantities Cost per Lot SM-3 Block IA 9.6 41 FY 2009 23 9.3 (last two lots)
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From page 260... ...
events."47 In addition, the MDA BMD Aegis program office provided the committee with a set of annual O&S cost estimates from FY 2010 through FY 2015 for the SM-3 Block IA and the AWS BMD Block 3.6.1 systems and the SM-3 Block IB and AWS BMD 4.0.1 systems. The MDA BMD Aegis program office provided a set of annual O&S costs from FY 2010 through FY 2015 similar to its GMD GBI O&S cost element breakdown.48 Table E-32 lists the total average annual O&S cost estimates for 46 Ibid.
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From page 261... ...
aSince an MOU is not currently in place for the SM-3 Block 1B missiles and AWS BMD 4.0.1 assets for Aegis ships, the MDA program office based the estimates for these two tables on the assumption that the U.S. Navy will agree to the same sustainment roles and responsibilities and an O&S cost share similar to that for SM-3 Block IA and AWS BMD 3.6.1.
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From page 262... ...
System Acquisition Costs According to the MDA FY 2012 FYDP PB, the THAAD program is continuing block development and concurrently expending procurement funds first initiated in FY 2009 for LRIP. Even though the first 50 THAAD interceptors were produced using RDT&E funds, the average missile unit costs are based on 49 The cost per missile and per ship is based on the Aegis program office estimate of the average MDA O&S cost per SM-3 Block IB missile of approximately $0.25 million per year.
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Block development 2004-2009 6.7 1,123 Procurement 2009 0.1 106 Total investment 16.4 TABLE E-34 THAAD Average Unit Procurement Costs (FY 2010 million dollars) Cumulative Average Unit Cost Total Quantity THAAD interceptor 11.2 431 Launcher 6.7 60 TSG 10.7 18 reported annual procurement budgets and lot quantity buys beginning in FY-2010 and continuing at the rate of between 65 and 68 per year from FY 2011 through FY 2016.
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From page 264... ...
• The sustainment funding for operating and maintaining nine THAAD batteries over a 20-yr service life. Consistent with the MDA FY 2011 and FY 2012 FYDP PB funding, the development and procurement cost estimates for AN/TPY-2 terminal mode radars 52 See MDA, FY-2011 FYDP Research, Development, Test & Evaluation, President's Budget, Exhibit R-2, RDT&E Budget Item Justification, BA 4: Advanced Component Development & Prototypes (ACD&P)
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From page 265... ...
68.0 Total 200.0 NOTE: The total annual O&S cost estimates and the breakdown by cost elements were provided by the MDA DOE THAAD cost team from FY 2010 through FY 2015. (See MDA, DOE THAAD Cost Team, "DOE Cost Estimates," presentation to the committee, February 26, 2010.
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From page 266... ...
bThe THAAD procurement cost range estimate of approximately $5.8 billion up to $6.6 billion is based on the FY 2012 MDA THAAD system program procurement total requested funds from FY 2010 through FY 2016 of $5.3 billion and $0.5 billion to $1.3 billion of additional funds after FY 2016 for funding the procurement of at least 44 and at most of 100 additional THAAD missiles plus six launchers, two TSG workstations, and any additional peculiar support equipment and other hardware necessary to fully configure nine Army batteries. cThe total force buy quantity of between 461 and 527 THAAD missiles will cover the total operational quantity needed for fully configuring nine Army batteries and the expendable assets to cover THAAD missile flight tests and operational readiness training exercises necessary from FY 2011 through the FY 2016 time frame.
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Table E-39 lists the PAC-3 Battalion AUPC estimates for each of the main equipment hardware elements listed for each Army battery fire unit. 55 The Patriot battery fire unit total AUPC range estimate includes support equipment; the lower bound of approximately $237 million represents the total of the hardware element unit costs and the upper bound of $260.5 million includes a 10 percent contingency cost along with the costs provided to the committee by the Army.
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From page 268... ...
236.8-260.5 System Life-Cycle Costs The Army PAC-3/MSE system LCC range estimates for development, procurement, and 20-yr O&S costs are presented in Table E-40. The total estimate from FY 2010 forward includes the following: • From FY 2010 forward, the requested Army funding for FY 2012 FYDP RDT&E PB of $0.4 billion for the upgraded PAC-3 MSE development program, and the total procurement budget requested of approximately $5.4 billion for the remaining procurement of another 275 PAC-3 missiles through FY 2012 ($1.5 billion)
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MILCON None required None required 20-yr O&Sc 14.7 16.2 Total 20-yr LCC estimate 26.7 33.5 aThe PAC-3/MSE development cost estimate of $0.4 billion is based on the FY 2012 Army RDT&E budget requested for the upgraded PAC-3 MSE system, approximately $366 million from FY 2011 through FY 2016. bThe PAC-3/MSE total procurement cost range estimate of between $11.5 billion and $16.9 billion comprises funding for three programs.
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From page 270... ...
continuing to support the two radar missions. Table E-41 summarizes the total MDA investments of $2.3 billion in AN/ TPY-2 radar block developments and procurements as well as radar test and evaluations with SBX radars from FY 2003 through FY 2009.
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From page 271... ...
However, MDA stated that these sustainment cost estimates do not include THAAD site-specific support costs or the annual Army military personnel, security, and base operations costs, which are included as part of the THAAD system sustainment costs.
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From page 272... ...
2010. "DOE Cost Estimates Supporting NAS: THAAD Cost Team," February 26.
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From page 273... ...
cThe total O&S cost for sustaining 11 AN/TPY-2 radar systems over a 20-yr service life is based on all the radars operating in a stand-alone, forward-based, mode. The lower bound, or minimum, O&S cost estimated is based on the annual cost for three FBM-configured systems fielded in FY 2011 at $54.8 million per system, and the maximum estimate is based on $75.4 million per system for two FBM-configured operational systems fielded in FY 2010.
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From page 274... ...
The GBX radar development cost range estimate is based on scaling down the new radar design effort needed by leveraging off of the proven heritage radar designs of the AN/TPY-2 phased array and receiver electronics hardware (at a total sunk development cost through FY 2009 of $2.3 billion) , and an SBX analogous radar turntable.
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From page 275... ...
The average unit cost estimate of MDA's procurement of 11 AN/TPY-2 radars is $181 million with the eleventh and last unit at $175 million. This buildup of the unit recurring cost is based on first extending the AN/TPY-2 production line and applying the same realized manufacturing assembly labor learning cost improvement curve efficiencies for assembling an additional 10 dismounted antenna units, cooling equipment units, diesel generator power units, and 5 modified electronic equipment units, including material cost unit price discounts in buying the quantity of T/R modules and other common parts from the same vendors at the higher total production lot quantities needed.
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From page 276... ...
The MDA investment in development of the SBX radar began in FY 2002 with an X-band radar technology development effort focused on providing highresolution tracking and discrimination data to significantly enhance the GMD fire control and, subsequently, the EKV. The RDT&E funds also covered the development of software algorithms to enhance target discrimination, along with material component enhancements to improve output power and sensitivity.
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From page 277... ...
To the extent possible, the committee's total development cost estimates generated from the MDA RDT&E budget from FY 2002 through FY 2009 were relatively consistent with the total sunk costs and with FYDP development cost estimates provided by MDA.
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From page 278... ...
cSince the MDA RDT&E FY 2011 PB did not provide the funding projections for the vessel and SBX radar system for FY 2012 through FY 2015, the committee used the total annual O&S costs provided by MDA for those fiscal years and allocated the costs for each category based on the percentages computed for the FY 2011 funds cited in the budget justification sheets for the SBX sustainment program budgets. (The MDA O&S cost estimates on which the allocations were based were provided in MDA, 2010, "SBX Joint Cost Estimates Supporting MDA Cost Presentations to NAS," February 28.
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From page 279... ...
The upper bound, or maximum, development cost estimate of $1.9 billion adds $0.8 billion for continuing this SBX-specific radar development effort based on extending the average annual FY 2012 FYDP budget request of $160 million for at least 5 more years through FY 2020. bProcurement cost is not separately identified from the development cost.
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From page 280... ...
64 Even though the first 34 SM-3 Block IB interceptors were produced using RDT&E funds, the average missile unit costs are based on reported annual procurement budgets and lot quantity buys beginning in FY 2011 and going forward through FY 2015. The projected cumulative average unit cost for the total quantity buy of 290 missiles over the 5-yr production is estimated at $9.3 million.
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From page 281... ...
Figure E-9 plots cumulative average unit procurement cost as a function of production quantity for the THAAD missile, along with the best-fit CIC slope for the missiles block build extended forward for a total buy quantity of 134. The CIC slope is computed at 94.5 percent with a first unit, or T 1, cost of $13.7 million in FY 2010 dollars.
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From page 282... ...
$14 Best Fit Learning Curve at 93.0% Rate with T1 = $14.3M $13 $12 $11 $10.7 $10.5 $10 $10.0 $9.3 $9 Estimated Cost of $7.7 at Cum QTY = 377 $9.3 $8.6 for FY-15 Lot QTY of 72 $8 $8.6 $8.0 $7 0 50 100 150 200 250 300 350 400 Cumulative Quantity FIGURE E-9 THAAD missile. Cumulative average unit cost learning curve.
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Key Terms
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information on Chapter Skim is available.