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OPERATING AND SUPPORT COST-ESTIMATING GUIDE

OPERATING AND SUPPORT COST-ESTIMATING GUIDE OFFICE OF THE SECRETARY OF DEFENSE cost ASSESSMENT AND PROGRAM EVALUATION MARCH 2014 This page intentionally left blank Contents 1. INTRODUCTION .. 1- 1 Purpose .. 1- 1 Applicability .. 1- 1 Overview .. 1- 1 2. OVERVIEW OF LIFE-CYCLE COSTS .. 2- 1 Life-Cycle cost Categories .. 2- 1 Life-Cycle cost Category Definitions .. 2- 3 Life-Cycle cost Categories and Budget Appropriations .. 2- 5 3. ROLE OF O&S cost INFORMATION .. 3- 1 Introduction .. 3- 1 O&S cost Information and Program Decision Points .. 3- 1 Trade-Off Studies .. 3- 4 Analysis of Alternatives .. 3- 5 Affordability .. 3- 6 Early Influence on System Design.

Life-cycle cost isdefined as the sum of four major cost categories: (1) research and development costs; (2) investment costs, consisting of procurement, military construction, and acquisitionrelated operations and maintenance (O&M) - associated with

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www.cape.osd.mil

Support (O&S) costs. 1.2 Applicability . This guide is focused on analytic methods and data for O&S cost estimates and analyses for a wide variety of DoD weapon systems. 1.3 Outline . The remainder of this guide is organized as follows: • Chapter 2 provides an overview of the concepts of system life-cycle cost and system O&S cost.

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