RFP ANNEX G

EELV PROGRAM
LCC ESTIMATE AND METHODOLOGY INSTRUCTIONS

THIS ANNEX, INCLUDING THE
COVER, CONSISTS OF 11 PAGES

GENERAL INSTRUCTIONS

The following instructions apply to the requirements of Volume IV, Appendix IV-G, "LCCE and LCCE Methodology (Total EELV Program)." The Offeror shall satisfy all requirements in the following LCCE and Methodology instructions. However, only LCCE cost data shall be included in Volume IV, Appendix IV-G. The narrative portion of Volume IV, Appendix IV-G is limited to 100 pages; however, the number of pages of spreadsheets displaying the LCCE is unlimited.

1. The Offeror shall develop, aggregate, and document a detailed level LCCE for the proposed concept. The LCCE is defined as the total "cradle-to-grave" costs across all acquisition phases, to include costs for research, design, development, test and evaluation, production, operations, and maintenance. Costs for support of the system (such as Government bases and ranges) shall also be included in the LCCE.

2. The EELV LCCE shall include only those allowable EELV costs allocable to the Government (DoD, civil and intelligence communities). Although the Offeror will be expected to incorporate considerations of potential market impacts and forces of the entire National Mission Model (NMM), including the requirements of the commercial component of the NMM, only costs attributable to the Government shall be included in the EELV LCCE.

3. The LCCE must consider all cost relevant to the EELV program, including all EELV system contracts and other Government costs (including, but not limited to, range costs, facility costs, and infrastructure costs). Although normally included in Government-developed LCCEs, Government program management costs need not be estimated in the Offeror's LCCE; Government program management costs will be estimated by the SPO. Examples of typical Government program management costs include SPO military and civilian pay, Government travel, Aerospace Corporation support, Systems Engineering and Technical Assistance Contractor support, supplies and equipment, etc.

4. Costs shall be based on the requirements of the NMM identified by the Government (RFP Annex C-1), and/or operational support requirements, design and test requirements, and other technical data as delineated by the Offeror's concept. The costs shall be displayed by Government fiscal years and include overhead, general and administrative expense, and estimated fee or profit.

5. The LCCE shall be presented at the 50th percentile confidence level. The cost-risk analysis supporting the development of this 50th percentile level shall utilize valid techniques and acceptable approaches to distribution range development and summarization, and will be performed by acquisition module/phase (e.g., Low Cost Concept Validation (LCCV), Pre-Engineering and Manufacturing Development (Pre-EMD), EMD, Production, and Operations and Support (O&S)). This cost-risk analysis shall contain narratives explaining all methodologies used to determine risk magnitudes of identified risk areas, quantification of these risk magnitudes into cost impacts, and spreadsheets or other formats containing calculations, algorithms, etc., that fully support an understanding of the performance of the cost-risk analyses. The cost-risk analysis shall include, but is not limited to, the following areas of risk: Design and Engineering, Technology (including the use of foreign technology, components, and non-domestically manufactured products), Cost Estimating, Manufacturing, Schedule, Supportability, Integration, and Threat. (The Air Force Risk Analysis Handbook may be helpful in conducting an acceptable risk analysis.) Cost drivers (e.g., high cost and high risk elements) and LCCE sensitivities (e.g., impacts resulting from changes in major cost drivers, risk drivers, or assumptions) shall be identified and explained. Cost risk quantification shall be performed and applied at the cost estimating level.

6. The cost estimating methodologies derived and utilized in the development of the LCCE shall be clearly documented to allow assessment of the reasonableness and completeness of costs presented in the LCCE.

LCCE INSTRUCTIONS

7. The Offeror shall develop a LCCE in accordance with the following cost estimating guidelines, general ground rules, and assumptions. The LCCE shall be presented in spreadsheet format. The number of pages of spreadsheets displaying the LCCE is unlimited.

a. The implications of the provided SPD NMM (RFP Annex C-1) shall be addressed in the LCCE, to include the Offeror's commercial market projections.

b. LCCE shall be shown by acquisition life cycle module/phase (i.e., LCCV, Pre-EMD, EMD, Production, O&S, etc.).

c. LCCE shall extend through Fiscal Year (FY) 2020.

d. OSD-approved 95-1 inflation indices shall be used. A copy of the directed inflation indices are included in RFP Annex G-1.

e. LCCE shall be provided at the point estimate level (i.e., the aggregate of initial estimates from cost models/methodologies, prior to any dollars added for risk) and the 50th percentile confidence level.

f. LCCE detail shall be shown at the level each element was estimated.

g. LCCE shall be structured as reflected in the Work Breakdown Structure (WBS) Dictionary submitted in the Offeror's proposal.

h. LCCE shall be developed and shown by Government fiscal years in constant FY 1995 and Then-Year (TY) dollars.

i. The EELV Baseline Funding Profile for the EMD Module is provided, for planning and reference purposes only, in RFP Annex G-2. For the pre-EMD module, $66 million and $64 million have been budgeted and programmed in FY96 and FY97, respectively. The pre-EMD dollars will be divided between two contracts.

LCCE METHODOLOGY DOCUMENTATION INSTRUCTIONS

8. The LCCE documentation will include a detailed discussion of the methodologies employed for each WBS element at which the LCCE was estimated. It shall be prepared in concert with the following requirements and be limited to 100 pages:

a. Detailed LCCE Approach/Methodology.

(1) Discussion of all levels of the WBS shall contain:

(a) WBS element definitions.

(b) acquisition life cycle phase identifications.

(c) cost phasing approach.

(d) detailed explanation of estimating approach/methodologies used, including Cost Estimating Relationships (CERs), factors, analogues, models and tools, etc.

(e) explanation of risk assessment/analysis and methods employed for quantifying risk.

(f) identification of sources of data.

b. Estimating approaches shall be presented at the WBS level at which the LCCE was developed. "Roll-up" is an acceptable description of methodology if the estimate was developed at a lower WBS level. If an estimating methodology is identical for all lower level elements, methodology need only be described once at the next highest WBS level.

c. Key ground rules and assumptions, business base assumptions, and trade analyses, shall also be clearly documented.

RFP ANNEX G-1

OSD-Approved
95-1 Inflation Indices

OSD-APPROVED 95-1 RAW INFLATION INDICES
OPR: SAF/FMCEE
DATE OF OSD INFLATION RATES FOR PERSONNEL AND NON-PERSONNEL: 10 JANUARY 1995
DATE OF SAF/FMC ISSUE: 31 JANUARY 1995
USAF RAW INFLATION INDICES
BASED ON OSD RAW INFLATION RATES
BASE YEAR FY 1995
OPERA-
GENERAL TIONS RESEARCH,
AIRCRAFT
SERVICE & MAIN- DEVELOP-
AND
MILITARY COMPEN-
& WAGE TENANCE: MENT, MILITARY MISSILE OTHER
FISCAL PAY OTHER

SATION

RETIRE-

BOARD NON-PAY, TESTING, CONSTRU- PROCURE- PROCURE-
YEAR BASE EXPENSES TOTAL MENT PAY NON-POL EVAL. CTION MENT MENT FUEL
(3500) (3500) (3500) (3500) (3400) (3400) (3600) (3300) (3010/20) (3080)

1983

0.676

0.714

0.680

0.999

0.615

0.685

0.685

0.685

0.659

0.685

1.003

1984

0.696

0.737

0.700

1.033

0.634

0.711

0.711

0.711

0.711

0.711

0.910

1985

0.724

0.758

0.727

1.069

0.669

0.736

0.736

0.736

0.736

0.736

0.871

1986

0.753

0.776

0.755

1.075

0.676

0.756

0.756

0.756

0.756

0.756

0.681

1987

0.770

0.794

0.772

1.111

0.713

0.777

0.777

0.777

0.777

0.777

0.625

1988

0.787

0.815

0.790

1.113

0.777

0.800

0.800

0.800

0.800

0.800

0.522

1989

0.815

0.843

0.818

1.008

0.805

0.834

0.834

0.834

0.834

0.834

0.522

1990

0.846

0.869

0.848

1.046

0.835

0.867

0.867

0.867

0.867

0.867

0.619

1991

0.879

0.899

0.881

1.073

0.868

0.904

0.904

0.904

0.904

0.904

1.158

1992

0.916

0.931

0.917

1.102

0.904

0.930

0.930

0.930

0.930

0.930

0.987

1993

0.951

0.960

0.952

0.975

0.939

0.955

0.955

0.955

0.955

0.955

1.000

1994

0.976

0.978

0.976

0.989

0.971

0.974

0.974

0.974

0.974

0.974

1.142

1995

1.000

1.000

1.000

1.000

1.000

1.000

1.000

1.000

1.000

1.000

1.000

1996

1.025

1.020

1.024

0.949

1.025

1.030

1.030

1.030

1.030

1.030

1.056

1997

1.054

1.047

1.054

0.909

1.055

1.061

1.061

1.061

1.061

1.061

1.070

1998

1.087

1.075

1.086

0.931

1.080

1.093

1.093

1.093

1.093

1.093

1.102

1999

1.121

1.103

1.119

0.950

1.103

1.126

1.126

1.126

1.126

1.126

1.135

2000

1.147

1.123

1.145

0.963

1.126

1.159

1.159

1.159

1.159

1.159

1.169

2001

1.174

1.143

1.171

0.976

1.150

1.194

1.194

1.194

1.194

1.194

1.204

2002

1.202

1.163

1.198

0.989

1.174

1.230

1.230

1.230

1.230

1.230

1.240

2003

1.230

1.184

1.226

1.002

1.199

1.267

1.267

1.267

1.267

1.267

1.277

2004

1.259

1.205

1.254

1.015

1.224

1.305

1.305

1.305

1.305

1.305

1.316

2005

1.288

1.227

1.283

1.028

1.250

1.344

1.344

1.344

1.344

1.344

1.355

2006

1.319

1.249

1.313

1.042

1.276

1.384

1.384

1.384

1.384

1.384

1.396

2007

1.350

1.271

1.343

1.056

1.303

1.426

1.426

1.426

1.426

1.426

1.438

OPERA-
GENERAL TIONS RESEARCH,
AIRCRAFT
SERVICE & MAIN- DEVELOP-
AND
MILITARY COMPEN-
& WAGE TENANCE: MENT, MILITARY MISSILE OTHER
FISCAL PAY OTHER

SATION

RETIRE-

BOARD NON-PAY, TESTING, CONSTRU- PROCURE- PROCURE-
YEAR BASE EXPENSES TOTAL MENT PAY NON-POL EVAL. CTION MENT MENT FUEL
(3500) (3500) (3500) (3500) (3400) (3400) (3600) (3300) (3010/20) (3080)

2008

1.381

1.294

1.374

1.070

1.330

1.469

1.469

1.469

1.469

1.469

1.481

2009

1.414

1.317

1.405

1.084

1.358

1.513

1.513

1.513

1.513

1.513

1.525

2010

1.447

1.340

1.438

1.098

1.386

1.558

1.558

1.558

1.558

1.558

1.571

2011

1.481

1.364

1.471

1.113

1.416

1.605

1.605

1.605

1.605

1.605

1.618

2012

1.516

1.389

1.505

1.128

1.445

1.653

1.653

1.653

1.653

1.653

1.667

2013

1.552

1.413

1.539

1.143

1.476

1.702

1.702

1.702

1.702

1.702

1.717

2014

1.588

1.439

1.575

1.158

1.507

1.754

1.754

1.754

1.754

1.754

1.768

2015

1.625

1.464

1.611

1.173

1.538

1.806

1.806

1.806

1.806

1.806

1.821

2016

1.664

1.490

1.648

1.189

1.571

1.860

1.860

1.860

1.860

1.860

1.876

2017

1.703

1.517

1.686

1.204

1.603

1.916

1.916

1.916

1.916

1.916

1.932

2018

1.743

1.544

1.725

1.220

1.637

1.974

1.974

1.974

1.974

1.974

1.990

2019

1.784

1.572

1.765

1.236

1.672

2.033

2.033

2.033

2.033

2.033

2.050

2020

1.826

1.600

1.805

1.253

1.707

2.094

2.094

2.094

2.094

2.094

2.111

2021

1.868

1.628

1.847

1.269

1.742

2.157

2.157

2.157

2.157

2.157

2.175

2022

1.912

1.657

1.889

1.286

1.779

2.221

2.221

2.221

2.221

2.221

2.240

2023

1.957

1.687

1.933

1.303

1.816

2.288

2.288

2.288

2.288

2.288

2.307

2024

2.003

1.717

1.977

1.320

1.855

2.357

2.357

2.357

2.357

2.357

2.376

2025

2.050

1.748

2.023

1.338

1.894

2.427

2.427

2.427

2.427

2.427

2.447

TABLE USE:
RAW INDICES ARE USED TO CONVERT CONSTANT DOLLARS IN ONE YEAR TO CONSTANT DOLLARS IN ANOTHER YEAR.
USE WEIGHTED INDICES TO CONVERT CONSTANT TO THEN-YEAR DOLLARS, AND VICE VERSA.

OSD APPROVED 95-1 WEIGHTED INFLATION INDICES
OPR: SAF/FMCEE
DATE OF OSD INFLATION RATES : 10 JAN 1995
DATE OF OSD OUTLAY RATES : 18 JAN 1995
DATE OF SAF/FMCEE ISSUE : 31 JAN 1995
USAF WEIGHTED INFLATION INDICES
BASED ON OSD RAW INFLATION AND OUTLAY RATES
BASE YEAR FY 1995
RESEARCH
DEVELOP-
OPERA- MENT, MILITARY MILITARY MILITARY AIRCRAFT AIRCRAFT MISSILE MISSILE OTHER OTHER
TIONS & TEST & CONSTR- CONSTR- CONSTR- PROCUR PROCUR PROCUR PROCUR PROCUR PROCUR
FISCAL MAINTEN EVALUA UCTION: UCTION: UCTION: EMENT MENT EMENT EMENT EMENT MENT
YEAR ANCE TION AF GUARD RESERVE SPECIAL OTHER SPECIAL OTHER SPECIAL OTHER
(3400) (3600) (3300) (3830) (3730) (3010) (3010) (3020) (3020) (3080) (3080)

1984

0.720

0.726

0.751

0.753

0.744

0.716

0.749

0.724

0.754

0.717

0.746

1985

0.744

0.750

0.768

0.765

0.766

0.739

0.773

0.746

0.775

0.741

0.771

1986

0.767

0.769

0.790

0.781

0.782

0.760

0.801

0.765

0.811

0.762

0.804

1987

0.796

0.804

0.818

0.809

0.808

0.781

0.833

0.795

0.846

0.784

0.834

1988

0.822

0.825

0.849

0.854

0.843

0.806

0.875

0.818

0.877

0.805

0.866

1989

0.855

0.865

0.880

0.876

0.880

0.839

0.903

0.847

0.916

0.841

0.896

1990

0.890

0.892

0.931

0.939

0.950

0.873

0.932

0.882

0.933

0.872

0.923

1991

0.924

0.925

0.958

0.949

0.967

0.909

0.970

0.916

0.963

0.907

0.947

1992

0.951

0.952

0.976

0.967

0.990

0.934

0.993

0.944

0.976

0.940

0.977

1993

0.967

0.974

1.004

0.995

1.019

0.958

1.012

0.970

1.002

0.964

0.996

1994

0.995

0.995

1.034

1.021

1.030

0.978

1.037

1.001

1.031

0.987

1.026

1995

1.023

1.024

1.065

1.052

1.061

1.005

1.068

1.031

1.062

1.015

1.056

1996

1.054

1.055

1.097

1.083

1.092

1.035

1.100

1.062

1.093

1.046

1.087

1997

1.086

1.086

1.130

1.116

1.125

1.066

1.133

1.093

1.126

1.077

1.120

1998

1.118

1.119

1.163

1.149

1.159

1.098

1.167

1.126

1.160

1.109

1.154

1999

1.152

1.152

1.198

1.184

1.194

1.131

1.202

1.160

1.195

1.143

1.188

2000

1.186

1.187

1.234

1.219

1.229

1.165

1.238

1.195

1.231

1.177

1.224

2001

1.222

1.223

1.271

1.256

1.266

1.200

1.275

1.231

1.268

1.212

1.261

2002

1.259

1.259

1.309

1.293

1.304

1.236

1.313

1.268

1.306

1.248

1.298

2003

1.296

1.297

1.349

1.332

1.343

1.273

1.352

1.306

1.345

1.286

1.337

2004

1.335

1.336

1.389

1.372

1.384

1.312

1.393

1.345

1.385

1.324

1.378

2005

1.375

1.376

1.431

1.413

1.425

1.351

1.435

1.385

1.427

1.364

1.419

RESEARCH
DEVELOP-
OPERA- MENT, MILITARY MILITARY MILITARY AIRCRAFT AIRCRAFT MISSILE MISSILE OTHER OTHER
TIONS & TEST & CONSTR- CONSTR- CONSTR- PROCUR PROCUR PROCUR PROCUR PROCUR PROCUR
FISCAL MAINTEN EVALUA UCTION: UCTION: UCTION: EMENT MENT EMENT EMENT EMENT MENT
YEAR ANCE TION AF GUARD RESERVE SPECIAL OTHER SPECIAL OTHER SPECIAL OTHER
(3400) (3600) (3300) (3830) (3730) (3010) (3010) (3020) (3020) (3080) (3080)

2006

1.417

1.417

1.474

1.456

1.468

1.391

1.478

1.427

1.470

1.405

1.461

2007

1.459

1.460

1.518

1.499

1.512

1.433

1.522

1.470

1.514

1.447

1.505

2008

1.503

1.504

1.564

1.544

1.557

1.476

1.568

1.514

1.559

1.491

1.550

2009

1.548

1.549

1.610

1.591

1.604

1.520

1.615

1.559

1.606

1.535

1.597

2010

1.594

1.595

1.659

1.638

1.652

1.566

1.663

1.606

1.654

1.581

1.645

2011

1.642

1.643

1.708

1.688

1.702

1.613

1.713

1.654

1.704

1.629

1.694

2012

1.691

1.692

1.760

1.738

1.753

1.661

1.765

1.704

1.755

1.678

1.745

2013

1.742

1.743

1.813

1.790

1.805

1.711

1.818

1.755

1.807

1.728

1.797

2014

1.794

1.795

1.867

1.844

1.860

1.763

1.872

1.807

1.862

1.780

1.851

2015

1.848

1.849

1.923

1.899

1.915

1.816

1.928

1.862

1.917

1.833

1.907

2016

1.904

1.905

1.981

1.956

1.973

1.870

1.986

1.917

1.975

1.888

1.964

2017

1.961

1.962

2.040

2.015

2.032

1.926

2.046

1.975

2.034

1.945

2.023

2018

2.020

2.021

2.101

2.076

2.093

1.984

2.107

2.034

2.095

2.003

2.084

2019

2.080

2.081

2.164

2.138

2.156

2.043

2.170

2.095

2.158

2.063

2.146

2020

2.143

2.144

2.229

2.202

2.221

2.105

2.235

2.158

2.223

2.125

2.211

2021

2.207

2.208

2.296

2.268

2.287

2.168

2.302

2.223

2.290

2.189

2.277

2022

2.273

2.274

2.365

2.336

2.356

2.233

2.371

2.290

2.358

2.255

2.345

2023

2.341

2.343

2.436

2.406

2.426

2.300

2.443

2.358

2.429

2.322

2.416

2024

2.412

2.413

2.509

2.478

2.499

2.369

2.516

2.429

2.502

2.392

2.488

2025

2.484

2.485

2.584

2.553

2.574

2.440

2.591

2.502

2.577

2.464

2.563

NOTE: 'SPECIAL' APPROPRIATIONS REFER TO PROGRAMS CLASSIFIED AS SECRET.
TABLE USE:
WEIGHTED INDICES ARE USED TO CONVERT CONSTANT DOLLARS TO THEN-YEAR DOLLARS, AND VICE VERSA.
USE RAW INDICES TO CONVERT CONSTANT DOLLARS IN ONE YEAR TO CONSTANT DOLLARS IN ANOTHER YEAR.
WEIGHTED INDICES FOR EACH APPROPRIATION ARE BASED ON OUTLAY RATES FOR TOA EXCLUDING PAY AND
POL AND SHOULD BE USED ACCORDINGLY. FOR PAY AND POL, USE RAW INDICES.

RFP ANNEX G-2

Baseline Funding Profile:

Projected For EELV Engineering & Manufacturing Development

The following profile represents the programmed funding for the EELV EMD module between Fiscal Years 1998 and 2001. The profile does not include the funds budgeted and programmed for the LCCV or Pre-EMD modules. It does, however, reflect the balance of funding projected against the $2 billion EELV Development Program ceiling beyond Fiscal Year 2001. (Note: The profile excludes funding for all non-contract costs funded by the Government program office, e.g., program office program management, program office support.)

Programmed/Projected EMD Module Funding
(Then-Year $ Millions)

FY98


FY99


FY00


FY01

To

Complete

Baseline Funding Profile

$30

$160

$97

$100

$1,233