Executive SummaryAssuring the future affordability of the Department of Defense's (DOD) portfolio of acquisition programs has been an enduring goal that has rarely been achieved. The consequences of failure are cancelling or curtailing programs that turn out to be unaffordable, with attendant waste. This research is a sequel to previous research by the Institute for Defense Analyses (IDA) on the affordability of defense acquisition programs. 1 The previous research focused on the context and theory of assessing affordability. The conclusions and recommendations of the previous publications are re-enforced by the current research, which focuses on two areas: (1) what can be learned from historical efforts to control the affordability of DOD programs, and (2) how affordability constraints for sustainment costs can best be implemented.The Better Buying Power (BBP) initiatives 2 mandate "affordability as a requirement" by setting affordability targets for both investment and sustainment, or operating and support (O&S), costs to be considered equivalent to key performance parameters.3 Historical Efforts to Control AffordabilityTwo previous acquisition initiatives bear sufficient similarities to the current affordability initiatives to provide meaningful insights. They are the Design to Cost (DTC) efforts of the early 1970 to early 1992 period and the Cost as an Independent Variable (CAIV) initiatives in 1996-2002.The research team reviewed the major DOD issuances that were in force for both the DTC and CAIV eras to identify provisions that were similar to current affordability policy. This review revealed a great deal of similarity, as well as some key differences, between both DTC and CAIV and current policy. The most significant difference is that in some of their manifestations both DTC and CAIV stressed aggressive efforts to reduce costs (focused on investment), and thus were more similar to the should-cost initiative of BBP. Those provisos The BBP was institutionalized with the issuance of Interim DOD Instruction (DODI) 5000.02, "Operation of the Defense Acquisition System," 25 November 2013.iii were based on the questionable premise that commercial developments were far more successful in driving unnecessary costs out of products in development than was DOD.DTC was "on the books" for about twenty years; however, by the late 1980s it had fallen into disuse. Nonetheless, according to IDA research from the late 1980-early 1990 period, some thirty-four DOD acquisition programs recorded DTC goals in their Selected Acquisition Reports (SAR) between 1971 and 1990 while forty-seven programs of the same era did not. The previous IDA research found that programs using DTC had significantly higher cost growth than those that didn't, as shown in the following The start dates of non-DTC programs were generally earlier than the start dates of DTC programs (median start dates: 1970 vs. 1976). Starting in the late 1970s, numerous changes occurred in acquisition policies and program management practices, so it cannot be concl...
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