Enabling CAIV through Design, Modularity, and Program Management

Many naval ship acquisition programs have not been able to effectively implement cost as an independent variable (CAIV). With a CAIV approach, operational requirements provided by the customer are given in terms of threshold and objective values. The range between these two values provides the program manager with trade-space to match the available funds with the capabilities that can be bought for that amount-the total program cost remains a constant. In practice though, much of the final cost of an acquisition program is fixed early in the design process through basic design decisions on architecture and the allocation of operational requirements and derived requirements to systems. Unfortunately, while much of the cost is determined early in the design process, estimating that cost to any degree of certainty is nearly impossible. As the costs of the program are better understood, the remaining design flexibility to adjust to increasing costs may not be sufficient to enable the program manager time to take corrective action when the cost estimates indicate a possible problem. This paper describes the techniques, including the use of modularity, cost contingencies, and set-based design, to provide the program manager with sufficient flexibility to implement CAIV. The views expressed in this paper are those of the author and are not necessarily official policy of the US Navy or any other organization. The intent of this paper is to foster dialogue to gain a better understanding of how to develop an acquisition strategy and systems engineering strategy to enable CAIV.