This is just an Excerpt from a larger document, click here to view the entire document.Background and Concept
As defense budgets have shrunk, DoD and service leaders have doubled their efforts to find more effective means of acquiring modern weapons at an affordable cost and in less time. Under Acquistion Reform, their efforts have resulted in standardization reform, use of commercial off-the-shelf (COTS) equipment, and the Single Process Inititative, to name a few. Making cost a truly independent variable in the acquisition process is another important part of their efforts. An essential part of the CAIV concept is a strong user role in setting and adjusting program goals throughout the acquisition process. This user role is especially important in making trades between cost and performance. Such trades are not new. What is new is the impetus behind them. In the past, they were primarily driven by a single, well-defined and dangerous threat and the technologies available to meet the threat. With the demise of the Soviet Union, the United States faces increasingly asymmetrical threats involving terrorism, rogue nations, and weapons of mass destruction in the hands of third-world countries. Coalition warfare has become a more frequent and probable mode of operation. And we must still be able to unilaterally fight conventional enemies with conventional weapons while maintaining a still-sizable nuclear deterrent.
At the same time that the threat has changed, funding for defense has dropped markedly. CAIV is just a part of the overall strategy for acquiring affordable systems needed to counter the new threats. Achieving the goal of making cost an independent variable in acquisition requires the DoD and military services to take the following actions:
Set realistic but aggressive cost objectives early in each acquistion program
Manage risks to achieve cost, schedule, and performance objectives
Devise appropriate metrics for tracking progress in setting and achieving cost objectives
Motivate government and industry managers to achieve program objectives
Develop incentives for reducing the operating and support costs for fielded systems
