Embedding Affordability Assessment in the Analysis of Alternatives in Defense Modernization Projects

Keywords:

defense acquisition, defense resource program management, de­fense capabilities, Economic Evaluation of Alternatives, EEoA, financial scenarios, life cycle cost., op­erational effectiveness

Abstract:

The significant amount of financial resources, spent on modernizing the armed forces, the importance of acquired defense capabilities for implementation of defense missions and tasks, the limited amount of money for investments in defense are among the arguments supporting the implementation of effective and efficient methods for economic analysis in assessing acquisition projects. The application of new methods for economic analysis is a part of the process of innovation intended to give competitive advantages to strategic management in defense. The Economic Evaluation of Alternatives (EEoA) is a tool of defense resource management that focuses on the operational effectiveness and life cycle cost of alternatives within a set of scenarios representing budget limitations. The application of EEoA allows experts and decision-makers to create appropriate structures of any analysis of al­ternatives for acquisition projects in defense in a way that guarantees the achieve­ment of desired goals.