Total Value Concepts in the Contract Definition Phase

For large military R&D Projects, Contract Definition type contracts are meeting the cost-effectiveness challenge by an intensive study of the total value considerations in a project before it starts. This has extended the application of total value concepts throughout all project activities and broadened their scope. Total value concepts are discussed and applied to various aspects of system effectiveness. The effects of configuration, reliability, and system availability upon overall costs are considered, and cost vs. performance optimization curves are shown. Practical measures of service life are calculated. Break-even curves relating acquisition and operational costs are shown. A decision matrix method for assessing system value is included. A case study graphically showing the effects of value considerations on a typical radar antenna tower is contained in the paper.