SMC's Cost Centralization Team earns high honors
By 1st Lt Blake Moorhead, SMC/FM
/ Published April 01, 2016
LOS ANGELES AIR FORCE BASE - EL SEGUNDO, Calif. -- A team from the Space and Missile Systems Center's Financial Management and Comptroller Directorate was recently recognized for saving over $76 million in budgeted Air Force funding through their cost centralization initiatives.
SMC/FM's Cost Centralization Team earned a Special Acts and Services Award as part of the fiscal year 2015 Air Force Financial Management and Comptroller awards program.
This award is given annually to Air Force financial management and comptroller organizations performing a special act or service. The team's achievement was the centralization of a consistent and efficient method of cost estimating. This method streamlined SMC's cost estimating process by eliminating the number of redundant estimates to deliver a single, high-quality, joint estimate to Lt. Gen. Samuel Greaves, SMC commander and Air Force program executive officer for space.
One method the team used to improve the quality of estimates was establishing "Murder Boards" where cost analysis subject matter experts from both the FM Directorate and the program offices develop the best and most defendable estimate possible. This process often resulted in the delivery of primary methodologies as well as crosschecks, and it ensured consistent implementation of rates and policies across SMC's space portfolio. This enhancement and others allowed the team to more than double its delivery of estimates from the previous year without additional manpower.
SMC/FM has been on the cutting edge of center-wide should-cost estimate development since its inception, and the Cost Centralization Team continued to advance should-cost initiatives. SMC was the first to develop a standardized should-cost estimating process based on program life cycle phase. The team also achieved 100 percent accountability with over $6 billion in initiatives identified. These significant should-cost savings allowed reinvestment of dollars into other critical SMC, Air Force Space Command and Air Force programs.
Centralizing processes and tools in Earned Value Management were other areas the team focused on. Previous EVM was a cumbersome and non-standardized process that resulted in inconsistent data formats and sources. SMC/FM's Cost Centralization Team worked closely and diligently with the program offices and streamlined several EVM processes, including auto-importing 13 years of contractor data files. This action alone saved over 1,000 hours of manual labor.
The team also trimmed additional steps from laborious processes in calculating earned value in SMC programs such as the Global Positioning System and the Space Based Infrared System, garnering the Air Force $10 million in annual savings to use towards other programs and provided lessons learned to other EVM teams throughout the Department of Defense.
Another achievement of the team is the work they have done with risk management on Air Force space contracts. Based on close and collaborative efforts with program office technical experts and The Aerospace Corporation personnel, the team created a risk management tool that used a risk assessment methodology. This tool helped them conclude the Air Force could save over $66 million in their future budgets by reducing risk exposure on certain contracts.
"Cost centralization is about outcomes," stated Col. James Bell, SMC's Financial Management and Comptroller director. "The goal is to standardize processes and methodologies across dozens of SMC programs in five states and provide quality and consistent cost estimates to General Greaves, as Air Force program executive officer for space, to make the best decisions possible."
Bell will accept the Special Acts and Services Award in June at the American Society of Military Comptrollers National Professional Development Institute in Orlando, Florida.