Homeland Security Watch

News and analysis of critical issues in homeland security

March 20, 2012

Worth Another Look: The application of cost management and life cycle cost theory to homeland security national priorities

Filed under: Budgets and Spending,Preparedness and Response — by Christopher Bellavita on March 20, 2012

I have no idea how many articles, reports, books, opinion pieces, news stories, journal articles, videos, tweets, or other data and information products have been generated during homeland security’s first decade.

Whatever the number, topic or quality, they represent homeland security’s literature.

As a part of my day job, I’m interested in learning what we know about homeland security, and what we don’t know about it that we should know.

Starting a year or so ago, I asked friends and colleagues to tell me about interesting reading and related materials they believe are worth a second look. Thanks to their efforts, I’ve gathered a collection of about 100 brief reviews of items worth another look. And by brief, I mean less than 500 words.

One day I hope to gather the reviews under a single cover (or whatever the eEquivalent of “cover” is) and make them available to people who care about homeland security.

Until (and if) that happens, I plan to post a few of them occasionally on this blog.

———————

Arnold’s “being sent to the minors” post reminded me of the following article, suggested by Robert Giorgio, the Cherry Hill, New Jersey, fire chief.

The article first appeared in May 2009.  Some of the context and language has been overcome by events.  But Robert and I agree the life cycle cost idea continues to have merit — probably even more than it did 3 long years ago.

———————

The Application of Cost Management and Life Cycle Cost Theory to Homeland Security National Priorities.

By Robert Hall and Erica Dusenberry Dimitrov

The homeland security enterprise remains unable to identify the total costs to acquire and sustain specific homeland security target capabilities or national priorities over fixed periods of time. This problem has persisted since the start of federally supported DHS grant funded programs.

Homeland security officials realize that initial DHS investments did not consider the cost of wear from use, maintenance expenditures, rehabilitation costs, and replacement funding streams. Many local governments also neglected sustainment costs in their homeland security fiscal planning.

Once the excitement of a new capability has worn off, sustainment issues emerge.  The costs of maintaining new capabilities have to be compared with other core expenditures. Knowing the full cost of a capability provides decision makers and analysts with a more accurate fiscal picture as they debate local policy choices.

Hall and Dimitrov do more than agree it is critically important to determine the costs associated with achieving and sustaining target levels of capability. They suggest how to do it.

They recommend using life cycle cost theory (LCC), a methodology for assessing the total cost of owning an asset. LCC is intended to aid decision makers understand the full costs of obtaining and sustaining preparedness capabilities.

LCC helps quantify the costs of the people, planning, organization, equipment, training, and exercise that make up a capability.

The Government Accountability Office supports using LCC to determine what agencies and jurisdictions can afford, to prepare coordinated spending plans, and to develop lifecycle cost practices.

LCC can help local, state, and federal officials forecast annual support and replacement costs for homeland security programs. LCC can also generate data necessary to monitor the cost drivers that waste limited investment funds. The authors claim adopting LCC will assist in maturing cost management practices and help to avoid what they term unprofitable pitfalls.

To illustrate their claim, Hall and Dimitrov apply the LCC methodology to the Explosive Device Response Operations (EDRO) target capability.

The authors conclude the article by identifying next steps needed to develop and apply LCC methods to national preparedness. These actions include:

  1. Focusing on capabilities aligned to the national priorities in the National Preparedness Guidelines.
  2. Conducting a national-level LCC analysis for each national priority capability.
  3. Creating and sharing prototype tools with jurisdictions to facilitate use of this methodology.
  4. Creating a central Web-enabled database to share cost models among jurisdictions.
  5. Incorporating LCC tools into future grant management systems for use by state and local jurisdictions.

The article is three years old.  I wonder what, if any, progress has been made employing LCC or something close to it to homeland security.  If limited progress, why?  If something like this has spread within the homeland security enterprise, I wonder what effect it’s had.

 

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5 Comments »

Comment by William R. Cumming

March 20, 2012 @ 9:15 am

And to verify even staffing capability for 24/7/365 ops is very difficult.

FEMA and DHS are not currently staffed for prolonged crisis operations. Expertise often one or two personnel thick.

Comment by Tim Beres

March 20, 2012 @ 1:33 pm

Several capability life cycle cost models developed by Rob and others at CNA are available for free at http://www.cna.org

Comment by Christopher Bellavita

March 20, 2012 @ 1:45 pm

Thanks, Tim. I was only able to locate http://www.cna.org/research/2003/life-cycle-costs-selected-uniformed-health. If you get the chance, can you point me to any other links at CNA?

Comment by Tim Beres

March 22, 2012 @ 3:09 pm

Chirs

Check out the following URL. We have developed some tools that will calculate life cycle costs for certain capabilities. http://www.cna.org/solution-centers/cnas-institute-public-research/safety-security/capability. If the URL doesn’t work go to CNA.org, Safety and Security Center, capability calculators.

Comment by bellavita

March 23, 2012 @ 3:47 pm

Thanks for taking the tie to post the link, Tim. It worked.

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