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A Key Decision-Making Tool: Cost Benefit Analysis
In today's resource-constrained environment, the Army must exercise wise stewardship of every dollar it manages. A key element in that stewardship is to develop and use sound CBA practices throughout all requirement/resourcing processes. For every proposed program, initiative or decision point that is presented to decision makers, it is important to provide an accurate and complete picture of both the costs to be incurred and the benefits to be derived.
The Senior Leaders of the Department of the Army have directed that any decisions involving Army resources be supported by a CBA. To support this objective, the Office of the Assistant Secretary of the Army (Financial Management & Comptroller) has developed the Army Cost Management (ACM) Portal. The Portal provides information on a wide range of requirements, issues, tasks, and problems that require a deliberate analysis to arrive at the optimum course of action.
Our goal is to make this Portal and the CBA process as clear and user-friendly as possible. Comments and questions are encouraged and should be submitted by clicking here to email the CPP help desk (email@example.com).
What is Cost Benefit Analysis (CBA)?
CBA is a structured methodology for forecasting and comparing the anticipated costs and benefits of alternative courses of action in order to identify the optimum solution for achieving a stated goal or objective. The goal is to produce a strong value proposition-a clear statement that the benefits more than justify the costs, risks, and billpayers.
CBA Workflow Tool
CBAs for HQDA review must be submitted and tracked using the CBA Workflow Tool. The Tool provides many benefits including:
Army, DoD and Federal Costing Tools
To aid in building CBAs, the Army, DoD and other organizations have developed a suite of costing tools and information including Inflation Indices, Reimbursable Rates, AMCOS, CHESS, FORCES, FED LOG, JIAT, and JTR. Click on the option Cost Estimating Tools in the left menu Cost Benefit Analysis Tools to access these tools.
A CBA defines a solution aimed at achieving specific Army objectives by quantifying the potential financial impacts and other business benefits such as savings, cost avoidance, revenue enhancements or performance improvements.
You have taken the first step in understanding CBAs by accessing this Web site. Explore the links in the left menu which provide information on Army CBA processes, training, documents, and FAQs. If you have additional questions, please contact us at the CBA mailbox: firstname.lastname@example.org
The DASA-CE CBA guide contains detailed information about building a CBA. Click on the "Documents" tab to access the U.S. Army CBA Guide V3.3.pdf at the bottom of the Directives and Guidance documents window.
For more information on how to prepare and present your CBA, click on the "Documents" tab then scroll down to the CBA Enablers section. Here you will find documents on briefing formats, spreadsheet design, process mapping, costing and other valuable CBA guidance.
Purpose and Objectives:
This new 4-Day CBA Training Course provides rigorous, analytical instruction, opportunities for hands-on application in performing Cost-Benefit Analyses, and one-on-one evaluation of work produced. The course is recommended for personnel with direct exposure to conducting and applying CBA to existing requirements and requirements generation:
Class Schedule for a 4-Day Course
Fiscal Year 2023 CBA 4-Day Course Locations and Dates are being reviewed. Upon Approval, CBA 4-Day Course Locations and Dates will be posted here.
Program of Instruction (POI) for CBA 4-Day Course - (CAC Required)
Basic Excel Primer
Case 1 Mar 2016
Case 2 v3 2014 Army Transformation CBA 4-Day Course
Case 3 Army Medium Generators
Case 3 Briefing template
Case 3 Medium Generator Cost Model
CBA Math Self-Assessment 20160706
Exercises and Homework
Master Schedule ACBA
Printable version of the lecture slides
The 4-Hour CBA course provides an overview for Army analysts who prepare and review CBAs, and decision makers who use CBAs to make resource-informed decisions.
If you want to attend the 4-Hour training class, click here to submit a request (please put CPP as the application).
00 Read Me - How to Use the CBA Tng Files 20121129
01 CBA Training Brief 20121129
02 APS PE Case Study 20111116
03 APS PE Questions 20111116
04 APS PE Answers 20111116
05 APS PE Back-Up Documentation 20111116
06 APS Narrative CBA 20111116
07 APS Briefing 20111116
08 CBA Training Survey 2010-04-12
09 Div of Labor - Two Briefers 20121129
A. In order to enable Army senior leaders to make resource informed decisions, the VCSA and USA issued a memorandum to the principal officials in HQDA directing unfunded requirements and new program proposals submitted to the Army Senior Leadership to be accompanied by a CBA.
The APGM requires CBAs in support of the program objective memorandum and budget estimates submission development.
Since then, several Army commands and service commands have issued guidance to employ CBAs to accompany proposals at their respective levels.
The CBA is a tool to help leaders make decisions by providing clear choices that carefully weigh costs, tradeoffs, and benefits.
A. CBAs are needed to support a decision for additional resources or a shift in resources. If the CBA will need to be reviewed, it is a good idea to plan time for its review in the decision making process. Currently, some processes such as the Army Cost Position (ACP) factor in time for CBA review.
A. Every organization in the Army can be asked for a CBA. Decision making bodies will ask for a CBA in order to make informed decisions and have a full range of options and associated consequences of those options.
A. The well formulated CBA should include a clear problem and real alternatives that address the problem. Every CBA should also include well documented backup material that define all assumptions, facts, constraints, calculations, and methodology on how COAs, tradeoffs, and costs were devised. The CBA guidebook provides a step by step process to assemble a CBA as well as a checklist.
A. The CBARB is the reviewing body that accepts CBAs and validates that all necessary components to include COAs, Benefits, and Tradeoffs are included. The CBARB convenes to review and validate a CBA when a CBA is submitted for review. The CBARB will provide recommendations to the DASA-CE, who will provide feedback to the decision making authority.
A. CBAs coming to the CBA mailbox need accompanying details in addition to the powerpoint slides to include analysis spreadsheets for cost estimates, assumptions, and details for tradeoffs and benefits. The CBARB will not be able to review and validate a CBA that only includes the summary presentation slides for senior level review. The CBA checklist provides a short summary of documents to check for prior to submission.
A. Assembling a CBA could take anywhere from days to months to complete. Even prior to the advent of the CBA, organizations usually performed all the work necessary to present a CBA, but the process and methodology in developing the requirement and recommendation(s) were not always captured in the presentation.
The CBA presentation template is meant to provide a briefing template that captures the elements required to make a resource informed decision. It attempts to summarize the result of any research or analysis that substantiates the CBA. The backup material containing the research and analysis needs to be well documented or explained in detail to the CBARB.
A. Depending on the complexity, the CBARB needs approximately 3-10 working days once it receives a complete CBA. However, the CBARB may require additional time to get clarification on detailed data, analysis, assumptions which will extend the number of days it takes for CBA review. In cases where submitters have been working with CE on cost methodology and the benefits and tradeoffs are clear, the CBARB can review a submission in less than a week.
Some recent submissions have taken multiple weeks to review due to lack of details, no supporting documentation, poor COA development, or inability to locate the data analyst to answer questions.
A. Yes, the policy can be applied to acquisition programs. However, the intent and requirements of the CBA may be met by other analysis (AOA, PBL, Business case...). CBAs support the VCSA and USA in prioritizing Army funding, even for acquisition programs that fall under the ASA(ALT).
Currently, large acquisition programs (ACAT I & II) currently meet the CBA/CBARB requirements. The acquisition process mandates rigorous vetting of assumptions, costs and benefits during the AoA approval process, of which the DASA CE is a part of as an AROC member. Costs are also included in the AoA and validated in an Army Cost position. Requirements changes not covered by an AoA should be reviewed by configuration steering board (CSB).
As for life cycle O&S costs, there are PBL estimates that provide courses of actions, tradeoffs, and associated costs.
Accompanying JCIDS documents existing positions suffice and meet the intent of the CBA guidance as per the DASA-CE.
For smaller acquisition programs (ACAT III) that do not have costs and requirements validated in the same manner, shortfalls that demand a UFR, or changes in the program that do not demand a revalidation of costs and requirements in the acquisition/JCIDS process, then a CBA is required.
ACAT I and ACAT II programs could require a CBA, but if the alternatives/COAs are covered by the AOA, then a new CBA isn't required.
In addition, the submitter of the CBA needs to prepare it. While DASA-CE is available to assist, there is not an entity that will put this package together. The submitter or sponsor will need to coordinate with the PEO or PM office to provide the backup data as well as the points of contact for cost estimates and analysis details.
A. In developing the Army Program Objective Memorandum (POM), a CBA is required for any proposed new requirement or increase in funding that totals $10 million in any one year or $50 million over the period FY23-27. In addition, a Program Evaluation Group (PEG) may require a CBA below these dollar thresholds if it determines that the proposal is sufficiently important.
A. CBA resources to include the guidebook, templates, & examples are posted under the "Documents" tab on this page.
In addition, users can download inflation indices and discount rates from the FM&C homepage (see Documents link on this page).
DASA CE members regularly provide assistance in identifying the proper methodology and tools for cost estimating.
Questions or requests for assistance can be sent via email by clicking here to email the CPP help desk (email@example.com).
A. DASA-CE regularly conducts 4-hour CBA training to familiarize people with the basic elements of a CBA and resources available for the cost estimating portion of the CBA. Please see training contact under the "Contact Us" tab at the top of this page.
The Cost Management Certificate course is a 4-week class. For details click the link "Training".