BAE Systems AustraliaTracey ClavellHead of Estimating and Pricing – CorporateDefence Cost Estimating Conference Adelaide July 2011

1DCEC July 2011 Commercial in Confidence

Quotes from Wikipedia

• Estimation is the calculated approximation of a result which is usable even if input data may be incomplete or uncertain.

• In statistics,• estimation theory and estimator, for topics involving inferences

about probability distributions

• forecasting and prediction, for estimation of yet-to-be observed quantities

• In mathematics, approximation or estimation typically means finding upper or lower bounds of a quantity that cannot readily be computed precisely

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End to End Estimating at BAE Systems Australia

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Cradle to Grave Estimating

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Processes

People & Professionalisation

Tools

Subcontracts / SuppliersCCP &EAC’s

VOPPBC

Pre Contract Post Contract

1st Pass 2nd Pass

DCP

DesignSubcontracts / Suppliers

VOPPBC

FIS

Techniques & Metrics

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Estimating Techniques

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• Top Down Vs Bottom up

• Multiple Methods

• Metrics

• Risk and Uncertainty

• Three Point Estimating

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Parametric

DetailedAnalogy

Parametric

DetailedAnalogous

Little Confidence1 method per bid

More ConfidenceMultiple methods per bid

Multiple methods of Estimating

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True Planning – Top Down Parametric Estimating

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Types of Parametric Estimating

• Should Costs for Subcontracts / Suppliers

• Design for Cost

• Cost as an Independent Variable

• Top Down Validation

• Cost Benefit Analysis

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Benefits of Parametric Estimating

• Supports Bid / No Bid decisions

• Supports Strategic Reform Program

• To validate / challenge Subcontractor quotes

• Supports initial design costing

• Additional validation point for other methods

• Quicker to generate ROMs and Indicative Pricing

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Parametric Journey Thus Far

2005 2006 2007 2008 2009 2011

Maturity

Tool Calibration

DemandHardware trg & Licenses

True Planning plus ICT trg & Licenses

Logistics

Training

& Licences

Evaluation of Software License & trg

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People and Developing Capability

• Standard Position Descriptions

• Developing You Program

• Competency Matrix

• Career Ladder

• External membership and accreditation

• Diversity and Inclusion

• Mentoring and Leadership

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Estimating & Pricing Tools

• True Planning - Parametric Estimating

• Phoenix - Estimating Capture Tool

• Open Plan – Scheduling

• ProPricer – Pricing Tool

• Predict – Risk Collation and Monte Carlo

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Phoenix – Estimating Capture Tool

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Lessons Learned

• DAREO

• Stability & Sensitivity

• Management of the Supply Chain

• Indexation & Cost Principles

• Demonstrate Value for Money

• Performance Based Contracting

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End to End Estimating – Getting the Balance Right

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All Done Any Questions ?

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