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BAE Systems AustraliaTracey ClavellHead of Estimating and Pricing – CorporateDefence Cost Estimating Conference Adelaide July 2011
1DCEC July 2011 Commercial in Confidence
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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
Commercial in Confidence 2
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End to End Estimating at BAE Systems Australia
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Cradle to Grave Estimating
Commercial in Confidence 4
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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DCEC July 2011 5
Estimating Techniques
Commercial in Confidence
• 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
DCEC July 2011 Commercial in Confidence
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True Planning – Top Down Parametric Estimating
Commercial in ConfidenceDCEC July 2011
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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
8DCEC July 2011 Commercial in Confidence
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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
Commercial in Confidence 9DCEC July 2011
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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
Commercial in ConfidenceDCEC July 2011
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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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