Mixed Deck — All ACAP Topics Flashcards

What is a 'data call' in Army cost analysis?

Answer: A formal request sent to program offices or contractors to collect specific cost and technical data needed for an estimate

A data call is a structured request that specifies exactly what information is needed, in what format, and by what date, ensuring consistent and complete data collection.

What discount rate does OMB Circular A-94 prescribe for most federal economic analyses of programs involving real costs and benefits?

Answer: 7% real discount rate

OMB Circular A-94 specifies a 7% real discount rate as the base case for cost-benefit analysis of federal investments, reflecting the opportunity cost of capital in the private sector.

What is the purpose of a 'cost model validation' in Army cost analysis?

Answer: To verify that the cost model produces accurate results by testing it against known historical data and comparing its outputs to actuals

Validation checks whether the model's predictions match actual historical outcomes, providing confidence that it will produce reliable estimates for new programs.

What is the Estimate to Complete (ETC) in EVM, and how does it relate to EAC?

Answer: ETC is the expected cost to finish remaining work; EAC = AC + ETC

ETC is the expected cost to complete all remaining work; adding actual costs to date (AC) yields the Estimate at Completion (EAC).

What is 'depreciation' in the context of Army economic analysis, and is it typically included in DoD life cycle cost estimates?

Answer: Depreciation is the reduction in asset value over time; it is generally NOT included in DoD LCC estimates because the focus is on cash outlays, not accounting entries

DoD cost estimates focus on budget authority and outlays (cash costs) rather than accounting depreciation, which is an accrual concept not relevant to budget planning.

What is the key difference between 'then-year' dollars and 'base-year' dollars in Army cost data management?

Answer: Then-year dollars include the effects of inflation to the year costs will actually be incurred; base-year dollars remove inflation to a fixed reference year

Converting between then-year and base-year requires applying inflation indices; base-year dollars enable comparison across programs while then-year dollars are needed for budget submissions.

What is 'cost realism analysis' and when is it performed during source selection?

Answer: An assessment of whether proposed costs are realistic for the work, performed on cost-reimbursement proposals to determine the probable cost of contract performance

Cost realism is mandatory on cost-type solicitations; the government adjusts unrealistically low proposed costs to probable cost for evaluation purposes to avoid awarding to a contractor that cannot perform for the proposed amount.

In DoD cost risk analysis, what is the 'most likely cost' (MLC)?

Answer: The mode of the cost probability distribution

The most likely cost is the modal value—the peak of the probability density function—representing the single most probable cost outcome.

What is 'Operations and Support (O&S) cost' in Army life cycle costing?

Answer: All costs incurred after fielding to operate, maintain, sustain, and support the system throughout its service life

O&S costs typically represent the largest portion of LCC (often 60–80%) and include personnel, fuel, maintenance, repairs, and other sustainment activities throughout the system's operational life.

What is the 'Army Cost Position (ACP)' and how does it relate to the PLCCE?

Answer: The ACP is the Army's official cost position for a program, typically derived from the ACEA's independent estimate and used as the basis for budget submissions

The Army Cost Position represents the Army's official view of expected costs for budget and planning purposes, and is developed independently to provide objective oversight of program office estimates.

What is the difference between 'obligations' and 'outlays' in Army program budget management?

Answer: Obligations are commitments to spend (e.g., signed contracts); outlays are actual cash disbursements made to contractors

An obligation occurs when the government legally commits funds (e.g., by awarding a contract); an outlay occurs when those funds are actually paid out, often in a later fiscal year.

Which Army organization is responsible for providing independent cost estimates (ICEs) for major Army programs?

Answer: Army Cost and Economic Analysis Center (ACEA)

ACEA (formerly SCEA/ACAA) produces independent cost estimates for Army programs, providing an objective check on program office and contractor estimates.

What is the concept of 'sunk cost' and how should it affect Army acquisition decisions?

Answer: Sunk costs are past expenditures that cannot be recovered; they should NOT influence future investment decisions, which should be based only on future costs and benefits

Economic rationality requires that sunk costs be ignored in forward-looking decisions; only incremental future costs and benefits should determine whether to continue or terminate a program.

Which of the following is an antonym for "Benevolent"

Answer: Malevolent

"Benevolent" means showing kindness or goodwill. "Malevolent" means having or showing a wish to do harm to others, making it the antonym.

Operational imperatives and principal categories of risk

Answer: CDM helps CDRs balance the dynamic relationship between

The CDM's core function is to help commanders navigate the tension between operational imperatives (mission accomplishment) and the principal categories of risk (collateral damage). It is a decision-support framework for balancing these two competing considerations, not merely a list of contributing factors, a support tool for a single function, or a level-specific planning trigger.

What is 'multiyear procurement (MYP)' authority and how does it affect Army cost estimates?

Answer: MYP allows the Army to contract for multiple years of production in a single contract, enabling contractor investments that reduce unit cost; estimates must reflect learning curve and economic order quantity savings

MYP contracts provide contractor stability that enables investments in tooling and labor efficiency, and cost estimates must reflect the resulting unit cost reductions compared to annual contracting.

What is a 'risk register' and how does it relate to cost risk analysis?

Answer: A documented list of identified risks with their likelihood, impact, and mitigation strategies used to inform cost uncertainty ranges

The risk register captures identified program risks, and cost analysts use it to set the uncertainty ranges and correlation assumptions in the cost risk model.

The TE90 from either the Observer Adjusted (OA) or Predicted (P) method of engagement at less than 1/2 maximum range to target for each weapon system, shell, and fuze combination plus the WCER

Answer: Circular Error of Probability (CEP)

CEP (Circular Error of Probability) is calculated by combining the TE90 delivery error from the OA or Predicted method with the WCER to define the probability zone around the target. The 3A, 3B, and 3C CER Reference Tables are reference inputs that provide individual and combined warhead data used in the calculation — they are lookup tools, not the probability measure itself.

What is 'program uncertainty' as distinguished from 'estimating uncertainty' in cost risk analysis?

Answer: Program uncertainty stems from unknown future events; estimating uncertainty stems from imprecision in the cost model itself

Program uncertainty reflects future events (requirements changes, technology immaturity) while estimating uncertainty reflects the analyst's limited knowledge of the true cost relationship.

What is a 'bottoms-up cost estimate' and what are its advantages?

Answer: An estimate built by summing detailed costs for every component, task, and resource; it is highly detailed and can be directly tied to the work breakdown structure

Bottoms-up estimates offer maximum traceability and granularity but require mature design data; they are often used to cross-check parametric estimates at later program stages.