* Written OPNAV cost and feasibility request must be in hand.
* Formal technical design inputs must be available.
* An approved acquisition strategy and shipbuilding schedule must be available.
* A cognizant Program Manager must be involved.
Cost estimates are to be prepared and submitted during each phase of the Planning, Programming and Budgeting system.These estimates are based on program acquisition strategy,technical definition and economic data available at the time of the estimate preparation. Clearly, the confidence and reliability of the estimates improve as the level of technical definition increases.
In the past, acquisition design was divided into four new ship design phases: Feasibility Study Phase, Preliminary Design Phase, Contract Design Phase and Detail Design Phase. For almost all major ship programs, NAVSEA would develop a ship design up to and including Contract Design.
The intent of Contract Design was to provide a ship design that was sufficiently detailed and technically mature that a shipbuilder could use it to develop a cost proposal and ultimately sign a contract to develop the Detail Design and build the ship. Nowadays, NAVSEA only develops rough designs at the concept design level by the NAVSEA 05 division. This allows it to make an analysis of different alternatives that are submitted. If the specifications that the DoD requests are met, then the development of the ship design will be turned over to industry. The latter then performs feasibility, preliminary and contract designs.The NAVSEA ship cost estimate classification system is shown in Table 1. The class "C" estimate is the ultimate goal of the ship cost estimating process. A class C is a commitment to Congress by the Navy that additional funds will not be required (exceptions being escalation factors due to inflation) . The estimate is based on the three-digit SWBS system. The estimate also includes cost for government
furnished material. The Cost Estimating Relationships (CERs) used to calculate the cost estimates are based on:
* an accepted weight estimate using bid information
* current weight estimate when using cost data from the contractor's latest Cost Performance Report (CPR)
* similar ship construction data of the prospective building yard(s) where new designs are being costed.