ACAP Program and Budget Management

Question 1

What is the Planning, Programming, Budgeting, and Execution (PPBE) process and what role does cost analysis play in it?

Accepted Answer

PPBE is the DoD resource allocation process; cost analysis informs each phase by providing estimates that support planning decisions, program justifications, and budget requests

Answer

PPBE is a contractor cost management process; cost analysts review contractor compliance with it

Answer

PPBE is a schedule management system; cost analysis ensures programs stay within schedule constraints

Answer

PPBE is the Army's contract award process; cost estimates determine award fees

Question 2

What is the 'Program Objective Memorandum (POM)' and how is it used in Army budgeting?

Accepted Answer

The POM is the Army's six-year resource plan submitted to OSD, identifying funding requirements for all programs based on cost estimates and priorities

Answer

The POM is a memo documenting a program office's should-cost review results

Answer

The POM is the Army Chief of Staff's annual directive on program priorities

Answer

The POM is a contract vehicle used to obligate multi-year program funds

Question 3

What is an 'Acquisition Program Baseline (APB)' and what cost elements does it establish?

Accepted Answer

The APB establishes threshold and objective cost, schedule, and performance parameters that define a program's success criteria and require reporting if breached

Answer

The APB is the cost estimate prepared at program initiation before Milestone A

Answer

The APB is the baseline used for EVM variance reporting at the contract level

Answer

The APB is the contractor's proposed cost baseline submitted during source selection

Question 4

What does the Nunn-McCurdy Act require when a major defense acquisition program (MDAP) breaches its cost thresholds?

Accepted Answer

The program must be certified to Congress as still essential to national security and that no less costly alternative exists, or it must be terminated

Answer

The program must reduce its scope by 25% to bring costs back within the baseline

Answer

The program must undergo a mandatory should-cost review within 60 days

Answer

The program's MDA must personally approve all future contract awards

Question 5

What is 'Earned Value Management (EVM)' and how does it help Army cost analysts?

Accepted Answer

EVM integrates scope, schedule, and cost to measure program performance and forecast the final cost at completion based on current efficiency rates

Answer

EVM is a contractor payment method tying progress payments to completed milestones

Answer

EVM measures the economic value added by an Army program to the warfighter

Answer

EVM is a budget execution tool tracking obligations against appropriations

Question 6

What is the 'Cost Performance Index (CPI)' in EVM and how is it interpreted?

Accepted Answer

CPI = Earned Value / Actual Cost; a CPI below 1.0 means the program is spending more than planned for the work accomplished

Answer

CPI = Actual Cost / Planned Value; a CPI above 1.0 means the program is ahead of schedule

Answer

CPI = Budget at Completion / Estimate at Completion; it measures overall cost efficiency

Answer

CPI = Schedule Variance / Cost Variance; it integrates both performance dimensions