https://armypubs.army.mil/epubs/DR_pubs/DR_a/pdf/web/ARN15922_AR11-18_FINAL.pdf
UNCLASSIFIED
Army Regulation 11–18
Army Programs
The Cost and
Economic
Analysis
Program
Headquarters
Department of the Army
Washington, DC
29 August 2019
SUMMARY of CHANGE
AR 11– 18
The Cost and Economic Analysis Program
This major revision, dated 29 August 2019—
o Adds recordkeeping requirements (para 1– 5).
o Incorporates Army Directive 2017– 34, Acquisition Reform Initiative #7: Improving Cost Estimation and Resourcing,
dated 15 November 2017 (paras 2–1f, 2–2c, and 2–3c).
o Updates references (app A).
o Updates abbreviations (glossary).
*This regulation supersedes AR 11-18, dated 19 August 2014.
AR 11–18 • 29 August 2019
UNCLASSIFIED i
Headquarters
Department of the Army
Washington, DC
*Army Regulation 11–18
29 August 2019 Effective 29 September 2019
Army Programs
The Cost and Economic Analysis Program
History. This publication is a major revi-
sion.
Summary. This regulation establishes
responsibilities and policy for the Army’s
Cost and Economic Analysis Program.
Applicability. This regulation applies to
the Regular Army, the Army National
Guard/Army National Guard of the United
States, and the U.S. Army Reserve. It also
applies to all Army activities performing
cost or economic analyses.
Proponent and exception authority.
The proponent of this regulation is the As-
sistant Secretary of the Army (Financial
Management and Comptroller). The propo-
nent has the authority to approve exceptions
or waivers to this regulation that are con-
sistent with controlling law and regulation.
The proponent may delegate this approval
authority, in writing, to a division chief
within the proponent agency or its direct re-
porting unit or field operating agency in the
grade of colonel or the civilian equivalent.
Activities may request a waiver to this reg-
ulation by providing a justification that in-
cludes a full analysis of the expected bene-
fits and must include a formal review by the
activity’s senior legal officer. All waiver re-
quests will be endorsed by the commander
or senior leader of the requesting activity
and forwarded through their higher head-
quarters to the policy proponent. Refer to
AR 25 – 30 for specific guidance.
Army internal control process. This
regulation contains internal control provi-
sions in accordance with AR 11 –2 and
identifies key internal controls that must be
evaluated (see appendix B).
Supplementation. Supplementation of
this regulation and establishment of com-
mand and local forms are prohibited with-
out prior approval from the Assistant Sec-
retary of the Army (Financial Management
and Comptroller) (SAFM– CE), 109 Army
Pentagon, Washington, DC 22310 – 0109.
Suggested improvements. Users are
invited to send comments and suggested
improvements on DA Form 2028 (Recom-
mended Changes to Publications and Blank
Forms) directly to the Assistant Secretary
of the Army (Financial Management and
Comptroller) (SAFM – CE), 109 Army Pen-
tagon, Washington, DC 22310– 0109.
Distribution. This publication is availa-
ble in electronic media only and is intended
for the Regular Army, the Army National
Guard/Army National Guard of the United
States, and the U.S. Army Reserve.
Contents (Listed by paragraph and page number)
Chapter 1
Introduction, page 1
Purpose • 1– 1, page 1
References and forms • 1– 2, page 1
Explanation of abbreviations and terms • 1– 3, page 1
Responsibilities • 1 – 4, page 1
Records management (recordkeeping) requirements • 1– 5, page 1
Chapter 2
Responsibilities, page 1
Headquarters, Department of the Army principal officials • 2 – 1, page 1
Assistant Secretary of the Army (Financial Management and Comptroller) • 2 – 2, page 2
Commanders of Army commands, Army service component commands, and direct reporting units • 2 – 3, page 2
Program executive officers and program manager • 2 – 4, page 3
Chapter 3
Provisions, page 3
Planning, Programming, Budgeting, and Execution System • 3– 1, page 3
Cost and economic analyses • 3 – 2, page 3
Contents—Continued
ii AR 11–18 • 29 August 2019
Cost-benefit analysis requirements • 3 – 3, page 3
Appendixes
A. References, page 4
B. Internal Control Evaluation, page 6
Glossary
AR 11–18 • 29 August 2019 1
Chapter 1
Introduction
1– 1. Purpose
This regulation establishes policy for the Department of the Army (DA)’s Cost and Economic Analysis Program to support
decision making throughout the Army and assigns responsibility for aspects of the cost and economic analysis program to
appropriate officials. This regulation contains management control provisions and cost-benefit analysis (C– BA) manage-
ment controls.
1– 2. References and forms
See appendix A.
1– 3. Explanation of abbreviations and terms
See glossary.
1– 4. Responsibilities
See chapter 2.
1– 5. Records management (recordkeeping) requirements
The records management requirement for all record numbers, associated forms, and reports required by this regulation are
addressed in the Army Records Retention Schedule-Army (RRS– A). Detailed information for all related record numbers,
forms, and reports are located in ARIMS/RRS– A at https://www.arims.army.mil. If any record numbers, forms, and reports
are not current, addressed, and/or published correctly in ARIMS/RRS– A, see DA Pam 25– 403 for guidance.
Chapter 2
Responsibilities
2– 1. Headquarters, Department of the Army principal officials
HQDA principal officials will—
a. Provide program and cost data, such as system descriptions, requirements, plans, schedules, and funding data (for
example, the cost analysis requirements description (CARD)).
b. Serve as functional proponents for program areas involving economic analysis in decision making, resource alloca-
tion, and support of the Planning, Programming, Budgeting, and Execution System (PPBES).
c. Review cost and economic analysis or other cost comparisons to ensure completeness, suitability, feasibility, and
balance against Army program requirements and objectives.
d. Coordinate cost and economic analysis matters with Assistant Secretary of the Army (Financial Management and
Comptroller) (ASA (FM&C)) and provide members to the Army cost review board (CRB), study advisory groups, and
other cost and economic analysis groups. Study advisory groups may be established under the provisions of AR 5– 5. Intra-
Army committees may comply with AR 15– 1, including approval by the Secretary of the Army (SECARMY).
e. The following HQDA principal officials will establish procedural guidance for incorporating C–BAs into the deci-
sion-making processes and forums for which they are responsible. This procedural guidance may include dollar thresholds
below which C–BAs are not required.
(1) Chief, Legislative Liaison. Legislative proposals.
(2) Deputy Chief of Staff, G – 3/5/7. The Army Resource and Requirements Board, Army Campaign Plan decision
points, and capability portfolio reviews, concept plans, force design updates stationing analysis, and Equipment Require-
ments Validation Board.
(3) Deputy Chief of Staff, G–8. Develop the Army program objective memorandum.
f. The following HQDA officials will support the CRB process by participating in proposed CARD and Army cost
position (ACP) briefings and providing members to the CRB working group. The CRB process is further described in the
Department of the Army Cost Analysis Manual. CRB members include:
(1) Deputy Assistant Secretary of the Army (Plans, Programs, and Resources).
(2) Deputy Assistant Secretary of the Army (Budget).
(3) Deputy Assistant Secretary of the Army (Environment, Safety, and Occupational Health).
2 AR 11–18 • 29 August 2019
(4) Deputy Chief of Staff (DCS), G– 3/5/7.
(5) DCS, G– 4.
(6) Chief Information Officer/G– 6.
(7) DCS, G– 8, Program Analysis & Evaluation.
(8) DCS, G– 8, Force Development.
(9) Functional Proponent Representative (Information Systems only) will participate and serve in an advisory capacity
to the CRB.
2– 2. Assistant Secretary of the Army (Financial Management and Comptroller)
a. The ASA (FM&C) has the policy making authority to—
(1) Direct the DA Cost and Economic Analysis Program to include establishing the cost and economic policies, meth-
ods, and procedures.
(2) Develop and maintain standard cost and economic analysis systems, cost data collection, models, and databases;
statutory independent cost estimates; and cost factors for installation operations and civilian personnel.
(3) Ensure the use of sound methods for setting cost factors for preparing the program and budget, chairing the Army
CRB and approving the ACP for major acquisition programs, and supervising and providing technical guidance and sup-
port for cost management efforts.
b. The ASA (FM&C) will—
(1) Establish and publish policy and procedures for and oversee the following: all Army cost and economic analysis
activities, to include development, review, and validation of cost C– BA; the cost analysis career field, to include education,
training, professional development, and referral; the program office estimates and/or economic, cost analyses, or compo-
nent cost analysis processes; and estimating manpower.
(2) Approve the ACP, represent the Army in the acquisition process on all cost and economic analysis matters, provide
policy on implementing contractor cost data reporting, and publish manuals that provide frameworks and procedures to
implement DOD and Army policies to include DODD 5000.01, DODI 5000.02, DODI 5000.73, DODI 7041.03, and DOD
5000.04 – M–1.
(3) Implement the Army’s Cost and Economic Analysis Program, and administer the Office of the Secretary of Defense
Cost Assessment and Program Evaluation process for the Army.
(4) Prepare Army component cost analyses and independent cost analyses; develop cost models and tools for Armywide
use, databases, and planning factors; and review selected cost and economic analyses and other cost comparisons.
(5) Publish a cost-estimating calendar, and administer the contractor cost data reporting and the visibility and manage-
ment of operating and support cost program processes.
(6) Manage a cost research program and provide members to study advisory groups, CRBs, and other cost and economic
analysis groups.
(7) Develop, coordinate, and approve the recommended ACP for major weapon and information systems through the
CRB process. The ACP is the Army’s life-cycle cost estimate used to create a cost basis for Army program baselines,
decisions, programming, and budgeting.
c. On behalf of ASA (FM&C), the Deputy Assistant Secretary of the Army (Cost and Economics) (DASA– CE) will—
(1) Chair the CRB.
(2) Review and validate C–BAs submitted under the provisions in this regulation.
(3) Validate rough order of magnitude estimates to support development of the course of action and the Initial Capa-
bility Documents for the Army Requirements Oversight Council (AROC) and Materiel Development Decision Army Sys-
tems Acquisition Review Council (ASARC) decisions.
(4) Conduct sensitivity analysis for acquisition category (ACAT) I and selected ACAT II and III programs or Mid-Tier
acquisition programs, and brief the ACP to the AROC and ASARC at Milestones A, B, and C, and Full-Rate Production
decisions to provide funding options so Army senior leaders can make cost-informed decisions. The Assistant Secretary
of the Army for Acquisition, Logistics, and Technology; ASA (FM&C); and DCS, G– 8 can nominate ACAT II and III
programs for this process in accordance with AR 70 – 1.
(5) Perform Independent Cost Estimates or sufficiency reviews of cost estimates nominated in accordance with AR
70 – 1.
2– 3. Commanders of Army commands, Army service component commands, and direct reporting
units
Commanders of ACOMs, ASCCs, and DRUs will—
a. Incorporate C– BA into the resource decision-making processes within their organizations.
AR 11–18 • 29 August 2019 3
b. Establish and maintain sufficient cost and economic analysis expertise to support acquisition and resource allocation
processes, and review and validate cost and economic analyses and other cost comparisons for currency, reasonableness,
completeness, and compliance with DOD and Army guidance.
c. Implement contractor cost data reporting; collect, analyze, store, and distribute program and cost data; and provide
members to study advisory groups, CRB, and other cost and economic analysis groups.
2– 4. Program executive officers and program manager
PEOs and program managers will—
a. Provide program and cost data (to include a CARD) and contract data (to include cost performance reports), and
provide validated cost and economic analyses and other cost comparisons to support the acquisition and PPBES processes.
b. Conduct in-process reviews to ensure coordination of program requirements and consistency of cost estimating for
the program office estimates, coordinate cost and economic analyses with supporting major command cost analysis activ-
ities for validation, implement contractor cost data reporting, and coordinate cost and economic analysis matters with the
ASA (FM&C).
Chapter 3
Provisions
3– 1. Planning, Programming, Budgeting, and Execution System
The Army is committed to supporting the PPBES and the system acquisition processes within the DOD (see AR 1 – 1). The
keys to an executable PPBES and to properly resource acquisition programs are professionally prepared cost and economic
analyses.
3– 2. Cost and economic analyses
The Army will provide timely and sufficient cost and economic analyses to support the effective allocation and manage-
ment of resources for Army programs, materiel systems, automated information systems, facility acquisitions, installation
services, capital budget investments, production base support, construction projects, forces, and activities.
3– 3. Cost-benefit analysis requirements
a. C– BA is a process used to support a resource-informed decision by analyzing courses of actions to make a value
based proposition recommendation to decision makers. A list of best practices and methods to completing a C– BA can be
found in the U.S. Army Cost Benefit Analysis Guide.
b. At HQDA level, a C– BA is required to support resource-informed decision making in the following situations:
(1) When an unfunded requirement or a new or expanded program proposal is submitted to the SECARMY, Chief of
Staff of the Army, Under Secretary of the Army, or Vice Chief of Staff of the Army.
(2) When a resource decision is to be made in the context of the processes and forums identified in this regulation.
c. Within ACOMs, ASCCs, and DRUs, a C– BA is required to support significant resource decisions. The commanders
of these organizations will determine significance. A general guideline is that a C– BA is appropriate for any decision
involving $10 million or more in any one fiscal year.
4 AR 11–18 • 29 August 2019
Appendix A
References
Section I
Required Publications
DOD publications are available at https://www.esd.whs.mil/dd/.
AR 1– 1
Planning, Programming, Budgeting and Execution (Cited in para 3 –1.)
AR 70 – 1
Army Acquisition Policy (Cited in para 2–2c(4).)
Army Directive 2017– 34
Acquisition Reform Initiative #7: Improving Cost Estimation and Resourcing, dated 15 November 2017 (Cited in summary
of change.)
Department of the Army Cost Analysis Manual
(Available at https://www.asafm.army.mil/offices/ce.) (Cited in para 2–1f.)
DOD 5000.04 –M – 1
Cost and Software Data Reporting (CSDR) Manual (Cited in para 2–2b(2).)
DODD 5000.01
The Defense Acquisition System (Cited in para 2–2b(2).)
DODI 5000.02
Operation of the Defense Acquisition System (Cited in para 2–2b(2).)
DODI 5000.73
Cost Analysis Guidance and Procedures (Cited in para 2–2b(2).)
DODI 7041.03
Economic Analysis for Decision-Making (Cited in para 2–2b(2).)
U.S. Army Cost Benefit Analysis Guide
(Available at https://www.asafm.army.mil/offices/ce/.) (Cited in para 3–3a.)
Section II
Related Publications
A related publication is a source of additional information. The user does not have to read it to understand this publication.
Unless otherwise indicated, DA publications are available on the Army Publishing Directorate website
(https://armypubs.army.mil/).
AR 5 – 5
Army Studies and Analyses
AR 5– 10
Stationing
AR 11– 2
Managers’ Internal Control Program
AR 15– 1
Department of the Army Federal Advisory Committee Management Program
AR 25– 30
The Army Publishing Program
DA Pam 5– 13
Procedures for Army Stationing
DA Pam 25 – 403
Guide to Recordkeeping
AR 11–18 • 29 August 2019 5
Department of the Army Economic Analysis Manual
(Available at https://www.asafm.army.mil/offices/documents.aspx?category=303.)
GAO Cost Estimating and Assessment Guide
(Available at http://www.gao.gov/new.items/d093sp.pdf.)
Joint Agency Cost Schedule Risk and Uncertainty Handbook
(Available at https://www.ncca.navy.mil/tools/csruh/ja_csruh_16sep2014.pdf.)
Section III
Prescribed Forms
This section contains no entries.
Section IV
Referenced Forms
Unless otherwise indicated, DA Forms are available on the Army Publishing Directorate website
(https://armypubs.army.mil/).
DA Form 11– 2
Internal Control Evaluation Certification
DA Form 2028
Recommended Changes to Publications and Blank Forms
6 AR 11–18 • 29 August 2019
Appendix B
Internal Control Evaluation
B– 1. Function
The function covered by this evaluation is the Army Cost and Economic Analysis Program.
B– 2. Purpose
The purpose of this evaluation is to assist PEOs in evaluating the key internal controls listed. It is intended as a guide and
does not cover all controls.
B– 3. Instructions
Answers must be based on the actual testing of key internal controls. Answers that indicate deficiencies must be explained
and the corrective action identified in supporting documentation. These internal controls must be evaluated at least once
every 5 years. Certification that the evaluation has been conducted must be accomplished on DA Form 11 – 2 (Internal
Control Evaluation Certification).
B– 4. Test questions
a. Have the policies and guidelines supporting the execution of the Army Cost and Economic Analysis Program been
established and published?
b. Have the policy, procedures, and process to review and validate C–BAs been established and published?
c. Are manuals, guidebooks, and supporting documents for executing the Army Cost and Economic Analysis Program
current?
d. Have ACPs been fully documented and approved by the ASA (FM&C)?
B– 5. Supersession
This evaluation replaces the evaluation previously published in AR 11 – 18, dated 19 August 2014.
B– 6. Comments
Help make this a better tool for evaluating internal controls. Submit comments to the Assistant Secretary of the Army
(Financial Management and Comptroller) (SAFM– CE), 109 Army Pentagon, Washington, DC 22310 –0109.
AR 11–18 • 29 August 2019 7
Glossary
Section I
Abbreviations
ACAT
acquisition category
ACOM
Army command
ACP
Army cost position
AR
Army regulation
ARIMS
Army Records Information Management System
AROC
Army Requirements Oversight Council
ASA (FM&C)
Assistant Secretary of the Army for Financial Management and Comptroller
ASARC
Army Systems Acquisition Review Council
ASCC
Army service component command
CARD
cost analysis requirements description
C– BA
cost-benefit analysis
CRB
cost review board
DA
Department of the Army
DA Form
Department of the Army form
DA Pam
Department of the Army pamphlet
DCS
Deputy Chief of Staff
DOD
Department of Defense
DODD
Department of Defense directive
DODI
Department of Defense instruction
DRU
direct reporting unit
HQDA
Headquarters, Department of the Army
8 AR 11–18 • 29 August 2019
PEO
program executive officer
PPBES
Planning, Programming, Budgeting, and Execution System
SECARMY
Secretary of the Army
Section II
Terms
Cost analysis
The act of developing, analyzing, and documenting cost estimates through various analytical approaches and techniques.
It is the process of analyzing and estimating incremental and total resources required to support past, present, and future
systems. In its application to future resource requirements, it becomes a step in selection of alternatives by the decision
maker.
Cost–benefit analysis
A structured methodology for estimating and comparing the anticipated costs and benefits of alternative courses of action
in order to identify the optimum solution for achieving a stated goal or objective. A C– BA identifies courses of action for
solving a problem, determines their costs and benefits and, with a sound rationale, identifies the best course of action. The
purpose of a C– BA is to produce a strong value proposition, which is a clear statement that the benefits of a recommended
course of action justify the costs, risks, and bill-payers associated with that course of action. C– BA is a narrowly focused
economic analysis that applies rigorous analytical techniques to complement, but not replace, experience, judgment, and
subject matter expertise.
Economics analysis
A systematic approach to identify, analyze, and compare costs or benefits of alternative courses of action that will achieve
a given set of objectives. This approach is taken to determine the most efficient and effective manner to employ resources.
In the broad sense, the systematic approach called economic analysis applies to new programs, as well as to the analysis
of ongoing actions.
UNCLASSIFIED PIN 000410–000