Sunday, October 19, 2008

DOD Gets Real with the True Cost of Fuel in 2009

I just got a heads-up from a new friend at the DC Energy Consensus regarding the National Defense Authorization Act for FY2009.  You can read this for yourself in: Section 2925, DOD energy management, SEC. 332. CONSIDERATION OF FUEL LOGISTICS SUPPORT REQUIREMENTS IN PLANNING, REQUIREMENTS DEVELOPMENT, AND ACQUISITION PROCESSES.

But here's the take away: a few days ago President Bush signed the National Defense Authorization Act (NDAA) and this time it included something new and special from a DOD Energy point of view: it included language to force program managers and other leaders to consider the true costs of fuel in all new procurements.  Although you may not believe it, they have never done this before. 

The term of art is the fully-burdened cost of fuel, or FBCF, and it is to become a programmatic Key Performance Parameter (KPP) from this point forward. Actually, you're probably better off going here first: see Chris DiPetto, DUSD Acquisition & Technology, recent Powerpoint on "DOD Energy Demand" and the Fully Burdened Cost of Fuel (FBCF). I liked and took a couple of DiPetto's statements right off the page, including:
  • DoD Planning Processes Undervalue Fuel And Its Delivery Costs and DoD Business Practices and Culture Disincentivize Strategic Investment
  • FBCF is a force planning variable
  • FBCF is an input to requirements and the acquisition process
  • FBCF is a denominator for metrics
  • FBCF is a facilitator for portfolio analysis
  • FBCF is a composite of capability and cost
There's a lot more to say on this, and I'll plan to come back to FBCF 2009 shortly.  In particular, will be looking at how comprehensively and how quickly it's really being implemented.

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