Embedding Affordability Assessment in the Analysis of Alternatives in Defence Modernization Projects

Abstract

The significant amount of financial resources, spent on modernizing the
armed forces, the importance of acquired defense capabilities for implementation of
defense missions and tasks, the limited amount of money for investments in defense
are among the arguments supporting the implementation of effective and efficient
methods for economic analysis in assessing acquisition projects. The application of
new methods for economic analysis is a part of the process of innovation intended
to give competitive advantages to strategic management in defense. The Economic
Evaluation of Alternatives (EEoA) is a tool of defense resource management that
focuses on the operational effectiveness and life cycle cost of alternatives within a
set of scenarios representing budget limitations. The application of EEoA allows
experts and decision-makers to create appropriate structures of any analysis of alternatives
for acquisition projects in defense in a way that guarantees the achievement
of desired goals.