Academic journal article Homeland Security Affairs

The Application of Cost Management and Life-Cycle Cost Theory to Homeland Security National Priorities

Academic journal article Homeland Security Affairs

The Application of Cost Management and Life-Cycle Cost Theory to Homeland Security National Priorities

Article excerpt

As the nation's homeland security environment develops and evolves, federal, state, tribal, and local partners must continually implement and adapt homeland security programs that address both national and local homeland security priorities, while simultaneously managing the costs and resources necessary to maintain an adequate level of preparedness. Without a flexible, logical, and transparent method of managing homeland security costs and programs, homeland security leaders are faced with a daunting task. This article proposes life-cycle cost (LCC) theory as a method to identify and quantify the costs of achieving and sustaining preparedness capabilities across the nation.

The purpose of this article is threefold. First, it documents a methodology that uses LCC theory to quantify the costs of achieving and sustaining target capabilities to support the National Preparedness System. Second, as an example case, the article applies the methodology to the Explosive Device Response Operations (EDRO) target capability, which is the capability to coordinate, direct, and conduct improvised explosive device (IED) response after initial alert and notification. We chose to exemplify the application of LCC methodology using the EDRO capability because this particular capability includes a complex structure with many cost components. As such the example provides a robust overview of the methodology. Third, it articulates a number of next steps needed to develop and apply LCC methods to national preparedness.


In March 2005, the Department of Homeland Security (DHS) issued the Interim National Preparedness Goal. In September 2007, DHS published the National Preparedness Guidelines, which finalized the development of the national goal. The goal describes the following national preparedness system vision: A nation prepared with coordinated capabilities to prevent, protect against, respond to, and recover from all hazards in a way that balances risk with resources and need. 1

To support the preparedness system vision, DHS created a conceptual framework to build, sustain, and improve national preparedness for a broad range of natural, man-made, and technological threats and hazards within the following four mission areas: prevent, protect, respond, and recover. 2 A collection of aggregate capabilities outlines the homeland security tasks associated with each mission area. Each capability integrates multiple disciplines, processes, and procedures through a method detailing the conditions under which tasks take place and describing desired outcomes. The collection of these capabilities comprises the Target Capabilities List (TCL).

The TCL is a generic model of operationally ready capabilities that define preparedness for all types of hazards. Target Capabilities List 2.0 describes the amount of capability a jurisdiction must achieve in (1) planning factors, which provide estimates of the amount of a capability necessary to address a specific scenario and (2) national target levels, which provide estimates of the amount of a capability needed across the nation to achieve national preparedness. 3 The next iteration of the TCL, 3.0, will describe the level of capabilities a jurisdiction must achieve in terms of performance class, performance objective, and capability element frameworks. 4

As DHS policy has matured over the last several years, the importance of quantifying levels and costs of capabilities has gained importance. Government Accountability Office (GAO) reports have emphasized the need to determine capability costs, determine what governments can afford, establish capability baselines, develop coordinated funding plans and expenditures, and develop life-cycle cost practices. 5 For the federal government, this will require that homeland security program analysts quantify, in some way, the costs associated with achieving and sustaining the target levels of capability that make the nation fully prepared. …

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