Fuel and Water for OEF Towards Developing Fully Burdened Costs

1
Fuel and Water for OEFTowards Developing
Fully Burdened Costs

• Headquarters Marine Corps PR, PAE
• Edward Blankenship, PAE
• Randal Cole, Ph.D., CNA
• Presented at MORS Power and Energy Workshop
• November 30, 2009

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BLUF

• TASK
• To determine Fully Burdened Cost of Fuel (FBCF)
  and Fully Burdened Cost of Water (FBCW) for
  Afghanistan (OEF) for the GOS
• Fallback Develop a methodology and data elements
  needed
• OUTCOME
• Assured Delivery Prices (ADPs) for both Fuel and
  Water were calculated, sent to Col Moore at
  DARPA, presented at GOS

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Past Studies

• 2001 OSD ATL Study
• Fuel - 13(FEBA)-25(FEBA100km)/gallon
• 400/gallon for air delivery
• 2006 AEPI Study (Contingency Ops, SWA)
• Fuel - 4.40-11.54/gal or 2.6K-7K/soldier/yr
• H2O - 3.06-10.84/gal or 3.5K-12.5K/soldier/yr
• 2008 NDIA FBCF Workshop
• Fuel - 14.13 (Iraq), 17.44 (Immature Theater)
• Putting these into FY10s
• Fuel 4.79-30.82/gal or 2.8K-18.7K/soldier/yr
  
• (493/gallon for air delivery)
• H2O - 3.33-11.81/gal or 3.8K-13.6K/soldier/yr

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Methodology

• DoD Cost Analysis Symposium (DoDCAS)
• Step 1 - Commodity Cost of Fuel
• Step 2 - Primary Fuel Delivery Asset OS Cost
• Step 3 - Depreciation Cost of Primary Fuel
  Delivery Assets
• Step 4 - Direct Fuel Infrastructure OS and
  Recapitalization Cost
• Step 5 - Indirect Fuel Infrastructure OS Cost
• Step 6 - Environment Cost
• Step 7 Other Service Platform Delivery
  Specific Costs
• JLTV Pilot FBCF Results - 7.50/gallon (07s),
  7.97/gallon in FY10s
• Mixed Contingencies

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New DefinitionsFBCF/FBCW and now also ADP
Note Tactical Delivery includes Force
Protection and combat offloading
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Caveats/Assumptions

• Calculations are for the price at one particular
  FOB only using the delivery method observed at
  the time
• No aerial delivery needed to the FOB
• No Air Support consideredonly convoy delivery
• FOB is at an austere location (35 miles one-way)
• Convoy utilized elsewhere when not delivering to
  a certain FOB
• Pumping/Loading cost estimated at 0.13/gal
• Water is in individual plastic bottles, not in
  bulk
• No hostilities encountered / No attrition

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OEF Example

• Based on September 2009 Afghanistan Assessment to
  one FOB

Factor in Demand
ADP
Contractor
USMC
FBCF/FBCW
Retail Point of Sale
Camp Dwyer
FOB
Fuel 2.19/gal H2O 1.42/gal
Fuel 6.39/gal H2O 3.36/gal
This fits in with earlier studies showing an ADP
range of 4.79-30.82/gallon for fuel
3.33-11.81/gallon
for water
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OEF Calculations(Spreadsheet Approach)
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FBCF Model

• Fully Burdened Cost of Fuel (FBCF) Calculator v
  6.1
• Provided to us by OUSD (ATL) DDRE/DTE
• Original structurecalculating FBCF for ship
  delivery
• Adapted with OUSD (ATL) help for land-based
  delivery
• Categorizes costs according to 7 DoDCAS
  components
• Mathematical estimate
• Based on range and distribution of input
  parameters
• Weighted average of many sample estimates (we
  present the mean)
• Not all data we received was suitable for model
  input
• Had to stretch the model for air delivery only

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OEF Calculations(Model Approach)
Operational Parameter (OP)
Fully Burdened Cost of Fuel (FBCF) Calculator v
6.1, OSD (ATL)
DDRE/DTE
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Model Data (Fuel)
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Model Data (Water)
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Air Support Excursion

• Additional Inputs
• AH-1s, 5 hour Dedicated Mission
• 4,500 cost per flight hour per AH-1
• Results
• Adds roughly 6.43-6.78/gal (Fuel),
  1.50-1.52/gal (H2O)
• In the model, most of this adds to force
  protection costs
• Revised Assured Delivery Price (ADP) with Air
  Support
• Fuel 15.63-18.59/gallon
• Water 6.10-6.42/gallon

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Air Delivery Excursion

• Inputs/Assumptions
• CH-53Es, 3.3 hour Dedicated Mission
• AH-1Ws, 3.3 hour Escort Mission
• 10.4K/flight hour per CH-53E, 4.5K/flight hour
  per AH-1
• Travel less than 4,000 ft. altitude
• No ground vehicles used
• Results
• Spreadsheet method
• Removes Convoy costs of approx 2.27/gal (Fuel)
  and 1.01/gal (H2O)
• Adds approximately 19.62-23.85/gal (Fuel),
  4.54-7.95/gal (H2O) to Camp Dwyer price of
  6.39/gal (Fuel) and 3.36/gal (H2O)
• Revised Assured Delivery Price (ADP) to the FOB
  by Air
• Fuel 28.94-30.78/gallon
• Water 8.43-11.54/gallon

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Summary
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Way-Ahead

• Follow the Marine Corps Expeditionary Office lead
  
• Established October 2009
• Continue collecting data and exploring
  methodologies (approaches are evolving)
• Continue to adapt methodologies for USMC
• Calculate more refined ADPs and FBCF and FBCW as
  we get smarter

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Contact Information

• Ed Blankenship
• edward.r.blankenship_at_usmc.mil
• [phone]
• Randal Cole
• randal.cole.ctr_at_usmc.mil
• [phone]