Analysis of Alternatives
This article refers to the Analysis of Alternatives (AoA) military process, not the general business practice. The AoA is a cornerstone of Military Acquisition
Military acquisition
Military acquisition is the bureaucratic management and procurement process dealing with a nation's investments in the technologies, programs, and product support necessary to achieve its national security strategy and support its armed forces...

, and deliberately embodies the fair and competitive character of the United States business atmosphere. It is an effort to move from employing a single source to the exploration of multiple alternatives so agencies have a basis for funding the best possible projects in a rational, defensible manner considering risk and uncertainty. The policy of both the Office of Management and Budget (OMB) and the United States Department of Defense
United States Department of Defense
The United States Department of Defense is the U.S...

 (DoD) is to ensure that at least three feasible alternatives are analyzed prior to making costly investment decisions. The AoA establishes and benchmarks metrics for Cost, Schedule, Performance (CSP) and Risk (CSPR) depending on military needs.
The AoA also assesses critical technology elements (CTEs) associated with each proposed materiel solution, identified in the Initial Capabilities Document (ICD), including; technology maturity, integration risk, manufacturing feasibility, and, where necessary, technology maturation and demonstration needs. An AoA begins by establishing (or modifying) Key Performance Parameters (KPPs) metrics for each alternative. KPPs help compare the operational effectiveness, suitability, and life cycle costs of alternatives to satisfy the military need.

DoD Instruction 5000.02 requires an AoA in support of each decision milestone: The Milestone Decision Authority (MDA) directs a study team to accomplish the AoA; the AoA then becomes the primary input to the program documents that direct the development of a weapons acquisition program. The results of the AoA provide the basis for the Technology Development Strategy (TDS), which must be approved by the MDA at program's Milestone A. Though the AoA is executed before any solution is determined, it must be updated throughout the life of the program.

The AoA attempts to arrive at the best value for a set of proposals received from the private sector or other sources. Though Source Selection criteria change per proposal request, and specifics are considered sensitive information, there is usually some form of the Cost Schedule Performance (CSP) trade-space analysis, and strong consideration of Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...

, (CSPR). Performance is measured by the US military in terms of Measures of Effectiveness (MOEs), and new capabilities. Risk is analyzed in many ways; aggressiveness of the schedule, cost reasonableness and finally, each MOE, and capability may carry an associated risk. RiskAoA
RiskAoA is a United States Department of Defense project Risk Management tool, allowing the instantaneous review of portfolio , proposal or alternatives Risk. It was designed by Air Force Research Laboratory Headquarters to perform predictive risk analysis for the Analysis of Alternatives ...

, designed for the AoA process, allows the alternative’s Risks to be transformed into a single number, and compared, just like the dollar values and schedule lengths of the alternatives are comparable.

Risks that affect cost may be evaluated separately from risks affecting an alternative’s schedule and MOEs. The risk from each alternative's capabilities is partially or wholly accounted for with the assumption that every unattained MOE and new capability has some associated risk.

According to the Office of Aerospace Studies, the AoA is the focus of Concept and Technology Development Phase (CTDP). The AoA is designed to examine a broad spectrum of potential alternatives to the mission need described in the Mission Needs Statement. The objective of the AoA is to:
  • Refine alternatives
  • Refine criteria
  • Refine evaluation
  • Work to gain consensus
  • Reduce uncertainty
  • Choose an alternative

Appendix A of General Services Administration
General Services Administration
The General Services Administration is an independent agency of the United States government, established in 1949 to help manage and support the basic functioning of federal agencies. The GSA supplies products and communications for U.S...

’s (GSA's) IT Budget Submission Instructions (GSA, 2007) states:
In order to achieve a Level 1 AoA, Section 300 requires that an organization identify and consider at least three viable alternatives. These alternatives need to be presented in a table that shows: 1. Alternative[s] Analyzed 2. Description of Alternative[s] 3. Risk Adjusted Lifecycle Costs estimate[s] – the overall estimated cost over the life of the investment that has been adjusted to accommodate any risk identified and 4. Risk Adjusted Lifecycle Benefits estimate[s] – projected benefits and costs for each viable alternative. The normalized or advanced results of a RiskAoA
RiskAoA is a United States Department of Defense project Risk Management tool, allowing the instantaneous review of portfolio , proposal or alternatives Risk. It was designed by Air Force Research Laboratory Headquarters to perform predictive risk analysis for the Analysis of Alternatives ...

 analysis provides a proportional risk-multiplier for “Risk Adjusted” values (q.v.). It also states the following quantitative and qualitative benefits should be addressed when evaluating total annual benefits for each alternative:
  • Qualitative benefits
  • Cost savings
  • Cost avoidance
  • Stakeholder benefits
  • Non-Monetary [benefits]

The AoA may also be important to the System Development and Demonstration Phase (SDDP) and the Production and Deployment Phase (PDP) Activities:
Before Milestone C, the decision authority may require a new AoA or an update to a previous AoA to account for any factors that may have changed during the preceding phase.
There are many elements in an AoA follow-on effort that are updated, focused, and refined. These elements were originally characterized and developed in the CTDP phase AoA and include:
  • Mission need
  • Threat scenarios
  • Operating environment
  • Constraints & assumptions
  • Operations concept
  • Description of alternatives
  • Mission tasks
  • MOEs/Measures of Performance (MOPs)
  • Models & Data analysis
  • Life cycle costs
  • and the Report

The AoA and its associated documentation, is required before any major investment decision and before each decision milestone, is therefore one of the most important steps in the military acquisition process.

The AoA differs from the Evaluation of Alternatives
Evaluation of Alternatives
The Evaluation of Alternatives is very similar to, but occurs before, the Analysis of Alternatives process, except that its scope is broader and includes non-materiel solutions analysis....

 (EoA) primarily in that it is conducted during the Materiel Solution Analysis Phase, so an EoA may be used as a continuity document for the AoA. Other analysis processes, such as Analysis of Technical Alternatives (ATA), Analysis of Schedule Alternatives (ASA), etc., also exist as formal processes whose derivation is intuitive, but are not in common use.

† = Milestone A approves entry into the Technology Development (TD) phase; Milestone B approves entry into the Engineering and Manufacturing Development (EMD) phase; and Milestone C approves entry into the Production and Deployment (P&D) phase.

AoA Related Documentation

  • Mission Need Statement
    Mission Need Statement
    A Mission Needs Statement is a U.S. Department of Defense type of document which identifies capability needs for a program to satisfy by a combination of material and non-material solution to resolve a mission deficiency or to enhance operational capability.This term was introduced as a...

     (MNS) became the Initial Capabilities Document (ICD) for Milestone A
  • Operational Requirements Document (ORD) became the Capability Development Document
    Capability Development Document
    A Capability Development Document provides operational performance attributes, including supportability, for those responsible for the acquisition of military equipment in the military of the United States. It includes "key performance parameters" and other parameters that guide the development,...

     for Milestone B and Capability Production Document for Milestone C
  • System Threat Assessment Report
    • Threat Assessment Report (TAR) for Air Force component programs, or
    • Threat Planning Document (TPD)
  • Test and Evaluation Master Plan (TEMP)
  • Integrated Logistics Support Plan
  • Single Acquisition Master Plan (SAMP)
  • Systems Engineering Plan (SEP)
  • Systems Engineering Management Plan (SEMP)
  • Acquisition Program Baseline
    Acquisition Program Baseline
    Acquisition Program Baseline is a term used by the United States Department of Defense to refer to a program threshold and objective values for the minimum number of cost, schedule, and performance attributes that describe the program over its life cycle...

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