Our long-time readers know that we’ve been watching developments over at Shay Assad’s new DOD Pricing Directorate since he departed DPAP. We’ve even ventured an opinion or two about what his new focus area might mean to defense contractors.

The latest scoop (well, it’s a scoop if you ignore the reports from other sources) is the should-cost template.

The should-cost template is a PowerPoint slide deck for use by Program Managers of ACAT I programs when preparing presentations to the Pentagon Milestone Decision Authority (MDA). It’s mandatory for ACAT I use, but “recommended” for use by ACAT II and III programs.

Some of you may be asking what an ACAT is. Google it.

Some other readers may be asking about this whole “should cost” thingee that appears to be the DOD buzz-word of 2012. According to the template—

The Program’s “should cost” is the set of program’s initiatives or opportunities to reduce costs below the Independent Cost Estimate (ICE) level. It is primarily the basis for a negotiating position and result for pending contracts that will be below the ICE, but it also includes measures taken to reduce cost beyond near term contract actions.

We have heard little if any feedback from contractors regarding their experience with “should cost.” But if you’re a Boeing person and you work on the Poseidon P-8A program, we encourage you to take a look at Slide 5 and see if the Navy isn’t getting ready to stick it to your program, hard. Wonder how that one slipped in?