A Combined Operational Effectiveness Investment Appraisal (COEIA) must be considered for projects that may affect the Operational Effectiveness (OE) of the MOD.
The OE of the MOD is affected by the introduction of new systems or ways of working.
OE is a formal measure of the ability of the MOD to conduct its business. Investment Appraisal (IA) is a formal measure of the costs involved.
COEIA is often used to describe the process of determining the OE and IA, and also the output of the process at various stages in the procurement lifecycle.
It may not be necessary for a project team to produce a COEIA where they are replacing an existing capability with a like for like alternative.
The MOD Architecture Framework (MODAF) describes the COEIA as:
Combined Operational Effectiveness Investment Appraisal (COEIA) is a formal comparison of acquisition options on a cost versus effectiveness basis to satisfy a User Requirement. The COEIA is an integral part of the Investment Approvals Committee (IAC) procedure as detailed in the SMART Approvals guidance (registration required). The Concept of Analysis (COA) for the COEIA is approved at Initial Gate with the full COEIA report submitted for approval at Main Gate.
The COEIA may be considered an Investment Appraisal, used to assess the effectiveness of differing acquisition options in an objective and, where possible, quantitative way. Its purpose is to select one of the acquisition options before proceeding further.
The COEIA ensures that significant factors which may be difficult or impossible to quantify but with a potential bearing on whole life cost or effectiveness are brought to the attention of decision makers – commonly referred to as Other Contributory Factors (OCFs).
Operational Effectiveness (OE) is determined by Operational Analysis (OA) which is defined in MODAF as:
Operational Analysis (OA) uses modelling across a range of scenarios to determine the effectiveness that might be provided by a given performance. When combined with an Investment Appraisal in a COEIA, OA allows an assessment of which solution provides the required effectiveness and provides value for money.
Models and scenarios may contain details which are commercially sensitive or have security connotations – for example, details of other friendly or threat systems.
A project team will submit a Business Case (including a COEIA) to the Investment Approvals Committee (IAC) or delegated authority, such as DE&S Investment Board (DESIB).
The COEIA is scrutinised and analysed to determine whether the evidence presented from Balance of Investment (BoI) and COEIA assessments supports the recommendation made over other options.
If the recommendation is agreed, money is released to allow the project to proceed.
Simplistically, the COEIA must offer evidence that the recommended option will provide the best Value For Money (VfM).
This would entail a thorough description of the options with Strengths and Weaknesses highlighted. Ultimately, the IAC will need to see a summary output of the OE and the IA.
The OE and IA are often described as orthogonal issues; as such, they can be depicted on a two-dimensional chart…
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