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Cost Benefit Analysis Seminar Attended by BiH Parliamentary Committee Members

By Maggie Spivey

Members of the Joint Committee on Defence and Security of the Bosnia and Herzegovina (BiH) Parliamentary Assembly attended the Building Integrity in Cost Benefit Analysis, June 20 – 22, in Sarajevo at the BiH Peace Support Operations Training Centre (PSOTC).

The seminar was part of the ongoing efforts between the PSOTC and Naval Postgraduate School—both designated NATO Partnership for Peace Training and Education Centers (PTCs).  A team from the Naval Postgraduate School, in its capacity as the United States’ PTC (USPTC), coordinated the event.  The NPS faculty leading the workshop included Dr. Dan Nussbaum, Visiting Professor in the Operations Research Department, whose research interests include life cycle cost estimating and modeling; the planning, programming, budgeting, and execution system; budget preparation and justification; performance measurement; and earned value management.  Joining Dr. Nussbaum was Dr. Diana Angelis, Associate Professor in the Defense Resources Management Institute, whose research interests include cost accounting, activity-based costing, valuation of research and development, and acquisition innovation.

Over the workshop’s three days, participants learned about cost benefit analysis, known as CBA, including what it is; why it is used; the process to conduct CBA, including its non-linear slide, assumptions, and planning horizons; and, finally, deliverables from a CBA.  

Attendees also learned about CBA’s value.  For example, it supplements professional experience and military and political judgments with sound analytical techniques; it also creates the ability to make better resource-informed decisions; and, finally, it results in a strong value proposition, or a clear statement that the benefits more than justify the costs and required trade-offs.  

In addition to members and staff from the Joint Committee, attendees also included members of the European Union, NATO Headquarters, Parliamentary Military Committee, the Organization for Security and Co-operation in Europe (OSCE), and other government audit institutions.  Many of these same participants attended the Building Integrity in Defense Acquisition seminar held in September of 2011 at the PSOTC.  The purpose of that seminar was to provide a conceptual understanding of public management and procurement principles and institutional integrity fundamentals that apply to any nation, culture, or government agency and also to provide insight into issues linking resources to national security.

According to Dr. Nussbaum, an important aspect of the workshop was that it focused on the decision-making aspect of building integrity in the transparency process.  Launched in November 2007 by the Euro-Atlantic Ambassadors, the Building Integrity Initiative is aimed at developing practical tools to help nations reduce corruption risk in their defense establishments.   This workshop is one such tool that helps nations implement the obligations under the United Nations Convention against Corruption and to reduce the risk of corruption in the defense and security sectors.  Along with the other events conducted by the PSOTC and NPS, this workshop contributed to partner capability and capacity building in the region.

Posted 29 June, 2012

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