Hazardous Material Life-cycle Cost Estimator (HAZMAT)

Prepared by:
The Analytic Sciences Corporation (TASC)

Prepared for:
U.S. Air Force-HCS/EMP. (Human Systems Center, Brooks Air Force Base)

Application:
Financial analysis: ---
Environmental impact analysis: ---
Waste management/P2:
Environmental cost listing/database: ---
Cost estimation:
Alternative product/process comparison:

An analytical tool to support trade-off analyses in selecting alternatives to hazardous materials.

Development date and updates:
March 1991. Version 3.0 released in December, 1993.

Public availability:
Available to Federal facilities

Purpose and current use:
The purpose of the system is to facilitate cost trade-off analyses for comparisons between one hazardous substance and another hazardous/nonhazardous substance. The objective is to reduce the kinds and amounts of hazardous materials used in weapon systems and their associated development, production, maintenance, and decommissioning processes. HAZMAT is manufacturing and maintenance process oriented.

Cost information:
Free of charge.

Contents and system requirements:
HAZMAT is programmed in Ada using the Ada-Sage programming tool and compiler. Minimum system requirements are:


Summary of methodology

Users enter chemical-specific information, after which the system allows them to perform trade-off studies of one hazardous material versus another. The goal of this method is to include hazardous materials cost elements in four phases of the system: development, production, operation and support, and system disposal. Cost elements are identified for each phase for the inputs and outputs of different life-cycle stages. Model outputs are either documentation or cost outputs. HAZMAT functions in the following manner

  1. Users enter information in the HAZMAT main menu. Options include generating a new estimate, modifying a previous on, viewing and/or print reports, entering a user inflation table, or exiting HAZMAT.
  2. Users enter general estimate information such as the title, date, base and cost input years, discount rate, inflation table selection, and type of analysis. The analysis types are either modeling the cost of hazardous materials for one subsystem[1] for one year, or total phase[2] cost calculation.
  3. Users select the systems, types, subsystems and phase. The phase choices are acquisition, operating and support, and decommissioning. The system moves on to different screens depending on the phase choice.
  4. The system enters into a process loop in which users select one or more processes of interest, either from the HAZMAT database or by adding or modifying processes. Processes include items such as depot painting, repairing, base aerospace ground equipment, etc. In the process information screens, users can either use default values from the database or modify the information.
  5. HAZMAT then moves into a substance (the materials-[e.g., lubricating oil, cleaning compound, etc.] loop, where substances can be arranged into up to three groups with up to five substances each (baseline and alternatives). Again, users can choose substances from the database or add or modify substances. Entering the custom substance would involve entering related data such as quantity used in phase or process, disposal percentages, etc.

The reports generated include parameter list reports (general, process, and substance information), a base-year dollars report (reflect the purchasing power for that year, prior years adjusted to base year, and future years estimated without inflation), then year-dollars report (escalated or inflated dollars),and the discounted-dollar report (present value costs). If users selected the one subsystem for one-year option, HAZMAT generates costs for the 12 (predefined) cost elements.

Life-cycle stages covered

Raw material acquisition ---
Manufacturing stage ---
Use/reuse/maintenance
Recycle/waste management

The acquisition phase includes information on acquiring various systems and subsystems. The operating and support phase uses information on the economic life of the subsystems, operating sites, etc. This corresponds to the use/reuse/maintenance stage of the life-cycle. The decommissioning phase uses information on the numbers and types of subsystems being decommissioned. This corresponds to the waste management stage of the life-cycle. Recycling is not taken into account.

Type of costs considered

Conventional
Potentially hidden
Contingent
External ---

The system has 12 different cost elements for actual costs of items such as facilities used, medical exams, etc. The cost elements are as follows:

The third basic HAZMAT algorithm employs factors from the Pollution Prevention Benefits Manual (EPA230-R-89-100), prepared by the EPA and ICF Incorporated, to estimate the Potential Legal/Environmental Liability cost element (and all subordinate cost elements). The developers of HAZMAT also cite a TASC Technical Information Memorandum as part of the basis for this algorithm.

Method of cost estimation

The methods used for calculating the costs are predicated on estimating the costs attributed to hazardous materials for the entire weapons system. Model algorithms are based on data collected for the estimates and are chemical specific. HAZMAT uses general and estimate information entered by users to do cost calculations. HAZMAT has algorithms for calculating costs under each of the categories explained above. The type of calculation depends on the choices entered by users. The algorithms may be the same or may vary depending on the phase under consideration. For instance, the algorithm for Transportation cost is the same for all subsystems and all phases. Algorithms to compute the cost of Training are different in different phases. Cost units available are thousands of dollars (default) or millions of dollars.

Generation of financial indicators

Net present value (NPV) ---
Payback period ---
Internal rate of return (IRR) ---
Benefits cost ratio ---
Other

HAZMAT calculates the Present Value (PV) of costs. The discount rate and the inflation table are entered in the first screen. The inflation table can be user defined, or HAZMAT defined. Users also enter the estimate base year and the cost input base year. Both these values have to be between the years 1975 and 2050, or else HAZMAT will default to 1993. Tables include raw and weighted indices.

Attributes

Output can be exported to a word processor or spreadsheet (after reports are generated). However, some reformatting may be necessary, and in a spreadsheet application, no arithmetic operations are retained. The system is menu-driven and is easy to understand and use.

All system-level parameter files are maintained in files or lists, rather than being hard coded. HAZMAT has permanent files and estimate files. The permanent files contain the entire HAZMAT database and cannot be changed by users. The estimate files contain the information on estimates (and data drawn from permanent files for the estimate). Any changes made to the data affects only the estimate files. HAZMAT cost algorithms are explained in the manual and are available for users to review.

Customer service is provided at HSC/EMP from 7.30 AM to 4.15 PM CST. HSC/EMP is also attempting to set up user groups in different geographical areas to enable trading of information on uses of the model, data from specific sources, and other information.

Limitations

The system is chemical specific and is not designed for estimating life-cycle costs of products. Users have to identify a system and subsystems that use one or more hazardous materials and make comparisons in that context. Users can enter up to three groups of chemicals with a maximum of 15 substances for the cost trade-off analysis. HAZMAT performance and run-time is highly dependent on the hardware used. The maximum number of years (schedules) that can be selected for any phase is 15 and not less than 1 year. The maximum cost is less than $10 trillion when cost units are expressed in millions of dollars. The system does not include external costs or list the environmental costs/benefits of using a particular hazardous substance. No additional cost categories may be added, and cost algorithms cannot be modified.

Basis for evaluation:
The information provided here is derived from the HAZMAT user's manual and software provided by HCS/EMP in March, 1995.

Contact information:
Available to any government facility/government contractor.

U.S. Air Force-HSC/EMP
8213 14th Street
Brooks Air Force Base
TX 78235-5246

Betty West
210-536-5121

TASC
2555 University Boulevard
Fairborn, Ohio 45324

  1. A system is the major classification, such as an aircraft. The type is the major subdivision, such as a fighter plane, and the subsystem is the major subdivision of the type (e.g., Airframe).
  2. A phase represents the period of interest in the life of the subsystem.

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