Abstract: With rapid advances in technology, there is an ever increasing need for deploying increasingly complex defence systems to be fielded in operation within costs, time and acceptable end-use functionality. The design of such large-scale military systems are done by integrating off-the-shelf sub-systems, and component-based systems along with indigenously developed systems, ensuring interoperability, functionality and performance. As the size and complexity of systems increases, the design problem goes beyond component and subsystem design or the design of algorithms and data structures of the computation in the sub-systems. The proliferation of software systems have triggered a transition from the hardware oriented military systems to systems that are controlled by software and more so towards embedded systems. In this paper, we extend and apply a framework based reliability assessment approach for a naval system architecture based on a scenario analysis. This approach enables us to infer the system reliability from aspect reliabilities based on the composition methods, allowing the application specific aspects to be added dynamically or upgraded at a later stage. The design of a system as a framework that can support plug-in application specific aspects is an effective way of simplifying the system and assuring high quality by making the specification of each aspect as well as composition component more amenable to rigorous analysis. In order to assess the performance of these systems in various real time warfare scenarios, a Discrete Time Markov Chain is constructed. This methodology can be applied in early design stages to allow the designer to understand the effect of operational degradation factors and their effects that occur over the days of war. The methodology has been effectively applied to carry out the sensitivity analysis of the sub-systems with respect to the scenario based operations and compute mission reliability.