Mission Costs at NASA.ppt

Agenda Summary of NASA’s cost and schedule performance Claimed causes for cost and schedule growth Initiatives to mitigate cost and schedule growth Other cost-estimating initiatives Background Summary of Claimed Root Causesfrom Recent Studies Initiatives to MitigateCost and Schedule Growth Developing Cost Analysis Data Requirement (CADRe) documents on all Flight and Ground System projects for the project managers Established policy and wrote Strategic Planning Guidance that requires … All projects to submit budget requests that reflect a 70 percent probability of completing within the requested resources as determined by a reconciled Independent Probabilistic Cost Estimate New projects about to enter Phase A must undergo a Basis of Estimate review Conducting Cost Risk workshops at development centers: JPL, GSFC, GRC, MSFC, JSC, and KSC Re-evaluating root causes for cost and schedule growth at NASA and recommending and coordinating mitigating actions Sponsoring cost estimating research to address weaknesses in estimating methodologies and tools When CADRes are Due Why We Do Probabilistic Cost Estimating Fact: It is impossible to estimate precisely how much something will cost or how long it will take Decision-makers and cost analysts should always think of a cost estimate as a probability distribution, NOT as a deterministic number The best we can provide to decision-makers is the cost probability distribution It is up to the decision-maker to decide where (i.e., at which confidence level) he/she wants to set the budget The probability distribution provides a quantitative basis for making this determination Low budget = high probability of cost overrun High budget = low probability of cost overrun Due to the mathematics of the situation, attempts to circumvent this process lead inevitably to failure 70 Percent Confidence LevelEstimating Policy SMC 3/27/06 meeting minutes: “Griffin determined that NASA’s standard practices will be to budget projects at a 70% con