Keys to Evaluating and Conveying Credible Space SystemsCost Estimates to Acquisition Management

摘要

The credibility of military space systems' cost estimates are called into question at the start of the program when annual program budgets are established by the program office, compared with the service cost analysis agency's position; and for most major programs, when reviewed by an Independent Program Assessment (IPA) team, and evaluated against an independent estimate generated by the OSD Cost Analysis Improvement Group (CAIG). Program cost estimates are also challenged during program execution when the program office requires additional funds in the out-years; and when the contractor team's and/or the program office's assessments of the updated estimates at completion (EAC) increase beyond the planned and projected forecasts, and especially when a program re-baseline is required.Although recent military space system programs have experienced substantial cost and schedule overruns, the original estimates for each program were deemed to be credible by the government analysts who perform these assessments or by the acquisition managers who ultimately granted authority to proceed/continue with development. Why were the estimates not challenged as unrealistic? Where did the process fall short?Our analysis suggests that the evaluation process broke down in two key areas. In the broader context, the "estimating team" (which the government analysts are a part of) failed to fully disclose the complete set of ground rules and assumptions and account for all the known technical risks and cost uncertainties associated with their space system cost estimate. As part of the government review process before conveying a recommended space systems program cost to acquisition management, the cost communities either didn't conduct formal peer reviews or if they did, they did not fully reconcile the major underlying differences with the other estimates generated. This paper focuses on identifying the problems associated with estimating space systems and the recommended keys to successfully evaluating the program cost estimates to determine how credible they are, and then more effectively conveying these recommended results to acquisition management.