2008 Cost Estimating Handbook

Transcription

1 2008 Cost Estimating Handbook Ingegneria dell Informazione e Organizzazione d Impresa

2 Incorporate the survey feedback from the NASA Cost Estimating Community Primary goal is to Include updates, comments collected through mail address, and data on new cost initiatives. NASA office Helps in delivering projects on time and within budget improve NASA s reputation with external stakeholders designed to be a resource for NASA cost estimators Those who interface with cost estimators and need to understand the process Science because CE is not a black box, it s composed by welldefined processes Cost estimation is part science, part art Art because CE is a discipline influenced by subjective elements

3 Project Life Cycle Management & Cost Estimating An approach to life cycle management of projects that is integrated, process-centered and disciplined produces real and tangible benefits to all project stakeholders achievable through Upfront trade studies and cost-risk performance analyses joined with appropriate hardware and software resources LCCE (Life Cycle Cost Estimate) = estimate that includes total cost of ownership over the system life cycle used for Budgetary decisions (difficult for NASA), system trades and studies, milestone review support Managers sometimes feel pressured to provide optimistic estimates (in order to obtain project go-ahead approval): produces Completed and unambiguous requirements Clearly defined product functional expectations Higher quality and value of the product (i.e. reliability, adaptability, usability, maintainability, supportability) consistent visibility to problems More efficient project management Historical data to gauge process improvements and effectiveness Overestimating Life Cycle Costs may result in the program being deemed unaffordable and therefore risking not being funded Underestimating LCCs will prevent decision-makers from allocating the proper funding required Minimization of risks inherent with the successful delivery of the right product on time and within budget leads to Increase of the organizational credibility and reputation

4 Technical requirements, schedule and cost are the most important factors to consider in a project The specific tradeoffs may vary from project to project, but they always return to the concept of the triple constraint Government Wide Imperatives Legislative framework that includes new accountability laws and regulations that aim at improving project performance helps getting the biggest Bang for the buck President s Management Agenda (PMA) = Initiative to make the U.S. federal government more efficient and effective that identifies five mutually reinforcing Government-wide initiatives George Walker Bush announced the PMA initiative in 2001 The Executive Branch Management Scorecard tracks how well the Government s departments and major agencies are executing these

5 The PMA emphasizes regular performance reviews for departments: each review examine five areas NASA Cost Estimating Community has a direct impact on three of them: 1 - Human capital 2 - Financial Performance 3 - Competitive sourcing 4 - e-government 5 - Budget and performance integration Erroneous payments and accounting errors reduce confidence in Government systems. Changes will be made in the budget process to allow better measure of the real cost and performance of programs Detailed estimates of full cost government performance to the taxpayer are needed for identifying the most efficient means of accomplishing a task. All NASA cost estimates reflect full cost. Improvements will have little impact unless they are linked to better results. A budget comparison of procurement funds requested and identified need is not an accurate measure of performance results achieved with previous budgets. NASA has influence by: providing timely and accurate cost estimates reconciling and updating the estimates frequently providing estimates to support studies conducting trade studies for efficiency. future requirements and demonstrating results The Appropriations Committees reiterate concern expressed in the House report that NASA is not able to anticipate adequately technical problems and project overruns on existing programs, and are especially concerned that new programs, such as Project Constellation, will encounter similar problems. (2008 Appropriations Conference Report)

6 NASA tries mitigate this concern is by integrating cost and schedule data with budgeting and external reporting activities Following this approach is allowing NASA to evaluate cost estimates and perform comparative analysis with budget data and external reports leads to Improved budget plans and cost estimates Maximum results with limited budget OCFO: Office of the Chief Financial Officer MPAR: Major Program Annual Report OMB: Office of Management and Budget GAO: Government Accountability Office revitalize and enhance the current cost estimating infrastructure greater credibility in NASA

7 Cost Estimating Community Impact Years ago cost estimating was used solely as a means of getting project money Its ability to tie costs with benefits and risks is essential for decision makers as they prepare the necessary project documentation to receive funding

8 The Federal Budget Process Creating the President s Budget Development for a given year s budget starts a year and a half before appropriations are enacted Flow of the Federal Budgeting Cycle

9 Budgeting at NASA Planning Programming Budgeting and Execution (PPBE) process Resources aligned in a comprehensive, disciplined, top-down approach supports the agency s vision and mission focuses on translating strategy into actionable programs brings together agency priorities and strategic outcomes within the agency s resource constraints benefits to the Agency: focus on ensuring successful implementation of the strategic goals Clearly defined roles and responsibilities Complete and integrated budget process outputs Strong emphasis on performance and resource management Less repetitive calculation of budget details Timely, high-quality budget support of NASA s mission A stable funding baseline plan to expedite and streamline funds distribution

10 PPBE goes beyond NASA s traditional Program Operating Plan (POP) budget approaches of the past resource alignment supports the accomplishment of agency strategic goals and objectives Responsibility: PA&E (Program Analysis and Evaluation): Planning and Programming Phases OCFO: Budgeting and Execution Phases NASA's Planning Programming Budgeting Execution Process Data confidentiality must be maintained: the process is not to be discussed outside the agency!

11 NASA s Integrated Budget Performance Document NASA consolidates all of its budget inputs into the IBPD for Congressional Submission It supplies: Budget information Performance commitments and metrics supported by this budget Commitment to proceed to development Supplemental project information for OMB Detailed cost and schedule information by phase, year and WBS level NASA Mission Directorates must be able to prepare and submit project budget requests that reflect a 70% confidence level; it s a way to improve: reputation with its external stakeholders quality of its cost estimates

12 NASA Full Cost Requirement NASA initiated a full cost concept in 1995 The Agency began budgeting and accounting in Full Cost for FY 2004 Costs to operate a Center are not solely a function of the size of the workforce! but Original full cost approach: NASA allocated the cost to run each Center to projects based upon their workforce at the Center Overhead costs for the smaller Centers were significantly higher than for the larger Centers Beginning in fiscal year 2007, NASA is managing Center overhead costs with a single rate for all nine Federal center The effort estimate affects the total cost

13 Calendar Year NASA budget Nominal Dollars % of Fed Budget 2014 Constant Dollars (Millions) (Millions) % % 1, % 3, % 5, , % 9, , % 19, , % 32, , % 38, , % 43, , % 38, , % 32, , % 27, , % , % 19, , % 19, , % 17, , % 15, , % 14, , % 15, , % 15, , % 15, , % 14, , % 14, , % 14, , % 15, , % 16, , % 16, , % 16, , % 16, , % 15,893 Calendar NASA budget 2014 Constant Year Nominal Dollars % of Fed Budget Dollars (Millions) (Millions) , % 18, , % 21, , % 22, , % 24, , % 23, , % 23, , % 21, , % 20, , % 21, , % 21, , % 20, , % 19, , % 18, , % 18, , % 19, , % 18, , % 19, , % 19, , % 17, , % 18, , % 19, , % 19, , % 20,423 FY , % 17,833 FY , % 17,471 FY , % 17,219 FY , % 17, , (Final 2016) 19, (projected) 18, (projected) 19, (projected) Gestione 19,375dei Progetti Software - Martino De Nardi 2020 (projected) 19,666

14 Thanks for the attention!