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3 Risks and Realities of Cost Overruns for Large Strategic Missions
Pages 47-59

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From page 47...
... Even today some stakeholders consider that there is a lingering stigma to large strategic missions because of recent experience. As this chapter explains, NASA, Congress, and the decadal surveys all took actions in response to these cost overruns, and the positive results of these actions are now becoming apparent.
From page 48...
... For this study, PI-managed missions represent smaller missions and center-managed missions represent large strategic missions. The purpose of the study was to identify level and could be applied to other missions that were experiencing a larger amount of cost growth.
From page 49...
... The two graphs show that in terms of mission funding as an overall percentage of the division's budget, astrophysics spends the most on directed missions, whereas planetary science and heliophysics have the lowest percentages. SOURCE: Bob Bitten, Justin Yoshida, Elliott Tibor, and Christopher May (The Aerospace Corporation)
From page 50...
... SOURCE: Justin Yoshida, Mark Cowdin, Taylor Mize, Robert Kellogg, and David Bearden, Complexity Analysis of the Cost Effectiveness of PI-led NASA Science Missions, 2013 IEEE Aerospace Conference. FIGURE 3.4  The average cost growth of principal-investigator (PI)
From page 51...
... Understanding this will be valuable to improving the accuracy of future cost estimates. What these studies of cost growth in NASA missions demonstrate is that both small and large missions have similar percentage cost overruns, large missions naturally cost more than small missions, and the entire budget of the Science Mission Directorate is not consumed by large missions.
From page 52...
... This is representative of what can happen to create imbalance within a portfolio and underscores the importance of conservative cost estimation and sound cost management and controls for large strategic missions. This example also suggests that cost-estimating methods should place high emphasis on program phasing profiles as well as total program life cycle.
From page 53...
... FINDING: Cost control of large strategic missions remains vital in order to preserve overall program matic balance. REFORMS IN HOW NASA ESTIMATES COSTS Public Law 109-155 was implemented in December 2005 to address cost growth in NASA missions with Section 103, "Baseline and Cost Controls" stating: • The Administrator shall determine whether the development cost of the program is likely to exceed the estimate provided in the Baseline Report of the program by 15 percent or more, or whether a milestone is likely to be delayed by 6 months or more.
From page 54...
... It has now been 11 years since the implementation of these reforms, and a number of new space science missions -- including large strategic missions -- have been started and have proceeded through KDP-C to launch and initial operations. This has enabled independent assessments of the success of NASA's reforms.
From page 55...
... Both Aerospace Corporation's assessment and the 2016 GAO report are consistent and conclude that NASA has made significant strides in better estimating costs and limiting cost growth to its programs. The committee 9  Those projects are Parker Solar Probe; Ionospheric Connection; Ice, Cloud, and Land Elevation Satellite-2; Transiting Exoplanet Survey Satellite; Exploration Ground Systems; James Webb Space Telescope; Space Network Ground Segment Sustainment; Space Launch System; and Orion Multi-Purpose Crew Vehicle.
From page 56...
... Over the past decade NASA has put in place a number of new approaches to cost control including establishment of independent cost estimates, periodic (up to monthly) project monitoring using earned value, major milestone cost/schedule reviews, and increased allocation of reserves, among other approaches, to estimate and control cost throughout the project life cycle.
From page 57...
... , by providing NASA a range of options at varying levels of science, complexity, and cost, a decadal survey can assist the agency in examining options within a balanced portfolio, make trades against budget constraints, or appropriately sequence mission priorities within the coming decade. The existence of trade-offs might allow large strategic missions to coexist with a science theme with other commitments -- for example, developments already under way, R&A, or missions in the operations phase.
From page 58...
... There are valuable lessons that can be learned from the planetary science experience. One lesson is that it is possible to keep costs for large strategic missions within manageable limits provided the program considers ways to de-scope them, and the decadal survey has provided guidance on how to de-scope large strategic missions.
From page 59...
... NASA should support the development of new tools to perform robust cost estimates and risk assessment. These new cost estimation tools will also be helpful in support of the National Academies' decadal surveys.


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