2012-MGM04

Modeling R&D Budget Profiles

Management Track

MGM04_Presentation_ModelingR&DBudgetProfiles_Burgess

Abstract:

Prior research sponsored by the National Reconnaissance Office (NRO) and published in the Journal of Parametrics (Summer 2006) has become the principal method for developing space and ground segment budget profiles for NRO programs. Since then, the practice of budgeting to independent cost estimates has been signed into law for the intelligence community. The resulting scrutiny and reliance on budget-phasing models has motivated several improvements that should be relevant to the estimating process for other DoD commodities. The presentation first reviews the mathematical formulation of expenditure profiles that are based on historical data, and how some of the resulting accuracy metrics have been useful in defending annual budgets. New models for space and ground systems are presented. Since the annual budget authority required to support an expenditure stream is heavily dependent on a program’s execution rates (i.e., outlay rates), we also present a new approach for estimating what those outlay rates will be. This is a new area of responsibility for most cost estimating organizations, yet its impact on annual budget requests can be significant.

Author:

Erik Burgess
Burgess Consulting Inc.
Erik Burgess has provided cost estimating and program support to the National Reconnaissance Office since 1995, and prior to that he supported space programs at the USAF Space and Missile Systems Center as an engineer and cost estimator. He is the president of Burgess Consulting Inc., and has also served with The Aerospace Corporation, PriceWaterhouseCoopers, and MCR, LLC. Mr. Burgess earned his M.S. and B.S. in Mechanical Engineering from the Massachusetts Institute of Technology.