The Challenge of Estimating Space System Costs—Modeling the Relationship with Acquisition Strategy
In recent years, a considerable number studies and “blue-ribbon” reports have highlighted the problems associated with the acquisition of military space systems. These problems are manifested by the fact that almost all major space programs under development by both the DoD and Intelligence Community have encountered (or are currently encountering) breaches of their cost, schedule, or technical baselines. The author hypothesizes that understanding the impact of a program cost estimate and its associated risk within the context of the complex program acquisition process may help us better understand the sources of cost growth. This paper presents an approach for modeling the dynamics of program acquisition strategy and the role played by the cost estimate and risk analysis. A high-level representation of a military comsat program is developed along with it’s cost estimate and acquisition strategy. An alternative strategy is proposed and evaluated and its impact on the program budget and risk levels is examined. The paper proposes that there should be participation by cost analysts during the crafting of acquisition strategies in order to effectively manage the government’s cost risk exposure.
Paul S. Killingsworth
Mr. Killingsworth is currently the Chief of the Cost Research Branch at Air Force Space & Missile Systems Center (SMC). He has over 22 years of experience addressing a broad range of defense-related issues and challenges. His experience includes cost analysis of advanced aircraft avionics, space sensor, and missile defense systems. He has also provided direct support to satellite program offices, including milestone decision efforts, Nunn-McCurdy breaches, integrated baseline reviews, congressional inquiries, and development of detailed program office estimates. He developed the initial normalization spreadsheet progression that became the foundation for the Unmanned Space Vehicle Cost Model (USCM), National Reconnaissance Office (NRO), and NAFCOM data normalization processes. He has conducted cost research to develop complexity-based cost estimating relationships (CERs) for space-based digital electronics, CERs for estimating SEIT/PM costs, and schedule estimating relationships (SERs) for estimating space program schedule milestones. Mr. Killingsworth is currently leading the effort to formulate improved methodologies for USCM.