Assessing Impact of Funding Constraints to Cost and Schedule
Models and Methods Track
Cost risk and uncertainty over the past few years have drawn high interest in the cost estimation industry. Significant effort has been invested by the cost community to develop standard practices and refining tools to standardize how analysts to conduct risk and uncertainty analysis and examine the results. The most common output has been the cumulative distribution function (S-Curve) from which a target confidence level can be identified and a resulting cost target can be generated. This result is normally defined as the risk-adjusted estimate and phased over time to generate a desired funding level for the program.
Although this analysis provides a mechanism for generating a budget submission, the question remains – what is the impact to the program if the desired funding level cannot be provided? Does this impact change the overall cost estimate, the confidence level and more importantly are there schedule impacts one needs to consider?
This presentation leverages a research study conducted by NASA in 2009, “Early FY Funding Shortfall Impact on Overall Project Confidence Level” (FSCL) methodology developed by Alf Smith, to assess the potential impact of budgetary constraints and resulting shifting of non-funded effort within in a program estimate. This presentation will highlight a potential method to address the over/under funding of effort and the resulting impact to annual costs and the overall schedule duration.
Using the simple principles outlined in this presentation, analysts will be able to provide ROM level answers to the question of how the unfunded effort affects the overall schedule and phased risk adjusted estimate. The tool will help Program managers to be aware of yearly effort that is above the budget and effectively manage potential shortfalls that could carry over to the completion of the program and result in schedule slips.
Tecolote Research, Inc.
Mr. Elliott graduated from the University of California at Los Angeles with a B.S. in Electrical Engineering and from California State University at Dominguez Hills with an MBA. He is employed by Tecolote Research, Inc as the Operations Manager for Tecolote’s NASA Project Support Consulting group. Since 1992, Mr. Elliott has actively been teaching cost estimating, statistical analysis, and risk modeling for a wide variety of customers (Army, USCG, Navy, USMC, USAF, and NASA). Since 2005, he has been actively involved with NASA in supporting cost risk analysis and integrated cost/schedule risk analysis to support NASA’s Joint Cost Level (JCL) policy. In late 2008, Mr. Elliott was the lead analyst to develop a methodology and build a proof-of-concept for NASA to conduct JCL analysis. He has won multiple awards from NASA, ranging from Cost Team of the Year to various Awards of Excellence, and most recently NASA’s Support Contractor of the Year.
Tecolote Research, Inc.
Mr. Rippe graduated from the Inter American University of Puerto Rico with a B.S. in Applied Mathematics. He is employed by Tecolote Research, Inc as an Advanced Analyst for Tecolote’s NASA Project Support Consulting group. Since 2005, Mr. Rippe has actively been teaching cost estimating, statistical analysis, and risk modeling for a wide variety of customers (USCG, Navy, USAF, and NASA). Since 2008, he has been actively involved with NASA in supporting cost risk analysis and integrated cost/schedule risk analysis to support NASA’s Joint Cost Level (JCL) policy. He has won awards from NASA, ranging from Cost Team of the Year to various Awards of Excellence.