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Using Project Performance Data in Cost and Schedule Analysis

Research Track



Numerous projects developed at NASA now use the Joint Confidence Level (JCL) approach to simultaneously estimate cost and schedule uncertainty associated with the project. One crucial step in JCL analysis is the development of proper uncertainty bounds. These bounds are often the opinion of subject matter experts, or are derived from cost and schedule estimating relationships. However, as a project progresses, over time the bounds around certain elements and tasks are likely to change.

This study is a proof-of-concept that explores the use of objective performance or progress data gathered over time to update uncertainty distributions. Focusing primarily on schedule uncertainty, this effort concentrated on two specific areas – an examination of appropriate performance data to update uncertainty distributions, and the development of an updating method. In particular, this study looks at Earned Value Management data, as well as several other performance metrics as the source for estimating the changes in distribution bounds. The algorithm for updating uncertainty distributions borrows heavily from the world of Bayesian statistics.

In this presentation we will cover the numerous issues associated with the use of traditional Earned Value data as a performance metric for estimating schedule uncertainty. The presentation will discuss current conclusions on what the “best” metric is for this process, describe the updating algorithm, and demonstrate how it can take a given uncertainty distribution and update it over time to keep it current with project performance data.


Fred Kuo
Fred Kuo is the integration lead at the SCEA office of the Constellation Program. Prior returning to NASA, Fred was a Principal Consultant at PA Consulting Group. While at PA, Fred has worked on portfolio optimization project utilizing real option theory, power and gas contract valuation, energy trading risk management, and commodity price modeling. Prior to joining PA, Fred was the risk manager on the International Space Station Program at NASA for 6 years. He was instrumental in developing quantitative risk analysis approach for the aerospace systems. Fred has a broad modeling skill in engineering systems and business systems, and has deep insight in all aspect of risk issues. He holds advanced degrees in Electrical, Nuclear and Aerospace Engineering, and M.S in Finance with concentration in risk management. He is a certified Financial Risk Manager (FRM).

Mike Stelly
Mike Stelly is a cost analyst for Johnson Space Center (NASA) supporting a variety of projects designed to further human spaceflight. Prior to joining NASA, Mike worked on a number of projects concerned with the integration of cost, schedule, and risk at Tecolote Research, Inc. Mike has also worked for the Air Force as the cost lead for the Space Based Infrared System satellite program. He was responsible for all life-cycle costs for the $18B satellite constellation, as well as cost and schedule risk, budgetary excursions, and incorporating earned value metrics where applicable. Prior to his work as a cost analyst, Mike managed operational budgets in the Air Force. His most recent budgetary work was in Andersen Air Force Base, Guam, where he oversaw the development and execution of a $230M annual budget. This budget was responsible for such areas as certain military operations out of Guam, military family housing, and civilian pay. Mike holds a B.S. in Economics with an M.S. in Cost Analysis.

Darren Elliott
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.