Understand project.
Once the decision to use a parametric cost estimating
approach has been made, you should involve the Cost
Engineering Office as soon as possible after initiation
of the project. Make sure the cost estimators assigned to
the project understand the project: content, schedule,
driving requirements, impacts to other programs, etc.
Establish a clear set of groundrules and assumptions that
get communicated to both the technical and cost analysts
on the project team. Establish a WBS if one has not
already been developed.
Collect cost estimating input data.
Each person responsible for a WBS element should
insure the following data is provided to the cost
analyst:
- Functional description
- Schematics, drawings, etc.
- Weights and other technical parameters (thrust,
pointing accuracy, data rates, etc.)
- Quantities (development units, qualification
units, flight hardware, etc.)
- Start and stop dates for development and
production
In addition each person responsible for a WBS element
should review the cost models with the cost analyst to
determine the most applicable CER to use. Also each
analyst should determine the appropriate complexity
factor to be applied to the subsystem. The complexity
factor would account for the differences in development
risk and design inheritance between the system being
costed and the systems included in the CER data base.
Prepare estimates.
The cost analyst will run the cost models, add system
level impacts (reserve, prime fee, program support, OUCD,
etc.), and spread the cost estimate to the proposed
schedule to determine annual funding requirements.
Appropriate inflation factors will be applied at this
point to convert the estimate to real year dollars.
The result of this activity will be the initial
baseline cost estimate. This baseline will be updated, as
appropriate, as a consequence of the results of Box 4 and
Box 5 below.
Perform supporting analyses.
Other analyses would be performed as required. These
could consist of:
- trade studies to determine the cost effectiveness
of alternative technical approaches,
- "what if" analyses to determine the
cost impact of relaxing technical requirements
associated with the cost drivers,
- "what if" analyses to determine the
cost impact of changing an assumption or
groundrule,
- comparisons and reconciliation's with other
costing methodologies, and
- risk analyses to derive analytically the
appropriate amount of reserve.
Document and review.
This would include documenting the results of the
analyses, preparing briefings, reviewing the results with
project and center management, presenting and defending
the estimates to a Non-Advocate Review team, and, for
larger projects, documenting a baseline program cost
commitment in accordance with NMI 7120.4 for annual
revalidation purposes.
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