NRC Calls For Vigilance in Cost Estimating for NASA Space and Earth Science Missions

A new report from the National Research Council (NRC)’s Space Studies Board (SSB) recommends that NASA do a better job of estimating the costs of its space and Earth science missions. An SSB study committee chaired by Ron Sega, former astronaut and former Undersecretary of the Air Force in charge of its space activities, concludes that:

“Unfortunately, instead of motivating and rewarding vigilance in accurately predicting and controlling costs, the current system incentivizes overly optimistic expectations regarding cost and schedule. For example, competitive pressures encourage (overly) optimistic assessments of the cost and schedule impacts of addressing uncertainties and overcoming potential problems. As a result, initial cost estimates generally are quite optimistic, underestimating final costs by a sizable amount, and that optimism sometimes persists well into the development process.”

The committee reviewed 10 existing studies on cost growth in NASA programs and “generally concurs with the consensus viewpoints expressed” in those studies, including the facts that the earlier in a program an initial cost estimate is made, the more it will grow. Also, most cost growth occurs after the program has gone through critical design review, meaning that cost reserves must be maintained into the later stages of development.

The committee complimented NASA on recent changes in how it estimates costs for space and Earth science missions, including the decision to cost projects on a 70% confidence level. It added, however, that it is too early to assess how effective that action is, and recommended that NASA develop a “comprehensive, integrated cost containment strategy.”