I'm working an Implementation Review (IR) of a major space flight vehicle, that includes Software Intensive System of Systems.
Here are the guidelines for a credible cost estimate (GAO-16-620)
Comprehensive
- Includes all life-cycle costs
- Defines program, reflects current schedule, technically reasonable
- Work Breakdown structure is traceable and includes appropriate details
- Documents all cost-influence ground rules and assumptions
Well Documented
- Capture source data used, reliability, and data normalization
- Details of calculations performed and estimating methodology used
- Includes detailed instruction on how to replicate the estimate
- Describe a technical baseline consistent with program
- Includes evidence of review and acceptance by management
Accurate
- Estimate should lack bias; be neither overly conservative nor optimist
- Proper adjustment for inflation
- Few, if any, mistakes in calculation
- Regular updates cost estimate to reflect significant changes
- Documented and explained variances between planned and actual costs
- Estimate based on historical record of comparable programs
- Estimating techniques used appropriately
Credible
- Includes sensitivity with a range of costs based on varying inputs
- Risk and uncertainty analysis that qualifies risks and impacts
- Cross-check major cost elements
- Independent cost estimate to compare different estimating methods
These guidelines are comprehensive and not likely to cover most projects or programs. But it's good to ask how many of these attributes can be found in your cost estimate?
