The last 10 percent of the technical performance development generates one-third of the cost and two-thirds of the of problems - Norm Augistines 15th Law
Using the NASA definition, Margin is the difference between the maximum possible value and the maximum expected Value whereas, contingency is the difference between the current best estimates and maximum expected estimate. For systems under development, the technical outcome and technical performance values both carry margin and contingency.
- Technical Margin and Contingency serve several purposes:
- Describes the need for and use of resource margins and contingency in system development.
- Defines and distinguishes between margins and contingency.
- Demonstrates that, historically, resource estimates grow as designs mature.
- Provides a representative margin depletion table showing prudent resource contingency as a function of the project phase.
For any system, in any stage of its development, there is a current maximum possible, maximum expected, and current best estimate for every technical outcome. The current best estimate of a technical performance change as the development team improves the design and the understanding as that design matures.
For a system in development, most technical outcomes should carry both margin and contingency. The goal of Technical Margin (unlike Cost and Schedule Margin) is to reduce the margins (for example Size, Weight and Power) to as close to zero as possible, to maximize mission capabilities. The technical growth and its handling include:
- Expected technical growth ‒ contingency accounts for expected growth
- Recognize mass growth is historically inevitable.
- As systems mature through their development life cycle from conceptual to detailed design, variability is reduced and a better understanding of the design is achieved.
- Requirements changes often increase resource use.
- Unplanned technical growth ‒ margins account for unexpected growth
- Recognize any complex project or program development is challenging
- Projects encounter “unknown unknowns” with the use of new technology that is difficult to gauge, that develop into uncertainties in design and execution of the project, all the way to manufacturing variations.
As always no credible decision can be made in the presence of uncertainty without estimating the impact of that decision on the probability of the success of the project.
