1. Introduction / 2. Space system fundamentals / 3. Reviewing a cost estimate / 4. Space vehicle cost crosschecks / 5. Common issues in estimating space programs / 6. Resources for space system cost estimation / 7. Recommendations.

Why have the costs of acquiring space systems been so high? What are the sources of the problems? To answer these questions, RAND researchers examined the sources of cost growth of Air Force space systems and undertook an extensive study of two space systems--the Space Based Infrared System-High (SBIRS) and the Global Positioning System (GPS)--including an evaluation of their sources of cost growth, an assessment of their approaches to technical risk assessment, and an examination of their acquisition policy adaptations and industrial base environments. The researchers recommend independent program assessment for space systems that emphasizes technical and program factors, and a modified organizational structure that maintains cost analyst independence. They also summarize the cost estimating best practices of several other government organizations.

To use public funds effectively, the gov¿t. must meet the demands of today's changing world by employing effective mgmt. practices and processes, including the measurement of gov¿t. program performance. Legislators, gov¿t. officials, and the public want to know whether gov¿t. programs are achieving their goals and what their costs are. To make those evaluations, reliable cost information is required and fed. standards have been issued for the cost accounting that is needed to prepare that information. This Cost Guide has been developed in order to establish a consistent methodology that is based on best practices and that can be used across the fed. gov¿t. for developing, managing, and evaluating capital program cost estimates. Illustrations.

In response to historically high cost growth in the acquisition of space systems, the Under Secretary of the Air Force, in accordance with National Security Space (NSS) Acquisition Policy, directed the Air Force acquisition community to support the development of independent, accurate, and timely cost analyses to make the acquisition of NSS systems more realistic in terms of estimated costs. In turn, the former commander of Air Force Space Command (AFSPC), Gen Lance W. Lord, and the former commander of the Air Force Space and Missile Systems Center (SMC), Lt Gen Michael Hamel, asked RAND Project AIR FORCE to assess cost-estimating requirements and capabilities of SMC cost-estimating organizations as well as their resources, tools, methods and processes and to recommend an enhanced approach to cost analysis aimed at improving cost-estimating for space systems and increasing the understanding of factors that influence their cost. The study was sponsored by the former commander of SMC, General Hamel. The project technical monitor was Col Delane Aguilar, SMC/FMC. The research was conducted within the Resource Management Program of RAND Project AIR FORCE as part of a multiyear study entitled Air Force Space Systems Costs. The initial data collection was completed in May of 2006 and the final update was provided in February of 2007, with frequent updates in between. The final briefing was presented to General Hamel on March 13, 2007, and to Gen Kevin P. Chilton, the former commander of Air Force Space Command, on March 21, 2007. This monograph should interest government personnel involved in cost estimation and acquisition of defense systems, the military space acquisition communities, and those concerned with current and future acquisition policies.

The costs to acquire space-based missile defense systems are often reviewed by DoD. Issues are raised concerning the cost models used to generate cost estimates for space-based missile defense systems. The Ballistic Missile Defense Organization questions the use of traditional weight-based spacecraft cost models developed by the Air Force Space and Missile Systems Center. The concern is motivated by changes in satellite designs of future systems where smaller but more capable spacecraft are being built. Using weight-based cost models yields lower cost estimates, although the spacecraft are more capable. IDA developed spacecraft functional (engineering and manufacturing) cost-estimating relationships (CERs) at the spacecraft subsystem level using performance and physical characteristics that are not primarily weight-based. We developed nonrecurring (design, development, and test) and recurring (production) CERs for the spacecraft bus, including ground support equipment, and for communications payloads. The CERs show that programmatic aspects, which reflect the requirements and acquisition environments that the satellites were acquired under, have considerable influence on satellite costs.

NASA is responsible for developing much of the nation's future space technology. Cost estimates for new programs are required early in the planning process so that decisions can be made accurately. Because of the long lead times required to develop space hardware, the cost estimates are frequently required 10 to 15 years before the program delivers hardware. The system design in conceptual phases of a program is usually only vaguely defined and the technology used is so often state-of-the-art or beyond. These factors combine to make cost estimating for conceptual programs very challenging. This paper describes an effort to develop parametric cost estimating methods for space systems in the conceptual design phase. The approach is to identify variables that drive cost such as weight, quantity, development culture, design inheritance and time. The nature of the relationships between the driver variables and cost will be discussed. In particular, the relationship between weight and cost will be examined in detail. A theoretical model of cost will be developed and tested statistically against a historical database of major research and development projects. Cyr, Kelley Unspecified Center ...