IMPROVING SPACE PROJECT COST ESTIMATING
WITH ENGINEERING MANAGEMENT VARIABLES
Joseph W. Hamaker, NASA Headquarters Cost Analysis Division
Paul J. Componation, The University of Alabama in Huntsville
Current aerospace parametric cost models predict
space project costs using regression equations.
equations relate the historical cost of projects to
technical variables such as weight and power.
improvements in parametric cost modeling have been
made, there is still significant variability in the
This is particularly true when estimating
the costs for complex systems.
Part of this variability
may be due to the models’ inability to capture the
considerations required to develop these systems.
Our paper lays the groundwork for the introduction
of engineering management variables into current
cost models to improve their predictive capabilities.
The general problem in space project cost estimating
is predicting the cost of projects early in their
formulation phase in order to make accurate
commitments on what the project is likely to cost.
These commitments are made to the project
stakeholders who include NASA management, the
Office of Management and Budget and Congress,
Parametric cost models are used
because in the early stages of project definition, not
enough detailed information is known to perform
other types of estimates (such as a detailed
engineering estimate which is based on a labor and
material buildup of cost).
The parametric cost
models that are generally used in the early phases
currently relate design information to cost.
purpose of this paper is to report the results of our
investigation into whether engineering management
parameters show promise for improving the accuracy
of the models.
Background on Cost Estimating
Parametric estimating is the process of estimating
cost by using mathematical equations that relate cost
to one or more physical or performance variables
associated with the item being estimated.
estimating is used in a wide variety of applications
including aeronautics and space, the military and
commercial aircraft industries, the chemical industry,
shipbuilding, construction, mining, power plants,
computers, computer software, electronics and many
Sometimes, especially before detailed
designs are available, the parametric approach is the
only estimating technique used in a project.
Parametric estimating equations are often called
cost estimating relationships, or CERs.
Cost is the
dependent variable in CERs while the physical or
performance inputs are the independent variables.
CERs can relate cost to many different types of
independent variables (e.g., dollars per square feet for
buildings, dollars per cubic feet for chemical process
pressure vessels, dollars per pound for spacecraft,
dollars per kilowatt for electrical power plants,
dollars per horsepower for motors, dollars per
kilobyte for computers, dollars per line of code for