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									                                                  Office of the Chief Engineer
                                          Office of the Chief Financial Officer




New Initiatives in Program and Project Management




                David R. Graham
       NASA Headquarters Cost Analysis Division
Drivers for Change
                                                        Office of the Chief Engineer
                                                Office of the Chief Financial Officer


  Transformation of NASA
   • CAIB / Return to Flight
   • Renewed Commitment to Excellence (Diaz Report)
   • Report of the President’s Commission (Aldridge Report)
   • Vision for Exploration
   • Clarity Team Report
  External and Internal Initiatives
   • OMB and GAO “Guidance”
   • Governmental collaborations (e.g., eGov, DAU, DoD / DoE)
   • Culture Change / OneNASA
   • Strategic Alignment
   • Financial Management Practices (e.g., IFMP, Full-Cost Accounting)
Summary of Major Changes in 7120.5C
                                                          Office of the Chief Engineer
                                                  Office of the Chief Financial Officer




    Inclusion of all NASA Investments
    Product Line Management
    Project Categorization
    Return to “Lifecycle Phases” terminology
    Implementation of Independent Technical Authority
    Inclusion of recommendations from CAIB /Diaz reports
  CCRM: Cost estimating, Cost-risk, Full Cost, CADRe, EVM, ONCE
  Living requirements document - change process defined
  Requirements “tailorable” through deviations and waivers
  Compliance Matrix
NASA Program and Project Management
Processes and Requirements Document
NPR 7120.5C                                              Office of the Chief Engineer
                                                 Office of the Chief Financial Officer


 Chapter 1          Overview of the NASA Environment
 Chapter 2          Program Management Requirements
 Chapter 3          Common Project Management Requirements
 Chapter 4          Basic and Applied Research Portfolios
 Chapter 5          Advanced Technology Development Projects
 Chapter 6          Flight Systems and Ground Support Projects
 Chapter 7          Institutional Projects
 Appendices
    -   Templates
    -   Product Maturity Matrix
    -   Reviews
    -   Index
    -   WBS
    -   Compliance Matrix
    -   Deviation / Waiver Form
Chapter 1:
Overview of the NASA Environment
                                                                               Office of the Chief Engineer
                                                                       Office of the Chief Financial Officer

    Budget Framework aligned with the Strategic Framework
    Program and Project Definitions
    Product Lines with appropriate lifecycles:
        Management Requirements Developed to Support the Different Types of NASA
         Investments
              Basic and Applied Research Portfolios
              Advanced Technology Development Projects
              Flight Systems and Ground Support Projects
              Institutional Projects

    Categorization:
        Projects are Categorized I, II, or III depending on lifecycle cost and priorities
         established by the Agency
    Four-Part Management Process
        Formulation
        Approval
        Implementation
        Evaluation
Chapter 2:
Program Management Requirements
                                                              Office of the Chief Engineer
                                                      Office of the Chief Financial Officer




 Preparation of a Program Plan using template provided in document
 All Programs are governed by the Agency PMC
 All Programs must have a signed Program Commitment Agreement (PCA)
 Two-phase process: Formulation and Implementation
 Program Implementation Reviews (PIR) will be conducted on all programs in xx
xxximplementation biennially (every three years on Basic and Applied Research
xxxPrograms)
 Reviews conducted by Independent Program Assessment Office (IPAO) through
xxxTerms of Reference with the Mission Directorate or Mission Support Office
Chapter 3:
Common Project Management Requirements
                                                               Office of the Chief Engineer
                                                       Office of the Chief Financial Officer


 Emphasis on planning and the preparation of a Project Plan using template
xxxprovided in document

 Project Control and Cost Estimating (WBS, EVM, CADRe, Full
Cost)
 Independent Technical Authority
 Risk Management
 Categorization determines governing PMC
 Breaches established against the project baseline
    Cost, Schedule & KPP
 Reviews conducted by independent assessment organization (determined
xxxby categorization) through Terms of Reference with the Mission Directorate
xxxor Mission Support Office
Chapter 4:
Basic and Applied Research Portfolios
                                                               Office of the Chief Engineer
                                                       Office of the Chief Financial Officer


    Portfolio Process Planning
    Proposal solicitation, evaluation, and selection
    MDAA or MSOD through the selection official approves selection of proposals
    Initiates funding and updates portfolio
    Peer review of progress reports and annual evaluations
Chapter 5:
Advanced Technology Development Projects
                                                                Office of the Chief Engineer
                                                        Office of the Chief Financial Officer



  Perform portfolio analyses, identify Key Performance Parameters (KPPs),
  Prepare Project Plan
  Approval secured as in the common project chapter
  Mature technology and report progress against KPPs and TRLs
  Typically at the Mission Directorate or Center due to the
 categorization    thresholds
Chapter 6:
Flight Systems and Ground Support Projects
                                                           Office of the Chief Engineer
                                                   Office of the Chief Financial Officer




  Continuous Cost-Risk Management: Common Core Level II
 xxxWBS (per appendix), Cost Estimation, Cost-Risk, Cost Analysis Data
 xxxRequirement (CADRe), One NASA Cost Engineering (ONCE) Data
 zzzBase, Integrated Schedules
  Special consideration to projects with long duration operations and
 xxx sustainment
  Evolutionary acquisition incorporated
    Incremental & Spiral
  Approval secured as in the common project chapter
  Refined success criteria for projects with long duration operations
  At a minimum, Pre-NAR and NAR per categorization scheme
Chapter 6 cont.:
Flight Systems and Ground Support Projects
                                              Office of the Chief Engineer
                                      Office of the Chief Financial Officer
   Flight Projects Lifecycle Phases
   and CADRe Submissions
  Program                                     Formulation                                                    Office
                                                                                                    Implementation of the Chief Engineer
  Phases                                                                                                 Office of the Chief Financial Officer


Flight Projects   Pre-Phase A: Phase A:                    Phase B:             Phase C:            Phase D:        Phase E:
                                                                                                                                  Phase F:
  Life Cycle        Concept     Concept                                                           Fabrication,     Operations &
                                                                                                                                  Disposal
    Phases           Studies  Development          Preliminary Design         Detailed Design    Assembly & Test   Sustainment


 Traditional
  Waterfall
Development                                                             NAR
                                              Pre-NAR
 or Directed
  Missions
 Evolutionary
  Acquisition           Concept Decision                                                   Production
   (Spiral or               Review                                      NAR                  Review
                                              Pre-NAR
  Incremental
 Development)
                            Down
  AO-Driven                 Select                                      CR
                                           Select Step 2
   Projects                 Step 1


                                                                        PDR                 CDR               ATLO
Legend

      GPMC Mission Decision Review                            CADRe, Preliminary Parts A & B,                  CADRe, Part C only during
                                                              90 days prior to Review                          Last year of project life
      CADRe EZ, 90 days prior to
      Decision Review                                          CADRe, All Parts,
                                                               30 days prior to Review
      Concept Study Report and
      Winning Proposal                                        CADRe, Part C only
                                                              180 days after launch
                             Office of the Chief Engineer
                     Office of the Chief Financial Officer




Cost Estimating Initiatives
            In
      NPR 7120.5C
Common Level 2 WBS for Flight
Systems and Ground Support Projects
                                                                       Office of the Chief Engineer
                                                               Office of the Chief Financial Officer



   Good corporate knowledge base
                                                 1.0 Project
   management requires some level of
   WBS standardization                              1.1 Program Management
       Long recognized in DOD with MIL-            1.2 Systems Engineering
        HDBK-881
       DoD, NRO, Air Force, with NASA              1.3 Safety and Mission Assurance
        participation, currently updating MIL-
        HDBK-881 for space systems                  1.4 Science/Technology
                                                    1.5 Payload
   NASA budget and cost community                   1.6 Aircraft/Spacecraft
   desire common WBS for product lines
                                                    1.7 Mission Operations

   December 8-9, 2004 HQ meeting                    1.8 Launch Vehicle/Services
   (with all centers represented) agreed
   to a common structure to Level 2                 1.9 Ground Systems Development
       Cost analysis community trying to
        agree to level 4 WBS (maps may be           1.10 System Integration Assembly & Test
        required) for CADRe
                                                    1.11 Education & Public Outreach
Continuous Cost-Risk Management
                                                                                               Office of the Chief Engineer
                                                                                       Office of the Chief Financial Officer


  A cost management architecture
   providing:                                                                            1
                                                                                                             2
                                                                  12                Perform Cost/     Build Reqmts/                    Preparation
       Early identification of medium-                              Assess Data
                                                                     For Model &
                                                                                    Benefit Trades
                                                                                      (CAIV is a
                                                                                       Subset)
                                                                                                      Function /
                                                                                                      WBS Matrix
                                                                                                      (CADRe)
                                                                                                                             3          Cost-Risk
                                                                   Database Updates

        and high-risk WBS elements                                 (CADRe) & (ONCE)
                                                                                                                  Develop Ref           Feedback:
                                                                                                                  Point Cost &
                                                      11       Compile                                            Schedule
                                                                                                                  Estimate
                                                                                                                                        Steps 1-5
                                                           End-of-Contract

       Communication of WBS risk          Application
                                                           Cost-Risk Data
                                                           for Evaluation
                                                             & Analysis                                               Assess WBS       4
                                                                                                                      Element Risk

        elements to project managers for
        focused cost management
                                            Cost-Risk
                                            Feedback:
                                                           Update LCCE
                                                            (CADRe) &
                                                              Cost /
                                                                                   RISK                               Translate Risk

                                           Steps 9-12 10
                                                            Sched-Risk
                                                                                                                                       5
                                                           Assessment                                                       into
                                                                                                                      Cost /Schedule
                                                                 Do EVM,                                                 Impacts


       Emphasis on WBS risk elements                           “S”-curve,
                                                              schedule risk
                                                               critical path                                     Develop
                                                                analyses,                                         EVM,
                                                                                                                                  Development
        in cost estimating                                    9
                                                                    etc.          Participate
                                                                               In Post-Contract Review Cost
                                                                                Award Meeting   Proposal
                                                                                                              Risk & CADRe
                                                                                                                RFP DRDs
                                                                                                                                   Cost-Risk
                                                                                        (Key    During Source
                                                                                     Bridging Selection
                                                                                                                         6
       Post-cost estimate tracking of                                           8
                                                                                     Event)                                        Feedback:
                                                                                                      7                            Steps 6-8
        identified risk WBS element
        using EVM system
       Updates, collection and
        archiving of technical and cost
        data for cost model improvement
Cost Risk Analysis & Mitigation
                                                                                Office of the Chief Engineer
                                                                        Office of the Chief Financial Officer

    Risk Areas
         Safety                    From            All cost estimates are really
         Technical/Performance/ CRM*               probability distributions
         Engineering                               Cost risk analysis quantifies budget
         Schedule, programmatic risk               reserves necessary for acceptable
         Cost estimating uncertainty               level of confidence
         Correlation
        *CRM=Continuous Risk Management


WBS Elements Fully
   Correlated                                             “Dollarizing” Risks

P                                  TOTAL PROJECT                                     Estimating Variance
                                                   Safety & Technical     t
    $                                                                               Schedule
                                                   Risk Mitigators                        $
                     Cumulative                    • Redundancy
P
                     Probability                   • Parts Program
                                                                                      Estimating Variance
    $                                              • Tests
                                                   • Etc.                             Cost
P                                                                         $
                                          $        $
Chapter 3: Requires Risks from Cost Estimate
Be Used in EVM
                                                            Office of the Chief Engineer
                                                    Office of the Chief Financial Officer


    3.4.3.2.a: Execute the Project Control Plan
        (6) Consistent with Continuous Cost-Risk Management
         (see reference L.2.a(1)), in addition to standard WBS-level
         performance measurement reporting, performance
         measurement of medium- and high-risk WBS elements
         identified during life cycle cost estimation shall be provided
         to the Project Manager through specification in the Cost
         Performance Report (CPR) Data Requirements Description
         (DRD) and/or the Project Plan
Cost Analysis Data Requirement
(CADRe)                                                                          Office of the Chief Engineer
                                                                         Office of the Chief Financial Officer

 CADRe is a Data Requirement on
 new high dollar value flight projects
     Configuration control for the cost
                                                                               Life Cycle Cost
      estimate                              Priority
     Documents the project technical and                LCC<$100M           $100M < LCC < $500M     LCC > $500M
      programmatic basis of estimate and                  Category II            Category I           Category I
      the corresponding cost estimate in     High
                                                       (CADRe Required)       (CADRe Required)     (CADRe Required)
      one document
     Snapshots taken < 6 times over        Moderate      Category III
                                                                                 Category II          Category I
      project life cycle                                                      (CADRe Required)     (CADRe Required)

                                                                                                      Category II
                                              Low         Category III           Category III
 DoD has had a similar approach in                                                                 (CADRe Required)
 place for many years
     CARDs (Cost Analysis Requirement
      Description)
     CCDRs (Contractor Cost Data
      Report)

 Ultimately, CADRe feeds a new
 corporate cost estimating data base
     ONCE (One NASA Cost Engineering
      Data Base)
     To be managed by the IPAO
  One NASA Cost Engineering (ONCE)
  Database Concept                                                  Office of the Chief Engineer
                                                            Office of the Chief Financial Officer

            Historical                                  Recurring
              Data                                     CADRe Data

                                   Cost Shops at
        Normalization              NASA Centers             Standard WBS



                                    Database       •Future data
•Historical data                     Support           –Collected with CADRe at
                                    Contractor         major milestones (at least
    –Data for completed projects
                                                       annually)
     from existing Center
     databases
                                    ONCE DB
        •MSFC – REDSTAR/NAFCOM
        •GSFC
        •JPL                                           Improved Cost
        •etc.                                            Estimates
Chapter 6:
Cost Initiative References                                     Office of the Chief Engineer
                                                       Office of the Chief Financial Officer

    6.1.f    New cost estimation requirements for flight systems and
    ground support projects are another important addition to this
    document. Category I and II projects must develop a CADRe.
    Cost-risk identification and quantification of medium- and high-
    risks are an integral new addition to project lifecycle cost estimates.
    Consistent with Continuous Cost Risk Management (CCRM),
    these medium- and high-risks are identified for performance
    measurement reporting in the application of earned value
    management. While conceptually related to the DoD CARD, the
    CADRe is NASA’s unique response to the need to improve cost
    estimates during formulation, and to do project grass roots and
    independent cost estimation based on the same information. The
    CADRe is a comprehensive document, developed and configuration
    controlled by the project, that provides a technical and quantitative
    description of the project in terms that permit the development of a
    LCCE. Typically, the contractor and/or NASA project engineers,
    assisted by cost estimators and the Center SMO, construct the
    CADRe. The CADRe should be considered a “living document”,
    which is matured at major milestones.
Chapter 6:
Cost Initiative References                        Office of the Chief Engineer
                                          Office of the Chief Financial Officer




     6.4.4.a     Capture and forward summaries of
    project costs as a function of the WBS and other
    performance information, to the OCFO Cost Analysis
    Division for inclusion in the ONCE database using the
    CADRe format
Chapter 7:
Institutional Projects                                                           Office of the Chief Engineer
                                                                         Office of the Chief Financial Officer

  Real property (CoF, Environmental Compliance and Restoration),
 Information Technology, Other Functional Initiatives (Education, Mission Support
 Office    investments)
  Requirements and approval process designed to accommodate various project types




                                       Capital Assets Project Lifecycle for Institutional Projects




                                        Non-Capital Assets Project Lifecycle for Institutional Projects
Appendices:
                                                             Office of the Chief Engineer
                                                     Office of the Chief Financial Officer

    Templates
       •  Formulation Authorization Document (FAD)
       •  Program Commitment Agreement (PCA)
       •  Program Plan
       •  Project Plan
       •  Cost Analysis Data Requirement (CADRe)
       •    Compliance         Matrix (App K)
    Reviews
    WBS
    References
    Definitions
    Acronyms
    Index
    Deviation / Waiver Form
Appendix K: WBS
7120.5C “SHALL” Statements                          Office of the Chief Engineer
                                            Office of the Chief Financial Officer




    3.2.1.2.b Define a Work Breakdown Structure (WBS)
     (1) The WBS for the project shall encompass all the

       work required in the project, including both in-house
       and contractor efforts, over the project life cycle
     (2) The WBS for the project shall be based on the

       appropriate product line template
     (3) The WBS shall have a companion WBS dictionary
       that narratively describes the overall structure and
       content of each individual element of the WBS, and a
       WBS index linked to reference individual elements to
       the dictionary
Appendix K: WBS
7120.5C “SHALL” Statements                              Office of the Chief Engineer
                                                Office of the Chief Financial Officer




    6.2.1 Project Planning Requirements: The Project Manager
    and the project team shall:
      6.2.1.a Structure the detailed product-based project WBS

       and WBS dictionary based on the standard WBS in Appendix
       J, or shall obtain approval for WBS tailoring from the OCFO
       and OCE
      6.2.1.b Generate a Contract WBS that supports

       cost/schedule control requirements for each contract
       following contractor selection or authority to proceed to
       implementation (see paragraph 3.4.3.2 for detailed EVM
       requirements).
Appendix K: Cost Estimation
7120.5C “SHALL” Statements                                    Office of the Chief Engineer
                                                      Office of the Chief Financial Officer

   3.2.2 Cost Estimation
   3.2.2.2 Requirements: The Project Manager and the project team
   shall:
      3.2.2.2.a Develop an initial Life Cycle Cost Estimate (LCCE)
          (1) The Project Manager shall develop an initial LCCE
           consistent with the project WBS, schedule, and
           performance parameters to form the project estimate
           (to be included in the initial Project Plan, Part 2,
           Resources.)
               (i) All cost and workforce estimates shall be summarized
                according to the NASA standard product line WBS and
                time phased by Government Fiscal Year (GFY)
               (ii) The project estimate shall always use the latest
                available full cost accounting initiative guidance and
                practices
         (2) The project estimate shall include reserves, along
          with the level of confidence provided by the reserves
         (3) Upon completion of the initial LCCE, the Project
          Manager shall provide it to the Program Manager
Appendix K: Cost Estimation (cont)
7120.5C “SHALL” Statements                                Office of the Chief Engineer
                                                  Office of the Chief Financial Officer




     3.2.2.2.b Prior to the NAR, update the project
    estimate
        (1) The Project Manager shall ensure that all elements of
         the project LCCE are internally consistent and have been
         updated in time for the NAR (at which time it is designated
         the NAR estimate)
        (2) In the event that the (Category I and II) project LCCE
         and ICE do not agree and cannot be reconciled, the OCFO
         Cost Analysis Division will provide a recommended cost
         position to the MDAA (or MSOD), Chief Financial Officer, and
         Chief Engineer, who together will make a recommendation
         to the Agency or Mission Directorate PMC. The Project
         Manager shall defer to their decision.
Appendix K: CADRe
7120.5C “SHALL” Statements                                Office of the Chief Engineer
                                                  Office of the Chief Financial Officer



    6.2.2.a For Category I and II projects, the Project Manager
    shall complete a preliminary CADRe (Parts A and B), in
    accordance with Table H-4 in Appendix H. Appendix E contains
    the initial CADRe DRD, but the latest CADRe DRD, available in
    the on-line NASA Cost Estimation Handbook
    (<http://www.ceh.nasa.gov>), should be used. For AO-driven
    projects, the requirement for a preliminary end-of-Phase A
    CADRe is waived in lieu of the submission of a copy of the
    winning proposal and concept study report
    6.2.2.b For Category I and II projects, the Project Manager
    shall develop a risk-based LCCE (including a project cost S-
    curve) consistent with the preliminary CADRe for presentation
    at the preliminary NAR. This LCCE is called the project estimate
    and is appended to the CADRe as Part C.
Appendix K: CADRe (cont)
7120.5C “SHALL” Statements                               Office of the Chief Engineer
                                                 Office of the Chief Financial Officer




     6.2.2.c For Category I and II projects, the Project Manager
    shall develop a Baseline CADRe and a risk-based LCCE
    (including a project cost S-curve) consistent with the Baseline
    CADRe for presentation at the NAR. This LCCE is called the NAR
    estimate and is appended to the CADRe as Part C. AO-driven
    Category I and II projects shall develop a risk-based LCCE
    (including a project cost S-curve) consistent with the Baseline
    CADRe for presentation at their Confirmation Review. This LCCE
    is called the CR estimate and is appended to the CADRe as Part
    C
Appendix K: ONCE Database
7120.5C “SHALL” Statements                         Office of the Chief Engineer
                                           Office of the Chief Financial Officer




    6.4.4 Capture Knowledge Requirements:
    The Project Manager and the project team
    shall:
       6.4.4.a Capture and forward summaries of
        project costs as a function of the WBS, and other
        performance information, to the OCFO Cost
        Analysis Division for inclusion in the ONCE
        database using the CADRe format
Appendix K: EVM
7120.5C “SHALL” Statements                                            Office of the Chief Engineer
                                                              Office of the Chief Financial Officer



   3.4.3.2.a Execute the Project Control Plan
      (1) EVM principles as defined by EIA-748-A shall be applied to all projects
       (contractor and civil service) exceeding $20M total project cost. However,
       the MDAA (or MSOD) can require EVM principles be applied to any
       project or activity
      (2) A fully validated EVM system as defined by EIA-748-A shall be
       applied to all projects (contractor and civil service) exceeding $50M total
       project cost. However, the MDAA (or MSOD) can require a fully
       validated EVM system be applied to any project or activity
      (3) In implementing (1) and (2) above, the Project Manager shall ensure (for
       all applicable procurements) the appropriate provisions and clauses are
       included in solicitations and contracts
      (4) For projects requiring EVM, the Project Manager shall conduct and
       complete Integrated Baseline Reviews (IBRs) on projects to ensure
       the validity of the baseline.(i) The IBR shall be accomplished within six
       months after contract award or after approval of the Project Plan by the
       MDAA (or MSOD).(ii) The IBR shall be accomplished within two months
       after definitization of significant scope changes or after budget realignment.
Appendix K: CCRM
7120.5C “SHALL” Statements                       Office of the Chief Engineer
                                         Office of the Chief Financial Officer




    (6) Expenditures shall be accumulated according to
   the WBS established for the project, and in as near-
   real time as possible. Consistent with Continuous
   Cost-Risk Management (see reference L.2.a(1)),
   in addition to standard WBS-level performance
   measurement reporting, performance measurement
   of medium- and high-risk WBS elements identified
   during life cycle cost estimation shall be provided to
   the Project Manager through specification in the Cost
   Performance Report (CPR) Data Requirements
   Description (DRD) and/or the Project Plan.
Cost Initiatives Implementation Plan
                                                            Office of the Chief Engineer
                                                    Office of the Chief Financial Officer


    Phase 1 – Conduct Workshops at Centers
       Communicate NPR 7120.5C policy changes
       Obtain feedback, revise cost initiatives accordingly
       February - March 2005
       Codify in NPR 7120.5C and the CEH
    Phase 2 –Communicate and Facilitate Policy Changes
       Joint OCFO Cost Analysis Division and Office of Chief Engineer
        Center road shows
       Projected dates: May-June 2005
    Phase 3 – Train
       Detailed CCRM 2 day training seminar at the Centers
       Projected dates: July - September 2005
                 Office of the Chief Engineer
         Office of the Chief Financial Officer




Questions?
              Office of the Chief Engineer
      Office of the Chief Financial Officer




BACKUPS
Eleven Diaz Actions Incorporated in 7120.5C
                                                                                                Office of the Chief Engineer
                                                                                        Office of the Chief Financial Officer


       Action(s)                                                  Description
                         (1) Review/develop current policy or guidance that assures critical event data is collected, observed
          1,2,21         and analyzed (2) Develop a standard for comprehensive program risk management and observable
                         data collection for all phases of program development, test, operation to be used for program
    (Partially Closed)   management, improvement, anomaly/disaster reconstruction (21) Identify methods used by other test
                         organizations to perform remote system testing and anomaly resolution
                         “Develop a standard for program development strategy based on the program focus of R&D versus
                         operational system or infrastructure that focuses on the comprehensive assessment of program
            6            management, technical, and operational risks; all of these factors must be incorporated into the
                         development of an integrated program schedule.”

             9           “Develop plans for implementing an Independent Technical Engineering Authority (ITEA) of the scope
                         envisioned by the CAIB”
    (Partially Closed)
                         (24) Identify clear chains of command in a program including responsibility, accountability, and
                         authority for issue communications. (28) Develop a clear process for management chain of command
                         and communications within a program and among government organizations and program
        24,28,35         management/contractor interfaces for anomaly request and resolution. (35) Review communications
                         policies and reports. The review will focus on the requirements for formal reporting during normal
                         and emergency/crisis times. For formal reporting during normal operating tempo, the frequency of the
                         reports shall be determined, and who produces/reviews, and approves these reports.
                         “Expand upon the process for independent program reviews (Independent Assessments,
           30            Independent Implementation Reviews, and Non-Advocate Reviews) that require re-review when any
                         interim major milestone slips to determine the impact on mission completion schedule and cost risk”

           31            “Perform a comprehensive assessment of major program interdependencies.“

                         “Perform an assessment of best industry practices for R&D, completion, and operational programs to
           33            assess the management of schedule and cost risk through the development of management
                         reserves.”
Strategic Framework Aligned to
Budget Framework                         Office of the Chief Engineer
                                 Office of the Chief Financial Officer
     Requirements Flow and Documentation
                          •Forum for assessing Agency space                    •Administrator chair, develops multi-year strategic
                          operations practices, policies,                      plan, strategic roadmap, multi-year detailed plan
                          standards, procedures, and                           that forms basis for budgets                  Officeof the Chief Engineer
                          capabilities,                                                                              Office of the Chief Financial Officer

                   Vision                                          National
                                                                    Goals
               for Exploration
                                                                                                               Strategic                      Goals &
                                                                  NASA HQ                                      Planning     Administrator    Objectives
                                                                                                               Council
           NASA Strategic Plan
                                                                   Agency
           Strategic Roadmaps                                                                                   Ops          Deputy
                                                                   Goals &
           NPRs / NPDs…                                           Objectives                                   Council     Administrator

                                                                                                               Agency
                                                                                                                                              Agency
                                                               Mission Directorates                             PMC                         Requirements
          Capability Roadmaps
                                         Mission                                  Mission
          PCA, FAD                      Directorate                              Directorate
          NPRs/NPDs…                                                                                                       AA / Chief…
                                         Themes/                                  Themes/
                                           Goals                                    Goals
           •Approves formulation start
•Approves •Between AA and Prog Mgr
                                                                                                            Directorate
                                                                                                                                              Program
implementat                                                                                                                                 Requirements
                                 Program 1           Program 2                                                 PMC
ion start
•Between
                                                         •Responsible for reviewing new programs proposed
AA and DepProgram Plan,           Program                by the Enterprises as part of the annual budget             Program Manager(s)
Adm       Documents…               Goals/                cycle and making recommendations to the
                                  Reqmts                 Administrator. In addition, the Council reviews the
                                                         performance of existing programs
                                                                                                                Center                        Project
                        Project 1            Project 2                                                           PMC                        Requirements

           Project Plan,
           Documents…                                                                                                Project Manager(s)
Program and Project Definitions
                                                                                 Office of the Chief Engineer
                                                                         Office of the Chief Financial Officer



Program:          A strategic investment by a Mission Directorate
    or Mission Support Office that has defined goals, objectives,
    architecture, funding level, and a management structure that
    supports one or more projects. A Program usually contains
    several projects or portfolios of investigation.


Project:       A discrete investment defined in a Program Plan
    having defined goals, objectives, requirements, lifecycle cost, a
    beginning and an end. A project yields new products or
    services that directly address NASA’s strategic needs.


Note: Investment is defined as the Full Cost required to achieve the Agency, Mission Directorate,
    or Mission Support Office goals.
Product Line Management
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  Basic and Applied Research
  Portfolios
      Usually level of effort through award of
       grants
  Advanced Technology Development
      Advancement of TRLs, usually spiral
       development
  Flight Systems and Ground Support
      Standard waterfall development and
       evolutionary acquisition
      Operations typically level of effort with
       significant ramps
  Institutional Projects
      Combination of waterfall and level of
       effort developments
Categorization of Projects
                                     •CCRM/CADRe required on Cat I and II
                                     Flight Systems and Ground Support projects
                                     •Projects in Phase C/D now waived (CAD will fund           Office of the Chief Engineer
                                     CADRes on these)                                 Office   of the Chief Financial Officer




                                                                                  •PM assigns project “Priority” with Enterprise
 Priority is a complex variable that can include:                                 oversight

 •   Importance of the activity (project in-line with the critical path of the Strategic and Capability
     Roadmaps)
 •   Complexity of the activity (international participation, joint effort with other government
     agencies, etc.)
 •   Uncertainty surrounding the application of new and untested technologies
    Presence of nuclear materials on board
    Systems being developed for human spaceflight
    Spacecraft development classification (NPR 8705.4, Risk Classification for NASA Payloads)
2004 GAO Report on NASA Cost Estimating
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  Scope included 27 projects
        Median cost growth of 13%
        (Absolute mean deviation of 26%)
  Recommendations
        Develop an integrated plan including
            Guidance for rebaselining
            Enforced use of Earned Value Management
            Staff and support for cost-estimating and
             EVM
        Establish a standard framework for Life
         Cycle Cost Estimates
            Based on a full Life Cycle Cost
            Using a WBS encompassing both in-house
             and contractor efforts
            Using CARDs
            With Independent Cost Estimates at each
             milestone
            Using cost risk assessments
        Prohibit projects from proceeding
         through the review and approval
         process without above
2004 Aldridge Commission
Recommendations On NASA Cost Estimating
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  Recommended an
  independent cost analysis
  organization similar to
  DoD CAIGs (Cost Analysis
  Improvement Group)
      Independent cost
       estimating organization
      Maintains corporate data
       base of historical project
       cost information
      Generally uses parametric
       cost estimating procedures
      Recommends final cost
       position to approving bodies
NPR 7120.5C
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 Initiatives to improve Agency cost
 estimating are documented in the new
 NASA Cost Estimating Handbook
 (www.ceh.nasa.gov)

 Cost initiatives addressed
     HQ Cost Analysis Division and Independent
      Program Assessment Office (IPAO) “CAIG-
      like” capability
     Use of Continuous Cost Risk Management
      to improve coordination across cost
      communities of practice
     The use of EVM
     The use of cost risk analysis to quantify
      uncertainty
     Commonality in work breakdown structures
     Better cost documentation using a Cost
      Analysis Data Requirement (CADRe)
     A corporate cost data base-the One NASA
      Cost Engineering (ONCE) database
2004 NASA Cost Estimating Handbook
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  Completely revised since 2002
    Edition
  Purpose and Objectives
        To provide a best practices
         resource
        Tied closely to NPR 7120.5C
  Scope
        Approaches broad cost-estimating
         topics through general concept
         discussions and generic
         processes, techniques, and tool
         descriptions
        Introduces Continuous Cost Risk
         Management (CCRM)
  A living document at
    www.ceh.nasa.gov
Project Categorization Determines Governance
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                              •OFCO CAD maintains cognizance of IPAO
                              independent cost estimates
                              •IPAO is a HQ OCE organization with a dotted line
                              responsibility to the OFCO CAD
                              •IPAO Deputy Director leads IPAO cost efforts




 Management Oversight Aligned with the Magnitude of
                 the Investment
Special Thanks to:                                                                    Office of the Chief Engineer
                                                                              Office of the Chief Financial Officer
Aeronautics Research Mission Directorate   Office of Education                    Ames Research Center
            - Rob Anderson                               - Bernice Alston                     - Ron Johnson
            - Yuri Gawdiak                 Office of Chief Information Officer    Dryden Flight Research Center
Exploration Systems Mission Directorate                  - Gary Cox                           - Carol Reukauf
            - Joey Shelton                 Office of Chief Financial Officer                  - James Stewart
            - Jeff Belanger                              - Joe Hamaker            Goddard Space Flight Center
            - Ellen Stigberg                             - David Graham                       - Rich Day
            - Neil Woodward                Office of Institutions & Management                - Beth Keer
            - Rob Robbins                                - Ken Sateriale                      - Ed Torres
            - Rick Bonfiglio                             - Olga Dominguez         Glenn Research Center
Science Mission Directorate                              - Mike McNeil                        - Mark Kilkenny
            - Ken Ledbetter                              - Maria Bayon            Jet Propulsion Center
            - Gary Rawistzer               Office of Chief Scientist                          - Jeff Leising
            - George Albright                            - Ann Clarke                         - Bob Shishko
            - Paul Hertz                   Office of the Inspector General        Johnson Space Center
Space Operations Mission Directorate                     - Beth Richardson                    - James Ortiz
            - Stan Fishkind                Office of Chief Engineer                           - Lisa Moore
            - Heather Pizzamiglio                        - Vicki Parsons (NESC)   Kennedy Space Center
Safety and Mission Assurance                             - Mike Benick (IPAO)                 - Hugo Delgado
            - John Tinsley                               - Ray Carpio (IPAO)      Langley Research Center
            - Ron Moyer                                  - Jeff Jones (IPAO)                  - Arlene Moore
            - Martha Wetherhold                          - Robert Ross            Marshall Space Flight Center
            - Will Harkins                               - Mark King                          - John Brunson
            - Len Sirota                                 - Mike Blythe            Stennis Space Center
            - Homayoon Dezfuli                           - Bill Best                          - Freddie Douglas
                                                         - Liam Sarsfield
                                                         - Greg Robinson
                                                         - John Kelly
                                                         - Walter Hussey
Chapter 6:
Cost Initiative References                                      Office of the Chief Engineer
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     6.2.1. Project Planning Requirements
        (a) Structure the detailed product-based project WBS and WBS
         dictionary based on the standard WBS in Appendix J, or shall
         obtain approval for WBS tailoring from the OCFO and OCE
        (b) Generate a Contract WBS that supports cost/schedule control
         requirements for each contract following contractor selection or
         authority to proceed to implementation (see paragraph 3.4.3.2 for
         detailed EVM requirements)
        (f) Form an operations team organization compatible with the
         operations portion of the WBS and the project’s flight and ground
         operations concept. This team shall include expertise in the
         following areas: flight operations, ground operations, safety,
         mission assurance, logistics, sustaining engineering, and any other
         expertise required for a successful Phase E, and/or Phase F

								
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