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Friday, November 17, 2006

Price Tags On Pentagon Space Projects Soar

Costs for US Department of Defense space acquisitions over the past several decades have consistently been underestimated—sometimes by billions of dollars, according to a government watchdog agency.

For example, Space Based Infrared System High program costs were originally estimated at $4 billion, but the program is now estimated to cost over $10 billion. Estimated costs for the National Polar-orbiting Operational Satellite System program have grown from almost $6 billion at program start to over $11 billion, says a new report by the Government Accountability Office (GAO), the nonpartisan investigative arm of Congress.

For the most part, cost growth has not been caused by poor cost estimating, but rather the tendency to start programs before knowing whether program requirements can be achieved within available resources—largely because of pressures to secure funding, GAO says.

At the same time, however, unrealistic program office cost estimates have exacerbated space acquisition problems. Specifically, with budgets originally set at unrealistic amounts, DOD has had to resort to continually shifting funds to and from programs, and such shifts have had costly, reverberating effects, it adds.

"Our analyses of six ongoing space programs found that original cost estimates were particularly unrealistic about the promise of savings from increased contractor program management responsibilities, the constancy and availability of the industrial base, savings that could be accrued from heritage systems, the amount of weight growth that would occur during a program, the availability of mature technology, the stability of funding, the stability of requirements, and the achievability of planned schedules," GAO says. "At times, estimates that were more realistic in these areas were available to the Air Force, but they were not used."


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