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GAO Not Convinced by NASA's Latest JWST Cost Estimate

Marcia S. Smith
Posted: 03-Dec-2012
Updated: 03-Dec-2012 04:46 PM

The Government Accountability Office (GAO) is giving NASA credit for taking steps in the right direction, but remains unconvinced that the most recent cost estimate is reliable.

In a report released today, GAO assessed the latest cost estimate -- $8 billion for development plus $800 million for operations, for a total life cycle cost of $8.8 billion -- against four characteristics that GAO seeks: comprehensive, well documented, accurate and credible.   NASA's estimate meets the first of those "substantially," but the other three only "partially," GAO concluded. 

One criticism is that NASA "did not perform a sensitivity analysis that would have identified key drivers of costs, such as workforce size," GAO said.  GAO is also worried about schedule reserves.   Whle project officials say there are 14 months of reserve, which meets Goddard's requirements, GAO points out that only 7 of those months are likely to be available for the last three of five integration and test efforts when problems historically pop up.

GAO recommends that the NASA Administrator direct JWST officials to do the following:

  • "improve cost estimate documentation and continually update it to reflect earned value management actual costs and record any reasons for variances";
  • "conduct a sensitivity analysis on the number of staff working on the program to determine how staff variations affect the cost estimate";
  • "perform an updated integrated cost/schedule risk analysis, or joint cost and schedule confidence level analysis, using a schedule that meets best practices and includes enough detail so that risks can be appropriately mapped to activities and costs; historical analogous data should be used to support the risk analysis";
  • "conduct a separate independent review prior to the beginning of the Optical Telescope Element and Integrated Science Instrument Module and spacecraft integration and test efforts to allow the project's independent standing review board the opportunity to evaluate the readiness of the project to move forward, given the lack of schedule flexibility once these efforts are under way";
  • "schedule the management review and approval to proceed to integration and test (key decision point D or KDP-D) prior to the start of observatory integration and test effort"; and
  • "devise an effective, long-term plan for project office oversight of its contractors that takes into consideration the anticipated travel budget restrictions."

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