A Case Study in NASA-DoD - The Black Vault

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Appendix A
ESTIMATES OF COST
by
J. P. Large
Spacecraft traditionally have been very expensive to produce because
of stringent weight and performance requirements, heavy emphasis
on reliability, and small production quantities. Various parametric
cost-estimating models have been developed from experience over the
past 15 or so years, and those models reproduce the cost of the traditional
spacecraft with acceptable accuracy. Initially, it was
thought that such a model could be used to estimate the costs of the
AEM, L-AEM, STPSS, and MMS. Such a model would have insured costcomparability
among them, perhaps at the sacrifice of absolute accuracy
in some instances.
It developed, however, that models based on 15 years of spacecraft
data estimate costs that are higher than those experienced in the Air
Force Space Test Program and those in the AEM contract. The SAMSO cost
model, for example, estimates the nonrecurring and recurring cost of
HCMM at about $14 million, mainly for development; Boeing's ceiling
estimate was approximately $5 million, and at the time of the Rand
study it did not appear that the ceiling would be exceeded. At the
same time, GSFC was estimating a unit cost of under $10 million for
MMS compared to the SAMSO model's estimate of about $19 million. The
GSFC estimate was based on some hardware development; component costs
were based on vendor quotes and analogy with known costs.
At both ends of the spectrum, then, costs were known to a reasonable
degree of accuracy. The problem was to ensure relative accuracy
between the AEM and MMS and to estimate L-AEM and STPSS costs that
would reflect their relative complexity. The decision was made to
develop a cost model based on a combination of AEM costs and traditional
scaling curves. That would assume implicitly that if Boeing
could produce an AEM for about $2 million, all spacecraft manufacturers
could be equally efficient in producing larger spacecraft using a philosophy
of low cost, use of flight-proven components, etc.