GAO - US Government Accountability Office
home → Life Cycle Costing → GAO - US Government Accountability Office
GAO Cost Estimating and Assessment Guide—Best Practices for Developing and Managing Capital Program Cost (GAO-09-3SP, March 2009)
The above guide can be downloaded at http://www.gao.gov/new.items/d093sp.pdf
The 12 step process is shown below.
| No | Steps | Some of the tasks in each of the steps |
|---|---|---|
| 1 | Define Estimate's Purpose | Determine estimate's purpose, required level of details, and overall scope |
| 2 | Develop Estimating plan | Determine the cost estimating team members Develop a schedule |
| 3 | Define program characteristics | Understand technical baseline Understand acquisition strategy Sustainment strategy, etc. |
| 4 | Determine estimating structure | Work Breakdown Structure Best cost estimating method for each WBS element |
| 5 | Identify ground rules and assumption | Program assumptions, inflation assumption, what is included in the estimate and what is excluded in the estimate |
| 6 | Obtain data | Data collection, data normalization, develop model and update model |
| 7 | Develop point estimate | Use the cost estimating model to develop point estimate;compare the estimate with prior estimate or independent estimate |
| 8 | Conduct sensitivity analysis | Test the sensitivity of the model and each of the cost element to variation input values and assumptions |
| 9 | Conduct risk and uncertainty analysis | Determine minimum, most likely, and maximum estimate using risk distribution (S curve, tornado chart, coefficient of variance, etc.) |
| 10 | Document the estimate | Document all steps used to develop the estimate so that a cost someone can re-create it quickly to produce the same result |
| 11 | Present estimate to management | Briefing, follow up assignments, and requesting acceptance of the estimate |
| 12 | Update the estimate to reflect actual costs and changes | Create a annual process to update the estimate to reflect the actual "current" status of the program. Document the changes |
