Cost Overruns in Large Systems

From my Masters Thesis on cost overruns, I wonder how much planning went into… so if NASA who has the brains about how to build build systems has a tough time getting it right, HHS has no hope. There were also time over runs as well.

… design decisions made early in the life cycle can have a large impact later when the technology is in operation.  An example of this in the graph by Werner M. Gruhl (Cost and Analysis Branch, NASA) presented at a INCOSE (International Council of System Engineering) System Engineering Seminar in 1998.


In the Figure 1-1, Phase A & B Costs are the costs associated with early stage conceptual planning and design of a technology. One early stage decision in the life cycle of a technology is how much money to allocate to the early stages of development and design. The chart shows that (for systems at NASA) if less than ten percent of the total cost is allocated to these early stages there can be an expectation of cost overruns. Making the decision to allocate more money to these earlier stages allows for the use of more resources to make sure the technology being developed closely matches what was envisioned.