R. & D. project cost and schedule realism-A risk analysis approach

All project managers strive for cost and schedule realism. The Department of the Army has established a novel concept called the "Total Risk Assessing Cost Estimate (TRACE)" to develop a new program cost-estimation procedure for research, development, test and evaluation cost realism. Such a procedure properly accommodates program uncertainties/ risks inherent to specific work elements, and the high-risk work elements are budgeted accordingly. The purpose of this paper is to propose such a procedure which subscribes to a risk analysis approach and satisfies the essential elements of the TRACE concept. The procedure consists of two models: a cost impact model and a schedule variance model. Applications of the procedure to the NASA/Army Tilt Rotor Research Aircraft Project are also presented for illustration.