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NASA made a decision to budget programs and projects at a 70% confidence level during a Strategic Management Council meeting on March 6, 2006. This decision was made because several GAO reports were critical of NASA’s inability to complete projects within the approved budgets. The GAO pointed out an average cost growth of about 35% and recommended the agency fully embrace and quantify risks. In response to these concerns NASA surveyed the best practices in the industry and determined that all projects should be estimated using probabilistic cost estimating methods and budgets should reflect a 70% probability the project could be completed for that budget request or lower. Initially, the confidence level calculation approaches were schedule insensitive and did not take full advantage of the “portfolio effect”. To account for the previously mentioned issues, NASA created Joint Cost and Schedule Confidence Level (JCL) policy language in NASA Procedure Directive (NPD) 1000.5 in early 2009.
The Cost Analysis Division within Program Analysis and Evaluation has been tasked by the Office of the Chief Engineer to implement this new JCL policy. There are many questions and misinformation regarding JCL. This Frequently Asked Questions (pdf, 188k) document is intended to shed light on these inquiries.
- Frequently Asked Questions (pdf, 188k)