System Cost Growth Associated with Technology-Readiness Level

Abstract

Introduction Today most cost-estimating tools being used by the Air Force and other DOD organizations fail to take into account the technical maturity of various technologies required for successful completion of the program. In this paper, we develop a methodology to account for anticipated cost growth as technologies mature across the scale of 1-9 Technology-Readiness Levels (TRLs) defined by NASA (See Appendix A). We recognize that numerous programs in the Air Force, DOD, and NASA have their initial cost estimate prepared early in the cycle of technological maturity. At those early TRLs (3-5) much knowledge of how the technology will mature has yet to be revealed to the program engineers and hence to the cost estimators. As investments are made in these programs, the technologies mature, and updated cost estimates show a growth over initial estimates. This cost growth tends to require increased budgets and occasionally results in program managers getting fired or, at best, blaming cost estimators for not providing good initial estimates. This study offers a method for planning more accurately for cost growth associated with the time to mature technologies associated with each specific system under development, thereby reducing the risk of incurring unanticipated overruns to the plan.