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the greatest degree of inaccuracy (DoD, 2014). Even outside of the DoD, risks associated with early cost estimates have been studied by Flyvbjerg et al. (2002) and Merrow et al. (1981).
To help facilitate this difficult challenge of providing accurate early program estimates, the DoD and the National Aeronautics and Space Administration (NASA) published the Joint Agency Cost Schedule Risk and Uncertainty Handbook ( JA CSRUH ; DoD, 2014). This handbook defines processes and procedures for performing cost, schedule, risk, and uncertainty analysis in support of life-cycle cost estimates for major defense acquisition programs for the DoD and NASA (DoD, 2014). It provides guidance to cost estimators on how to produce cost estimates given both objective and subjective uncertainty. In addition to the JA CSRUH , there also exists the Cost Risk and Uncertainty Analysis Metrics Manual ( CRUAMM ; DoD, 2014). This manual provides WBS-level data and data-driven uncertainty bounds for various weapon system types. Given available data for a particular project, every weapon system area does not have equal levels of data, analysis, and data-driven uncertainty bounds. Consequently, the CRUAMM results published in this document are generalized and are not meant to take the place of the outputs derived from following appropriate best practices in risk and uncertainty analysis, such as those outlined in JA CSRUH (DoD, 2014). One of the outputs of a cost estimate model developed as prescribed by JA CSRUH is a model that describes the likelihood of a program’s cost defined by a distribution. Within JA CSRUH , we denote Table 2-9, Table of Last Resort Bounds for Subjective Distributions as ToLR. The ToLR lists a series of probability distributions and their associated cost factors applied to cost estimates if very little information is known about the project. As relayed by the handbook, when an analyst is unable to develop objective
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Defense ARJ , Spring 2025, Vol. 32 No. 1
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