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GAO-07-1134SP, COST ASSESSMENT GUIDE: BEST PRACTICES FOR ESTIMATING AND MANAGING PROGRAM COSTS (EXPOSURE DRAFT) (JUL 2007)., [NOTE: This publication has been superseded by GAO-09-3SP, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs, March 2009.]., The U.S. Government Accountability Office is responsible for, among other things, assisting the Congress in its oversight of the federal government, including agencies’ stewardship of public funds. To effectively use public funds, the government must meet the demands of today’s changing world by employing effective management practices and processes, including the measurement of government program performance. Legislators, government officials, and the public want to know whether government programs are achieving their goals and what their costs are. We developed the Cost Guide in order to establish a consistent methodology, based on best practices, to be used across the federal government for developing and managing its program cost estimates. For the purposes of this guide, a cost estimate is the summation of individual cost elements, using established methods and valid data to estimate the future costs of a program, based on what is known today. The management of a cost estimate involves continually updating the estimate with actual data as they become available, revising the estimate to reflect changes, and analyzing differences between estimated and actual costs—for example, using data from a reliable earned value management (EVM) system.1 The ability to generate reliable cost estimates is a critical function, necessary to support the Office of Management and Budget’s (OMB) capital programming process.2 Without this ability, agencies are at risk of experiencing cost overruns, missed deadlines, and performance shortfalls—all recurring problems that our program assessments too often reveal. Furthermore, cost increases often mean that the government cannot fund as many programs as intended or deliver them when promised. The methodology outlined in this guide is a compilation of best practices that federal cost estimating organizations and industry use to develop and maintain reliable cost estimates throughout the life of a government program. By default, the guide will also serve as a guiding principle for our auditors to evaluate the economy, efficiency, and effectiveness of government programs.



 FSC Code:

06-20075.23 MB GAO-07-1134SP_2007

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