Cost Engineering

'Putting money into space' is a somewhat misleading phrase, because, of course, space budgets all get spent on goods and services down here on Earth. But the extreme complexity of space projects means their costs can be difficult to anticipate, manage and control.

Cost engineering is about estimating the costs of ESA procurement and evaluating the prices of the offers, at different stages of consolidation of the technical definition of the item and of the programmatic context in which the procurement is performed.

What is the Cost Engineering domain?

User ambitions for space missions whether research or service driven, are always high. Resources are always limited. Cost is therefore a major consideration in the definition of technical solutions and cost engineering is a fundamental discipline within systems engineering.

The management of complex leading-edge programmes holds many difficulties. Accurate estimation and control of costs poses a particular challenge, especially when in the business of developing something never before achieved. Cost engineering is the process of putting accurate price tags onto space projects. Part of the process is the analysis of risks and estimation of potential cost impact.

It involves the capture of practical experience in a systematic way in order to develop tools and models that relate the cost of each element to its driving characteristics with due consideration of the context. Cost engineering can thus assist system engineers in trading technical solutions. Cost engineering supports project managers in making predictions of likely costs, or assessing if a quoted price is reasonable. These capabilities can then be applied across a project life cycle to increase its overall cost-effectiveness.

ESA has a centralised Cost Engineering section within the Systems Engineering and Support Division, which is part of the Agency's Directorate of Technical and Quality Management. Its centralisation ensures a systematic gathering of cost, technical and schedule data for all areas of activity and all user Programmes in support to the preparation of independent cost estimates.

Last update: 18 November 2009

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