Why is Cost Engineering important?

26 NOV. 2004 7809

It has always been important for organisations to estimate and control their costs properly. This is especially important for an international organisation such as ESA.

Member States have the right to expect their financial contributions will be used as efficiently as possible, returning maximum value for money. In addition, Member States make decisions on their level of involvement in optional ESA programmes based on estimates of their cost. A high level of accuracy is essential to support the decision-making process. Equally important is to maintain the costs within the proposed values.

Cost Engineering delivers early awareness of costs associated with engineering decisions and risks as a project first gets underway. Cost Engineering supports the refinement of the estimates as the technical baseline gets more consolidated and the industrial teams are formed.

In addition ESA places many contracts related to technically sophisticated items requiring experimental development. Cost Engineering provides an informed assessment of a reasonable and acceptable price for the product concerned.

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'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.

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[ Space Engineering & Technology ]

26 NOV. 2004