November/December Issue: PRICE methodology helps to improve government’s software development cost models

U.S. Army PEO STRI projects cost savings of more than $90 million over six months in pilot project using PRICE methodology


The U.S. Army’s Program Executive Office for Simulation, Training and Instrumentation (PEO STRI) sought to improve estimates for programs involving extensive software development. Typically, the PEO was directed to apply a subjective growth factor to cost estimates when local, calibrated historical databases were unavailable for estimating future software development.

As a result, oversight authorities would require the addition of a contingency of 30-60%. These additions to the program budget made it and other programs in the PEO portfolio unaffordable. While processes for capturing software development costs existed, there was no standardization or correlation to what was being delivered, leading to an unhealthy reliance on Subject Matter Experts (SMEs) to provide subjective estimates. There was no direct link between development costs and the capabilities being developed.

To calculate budget submissions that were more credible, defendable and easier to earn approval, PRICE® experts teamed with SMEs from government and the contracting community to create a repeatable process of collecting and using data on existing software development to calculate credible and defendable estimates for future projects.

This collaborative implementation of the PRICE® Estimation Systems Integration (ESI) methodology using the PRICE® TruePlanning® Cost Estimation Framework yielded a projected cost savings in the pilot project (OneSAF development) of more than $90 million over six years and the opportunity to improve the affordability of the PEO’s entire project portfolio. View full case study »

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