A Range of Cost Measuring Risk and Uncertainty in Major Programs

An Aid to Decisionmaking Gao ID: PSAD-78-12 February 2, 1978

Historically, major Federal programs and projects have experienced substantial cost growth. Overly optimistic estimates, problems encountered during the life of the program, inflation, and uncertainty associated with the estimating process itself contribute to the cost increases.

Uncertainty is the keynote in decisions involving Federal programs which span many years. Agencies continue to present early cost projections to Congress as single-point estimates despite the fact that they are highly misleading. A range of probable cost should be presented in addition to the single, most likely, point estimate which would remain as program and budget cost estimates.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.