Comparing Estimated to Actual Development Budgets for Air Force Space Programs

The accuracy of budget estimates is vital in ensuring cost efficiency and decreasing the possibility of budget and schedule growth. The goal of this study was to determine when budget estimates increase and what may cause those increases. Percent schedule and linear interpolation was used to analyze the budget changes. Space program budget growth does not increase at a constant rate between Milestone B (MS B) and Initial Operational Capability (IOC). When an exponential curve was fit to the deviations in budget growth, the mean and median R2 for the programs in this study were .83 and .91, respectively. Many programs had negative annual budget growth in the first one or two fiscal years of their schedule, this even included large satellite programs with substantial budget growth later in their schedules. Much of the cumulative % budget growth was also in the later fiscal years of the schedule between MS B and IOC. The mean and median of cumulative % budget growth change at the 90% to 100% schedule mark are 25.30% and 22.51% than while they are only 7.12% and 0.96% at the 30% to 40% schedule mark. The original objective, to determine how close previous fiscal year budget estimates are to the actual budget, was also achieved. This accuracy has increased in recent years as well. As a program nears a specific fiscal year, the mean difference in the estimate to actual decreases from 42.3% four years out to 15.9% one year out. A confidence interval can also be created for these differences. At four years out, there is 95% confidence that the budget estimate is between 38.2% and 51.3% of the actual budget, and, at one year out, there is 95% confidence that the budget estimate is between 8% and 21.6% of the actual budget