Last week, NASA Inspector General Paul Martin released the results of an investigation that looked into why the U.S. space agency has had long-standing problemsaka challengesin meeting its programs cost, schedule and performance goals (pdf).

For instance, in 2009, it was estimated that the James Webb Space Telescope (JWST) would cost US $2.6 billion to develop and launch by 2014. At latest count, the tab has now ballooned toover $8 billion for development(not including $940 million contributed by international partners) and another $800 million for five years of operational costs. The huge cost overrun on JWSTas well as many other projectshas not helped win the friends in Congress that NASA needs in order to maintain its funding in these lean times, to say the very least.

The inspector general's report focuses on NASAs culture of optimism, which Martin accepts is essential to overcoming the extraordinary technological challenges inherent in the development of unique, first-of-their-kind space systems. However, this optimism unchecked also "leads managers to overestimate their ability to overcome the risks inherent in delivering such projects within available funding constraints. This in turn leads to overly optimistic cost and schedule estimates, the report states.

Technical complexity is also identified in the report as a driver of poor cost and schedule estimates. It acknowledges that if you are working on something unprecedented, it is hard to be accurate in your estimates of how much the effort will take or its final cost.

Making estimation even harder is that Congress keeps changing program funding, which often requires a program re-planning exercise and new technical approach. Of course, some of this funding volatility is self-inflicted: any government program that is massively overrunning its budget cant expect Congress to keep its budget axe sheathed.

There is also the lack of experience by those making program cost and budget estimates. NASA, like many defense and aerospace companies, is starting to lose to retirement (pdf) its cadre of most experienced program managers who have a lot of hands-on experience. There is not that much opportunity anymore at NASA (or elsewhere for that matter) for junior personnel to gain the proper experiential scarring needed to produce realistic budget estimates. That said, however, it may not really matter.

One of the primary causes of NASA cost/schedule problems is what the inspector general calls the "Hubble Psychology" that is common among the organization's managers.

Many project managers we spoke with mentioned the Hubble Psychology an expectation among NASA personnel that projects that fail to meet cost and schedule goals will receive additional funding and that subsequent scientific and technological success will overshadow any budgetary and schedule problems. They pointed out that although Hubble greatly exceeded its original budget, launched years after promised, and suffered a significant technological problem that required costly repair missions, the telescope is now generally viewed as a national treasure and its initial cost and performance issues have largely been forgotten.

How pervasive is this psychology? The reported noted that, when asked whether their projects had been successful, every project manager we interviewed answered in the affirmative, regardless of the projects fidelity to cost and schedule goals.

Of course, this same psychology permeates program and project managers at the U.S. Department of Defense as well. If a weapon system works well in combat, no one remembers how much it overran its budget or schedule. DoD managers, however, are in a better position to get away with this behavior than NASA managers.

See more here:

"Hubble Psychology” Causing NASA Program Cost Overruns?