Space project management - Part 60: Cost and schedule management

The requirements specified herein apply to, and affect the customer and supplier at all levels. This standard may be tailored for the specific characteristics and constraints of a space project in conformance with ECSS-S-ST-00.

Raumfahrt-Projektmanagement - Teil 60: Kosten- und Zeitplanmanagement

Die in dieser Norm festgelegten Anforderungen betreffen und gelten für Kunden und Lieferanten auf allen Ebenen.
Diese Norm darf auf die speziellen Merkmale und Vorgaben eines Raumfahrt-Projekts nach ECSS S ST 00 ausgelegt werden.

Management des projets spatiaux - Partie 60: Maîtrise des coûts et des délais

Vodenje vesoljskih projektov - 60. del: Vodenje stroškov in časovnih rokov

Zahteve, navedene v tem dokumentu, veljajo za stranke in dobavitelje na vseh ravneh. Ta standard se lahko prilagodi posameznim lastnostim in omejitvam vesoljskega projekta v skladu s standardom ECSS-S-ST-00.

General Information

Status
Published
Publication Date
16-Oct-2014
Technical Committee
Current Stage
6060 - National Implementation/Publication (Adopted Project)
Start Date
24-Sep-2014
Due Date
29-Nov-2014
Completion Date
17-Oct-2014

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2003-01.Slovenski inštitut za standardizacijo. Razmnoževanje celote ali delov tega standarda ni dovoljeno.Raumfahrt-Projektmanagement - Teil 60: Kosten- und ZeitplanmanagementManagement des projets spatiaux - Partie 60: Maîtrise des coûts et des délaisSpace project management - Part 60: Cost and schedule management49.140Vesoljski sistemi in operacijeSpace systems and operations03.100.40Raziskave in razvojResearch and developmentICS:Ta slovenski standard je istoveten z:EN 16601-60:2014SIST EN 16601-60:2014en,fr,de01-november-2014SIST EN 16601-60:2014SLOVENSKI

STANDARDSIST EN 13290-7:20021DGRPHãþD
SIST EN 16601-60:2014
EUROPEAN STANDARD NORME EUROPÉENNE EUROPÄISCHE NORM
EN 16601-60
August 2014 ICS 49.140 Supersedes EN 13290-7:2001
English version
Space project management - Part 60: Cost and schedule management
Management des projets spatiaux - Partie 60: Maîtrise des coûts et des délais

Raumfahrt-Projektmanagement - Teil 60: Kosten- und Zeitplanmanagement This European Standard was approved by CEN on 14 December 2013.

CEN and CENELEC members are bound to comply with the CEN/CENELEC Internal Regulations which stipulate the conditions for giving this European Standard the status of a national standard without any alteration. Up-to-date lists and bibliographical references concerning such national standards may be obtained on application to the CEN-CENELEC Management Centre or to any CEN and CENELEC member.

This European Standard exists in three official versions (English, French, German). A version in any other language made by translation under the responsibility of a CEN and CENELEC member into its own language and notified to the CEN-CENELEC Management Centre has the same status as the official versions.

CEN and CENELEC members are the national standards bodies and national electrotechnical committees of Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Former Yugoslav Republic of Macedonia, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and United Kingdom.

CEN-CENELEC Management Centre: Avenue Marnix 17, B-1000 Brussels © 2014 CEN/CENELEC All rights of exploitation in any form and by any means reserved worldwide for CEN national Members and for CENELEC Members. Ref. No. EN 16601-60:2014 E SIST EN 16601-60:2014

EN 16601-60:2014 (E) 2 Table of contents Foreword .................................................................................................................... 6 Introduction ................................................................................................................ 7 1 Scope ....................................................................................................................... 8 2 Normative references ............................................................................................. 9 3 Terms, definitions and abbreviated terms .......................................................... 10 3.1 Terms from other standards ...................................................................................... 10 3.2 Terms specific to the present standard ..................................................................... 10 3.3 Abbreviated terms ..................................................................................................... 11 4 Cost and schedule management common principles ....................................... 12 4.1 Objectives and relationships ................................................................................... 12 4.2 Project structure ..................................................................................................... 13 4.2.1 Work breakdown structure ...................................................................................... 13 4.2.2 Cost breakdown structure ....................................................................................... 14 4.2.3 Business agreement Structure ................................................................................ 14 4.2.4 Country/Company structure .................................................................................... 15 4.3 Business agreement types ...................................................................................... 16 4.3.1 General .................................................................................................................. 16 4.3.2 Fixed price contracts ............................................................................................... 16 4.3.3 Cost reimbursement contracts ................................................................................ 16 4.3.4 Ceiling price to be converted into fixed price ........................................................... 17 4.4 Risk management ................................................................................................... 17 4.4.1 General description ................................................................................................. 17 4.4.2 Risk register ............................................................................................................ 18 4.4.3 Lessons learned ..................................................................................................... 18 5 Schedule management principles ....................................................................... 19 5.1 Schedule definition ................................................................................................. 19 5.1.1 General .................................................................................................................. 19 5.1.2 Activities definition / Activities sequencing .............................................................. 19 5.1.3 Key milestones ....................................................................................................... 20 SIST EN 16601-60:2014

EN 16601-60:2014 (E) 3 5.1.4 Resource allocation ................................................................................................ 20 5.2 Schedule control ..................................................................................................... 20 5.2.1 Baseline schedule................................................................................................... 20 5.2.2 Current working schedule ....................................................................................... 21 5.2.3 Performance evaluation .......................................................................................... 22 5.3 Schedule reporting.................................................................................................. 24 5.3.1 General .................................................................................................................. 24 5.3.2 Schedule progress information ............................................................................... 24 5.3.3 Reporting system and tools .................................................................................... 24 6 Cost management principles ............................................................................... 26 6.1 General ................................................................................................................... 26 6.2 Contractual and financial interfaces ........................................................................ 26 6.2.1 Audited rates and cost structure ............................................................................. 26 6.2.2 Currency and exchange rates ................................................................................. 26 6.2.3 Contract change notice (CCN) ................................................................................ 27 6.3 Cost estimating and planning .................................................................................. 27 6.3.1 Cost estimating ....................................................................................................... 27 6.3.2 Development cost plan (DCP) ................................................................................ 29 6.3.3 Payment plans ........................................................................................................ 30 6.3.4 Price variation mechanism ...................................................................................... 30 6.3.5 Geographical distribution ........................................................................................ 31 6.3.6 Inventory control plan ............................................................................................. 31 6.4 Cost control ............................................................................................................ 31 6.4.1 Baseline cost plan................................................................................................... 31 6.4.2 Estimate at completion (EAC) and estimate to completion (ETC) ........................... 32 6.4.3 Price variation ......................................................................................................... 32 6.4.4 Geographical distribution control ............................................................................. 33 6.4.5 Inventory control ..................................................................................................... 33 6.4.6 Financial audits ....................................................................................................... 33 6.4.7 Payment milestone achievement ............................................................................ 33 6.5 Cost reporting ......................................................................................................... 34 6.5.1 Reports applicable to all contract types ................................................................... 34 6.5.2 Reports specific to cost reimbursement contracts ................................................... 34 7 Cost and schedule management common requirements ................................. 35 7.1 Project structure ..................................................................................................... 35 7.1.1 Cost breakdown structure ....................................................................................... 35 7.1.2 Business agreement structure ................................................................................ 35 SIST EN 16601-60:2014

EN 16601-60:2014 (E) 4 7.1.3 Country/Company structure (CCS) ......................................................................... 35 7.2 Risk management ................................................................................................... 35 8 Schedule management requirements ................................................................. 36 8.1 Schedule definition ................................................................................................. 36 8.2 Schedule control ..................................................................................................... 36 8.3 Schedule reporting.................................................................................................. 37 9 Cost management requirements ......................................................................... 38 9.1 Contractual and financial interfaces ........................................................................ 38 9.1.1 Audited rates and cost structure ............................................................................. 38 9.1.2 Economic conditions ............................................................................................... 38 9.1.3 Currency and exchange rates ................................................................................. 38 9.1.4 Contract change procedure .................................................................................... 38 9.2 Cost estimating and planning .................................................................................. 38 9.2.1 Cost estimating ....................................................................................................... 38 9.2.2 Project financial information .................................................................................... 39 9.2.3 Development cost plan (DCP) ..................................................................................... 39 9.2.4 Milestone payment plans ........................................................................................ 39 9.2.5 Price variation mechanism ...................................................................................... 39 9.2.6 Geographical distribution ........................................................................................ 39 9.3 Cost control ............................................................................................................ 40 9.3.1 Original baseline cost plan ...................................................................................... 40 9.3.2 Current baseline cost plan ...................................................................................... 40 9.3.3 Estimate at completion (EAC) and estimate to completion (ETC) ........................... 40 9.3.4 Price variation mechanism ...................................................................................... 41 9.3.5 Geographical distribution control ............................................................................. 41 9.3.6 Inventory control ..................................................................................................... 41 9.3.7 Financial audits ....................................................................................................... 41 9.3.8 Payment milestone achievement ............................................................................ 42 9.4 Cost management reporting ................................................................................... 42 9.4.1 Cost and manpower report ..................................................................................... 42 9.4.2 Inventory record ...................................................................................................... 42 Bibliography ............................................................................................................. 84

Figures Figure 4-1: Overall functional analysis .................................................................................. 13 Figure 4-2: Business agreement structure example .............................................................. 15 SIST EN 16601-60:2014

EN 16601-60:2014 (E) 5 Figure 4-3: Business agreement structure schematic ........................................................... 15 Figure 5-1: Gantt chart example ........................................................................................... 22 Figure 5-2: Milestone trend chart example............................................................................ 23 Figure 5-3: Milestone list example ........................................................................................ 23 Figure A-1 : CBS .................................................................................................................. 44

Tables Table Q-1 : Cost estimate method vs. project phase ............................................................ 79

SIST EN 16601-60:2014

EN 16601-60:2014 (E) 6 Foreword This document (EN 16601-60:2014) has been prepared by Technical Committee CEN/CLC/TC 5 “Space”, the secretariat of which is held by DIN. This standard (EN 16601-60:2014) originates from ECSS-M-ST-60C. This European Standard shall be given the status of a national standard, either by publication of an identical text or by endorsement, at the latest by February 2015, and conflicting national standards shall be withdrawn at the latest by February 2015. Attention is drawn to the possibility that some of the elements of this document may be the subject of patent rights. CEN [and/or CENELEC] shall not be held responsible for identifying any or all such patent rights. This document supersedes EN 13290-7:2001. This document has been developed to cover specifically space systems and has therefore precedence over any EN covering the same scope but with a wider domain of applicability (e.g. : aerospace). According to the CEN-CENELEC Internal Regulations, the national standards organizations of the following countries are bound to implement this European Standard: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Former Yugoslav Republic of Macedonia, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and the United Kingdom. SIST EN 16601-60:2014

EN 16601-60:2014 (E) 7 Introduction Cost and schedule management is defined as a collective system of organized processes and actions in support of project management. It allows optimal use to be made of human resources, facilities, materials and funds, thereby achieving a successful completion of the space project with respect to

• cost targets, • timely completion, and • technical performance. To this end, costs and activities are planned and actively controlled, with special care being given to the identification of critical situations that can lead to an adverse impact on the project cost and schedule, so that the relevant recovery actions can be proposed. SIST EN 16601-60:2014

EN 16601-60:2014 (E) 8 1 Scope The requirements specified herein apply to, and affect the customer and supplier at all levels.

This standard may be tailored for the specific characteristics and constraints of a space project in conformance with ECSS-S-ST-00.

SIST EN 16601-60:2014

EN 16601-60:2014 (E) 9 2 Normative references The following normative documents contain provisions which, through reference in this text, constitute provisions of this ECSS Standard. For dated references, subsequent amendments to, or revisions of any of these publications do not apply. However, parties to agreements based on this ECSS Standard are encouraged to investigate the possibility of applying the most recent editions of the normative documents indicated below. For undated references, the latest edition of the normative document referred to apply.

EN reference Reference in text Title EN 16601-00-01 ECSS-S-ST-00-01 ECSS system – Glossary of terms EN 16601-10 ECSS-M-ST-10 Space project management – Project planning and implementation EN 16601-80 ECSS-M-ST-80 Space project management – Risk management

SIST EN 16601-60:2014

EN 16601-60:2014 (E) 10 3 Terms, definitions and abbreviated terms 3.1 Terms from other standards For the purpose of this Standard, the terms and definitions from ECSS-S-ST-00-01 apply, in particular for the following terms: cost breakdown structure

estimate (cost) at completion
estimate (cost) to completion

3.2 Terms specific to the present standard 3.2.1 cost reimbursement contract generic type of business agreement in which payments are depending upon incurred costs 3.2.2 cost estimating process helping in the determination of the expected costs of a project 3.2.3 critical path chain of activities critical to the timely completion of the project 3.2.4 direct manpower cost manpower cost charged to the project using the agreed rates 3.2.5 economic conditions reference period of time during which a set of financial elements (e.g. hourly rates and overheads) are applicable NOTE

Reference economic conditions are those prevailing when the decision to commit to the project is taken. Current economic conditions are the conditions prevailing when the service is provided. 3.2.6 fixed price contract generic type of business agreement in which payments are defined in the business agreement in the form of milestone payment plan(s), and depend upon the achievement of the relevant contractual milestones SIST EN 16601-60:2014

EN 16601-60:2014 (E) 11 3.3 Abbreviated terms For the purpose of this Standard, the abbreviated terms from ECSS-S-ST-00-01 and the following apply: Abbreviation

Meaning AIV assembly, integration and verification CBCP current baseline cost plan CBS cost breakdown structure CCN contract change notice CCS country/company structure CIL critical items list CPM critical path method CR cost reimbursement CWP control work package DCP development cost plan DIL deliverable items list EAC estimate at completion EC economic conditions ETC estimate to completion FP fixed price FFP firm fixed price G&A general & administrative MPP milestone payment plan MTA milestone trend analysis MTC milestone trend chart OBCP original baseline cost plan PDM precedence diagram method PMAC payment milestone achievement certificate PEF price escalation formula PSS procedure standard specification PT product tree WBS work breakdown structure SIST EN 16601-60:2014

EN 16601-60:2014 (E) 12 4 Cost and schedule management common principles 4.1 Objectives and relationships Cost and schedule management is a major factor in the effective, responsible and proactive controlling of projects. It provides a common working baseline for the planning and expenses and across the participants of the project. It ensures a uniform basis and common understanding of the project planning, cost and manpower targets for use by all participants. The main objectives of Cost and Schedule management are to: • plan accurately the phasing of procurements, expenses and resources for the project; • highlight any deviations and hence propose remedial actions, with the aim of completing the project within the given time and financial constraints. Schedule management includes the activities to accomplish timely completion of the project, i.e.: • Schedule definition, including activity definition and sequencing, activity duration estimating and schedule baseline establishment; • Schedule control, including the comparison between the current working schedule and the baseline schedule; • Schedule reporting. Cost management includes the activities to complete the project within the approved budget, i.e. • Cost estimating and planning; • Cost control; • Cost reporting. The main structures to perform these activities are the: • Work breakdown structure; • Cost breakdown structure; • Business agreement structure; • Country/company structure.

SIST EN 16601-60:2014

EN 16601-60:2014 (E) 13 Figure 4-1 presents an overall functional analysis of cost and schedule management.

Figure 4-1: Overall functional analysis 4.2 Project structure 4.2.1 Work breakdown structure A general introduction into the Work Breakdown Structure (WBS) is provided in ECSS-M-ST-10. In the specific context of Cost and Schedule management, the WBS is used as a common tool in the project, assisting its participants in: • Conducting tender comparisons and business agreement negotiations; • Optimizing the distribution of work amongst the different suppliers; • Monitoring the schedule of the project: A network of events (e.g. start, complete) and activities (e.g. design, develop and operate) takes place. The logical relationships between the activities allow the producing and completing of the WBS deliverables. Resources (e.g. labour skill, and materials) and responsible organizations (e.g. mechanical engineering department, fabrication department, supplier) can then be identified for each activity. The scope and complexity of the work and the management needs for schedule visibility influence the frequency of schedule reporting and their associated levels of detail.

Cost management WBS / Business agreement Project schedule (baseline & current)

Constraints and risks Resource development plan Cost and schedule project plan Performance

report OBCP / CBCP

and MPP Cost estimates (EAC and ETC) Task definition, duration and sequencing Schedule management Schedule report (progress status, performances, delivery and trends) Project milestones CBS and CCS (+geo return) Inventory control plan Audit Geographical distribution CCN Financial elements (Company cost element data sheet, Company price breakdown forms, Manpower and price summary, Work package manpower and cost plan, Price variation mechanism) Report (Performance measurement, Contract close out report, payment and commitment status report, Inventory record) SIST EN 16601-60:2014

EN 16601-60:2014 (E) 14 • Estimating, planning and monitoring the cost: By breaking down the total product tree into successively smaller elements and support functions, management can verify that all activities identified in the WBS actually contribute to the project objectives. In addition, using WBS elements to plan for the work serves as the basis for estimating and scheduling resource needs. An estimate based on WBS elements helps to plan, coordinate, and control the various project activities that both the customer and the suppliers are conducting. The WBS also provides a common framework for tracking the evolution of estimates, hence forecasting the total cost of the project more accurately. Proper use of the WBS for technical, schedule, and cost management allows the defining of work and related resources, ensuring that all work is included without duplication of effort. In addition, the WBS is used to accumulate performance data and associated variances to evaluate progress in terms of performance.

To perform data reporting, the WBS is broken down into work-packages. All defined work-packages reflect the total work scope. Any reporting to the customer is performed using Control work-packages, which are agreed between the customer and the supplier and reflected in the corresponding business agreement. All defined Control work-packages also reflect the total work scope. 4.2.2 Cost breakdown structure The Cost Breakdown Structure (CBS) defines a set of cost categories used to break down all the costs of the project. It provides a common framework for all cost management activities among suppliers for the same project.

The total cost planned for each work package is broken down per cost category (e.g. labour, non-labour, subcontracts). For each cost category, the distinction between direct and indirect costs is identified by each supplier to the customer.

4.2.3 Business agreement Structure A Business Agreement Structure is a specific type of organization chart, the purpose of which is to identify the project reporting relationships between the respective customers and suppliers. It shows which suppliers are responsible for which work packages, as depicted in Figure 4-2.

SIST EN 16601-60:2014
EN 16601-60:2014 (E) 15
Supplier 1 Service Module Supplier 6
Electrical system
Supplier 2 Payload Module Supplier 3 AIV Supplier 4
Risk Magt Supplier 5
PA support Supplier 9 Structure Supplier 11
Propulsion
Supplier 7
Structure
Supplier 8
EGSE
Supplier 10
Reflector
Prime Contractor

Figure 4-2: Business agreement structure example By relating work packages in the WBS to business agreements in the Business Agreement Structure, contractual responsibilities can be traced. It facilitates the cost management process by providing the means to ensure that all impacts (e.g. liability, financial, technical or schedule) of a change in the business agreement are properly assessed at all levels of the contractual hierarchy (see Figure 4-3).

Figure 4-3: Business agreement structure schematic 4.2.4 Country/Company structure The Country/Company Structure (CCS) shows the relationships between each company's business agreement for a project and the countries in which the corresponding work is performed. By identifying the relationships between work packages in the WBS and business agreements in the CCS, reports can be generated to illustrate how each supplier’s work is distributed per country, e.g. for geographical return purposes. In the case of projects where it is simple to identify the countries in which the works are performed, the CCS is combined with the Business Agreement Structure.

Prime level Sub-level 1 OBS Sub-level 2 Sub-level n WBS SIST EN 16601-60:2014

EN 16601-60:2014 (E) 16 4.3 Business agreement types 4.3.1 General The way to manage the cost and schedule aspects of a project depends on the business agreement type. There are two basic types: Fixed Price and Cost Reimbursement, which are broken down as defined below.

4.3.2 Fixed price contracts a. Firm fixed price: the price of the business agreement is not subject to any adjustment or revision by reason of the actual costs incurred by the supplier in the performance of his business obligations. b. Fixed price with variation: the price of the business agreement is not subject to any adjustment or revision by reason of the actual costs incurred by the supplier in the performance of his business obligations, except for the update to current economic conditions by applying an agreed price variation mechanism. c. Fixed unit price: the price of the business agreement is defined per unit price of the various supplies and services. 4.3.3 Cost reimbursement contracts a. Cost plus fixed fee: it is a cost-reimbursement type of business agreement which provides for the payment of a fixed fee to the supplier. Its implementation mechanism is described in the business agreement and generally includes the following elements:  a target cost for the whole project;  the above-mentioned fixed fee, which does not vary with actual cost;  a cost sharing scheme, defining applicable incentives and penalties depending on how the actual cost spent for the whole project compares with agreed target cost. b. Cost plus incentive fee: it is a cost-reimbursement type of business agreement which provides for the payment of a target fee, which is the fee to be paid to the supplier if the

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