In Search of the Optimal Funding Profile: The Effect of Funding Profiles on Cost and Schedule Growth
Bitten, R.¹; Emmons, D.¹; Freaner, C.^2
1The Aerospace Corporation; ²NASA Headquarters - Science Mission Directorate

When allocating funding to NASA missions, it is very important to allocate sufficient funding to each year of development in order to properly fund the mission. Unfortunately, many funding profiles are defined by the budget available in a given year as opposed to allocating the funding according to an optimal profile for that individual project's development. This funding shortage in a given year can result in many funding profiles being back-loaded, where limited funding is available in the early years of development for risk reduction, leading to potential overruns in the later years of development due to unanticipated or unmitigated risks. Front-loaded funding profiles can provide substantial money in the early years of development but may also be problematic as the higher spend rate in the early years of development can lead to problems in reducing the work force in later years which can consume funding that is needed in case problems arise during integration and testing. Derivation of an optimal funding profile is not straightforward, however, as it is difficult to determine which profile is more "optimal" for a given mission. This paper investigates the cost and schedule growth for over 40 different NASA missions and compares the initial funding profiles to final funding profiles to determine if a correlation exists, thereby identifying a relatively ideal funding profile. The profiles and correlations are also examined by mission class and size. Clarifying examples are used to help explain the difference profiles and to demonstrate the effect on relative cost and schedule growth. Recommendations are then made to provide guidance for determining funding profiles for developing an initial budgets for future NASA missions.