NASA Procedural Requirements

NPR 7120.5F Effective Date: August 03, 2021 Expiration Date: August 03, 2026

Subject: NASA Space Flight Program and Project Management Requirements w/Change 3

Responsible Office: Associate Administrator

Chapter 2. NASA Life Cycles for Space Flight Programs and Projects

2.1 Programs and Projects

2.1.1 Space flight programs and projects flow from the implementation of national priorities, defined in the Agency’s Strategic Plan, through the Agency’s Mission Directorates, as part of the Agency’s general work breakdown hierarchy shown in Figure 2-1.

Figure 2-1 Programmatic Authority Organizational Hierarchy

2.1.1.1 This hierarchical relationship of programs to projects shows that programs and projects are different, and their management involves different activities and focus. Programs and projects are distinguished by the following characteristics.

a. Program—Programs are a strategic investment by Mission Directorates or mission support offices with a defined architecture and/or technical approach, requirements, funding level, and a management structure that initiates and directs one or more projects. A program implements a strategic direction that the Agency has identified as needed to accomplish Agency goals and objectives.

b. Project—Space flight projects are a specific investment identified in a Program Plan having defined requirements, a life-cycle cost, a beginning, and an end. A project also has a management structure and may have interfaces to other projects, agencies, and international partners. A project yields new or revised products that directly address NASA’s strategic goals.

2.1.1.2 Regardless of the structure of a program or project meeting the criteria of Section P.2, this NPR shall apply to the full scope of the program or project and all the activities under it. Specific NPR 7120.5 requirements are flowed down to these activities to the extent necessary for the program or project to ensure compliance and mission success. See Section 3.5.5.1 for the process of obtaining any required deviations or waivers.

2.1.2 NASA Programs

2.1.2.1 NASA space flight programs are initiated and implemented to accomplish scientific or exploration goals that generally require a collection of mutually supporting projects. Programs integrate and manage these projects over time and provide on-going enabling systems, activities, methods, technology developments, and feedback to projects and stakeholders. Programs are generally created by a Mission Directorate with a long-term horizon in mind, though as the Agency’s strategic direction or circumstances change, a Mission Directorate occasionally needs to replan its programs or combine related programs to increase effectiveness. Programs are generally executed at NASA Centers under the direction of the Mission Directorate and are assigned to Centers based on decisions made by Agency senior management consistent with the results of the Agency’s strategic acquisition planning process. Because the scientific and exploration goals of programs vary significantly, different program implementation strategies are required, ranging from simple to complex. To accommodate these differences, NASA identifies four basic types of programs (described below and defined in Appendix A) that may be employed: single-project programs, uncoupled programs, loosely coupled programs, and tightly coupled programs. Characteristics of the program types are:

a. Single-Project: These programs (e.g., James Webb Space Telescope) tend to have long development and operational lifetimes and represent a large investment of Agency resources. Multiple organizations or agencies contribute to them. Single-project programs have one project and implement their program objectives and requirements through one of two management approaches: (1) separate program and project structures or (2) a combined structure. The requirements for both programs and projects apply to single-project programs as described in this NPR.

b. Uncoupled: These programs (e.g., Discovery Program) are implemented under a broad theme (like planetary science) and/or a common program implementation mechanism, such as providing flight opportunities for formally competed cost-capped projects or Principal Investigator (PI)-led missions and investigations. Each project in an uncoupled program is independent of the other projects within the program.

c. Loosely Coupled: These programs (e.g., Mars Exploration Program) address specific objectives through multiple space flight projects of varied scope. While each project has an independent set of mission objectives, the projects as a whole have architectural and technological synergies and strategies that benefit the program. For example, Mars orbiters designed for more than one Mars year in orbit are required to carry a communication system to support present and future landers.

d. Tightly Coupled: These programs have multiple projects that execute portions of a mission or missions. No single project is capable of implementing a complete mission. Typically, multiple NASA Centers contribute to the program. Individual projects may be managed at different Centers. The program may also include other agency or international partner contributions.

2.1.3 NASA Projects

2.1.3.1 As with programs, projects vary in scope and complexity and thus require varying levels of management requirements and Agency attention and oversight. Consequently, project categorization defines Agency expectations of project managers by determining both the oversight council and the specific approval requirements. Projects are Category 1, 2, or 3 and shall be assigned to a category based initially on: (1) the project life-cycle cost (LCC) estimate, the inclusion of significant radioactive material ³ , and whether or not the system being developed is for human space flight; and (2) the priority level, which is related to the importance of the activity to NASA, the extent of international participation (or joint effort with other government agencies), the degree of uncertainty surrounding the application of new or untested technologies, and spacecraft/payload development risk classification. (See NPR 8705.4, Risk Classification for NASA Payloads.) Guidelines for determining project categorization are shown in Table 2-1, but categorization may be changed based on recommendations by the Mission Directorate Associate Administrator (MDAA), who considers additional risk factors facing the project. Projects that plan continuing operations and production, including integration of capability upgrades, with an unspecified Phase E end point are assigned to Category 1 unless otherwise agreed to by the Decision Authority. (See Section 2.4.1.3.b and Section 2.4.1.6.) The NASA Associate Administrator (AA) approves the final project categorization. The project category is identified in the Formulation Authorization Document (FAD) and Project Plan and documented in the KDP B Decision Memorandum. The Office of the Chief Financial Officer (OCFO) is responsible for the official listing of NASA programs and projects.⁴ For purposes of project categorization, the project LCC estimate includes phases A through F and all Work Breakdown Structure (WBS) Level 2 elements and is measured in real-year (nominal) dollars.

Table 2-1 Project Categorization Guidelines

2.1.3.2 When projects are initiated, they are assigned to a NASA Center or implementing organization by the MDAA consistent with direction and guidance from the strategic planning process. They are either assigned directly to a Center by the Mission Directorate or are selected through a competitive process such as an Announcement of Opportunity (AO). ⁵ For Category 1 projects, the assignment of a project to a Center or implementing organization shall be with the concurrence of the NASA AA.

2.1.4 Program and Project Manager Certification

2.1.4.1 Programs and projects with a LCC or initial capability cost (see Section 2.4.1.3.b) greater than $250M shall be managed by program and project managers who have been certified in compliance with Office of Management and Budget (OMB)’s promulgated Federal acquisition program/project management certification requirements. This certification is required within one year of appointment. Further information on how NASA is implementing program and project manager certification can be found in the NASA Space Flight Program and Project Management Handbook.

2.2 Program and Project Life Cycles

2.2.1 Program and project managers shall follow their appropriate life cycle as identified in each program and project respective life-cycle figure. Life cycles include life-cycle phases, gates, and major events; performing KDPs and major life-cycle reviews (LCRs); developing principal documents that govern the conduct of each phase; and re-entering the life cycle when program or project changes warrant such action.

2.2.2 Each program and project performs the work required for each phase, which is described in the NASA Space Flight Program and Project Management Handbook; NASA/SP-2016-3424, NASA Project Planning and Control Handbook, which covers the functions and activities of the planning and control community; NPR 7123.1, NASA Systems Engineering Processes and Requirements; and NPR 7150.2, NASA Software Engineering Requirements. Program and project managers shall organize the work required for each phase using a product-based WBS developed in accordance with the Program and Project Plan templates (appendices G and H). Additional information on the NASA WBS structure is provided in the NASA Work Breakdown Structure (WBS) Handbook, NASA/SP-2010-3404, which can be found in NODIS on the OCE tab under the “Other NASA-Level Documents” menu. When an alternate approach provides for better program/project implementation, the program/project manager should tailor the requirement as noted in the Compliance Matrix. (See Appendix C.)

2.2.3 The documents shown on the life-cycle figures and described below shall be prepared in accordance with the templates in appendices D, E, F, G, and H.

Figure 2-2 NASA Uncoupled and Loosely Coupled Program Life Cycle

Figure 2-3 NASA Tightly Coupled Program Life Cycle

Figure 2-4 NASA Single-Project Program Life Cycle

Figure 2-5 NASA Project Life Cycle

2.2.3.1 The program FAD (see Appendix E) is prepared by the Mission Directorate and authorizes a program manager to initiate the planning of a new program and to perform the analysis of alternatives required to formulate a sound Program Plan that contains project elements, requirements, schedules, and time-phased cost plans.

2.2.3.2 The Program Commitment Agreement (PCA) (see Appendix D) is an agreement between the MDAA and the NASA AA (the Decision Authority) that authorizes program transition from Formulation to Implementation. The PCA is prepared by the Mission Directorate and documents Agency requirements that flow down to the program, Mission Directorate requirements, program objectives, management and technical approach and associated architecture, technical performance, schedule, time-phased cost plans, safety and risk factors, internal and external agreements, LCRs, and all attendant top-level program requirements.

2.2.3.3 The Program Plan (see Appendix G) is an agreement between the MDAA (who has final approval authority for the plan), the participating Center Director(s), and the program manager. It documents at a high level the program’s objectives and requirements, scope, implementation approach, interfaces with other programs, environment within which the program operates, funding by time-phased cost plans consistent with the approved PCA, and commitments of the program. The Program Plan is prepared by the program.

2.2.3.4 The project FAD (see Appendix E) is prepared by the Mission Directorate. It authorizes a project manager to initiate the planning of a new project and to perform the analysis of alternatives required to formulate a sound Formulation Agreement and subsequent Project Plan. The FAD contains requirements, schedules, and project funding requirements.

2.2.3.5 The Formulation Agreement (see Appendix F) is prepared by the project in response to the FAD to establish the technical and acquisition work that needs to be conducted during Formulation and defines the schedule and funding requirements during Phase A and Phase B for that work.

2.2.3.6 The Project Plan (see Appendix H) is an agreement among the MDAA; the program manager; participating Center Director(s); the project manager; and for AO-selected missions, the principal investigator. ⁶ The Project Plan is prepared by the project manager with the support of the project team and defines at a high level the project’s objectives, technical and management approach, environment within which the project operates, and commitments of the project to the program.

2.2.4 Each program and project shall perform the LCRs in accordance with NPR 7123.1, applicable Center practices, and the requirements of this document. These reviews provide a periodic assessment of the program’s or project’s technical and programmatic status and health at key points in the life cycle using six criteria: alignment with and contribution to Agency strategic goals, adequacy of management approach, adequacy of technical approach, adequacy of the integrated cost and schedule estimates and funding strategy, adequacy and availability of resources other than budget, and adequacy of the risk management approach. (For further guidance on addressing the six criteria, see NASA/SP-20230001306, NASA Standing Review Board Handbook.) LCRs that occur at the end of each life-cycle phase are complete when the governing Program Management Council (PMC) and Decision Authority complete their assessment at the KDP and sign the Decision Memorandum. (See Section 2.4.1.)

2.2.4.1 NASA programs and projects that leverage commercial partnerships or other practices (e.g., Commercial Crew Program) may employ tailoring approaches to accommodate their acquisition strategies. Examples of tailoring approaches used by these programs are provided on the Agency Tailoring Web site at https://appel.nasa.gov/npr-7120-5-tailoring-resources.

2.2.4.2 The need for a PIR LCR is determined in one of two ways:

a. The NASA AA determines the need for a PIR based on the occurrence of a trigger and discussion with the Convening Authorities. The MDAA or an independent team member (Technical Authorities (TAs), OCFO) report to the NASA AA that a trigger for discussing the need for a PIR has occurred. This is reported at the Agency Program Management Council (APMC) during the annual review of Mission Directorate Independent Assessment Manifests. (For considerations that trigger a discussion on the need for a PIR see the NASA Space Flight Program and Project Management Handbook, Section 5.11.3.)

b. The NASA AA or MDAA, per their discretion, determine that a PIR is needed.

2.2.4.3 Programs or projects that implement major upgrades as referenced in Section 2.4.1.6 will enter the life cycle at the appropriate LCR within the Formulation Phase. If other upgrades to a program or project are needed between flights, the program or project will re-enter the life cycle and perform the LCRs as necessary to demonstrate technical, cost, and schedule maturity for those upgrades through the applicable Formulation and/or Implementation phases.

2.2.5 Program or project managers and an independent Standing Review Board (SRB) shall conduct the System Requirements Review (SRR), System Definition Review (SDR)/ Mission Definition Review (MDR), Preliminary Design Review (PDR), Critical Design Review (CDR), System Integration Review (SIR), Operational Readiness Review (ORR), and PIR LCRs in figures 2-2, 2-3, 2-4, and 2-5. LCRs that do not require an SRB will be convened by the Center Director (or designee) of the Center responsible for the program or project management.

a. The program or project manager determines whether one- or two-step reviews will be conducted. (See the NASA/SP-20230001306, NASA Standing Review Board Handbook and the NASA Space Flight Program and Project Management Handbook for further guidance on the review processes conducted by the SRB, including one- and two-step reviews.)

2.2.5.1 NASA accords special importance to the policies and procedures established to ensure the integrity of the SRB’s independent review process and to comply with Federal law. The Conflict of Interest (COI) procedures detailed in the NASA Standing Review Board Handbook shall be strictly adhered to.

2.2.5.2 The portion of the LCRs conducted by the SRB shall be convened by the Convening Authorities in accordance with Table 2-2. The scope and requirements for this review will be documented in a Terms of Reference (ToR), for which there is a template in the NASA Standing Review Board Handbook.

Table 2-2 Convening Authorities for Standing Review Board

NOTE: LCR entrance and success criteria in NPR 7123.1 and the life-cycle phase and KDP information in the NASA Space Flight Program and Project Management Handbook provide specifics for addressing the six criteria required to demonstrate the program or project has met expected maturity state.

2.2.5.3 The program or project manager, the SRB chair, and the Center Director (or designated Engineering Technical Authority (ETA) representative) shall mutually assess the program or project's expected readiness for the LCR and report any disagreements to the Decision Authority for final decision. The assessment occurs approximately 30 to 90 calendar days prior to the LCR.

2.2.5.4 The Decision Authority may request the SRB to conduct other reviews identified on figures 2-2, 2-3, 2-4, and 2-5 or special reviews identified in Section 2.2.9. The Decision Authority may also request other special reviews that may or may not be conducted by the SRB. Examples of situations that may prompt such reviews include long periods of time (as determined at the discretion of the Decision Authority) between LCRs, between an LCR and when the subsequent KDP is scheduled, and between KDPs; key junctures in the life cycles of major programs, projects, or missions; and key aspect(s) of programs, projects, or missions of particular interest to the Agency. (See the NASA Space Flight Program and Project Management Handbook, Sections 3.1.3 and 4.1.3 for more information about special reviews.) The Decision Authority may also request informational briefings.

2.2.6 In preparation for these LCRs, the program or project manager shall generate the appropriate documentation per the Appendix I tables of this document, NPR 7123.1, and Center practices, as necessary, to demonstrate that the program’s or project’s definition and associated plans are sufficiently mature to execute the follow-on phase(s) with acceptable technical, safety, and programmatic risk.

2.2.6.1 For a single-project program that is implemented through separate program and project structures, the MDAA and single-project program manager will determine which of the documents in the tables are produced by the program and which are produced by the project. In both management approaches, the Program and Project Plans may be combined if approved by the MDAA.

2.2.7 Each program and project proceeds through the KDPs identified in its respective life-cycle figure. A KDP is the event where the Decision Authority determines the readiness of a program or project to progress to the next phase of the life cycle and establishes the content, cost, and schedule commitments for the ensuing phase(s). Transition to the following phase occurs immediately following KDP approval except for the transition from Phase D to E, where transition occurs following on-orbit checkout. KDPs associated with uncoupled, loosely coupled, and tightly coupled programs are designated with Roman numerals and zero. The first KDP is KDP 0; the second is KDP I, etc. KDPs for projects and single-project programs are designated with letters, i.e., KDP A, KDP B, etc.

2.2.7.1 For missions selected as a result of an AO, KDP A is the selection of a Step 1 proposal for concept development. In a one-step AO process, projects enter Phase A after selection (KDP A) and the process becomes conventional. In a two-step AO process, projects are down-selected following evaluation of concept study reports and the down-selection serves as KDP B. Following this selection, the process becomes conventional with the exception that products normally required at KDP B that require Mission Directorate input or approval will be finished as early in Phase B as feasible.

2.2.8 Projects, single-project programs (and other programs at the discretion of the MDAA) with a life-cycle cost (LCC) or initial capability cost (see Section 2.4.1.3.b) estimated to be greater than $250M shall perform earned value management (EVM) and comply with EIA-748, Earned Value Management Systems for all portions of work including in-house and contracted portions of the project. To ensure that projects meet KDP C requirements, EVM System (EVMS) setup and implementation efforts begin as soon as a project begins to develop the WBS, Organizational Breakdown Structure, and Integrated Master Schedule (IMS). EVM reporting to the performance measurement baseline begins during Phase B and continues as long as EVM applies for the remaining phases.

2.2.8.1 Program and project managers with programs and projects subject to EVM shall utilize the NASA EVM Capability Process for in-house work. NASA's EVM Capability Process can be found on the Program and Project Management Community of Practice at https://nen.nasa.gov/web/evm by selecting “Document Repository” under the “Community Navigation” section. For programs and projects with an LCC or initial capability cost less than $250M, EVM is optional on the in-house work portion, however EVM may be implemented at the discretion of the project manager. An EVMS is not required on non-developmental work, steady state operations, or basic and applied research.

2.2.8.2 EVM system requirements for contracted work shall be applied to suppliers in accordance with the NASA Federal Acquisition Regulation (FAR) Supplement, independent of phase and the $250M threshold (https://www.hq.nasa.gov/office/procurement/regs/NFS.pdf.). For contracts that require EVM, an Integrated Program Management Report (IPMR) and WBS are the Data Requirements Descriptions (DRDs) that are included in the contract and/or agreement.

2.2.8.3 Integrated Baseline Reviews (IBRs) are required whenever EVM is required. Mission Directorates shall conduct an IBR in preparation for KDP C and for major changes that significantly impact the cost and schedule baseline. For contracts, refer to the NASA FAR Supplement for IBR requirements.

2.2.8.4 EVMS surveillance shall be conducted on contracts and on programs and projects with in-house work to ensure continued compliance with EIA-748, Earned Value Management Systems.

2.2.9 The Office of the Administrator, MDAA, or the Center Director (or designee) may also convene special reviews as they determine the need. In these cases, the MDAA or a Technical Authority forms a special review team composed of relevant members of the SRB and additional outside expert members as needed. The process followed for these reviews is the same as for other reviews. The special review team is dissolved following resolution of the issue(s) that triggered its formation.

2.2.10 Program and project managers shall complete and maintain a Compliance Matrix (see Appendix C) for this NPR and attach it to the Formulation Agreement for projects in Formulation and/or the Program or Project Plan. The program or project will use the Compliance Matrix to demonstrate how it is complying with the applicable program or project requirements of this document.

2.2.11 Single-project programs and projects shall develop a Project Protection Plan that addresses NASA-STD-1006, Space System Protection Standard in accordance with NPR 1058.1, NASA Enterprise Protection Program. (A copy of the Project Protection Plan Template can be found at https://nen.nasa.gov/web/sap.)

2.3 Program and Project Oversight and Approval

2.3.1 Each program and project shall have a Decision Authority, the Agency’s responsible individual who determines whether and how the program or project proceeds through the life cycle and the key program or project cost, schedule, and content parameters that govern the remaining life-cycle activities. For programs and Category 1 projects, the Decision Authority is the NASA AA. The NASA AA may delegate this authority to the MDAA. For Category 2 and 3 projects, the Decision Authority is the MDAA. The MDAA may delegate some of their Programmatic Authority to appropriate Mission Directorate staff or to Center Directors. Decision authority may be delegated to a Center Director for determining whether Category 2 and 3 projects may proceed through KDPs into the next phase of the life cycle. However, the MDAA will retain authority for all program-level requirements, funding limits, launch dates, and any external commitments.

2.3.1.1 The MDAA shall inform the NASA AA and Administrator via email on all Agency Baseline Commitments (ABCs) per the following: inform the NASA AA on ABCs for single-project programs and projects with a LCC or initial capability cost (see Section 2.4.1.3.b) greater than $250M; and inform the NASA Administrator on ABCs for all single-project programs and projects with a LCC or initial capability cost greater than $1B and all Category 1 projects. (See Section 2.4.1.5 for more information on ABCs.)

2.3.2 To ensure the appropriate level of management oversight, NASA has established two levels of PMCs—the Agency PMC (APMC) and Mission Directorate PMCs (DPMCs). The PMCs have the responsibility for periodically evaluating the technical, safety, health and medical, and programmatic performance (including cost, schedule, risk, and risk mitigation) and content of a program or project under their purview. These evaluations focus on whether the program or project is meeting its commitments to the Agency. Each program and project shall have a governing PMC. For all programs and Category 1 projects, the governing PMC is the APMC; for Category 2 and 3 projects, the governing PMC is the DPMC. The PMC function may be delegated by the Decision Authority to the Center Management Council (CMC) in the event the Decision Authority is delegated to the Center.

2.3.3 The Decision Authority and governing PMC for the program or project are documented in the applicable authority documents: Program Commitment Agreement (PCA), Formulation Authorization Document (FAD), Formulation Agreement, Program Plan, and Project Plan. Delegations of Decision Authority and delegations of governing PMCs are documented in the applicable authority documents (PCA, Formulation Agreement, Program Plan, Project Plan). Templates for the PCA, FAD, Formulation Agreement, Program Plan, and Project Plan are provided in appendices D, E, F, G, and H, respectively. These templates identify what is documented in each authority document.

2.3.4 The Center Director (or designee) shall oversee programs and projects usually through the CMC, which monitors and evaluates all program and project work (regardless of category) executed at that Center. The CMC evaluation focuses on whether Center engineering, Safety and Mission Assurance (SMA), health and medical, and management best practices (e.g., program and project management, resource management, procurement, institutional best practices) are being followed by the program or project under review and whether Center resources support program/project requirements. The CMC also assesses program and project risk and evaluates the status and progress of activities to identify and report trends and provide guidance to the Agency and affected programs and projects. The CMC provides its findings and recommendations to program or project managers and to the appropriate PMCs regarding the performance and technical and management viability of the program or project prior to KDPs.

2.3.4.1 For programs and projects that are conducted by multiple Centers, an Integrated Center Management Council (ICMC) should be used where the Center Director (or designee) of each Center with substantial contributions is a member of the ICMC. The ICMC is chaired by the Center Director (or representative) responsible for the program/project management.

2.3.5 Following each LCR, the independent SRB chair and the program or project manager shall brief the applicable management councils on the results of the LCR to support the councils’ assessments. The final LCR in a given life-cycle phase provides essential information for the KDP, which marks the end of that life-cycle phase except for transition from Phase D to E, where transition occurs following on-orbit checkout and initial operations. To support the Decision Authority’s determination of the readiness of a program or project to progress to the next phase of the life cycle, the program manager (for projects in their program), the Center Director, the MDAA (for programs and Category 1 projects), and the governing PMC provide their assessments and recommendations with supporting data, as necessary. Tables 2-3 through 2-6 define for each LCR and each KDP the LCR objectives and the expected maturity state at the subsequent KDP. (The NASA Space Flight Program and Project Management Handbook provides further details.)

Table 2-3 Expected Maturity State Through the Life Cycle
of Uncoupled and Loosely Coupled Programs

NOTE: LCR entrance and success criteria in NPR 7123.1 and the life-cycle phase and KDP information in the NASA Space Flight Program and Project Management Handbook provide specifics for addressing the six criteria required to demonstrate the program or project has met expected maturity state.

Table 2-4 Expected Maturity State
Through the Life Cycle of Tightly Coupled Programs

NOTE: LCR entrance and success criteria in NPR 7123.1 and the life-cycle phase and KDP information in the NASA Space Flight Program and Project Management Handbook provide specifics for addressing the six criteria required to demonstrate the program or project has met expected maturity state.

Table 2-5 Expected Maturity State Through the Life Cycle of
Projects and Single-Project Programs

NOTE: LCR entrance and success criteria in NPR 7123.1 and the life-cycle phase and KDP information in the NASA Space Flight Program and Project Management Handbook provide specifics for addressing the six criteria required to demonstrate the program or project has met expected maturity state.

Table 2-6 Objectives for Other Reviews

2.4 Approving and Maintaining Program and Project Plans, Baselines, and Commitments

2.4.1 After reviewing the supporting material and completing discussions with concerned parties, the Decision Authority determines whether and how the program or project proceeds into the next phase and approves any additional actions. The decisions by the Decision Authority on whether and how the program or project proceeds into the next phase shall be summarized and recorded in the Decision Memorandum signed at the conclusion of the governing PMC by all parties with supporting responsibilities, accepting their respective roles. Once signed, the Decision Memorandum is appended to the project Formulation Agreement, Program Plan, or Project Plan, as appropriate. (Decision Memorandum templates may be found at https://community.max.gov/pages/viewpage.action?pageId=1232962906. Additional information on the Decision Memorandum is provided in the NASA Space Flight Program and Project Management Handbook, Section 5.5.6.)

2.4.1.1 The Decision Memorandum shall describe the constraints and parameters within which the Agency, the program manager, and the project manager will operate; the extent to which changes in plans may be made without additional approval; any additional actions that came out of the KDP; and the supporting data (e.g., the cost and schedule data sheet) that provide further details. The NASA Space Flight Program and Project Management Handbook provides an example of the Decision Memorandum to illustrate the level and types of information that are documented.

2.4.1.2 The Management Agreement contained within the Decision Memorandum defines the parameters and authorities over which the program or project manager has management control. A program or project manager has the authority to manage within the Management Agreement and is accountable for compliance with the terms of the agreement. The Management Agreement, which is documented at every KDP, may be changed between KDPs as the program or project matures and in response to internal and external events. The Management Agreement should be viewed as a contract between the Agency and the program or project manager. A divergence from the Management Agreement that any signatory identifies as significant shall be accompanied by an amendment to the Decision Memorandum.

2.4.1.3 During Formulation, the Decision Memorandum shall establish a target LCC or initial capability cost range (and schedule range, if applicable) as well as the Management Agreement addressing the schedule and resources required to complete Formulation.

a. For single-project programs and projects with a LCC or initial capability cost greater than or equal to $1B, the Decision Memorandum shall establish a high and low value for cost and schedule with the corresponding JCL value at KDP B. (See Section 2.4.3.1.) (This requirement does not apply to two-step AO missions.)

b. Single-project programs and projects that plan continuing operations and production, including integration of capability upgrades, with an unspecified Phase E end point, (e.g., SLS, EGS, Orion) define the scope of an initial capability in the KDP B Decision Memorandum and establish an initial capability cost.

2.4.1.4 The Decision Memorandum also documents any additional resources beyond those explicitly estimated or requested by the program/project (e.g., additional schedule margin) when the Decision Authority determines that this is appropriate. This includes Unallocated Future Expenses (UFE), which are costs that are expected to be incurred but cannot yet be allocated to a specific WBS sub-element of a program’s or project’s plan. Management control of some UFE may be retained above the level of the project (i.e., Agency, Mission Directorate, or program). (See Figure 2-6, Example of Agreements and Commitments in Terms of Cost for Projects.)

Figure 2 6 Example of Agreements and Commitments in Terms of Cost for Projects

2.4.1.5 All single-project program managers and project managers shall document the Agency’s LCC estimate or initial capability cost estimate and other parameters in the Decision Memorandum for Implementation (KDP C), and this becomes the ABC. The ABC is the baseline against which the Agency’s performance is measured during the Implementation Phase. The ABC for programs and projects with a LCC of $250M or more forms the basis for the Agency’s external commitment to OMB and Congress.

a. For all single-project programs and projects with a definite Phase E end point, the Agency’s LCC estimate and other parameters shall become the ABC.

b. For single-project programs and projects that plan continuing operations and production, including integration of capability upgrades, with an unspecified Phase E end point, the initial capability cost estimate and other parameters shall become the ABC.

2.4.1.6 For single-project programs and projects that plan continuing operations and production, including integration of capability upgrades, with an unspecified Phase E end point, the Phase E cost estimate for the continuing operations and production phase is established as part of the ORR and KDP E for the five years after initial capability and subsequently updated and documented annually for the next 5-year period. Upgrades during Phase E meeting the Agency criteria for a major project for external reporting will be treated as projects for the purposes of their own ABC outside the Phase E cost estimate. Other upgrades will be reflected in the Phase E cost estimate.

2.4.1.7 Tightly coupled programs shall document their LCC estimate in accordance with the life-cycle scope defined in the FAD or PCA, and other parameters in their Decision Memorandum at KDP I and update it at subsequent KDPs.

2.4.1.8 Programs or projects shall be rebaselined when: (1) the estimated development cost ⁷ exceeds the ABC development cost by 30 percent or more (for projects over $250M, also that Congress has reauthorized the project); (2) the NASA AA judges that events external to the Agency make a rebaseline appropriate; or (3) the NASA AA judges that the program or project scope defined in the ABC has been changed or the project has been interrupted. ABCs for projects are not rebaselined to reflect cost or schedule growth that does not meet one or more of these criteria. When an ABC is rebaselined, the Decision Authority directs that a review of the new baseline be conducted by the SRB or as determined by the Decision Authority.

2.4.2 All programs and projects develop cost estimates and planned schedules for the work to be performed in the current and following life-cycle phases (see Appendix I tables). The program or project shall document the basis of estimate (BOE) for cost estimates and planned schedules in retrievable program or project records.

2.4.3 Single-project programs (regardless of LCC or initial capability cost) and projects with an estimated LCC or initial capability cost greater than $250M develop probabilistic analyses of cost and schedule estimates to obtain a quantitative measure of the likelihood that the estimate will be met in accordance with the following requirements. (In this section, for programs and projects that plan continuing operations and production, including integration of capability upgrades, with an unspecified Phase E end point, the initial capability cost is used instead of LCC.)

2.4.3.1 At KDP B:

a. Single-project programs with an estimated LCC under $1B and projects with an estimated LCC greater than $250M and under $1B shall provide a range of cost and a range for schedule, each range (with confidence levels identified for the low and high values of the range) established by a probabilistic analysis and based on identified resources and associated uncertainties by fiscal year. Separate analyses of cost and schedule, each with associated confidence levels, meet the requirement. A joint cost and schedule confidence level (JCL) is not required but may be used.

b. Single-project programs and projects with an estimated LCC greater than or equal to $1B shall develop a JCL and provide a high and low value for cost and schedule with the corresponding JCL value (e.g., 50 percent, 70 percent).⁸ The JCL is informed by a probabilistic analysis of development cost and schedule duration.⁹ The JCL measures the likelihood of completing all remaining work at or below the budgeted levels and on or before the planned completion of Phase D.

2.4.3.2 At KDP C, single-project programs (regardless of LCC) and projects with an estimated LCC greater than $250M shall develop a cost-loaded schedule and perform a risk-informed probabilistic analysis that produces a JCL. The JCL at KDP C is the product of a probabilistic analysis of the coupled cost and schedule.

2.4.3.3 At CDR, single-project programs and projects with an estimated LCC greater than or equal to $1B shall update their KDP C JCL and communicate the updated JCL values for the ABC and Management Agreement to the APMC for informational purposes.

2.4.3.4 At KDP D, single-project programs and projects with an estimated LCC greater than or equal to $1B shall update their JCL if current reported development costs have exceeded the development ABC cost by 5 percent or more and document the updated JCL values for the ABC and Management Agreement in the KDP D Decision Memorandum.

2.4.3.5 When a single-project program (regardless of LCC) or project with an estimated LCC greater than $250M is rebaselined, a JCL shall be calculated and evaluated as a part of the rebaselining approval process.

2.4.4 Mission Directorates plan, budget, and ensure funding for single-project programs (regardless of LCC or initial capability cost) and projects with an estimated LCC or initial capability cost greater than $250M in accordance with the following requirements. (In this section, for programs and projects that plan continuing operations and production, including integration of capability upgrades, with an unspecified Phase E end point, the initial capability cost is used instead of LCC.)

2.4.4.1 At KDP B, Mission Directorates shall plan and budget single-project programs and projects with an estimated LCC greater than or equal to $1B based on a 70 percent JCL or as approved by the Decision Authority.

2.4.4.2 At KDP C, Mission Directorates shall plan and budget single-project programs (regardless of LCC) and projects with an estimated LCC greater than

$250M based on a 70 percent JCL or as approved by the Decision Authority.

2.4.4.3 At KDP B and KDP C, any JCL approved by the Decision Authority at less than 70 percent shall be justified and documented in a Decision Memorandum.

2.4.4.4 At KDP C, Mission Directorates shall ensure funding for single-project programs (regardless of LCC) and projects with an estimated LCC greater than $250M is consistent with the Management Agreement and in no case less than the equivalent of a 50 percent JCL or as approved by the Decision Authority.

2.4.4.5 At KDP C, any funding approved by the Decision Authority that is inconsistent with the Management Agreement or less than 50 percent JCL shall be justified and documented in a Decision Memorandum.

2.4.5 Tightly coupled, loosely coupled, and uncoupled programs are not required to develop program cost and schedule confidence levels. Tightly coupled, loosely coupled, and uncoupled programs shall provide analysis of the program’s risk posture to the governing PMC as each new project reaches KDP B and C or when a project’s ABC is rebaselined.

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