GOVERNMENT ACCOUNTABILITY OFFICE WASHINGTON DC WASHINGTON United States
To use public funds effectively, the government must employ effective management practices and processes, including the measurement of government program performance. In addition, legislators, government officials, and the public want to know whether government programs are achieving their goals and what their program costs are. The U. S. Government Accountability Office GAO has shown that in order to conduct oversight of the federal government, including agencies stewardship of public funds, reliable cost information is required. We developed this Guide to establish a consistent methodology based on best practices that can be used across the federal government for developing, managing, and evaluating program cost estimates. The Cost Estimating and Assessment Guide presents the best practices associated with developing a reliable, high-quality cost estimate and the best practices associated with effective management of program costs using earned value management EVM. Use of these best practices should enable government programs to better estimate and manage their costs to improve program management and execution. For the purposes of this Guide, a cost estimate is the summation of individual cost elements, using established methods and valid data, to estimate the future costs of a program, based on what is known today. The management of a cost estimate involves updating the estimate with actual data as they become available, revising the estimate to reflect program changes, and analyzing differences between estimated and actual costs - for example, by using data from a reliable EVM system.