Investment Analysis > Investment Analysis Standard Guidance > Benefit Basis of Estimate
Documentation Standard for FAA Benefits Estimate
Basis of Estimate
October, 2002
Federal Aviation
Administration
Introduction to Template for FAA Benefits Estimate
Basis of Estimate
The following standard describes in detail the
necessary elements for writing a benefits basis of estimate, which
documents the processes and the methodologies utilized to produce the
benefits estimate. The BoE should also meet the standard of
facilitating the replication of the estimate for JRC 2b, which would
require that all equations and all data sources be listed. However,
the requirements for JRC 2a are less rigorous and only need to meet
the standard of listing the major methodological equations and the
major drivers and data inputs. Comprehensive documentation is
essential for future validation, verification, credibility, and
accuracy of the estimate. Detailed documentation also provides
important methodological guidance for future benefit estimates.
Benefits Basis of Estimate
for
Program Name
Date
Table of Contents
1.0
INTRODUCTION
1.1
Phase of JRC Decision
1.2
Historical Background of
program
1.3
Program Goals and
Objectives
1.4
Describe Alternatives
1.5
Decision Criteria
2.0
GROUND
RULES AND ASSUMPTIONS
3.0
DATA
INPUTS
4.0
METRICS
5.0
DESCRIPTION
OF METHODOLOGY
6.0
DETAILED
EQUATIONS OF METHODOLOGY
7.0
DISTRIBUTION
OF BENEFITS TO SPECIFIC BENEFITS BREAKDOWN STRUCTURE (BBS) ELEMENTS
8.0
BENEFIT
RISKS
9.0
QUALITATIVE
BENEFITS (NON-QUANTIFIABLE, ENABLING, AND QUANTIFIABLE
NON-MONETIZED)
10.0
FUTURE
WORK/NEXT STEPS
11.0
LIST
OF PARTICIPANTS
APPENDIX A: NAME
REFERENCES
1.0 INTRODUCTION
1.1 Phase of JRC Decision
Explain the phase of the JRC decision.
1.2 Historical Background of program
Describe the historical events that have lead up
to the current status of the program.
1.3 Program Goals and Objectives
State the program goals and objectives.
1.4 Describe Alternatives
Describe the alternatives to be evaluated, and
how they meet minimum requirements. Baseline reference cases should
be described in detail.
1.5 Decision Criteria
Explain the decision criteria used for evaluating
alternatives.
2.0 GROUND RULES AND ASSUMPTIONS
-
List and explain all general assumptions that
apply to all alternatives
-
List and explain all specific assumptions that
apply to certain alternatives. This may include very detailed
explanations and/or justifications for the specific assumptions.
Supply data used for the assumptions and explain methodology
implemented to develop these assumptions.
-
For expediency and deadline purposes the JRC 2a
effort requires that only the more gross assumptions be listed and
explained.
3.0 DATA INPUTS
-
For JRC 2a, more general benefits estimates are
generated, and therefore, only the major drivers and data sources
need to be documented.
-
For JRC 2b decision, all data should be
included in a citation and in a list of references at the end of
the BOE
-
If the data is a major driver for the benefits,
it should be described in more detail why and how the data was
used. Because a JRC 2b effort requires detailed use of data at a
regional or airport level, the BOE should include the datasets
used in the appendix of the BOE, if possible. This will facilitate
the use of this data in future analyses and enable replication of
the results if necessary in the future.
-
In the narrative data inputs section, the
quality of the data used should be discussed and evaluated. Any
corrective procedures or adjustments to the data should also be
included.
-
This section would also include the use of
previous analyses and/or studies on benefits estimation. Protocol
for data inputs citations and referencing also applies to the use
of previous analyses and/or studies.
4.0 Metrics
-
All benefits should be listed and then
organized into general benefits/metrics groupings. Assistance may
be found by reviewing the connection between the benefits and the
Benefits Breakdown Structure (BBS). Explanations and
justifications for the metrics chosen and how they will be
measured should be included.
-
Construct a summary table, which depicts the
benefits/metrics associated with each alternative over the
lifecycle of the program for each year.
5.0 DESCRIPTION OF METHODOLOGY
-
Overview of Methodology should clearly explain
what was done and how it was done in a step-wise chronological
progression
-
All diagrams and tables depicting the
methodology should have citations and headings describing their
contents.
-
Models used in the estimation process should be
clearly identified and described in detail how they operate and
what assumptions were input and what the outputs consist of.
6.0 DETAILED EQUATIONS OF METHODOLOGY
7.0 Distribution of Benefits to Specific Benefits Breakdown
Structure (BBS) elements
-
Each benefit and accompanying metric should be
connected to a specific BBS line item element. By tracking each
benefit and metric to the BBS, the benefits estimate will be
easier to compare to the universe of potential benefits associated
with a particular benefits category, phase of flight, etc. This
may prevent double counting or over-estimation of total benefits.
-
Estimation of risk ranges around the benefits
estimate will be facilitated by linking the benefits and metrics
to the BBS.
8.0 Benefits Risks
-
All uncertainties and risks associated with the
estimate should be listed.
-
Each uncertainty should be associated with a
range of benefits estimates based on changing a key driver, which
may be highly uncertain, and re-running the benefits estimate with
these range of driver inputs. All key drivers and their ranges
used to develop the risk analysis relative to benefits estimates
shall be listed and described how the ranges were developed.
- The outputs from incorporating the benefit risks into the
benefits estimate will be used as inputs into the risk and
confidence analysis with the cost ranges.
9.0 Qualitative Benefits (non-quantifiable, enabling, and
quantifiable non-monetized)
-
For JRC 2a, major qualitative benefits will
be listed, and
-
Other programmatic areas that are affected or
those that share qualitative benefits will be diagrammatically
laid out.
-
For JRC 2b, all qualitative benefits will be
listed,
-
Non-quantifiable benefits may be bound in
terms of all inter-related programs benefits pool, and
-
Non-monetized Benefits will be described and
quantified if possible
10.0 Future Work/Next Steps
11.0 List of Participants
A list should be constructed of all participants in the benefits
estimate development. By listing the participants, it acknowledges the
effort put forth from participants, and adds to traceability,
especially if transitioning from JRC 2A to 2B, re-evaluating for re-baselining,
post-implementation review, and/or for verification purposes.
Appendix A: Name
Appendices-include a copy of estimate, briefing
charts, model runs, tables, etc.
References
References-source documents/data should be
identified where used in the documentation package, with its citation.
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