ABSTRACT
In times of economic welfare when year-to-year GDP increases regularly, such cost overruns for longer-term projects can be more easily absorbed. Due to the fact that original space projects had relatively short operational lifetimes the space industry has focused strongly on development costs. Insurance can be seen as an ultimate cost mitigation instrument, in particular if public funding is involved. In order to be confident that the right price will be negotiated, it is important before the contract to have a convincing feeling about the cost of a project, taking into account its operational cost. An element to be taken into account in this context is life cycle costing (LCC), which is becoming more important in the space sector. Cost-plus-incentive-fee (CPIF) is similar to cost-plus-fixed-fee (CPFF), but in this case the fee may vary up or down within set limits and in accordance with a formula tied to allowable actual costs.
