Predicting Future Environmental Funding Needs: Regression Modeling of Historic Project and Program Costs

The accurate forecasting of resource levels required to maintain the Army's environmental programs has proved to be a challenging endeavor. The process often involves a detailed analysis of known programmatic costs along with the projection of various cost factors associated with new or revised environmental regulations, unexpected environmental situations, and overlooked program shortfalls. Since the Army's Environmental Program Requirements (EPR) Report serves as an environmental work plan for installation and major Army command (MACOM) environmental projects, the funding requirements contained within represent the single best picture of the Army's environmental expenditures at any given point in time. Using the EPR and other data sources, the U.S. Army Environmental Center (USAEC) has developed a prototype tool for estimating environmental project costs that installation staff can readily use to generate initial planning estimates for a variety of different types of environmental expenditures. MACOM and HQDA staff could also use the tool to identify and validate cost estimates for installations' EPR projects that appear to fall outside the normal range of expected values. Regression analysis applied to historical data sets collected automatically by the cost‐estimating software could be used to periodically update estimating protocols, thereby increasing the tool's accuracy over time. Similarly, through the regression analysis of environmental projects' historical cost drivers and associated EPR funding data, USAEC is developing a model that extrapolates macro‐level cost trends based on historical funding requirements and obligation levels for use in estimating environmental program costs . As with the project cost estimator, the model could be self‐correcting because successive submissions of the EPR data can serve to refine cost estimates in future years and incorporate economic inflation trends. © 2001 John Wiley & Sons, Inc.