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Testimony before the Committee on Science, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 2:00 p.m. EDT: 

Thursday, September 28, 2006: 

NASA: 

Sound Management and Oversight Key to Addressing Crew Exploration 
Vehicle Project Risks: 

Statement of Allen Li, Director, Acquisition and Sourcing Management: 

GAO-06-1127T: 

GAO Highlights: 

Highlights of GAO-06-1127T, a testimony before the Committee on 
Science, House of Representatives 

Why GAO Did This Study: 

The National Aeronautics and Space Administration (NASA) plans to spend 
nearly $230 billion over the next two decades implementing the 
President’s Vision for Space Exploration (Vision) plans. In July 2006, 
GAO issued a report that questioned the program’s affordability, and 
particularly, NASA’s acquisition approach for one of the program’s 
major projects—the Crew Exploration Vehicle (CEV). This testimony, 
which is based upon that report and another recent GAO report 
evaluating NASA’s acquisition policies, highlights GAO’s continuing 
concerns with: 

* the affordability of the exploration program;
* the acquisition approach for the CEV, and;
* NASA’s acquisition policies that lack requirements for projects to 
proceed with adequate knowledge. 

Although GAO is not making recommendations in this testimony, we 
previously recommended that NASA modify the CEV acquisition strategy to 
ensure that a long-term commitment is not made prior to attaining of 
key knowledge. NASA disagreed and stated that it had sufficient 
knowledge for proceeding. Subsequent to our report, NASA changed its 
strategy to lessen the government’s fiscal obligation. GAO also made 
recommendations regarding NASA’s acquisition policies. The agency 
agreed, but has yet to take major actions to implement them. 

What GAO Found: 

NASA’s proposals for implementing the space exploration Vision raise a 
number of concerns: 

* NASA cannot develop a firm cost estimate for the exploration program 
at this time because the program is in its early stages. The changes 
that have occurred to the program over the past year and the resulting 
refinement of its cost estimates are indicative of the evolving nature 
of the program. While changes are appropriate at this stage of the 
program, they leave the agency unable to firmly identify program 
requirements and needed resources and, therefore, not in the position 
to make a long term commitment to the program. 

* NASA will likely be challenged to implement the program, as laid out 
in its Exploration Systems Architecture study (ESAS), due to the high 
costs associated with the program in some years and its long-term 
sustainability relative to anticipated funding. As we reported in July 
2006, there are years when NASA, with some yearly shortfalls exceeding 
$1 billion, does not have sufficient funding to implement the 
architecture; while in other years the funding available exceeds needed 
resources. Despite initial surpluses, the long-term sustainability of 
the program is questionable, given its long-term funding outlook. 
NASA’s preliminary projections show multibillion-dollar shortfalls for 
its exploration directorate in all fiscal years from 2014 to 2020, with 
an overall deficit through 2025 in excess of $18 billion. 

* NASA’s acquisition strategy for the CEV was not based upon obtaining 
an adequate level of knowledge when making key resources decisions, 
placing the program at risk for cost overruns, schedule delays, and 
performance shortfalls. These risks were evident in NASA’s plan to 
commit to a long-term product development effort before establishing a 
sound business case for the project that includes well-defined 
requirements, mature technology, a preliminary design, and firm cost 
estimates. NASA adjusted its acquisition approach and the agency 
included the production and sustainment portions of the contract as 
options—a move that is consistent with the recommendation in our report 
because it lessens the government’s financial obligation at this early 
stage. However, risks persist with NASA’s approach. 

* As we reported in 2005, NASA’s acquisition policies lacked major 
decision reviews beyond the initial project approval gate and lacked a 
standard set of criteria with which to measure projects at crucial 
phases in the development life cycle. These decision reviews and 
development measures are key markers needed to ensure that projects are 
proceeding with and decisions are being based upon the appropriate 
level of knowledge and can help to lessen identified project risks. The 
CEV project would benefit from the application of such markers. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-1127T]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Allen Li at (202) 512-
4841 or lia@gao.gov. 

[End of Section] 

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss the National Aeronautics and 
Space Administration's (NASA) plans for implementing the President's 
Vision for Space Exploration (Vision).[Footnote 1] NASA plans to spend 
nearly $230 billion over the next two decades--more than $31 billion of 
which will be spent in the next 5 years--to bring the Vision to 
reality.[Footnote 2] In July 2006, we issued a report that questioned 
the program's affordability, and in particular, NASA's acquisition 
approach for one of the program's major projects--the Crew Exploration 
Vehicle (CEV).[Footnote 3] My statement today, which is based upon that 
report and another report evaluating NASA's acquisition 
policies,[Footnote 4] highlights our continuing concerns with the 
affordability of the exploration program and the acquisition approach 
for the CEV project, as well as the absence of firm requirements in 
NASA's acquisition policies for projects to proceed with development 
with the appropriate level of knowledge. Given the competing demands 
facing the federal government and an already troubling funding profile 
for the program, it is imperative that NASA implement the various 
aspects of the Vision in a fiscally prudent and competent manner. Our 
work was performed in accordance with generally accepted government 
auditing standards. 

Summary: 

In summary, we found that because NASA's exploration program is in its 
early stages, the agency cannot develop a firm cost estimate for the 
program at this time. The changes that have occurred to the program 
over the past year and the resulting refinement of its associated cost 
estimates are indicative of the evolving nature of the program. 
Furthermore, we found that it will likely be a challenge for NASA to 
implement the program, as laid out in its Exploration Systems 
Architecture study (ESAS)[Footnote 5] due to the high costs associated 
with the program in some years and the long-term sustainability of the 
program relative to anticipated funding. Finally, we found that NASA's 
acquisition strategy for the CEV was not based upon obtaining an 
adequate level of knowledge when making key resources decisions, 
placing the program at risk for cost overruns, schedule delays, and 
performance shortfalls. These risks were evident in NASA's plan to 
commit to a long-term product development effort before establishing a 
sound business case for the project that includes well-defined 
requirements, mature technology, a preliminary design, and firm cost 
estimates. Furthermore, in our 2005 report on NASA's acquisition 
policies, we found that NASA's policies lacked major decision reviews 
beyond the initial project approval gate and lacked a standard set of 
criteria with which to measure projects at crucial phases in the 
development life cycle. These decision reviews and development measures 
are key markers needed to ensure that projects are proceeding with and 
decisions are being based upon the appropriate level of knowledge and 
can help to lessen project risks. 

In our July 2006 report, we recommended that NASA adjust its 
acquisition strategy to ensure that sufficient program knowledge--to 
include well-defined requirements, mature technologies, a stable 
design, and realistic cost estimates--be attained prior to committing 
the government to a long-term contract. NASA did not concur with our 
recommendation and in late August awarded a contract for the design, 
development, production, and sustainment of the CEV to Lockheed Martin. 
However, prior to awarding the contract, NASA adjusted its acquisition 
approach and the agency included the production and sustainment 
portions of the contract as options--a move that is consistent with the 
recommendation in our report because it lessens the government's 
financial obligation at this early stage. While these changes are 
positive steps, the agency's acquisition strategy needs further 
refinement to conform to acquisition best practices. Given the approach 
that NASA has chosen, continued congressional oversight will be 
critical for ensuring that the program stays within cost and schedule 
goals. This is especially true given NASA's "go as you can afford to 
pay" approach, wherein lower priority efforts will be deferred, 
descoped, or discontinued to allow NASA stay within its budget profile. 
Competing demands within the agency, coupled with a declining supply of 
federal discretionary funding requires due diligence on the part the 
agency and Congress to ensure successful program outcomes. As our work 
has found, all too often, programs are allowed to proceed without 
adequate knowledge being attained at key phases of development. Without 
such knowledge, it is difficult to predict with any confidence how much 
the program will cost, what technologies will or will not be available 
to meet performance expectations, and when the vehicle will be ready 
for use. 

Background: 

Despite many successes in the exploration of space, such as landing the 
Pathfinder and Exploration Rovers on Mars, NASA has had difficulty 
bringing a number of projects to completion, including several efforts 
to build a second generation reusable human spaceflight vehicle to 
replace the space shuttle. NASA has attempted several costly endeavors, 
such as the National Aero-Space Plane, the X-33 and X-34, and the Space 
Launch Initiative. While these endeavors have helped to advance 
scientific and technical knowledge, none have completed their objective 
of fielding a new reusable space vehicle. We estimate that these 
unsuccessful development efforts have cost approximately $4.8 billion 
since the 1980s. The high cost of these unsuccessful efforts and the 
potential costs of implementing the Vision make it important that NASA 
achieve success in its new exploration program beginning with the CEV 
project. 

Our past work has shown that developing a sound business case, based on 
matching requirements to available and reasonably expected resources 
before committing to a new product development effort, reduces risk and 
increases the likelihood of success. High levels of knowledge should be 
demonstrated before managers make significant program commitments, 
specifically: (1) At program start, the customer's needs should match 
the developer's available resources in terms of availability of mature 
technologies, time, human capital, and funding; (2) Midway through 
development, the product's design should be stable and demonstrate that 
it is capable of meeting performance requirements; (3) By the time of 
the production decision, the product must be shown to be producible 
within cost, schedule, and quality targets, and have demonstrated its 
reliability. Our work has shown that programs that have not attained 
the level of knowledge needed to support a sound business case have 
been plagued by cost overruns, schedule delays, decreased capability, 
and overall poor performance. With regard to NASA, we have reported 
that in some cases the agency's failure to define requirements 
adequately and develop realistic cost estimates--two key elements of a 
business case--resulted in projects costing more, taking longer, and 
achieving less than originally planned.[Footnote 6] 

Firm Cost Estimates Cannot Be Developed at This Time: 

Although NASA is continuing to refine its exploration architecture cost 
estimates, the agency cannot at this time provide a firm estimate of 
what it will take to implement the architecture. The absence of firm 
cost estimates is mainly due to the fact that the program is in the 
early stages of its life cycle. NASA conducted a cost risk analysis of 
its preliminary estimates through fiscal year 2011. On the basis of 
this analysis and through the addition of programmatic reserves (20 
percent on all development and 10 percent on all production costs), 
NASA is 65 percent confident that the actual cost of the program will 
either meet or be less than its estimate of $31.2 billion through 
fiscal year 2011. For cost estimates beyond 2011, when most of the cost 
risk for implementing the architecture will be realized, NASA has not 
applied a confidence level distinction. Since NASA released its 
preliminary estimates, the agency has continued to make architecture 
changes and refine its estimates in an effort to establish a program 
that will be sustainable within projected resources. While changes to 
the program are appropriate at this stage when concepts are still being 
developed, they leave the agency in the position of being unable to 
firmly identify program requirements and needed resources. NASA plans 
to commit to a firm cost estimate for the Constellation program at the 
preliminary design review in 2008, when requirements, design, and 
schedule will all be baselined. It is at this point where we advocate 
program commitments should be made on the basis of the knowledge 
secured. 

Expected Budget and Competing Demands Will Challenge Architecture 
Implementation: 

NASA will be challenged to implement the ESAS recommended architecture 
within its projected budget, particularly in the longer-term. As we 
reported in July 2006, there are years when NASA has projected 
insufficient funding to implement the architecture with some yearly 
shortfalls exceeding $1 billion; while in other years the funding 
available exceeds needed resources. Per NASA's approach, it plans to 
use almost $1 billion in appropriated funds from fiscal years 2006 and 
2007 in order to address the short-term funding shortfalls. NASA, using 
a "go as you can afford to pay" approach, maintains that in the short- 
term the architecture could be implemented within the projected 
available budgets through fiscal year 2011 when funding is considered 
cumulatively. However, despite initial surpluses, the long-term 
sustainability of the program is questionable given the long-term 
funding outlook for the program. NASA's preliminary projections show 
multibillion-dollar shortfalls for its Exploration Systems Mission 
Directorate in all fiscal years from 2014 to 2020, with an overall 
deficit through 2025 in excess of $18 billion. According to NASA 
officials, the agency will have to keep the program compelling for both 
Congress and potential international partners, in terms of the 
activities that will be conducted as part of the lunar program, in 
order for the program to be sustainable over the long run. 

NASA is attempting to address funding shortfalls within the 
Constellation program by redirecting funds to that program from other 
Exploration Systems Mission Directorate activities to provide a 
significant surplus in fiscal years 2006 and 2007 to cover projected 
shortfalls beginning in fiscal year 2009. Several Research and 
Technology programs and missions were discontinued, descoped, or 
deferred and that funding was shifted to the Constellation Program to 
accelerate development of the CEV and CLV. In addition, the 
Constellation program has requested more funds than required for its 
projects in several early years to cover shortfalls in later years. 
NASA officials stated the identified budget phasing problem could 
worsen given the changes that were made to the exploration architecture 
following issuance of the study. For example, while life cycle costs 
may be lower in the long run, acceleration of development for the five 
segment Reusable Solid Rocket Booster and J-2x engine will likely add 
to the near-term development costs, where the funding is already 
constrained. NASA has yet to provide cost estimates associated with 
program changes. 

NASA must also contend with competing budgetary demands within the 
agency as implementation of the exploration program continues. NASA's 
estimates beyond 2010 are based upon a surplus of well over $1 billion 
in fiscal year 2011 due to the retirement of the space shuttle fleet in 
2010. However, NASA officials said the costs for retiring the space 
shuttle and transitioning to the new program are not fully understood; 
thus, the expected surplus could be less than anticipated. This year, 
NASA plans to spend over 39 percent of its annual budget for space 
shuttle and International Space Station (ISS) operations--dollars that 
will continue to be obligated each year as NASA completes construction 
of the ISS by the end of fiscal year 2010. This does not include the 
resources necessary to develop ISS crew rotation or logistics servicing 
support capabilities for the ISS during the period between when the 
space shuttle program retires and the CEV makes its first mission to 
the ISS. While, generally, the budget for the space shuttle is 
scheduled to decrease as the program moves closer to retirement, a 
question mark remains concerning the dollars required to retire the 
space shuttle fleet as well as transition portions of the 
infrastructure and workforce to support implementation of the 
exploration architecture. In addition, there is support within Congress 
and the scientific community to restore money to the Science Mission 
Directorate that was transferred to the space shuttle program to ensure 
its viability through its planned retirement in 2010. Such a change 
could have an impact on future exploration funding. 

Lack of Sound Business Case Puts CEV Acquisition at Risk: 

In July 2006, we reported that NASA's acquisition strategy for the CEV 
placed the project at risk of significant cost overruns, schedule 
delays, and performance shortfalls because it committed the government 
to a long-term contract before establishing a sound business case. We 
found that the CEV contract, as structured, committed the government to 
pay for design, development, production and sustainment upon contract 
award--with a period of performance through at least 2014 with the 
possibility of extending through 2019. 

Our report highlighted that NASA had yet to develop key elements of a 
sound business case, including well-defined requirements, mature 
technology, a preliminary design, and firm cost estimates that would 
support such a long-term commitment. Without such knowledge, NASA 
cannot predict with any confidence how much the program will cost, what 
technologies will or will not be available to meet performance 
expectations, and when the vehicle will be ready for use. NASA has 
acknowledged that it will not have these elements in place until the 
project's preliminary design review scheduled for fiscal year 2008. As 
a result, we recommended that the NASA Administrator modify the current 
CEV acquisition strategy to ensure that the agency does not commit 
itself, and in turn the federal government, to a long-term contractual 
obligation prior to establishing a sound business case at the project's 
preliminary design review. In response to our recommendation, NASA 
disagreed and stated that it had the appropriate level of knowledge to 
proceed with its current acquisition strategy. NASA also indicated that 
knowledge from the contractor is required in order to develop a 
validated set of requirements and, therefore, it was important to get 
the contractor on to the project as soon as possible. In addition, 
according to NASA officials, selection of a contractor for the CEV 
would enable the agency to work with the contractor to attain knowledge 
about the project's required resources and, therefore, be better able 
to produce firm estimates of project cost. In our report, we 
highlighted that this is the type of information that should be 
obtained prior to committing to a long-term contract. To our knowledge, 
NASA did not explore the possibility of utilizing the contractor, 
through a shorter-term contract, to conduct work needed to develop 
valid requirements and establish higher-fidelity cost estimates--a far 
less risky and costly strategy. 

Subsequent to our report, NASA did, however, take steps to address some 
of the concerns we raised. Specifically, NASA modified its acquisition 
strategy for the CEV and made the production and sustainment schedules 
of the contract--known as Schedules B and C--contract options that the 
agency will decide whether to exercise after project's critical design 
review in 2009. Therefore, NASA will only be liable for the minimum 
quantities under Schedules B and C when and if it chooses to exercise 
those options. These changes to the acquisition strategy lessen the 
government's financial obligation at this early stage. Table 1 outlines 
the information related to the CEV acquisition strategy found in the 
request for proposal and changes that were made to that strategy prior 
to contract award. While we view these changes as in line with our 
recommendation and as a positive step to address some of the risks we 
raised in our report, NASA still has no assurance that the project will 
have the elements of a sound business case in place at the preliminary 
design review. Therefore, NASA's commitment to efforts beyond the 
project's preliminary design review--even when this commitment is 
limited to design, development, test and evaluation activities (DDT&E)-
-is a risky approach. It is at this point that NASA should (a) have the 
increased knowledge necessary to develop a sound business case that 
includes high-fidelity, engineering-based estimates of life cycle cost 
for the CEV project, (b) be in a better position to commit the 
government to a long-term effort, and (c) have more certainty in 
advising Congress on required resources. 

Table 1: CEV Acquisition Strategy in the Request for Proposal and 
Awarded Contract: 

Contract schedule and type: 
Schedule A-; DDT&E; 
Cost plus award fee (CPAF)[A]; 
Indefinite delivery/ indefinite quantity (ID/IQ)[B]; 
Schedule activities and deliverables: Schedule A is for design 
development, test and evaluation of the CEV. Deliverables under 
Schedule A include all test articles and two operational CEV vehicles- 
one human-rated variant and one pressurized cargo variant; 
Request for proposal period of performance: * Contract award date 
through 2013; 
Contract period of performance: * 2006 through 2013; 
Contract cost estimate: $3.9 billion (CPAF); Up to $750 million 
(ID/IQ). 

Contract schedule and type: 
Schedule B-; 
Production; 
ID/IQ; 
Schedule activities and deliverables: Schedule B is for production 
beyond the two operational vehicles delivered under Schedule A. The CEV 
request for proposal stated that the "guaranteed minimum" quantity for 
Schedule B is "two CEV," the type of which, according to NASA officials 
is undetermined; 
Request for proposal period of performance: 
* 2009 through 2014 (base period); 
* 5-year option period through 2019; 
Contract period of performance: 
* Initial option period from 2009 through 2014; 
* Additional option period from 2014 through 2019; 
Contract cost estimate: $3.5 billion; (Not to exceed). 

Contract schedule and type: 
Schedule C-; 
Sustaining Engineering; 
ID/IQ; 
Schedule activities and deliverables: Schedule C is for sustainment in 
support of operations and in support of Schedule B activities; 
Request for proposal period of performance: 
* 2009 through 2014 (base period); 
* 5-year option period through 2019; 
Contract period of performance: 
* Initial option period from 2009 through 2014; 
* Additional option period from 2014 through 2019; 
Contract cost estimate: $750 million. 

Source: GAO Analysis of NASA's CEV Request for Proposal and Contract: 

[A] A cost-plus-award-feed contract is a cost-reimbursement contract 
that provides for a fee consisting of a base amount (which may be zero) 
fixed at inception of the contract and an award amount, based upon a 
judgmental evaluation by the government, sufficient to provide 
motivation for excellence in contract performance. 

[B] An indefinite quantity contract provides for an indefinite quantity 
within stated limits, of supplier or services during a fixed period. 
The government places orders for individual requirements. This type of 
contract includes a minimum quantity and a maximum quantity. 

[End of table] 

Sound Management and Oversight Key to Addressing CEV Project Risks: 

Sound project management and oversight will be key to addressing risks 
that remain for the CEV project as it proceeds with its acquisition 
approach. To help mitigate these risks, NASA should have in place the 
markers necessary to help decision makers monitor the CEV project and 
ensure that is following a knowledge based approach to its development. 
However, in our 2005 report that assessed NASA's acquisition policies, 
we found that NASA's policies lacked major decision reviews beyond the 
initial project approval gate and a standard set of criteria with which 
to measure projects at crucial phases in the development life cycle-- 
key markers for monitoring such progress. In our review of the 
individual center policies, we found that the Johnson Space Center 
project management policy, which is the policy that the CEV project 
will be required to follow, also lacked such key criteria. We concluded 
that without such requirements in place, decision makers have little 
knowledge about the progress of the agency's projects and, therefore, 
cannot be assured that they are making informed decisions about whether 
continued investment in a program or project is warranted. 

We recommended that NASA incorporate requirements in its new systems 
engineering policy to capture specific product knowledge at key 
junctures in project development. The demonstration of such knowledge 
could then be used as exit criteria for decision making at the 
following key junctures: 

* Before projects are approved to transition in to implementation, we 
suggested that projects be required to demonstrate that key 
technologies have reached a high maturity level. 

* Before projects are approved to transition from final design to 
fabrication, assembly, and test, we suggested that projects be required 
to demonstrate that the design is stable. 

* Before projects are approved to transition to production, we 
suggested that projects be required to demonstrate that the design can 
be manufactured within cost, schedule, and quality targets. 

In addition, we recommended that NASA institute additional major 
decision reviews that are tied to these key junctures to allow decision 
makers to reassess the project based upon demonstrated knowledge. 

While NASA concurred with our recommendations, the agency has yet to 
take significant actions to implement them. With regard to our first 
recommendation, NASA stated that the agency would establish 
requirements for success at the key junctures mentioned above. NASA 
planned to include these requirements in the systems engineering policy 
it issued in March 2006. Unfortunately, NASA did not include these 
criteria as requirements in the new policy, but included them in an 
appendix to the policy as recommended best practices criteria. In 
response to our second recommendation, NASA stated it would revise its 
program and project management policy for flight systems and ground 
support projects, due to be completed in fall 2006. In the revised 
policy, NASA indicated that it would require the results of the 
critical design review and, for projects that enter a large-scale 
production phase, the results of the production readiness review to be 
reported to the appropriate decision authority in a timely manner so 
that a decision about whether to proceed with the project can be made. 
NASA has yet to issue its revised policy; therefore, it remains to be 
seen as to whether the CEV project decision authorities will have the 
opportunity to reassess and make decisions about the project using the 
markers recommended above after the project has initially been 
approved. Briefings that we have recently received indicate that NASA 
plans to implement our recommendation in the revised policy. 

The risks that NASA has accepted by moving ahead with awarding the 
contract for DDT&E for CEV could be mitigated by implementing our 
recommendations as it earlier agreed. Doing so would provide both NASA 
and Congress with markers of the project's progress at key points. For 
example, at the preliminary design review, decision makers would be 
able to assess the status of the project by using the marker of 
technology maturity. In addition, at the critical design review, the 
agency could assess the status of the project using design stability 
(i.e., a high percentage of engineering drawings completed). If NASA 
has not demonstrated technology maturity at the preliminary design 
review or design stability at the critical design review, decision 
makers would have an indication that the project will likely be headed 
for trouble. Without such knowledge, NASA cannot be confident that its 
decisions about continued investments in projects are based upon the 
appropriate knowledge. Furthermore, NASA's oversight committees could 
also use the information when debating the agency's yearly budget and 
authorizing funds not only for the CEV project, but also for making 
choices among NASA's many competing programs. If provided this type of 
information from NASA about its key projects, Congress will be in a 
better position to make informed decisions about how to invest the 
nation's limited discretionary funds. 

NASA's ability to address a number of long-standing financial 
management challenges could also impact management of NASA's key 
projects. The lack of reliable, day-to-day information continues to 
threaten NASA's ability to manage its programs, oversee its 
contractors, and effectively allocate its budget across numerous 
projects and programs. To its credit, NASA has recognized the need to 
enhance the capabilities and improve the functioning of its core 
financial management system, however, progress has been slow. NASA 
contract management has been on GAO's high-risk list since 1990 because 
of such concerns. 

Conclusions: 

In conclusion, implementing the Vision over the coming decades will 
require hundreds of billions of dollars and a sustained commitment from 
multiple administrations and Congresses. The realistic identification 
of the resources needed to achieve the agency's short-term goals would 
provide support for such a sustained commitment over the long term. 
With a range of federal commitments binding the fiscal future of the 
United States, competition for resources within the federal government 
will only increase over the next several decades. Consequently, it is 
incumbent upon NASA to ensure that it is wisely investing its existing 
resources. As NASA proceeds with its acquisition strategy for the CEV 
project and other key projects, it will be essential that the agency 
ensure that the investment decisions it is making are sound and based 
upon high levels of knowledge. NASA should require that the progress of 
its projects are evaluated and reevaluated using knowledge based 
criteria, thereby improving the quality of decisions that will be made 
about which program warrant further investment. Furthermore, it will be 
critical that NASA's financial management organization delivers the 
kind of analysis and forward-looking information needed to effectively 
manage its programs and projects. Clear, strong executive leadership 
will be needed to ensure that these actions are carried out. Given the 
nation's fiscal challenges and those that exist within NASA, the 
availability of significant additional resources is unlikely. NASA has 
the opportunity to establish a firm foundation for its entire 
exploration program by ensuring that the level of knowledge necessary 
to allow decision makers to make informed decisions about where 
continued investment is justified. Doing so will enhance confidence in 
the agency's ability to finally deliver a replacement vehicle for 
future human space flight. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 
to respond to any questions that you or other Members of the Committee 
may have. 

GAO Contact and Staff Acknowledgements: 

For further information regarding this testimony, please contact Allen 
Li at (202) 512-4841 or lia@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this testimony. GAO staff who made key contributions to this 
testimony include Greg Campbell, Richard Cederholm, Hillary Loeffler, 
James L. Morrison, Jeffrey M. Niblack, and Shelby S. Oakley. 

FOOTNOTES 

[1] The Vision includes a return to the moon that is intended 
ultimately to enable exploration of Mars and other destinations. To 
accomplish this, NASA initially plans to (1) complete its work on the 
International Space Station by 2010, fulfilling its commitment to 15 
international partner countries; (2) begin developing a new manned 
exploration vehicle to replace the space shuttle; and (3) return to the 
moon no later than 2020 in preparation for future, more ambitious 
missions. 

[2] All cost estimates related to the Vision are reported as inflated 
("real year") dollars. 

[3] GAO, NASA: Long-Term Commitment to and Investment in Space 
Exploration Program Requires More Knowledge, GAO-06-817R (Washington, 
D.C.: July 17, 2006). 

[4] GAO, NASA: Implementing a Knowledge-Based Acquisition Framework 
Could Lead to Better Investment Decisions and Project Outcomes, GAO-06-
218 (Washington, D.C.: Dec. 21, 2005). 

[5] The ESAS was an effort to identify the best architecture and 
strategy to implement the Vision. The architecture supports the 
development of a new CEV, Crew Launch Vehicle (CLV), a Cargo Launch 
Vehicle (CaLV), and other supporting systems. The architecture also 
calls for various Research and Technology (R&T) and Robotic Lunar 
Exploration Program (RLEP) projects. NASA's Exploration Systems Mission 
Directorate's Constellation program is responsible for the development 
of the CEV, CLV, and CaLV. 

[6] GAO, NASA: Lack of Disciplined Cost-Estimating Processes Hinders 
Effective Program Management, GAO-04-642 (Washington, D.C.: May 28, 
2004). 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
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