NASA:

Actions Needed to Improve Transparency and Assess Long-Term Affordability of Human Exploration Programs

GAO-14-385: Published: May 8, 2014. Publicly Released: May 8, 2014.

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Cristina Chaplain
(202) 512-4841
chaplainc@gao.gov

 

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What GAO Found

The scope of the National Aeronautics and Space Administration's (NASA) preliminary cost estimates for the Space Launch System (SLS), Orion Multi-Purpose Crew Vehicle (Orion), and associated ground systems encompasses only the programs' initial capabilities and does not include the long-term, life cycle costs associated with the programs or significant prior costs:

The SLS estimate is based on the funding required to develop and operate the initial 70-metric ton variant through first flight in 2017 but not the costs for its second flight in 2021. NASA is now incurring some costs related to the second flight, but it is not currently tracking those costs for life cycle cost estimating purposes. Furthermore, the estimate does not include costs to incrementally design, develop, and produce future 105- and 130-metric ton SLS variants which NASA expects to use for decades. NASA is now funding concept development and analysis related to these capabilities.

The Orion estimate does not include costs for production, operations, or sustainment of additional crew capsules, despite plans to use and possibly enhance this capsule after 2021. It also does not include $4.7 billion in prior costs incurred during the approximately 4 years when Orion was being developed as part of NASA's now-defunct Constellation program.

The ground systems estimate excludes costs to develop or operate the ground systems infrastructure beyond 2017, although NASA intends to modify ground architecture to accommodate all SLS variants.

NASA expects to use this same limited scope of work to establish the programs' baseline cost estimates in 2014. According to NASA, the agency is developing a tailored definition for the programs' life cycle cost estimates as allowed by NASA requirements. Agency officials stated that NASA chose its approach in part due to uncertainties about the programs' end dates and missions beyond 2021.

GAO recognizes that defining life cycle costs can be difficult when uncertainties exist, and that best practices for cost estimating look favorably on evolutionary development. Even so, best practices expect that a high-quality cost estimate will account for program uncertainties, forecast a minimum and maximum range for all life cycle costs, and clearly define the characteristics of each increment of capability so that a rigorous life cycle cost estimate can be developed. According to these practices as well as NASA's requirements and guidance, life cycle cost estimates should encompass all past, present, and future costs for a program, including costs for operations, support, and disposal. The limited scope that the agency has chosen for constructing preliminary and baseline cost estimates, however, means that the estimates are unlikely to serve as a way to measure progress and track cost growth over the life of the programs. For example, cost growth on the current SLS variant could be masked as the addition of scope associated with work for future variants, and the baseline estimate would no longer be applicable. Insight into program costs helps decision makers understand the long-term affordability of programs—a key goal of the National Space Transportation Policy—and helps NASA assess management of its portfolio to achieve increasing capabilities as directed in the NASA Authorization Act of 2010.

Why GAO Did This Study

NASA is undertaking a trio of closely-related programs to continue human space exploration beyond low-Earth orbit: the SLS vehicle; the Orion capsule, which will launch atop the SLS and carry astronauts; and the supporting ground systems. As a whole, the efforts represent NASA's largest exploration investment over the next decade, potentially as much as $22 billion, to demonstrate initial capabilities. Beyond 2021, NASA plans to incrementally develop progressively more-capable SLS launch vehicles complemented by Orion capsules and ground systems.

GAO was asked to assess the costs of NASA's human exploration program. This report examines the scope of NASA's preliminary cost estimates for the three programs. To conduct this work, GAO reviewed NASA information on cost estimates for the three programs, discussed the estimates with NASA officials, and assessed the estimates against best practices criteria in GAO's cost estimating guidebook as well as NASA's own requirements and guidance.

What GAO Recommends

NASA should establish separate cost baselines that address the life cycle of each SLS increment, as well as for any evolved Orion or ground systems capability, among other actions to enable assessment of affordability and enhance oversight.

In commenting on a draft of this report, NASA partially concurred with GAO's recommendations, citing that actions taken to structure the programs and track costs met their intent. However, GAO believes NASA's responses do not fully address the issues raised in this report.

For more information, contact Cristina Chaplain at (202) 512-4841 or chaplainc@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To provide the Congress with the necessary insight into program affordability, ensure its ability to effectively monitor total program costs and execution, and to facilitate investment decisions, the NASA's Administrator should direct the Human Exploration and Operations Mission Directorate to establish a separate cost and schedule baseline for work required to support the SLS Block I Exploration Mission-2 (EM-2) and report this information to the Congress through NASA's annual budget submission. If NASA decides to fly the SLS Block I beyond EM-2, establish separate life cycle cost and schedule baseline estimates for those efforts, to include funding for operations and sustainment, and report this information annually to Congress via the agency's budget submission.

    Agency Affected: National Aeronautics and Space Administration

    Status: Open

    Comments: NASA partially concurred with our recommendation in its comments and letter. The agency stated that it plans to provide Congress with insights into Space Launch System development costs through development commitments and annual budget requests which contain development and operations costs through the budget horizon. We will review NASA's fiscal year 2016 budget documentation to determine whether the agency has initiated the steps it indicated.

    Recommendation: To provide the Congress with the necessary insight into program affordability, ensure its ability to effectively monitor total program costs and execution, and to facilitate investment decisions, because a significant amount of the original Orion development work occurred under the Constellation program, the NASA's Administrator should direct the Human Exploration and Operations Mission Directorate to include those costs in the baseline cost estimate for the Orion program.

    Agency Affected: National Aeronautics and Space Administration

    Status: Open

    Comments: NASA partially concurred with our recommendation in its comments and letter to the Congress. The agency stated that funds invested in prior programs such as Constellation have been previously reported and are available as a historical record for future program and technical decision-making. NASA stated that it does not include the costs of prior programs in the life-cycle cost of current programs. However, we are leaving this recommendation open until NASA formalizes Orion's baseline cost estimate, which the agency expects to do in December 2014 when the program is planned to move from the formulation to implementation phase.

    Recommendation: To provide the Congress with the necessary insight into program affordability, ensure its ability to effectively monitor total program costs and execution, and to facilitate investment decisions, because NASA intends to use the increased capabilities of the SLS, Orion, and Ground Systems Development and Operations efforts well into the future and has chosen to estimate costs associated with achieving the capabilities, the NASA's Administrator should direct the Human Exploration and Operations Mission Directorate to establish separate cost and schedule baselines for each additional capability that encompass all life cycle costs, to include operations and sustainment. When NASA cannot fully specify costs due to lack of well-defined missions or flight manifests, forecast a cost estimate range -- including life cycle costs -- having minimum and maximum boundaries. These baselines or ranges should be reported to Congress annually via the agency's budget submission.

    Agency Affected: National Aeronautics and Space Administration

    Status: Open

    Comments: NASA partially concurred with our recommendation in its comments and letter to the Congress. The agency stated that it intends to set cost commitments for upgraded capabilities as part of the design review process and that it will provide the Congress with insight into program development costs through a combination of these major upgrade cost commitments and the agency's annual budget request. We will review NASA's fiscal year 2016 budget documentation to determine if the agency has initiated these efforts.

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