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

GAO-14-385 Published: May 08, 2014. Publicly Released: May 08, 2014.
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Highlights

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.

Recommendations

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.

Recommendations for Executive Action

Agency Affected Recommendation Status
National Aeronautics and Space Administration
Priority Rec.
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.
Open
NASA partially agreed with this recommendation. Officials stated that NASA defined and documented life-cycle costs for SLS to a first demonstrated capability, consistent with cost estimating best practices and NASA project and program management policy. In February 2023, officials stated that following the successful launch of Artemis I, the agency is updating the schedule for Artemis II. In spring 2022, SLS and the ground systems programs provided the first 5-year operational cost estimate and NASA plans to update it in spring 2023. Additionally, NASA plans to create a cost estimate for Artemis III informed by the development baselines of capabilities that will fly on the mission. To fully implement this recommendation, NASA needs to provide documentation of these efforts to determine the extent to which it has developed cost and schedule baseline estimates for future SLS work. Taking these actions would help NASA develop insight into the program's costs and allow decision makers to monitor program execution, including efforts to improve long-term affordability.
National Aeronautics and Space Administration 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.
Closed – Not Implemented
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. In September 2015, NASA formally established its committed cost baseline for Orion. The scope of costs for Orion design, development, test, and evaluation did not include funds invested in prior programs. Therefore, we consider this recommendation not implemented.
National Aeronautics and Space Administration
Priority Rec.
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.
Open
NASA partially agreed with this recommendation, stating that it had established separate programs for SLS, Orion, and the ground systems and adopted a block upgrade approach for SLS. In August 2021, NASA established an updated baseline commitment of the Orion system for Artemis II to include a docking capability. In February 2023, NASA reported SLS and the ground systems have begun annually reporting a 5-year cost estimate of operational costs. NASA officials also stated they are still in the process of establishing baselines for SLS's Exploration Upper Stage and associated capabilities and the Mobile Launcher 2. To address this recommendation, NASA needs to provide evidence that it established separate cost and schedule baselines for each additional SLS, Orion, and ground systems capability block that encompass all life-cycle costs, including operations and sustainment. Doing so will enable Congressional insight into program costs.

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Topics

Agency missionsBest practicesCost analysisExplorationFuture budget projectionsLife cycle costsOperational testingProgram managementSpace explorationStrategic planningSystems designCost estimatesTransparency