Space Shuttle:

Changes to the Solid Rocket Motor Contract

NSIAD-88-203: Published: Aug 5, 1988. Publicly Released: Aug 15, 1988.

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Pursuant to a congressional request, GAO reviewed the restructured space shuttle solid rocket motor contract to determine the extent to which the National Aeronautics and Space Administration (NASA) and the contractor changed production terms and conditions as a result of the January 1986 Challenger accident.

GAO found that NASA and the contractor signed a contract modification agreement on May 9, 1988, with changes including: (1) a significant increase in the amount of work, due to design changes; (2) an increase in estimated contract costs from $594.1 million to $1,367 million; (3) a contractor fee reduction of $10 million on the condition that NASA not formally conclude that it was responsible for the accident; (4) an increase in maximum fee from $84.4 million to $109.2 million; and (5) a contractor agreement to perform an estimated $505 million worth of redesign and recovery work at no additional fee. GAO also found that NASA and the contractor are still negotiating other contract changes.

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