Space Projects:

Improvements Needed in Selecting Future Projects for Private Financing

NSIAD-90-147: Published: Sep 21, 1990. Publicly Released: Sep 21, 1990.

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GAO assessed the National Aeronautics and Space Administration's (NASA) efforts to find acceptable private financing sources for seven space projects.

GAO found that: (1) the Office of Management and Budget (OMB) and NASA selected and removed six of the seven projects selected from the NASA budget request before adequately evaluating their suitability for commercialization; (2) commercial aerospace, construction, and finance companies were not willing to invest in four projects because they perceived that few or no commercial markets existed; (3) a NASA market survey found no interest in joint use or shared ownership of the weightlessness laboratory; (4) some projects were too far along in their development to be considered for commercialization without incurring redesign cost and causing delays; (5) potential investors were not willing to invest in the robotic arm and the space station docking system because they believed the technical risk was too high; (6) NASA economic analyses showed that private financing could be significantly more expensive than government financing; (7) four of the unsuccessful commercialization projects may not receive any significant funding in fiscal year 1990 and have been delayed; and (8) the final analysis of the government's financing options for the advanced solid rocket motor production facility did not adequately address the government's interest-rate risk.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: NASA established selection criteria as recommended by GAO.

    Recommendation: The Administrator, NASA, should establish and consistently apply appropriate screening criteria to identify projects for commercialization.

    Agency Affected: National Aeronautics and Space Administration

  2. Status: Closed - Implemented

    Comments: NASA agreed that items will stay in budget as recommended by GAO.

    Recommendation: The Administrator, NASA, in consultation with OMB, should keep such projects in the budget until they are adequately evaluated and determined to be private financing candidates and private financing is found or judged to be highly likely.

    Agency Affected: National Aeronautics and Space Administration

  3. Status: Closed - Implemented

    Comments: NASA agreed to action as recommended by GAO.

    Recommendation: The Administrator, NASA, should ensure that financing options for future commercialization projects are properly analyzed.

    Agency Affected: National Aeronautics and Space Administration

 

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