Space Programs:

NASA's Independent Cost Estimating Capability Needs Improvement

NSIAD-93-73: Published: Nov 5, 1992. Publicly Released: Nov 30, 1992.

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Pursuant to a congressional request, GAO determined whether the National Aeronautics and Space Administration (NASA) implemented an advisory committee's recommendation to strengthen its independent cost estimating capability.

GAO found that: (1) NASA actions to implement an independent cost estimating function did not meet the intent of the committee's recommendation; (2) NASA reported results of formal cost reviews to program officials rather than directly to the Administrator; (3) estimates and advice provided to the Administrator were undocumented; (4) NASA reviewed cost estimates only at the start of new initiatives, not at all major decision points over a program's life span; and (5) the cost analysis group did not have adequate staff to perform independent estimates at all major decision points.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: NASA established the Systems and Cost Analysis Division within the Office of the CFO/Comptroller. The Division performs the independent cost analysis and reports directly to the Office of the Administrator.

    Recommendation: To establish an independent cost estimating function, the Administrator, NASA, should ensure that the cost analysis group operates with the independence that the Advisory Committee intended, with results of cost reviews being reported directly to the Administrator.

    Agency Affected: National Aeronautics and Space Administration

  2. Status: Closed - Implemented

    Comments: The new cost analyses group and the related NASA management instruction provide a formal documentation and reporting process.

    Recommendation: To establish an independent cost estimating function, the Administrator, NASA, should require that the advice on cost estimates provided to the Administrator by the cost analysis group be formally documented.

    Agency Affected: National Aeronautics and Space Administration

  3. Status: Closed - Implemented

    Comments: The applicable NASA management instruction has been revised to specify the new project management approach incorporating a continuing involvement of an independent cost-estimating group throughout a project's life.

    Recommendation: To establish an independent cost estimating function, the Administrator, NASA, should direct the independent cost analysis group to review program estimates at all major milestones, decision points, or other significant events such as a major program restructuring.

    Agency Affected: National Aeronautics and Space Administration

  4. Status: Closed - Implemented

    Comments: NASA's Systems and Cost Analysis Division has added 6 new professional staff members.

    Recommendation: To establish an independent cost estimating function, the Administrator, NASA, should strengthen the independent cost analysis staff with sufficient personnel to generate independent estimates at all major milestones.

    Agency Affected: National Aeronautics and Space Administration

 

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