Pursuant to a congressional request, GAO provided information on the status of the National Aeronautics and Space Administration's (NASA) X-33 Program, focusing on: (1) whether the X-33 Program is meeting the cost, schedule, and performance objectives established in the X-33 cooperative agreement; (2) how NASA's oversight responsibility was changed by the cooperative agreement; and (3) potential issues NASA may face as it moves toward a decision on whether to use Venture Star reusable launch vehicles (RLV) to service the International Space Station.

GAO noted that: (1) NASA and Lockheed Martin X-33 program managers anticipate that the program will achieve technical requirements; (2) however, the program will not meet some original cost, schedule, and performance objectives; (3) problems encountered by Lockheed Martin while working toward the X-33 Program's technical requirements have caused cost increases, delay of the test vehicle's first flight, and revision of some performance objectives; (4) the technical problems occurred during development and fabrication of the X-33 vehicle's internal fuel tanks, rocket engines, and thermal protection system, the three key advanced technologies the program seeks to demonstrate; (5) the estimated costs increased from $216.9 million to $274.3 million as of March 1999; (6) the first flight of the X-33 vehicle was delayed 16 months, from March 1999 to July 2000; (7) this could delay NASA's decision about whether to invest in space shuttle fleet upgrades or rely on new launch vehicles such as Venture Star; (8) the technical problems and schedule constraints also resulted in changes to program performance objectives; (9) to implement the terms of the X-33 cooperative agreement, NASA assigned to Lockheed Martin the leadership role in executing the X-33 Program; (10) according to NASA's X-33 program manager, the agency's oversight is different from that used for traditional development contracts, as it relies on insight gained from NASA employees working alongside Lockheed Martin personnel; (11) several issues will need to be evaluated before NASA decides to use Venture Star RLVs to support the International Space Station; (12) the results of the X-33 Program must provide sufficient information for NASA to determine that the risks have been sufficiently reduced and that continuation of activities leading to the agency's use of Venture Star as a customer is warranted; (13) even though Venture Star RLVs are intended to be commercially owned and operated, government financial incentives will likely be needed to initiate such a venture; (14) NASA would have to pay for either two crew modules or modifications to Venture Star vehicles if the crew return vehicle being developed for the International Space Station is chosen as a means for Venture Star to carry people; (15) because the Venture Star RLV would not carry as much cargo as the space shuttle, additional flights would be needed; and (16) NASA's Fiscal Year 2000 Performance Plan does not include performance targets that establish a clear path leading from the X-33 Program flight-test vehicle to an operational single-stage-to-orbit vehicle.