Analysis of NASA's Supplemental FY 1979 Budget Request

PSAD-79-59: Published: Mar 16, 1979. Publicly Released: Mar 30, 1979.

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The National Aeronautics and Space Administration (NASA) requested $185 million to supplement its approved fiscal year 1979 research and development appropriation of $3,292 million. NASA estimated that the additional funding was needed because of technical problems encountered in the development, manufacturing, and testing of Shuttle systems; the need for design changes and weight reductions; and the requirements of prime contractors and subcontractors for increased effort to fabricate hardware and conduct test activities. This report covers the following issues: justification by NASA for the $185 million supplemental request; rationale in arriving at the $400 million to $600 million cost increase should the request be denied; the rationale behind the $787 million additional costs should the request be denied; and alternatives to granting the $185 million request.

According to NASA, if the request for $185 million is not approved, the effect of a delay on the Space Shuttle Program will result in an increase from $400 million to $600 million because: (1) NASA has decided to maintain the pace of the main engine development program regardless of whether or not the supplemental funds are received, and (2) NASA has anticipated receiving the funds and is spending at a rate which assumes the 1979 design, development, test, and evaluation (DDT&E) budget will contain the $185 million. At the same time, NASA has constrained spending in the production budget to offset increased spending in the DDT&E budget. If the supplement is denied, a cost growth of $787 million was estimated during the expected 12-year operating life of the system. These added costs would not be entirely budget costs, but would also represent user fees. Alternatives to granting the $185 million request are as follows: reprogramming $185 million from other NASA programs; delaying DDT&E even further; reallocating $185 million from production to DDT&E; and reducing program content.

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