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Testimony before the Subcommittee on Space, Aeronautics, and Related 
Sciences, Committee on Commerce, Science and Transportation, U.S. 

United States Government Accountability Office: 


For Release on Delivery Expected at 2:30 p.m. EDT: 

Wednesday, March 28, 2007: 


Issues Surrounding the Transition from the Space Shuttle to the Next 
Generation of Human Space Flight Systems: 

Statement of Allen Li, Director Acquisition and Sourcing Management: 


GAO Highlights: 

Highlights of GAO-07-595T, a testimony before the Subcommittee on 
Space, Aeronautics, and Related Sciences, Committee on Commerce, 
Science and Transportation, U. S. Senate 

Why GAO Did This Study: 

On January 14, 2004, the President announced a new Vision for space 
exploration that directs the National Aeronautics and Space 
Administration (NASA) to focus its efforts on returning humans to the 
moon by 2020 in preparation for future, more ambitions missions. 
Implementing the Vision will require hundreds of billions of dollars 
and a sustained commitment from multiple administrations and 
Congresses. Some of the funding for implementing exploration activities 
is expected to come from funding freed up after the retirement of the 
Space Shuttle, scheduled for 2010, and projected termination of U.S. 
participation in the International Space Station by 2016. Congress, 
while supportive of the effort has voiced concern over the potential 
gap in human space flight. In the NASA Authorization Act of 2005, 
Congress stated that it is the policy of the United States to have the 
capability for human access to space on a continuous basis. NASA has 
made it a priority to minimize the gap to the extent possible. GAO 
provides no recommendations in this statement. However, GAO continues 
to emphasize that given the Nation’s fiscal challenges and NASA’s past 
difficulty developing systems within cost, schedule, and performance 
parameters, it is imperative that the agency adequately manage this 
transition in a fiscally competent and prudent manner. 

What GAO Found: 

NASA is in the midst of a transition effort of a magnitude not seen 
since the end of the Apollo program and the start of the Space Shuttle 
Program more than 3 decades ago. This transition will include a massive 
transfer of people, hardware, and infrastructure. Based on ongoing and 
work completed to-date, we have identified a number of issues that pose 
unique challenges to NASA as it transitions from the shuttle to the 
next generation of human space flight systems while at the same time 
seeking to minimize the time the United States will be without its own 
means to put humans in space. These issues include: sustaining a viable 
workforce; effectively managing systems development efforts; managing 
the supplier base; providing logistical support to the International 
Space Station; identifying and disposing of property and equipment; 
ensuring adequate environmental remediation; and transforming its 
business processes and financial management system. 

NASA already has in place many processes, policies, procedures and 
support systems to carry out this transition. However, successful 
implementation of the transition will depend on thoughtful execution 
and effective oversight. How well NASA overcomes some of the challenges 
we have identified will not only have an effect on NASA’s ability to 
effectively manage the gap in the U.S. human access to space, but will 
also affect the agency’s ability to secure a sound foundation for the 
President’s space exploration policy. 

Figure: Moving to the Next Generation of human space flight vehicles: 

[See PDF for Image] 

Source: NASA images; GAO graphic. 

[End of figure] 


To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Allen Li at (202) 512-
4841 or 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me to discuss the challenges faced by the 
National Aeronautics and Space Administration (NASA) in transitioning 
from the space shuttle to the next generation of human space flight 
systems. In 2004, the President established a new exploration policy-- 
A Renewed Spirit of Discovery: The President's Vision for U.S. Space 
Exploration (Vision)--which calls for the retirement of the space 
shuttle and the development of a new family of exploration systems. 
NASA's implementation of the Vision is expected to cost hundreds of 
billions of dollars. A NASA effort of this size and scope has not been 
seen since the end of the Apollo program and the start of the Space 
Shuttle Program more than 3 decades ago. The transition includes a 
massive transfer of people, hardware, and infrastructure. Although NASA 
has in place many processes, policies, procedures, and support systems 
to carry out this effort, successful transition will depend on 
thoughtful execution and effective oversight. 

The need for NASA to implement the Vision in a fiscally prudent and 
effective manner cannot be overemphasized given the competing fiscal 
demands facing the federal government and an already troubling funding 
profile projected for human spaceflight activities. We have issued a 
number of reports that touch on various aspects of retiring the space 
shuttle and transitioning its assets and people to exploration 
activities. These reports have questioned the affordability of the 
exploration program, NASA's acquisition strategy for the development of 
new space vehicles, agencywide contract management, and workforce 
planning for current and future agency needs. We also have an ongoing 
body of work being performed at the request of the House Committee on 
Science and Technology regarding effective management of the industrial 
base, development of the Ares I Crew Launch Vehicle, and the logistical 
support needed by the International Space Station (ISS). In addition, 
at the request of the Senate Committee on Homeland Security and 
Governmental Affairs, Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia, we are 
reviewing NASA's ability to attract and retain a skilled workforce. My 
statement today will focus on the overarching challenges that NASA 
faces in transitioning from the shuttle to the next generation of human 
space flight systems and will discuss our prior work on shuttle 
workforce and development of the Orion Crew Exploration Vehicle, one of 
the agency's complex programs. I will also discuss areas where we have 
related ongoing work. 

This testimony is based on work conducted in accordance with generally 
accepted government auditing standards. 


NASA faces numerous challenges as it transitions from the Space Shuttle 
Program to the next generation of human space flight systems. We have 
undertaken a body of work over the past 3 years that has highlighted 
two of these challenges--sustaining the shuttle workforce and 
developing new systems. Sustaining the shuttle workforce through 
retirement and ensuring that the workforce is available to support 
future exploration activities presents an enormous challenge for NASA. 
In 2005, we reported that NASA has made limited progress toward 
developing a detailed strategy to retain a critically skilled workforce 
for shuttle operations. We recommended that the agency begin 
identifying the shuttle program's future workforce needs. NASA has 
recognized that shuttle workforce management and critical skills 
retention will be a major challenge and has taken action to address 
this issue. In 2006, we reported that NASA's acquisition strategy for 
the Orion Crew Exploration Vehicle was risky because it committed the 
government to a long-term contract before establishing a sound business 
case. We recommended that NASA modify the current Orion Crew 
Exploration Vehicle acquisition strategy to ensure that the agency does 
not commit itself to a long-term contractual obligation prior to 
establishing a sound business case. Although it initially disagreed 
with our recommendation, NASA subsequently revised its acquisition 
strategy to address some of the concerns we raised. 

We are currently conducting a body of work relating to the transition, 
including NASA's management of the supplier base, development of the 
Crew Launch Vehicle, and logistical support of the space station. Our 
work to date has also identified other issues that NASA will face 
during the transition, including disposing of property and equipment, 
completing environmental clean up, managing the overall workforce, and 
integrating financial information into how NASA does business. Each 
area contains its own set of unique challenges, but they are all 
critical to NASA's overall transition effort and will require 
significant management attention. 


The President's Vision for Space Exploration for NASA announced in 2004 
calls for the retirement of the shuttle upon completion of the ISS and 
the creation of new vehicles for human space flight that will allow a 
return to the moon by 2020 and voyages to Mars and points beyond. The 
shuttle manifest currently consists of 16 flights--15 to complete 
assembly and integration of the ISS and a servicing mission[Footnote 1] 
to the Hubble Space Telescope. The first new space vehicles currently 
are targeted to begin operating no later than 2014--thereby creating a 
potential gap in U.S. human space flight. Congress has voiced concern 
over the United States not having continuous access to space. NASA has 
made it a priority to minimize the gap to the extent possible. 

NASA has begun planning for the retirement of the shuttle, scheduled 
for 2010, by identifying best practices in closing facilities and the 
transitioning of capabilities. Specifically, NASA has conducted a 
number of benchmarking studies of previous closures and realignment of 
large programs, including the Titan IV rocket fly-out, the F/A-18 C/D 
fighter production close, and the Navy Base Realignment and Closure 
activities. The benchmarking efforts have highlighted to NASA the 
importance of having a plan, effective communication, human capital 
management, and effective program management tools. NASA's benchmarking 
effort also showed that closing and transitioning facilities, 
equipment, and people is expensive and time consuming. Among the 
lessons learned is that, historically, it has taken 3.5 years to close 
down an installation and another 3 years to complete the transition of 
the property. NASA's Office of the Inspector General has recently 
reviewed NASA's plan for the space shuttle transition and recommended, 
among other improvements, that the two affected space directorates 
finalize and implement the Human Space Flight Transition Plan.[Footnote 

Development of the Orion crew capsule, Ares I launch vehicle, and other 
exploration systems needed to implement the Vision is dependent on a 
"go as you can afford to pay" approach, wherein lower-priority efforts 
will be deferred, descoped, or discontinued to allow NASA to stay 
within its available budget profile. In recent testimony, the NASA 
Administrator said that the cost associated with returning the shuttle 
to flight, continued shuttle operations, and recent budget reductions 
had the combined effect of increasing the gap by delaying the first 
manned Orion test flight by 6 months. 

In an effort to address the gap in U.S. capability to resupply the 
space station following retirement of the shuttle, NASA is investing in 
commercial space transportation services. NASA's expectation is that by 
acquiring domestic orbital transportation services it will be able to 
send cargo and, in the future, transport crews to the ISS in a cost- 
effective manner. NASA refers to this as the Commercial Orbital 
Transportation Services project. The project is in the early stages of 
development. Should these commercial services prove to be unreliable or 
more costly than anticipated, NASA will need to purchase space 
transportation from its international partners to meet obligations to 
the ISS until the new Orion spacecraft become operational. 

NASA Faces Significant Challenges in Retiring the Space Shuttle Program 
and Transitioning to Exploration Activities: 

We have undertaken a substantial body of work over the past 3 years 
that has highlighted the significant challenges that NASA will face as 
it retires the shuttle and transitions to exploration activities. One 
key challenge is sustaining the shuttle workforce through the 
retirement of the shuttle while ensuring that a viable workforce is 
available to support future activities. Another key challenge will be 
developing the Orion Crew Exploration Vehicle within cost, schedule, 
and performance goals. Additionally, our ongoing work has identified a 
number of other areas that may present challenges during the transition 
period. Some of these challenges include managing the supplier base to 
ensure its continued viability, developing the Ares I Crew Launch 
Vehicle, and completing and supporting the space station. 

Maintaining a Skilled Workforce: 

The Space Shuttle Program's workforce is critical to the success of the 
Vision. The shuttle workforce currently consists of approximately 2,000 
civil service and 15,000 contractor personnel, including a large number 
of engineers and scientists. In 2005, we reported that NASA had made 
limited progress toward developing a detailed strategy for sustaining a 
critically skilled shuttle workforce to support space shuttle 
operations. We reported that significant delays in implementing a 
strategy to sustain the shuttle workforce would likely lead to larger 
problems, such as funding and failure to meet NASA program schedules. 
Accordingly, we concluded that timely action to address workforce 
issues is critical given their potential impact on NASA-wide goals such 
as closing the gap in human spaceflight. 

When we performed our work several factors hampered the ability of the 
Space Shuttle Program to develop a detailed long-term strategy for 
sustaining the critically skilled workforce necessary to support safe 
space shuttle operations through retirement. For example, at that time, 
the program's focus was on returning the shuttle to flight, and other 
efforts such as determining workforce requirements were delayed. In our 
report, we recommended that NASA begin identifying the Space Shuttle 
Program's future workforce needs based upon various future scenarios. 
Scenario planning could better enable NASA to develop strategies for 
meeting future needs. NASA concurred with our recommendation. It has 
acknowledged that shuttle workforce management and critical skills 
retention will be a major challenge for the agency as it progresses 
toward retirement of the space shuttle and has taken action to address 
this issue. For example, since we made our recommendation, NASA has 
developed an agencywide strategic human capital plan and developed 
workforce analysis tools to assist it in identifying critical skills 
needs. NASA has also developed a human capital plan specifically for 
sustaining the shuttle workforce through the retirement and, then 
transitioning the workforce. 

Additionally, in March 2006, the Senate Appropriations Subcommittee on 
Commerce, Justice, Science, and Related Agencies, and NASA asked the 
National Academy of Public Administration (NAPA) to assist the agency 
in planning for the space shuttle's retirement and transition to future 
exploration activities. In February 2007, a NAPA panel recommended that 
the Space Shuttle Program adopt a RAND model for projecting a core 
workforce because of its emphasis on "long-term scheduling projections, 
quantification of core competencies and proficiencies, and analysis of 
overlapping mission needs."[Footnote 3] Under the RAND model, an 
organization maintains a core capability for any competency that will 
be needed in the future. According to NAPA, this model is useful where 
a given expertise is not immediately required, but is likely to be 
needed in the future--in this case, for the Orion Crew Exploration 

Developing New Exploration Systems: 

In July 2006, we reported that NASA's acquisition strategy for the 
Orion Crew Exploration Vehicle placed the project at risk of 
significant cost overruns, schedule delays, and performance shortfalls 
because it committed the government to a long-term contract before 
establishing a sound business case.[Footnote 4] Our past work has shown 
that developing a sound business case--one that matches requirements to 
available and reasonably expected resources before committing to a new 
product development effort--reduces risk and increases the likelihood 
of successful outcomes.[Footnote 5] For a program to increase its 
chances of success, high levels of knowledge should be demonstrated 
before significant commitments are made (i.e., they should be following 
a knowledge-based approach to product development). 

At the time of our report, NASA had yet to develop key elements of a 
sound business case, including well-defined requirements, mature 
technology, a preliminary design, and firm cost estimates that would 
support its plans for making a long-term commitment. Without such 
knowledge, NASA cannot predict with any confidence how much the program 
will cost, what technologies will or will not be available to meet 
performance expectations, and when the vehicle will be ready for use. 
NASA acknowledged that it would not have these elements in place until 
the project's Preliminary Design Review scheduled for fiscal year 2008. 
As a result, we recommended that the NASA Administrator modify the 
agency's acquisition strategy for the Orion Crew Exploration Vehicle to 
ensure that the agency does not commit itself, and in turn the federal 
government, to a long-term contractual obligation prior to establishing 
a sound business case at the project's Preliminary Design Review. 

Although it initially disagreed with our recommendation, NASA 
subsequently took steps to address some of the concerns we raised. 
Specifically, NASA modified its acquisition strategy for the Orion 
project and changed the production and sustainment portions of the 
contract into options. The agency will decide whether to exercise these 
options after the project's critical design review in 2009. While these 
changes are in line with our recommendation and a step in a positive 
direction, we continue to believe NASA's acquisition strategy is risky 
because it does not fully conform to a knowledge-based acquisition 
approach. Attempting to close that gap by pushing forward development 
of the Orion Crew Exploration Vehicle without first obtaining the 
requisite knowledge at key points could very well result in the 
production of a system that not only does not meet expectations but 
ends up costing more and actually increases the gap. 

Since we last testified on this subject in September 2006,[Footnote 6] 
NASA has successfully completed its first major milestone for the Orion 
project. It has completed the Systems Requirements Review.[Footnote 7] 
This was a major step toward obtaining the information critical for 
making informed decisions. According to NASA's Orion contracting 
officer, NASA is also in the process of renegotiating the Orion 
contract to extend the Initial Operational Capability date of the 
system to 2014. Further, while this change will increase contract 
costs, the increase has already been accounted for in the Orion budget 
because the agency has been planning the change for over a year. In 
addition, risks associated with schedule, cost, and weight continue to 
be identified for the Orion project. 

As we have previously testified, sound project management and oversight 
will be key to addressing the risks that remain for the Orion project 
as it proceeds with its acquisition approach. To help mitigate the 
risks, we have recommended in the past that NASA have in place markers 
(i.e., criteria) to assist decision makers in their monitoring of the 
project at key junctures in the development process. Such markers are 
needed to provide assurance that projects are proceeding with and 
decisions are being based upon the appropriate level of knowledge and 
can help to lessen project risks. NASA has recently issued its updated 
program and project management requirements for flight systems in 
response to our recommendation. Changes to the policy,[Footnote 8] 
including the incorporation of key decision points throughout the 
project development life cycle, should provide an avenue for decision 
makers to reassess project decisions at key points in the development 
process to ensure that continued investment is appropriate. However, it 
should be noted that implementation of the policy in a disciplined 
manner will ensure success, not the existence of the policy itself. 

Currently, we are evaluating the development of NASA's latest human- 
rated launch vehicle--the Ares I Crew Launch Vehicle. When completed, 
the Ares I vehicle will be capable of delivering the Orion spacecraft 
to low earth orbit for ISS missions and for exploration missions to the 
moon. As initially conceived by NASA in the Exploration Systems 
Architecture Study completed in 2005, the Ares I design would rely on 
the existing solid rocket boosters and main engines from the space 
shuttle as major components of its two stages. The current design for 
the Ares I, however, diverges from the initial design set forth in the 
architecture study and now includes elements from the Apollo-era Saturn 
V launch vehicle. Current plans are for Ares I to evolve the solid 
rocket boosters from the Space Shuttle Program from four segments to 
five segments and to build a new upper-stage engine based on an 
original Saturn V design. NASA maintains that these changes are 
necessary to increase commonality between the Ares I and the planned 
Ares V cargo launch vehicle and to reduce overall development costs for 
implementing the Vision. As NASA's design for the Ares I continues to 
evolve, careful planning and coordination between the Orion and Ares I 
development teams will be critical to ensuring that current 
developmental efforts result in hardware that satisfies the future 
requirements of these systems. Subsequently, any development problems 
on either of these systems could result in increasing the gap. 

Our ongoing work is aimed at assessing whether NASA's acquisition 
strategy for Ares I reflects the effect of changes to the Ares I design 
incorporated since the Ares I was first conceived in the Exploration 
Systems Architecture Study as a shuttle-derived alternative. Also, we 
are evaluating the extent to which NASA's Ares I acquisition strategy 
incorporates knowledge-based concepts designed to minimize technical 
and programmatic risk. 

The Orion Crew Exploration Vehicle and the Ares I Crew Launch Vehicle 
are the first in a series of new systems to be developed in support of 
exploration activities. NASA's careful management of these projects 
must preclude historical instances of cost and schedule growth. Indeed, 
while NASA has had many successes in the exploration of space, such as 
landing the Pathfinder and Exploration Rovers on Mars, NASA has also 
experienced its share of unsuccessful missions, unforeseen cost 
overruns, and difficulty bringing a number of projects to completion. 
For example, NASA has made several attempts to build a second 
generation of reusable human spaceflight vehicle to replace the space 
shuttle, such as the National Aero-Space Plane, the X-33 and X-34, and 
the Space Launch Initiative, that never accomplished its objective of 
fielding a new reusable space vehicle. We estimate that these 
unsuccessful development efforts have cost approximately $4.8 billion 
since the 1980s. The high cost of these unsuccessful efforts and the 
potential costs of implementing the Vision make it important that NASA 
achieve success in developing new systems for its new exploration 

Managing the Supplier Base Throughout Retirement and Transition: 

NASA's plans to retire the shuttle have the potential to greatly impact 
the supplier base that has been supporting that program for the last 
several decades, as well as mold the future supplier base needed for 
its exploration program. Over the next few years, NASA will be making 
decisions about its supplier base needs, including which suppliers will 
be required for the remainder of the Space Shuttle Program, which will 
no longer be required for the program, and which will be needed to 
support exploration efforts. One concern is that NASA will be unable to 
sustain suppliers necessary to support the exploration program during 
the period between the shuttle's retirement and resumption of human 
space flight. Also of concern is that those suppliers determined by 
NASA as not needed for the exploration program will prematurely end 
their services, thus jeopardizing the safe and efficient completion of 
shuttle activities. In addition, issues such as obsolescence--already 
being experienced by some shuttle projects--could have an impact on the 
exploration program given the planned use of heritage hardware for some 
components of the Constellation projects. In an attempt to address 
these potential issues, NASA has been developing and implementing plans 
and processes to manage the transition of its supplier base. 

We are in the process of assessing how well NASA is positioning itself 
to effectively manage its supplier base to ensure both sustainment of 
the Space Shuttle Program through its scheduled retirement in 2010 and 
successful transition to planned exploration activities. 

Providing Logistical Support to the International Space Station: 

The shuttle is uniquely suited for transporting crew and cargo to and 
from the ISS. However, with scheduled retirement of the shuttle in 
2010, NASA and its international partners will be challenged to fully 
support ISS operations until 2014, when the new crew exploration 
vehicle is scheduled to come on line. To fill this gap, NASA plans to 
rely on its international partners and commercial services to provide 
ISS logistics and crew rotation. 

Two recent studies have raised serious concerns about whether future 
ISS operations can be continuously supported. A 2006 report by the 
National Research Council noted that the capabilities, schedules, and 
funding requirements for NASA, international partners, and commercial 
cargo and crew vehicles were not yet firm enough to give the panel 
confidence that ISS exploration mission objectives have a high 
likelihood of being fulfilled.[Footnote 9] A February 2007 report by 
the International Space Station Independent Safety Task Force, which 
was required by the NASA Authorization Act of 2005[Footnote 10], noted 
that the transition from the space shuttle to post-shuttle systems for 
logistical support to the ISS will require careful planning and phasing 
of new capabilities. Specifically, care must be taken to ensure 
adequate logistics and spares are provided to maintain a viable 
station.[Footnote 11] The task force report went on to say that if a 
commitment is made to an emerging logistics delivery capability and the 
capability does not materialize, then logistical support to the ISS 
could be lost for some time, seriously decreasing the utility of the 
space station and possibly resulting in its abandonment. 

We are reviewing NASA's plans for meeting ISS logistics and maintenance 
requirements after the shuttle retires, identifying the main risks to 
meeting ISS logistics and maintenance requirements, and assessing 
NASA's plans for addressing the risks. 

Disposing of Property and Equipment: 

NASA has not developed a comprehensive cost estimate for transitioning 
or disposing of Space Shuttle Program facilities and equipment. This 
poses a financial risk to the agency. As NASA executes the remaining 
missions needed to complete the assembly of and provide support for the 
ISS, it will simultaneously begin the process of disposing of shuttle 
facilities and hardware that the Space Shuttle Program will no longer 
need, or, transitioning such facilities and hardware to the other NASA 
programs.[Footnote 12] As the ninth largest federal government property 
holder, NASA owns more than 100,000 acres, as well as over 3,000 
buildings and 3,000 other structures totaling over 44 million square 
feet. Currently, the Space Shuttle Program uses 654 facilities valued 
in excess of $5 billion. The Space Shuttle Program also manages 
equipment dispersed across government and its contractors valued at 
more than $12 billion. NASA is in the process of evaluating its Space 
Shuttle Program facilities and equipment requirements and identifying 
existing facilities and equipment that will no longer be needed to 
support shuttle operations. Constellation and other NASA programs will 
determine whether they need any of the facilities or equipment released 
by the Space Shuttle Program. According to NASA officials, assessments 
currently project that only 70 to 80 of the existing facilities are 
needed to support the development or operation of future exploration 
systems. In cases where facilities or equipment are no longer required 
by the Space Shuttle Program, no other use is identified, or it is 
selected for disposal, it will transition to the resident NASA field 
center for disposition. 

It is worth noting that even before the retirement of the shuttle, over 
10 percent of NASA's facilities are underutilized or not utilized at 
all. One option NASA has is to lease underutilized facilities in 
exchange for cash and/or in-kind consideration, such as improvement of 
NASA's facilities or the provision of services to NASA. As directed by 
the NASA Authorization Act of 2005, we recently reported on NASA's 
Enhanced Use-Leasing Program.[Footnote 13] Congress authorized NASA to 
employ enhanced-use leasing at two demonstration centers. This allowed 
the agency to retain the proceeds from leasing out underutilized real 
property and to accept in-kind consideration in lieu of cash for rent. 
The act allows NASA to deposit the net proceeds (i.e., net of leasing 
costs) in a no-year capital account to use later for maintenance, 
capital revitalization, and improvement of the facilities, albeit only 
at the demonstration centers--Ames Research Center and Kennedy Space 
Center. However, unlike other agencies with enhanced-use leasing 
authority, NASA is not authorized to lease back the property during the 
term of the lease. Furthermore, we found that the agency does not have 
adequate controls in place to ensure accountability and transparency 
and to protect the government. We recommended that the NASA 
Administrator develop an agencywide enhanced use leasing policy that 
establishes controls and processes to ensure accountability and protect 
the government's interests including developing mechanisms to keep the 
Congress fully informed of the agency's enhanced use leasing activity. 
NASA concurred with our recommendations. After not receiving additional 
authority in the NASA Authorization Act of 2005, the agency is again 
requesting that the Congress extend enhanced use leasing authority to 
at least six NASA centers. NASA currently has other leasing 
authorities, but they require the agency to return to the U.S. Treasury 
any amounts exceeding cost. Further, NASA has indicated that it is 
preparing a package of legislative and administrative tools to help in 
the transition from the Space Shuttle Program to the Constellation 
Program. For example, in addition to requesting authority for increased 
use of enhanced use leasing, a NASA official informed us that one tool 
the agency might consider pursuing is the ability to keep the funds 
within NASA from the sale of facilities and equipment, rather than 
returning such funds to the Treasury. 

Completing Environmental Clean Up: 

NASA does not have a comprehensive estimate of the environmental clean 
up costs associated with the transition and disposal of Space Shuttle 
Program facilities and equipment. The agency must comply with federal 
and state environmental laws and regulations, such as the National 
Environmental Policy Act of 1969, as amended,[Footnote 14] the 
Resource, Conservation, and Recovery Act of 1976, as amended,[Footnote 
15] and the Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980, as amended,[Footnote 16] in identifying and 
mitigating the environmental concerns. Although NASA has an approach 
for identifying environmental risks, in our report on major challenges 
facing the nation in the 21st century, we pointed out that progress in 
cleaning up sites frequently does not meet expected time frames and the 
costs dramatically exceed available funding levels.[Footnote 17] For 
example, it cost the Titan IV program approximately $300 million over 
six years on cleaning facilities, equipment, and tools. At this time, 
the extent of the Space Shuttle Program's environmental liabilities is 
not yet fully known. Paying for this liability may require a 
significant future outflow of funds at the same time that NASA will be 
facing many other competing demands for its limited dollars, such as 
development of Orion, Ares I, and other exploration projects. 

Positioning the Science, Engineering, and Technical Workforce: 

As it moves away from flying the shuttle, the NASA acknowledges that it 
must realign where necessary and plan for a workforce that will not be 
quite as large. NASA projects fewer resources will be required for 
operating and sustaining hardware, especially during vehicle processing 
and launch operations. The reduction in reusability of future space 
systems will also result in less refurbishing. In addition, as new 
space systems are designed, emphasis will shift to personnel with 
skills in systems development and engineering, program management and 
systems integration. Unfortunately, these skills will be in high demand 
at a time when other federal agencies and the private sector have 
similar needs. 

NASA projects that by fiscal year 2012 the total number of personnel 
needed to meet its strategic goals will decrease from 18,100 to 17,000. 
The agency is taking advantage of the flexibilities outlined in the 
NASA Flexibility Act of 2004[Footnote 18] to attract highly qualified 
candidates, however, continued buy-outs and the threat of a reduction 
in force have created a feeling of instability among the science and 
engineering workforce. NASA's senior leaders recognize the need for an 
effective workforce strategy in achieving mission success. NASA has a 
strategic human capital plan, but more work is needed in workforce 
planning and deployment. In addition, NASA's transition to full cost 
accounting in fiscal year 2004 resulted in a number of its centers 
experiencing less than Full Time Equivalent utilization, a situation 
referred to by NASA as "uncovered capacity." The Administrator has 
committed to operating and maintaining 10 centers and transferred work 
to those centers with identified uncovered capacity. 

We are examining whether several federal agencies, including NASA, are 
taking sufficient steps to address their workforce challenges in a 
timely and comprehensive manner, while sustaining focus on its mission 
and programmatic goals. Specifically, we are assessing the extent to 
which NASA's human capital framework is aligned with its strategic 
mission and programmatic goals; whether NASA is effectively recruiting, 
developing, and retaining critically skilled staff; and what internal 
or external challenges NASA faces in achieving its workforce needs. As 
noted earlier, NAPA recently completed a study that made 
recommendations to NASA on how to achieve a flexible and scalable 
workforce by integrating its acquisition and workforce planning 

Transforming the Way Financial Information Is Used: 

Since 1990, GAO has designated NASA's contract management as high risk 
principally because NASA has lacked a modern financial management 
system that can provide accurate and reliable information on contract 
spending and has placed little emphasis on product performance, cost 
controls, and program outcomes.[Footnote 19] NASA has made progress 
toward implementing a disciplined project management processes, but it 
has made only limited progress in certain areas such as reengineering 
NASA's contractor cost reporting process. As we reported, the current 
Integrated Enterprise Management Program does not provide the cost 
information that program managers and cost estimators need to develop 
credible estimates and compare budgeted and actual cost with the work 
performed on the contract. NASA plans to spend billions of dollars to 
develop a number of new capabilities, supporting technologies, and 
facilities that are critical to enabling space exploration missions. 
The development of such capabilities will be largely dependent on NASA 
contractors--on which NASA spends about 85 percent of its annual 
budget. Because of such a large reliance on contractors to achieve its 
mission, it is imperative that NASA be able to track costs and the 
means to integrate financial decisionmaking with scientific and 
technical leadership by providing decisionmakers accurate information. 
To its credit, NASA is working to improve business processes and 
integrating disparate systems in order to improve efficiencies, reduce 
redundant systems, and improve business information available to the 
acquisition community and mission support organizations. However, more 
effort will be needed to make the cultural transformation a reality. 

Concluding Observations: 

The Vision for Space Exploration puts NASA on a bold new mission. 
Implementing the Vision over the coming decades will require hundreds 
of billions of dollars and a sustained commitment from multiple 
administrations and Congresses over the length of the program. How well 
NASA overcomes the transition challenges that we and others have 
identified will not only have an effect on NASA's ability to 
effectively manage the gap in the U. S. human access to space, but also 
will affect the agency's ability to secure a sound foundation of 
support for the President's space exploration policy. Consequently, it 
is incumbent upon NASA to ensure that these challenges are being 
addressed in a way that establishes accountability and transparency to 
the effort. 

Mr. Chairman and Members of the Subcommittee, this concludes my 
prepared statement. I would be happy to answer any questions you may 
have at this time. 

GAO Contact and Acknowledgments: 

For further information regarding this testimony, please contact Allen 
Li at (202) 512-4841 or Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this testimony. GAO staff who made key contributions to this 
testimony include Greg Campbell, Richard Eiserman, Yanina Golburt, 
James L. Morrison, Jeffrey M. Niblack, Shelby S. Oakley, Jose A. Ramos, 
Sylvia Schatz, and John Warren. 


[1] The servicing mission includes installing the Cosmic Origins 
Spectrograph and Wide Field Camera 3, installing a refurbished Fine 
Guidance Sensor that replaces one degrading unit of the three already 
onboard, and an attempt will also be made to repair the Space Telescope 
Imaging Spectrograph, which stopped working in 2004. 

[2] NASA Office of Inspector General. NASA's Plan for Space Shuttle 
Transition Could Be Improved by Following Project Management 
Guidelines, IG-07-005, (Washington, D.C.: Jan. 29, 2007). 

[3] NAPA also recommended that NASA adopt scenario planning into its 
agencywide workforce planning processes and use the results to inform 

[4] GAO, NASA: Long-Term Commitment to and Investment in Space 
Exploration Program Requires More Knowledge, GAO-06-817R (Washington, 
D.C.: July 17, 2006). 

[5] Examples of our best practices reports include GAO, Best Practices: 
Using a Knowledge-Based Approach to Improve Weapon Acquisition, GAO-04-
386SP (Washington, D.C.: Jan. 2004); Space Acquisitions: Committing 
Prematurely to the Transformational Satellite Program Elevates Risks 
for Poor Cost, Schedule, and Performance Outcomes, GAO-04-71R 
(Washington, D.C.: Dec. 4, 2003); Best Practices: Capturing Design and 
Manufacturing Knowledge Early Improves Acquisition Outcomes, GAO-02-701 
(Washington, D.C.: July 15, 2002); and Best Practices: Better Matching 
of Needs and Resources Will Lead to Better Weapon System Outcomes, GAO-
01-288 (Washington, D.C.: Mar. 8, 2001). 

[6] GAO, NASA: Sound Management and Oversight Key to Addressing Crew 
Exploration Vehicle Project Risks, GAO-06-1127T (Washington, D.C.: 
Sept. 28, 2006). 

[7] According to NASA's Systems Engineering Procedural Requirements 
(NASA Procedural Requirements NPR 7123.1), the SRR examines the 
functional and performance requirements defined for the system and the 
preliminary program or project plan and ensures that the requirements 
and the selected concept will satisfy the mission. 

[8] NASA Procedural Requirements (NPR) 7120.5D establishes the 
requirements by which NASA will formulate and implement space flight 
programs and projects. NPR 7120.5D became effective on March 6, 2007, 
and supersedes the previous version of the document, NPR 7120.5C, for 
space flight programs and projects. 

[9] Review of NASA Plans for the International Space Station, National 
Research Council, Washington, D.C., 2006. 

[10] Pub. L. No. 109-155, §§ 802, 804 (2005). 

[11] Final Report of the International Space Station Independent Safety 
Task Force, February 2007. 

[12] Facilities refers to real property such as land, buildings and 
other structures that cannot be readily moved, and equipment refers to 
personal property that could be transported elsewhere with relative 

[13] Pub. L. No. 109-155, § 710 (2005) and GAO, NASA: Enhanced Use 
Leasing Program Needs Additional Controls, GAO-07-306R (Washington, 
D.C.: Mar. 1, 2007). 

[14] 42 U.S.C. § 4321, et seq. 

[15] 42 U.S.C. § 6901, et seq. 

[16] 42 U.S.C. § 9601 et seq. 

[17] GAO, 21st Century Challenges: Reexamining the Base of the Federal 
Government, GAO-05-325SP (Washington, D.C.: February 2005). 

[18] Pub. L. No. 108-201. 

[19] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: 
Jan. 2007). 

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