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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Committee on Homeland Security and 
Governmental Affairs, United States Senate: 

July 2014: 

Space Launch System: 

Resources Need to be Matched to Requirements to Decrease Risk and 
Support Long Term Affordability: 

GAO-14-631: 

GAO Highlights: 

Highlights of GAO-14-631, a report to the Ranking Member, Committee on 
Homeland Security and Governmental Affairs U.S. Senate. 

Why GAO Did This Study: 

SLS is NASA's first exploration-class heavy lift launch vehicle in 
over 40 years. Predecessor programs, such as Constellation, were 
canceled in the face of acquisition problems and funding shortfalls. 
NASA estimates it could spend almost $12 billion developing the first 
of three SLS vehicle variants and associated ground systems through 
initial launch in late 2017 and potentially billions more to develop 
increasingly capable vehicles. Ensuring that this program is 
affordable and sustainable for the long term is a key goal of the 2013 
National Space Transportation Policy. 

GAO was asked to evaluate SLS program challenges. This report examines 
(1) the SLS program's progress toward and risks for its first test 
flight in 2017 and (2) the extent to which the SLS program has plans 
in place to achieve its long-term goals and promote affordability. To 
do this, GAO reviewed relevant design, development, cost, and schedule 
documents; interviewed program officials; and evaluated SLS program 
actions using acquisition and cost estimating best practices. 

What GAO Found: 

The Space Launch System (SLS) program is making solid progress on the 
SLS design. However, the National Aeronautics and Space Administration 
(NASA) has not developed an executable business case based on matching 
the program's cost and schedule resources with the requirement to 
develop the vehicle and conduct the first flight test in December 2017 
at the required confidence level of 70 percent. NASA uses a 
calculation referred to as the “joint cost and schedule confidence 
level” to estimate the probable success of a program meeting its cost 
and schedule targets. NASA policy usually requires a 70 percent 
confidence level for a program to proceed with final design and 
fabrication. GAO's work on best practices has shown that programs that 
do not establish an executable business case that matches 
requirements—-or customer needs-—to resources, such as schedule and 
funding-—are at increased risk of cost and schedule growth. The 
program is satisfying many of NASA's metrics that measure progress 
against design goals, such as requirements for design maturity. 
According to the program's risk analysis, however, the agency's 
current funding plan for SLS may be $400 million short of what the 
program needs to launch by 2017. Furthermore, the development schedule 
of the core stage—-which drives the SLS schedule-—is compressed to 
meet the 2017 launch date. NASA also faces challenges integrating 
existing hardware that was not originally designed to fly on SLS. For 
example, SLS is using solid rocket boosters from the Constellation 
program, but integrating a new non-asbestos insulating material into 
the booster design has proven difficult and required changes to the 
booster manufacturing processes. 

The SLS program has not yet defined specific mission requirements 
beyond the second flight test in 2021 or defined specific plans for 
achieving long-term goals, but the program has opportunities to 
promote affordability moving forward. NASA plans to incrementally 
develop more capable SLS launch vehicles to satisfy long-term goals, 
but future missions have not been determined, which will directly 
affect the program's future development path and flight schedule. 
Mission selection will likely determine which element the program 
decides to develop next, as the program can afford to develop only one 
element at a time. The magnitude of these development efforts could be 
significant but is currently unknown as the program has not developed 
complete life-cycle cost estimates for the initial or future SLS 
launch vehicles. In May 2014, GAO recommended that NASA address this 
issue, and NASA partially concurred, citing that actions taken to 
structure the programs and track costs met the intent of the 
recommendations. However, GAO believes NASA's responses do not fully 
address the concerns about the program's cost estimates. There are 
opportunities, however, to improve long-term affordability through 
competition once the development path has been determined and NASA can 
finalize its acquisition approach. For example, the program plans to 
compete the procurement of one element; however, the agency has not 
finalized assessments of options for competitively procuring other 
future elements. Such assessments could better position NASA to 
sustain competition, control costs, and better inform Congress about 
the long-term affordability of the program. GAO's body of work on 
contracting has shown that competition in contracting is a key factor 
in controlling cost. 

What GAO Recommends: 

Among other actions to reduce risk and allow for continued assessment 
of SLS progress and affordability, GAO recommends that NASA develop an 
executable business case for SLS that matches resources to 
requirements, and provide to the Congress an assessment of the SLS 
elements that could be competitively procured for future SLS variants 
before finalizing acquisition plans for those variants. NASA concurred 
with GAO's recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-14-631]. For more 
information, contact Cristina Chaplain at (202) 512-4841 or 
chaplainc@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Program's Ability to Meet Schedule for 2017 Test Flight at Risk: 

SLS Program Has Critical Gaps in Knowledge Needed to Assess Long-Term 
Affordability, but Opportunities Exist to Promote Affordability: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the National Aeronautics and Space 
Administration: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Figures: 

Figure 1: NASA's Life Cycle for Flight Systems: 

Figure 2: SLS and Orion Hardware Elements: 

Figure 3: SLS Funding Requested, Fiscal Years 2012-2016: 

Figure 4: Months Each SLS Element Spent under Undefinitized Contract 
Actions: 

Figure 5: SLS 2016 Vehicle Development Decision: 

Abbreviations: 

CDR: critical design review: 

EM-1: Exploration Mission 1: 

EM-2: Exploration Mission 2: 

EVM: earned value management: 

ICPS: Interim Cryogenic Propulsion Stage: 

JCL: Join Cost and Schedule Confidence Level: 

KDP: key decision point: 

MDR: mission definition review: 

mt: metric ton: 

NASA: National Aeronautics and Space Administration: 

NFS: National Aeronautics and Space Administration Federal Acquisition 
Regulation Supplement: 

Orion: Orion Multi-Purpose Crew Vehicle: 

PDR: preliminary design review: 

SDR: system definition review: 

SIR: system integration review: 

SLS: Space Launch System: 

UCA: undefinitized contract action: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

July 23, 2014: 

The Honorable Tom Coburn, M.D.
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Dear Senator Coburn: 

The National Aeronautics and Space Administration (NASA) is in the 
midst of developing its first exploration-class heavy lift launch 
vehicle in over 40 years--the Space Launch System (SLS). The SLS will 
expand NASA's exploration capability to include crewed flights beyond 
Earth's orbit. NASA's attempts over the past two decades to develop a 
successor to the Space Shuttle have been unsuccessful. Prior 
development programs, the most recent being the Constellation program, 
were canceled in the face of acquisition problems and funding-related 
issues. The nearly $12 billion in funding that NASA estimates it could 
spend developing SLS and associated ground systems through its first 
launch in late 2017 represents not only a significant portion of 
NASA's planned budget for major projects during that period but also a 
significant portion of governmentwide launch-related research and 
development funding. Developing an exploration program that will be 
affordable and sustainable for the long term is a key goal of the 2013 
National Space Transportation Policy.[Footnote 1] 

GAO has designated NASA's management of acquisitions as a high-risk 
area for more than two decades in view of persistent cost growth and 
schedule slippage in the majority of its major projects.[Footnote 2] 
While the agency has made progress in recent years in reducing risk on 
smaller-scale, less complex projects, demonstrating that this progress 
can be translated to larger, more complex projects, such as SLS, is 
important. In light of these issues and the long-term significance of 
the program, you requested that we review the challenges facing NASA's 
SLS program. This report examines (1) NASA's progress toward the first 
SLS test flight in 2017 and any acquisition risks associated with its 
plans and (2) the extent to which the SLS program has plans in place 
to achieve its long-term goals and promote affordability. 

In order to assess NASA's progress to conduct its first flight in 
2017, we interviewed and obtained briefings and relevant documents 
from NASA and contractor officials. We identified and evaluated 
technical and programmatic issues associated with each major SLS 
subsystem, by reviewing development plans and discussing relevant 
issues with agency officials. We also compared planned to actual 
progress in maturing system designs. We assessed NASA's risk 
mitigation plans to gauge progress in addressing technical issues and 
to evaluate the potential impact to scheduled events such as delivery 
and flight dates. We also reviewed other technical and programmatic 
indicators and progress made addressing required actions from 
programmatic reviews at both the subsystem and vehicle level. We 
evaluated the program's progress toward the 2017 launch date by 
comparing actual cost, schedule, and performance to current program 
baselines. To assess long-term affordability, we discussed long-term 
development plans in support of future missions with agency officials. 
For purposes of assessing the cost estimate, we reviewed NASA 
preliminary cost estimates for the SLS, Orion crew capsule that will 
launch atop SLS, and associated ground systems programs and 
information related to the baseline cost estimates to determine the 
scope of the estimates. We assessed the estimates' scope against best 
practices criteria outlined in GAO's cost estimating guidebook as well 
as NASA's own requirements and guidance.[Footnote 3] Furthermore, we 
evaluated the program's development and acquisition plans to compete 
future variants of the SLS by reviewing contract information, 
including any follow-on contract options, and discussing supplier 
availability with agency officials. For more information on our scope 
and methodology, see appendix I. 

We conducted this performance audit from June 2013 to July 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

The National Aeronautics and Space Administration Authorization Act of 
2010 directed NASA to, among another things, develop a Space Launch 
System as a follow-on to the Space Shuttle and as a key component in 
expanding human presence beyond low-Earth orbit. To that end, NASA 
plans to incrementally develop three progressively more capable SLS 
launch vehicles--70-, 105-, and 130-metric ton (mt) variants. When 
complete, the 130-mt vehicle is expected to have more launch 
capability than the Saturn V vehicle, which was used for Apollo 
missions, and be significantly more capable than any recent or current 
launch vehicle. The act also directed NASA to prioritize the core 
elements with the goal of operational capability for the core elements 
not later than December 2016.[Footnote 4] NASA subsequently negotiated 
an extension of that date, to December 2017, based on the agency's 
assessment of the tasks associated with developing the new launch 
vehicle. 

In 2011, NASA formally established the SLS program. To fulfill the 
direction of the 2010 act, the agency plans to develop the three SLS 
launch vehicle capabilities, complemented by the Orion Multi-Purpose 
Crew Vehicle (Orion) to transport humans and cargo into space. The 
first version of the SLS that NASA is developing is a 70-mt launch 
vehicle known as Block I. NASA expects to conduct two test flights of 
the Block I vehicle--the first in 2017 and the second in 2021. The 
vehicle is scheduled to fly an uncrewed Orion some 70,000 kilometers 
beyond the moon during the first test flight, known as Exploration 
Mission-1 (EM-1), and to fly a second mission known as Exploration 
Mission-2 (EM-2) beyond the moon to further test performance with a 
crewed Orion vehicle. After 2021, NASA intends to build 105-and 130-mt 
launch vehicles, known respectively as Block IA/B and Block II, which 
it expects to use as the backbone of manned spaceflight for 
decades.[Footnote 5] The agency plans for these vehicles to carry 
larger cargo and travel farther into space, but it has not yet 
selected specific missions for the increased capabilities to be 
provided by Block IA/B and Block II. NASA anticipates using the Block 
IA/B vehicles for destinations such as near-Earth asteroids and 
LaGrange points and the Block II vehicles for eventual Mars missions. 
[Footnote 6] 

NASA's Acquisition Life Cycle: 

NASA plans to evolve the 70-mt SLS design following the agency's life 
cycle acquisition process for flight systems. That process is defined 
by two broad phases--formulation and implementation--and several key 
decision points.[Footnote 7] These broad phases are then further 
divided into more discrete pieces with different purposes: pre-phase A 
through phase F. See figure 1 for a depiction of NASA's life cycle for 
flight systems. 

Figure 1: NASA's Life Cycle for Flight Systems: 

[Refer to PDF for image: illustration] 

Formulation: 
Pre-phase A: Concept Studies; 
KDP A; 
Phase A: Concept and Technology Development; 
KDP B; 
SDR/MDR; 
Phase B: Preliminary Design and Technology Completion; 
KDP C (confirmation review); 
PDR. 

Program Start: 

Implementation: 
Phase C: Final Design and Fabrication; 
CDR; 
KDP D; 
SIR; 
Phase D: System Assembly, Integration and Test, Launch' 
KDP E; 
Phase E: Operations and Sustainment; 
KDP F; 
Phase F: Closeout. 

Management decision reviews: 
KDP = key decision point. 

Technical reviews: 
SDR/MDR = system definition review/mission definition review; 
PDR = preliminary design review; 
CDR = critical design review; 
SIR = system integration review. 

Source: NASA data and GAO analysis. GAO-14-631. 

[End of figure] 

During formulation, programs develop and define requirements and 
establish cost and schedule baselines and an acquisition strategy. 
Formulation concludes with a preliminary design review (PDR) and 
project confirmation review where cost and schedule baselines are 
confirmed and documented in the agency baseline commitment.[Footnote 
8] The PDR evaluates the completeness and consistency of the planning, 
technical, and cost and schedule baselines developed during 
formulation. It assesses compliance of the preliminary design with 
applicable requirements, and determines if the project is sufficiently 
mature to begin the final design and fabrication phase. The agency 
baseline commitment establishes and documents an integrated set of 
requirements, cost, schedule, technical content, and an agreed-to 
joint cost and schedule confidence level (JCL) that forms the basis 
for NASA's commitment with the Office of Management and Budget and the 
Congress.[Footnote 9] These baselines are informed by the JCL process. 
The JCL is a probabilistic analysis that provides assurance to 
stakeholders that programs will meet cost and schedule targets. In 
general, programs' cost and schedule baselines are based on a 70 
percent confidence level, unless the decision authority approves a 
different confidence level with appropriate justification and 
documentation.[Footnote 10] This is the point on the joint cost and 
schedule probability distribution where there is a 70 percent 
probability that the project will be completed at or lower than the 
estimated amount and at or before the projected schedule. Program 
progress can subsequently be measured against the baseline 
commitments.[Footnote 11] NASA's policy requires that a JCL be 
developed at a program's confirmation review.[Footnote 12] According 
to agency officials, NASA is currently establishing the JCL for SLS 
and the program will move into the implementation phase when the 
confirmation review is complete. 

Acquisition Best Practices: 

GAO's best practices for systems acquisition state that evolutionary 
acquisition is a commercial best practice.[Footnote 13] In 
evolutionary acquisition, a program uses mature technologies and 
capabilities that fit within existing resources to field initial 
capabilities sooner and gradually develops progressively more capable 
increments until it achieves its ultimate requirements. This approach 
is considered a best practice because it allows commercial companies 
and the government to develop and produce more sophisticated products 
faster and less expensively. 

GAO's work on best practices has also shown that success in 
development efforts such as SLS depends on establishing an executable 
business case based on matching requirements and resources before 
committing to a new product development effort. In its simplest form, 
a business case requires a balance between the concept selected to 
satisfy customer needs and the resources--technologies, design 
knowledge, funding, time, and management capacity--needed to transform 
the concept into a product. At the heart of a business case is a 
knowledge-based approach that requires that managers demonstrate high 
levels of knowledge as the program proceeds from technology 
development to system development and, finally, production. Ideally, 
with such an approach, key technologies are demonstrated before 
development begins, the design is stabilized before prototypes are 
built or production begins, and testing is used to validate product 
maturity at each level. At each decision point, the balance among 
time, money, and capacity is confirmed. In essence, knowledge 
supplants risk over time. Having adequate knowledge about requirements 
and resources is particularly important for a program like SLS because 
human spaceflight development projects are complex, difficult, and 
costly. 

We have found that within NASA's acquisition framework, the PDR and 
corresponding confirmation review are the point at which development 
projects should have a sound business case in hand.[Footnote 14] 
NASA's Systems Engineering Policy states that this review demonstrates 
that the preliminary design meets all system requirements with 
acceptable risk and within the cost and schedule constraints. After a 
project is confirmed following PDR, it begins implementation during 
which time senior NASA officials periodically review the programmatic 
and technical status of projects and verify the project's readiness to 
proceed forward. For example, a critical design review (CDR) before 
the project's subsystems are integrated evaluates the integrity of the 
project design and its ability to meet mission requirements, with 
appropriate margins and acceptable risk, within defined project 
constraints, including available resources. In short, the CDR 
determines if the design is appropriately mature to support proceeding 
with the final design and fabrication phase.[Footnote 15] Our past 
work on product development best practices has found that programs 
having at least 90 percent of engineering drawings releasable by the 
critical design review lower their risk of subsequent cost growth and 
schedule delays, and guidance in NASA's Systems Engineering Handbook 
mirrors this metric.[Footnote 16] NASA also tracks both mass margin 
and resolution of requests for action, which are technical, safety, 
and programmatic comments from independent reviewers, as additional 
measures of design maturity.[Footnote 17] In addition, experts in the 
space community have identified other metrics that can be useful to 
assess the design stability of unique space systems.[Footnote 18] 
These include the program's level of funding reserves and schedule 
margin at various points in the development life cycle as well as the 
percent of verification and validation plans completed at both PDR and 
CDR. 

Elements of SLS: 

In accordance with direction contained in the NASA Authorization Act 
of 2010, NASA's acquisition approach for building the initial variant 
of the SLS is predicated on the use of legacy systems, designs, and 
contracts from the Space Shuttle and Constellation programs. Figure 2 
provides details about the heritage of each SLS hardware element and 
its source. 

Figure 2: SLS and Orion Hardware Elements: 

[Refer to PDF for image: illustration] 

Elements depicted: 

Existing system: 
Solid Rocket Booster (2); 
RS-25 Engines (4); 
Interim Cyrogenic Propulsion Stage (ICPS). 

New development: 
Core stage; 
Launch vehicle/stage adapter; 
MPCV/stage adapter (MSA). 

Orion Multi-Purpose Crew Vehicle (MPCV): 
Spacecraft adapter; 
Encapsulated service module panels; 
Service module; 
Crew module; 
Launch abort system. 

Source: GAO analysis of NASA data (data and images). GAO-14-631. 

[End of figure] 

NASA plans to use 16 RS-25 engines remaining from the Space Shuttle 
program to provide power for up to four flights of the SLS. Similarly, 
the agency is procuring five-segment boosters that were developed 
under the Constellation program to provide thrust during the initial 
minutes of SLS flight. NASA is also procuring a cryogenic rocket stage 
used on United Launch Alliance's Delta IV launch vehicle and modifying 
it to operate as the Interim Cryogenic Propulsion Stage (ICPS) to 
provide in-space power for SLS. Finally, the design for the new core 
stage, which functions as the SLS's fuel tank and structural backbone, 
is derived from the Shuttle's external tank and Ares I upper stage. 

Program's Ability to Meet Schedule for 2017 Test Flight at Risk: 

While the SLS program is satisfying many of NASA's metrics that 
measure progress against overall design goals, NASA has not 
established an executable business case that matches the SLS program's 
cost and schedule resources with the requirement to develop the SLS 
and launch the first flight test in December 2017 at the required 
confidence level of 70 percent.[Footnote 19] Matching resources to 
requirements is considered a best practice for establishing a 
successful acquisition program.[Footnote 20] Reduced confidence levels 
increase the risk that the program will miss its launch date or 
overrun its cost baseline. The program is on target to achieve goals 
for design drawing release and mass and expects to meet necessary 
documentation requirements for its critical design review. However, 
the development schedule of the core stage, which is driving the 
overall program schedule, is aggressive and substantial amounts of 
schedule that the program reserved to resolve unanticipated issues is 
already threatened. NASA has focused on integration issues, and the 
program is on plan for closing design trades, environmental studies, 
and design interface documents that are intended to reduce this risk. 
However, the modification and integration of heritage elements may be 
a challenge--one which NASA often underestimates. In addition, 
according to the program's risk analysis, the agency's current funding 
plan for SLS may be $400 million short of what the program needs to 
launch by 2017. This funding discrepancy was, in part, responsible for 
the significant delay in finalizing the contracts for element 
development, which increased cost and schedule risk to the government 
as well as reduced visibility into contractor performance. 

NASA Has Not Matched Resources and Requirements for 2017 Initial 
Flight Test: 

NASA has not established an executable business case based on matching 
the SLS program's cost and schedule resources with the requirement to 
develop the SLS and launch the first flight test in December 2017 at 
the required confidence level of 70 percent. NASA delayed the SLS key 
decision point C decision from October 2013 to at least July 2014, as 
the agency considered future plans for the program. If the agency 
determines the current funding plan for SLS is insufficient to match 
requirements to resources for the December 2017 flight test at the 70 
percent confidence level, the agency's options for matching resources 
to requirements are largely limited to increasing program funding, 
delaying the schedule or accepting a reduced confidence level for the 
initial flight test. While the program's decision authority is allowed 
in some instances to approve a confidence level of less than 70 
percent, doing so increases the likelihood that the program will miss 
the launch date or overrun the current cost estimate. Should cost 
growth or schedule delay occur, it could place other programs' funding 
at risk if NASA chooses to take planned funding from those programs in 
order to maintain the SLS schedule. Although cost and schedule growth 
can occur on any project, increases associated with NASA's most costly 
and complex missions--such as SLS, which makes up about 9 percent of 
NASA's annual budget--can have dramatic effects on the availability of 
funding for NASA's portfolio of major projects. 

Funding levels have impaired the SLS program's ability to match 
requirements to resources since its inception. As illustrated in 
figure 3, NASA has requested relatively consistent amounts of funding 
for SLS each year. According to agency officials, the program has 
taken steps to live within that flat funding profile, including 
streamlining program office operations and asking each contractor to 
identify efficiencies in their production processes. Even so, 
according to the program's own analysis, going into the confirmation 
review, SLS's top risk was that the current planned budget through 
2017 would be insufficient to allow the SLS as designed to meet the EM-
1 flight date. The SLS program office calculated the risk associated 
with insufficient funding through 2017 as having a 90 percent 
likelihood of occurrence; furthermore, it indicated the insufficient 
budget could push the planned December 2017 launch date out 6 months 
and add some $400 million to the overall cost of SLS development. 
Program officials stated that the potential cost impacts of this risk 
were considerably higher in the past, but that they were able to 
reduce the impact due to receiving more funding than requested in 
fiscal years 2013 and 2014. 

Figure 3: SLS Funding Requested, Fiscal Years 2012-2016: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2012: $1.69 billion. 

Fiscal year: 2013: $1.34 billion. 

Fiscal year: 2014: $1.38 billion. 

Fiscal year: 2015: $1.38 billion. 

Fiscal year: 2016: $1.36 billion. 

Source: GAO analysis of NASA budget data. GAO-14-631. 

Note: Fiscal year 2016 funding estimate is notional. 

[End of figure] 

In May 2014, the House Committee on Appropriations report--which 
accompanied the Commerce, Justice, Science, and Related Agencies 
Appropriations Bill, 2015--"expressed frustration with NASA's 
practices of requesting arbitrarily reduced funding levels for SLS and 
insisting that the program manage to an inefficient flat-line budget 
profile." The Committee noted that this practice has "detrimental 
results" and is likely to lead to a "launch delay for EM-1 and 
deferral of long-lead work needed for the timely achievement of EM-2 
and other future flights." In light of these and other issues, the 
Committee has chosen to recommend maintaining SLS vehicle development 
funding at the fiscal year 2014 enacted level of $1.6 billion. 

Best practices for acquisition programs indicate that matching 
resources to requirements and rationally balancing cost, schedule, and 
performance is a key step in establishing a successful acquisition 
program.[Footnote 21] We have also found that NASA's previous attempts 
to develop new transportation systems, such as the Constellation 
program, have failed in part because they were focused on maturing 
designs without adequate funding to support those efforts.[Footnote 
22] Our work has also shown that developing a sound business case 
before committing resources to development--which includes firm 
requirements, mature technologies, a knowledge-based acquisition 
strategy, a realistic cost estimate, and sufficient funding and time--
would help mitigate the risks inherent in NASA's programs.[Footnote 23] 

SLS Program Is Meeting Some Design Goals for 2017 Test Flight but 
Challenges Could Threaten Launch Date: 

Design Goals: 

NASA's metrics indicate that the program is on track to meet many of 
its design goals for demonstrating the initial capability of SLS. 
Based on our review of top level design metrics that the program is 
tracking, the program is currently meeting its plan for design drawing 
release for the core stage, where most of the new design work is 
occurring. As of May 2014 the program had released 82 percent of the 
core stage drawings and expects to have 95 percent released by the 
core stage CDR in July 2014. The program as a whole expects to release 
95 percent of its design drawings by the program level CDR in March 
2015, which exceeds the best practice metric for design drawing 
release at CDR.[Footnote 24] Because the CDR is the time in a 
project's life cycle when the integrity of the project design and its 
ability to meet mission requirements are assessed, it is important 
that a project's design is stable enough to warrant continuation with 
design and fabrication, which is evidenced by release of 90 percent of 
design drawings at CDR. A stable design allows projects to "freeze" 
the design and minimize changes prior to beginning the fabrication of 
hardware. It also helps to avoid re-engineering and rework efforts due 
to design changes that can be costly to the project in terms of time 
and funding. 

The program is also meeting or close to meeting several design goals 
related to SLS mass margin and program documentation. As of May 2014, 
SLS had sufficient mass margin to meet its design goals for EM-1; 
however, the program has less mass margin for some EM-2 test flight 
mission options in 2021. If mass becomes an issue leading into EM-2, 
the vehicle may require design changes that could lead to cost and 
schedule growth. While the program is behind on its own schedule for 
addressing the requests for action from the preliminary design review, 
the program's current plan indicates that all requests will be 
addressed prior to the CDR scheduled for 2015. In addition to these 
overall design goals, the program's verification and validation plan, 
which aids in assessing whether a chosen development solution is 
capable of meeting its intended purpose and if the system is being 
developed according to agency requirements, was baselined and approved 
at PDR with one exception that the program expects to resolve in 2014. 
With regards to finalizing interface control documents, which define 
requirements for how systems will connect and interact with one 
another, the program is 4 percent behind its planned schedule for 
determining interface requirements by CDR. According to NASA, these 
documents should help reduce integration issues, such as those between 
the heritage hardware elements and new core stage, by specifying 
interaction between the heritage elements and core stage, as well as 
provide a set of interface definitions for when new elements are being 
designed. 

Aggressive Schedule: 

Although the program is making progress against its design metrics, 
the core stage development schedule is aggressive and already 
threatened, and any delays could impair SLS readiness for first flight 
in 2017. The core stage development drives the SLS schedule because it 
represents the critical path of activities that must be completed to 
maintain the program's schedule as a whole. Based on our review of 
NASA documentation and discussions with program officials, it is clear 
that the core stage's major program milestones and developmental 
activities are tightly spaced. For example, the program is allowing 18 
months from the point at which it evaluates the design at PDR in 
January 2013 to the point at which it expects the design to be fully 
mature at the core stage CDR in July 2014. By comparison, the Ares I 
project within the Constellation program planned for about 2 years 
between PDR and CDR. NASA officials indicated that they compressed the 
core stage development schedule in order to meet the SLS 2017 launch 
date. The schedule allows for 7 months of schedule reserve after CDR 
and before the core stage ships to Kennedy Space Center for 
integration into the SLS, which NASA believes will allow time to 
address problems it could encounter during development. While allowing 
7 months of schedule reserve generally complies with NASA guidance for 
space flight projects, it may prove insufficient in this instance 
because the program has already identified a number of threats to the 
schedule.[Footnote 25] 

The SLS program is tracking threats to the core stage schedule that 
could take up as much as 70 percent of the 7 months of reserve. Many 
of these threats are associated with the schedule for acquiring liquid 
oxygen feeder lines that provide liquid oxygen from the fuel tanks 
within the core stage to the core stage engine. Agency officials 
indicated the program is encountering difficulties acquiring feeder 
lines from available suppliers to meet the core stage development 
schedule because the feeder lines are larger and will be used in more 
stressful environments than the lines that suppliers have manufactured 
in the past. The feeder lines must still be designed, built, and 
tested for operation in the SLS environment before they can be 
delivered for integration into the system. While these challenges are 
not overly complex from a technical viewpoint, resolving such threats 
to the schedule is critical because the element is in early 
development phases and still has several significant milestones and 
developmental activities ahead. For example, the core stage has CDR 
currently scheduled for July 2014 that will assess the program's 
design maturity. Further, qualification testing to determine if system 
components meet requirements is currently scheduled to begin in 
January 2015. As we have found in the past, the integration and test 
phase of development is generally where issues that require unexpected 
time and resources to address are discovered.[Footnote 26] 

Heritage Hardware: 

The SLS program could experience additional schedule pressure if 
unanticipated challenges associated with using heritage hardware occur 
when integrating it into the launch vehicle's operational environment 
and modifying manufacturing process to incorporate new materials. The 
use of heritage hardware--legacy engine, booster, and propulsion 
systems--was prescribed in the NASA Authorization Act of 2010, but the 
hardware was not originally designed for SLS. Therefore, the SLS 
program must ensure each heritage hardware element meets SLS 
performance requirements and current design standards prior to the 
2017 test flight. Although the heritage hardware challenges have yet 
to affect the SLS schedule, each heritage hardware element shares the 
common issue of operating in the SLS environment that is likely to be 
more stressful than that of its original launch vehicle as well as 
unique integration issues particular to that element, which must be 
resolved prior to SLS first flight in 2017. For example, according to 
agency officials the engines from the Space Shuttle require additional 
heat shielding because of the increased temperatures they will 
experience in the SLS environment, and the avionics within the solid 
rocket boosters from the Constellation program are likely to require 
additional cushioning to protect them from increased vibrations. Until 
the core stage is demonstrated, however, the SLS operating environment 
can be defined only through analytical predictions. Further, 
eliminating asbestos as a key insulating material within the solid 
rocket boosters on the SLS has required changes to the booster 
manufacturing processes to meet safety requirements. 

According to agency officials, the challenges they face are typical of 
those expected when heritage hardware is integrated into a new system. 
They also noted that addressing these challenges involves less time, 
money, and overall effort than developing new hardware and that each 
heritage hardware element has schedule reserves to address anticipated 
integration challenges as well as unknown issues that might arise. 
Nevertheless, the engineering effort required to address them is 
significant and, as found by both GAO's and the NASA Inspector 
General's prior work, the complexity associated with required 
modifications and problems with availability of components used on 
projects is often underestimated.[Footnote 27] 

Unclear Scope and Funding Uncertainties Increased Risk by Delaying 
Contract Definitization: 

Uncertainty regarding resources increased risk to the program because 
contracts were not finalized and complete contractor performance data 
was not provided. According to agency officials, the program was 
delayed in definitizing contracts, in part, due to resource 
uncertainty. As a result, the SLS program contractors have worked for 
extended periods of time without contract definitization--meaning no 
final agreement on the terms and conditions of their contracts has 
been negotiated with the government--which put the government at risk 
of increased costs and limited the program's ability to monitor 
contractor progress. Contractors have performed, and are performing, 
work under undefinitized contract actions (UCA) until their respective 
contracts are definitized and cost and schedule baselines are set. 
Contract actions such as these authorize contractors to begin work 
before reaching a final agreement with the government on contract 
terms and conditions. The government is thus in a weaker position to 
control costs. 

The NASA supplement to the Federal Acquisition Regulation (NFS) 
provides that the NASA goal is to definitize UCAs within 180 days of 
issuance, or approximately 6 months.[Footnote 28] Officials stated 
that the agency's ability to definitize the element contracts was 
impacted by the need to use existing contracts, as directed by the 
NASA Authorization Act of 2010, and to complete work necessary to 
define requirements and modify those contracts in order to accommodate 
the SLS effort's scope and content. The NFS allows for such use of 
UCAs on an exception basis and also notes that, when UCAs are used, 
the agency's liabilities and commitments must be minimized.[Footnote 
29] As figure 4 illustrates, the booster and main engine element 
contractors performed development work under UCAs for more than a year 
and the core stage and ICPS contractor continued those elements' 
development under UCAs for 2 years or more. 

Figure 4: Months Each SLS Element Spent under Undefinitized Contract 
Actions: 

[Refer to PDF for image: timeline] 

Booster: 
NASA Federal Acquisition Regulation Supplement guidance for work under 
undefinitized contract action (UCA), 180 days: 12/2011, Contract 
start - 6/2012; 
Work performed under UCA beyond 180 days: 6/2012-4/2013. 
Definitization: 4/2013. 

Main engine: 
NASA Federal Acquisition Regulation Supplement guidance for work under 
undefinitized contract action (UCA), 180 days: 12/2011, Contract 
start - 6/2012; 
Work performed under UCA beyond 180 days: 6/2012-8/2013. 
Definitization: 8/2013. 

Core stage: 
NASA Federal Acquisition Regulation Supplement guidance for work under 
undefinitized contract action (UCA), 180 days: 12/2011, Contract 
start - 6/2012; 
Work performed under UCA beyond 180 days: 6/2012-7/2014. 
Planned definitization: 7/2014. 

Interim Cyrogenic Propulsion Stage: 
NASA Federal Acquisition Regulation Supplement guidance for work under 
undefinitized contract action (UCA), 180 days: 10/2012, Contract 
start - 4/2013; 
Work performed under UCA beyond 180 days: 4/2013-7/2014; 
Work remaining until definitization: 7/2014-10/2014; 
Planned definitization: 10/2014. 

Source: GAO analysis of NASA data. GAO-14-631. 

[End of figure] 

NASA allowed high-value modifications to the SLS contracts to remain 
undefinitized for extended periods--in one instance a contract 
remained undefinitized for 30 months. Because lack of agreement on 
contract terms prolonged NASA's timeframes for finalizing SLS 
contracts, the establishment of contractor cost and schedule baselines 
necessary to monitor performance was delayed. Specifically, in most 
cases, the SLS program did not receive complete earned value 
management (EVM) data derived from approved baselines on these SLS 
contracts. Earned value, or the planned cost of completed work and 
work in progress, can provide accurate assessments of project 
progress, produce early warning signs of impending schedule delays and 
cost overruns, and provide unbiased estimates of anticipated costs at 
completion. The use of EVM, which integrates the project scope of work 
with cost, schedule, and performance elements for optimum project 
planning and control, is advocated by both GAO's best practices for 
cost estimating and NASA's own guidance.[Footnote 30] Without having a 
contracted baseline against which to measure the earned value, the 
program is missing a useful indicator of true program status--in the 
case of SLS, the program's performance toward its 2017 launch date. 

The program began receiving EVM data from the booster contractor in 
2013, and began receiving it from the main engine contractor in 2014, 
but has yet to receive EVM data from the core stage or ICPS 
contractors because, according to program officials, the core stage 
contract was just definitized and the ICPS contract has yet to be 
definitized and baselines have yet to be established. We have 
previously found that UCAs transfer cost and performance risk from the 
contractor to the government.[Footnote 31] Our earned value body of 
work indicates that an integrated baseline review can help allay that 
risk by providing the government with assurance that the performance 
baseline reflects all requirements and that resources are adequate to 
complete the work.[Footnote 32] Program officials stated that they 
planned to hold an integrated baseline review for each element, 
following contract definitization, in order to begin receiving EVM 
data from the element contractors. In lieu of EVM, according to 
program officials, the contractors have been providing cost and 
schedule data to NASA derived from their internal baselines. Until the 
program and the contractor reach final agreement on contract terms, 
however, this data may not reflect whether the contractor is 
accomplishing the work planned within the agency's allocated cost and 
schedule. Until baselines are set and an integrated baseline review is 
held, the cost and schedule data can only be used as indicators of 
progress. Furthermore, such data can be misleading as it lacks a 
comparison between work performed versus planned. 

SLS Program Has Critical Gaps in Knowledge Needed to Assess Long-Term 
Affordability, but Opportunities Exist to Promote Affordability: 

NASA has yet to make mission decisions beyond EM-2 for the SLS program 
and has not produced a complete life-cycle cost estimate for any of 
the three planned variants; however, competition opportunities exist 
for future development work that may promote long-term affordability. 
Although the agency has identified several possible destinations, it 
has not decided upon specific missions for the SLS program beyond EM-1 
and EM-2, which will directly affect the program's future development 
path and flight schedule. Mission selection will likely determine the 
order of future development efforts, as the program can only afford to 
develop one upgraded element at a time. Each development effort may be 
large enough to constitute a separate project, but the full magnitude 
of these development efforts is unknown as the program has not 
established cost estimates for any of the three SLS variants, 
including the 70-mt vehicle, beyond 2017. Although the program costs 
are as yet unknown, there are opportunities to improve long-term 
affordability through competition once the element upgrade development 
path has been determined. While the main engine contractor for future 
SLS vehicles is likely to remain the same, the program plans to 
compete the acquisition of the advanced boosters. Additionally, the 
program could compete the acquisition of several other elements in 
order to potentially reduce costs. 

The SLS Program's Long-Term Mission Plans and Requirements Are Unknown: 

NASA has not yet defined specific mission requirements for any variant 
of the SLS. The two currently scheduled flights, EM-1 and EM-2, are 
developmental test flights designed to demonstrate and test the 
capabilities of the 70-mt launch vehicle and the capability of the 
core stage in particular. Office of Management and Budget guidance 
indicates that agencies should develop long range objectives, 
supported by detailed budgets and plans that identify the agency's 
performance gaps and the resources needed to close them.[Footnote 33] 
According to agency officials, beyond the two scheduled test flights, 
no future mission destinations have been determined. In the absence of 
specific mission requirements, officials indicated the SLS program is 
developing the variants based on top-level requirements derived from 
NASA's Design Reference Architectures that lay out the technical and 
scientific framework for conducting missions in line with the agency's 
strategic plan. NASA's 2014 strategic plan, for example, identifies 
sending humans to Mars as one of the agency's long-term goals; in 
turn, the agency's Mars Design Reference Architecture indicates that 
multiple missions using a vehicle with a lift capability of about 130 
mt will be necessary to support that goal. 

Although NASA is considering long-term Mars missions and asteroid 
redirect missions, NASA has not yet finalized plans for the next step 
in evolving the SLS and risks investing limited available resources in 
systems and designs that are not yet needed. The agency intends to use 
the same core stage design for all variants of the SLS, but it will be 
faced with replacing all the other major hardware elements used on the 
70-mt vehicle--that is, the upper stage, boosters, and engines--so 
that the 105-and 130-mt vehicles can perform missions that support the 
agency's strategic goals of carrying heavier payloads and traveling 
deeper into space. To that end, NASA is working on analyses and 
concept designs for a new upper stage and for advanced boosters. 
Because mission requirements for the 105-mt variant are not yet 
defined, however, NASA faces the possibility that it will spend time 
and money developing systems and designs that may not be needed for 
the specific mission that will be defined. For example, according to 
program officials and as illustrated in figure 5, in order to have a 
105-mt capability ready to launch soon after 2021, the agency must 
make a decision not later than 2016 about whether it will first pursue 
development of the upper stage or advanced boosters as the next step 
in increasing SLS capability beyond the 70-mt variant. 

Figure 5: SLS 2016 Vehicle Development Decision: 

[Refer to PDF for image: illustration] 

70 metric ton: 
Finalize concept and definition of the advanced boosters and the 
exploration upper stage. 

2016: 
Notional exploration upper stage and advanced boosters. 

130 metric ton: 
Determine order of upgrades for future missions followed by full scale 
development of 105 metric ton and 130 metric ton capabilities. 

Source: GAO presentation of NASA data. GAO-14-631. 

[End of figure] 

Program officials stated that the agency does not have resources to 
conduct more than one development effort at a time and that it is 
difficult to determine which system to develop first because each 
improves SLS lift capability in different ways. A new upper stage 
would provide more capability beyond Earth orbit and better support 
missions that require more in-space propulsion, such as missions to a 
near-Earth asteroid or other distant locations. Advanced boosters 
would provide more capability to low-Earth orbit and better support 
missions that require the SLS to place a larger payload in orbit 
around the Earth. No matter which effort NASA pursues, in order for 
the agency to begin full-scale development after 2016, it is 
confronted with requesting related funding in the year before it plans 
to begin work. For example, if NASA intends to initiate full-scale 
upper stage development in 2017, including the related funding request 
in its fiscal year 2016 budget submission would be prudent. The sooner 
NASA makes a decision about which development to pursue first, the 
sooner it will be able to focus its limited resources on the chosen 
effort. Conversely, the longer the agency delays the decision, the 
more likely it will expend those resources on a design that might not 
yet be needed. 

Regardless of when the mission requirements are established and what 
development NASA first pursues, those future development efforts are 
likely to be of sufficient cost and scope to constitute programs or 
projects in and of themselves. According to NASA officials, the 
advanced booster and new upper stage, for example, will involve 
distinct development, integration, qualification, and testing efforts. 
As such, they meet NASA's own criteria for a new project in that they 
will represent a specific effort with defined requirements, a life-
cycle cost estimate, and a beginning and end, and will result in new 
or revised products, in the form of improved boosters and stages, to 
address strategic goals. Further, these efforts are likely to far 
exceed the $250 million life-cycle cost established in NASA policy as 
the threshold for requiring the NASA Associate Administrator approval 
of cost and schedule baseline commitments.[Footnote 34] These projects 
are subject to oversight by senior agency officials through periodic 
programmatic reviews that assess technical and programmatic readiness 
to move forward at various decision points. At this time, future SLS 
development efforts are not planned to be managed as separate 
projects, though NASA has indicated that it plans to hold design 
reviews for these efforts consistent with its acquisition policies and 
practices. Best practices for system acquisition and cost estimating 
advocate an evolutionary approach wherein each capability increment 
has its own cost, schedule, and performance baselines and methods to 
report progress against these baselines.[Footnote 35] In addition, we 
have previously concluded that it is prudent for an agency to manage 
increasing capabilities of an existing program on par with the level 
of investments yet to come and in a way that is beneficial for 
oversight. For example, we have recommended that agencies developing 
weapon systems in increments consider establishing each increment of 
increased capability with its own cost and schedule baseline.[Footnote 
36] Establishing cost, schedule, and performance baselines for each 
increment that has costs exceeding $250 million could provide decision 
makers with additional insights into the progress and long-term 
affordability of each increment. 

The Program's Long-Term Affordability Is Unknown Because SLS Cost 
Estimate Does Not Capture Life Cycle Costs: 

The long-term affordability of the SLS program is also unknown, as we 
found in May 2014, because NASA's baseline cost estimate for the 
program will not provide any information about the longer-term, life 
cycle costs of developing, manufacturing, and operating the launch 
vehicle.[Footnote 37] NASA does not plan for that baseline estimate, 
which will be established when SLS moves into implementation, to cover 
program costs after EM-1 or costs to design, develop, build, and 
produce the 105-or 130-mt variants. 

Based on the tenets of widely-accepted best practices for cost 
estimation as well as NASA's own requirements and guidance regarding 
life cycle costs, in May 2014 we made recommendations to enhance 
transparency, assist congressional oversight, and ensure insight into 
affordability as the agency moves ahead with the SLS, Orion, and 
related ground support programs.[Footnote 38] In terms of SLS, we 
recommended that NASA establish a separate cost and schedule baseline 
for work required to support SLS Block I EM-2 and report that 
information via its annual budget submission. As part of that 
recommendation, we noted that, if NASA decides to fly the SLS Block I 
70-mt variant beyond EM-2, the agency should then establish separate 
life cycle cost and schedule baseline estimates for that variant and 
report this information via its annual budget submission. 
Additionally, we recommended that NASA establish life cycle cost and 
schedule baselines for each upgraded block of the SLS, Orion, and 
associated ground support. We stated that, if the agency believed it 
could not do so because missions and flight manifests were unknown, 
then it should forecast minimum and maximum ranges for the increased 
capabilities' life cycle costs in its annual budget submission. NASA 
partially concurred with our recommendations, citing among other 
reasons that actions already in place such as establishing SLS, Orion, 
and related ground support as separate programs and a block upgrade 
approach for SLS--and actions it plans to take to track costs--met the 
intent of our recommendations. 

In our evaluation of NASA's comments, we acknowledged that these 
actions were a step in the right direction, but noted that NASA's 
actions do not fully address our concerns. Specifically, we pointed 
out that establishing cost and schedule at the broader program level 
was unlikely to provide the detail necessary to monitor the progress 
of each block against a baseline; it was unclear from NASA's response 
whether cost commitments the agency plans within the SLS design review 
process would serve the same purpose as establishing a cost baseline 
for each respective upgrade; and reporting costs associated with EM-2 
and subsequent variants of SLS via the agency's annual budget 
submission would not provide information about potential costs over 
the long term because budget requests neither offer all the same 
information as life-cycle cost estimates nor are necessarily linked to 
an established baseline that indicates how much NASA expects to invest 
to develop, operate, and sustain a capability over the long-term. We 
stated that, as NASA establishes parameters for the additional flights 
of the first SLS capability and upgraded capabilities, including 
flight rates, mission destinations, and other requirements, it will be 
well-poised to move from reporting costs in budget submissions to 
establishing baseline cost and schedule estimates for each capability 
and reporting progress against these respective baselines. 

NASA Taking Steps for Long-Term Affordability but Additional 
Opportunities May Exist: 

NASA has taken some steps that may promote the long-term affordability 
of the SLS program as directed in the National Space Transportation 
Policy.[Footnote 39] The policy requires that human space flight 
development efforts such as the SLS program identify and implement 
measures to enhance affordability. To promote affordability, SLS has 
funded a series of studies and assessments on advanced boosters by 
both potential industry partners and universities. According to 
program officials, these activities--which include improved welding 
procedures, simulation of material performance, and demonstration of 
potential propellants--may provide better understanding of the 
processes, structures, and risk levels of various booster development 
options, which may in turn reduce the cost or schedule necessary to 
design and develop an advanced booster. Program officials also 
indicated that such activities may provide better insight into which 
contractors may compete for future booster development contracts. 

The program, however, could promote longer term affordability by 
introducing competition in the development and production contracts 
for other hardware elements. Our body of work on contracting has shown 
that competition in contracting is a key element for maintaining cost 
control.[Footnote 40] We have found that promoting competition 
increases the potential for acquiring quality goods and services at a 
lower price and that noncompetitive contracts carry the risk of 
overspending because, among other reasons, they have been negotiated 
without the benefit of competition to help establish pricing. NASA has 
structured other launch programs, such as the Commercial Crew and 
Launch Services Program, based on the premise that competition will 
lower costs. In addition, the NASA Authorization Act of 2010 requires 
that NASA compete sub-elements of the SLS. Furthermore, with certain 
exceptions, full and open competition in soliciting offers and 
awarding contracts is generally a requirement of the Competition in 
Contracting Act of 1984 and the Federal Acquisition 
Regulation.[Footnote 41] Given the long-term planned use of SLS, using 
non-competitive procedures to acquire any portion of the SLS vehicle 
may lead to higher costs that could be felt for years or decades. 

As it replaces hardware elements used on the 70-mt variant with 
elements necessary to support NASA's anticipated uses of the 105-and 
130-mt variants, the SLS program will likely have several 
opportunities to promote long-term affordability through competing 
contracts for the new elements. The program plans to use only the core 
stage and main engines for all flights beyond EM-2. Program briefings 
indicate that the SLS program optimized the design of the core stage, 
which will be used with all vehicle variants, to utilize the RS-25 
engines remaining from the Space Shuttle program. According to agency 
officials, a natural consequence of finalizing the core stage design 
based on the RS-25 is that the only engine-related efforts open to 
future competition will be RS-25 subsystems and components. The 
program could be in a favorable position, however, to compete 
contracts for the exploration upper stage, the upper stage engine, and 
advanced boosters that it expects to use on the 105-and 130-mt 
variants. According to SLS program officials, it currently plans to 
compete contracts for the development and production of new advanced 
boosters that will be more capable than the current five-segment 
boosters. The program is considering multiple design solutions 
including metallic or composite casings and liquid or solid fuel. 
Based on our review of program documentation and discussions with 
agency officials, however, additional opportunities exist to compete 
the procurement of other sub-elements needed for the 105-and 130-mt 
vehicles. In some cases other programs, both within and outside of 
NASA, use alternative hardware that serves similar purposes. 

* According to program officials, the program plans to procure a new 
upper stage through the existing core stage contract to replace the 
ICPS, which the program is using as an interim solution, for all 
missions following EM-2. They also stated that the program does not 
plan to compete the upper stage development because its initial award 
to Boeing in 2007 under the Constellation program was done 
competitively. Since that award, however, our work indicates that the 
marketplace for spacecraft development has shifted considerably as new 
commercial providers have since developed and have launched, or are 
currently developing, upper stages. These providers may offer viable 
competition for the new upper stage. For example, in recent years 
Orbital Sciences Corporation and SpaceX have successfully flown upper 
stages for NASA's Commercial Cargo program and SpaceX and Boeing will 
need to human-rate upper stages as part of NASA's Commercial Crew 
program with flights expected to begin around 2017. 

* The SLS program must also procure a new upper stage engine. 
According to NASA officials, the upper stage engine will be selected 
based on mission need. Potential competitors include Aerojet 
Rocketdyne's J-2X, the Evolved Expandable Launch Vehicle's RL10, and 
the BE-3 engine that Blue Origin is developing for the Commercial Crew 
program, among other options. 

Because, except for the RS-25 engines, NASA's current contracting 
approach for the SLS program, does not commit the program beyond the 
hardware needed for EM-2, moving forward the agency will be in the 
position to take advantage of the evolving launch vehicle market. An 
updated assessment of the launch vehicle market could better position 
NASA to sustain competition, control costs, and better inform the 
Congress about the long-term affordability of the program. 

Conclusions: 

NASA established the SLS program to provide the capability for 
transporting humans into space, but the agency is unlikely to do so as 
quickly as it intended. The initial launch date for SLS is just 3 and 
a half years away. That is a short time given the amount of 
development, integration, and testing that must occur for the vehicle 
to fly in 2017. While the technical challenges associated with those 
efforts appear manageable, the compressed development schedule in 
conjunction with the agency's relatively flat funding profile for SLS 
through 2017 place the program at high risk of missing the planned 
December 2017 launch date for the EM-1 initial test flight. 

Beyond the SLS second flight in 2021, the program's path is unclear. 
NASA is waiting for additional policy direction on future missions, 
but the agency is approaching a crossroads wherein it is confronted 
with defining a developmental path forward to the more capable 
variants of SLS. Without identifying a range of mission possibilities 
and their required funding, the program is at risk of making 
uninformed decisions and pursuing development paths that may not make 
the most efficient use of limited resources in the near term and could 
negatively impact longer term affordability. Furthermore, without this 
information the agency's ability to make important decisions about the 
affordability of the program in the context of the agency's overall 
budget and competing priorities is limited. Additionally, it is 
unclear how the agency plans to manage the upgraded capability 
efforts. Without carefully structuring the approach for future 
variants, decision makers will lack transparency into costs and will 
be limited in their ability to assess long-term affordability and 
progress. This lack of knowledge about program direction and cost is 
of concern because the success of these programs will be measured by 
both the capabilities they achieve and their affordability. NASA has 
at its disposal one critical tool for addressing SLS affordability 
concerns--competition--more specifically, competition for procurement 
associated with the two variants' elements. While NASA is planning to 
compete procurement of the advanced boosters, the agency also has 
opportunities to compete procurement of other upgraded elements, 
including the upper stage and the upper stage engine to help it 
achieve long-term affordability. 

Recommendations for Executive Action: 

To provide the Congress with the necessary insight into program 
planning and affordability, and to decrease the risk of cost and 
schedule overruns, we recommend that NASA's Administrator direct the 
Human Exploration and Operations Mission Directorate to take the 
following four actions: 

NASA should develop an executable business case for SLS based on 
matching requirements and resources that results in a level of risk 
commensurate with its policies. For example, NASA could delay the 
planned first flight test or increase funding to allow the program to 
establish cost and schedule baselines for demonstration of the initial 
capability at the 70 percent confidence level. 

* To provide decision makers with an informed basis for making 
investment decisions regarding the SLS program, NASA should identify a 
range of possible missions for each future SLS variant that includes 
cost and schedule estimates and plans for how those possible missions 
would fit within NASA's funding profile. 

* To allow for a continued assessment of progress and affordability, 
NASA should structure each future increment of SLS capability with a 
total cost exceeding the $250 million threshold for designation as a 
major project as a separate development effort within the SLS program. 
In doing so, NASA should require each increment to complete both the 
technical and programmatic reviews required of other major development 
projects, per the agency's acquisition and system engineering policies. 

* To promote affordability, before finalizing acquisition plans for 
future capability variants, NASA should assess the full range of 
competition opportunities and provide to the Congress the agency's 
assessment of the extent to which development and production of future 
elements of the SLS could be competitively procured. 

Agency Comments: 

NASA provided written comments on a draft of this report. These 
comments are reprinted in appendix II. 

In written and oral comments on a draft of this report, NASA concurred 
with our four recommendations. NASA agreed that future increments of 
SLS should be structured as separate development efforts and indicated 
that those increments would be subject to the appropriate technical 
and programmatic reviews, as well as rigorous cost and schedule 
management. NASA also recognized the need to define missions to guide 
program planning and indicated it will develop plans for specific SLS 
missions within NASA's standard mission selection and review process. 
We would expect that this process would also include cost and schedule 
estimates associated with each option and plans for how these possible 
missions would fit within NASA's funding profile. NASA acknowledged 
the importance of establishing a business case and cost and schedule 
baselines for the SLS program consistent with NASA policies and 
recognized that the program's schedule may have to be revised to 
accommodate decreased funding levels or to address technical problems. 
We would expect that an executable business case for the SLS program 
would be based on cost and schedule baselines that reflect a joint 
cost and schedule confidence level of 70 percent. NASA also indicated 
it would assess opportunities for increased competition and follow all 
applicable federal and NASA acquisition regulations governing 
competition within its contracting activities. As our recommendation 
indicates, NASA's assessment of competitive procurement opportunities 
should address development and production of all future elements of 
the SLS, including the upper stage, and result in a report of this 
current assessment to the Congress. Separately, NASA provided 
technical comments, which have been incorporated into the report, as 
appropriate. 

We are sending this report to NASA's Administrator and to interested 
congressional committees. In addition, the report will be available at 
no charge on GAO's website at [hyperlink, http://www.gao.gov]. 

Should you or your staff have any questions on matters discussed in 
this report, please contact me at (202) 512-4841 or chaplainc@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. Other key 
contributors to this report are listed in appendix III. 

Sincerely yours, 

Signed by: 

Cristina T. Chaplain: 
Director: 
Acquisition and Sourcing Management: 

[End of section] 

Appendix I: Scope and Methodology: 

In order to assess the National Aeronautics and Space Administration's 
(NASA) progress to conduct its first flight in 2017, we interviewed 
and obtained briefings and relevant documents from NASA and contractor 
officials. We identified and evaluated technical and programmatic 
issues associated with each major Space Launch System (SLS) element, 
including new and heritage hardware, by reviewing associated 
development plans and discussing relevant schedules and issues with 
agency officials. We also compared planned and actual progress in 
maturing system designs at the element and program level and evaluated 
how delays in element maturation and integration could affect the SLS 
program as a whole. We assessed NASA's risk mitigation plans for SLS 
to gauge the program's progress in addressing technical issues and to 
evaluate the potential cost and schedule impact to program milestones, 
including events such as delivery and flight dates. We also reviewed 
other technical and programmatic indicators--including progress 
against mass and performance goals, progress made addressing required 
actions from programmatic reviews at both the subsystem and vehicle 
level, and the status of schedule threats to the program's critical 
path--and assessed program status against those indicators. We 
assessed the status of the program's allocation of top level 
requirements to the different elements and the preparation of 
verification and validation plans for those requirements at the 
preliminary design review. We also evaluated the status of contracting 
activities for each element, including determining whether respective 
contracts were definitized and baselined and whether earned value 
information about contractor progress against planned cost and 
schedule was available to the program. 

To assess long-term affordability, we discussed long-term development 
plans in support of future missions with agency officials. We also 
reviewed the design reference architecture establishing the need for 
the large launch vehicle and compared the program's approach for 
satisfying the need to the agency's strategic plan. For purposes of 
assessing the cost estimate, we reviewed NASA preliminary cost 
estimates for the SLS, Orion, and associated ground systems programs 
and information related to NASA's plans for the SLS baseline cost 
estimate in order to determine the scope of the estimates and assessed 
whether that scope provided transparency into costs and enabled 
assessment of long-term affordability. We assessed the preliminary 
estimates' scope against best practices criteria outlined in GAO's 
cost estimating guidebook as well as NASA's own guidance and 
procedural requirements. We also discussed the estimate with NASA 
officials, including the rationale for the estimates' scope and 
exclusions to that scope. As NASA had not released the baseline 
estimate for SLS at the time of our review, we did not asses the 
reliability of the SLS baseline estimate. Furthermore, we evaluated 
the program's development and acquisition plans to compete future 
variants of the SLS by reviewing contract information, including any 
follow-on contract options, and discussing supplier availability with 
agency officials. 

We conducted our work at locations where the SLS program is being 
managed and executed including NASA headquarters in Washington, D.C.; 
NASA's Kennedy Space Flight Center in Cape Canaveral, Fla.; NASA's 
Marshall Space Flight Center in Huntsville, Ala.; AeroJet Rocketdyne 
in Canoga Park, Calif.; Alliant Technologies in Promontory, Utah; and 
the Boeing Company in Huntsville, Ala. 

We conducted this performance audit from June 2013 to July 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the National Aeronautics and Space 
Administration: 

National Aeronautics and Space Administration: 
Office of the Administrator: 
Washington. DC 20546-0001: 

July 14, 2014: 

Human Exploration and Operations Mission Directorate: 

Cristina T. Chaplain: 
Director: 
Acquisition Sourcing Management: 
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Mrs. Chaplain: 

The National Aeronautics and Space Administration (NASA) appreciates 
the opportunity to review and comment on the Government Accountability 
Office (GAO) draft report entitled, "Space Launch System: Business 
Case Needed to Decrease Risk and Support Long Term Affordability" (GAO-
14-631). In order to properly respond to the GAO recommendations, NASA 
believes it is important to put this report on SLS in the broader
context of the Agency's overall exploration strategy. 

NASA appreciates GAO's recognition of the significant progress that 
SLS has made since the program entered pre-formulation in 2011. As GAO 
noted, SLS has remained on track to an aggressive schedule for launch 
readiness in December 2017. Requirements have been defined and 
verified, design drawings are being delivered on or ahead of schedule, 
mass and performance margins are being maintained, prototype hardware is
being manufactured, tests are on track, and the program is on plan for 
critical design review in 2015. The GAO noted areas where there 
continue to be some technical challenges, which is to be expected in a 
development project on the scale of SLS, but none were considered to 
be significant given proper program vigilance. GAO highlighted the 
status of contract definitization and implications for understanding the
full program risk posture, particularly in terms of having baselined 
earned value management data from the contractors. The GAO did not 
identify any specific issues that were not already being worked by the 
program, which reflects NASA's detailed and continuous oversight of 
contractor work during the undefinitized contract period. Three of the 
four prime contracts (for Core Stage, Engines, and Boosters) have been 
definitized, and the fourth (for the Interim Cryogenic Propulsion 
Stage) is on track for definitization this fall. 

As the GAO notes, SLS (along with the Orion Multi-Purpose Crew Vehicle 
and the Ground Systems Development and Operations programs) are being 
designed as foundational capabilities for human exploration in deep-
space. The capability-based architecture is designed for long-term 
human exploration of our inner solar system, with a horizon goal of 
landing humans on Mars. Both SLS and Orion are being designed to 
enable multiple exploration missions and destinations rather than 
being optimized for one particular exploration mission or architecture. 

This is a critical point, one that is at the core of a NASA capability-
driven exploration strategy that traces back to the NASA Authorization 
Act of 2010. NASA has developed an exploration concept of operations 
that defines both the required tactical (near-term, in the proving 
ground of trans-lunar space) and strategic (long-term, in preparation 
for exploration missions to Mars) capabilities for SLS. These 
requirements are being refined in the context of an evolvable Mars 
campaign concept that builds upon the initial concept of operations 
and Level I requirements. The evolvable Mars campaign will be developed
to maximize learning opportunities, provide flexibility to adjust 
based upon what is learned through exploration activities in the 
proving ground of cis-lunar space, and progress in accordance with the 
national budget environment. In essence, through this flexible, 
capability-driven framework, NASA applies the lessons of knowledge-based
decision making to the exploration architecture as a whole. 

As the GAO acknowledges, the evolvable nature of SLS is consistent 
with procurement best-practices for buying down program risk; 
likewise, evolvability in the service of affordability is also a key 
component of the capability-driven architecture. SLS is designed for 
the express purpose of enabling multi-decade human exploration beyond
low-Earth orbit in support of national objectives and policy. The 
requirements for a safe and reliable human exploration transportation 
system (particularly in terms of lift capacity and volume) are 
significantly greater than for non-exploration missions. As an
example of the SLS capabilities, the Block I SLS will have over two 
and a half times - and Block 2 over four times - the lift capacity to 
low Earth orbit compared with existing launch vehicles. The 
capabilities of SLS are even more pronounced for missions beyond low 
Earth orbit, where SLS is intended to deliver from two to over eight 
times the payload mass to Mars, in a single launch, and beyond 
compared to existing vehicles. 

Taken together, the capability-based framework and the evolvable 
architecture for SLS provide the foundation for a knowledge-based 
approach to exploration. From this strategy, NASA has identified 
conceptual missions that provide defined minimum capabilities for SLS 
(such as required mass delivered to lunar or Martian orbit), while the
basic timing of those missions (operating in trans-lunar space through 
the 2020s, with Mars missions in the 2030s) drives when upgraded SLS 
capabilities are required. 

Accordingly, this evolvable Mars concept does not readily lend itself 
to classical life cycle definitions. NASA acknowledges that it does 
not yet know how many launches of what version of SLS will be required 
for the first Mars mission, or what exact series of intermediate 
missions (ones that will have their own intrinsic worth beyond their 
value as precursors to Mars) will be the stepping stones on the way to 
Mars. Further, SLS may have uses beyond human exploration of the inner 
solar system. Within this framework, two facts are beyond dispute. 
One, in order to maximize the chances of success for missions to deep 
space (and certainly missions to Mars), a launch vehicle with the lift 
and in-space performance envisioned for SLS is required. Two, if 
missions to deep space and ultimately Mars are to be affordable, it is 
vital to minimize the costs to develop, operate, and upgrade SLS. It 
is in the context of this latter point, in particular, that NASA 
appreciates the work of GAO in providing their recommendations. 

In the draft report, GAO recommends that the NASA Administrator direct 
the Human Exploration and Operations Mission Directorate take the 
following actions: 

Recommendation 1: NASA should develop an executable business case for 
SLS based on matching requirements and resources that results in a 
level of risk commensurate with its policies. For example, NASA could 
delay the planned first flight test or increase funding to allow the 
program to establish cost and schedule baselines for demonstration
of the initial capability at the 70 percent confidence level. 

Management's Response: NASA understands the recommendation and concurs 
with the intent. The agency baseline cost and schedule commitment for 
SLS will be made consistent with NASA policy and documented in the SLS 
Key Decision Point C Decision Memorandum. NASA has and will continue 
to properly balance risk within SLS and across the exploration 
portfolio. An important (and widely used) element of managing risks is 
to manage a program to a schedule that provides margin against the 
agency commitment, to protect against schedule threats that may arise 
during development. Consistent with the discussion above, with SLS 
NASA is developing a capability that is affordable and sustainable 
over the long term. In this context, delaying the SLS development 
schedule or diverting funding from other priorities to satisfy a 
schedule confidence level could jeopardize these goals and result in 
an increase in costs to the taxpayer. Plans are in place to adjust 
schedule and minimize costs within the agency commitment if either 
funding levels decrease or technical problems arise. 

Recommendation 2: To provide decision makers with an informed basis 
for making investment decisions regarding the SLS program, NASA should 
identify a range of possible missions for each future SLS variant that 
includes cost and schedule estimates and plans for how those possible 
missions would fit within NASA's funding profile. 

Management Response: NASA concurs with the recommendation. NASA has
documented tactical (near-term) and strategic (in preparation for 
Mars) capabilities for SLS. Planning for specific missions will follow 
standard applicable NASA mission selection and review processes for 
ongoing operations. 

Recommendation 3: To allow for a continued assessment of progress and 
affordability, NASA should structure each future increment of SLS 
capability with a total cost exceeding the $250 million threshold for 
designation as a separate development effort within the SLS program. 
In doing so, NASA should require each increment to complete both the 
technical and programmatic reviews required of other major development
projects, per the agency's acquisition and system engineering policies. 

Management Response: NASA concurs with the recommendation. For major 
block element upgrades (specifically the Exploration Upper Stage and 
Advanced Boosters), NASA will conduct appropriate element and vehicle-
level technical design and programmatic reviews and perform rigorous 
cost and schedule management of the development of these elements in 
the context of overall SLS program goals. 

Recommendation 4: To promote affordability, before finalizing 
acquisition plans for future capability variants, NASA should assess 
the full range of competition opportunities and provide to the 
Congress the agency's assessment of the extent to which development 
and production of future elements of the SLS could be competitively
procured. 

Management Response: NASA concurs with the recommendation. NASA will 
follow all applicable federal and NASA supplemental acquisition 
regulations, including full justification on any proposed contract 
action for other than full and open competition. 

Thank you for the opportunity to comment on this draft report. If you 
have any questions or require additional information, please contact 
Michelle Bascoe at (202) 358-1574. 

Sincerely, 

Signed by: 

Wilham Gerstenmaier: 
Associate Administrator for Human Exploration and Operations: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Cristina T. Chaplain (202) 512-4841 or chaplainc@gao.gov. 

Staff Acknowledgments: 

In addition to the contact named above, Shelby S. Oakley (Assistant 
Director), Andrea M. Bivens, Tana M. Davis, Laura Greifner, Sylvia 
Schatz, Ryan Stott, Roxanna T. Sun, and John S. Warren, Jr. made key 
contributions to this report. 

[End of section] 

Footnotes: 

[1] The White House, National Space Transportation Policy (Washington, 
D.C.: Nov. 21, 2013). 

[2] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-13-283] (Washington, D.C.: February 
2013). 

[3] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 
2009). The Guide is a compilation of best practices that federal cost 
estimating organizations and industry use to develop and maintain 
reliable cost estimates throughout the life of a government 
acquisition program. NASA Procedural Requirements (NPR) 7120.5E, NASA 
Space Flight Program and Project Management Requirements, § 2.4 (Aug. 
14, 2012); and NASA, 2008 NASA Cost Estimating Handbook (Washington, 
D.C.). 

[4] Pub. L. No. 111-267, §§ 302(c)(2), 303(a)(2) (codified at 42 
U.S.C. §§ 18322, 18323). 

[5] NASA plans for SLS Block IA to utilize advanced boosters, Block IB 
an exploration upper stage, and Block II the advanced boosters and 
exploration upper stage. The agency has not yet determined whether it 
will first develop the Block IA or Block IB variant. 

[6] In a two-body system, such as Earth and the sun, there are points 
nearby where a third object can be positioned and remain in place 
relative to the other two objects. These are known as Lagrange points. 

[7] NASA defines the formulation phase as the identification of how 
the program or project supports the agency's strategic goals; the 
assessment of feasibility, technology, concepts, and performance of 
trade studies; risk assessment and possible risk mitigations and 
continuous risk management processes; team building, development of 
operations concepts and acquisition strategies; establishment of high-
level requirements, requirements flow down, and success criteria; 
assessing the relevant industrial base/supply chain to ensure program 
or project success, the preparation of plans, cost estimates, budgets, 
and schedules essential to the success of a program or project; and 
the establishment of control systems to ensure performance of those 
plans and alignment with current agency strategies. NPR 7120.5E, § 
1.3.1.a (Aug. 14, 2012). The implementation phase is defined as the 
execution of approved plans for the development and operation of the 
program or project, and the use of control systems to ensure 
performance to approved plans and requirements and continued alignment 
with the agency's strategic goals. NPR 7120.5E, §1.3.1.c (Aug. 14, 
2012). 

[8] NPR 7120.5E, (Aug.14, 2012). 

[9] NPR 7120.5E, Appendix A (Aug. 14, 2012). 

[10] NPR 7120.5E, § 2.4 (Aug. 14, 2012). 

[11] NPR 7120.5E, Table 2-5 (Aug. 14, 2012). 

[12] NPR 7120.5E, § 2.4 (Aug. 14, 2012). 

[13] GAO, Best Practices: Capturing Design and Manufacturing Knowledge 
Early Improves Acquisition Outcomes, [hyperlink, 
http://www.gao.gov/products/GAO-03-645T] (Washington, D.C.: Jul. 15, 
2002). 

[14] GAO, NASA: Implementing a Knowledge-Based Acquisition Framework 
Could Lead to Better Investment Decisions and Project Outcomes, 
[hyperlink, http://www.gao.gov/products/GAO-06-218] (Washington, D.C.: 
Dec. 21, 2005), and NASA: Agency Has Taken Steps Toward Making Sound 
Investment Decisions for Ares I but Still Faces Challenging Knowledge 
Gaps, [hyperlink, http://www.gao.gov/products/GAO-08-51] (Washington, 
D.C.: Oct. 31, 2007). 

[15] NPR 7120.5E, Table 2-5 (Aug. 14, 2012). 

[16] GAO, [hyperlink, http://www.gao.gov/products/GAO-03-645T]; 
[hyperlink, http://www.gao.gov/products/GAO-06-218]; Best Practices: 
Using a Knowledge-based Approach to Improve Weapon Acquisition, 
[hyperlink, http://www.gao.gov/products/GAO-04-386SP] (Washington, 
D.C.: Jan. 1, 2004); and NASA, Systems Engineering Handbook, NASA/SP-
2007-6105 Rev1 (Washington, D.C.: December 2007). 

[17] Mass is a measurement of how much matter is in an object. It is 
related to an object's weight, which is mathematically equal to mass 
multiplied by acceleration due to gravity. Margin is the spare amount 
of mass or power allowed or given for contingencies or special 
situations. 

[18] GAO, NASA: Assessments of Selected Large-Scale Projects, 
[hyperlink, http://www.gao.gov/products/GAO-14-338SP] (Washington, 
D.C.: Apr. 15, 2014). 

[19] NASA's procedural requirements require Mission Directorates to 
plan and budget programs and projects with an estimated life-cycle 
cost greater than $250 million based on a 70 percent Joint Cost and 
Schedule Confidence Level (JCL), or at a different level as approved 
by the Decision Authority, which for SLS is the NASA Associate 
Administrator. Any JCL approved by the Decision Authority at less than 
70 percent must be justified and documented. The JCL is a quantitative 
probability analysis that requires the project to combine its cost, 
schedule, and risks into a complete quantitative picture to help 
assess whether the project will be successfully completed within cost 
and on schedule. NPR 7120.5E, §§2.4.4, 2.4.4.1, 2.4.3.2 (Aug. 14, 
2012). 

[20] GAO, [hyperlink, http://www.gao.gov/products/GAO-04-386SP] and 
Best Practices: Better Matching of Needs and Resources Will lead to 
Better Weapon System Outcomes, [hyperlink, 
http://www.gao.gov/products/GAO-01-288] (Washington, D.C.: Mar. 8, 
2001). 

[21] [hyperlink, http://www.gao.gov/products/GAO-04-386SP] and 
[hyperlink, http://www.gao.gov/products/GAO-01-288]. 

[22] GAO, Space Transportation: Status of the X-33 Reusable Launch 
Vehicle Program, [hyperlink, 
http://www.gao.gov/products/GAO/NSIAD-99-176] (Washington, D.C.: Aug. 
11, 1999); National Aero-Space Plane: Restructuring Future Research 
and Development Efforts, [hyperlink, 
http://www.gao.gov/products/GAO/NSIAD-93-71], (Washington, D.C.: Dec. 
3, 1992); and NASA: Constellation Program Cost and Schedule Will 
Remain Uncertain Until a Sound Business Case Is Established, 
[hyperlink, http://www.gao.gov/products/GAO-09-844] (Washington, D.C.: 
Aug. 26, 2009). 

[23] GAO, Defense Acquisitions: Key Decisions to Be Made on Future 
Combat System, [hyperlink, http://www.gao.gov/products/GAO-07-376] 
(Washington, D.C.: Mar. 15, 2007); Defense Acquisitions: Improved 
Business Case Key for Future Combat System's Success, [hyperlink, 
http://www.gao.gov/products/GAO-06-564T] (Washington, D.C.: Apr. 4, 
2006); [hyperlink, http://www.gao.gov/products/GAO-06-218]; and NASA's 
Space Vision: Business Case for Prometheus 1 Needed to Ensure 
Requirements Match Available Resources, [hyperlink, 
http://www.gao.gov/products/GAO-05-242] (Washington, D.C.: Feb. 28, 
2005). 

[24] Engineering drawings are considered to be a good measure of the 
demonstrated stability of a product's design because the drawings 
represent the language used by engineers to communicate to the 
manufacturers the details of a new product design--what it looks like, 
how its components interface, how it functions, how to build it, and 
what critical materials and processes are required to fabricate and 
test it. Once the design of a product is finalized, the drawing is 
"releasable." 

[25] NASA, Goddard Procedural Requirements 7120.7 (May 4, 2008). 

[26] GAO, NASA: Assessments of Selected Large-Scale Projects, 
[hyperlink, http://www.gao.gov/products/GAO-13-276SP] (Washington, 
D.C.: Apr. 17, 2013). 

[27] GAO, NASA: Assessments of Selected Large-Scale Projects, 
[hyperlink, http://www.gao.gov/products/GAO-12-207SP], (Washington, 
D.C.: Mar. 1, 2012), and NASA Office of Inspector General, NASA's 
Challenges to Meeting Cost, Schedule, and Performance Goals, IG-12-
021, (Washington, D.C.: Sept. 27, 2012). 

[28] NASA Federal Acquisition Regulation Supplement (NFS) § 
1843.7005(a). 

[29] NFS § 1843.7002(a). 

[30] [hyperlink, http://www.gao.gov/products/GAO-09-3SP] and NPR 
7120.5E, § 2.2.8 (Aug. 14, 2012). 

[31] GAO, Defense Contract Management: DOD's Lack of Adherence to Key 
Contracting Principles on Iraq Oil Contract Put Government Interests 
at Risk, [hyperlink, http://www.gao.gov/products/GAO-07-839] 
(Washington, D.C.: Jul. 31, 2007); Defense Contracting: Use of 
Undefinitized Contract Actions Understated and Definitization Time 
Frames Often Not Met, [hyperlink, 
http://www.gao.gov/products/GAO-07-559] (Washington, D.C.: Jun. 19, 
2007); and Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures 
and Management Challenges, [hyperlink, 
http://www.gao.gov/products/GAO-04-605] (Washington, D.C.: Jun. 1, 
2004). 

[32] See, for example, GAO, NASA: Earned Value Management 
Implementation across Major Spaceflight Projects Is Uneven, 
[hyperlink, http://www.gao.gov/products/GAO-13-22], (Washington, D.C.: 
Nov. 19, 2012); Defense Acquisitions: Missile Defense Program 
Instability Affects Reliability of Earned Value Management Data, 
[hyperlink, http://www.gao.gov/products/GAO-10-676] (Washington, D.C.: 
Jul. 14, 2010); and [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP]. 

[33] Office of Management and Budget, OMB Circular A-11, Supplement 
for Part 7: Capital Programming Guide (Washington, D.C.: July 2013). 

[34] NPR 7120.5 E (Aug. 14, 2012). 

[35] [hyperlink, http://www.gao.gov/products/GAO-09-3SP]; [hyperlink, 
http://www.gao.gov/products/GAO-04-386SP]; and [hyperlink, 
http://www.gao.gov/products/GAO-01-288]. 

[36] GAO, Tactical Aircraft: F-22A Modernization Program Faces Cost, 
Technical, and Sustainment Risks, [hyperlink, 
http://www.gao.gov/products/GAO-12-447] (Washington D.C.: May 2, 2012). 

[37] GAO, NASA: Actions Needed to Improve Transparency and Assess Long-
Term Affordability of Human Exploration Programs, [hyperlink, 
http://www.gao.gov/products/GAO-14-385], (Washington D.C.: May 8, 
2014). 

[38] [hyperlink, http://www.gao.gov/products/GAO-09-3SP]; NPR 7120.5E 
§ 2.4(Aug. 14, 2012); 2008 NASA Cost Estimating Handbook; and 
[hyperlink, http://www.gao.gov/products/GAO-14-385]. 

[39] National Space Transportation Policy. (Nov. 21, 2013). 

[40] See, for example, GAO, Federal Contracting: Noncompetitive 
Contracts Based on Urgency Need Additional Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-14-304] (Washington, D.C.: Mar. 26, 
2014); Defense Contracting: Actions Needed to Increase Competition, 
[hyperlink, http://www.gao.gov/products/GAO-13-325] (Washington, D.C.: 
Mar. 28, 2013); and Federal Contracting: Opportunities Exist to 
Increase Competition and Assess Reasons When Only One Offer Is 
Received, [hyperlink, http://www.gao.gov/products/GAO-10-833] 
(Washington, D.C.: Jul. 26, 2010). 

[41] Pub. L. No. 98-369, § 2711, 98 Stat. 494, 1175; and Federal 
Acquisition Regulation § 6.101(a). 

[End of section] 

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