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Testimony:

Before the Subcommittee on Science, Technology, and Space, Committee on 
Commerce, Science, and Transportation, United States Senate:

United States General Accounting Office:

GAO:

For Release on Delivery Expected at 2:00 p.m., EST:

Wednesday, October 29, 2003:

NASA:

Shuttle Fleet's Safe Return to Flight Is Key to Space Station Progress:

Statement of Allen Li, Director:

Acquisition and Sourcing Management:

GAO-04-201T:

GAO Highlights:

Highlights of GAO-04-201T, a testimony before the Subcommittee on 
Science, Technology, and Space, Committee on Commerce, Science, and 
Transportation, U.S. Senate

Why GAO Did This Study:

Since its inception, the International Space Station has experienced 
numerous problems that have resulted in significant cost growth and 
assembly schedule slippages. Following the Columbia accident and the 
subsequent grounding of the shuttle fleet in February 2003, concerns 
about the future of the space station escalated, as the fleet has been 
key to the station’s assembly and operations.

In August 2003, the Columbia Accident Investigation Board drew a 
causal link between aggressive space station goals—supported by the 
National Aeronautics and Space Administration’s (NASA) current culture—
and the accident. Specifically, the Board reported that, in addition 
to technical failures, Columbia’s safety was compromised in part by 
internal pressures to meet an ambitious launch schedule to achieve 
certain space station milestones.

This testimony discusses the implications of the shuttle fleet’s 
grounding on the space station’s schedule and cost, and on the 
program’s partner funding and agreements—findings we reported on in 
September 2003. The testimony also proposes a framework for providing 
NASA and the Congress with a means to bring about and assess needed 
cultural changes across the agency.

What GAO Found:

Since the grounding of the shuttle fleet last February, the space 
station has been in a survival mode. Due to the limited payload 
capacity of the Russian launch vehicles—which the program must now 
rely on to transport crew and supplies to and from the station—on-
orbit assembly is at a standstill and on-board research has been 
limited. Moreover, certain safety concerns on board the station cannot 
be corrected until the shuttle fleet returns to flight. For example, 
NASA has had to delay plans to fly additional shielding to protect the 
on-orbit Russian Service Module from space debris—a risk that 
increases each year the shielding is not installed.

To date, NASA has not fully estimated the increased costs and future 
budget impact incurred due to the grounding of the space shuttle 
fleet. However, it projects that additional costs of maintaining the 
space station while the shuttle fleet is grounded will reach almost 
$100 million for fiscal years 2003 and 2004. It has also identified a 
number of factors that will affect costs—including the need to extend 
contracts to complete development and assembly of the station. Delays 
in completing the assembly of the station—which will be at least 2 
years—are likely to incur significant additional program costs. At the 
same time, partner funding is uncertain, which may result in NASA 
paying a larger share of certain program costs. 

Although the full impact of the shuttle fleet’s grounding on the space 
station is still unknown, it is clear that the station’s future is 
dependent on the shuttle fleet’s return to flight. NASA must carefully 
weigh this future against the risks inherent in its current culture. 
As we reported early this year, NASA’s organization and culture has 
repeatedly undermined the agency’s ability to achieve its mission. The 
Columbia Accident Investigation Board similarly found that NASA’s 
history and culture have been detrimental to the shuttle fleet’s 
safety and that needed improvements at NASA go beyond technical 
enhancements and procedural modifications. The cultural change 
required for NASA to consider the numerous technical and 
administrative recommendations made by the Board could be the agency’s 
greatest challenge to date.

In an effort to help NASA as it undergoes this change—and the Congress 
as it assesses NASA’s future corrective actions—we have provided a 
framework for establishing appropriate operating principles and values 
and program direction, securing and maintaining a sufficient and 
skilled workforce, establishing proper performance targets, and 
ensuring adequate monitoring.

www.gao.gov/cgi-bin/getrpt?GAO-04-201T.

To view the full product, click on the link above. For more 
information, contact Allen Li at (202) 512-4841 or lia@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss the challenges facing the 
International Space Station in the wake of the Columbia accident. The 
grounding of the shuttle fleet this past February escalated concerns 
about the future of the space station--which, since its inception, has 
experienced numerous problems that have resulted in significant cost 
growth and assembly schedule slippages. The shuttle fleet has been key 
to the station's assembly and operations, and without it, the program 
must rely on Russian launch vehicles to transport crew and supplies to 
and from the station. As requested, my testimony today will discuss the 
implications of the shuttle fleet's grounding on the space station's 
schedule and cost and on the program's partner funding and agreements-
-findings we reported on to the full Committee in September 
2003.[Footnote 1]

You asked how the Congress can assess the cultural changes that the 
National Aeronautics and Space Administration (NASA) is considering as 
the agency proceeds with its efforts to safely return the shuttle fleet 
to flight. As you know, the Columbia Accident Investigation Board 
reported in August 2003 that in addition to technical failures, 
Columbia's safety was compromised in part by the shuttle program's 
fluctuating priorities and arbitrary schedule pressures to achieve 
certain space station milestones.[Footnote 2] The Board characterized 
NASA's emphasis on maintaining the launch schedule to support 
construction of the station as a "line in the sand" and found evidence 
that structural inspection requirements for the shuttle were reduced 
and other requirements were deferred in order to meet an ambitious 
schedule. NASA's recent revision to its return to flight plan 
recognizes that to ensure safety in all its programs, a cultural change 
is needed across the agency. Today, I am proposing a framework intended 
to provide NASA and the Congress with a means to assess cultural change 
in the context of NASA's overall mission.

In summary, the grounding of the shuttle fleet last February has 
basically put the space station in a survival mode. Due to the limited 
payload capacity of the Russian launch vehicles, on-orbit assembly is 
at a standstill and on-board research has been limited. Moreover, 
certain safety concerns on board the station cannot be corrected until 
the shuttle fleet returns to flight. NASA estimates that additional 
costs of maintaining the space station while the shuttle fleet is 
grounded will reach almost $100 million for fiscal years 2003 and 2004. 
However, significant additional program costs are likely to be incurred 
because completing assembly of the station will be delayed by at least 
2 years. At the same time, partner funding is uncertain--which may 
result in NASA paying a larger share of certain program costs--and 
partner agreement on the final station configuration has been delayed 
by approximately one year.

While the space station's future is clearly dependent on the shuttle 
fleet's return to flight, NASA must carefully weigh this future against 
the risks inherent in its current culture. As we reported in January 
2003, NASA's management challenges and risks reflect a deeper need for 
broad cultural change to eliminate organizational stovepipes and 
hierarchy, which have repeatedly undermined the agency's ability to 
achieve its mission.[Footnote 3] The Columbia Accident Investigation 
Board similarly found in its August 2003 report that NASA's history and 
culture resulted in organizational practices that have been detrimental 
to the shuttle fleet's safety. The cultural sea change required for 
NASA to consider the numerous technical and administrative 
recommendations made by the Board could be the agency's greatest 
challenge to date. In an effort to help NASA as it undergoes a cultural 
change--and the Congress as it assesses NASA's future corrective 
actions--we have provided a framework for establishing appropriate 
operating principles and values and program direction, securing and 
maintaining a sufficient and skilled workforce, establishing proper 
performance targets, and ensuring adequate monitoring.

Background:

In 1998, NASA and its international partners--Canada, Europe, Japan, 
and Russia--began on-orbit assembly of the International Space Station, 
envisioned as a permanently orbiting laboratory for conducting 
materials and life sciences research and earth observations under 
nearly weightless conditions. The International Space Station program 
has three key goals: (1) maintain a permanent human presence in space, 
(2) conduct world-class research in space, and (3) enhance 
international cooperation and U.S. leadership through international 
development and operations of the space station. Each of the partners 
is to provide hardware and crew, and each is expected to share 
operating costs and use of the station.[Footnote 4]

Since October 2000, the space station has been permanently occupied by 
two or three crewmembers, who maintain and operate the station and 
conduct hands-on scientific research. The space station is composed of 
numerous modules, including solar arrays for generating electricity, 
remote manipulator systems, and research facilities. The station is 
being designed as a laboratory in space for conducting experiments in 
near-zero gravity. Life sciences research on how humans adapt to long 
durations in space, biomedical research, and materials-processing 
research on new materials or processes are under way or planned. In 
addition, the station will be used for various earth science and 
observation activities. Figure 1 shows the International Space Station 
on orbit.

Figure 1: International Space Station On Orbit:

[See PDF for image]

[End of figure]

Since fiscal year 1985, the Congress has appropriated a total of about 
$32 billion for the program. When the station's current design was 
approved in 1993, NASA estimated that its cost would be $17.4 
billion.[Footnote 5] By 1998, that estimate had increased to $26.4 
billion. In January 2001, NASA announced that an additional $4 billion 
in funding over a 5-year period would be required to complete the 
station's assembly and sustain its operations. By May 2001, that 
estimated cost growth increased to $4.8 billion. In an effort to 
control space station costs, the administration announced in its 
February 2001 Budget Blueprint that it would cancel or defer some 
hardware and limit construction of the space station at a stage the 
administration calls "core complete.":

In November 2001, the International Space Station Management and Cost 
Evaluation Task Force--appointed by the NASA Administrator--made a 
number of recommendations to get costs under control. NASA implemented 
most of the recommendations, and the task force reported in December 
2002 that significant progress had been made in nearly all aspects of 
the program, including establishing a new management structure and 
strategy, program planning and performance monitoring processes, and 
metrics. NASA was postured to see results of this progress and to 
verify the sufficiency of its fiscal year 2003 budget to provide for 
the core complete version of the station when the Columbia accident 
occurred.

Grounding of the Shuttle Fleet Will Result in Additional Schedule 
Delays and Cost:

With the shuttle fleet grounded, NASA is heavily dependent on its 
international partners--especially Russia--for operations and 
logistics support for the space station. However, due to the limited 
payload capacity of the Russian space vehicles, on-orbit assembly has 
been halted. The program's priority has shifted from station 
construction and research to maintenance and safety, but these areas 
have also presented significant challenges and could further delay 
assembly of the core complete configuration. While NASA maintains that 
its fiscal year 2004 budget will remain unchanged, the schedule delays 
that have resulted from the grounding of the shuttle fleet will come at 
a cost.

Program's Priority Has Shifted From Station Construction and Research 
to Maintenance and Safety:

The space shuttle fleet has been the primary means to launch key 
hardware to the station because of its larger payload capacity. With 
the shuttle fleet grounded, current space station operations are solely 
dependent on the Russian Soyuz and Progress vehicles. Because the 
payload capacity of the Soyuz and Progress vehicles are significantly 
less than that of the U.S. shuttle fleet,[Footnote 6] operations are 
generally limited to rotating crew and transporting food, potable 
water,[Footnote 7] and other items to the station. The Russian vehicles 
are also used for logistics support.

On-orbit assembly of the station has effectively ceased. Prior to the 
Columbia accident, NASA had planned to assemble the core complete 
configuration of the station by February 2004. NASA officials estimate 
that assembly delays will be at least a "month for month" slip from the 
previous schedule, depending on the frequency of flights when the 
shuttles resume operations. Assuming a return to flight around fall 
2004, the core complete configuration would not be assembled before 
early 2006.

While the space station crew's primary responsibility is to perform 
routine maintenance, the two crewmembers on board will conduct some 
research, according to an interim space station research plan developed 
by NASA. However, due to the grounding of the shuttle fleet and the 
station's reliance on the Russian vehicles, this research will be 
curtailed. For example:

* Outfitting of U.S. research facilities halted: Currently, 7 of the 20 
planned research facilities are on orbit. With the fleet grounded, 
three major research facilities--which, according to NASA, complete the 
outfitting of the U.S. laboratory--could not be launched in March of 
this year, as planned.[Footnote 8] At this time, it remains unknown 
when the full configuration of the 20 research facilities will be on 
board the station.

* Existing hardware failures: Because new and additional hardware 
cannot be transported, NASA has to rely more heavily on existing on-
orbit science facilities--facilities that have already experienced some 
failures. For example, the refrigerator-freezers on board the station, 
which serve as the main cold storage units, have failed several times, 
according to NASA officials. A larger cold temperature facility was one 
of three facilities that had been planned for launch in March 2003.

* Limited science material: Currently, there are very limited 
allocations for science materials to be transported to or from the 
space station by the Russian Soyuz and Progress vehicles.[Footnote 9] 
According to NASA officials, they plan to send about 93 kilograms (just 
over 200 pounds) of science material to the station on the next 
Progress vehicle scheduled for launch in January 2004. However, 
returning samples from investigations will be delayed until the shuttle 
fleet returns to flight because of the Soyuz's limited storage 
capacity.

NASA also cannot resolve known safety concerns on board the station 
while the shuttle fleet is grounded. For example, NASA has had to delay 
plans to fly additional shielding to protect the on-orbit Russian 
Service Module from space debris--a risk that increases each year the 
shielding is not installed. NASA is studying alternatives for launching 
and installing the debris protection panels earlier than currently 
planned. In addition, a failed on-orbit gyro--one of four that 
maintains the station's orbital stability and control--remains on board 
because the shuttle flight that was to carry a replacement gyro to the 
station and return the failed unit for detailed analysis was planned 
for March of this year--1 month after the grounding of the shuttle 
fleet.

Cost Implications Have Yet to Be Determined, but Increases Are Likely:

To date, NASA has not fully estimated the potential increased costs and 
future budget impact incurred due to the grounding of the space shuttle 
fleet. However, it has identified a number of factors that will likely 
result in increased costs--including the need to extend contracts to 
complete development and assembly of the station.

NASA has requested $1.71 billion for fiscal year 2004 for the space 
station. The request is based, in part, on near completion of the 
hardware development for the U.S. core configuration and the transition 
to on-orbit operations. Soon after the Columbia accident, NASA stated 
that it would maintain budget requests at current levels until the 
shuttle returns to flight. NASA estimates the impact to the station 
program from the Columbia accident to be $22 million in fiscal year 
2003 and up to $72 million in fiscal year 2004. NASA maintains that an 
assessment of total impact cannot be accomplished prior to the fiscal 
year 2006 budget submission in February 2005.

However, the considerable uncertainty about when the shuttle will 
return to flight, what the payload capability will be, and how many 
flights can be achieved each year greatly impact the total cost to the 
station program. NASA anticipates that by keeping a crew on board the 
station while the shuttle fleet is grounded and the continued 
development of space station hardware will incur additional costs. For 
example, NASA officials told us there are approximately 80,000 pounds 
of hardware at Kennedy Space Station ready for integration to the space 
station and another 106,000 pounds there being processed.

Uncertainty of the Shuttle's Return-to-Flight Date Delays Partner 
Agreements:

While long-term plans are not well defined at this time, alternative 
funding may be needed to sustain the station--let alone achieve the 
station's intended goals. International agreements governing the space 
station partnership specify that the space agencies of the United 
States, Canada, Europe, and Japan are responsible for funding the 
operations and maintenance of the elements that each contributes, the 
research activities each conducts, and a share of common operating 
costs. Under current planning, NASA will fund the entire cost of common 
supplies and ground operations, then be reimbursed by the other 
partners for their shares. Depending on contributions made by the 
partners while the shuttle fleet is grounded, the share that each 
partner contributes to the common operations costs may have to be 
adjusted and could result in NASA's paying a larger share of those 
costs. For example, the European Automated Transfer Vehicle is 
scheduled to begin flying in September 2004. If that vehicle takes on a 
larger role in supporting the station than currently planned, the 
European share of common operations costs could be reduced with the 
other partners paying more.

At the same time, NASA and its partners must develop a plan for 
assembling the partners' modules and reaching agreement on the final 
station configuration. Prior to the Columbia accident, options for the 
final on-orbit configuration were being studied, and a decision was 
planned for December 2003. NASA officials told us the process has been 
delayed, and NASA and its partners agreed on a program action plan in 
October 2003 that will ultimately lead to an agreement on the final on-
orbit configuration in December 2004.

Proposed Framework for Guiding and Assessing Cultural Change:

Clearly, the space station's future is dependent on the shuttle fleet's 
safe return to flight. In the past, we have reported on challenges 
facing NASA's shuttle program--especially in maintaining an adequate 
shuttle workforce.[Footnote 10] In January 2003, we reported that NASA 
needed to shift its overall orientation from processes to results, 
organizational stovepipes to matrixes, management hierarchy and control 
to flatter structures and employee empowerment, and reactive behavior 
to proactive approaches. The Columbia Accident Investigation Board's 
report and recommendations similarly indicate that needed improvements 
to the shuttle program go beyond technical enhancements and procedural 
modifications. Specifically, the Board found that despite several 
schedule slippages and rapidly diminishing schedule margins, NASA 
remained committed to 10 shuttle launches in less than 16 months to 
achieve the space station's core complete status by February 2004--a 
target date set in mid 2001. According to the Board, this schedule-
driven environment influenced managers' decisions about the potential 
risks to the shuttle if a piece of foam struck the orbiter--an event 
that had occurred during an October 2002 shuttle flight and one that 
was ultimately identified as the technical cause behind Columbia's 
breakup. The Board concluded that cultural issues--including lapses in 
leadership and communication, a dogged "can do" attitude, and reliance 
on past successes--were critical factors that contributed to the 
accident.

In its September 8, 2003, response to the Board's findings,[Footnote 
11] NASA stated that it would pursue an in-depth assessment to identify 
and define areas where the agency's culture can be improved and take 
aggressive action." NASA indicated that it would take actions to 
achieve several goals:

* Create a culture that values effective communication and remove 
barriers to the expression of dissenting views.

* Increase its focus on the human element of change management and 
organizational development.

* Ensure that existing procedures are complete, accurate, fully 
understood, and followed.

* Create a robust system that institutionalizes checks and balances to 
ensure the maintenance of the agency's technical and safety standards.

Most recently, on October 15, 2003, NASA indicated that the agency is 
also assessing if cultural change is needed agency-wide. However, the 
agency offered no further details beyond its previous commitments.

As NASA works to change its culture, and as the Congress assesses the 
adequacy of NASA's corrective actions, applying a framework could prove 
beneficial. Such a framework should recognize NASA's operating 
principles and values, describe the direction of NASA's programs, focus 
attention on securing and maintaining skills for its employees, provide 
safety targets, show key results, and acknowledge the importance of 
internal and external review. The following framework--similar in 
concept to GAO's framework for ensuring the quality of its work--is 
anchored in four main areas: leadership, human capital, program 
performance, and monitoring and review.

Figure 2: Framework for Quality:

[See PDF for image]

[End of figure]

* Leadership: The leadership anchor encompasses the agency's core 
values, including safety as NASA's highest priority; and the 
expectations that top management sets, such as stressing the importance 
of character, integrity, and support of safety assurance measures. This 
anchor also stresses the need to encourage staff to raise safety 
concerns, regardless of the staff member's formal organizational 
relationships or job responsibilities. Strategic planning and 
stakeholder consultation have importance only if championed by NASA's 
leadership. The leadership anchor helps address the question "What do 
we do?":

* Human Capital: Securing and assigning skilled staff, understanding 
short-and long-term skill deficiencies, establishing and maintaining 
skills, as well as assessing individual employee performance are major 
components of a comprehensive human capital anchor. NASA's efforts at 
developing a strategic human capital plan and legislative proposals 
related to human capital would be included in this anchor. The human 
capital anchor helps address the question "Who will do it?":

* Program Performance: While the primary focus of program performance 
is often related to mission-related activities, such as flight 
processing and major modifications, effective program performance also 
measures results achieved, oversight of contractors, infrastructure 
maintenance, and sound financial management to provide decision makers 
with accurate information with which to make resource tradeoffs and 
long-term investments. The program performance anchor helps address the 
question "How do we translate what we do into processes and procedures-
-that is, how do we operationalize our work?":

* Monitoring and Review: The oversight and enforcement of safety is a 
shared responsibility between program officials, Associate 
Administrators, the NASA Administrator, and independent groups such as 
non-advocate reviews and the Aerospace Safety Advisory Panel. The 
monitoring and review anchor helps address the question "How is this 
reinforced?":

We believe this framework can serve to identify the priorities agency 
leadership must communicate, the human capital activities needed to 
ensure that expected employee performance is achieved, the safety 
processes and procedures that need to be operationalized as part of 
program performance, and the scope of enforcement responsibilities. As 
such, use of this framework can help the Congress monitor the 
corrective actions NASA will undertake to strengthen the agency's 
culture.

Mr. Chairman, this concludes my prepared statement. I will be happy to 
answer any questions you or other members of the subcommittee may have.

Contact and Acknowledgments For future information, please contact 
Allen Li at (202) 512-4841 or lia@gao.gov. Individuals making key 
contributions to this testimony include Jerry Herley, James Beard, Rick 
Cederholm, and Karen Sloan.

FOOTNOTES

[1] U.S. General Accounting Office, Space Station: Impact of the 
Grounding of the Shuttle Fleet, GAO-03-1107 (Washington, D.C.: Sept.12, 
2003).

[2] Columbia Accident Investigation Board, Report Volume 1 (Washington, 
D.C.: Aug. 2003).

[3] U.S. General Accounting Office, Major Management Challenges and 
Program Risks: National Aeronautics and Space Administration, 
GAO-03-114 (Washington, D.C.: Jan. 2003).

[4] In 1996, NASA and the Russian Aviation and Space Agency signed a 
"balance protocol" listing the services that each side would provide to 
the other during assembly and operations. 

[5] All amounts are stated in current-year dollars.

[6] At about 36,000 pounds, the shuttle's payload capacity is roughly 7 
times that of Russia's Progress vehicle and almost 35 times the payload 
capacity of its Soyuz vehicle. 

[7] Potable water is a constraint to sustaining station operations. For 
example, crewmembers currently have a limit of two liters of water per 
day per crewmember.

[8] The research facilities that were packed in a logistics module 
awaiting launch had to be removed from the flight module and serviced. 

[9] Currently, science material is flown on a space and weight 
available basis. For example, if food or other life support items were 
not depleted between flights, science material might be transported.

[10] U.S. General Accounting Office, Space Shuttle: Human Capital and 
Safety Upgrade Challenges Require Continued Attention, GAO/NSIAD/
GGD-00-186 (Washington, D.C.: Aug. 15, 2000). 

[11] See NASA, NASA's Implementation Plan for Space Station Return to 
Flight and Beyond (Oct., 2003).