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NASA Acquisition Management

In light of deteriorating cost and schedule performance, the National Aeronautics and Space Administration (NASA) needs to address management weaknesses and implement an action plan.

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NASA plans to invest billions of dollars in the coming years to explore space, and conduct aeronautics research, among other things. We designated NASA’s acquisition management as high-risk in 1990 in view of NASA’s history of persistent cost growth and schedule delays in the majority of its major projects. We have identified management weaknesses that have exacerbated the inherent technical and engineering risks faced by NASA’s largest projects.

In more recent years, we found that NASA had taken steps to improve its management of its major projects—those projects and programs with an estimated life-cycle cost over $250 million. However, we reported in May 2018 that the cost and schedule performance of NASA’s portfolio of major projects deteriorated. One of NASA’s largest projects, the James Webb Space Telescope, has experienced delays of 81 months and cost growth of 95 percent since 2009.

In 2018, we found that additional cost and schedule growth is likely for the portfolio. Many major projects, including some of the most expensive ones, are in the phase of their life cycles when cost and schedule growth is most likely. Further, NASA faces significant challenges largely driven by the need to improve the completeness and reliability of its cost and schedule estimates, update cost and schedule estimates as new risks emerge, and ensure that programmatic decisions are not increasing risks to projects.

NASA Acquisition Management

Since our 2017 High-Risk Report, we have lowered two criteria ratings for NASA’s acquisition management from met to partially met—leadership commitment and monitoring. Our assessment of the other three criteria remains the same. Capacity and demonstrated progress remain partially met and corrective action plan remains met.
Leadership commitment: partially met. NASA is no longer fully meeting the criteria for leadership commitment because of 1) a lack of transparency in major project cost and schedules, especially for its human spaceflight programs, 2) a lack of information on long-term human exploration program costs, and 3) leadership approval of risky programmatic decisions for complex major projects. When we determined that NASA met the criteria in 2015, NASA’s senior leadership had implemented key components of the agency’s action plan, which had resulted in improvements in the cost and schedule performance of its major projects for several years. Specifically, NASA is no longer meeting the criteria for leadership commitment in 2019 for the following reasons:
  • In our May 2018 assessment of major projects, we were unable to determine the cost performance for NASA’s portfolio of major projects for the first time because NASA lacked a current cost estimate for its Orion Multi-Purpose Crew Vehicle (Orion)—one of the largest projects in the portfolio. In addition, the approved cost estimate for the Space Network Ground Segment Sustainment project underestimated the expected life-cycle cost because it did not include the full scope of the project’s effort.

    Further, we reported in July 2018 that the Commercial Crew Program did not provide Congress with the results of its schedule analysis showing a risk of schedule delays beyond what each of its two contractors’ had previously provided. As a result, Congress does not have complete information for decision-making regarding U.S. access to the International Space Station.
  • NASA has not taken action on several recommendations we made related to understanding the long-term costs of its human exploration programs. For example, two human spaceflight programs—Exploration Ground Systems (EGS) and Space Launch System (SLS)—do not have a cost and schedule baseline that covers activities beyond the first planned flight. In addition, the third program—Orion—does not have a baseline beyond the second planned flight. As a result, NASA is now committing itself to spend billions of dollars for missions that do not have a cost and schedule baseline against which to assess progress.
  • NASA leadership has approved programmatic decisions that compounded technical challenges. These decisions included establishing insufficient cost and schedule reserves, operating under aggressive schedules, and not following best practices for establishing reliable cost and schedule baselines for some of its most expensive major projects, including Orion, SLS, and the James Webb Space Telescope. As a result, these programs have been at risk of cost growth and schedule delays since NASA approved their baselines.

    Further, the Mars 2020 project experienced cost growth stemming from technical challenges on a technology demonstration instrument designed to convert carbon dioxide to oxygen. NASA approved the project to proceed through its preliminary design review without maturing a critical technology for this instrument. In our prior work on best practices for systems entering product development, we have found that such decisions can increase risk for these systems.
Capacity: partially met. NASA has taken steps to build capacity to reduce acquisition risk including updating tools aimed at improving cost and schedule estimates but continues to experience challenges. For example:
  • NASA has not always followed best practices in areas such as estimating costs and schedules and earned value management, and projects are reluctant to update their cost and schedule estimates as new risks emerge. For example, NASA partially agreed with our July 2016 recommendation that the Orion program should update its joint cost and schedule confidence analysis—a point-in-time estimate that, among other things, includes all cost and schedule elements, and incorporates and quantifies known risks that support each program’s cost and schedule baseline. In January 2018, however, NASA officials stated that they have no plans to update this analysis. An updated analysis would be beneficial given numerous conditions and risks have changed since the analysis was completed, including delays to its first planned flight.
  • In our May 2018 assessment of major projects, we found that several NASA major projects experienced workforce challenges, including not having enough staff or staff with the right skills. NASA has also identified capability gaps in areas such as scheduling, earned value management, and cost estimating, and has efforts underway to try to improve capacity in these areas.
Action plan: met. NASA is meeting the criteria for a corrective action plan as the agency finalized a new plan in December 2018. NASA determined that it was necessary to develop a new plan because several of its highest-profile missions recently experienced cost and schedule growth. The plan contains several initiatives that could help the agency manage its acquisitions, if implemented. For example, NASA plans to implement a training program to increase the agency’s programmatic capabilities, including those related to cost and schedule estimation and assessment. In addition, the agency plans to establish new requirements for projects over $1 billion to conduct a joint cost and schedule confidence level assessment at additional reviews throughout a project’s lifecycle, or as required by the Associate Administrator. Further, the plan includes an effort to improve portfolio analysis and planning for NASA human spaceflight programs by enhancing cross-portfolio assessments. We plan to follow up with NASA to better understand how this effort could help improve outcomes for these programs and enhance transparency into human exploration program costs.
Monitoring: partially met. NASA is no longer fully meeting the criteria for monitoring because it will need to institute a program for monitoring and independently validating the effectiveness and sustainability of corrective action measures in conjunction with its new action plan. NASA has been reporting metrics for its prior action plan to us on a semiannual basis; however, the agency is not performing within some of the parameters outlined in the plan—such as meeting metrics for cost and schedule performance. In addition, NASA officials stated that they plan to revise these metrics because they are outdated.
Demonstrated progress: partially met. We reported in May 2018 that the cost and schedule performance of NASA’s portfolio of major projects had deteriorated. The average launch delay increased from 7 months in our May 2017 report to 12 months in our May 2018 report. As mentioned above, we were not able to determine the extent of cost performance deterioration because NASA lacked a current cost estimate for its Orion crew capsule. Even without including expected Orion cost growth, the overall development cost growth for the portfolio of 17 development projects increased to 18.8 percent, up from 15.6 percent in 2017. We found that the decline in cost and schedule performance was driven by major projects encountering technical issues that were compounded by risky program management decisions; technical challenges that resulted in delays in the integration and test phase; and factors largely outside of the projects’ control, such as delays related to their launch vehicles.
In addition, NASA approved new cost and schedule commitments for the James Webb Space Telescope project in June 2018. As a result, the project has experienced total schedule delays of 81 months and cost growth of 95 percent since the project’s cost and schedule baseline was first established in 2009. The project office updated its cost and schedule estimates after experiencing a series of delays largely due to complications with spacecraft element integration, and various technical and workmanship issues. The project’s ability to execute to its new schedule will continue to be tested through the remainder of its challenging integration and test phase, which includes executing several first-time activities such as integrating the spacecraft and telescope elements.   
Further, we reported in May 2018 that NASA’s portfolio of major projects was at risk for continued cost growth and schedule delays as new, large, and complex projects enter the portfolio and expensive projects remain in the portfolio for longer than expected. For example, NASA expects to begin development on a lunar Gateway—currently being discussed as a platform in a lunar orbit to mature deep space exploration capabilities.

Since we initially designated this area as high-risk, we have made numerous recommendations. As of December 2018, 15 recommendations related to this high-risk area remain open. Of the 9 recommendations we have made since the last high-risk update in February 2017, 6 remain open.

NASA should take action in the following areas to reduce acquisition risk to its portfolio of major projects and demonstrate progress.

  • Increase transparency of project costs and decline to approve cost and schedule baselines or programmatic decisions that increase risk to projects. This includes not approving project cost and schedule baselines that do not meet best practices and that do not have adequate cost and schedule reserves.
  • Implement recommendations related to the long-term costs of its human exploration programs. This will be especially important for NASA to determine the affordability of its portfolio, especially now that it plans to begin developing other large, complex projects.
  • Build capacity by ensuring that NASA’s workforce has the right skills to develop project cost and schedule estimates that meet best practices.
  • Ensure that NASA updates project cost and schedule estimates as risks change.
  • Implement the new corrective action plan and track progress against it. Continue to develop and refine outcome metrics for the human spaceflight portfolio analysis and planning effort to provide better metrics to assess improvements in program outcomes.
  • In conjunction with its new corrective action plan, institute a program for monitoring and independently validating the effectiveness and sustainability of corrective measures.

Congressional Actions Needed

In October 2017, we raised a matter for Congressional consideration that Congress should consider requiring the NASA Administrator to direct the Exploration Systems Development organization within the Human Exploration and Operations Mission Directorate to establish separate cost and schedule baselines for work required to support Space Launch System and Exploration Ground Systems for the second combined exploration mission and establish separate cost and schedule baselines for each additional capability that encompass all life-cycle costs, to include operations and sustainment. We made this a matter for Congressional consideration because NASA has not acted on our May 2014 recommendation to establish baselines for these programs or for capabilities beyond NASA’s first test flight, and does not have plans to do either.

Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.
  • portrait of Cristina T. Chaplain
    • Cristina T. Chaplain
    • Director, Contracting and National Security Acquisitions
    • (202) 512-4841