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NASA Acquisition Management

This information appears as published in the 2017 High Risk Report.

View the 2017 Report

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The National Aeronautics and Space Administration (NASA) plans to invest billions of dollars in the coming years to explore space, understand Earth’s environment, and conduct aeronautics research. 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. Our work has shown that NASA has made progress over the past 5 years in a number of key acquisition management areas, but it faces significant challenges in some of its major projects largely driven by the need to improve the completeness and reliability of its cost and schedule estimating, estimating risks associated with the development of its major systems, and managing to aggressive schedules.

NASA Acquisition Management

NASA has continued to strengthen and integrate its acquisition management functions, resulting in the agency continuing to meet three criteria for removal from our High-Risk List: leadership commitment, a corrective action plan, and monitoring. For example, NASA has established metrics to monitor progress in improving acquisition management, and in recent years, we have found that many of the projects within the agency’s major project portfolio have improved their cost and schedule performance.[1] NASA’s metrics include cost and schedule performance indicators and we have found that NASA’s performance metrics generally reflect improved performance. These actions have helped NASA to create better baseline estimates and track performance such that NASA has been able to launch more projects on time and within cost estimates.

Although NASA has taken steps toward meeting our criteria for capacity by issuing guidance and implementing tools to reduce acquisition risk, our reviews have found that these efforts have not always been consistent with best practices in areas such as cost and schedule estimating and earned value management (EVM). Finally, while the agency has taken steps to demonstrate progress toward improving acquisition outcomes overall, we found that NASA continues to face significant challenges in its ability to manage and oversee its most expensive and complex projects, most notably its human spaceflight development programs. NASA must ensure that it conducts adequate and ongoing assessments of risks and understands the long-term costs for its larger human exploration programs, as the effects of any potential miscalculations could be felt across NASA’s portfolio. Such efforts should help maximize improvements and to demonstrate that the improved cost and schedule performance will be sustained, even for the agency’s most expensive and complex projects.

In our 2015 high-risk update, we found that NASA has satisfied our high-risk criteria for the areas of leadership commitment, monitoring, and an action plan.[2] We believe NASA’s progress in these areas is reflected in the improved cost and schedule performance of NASA’s portfolio of major acquisition projects, which includes projects with a life-cycle cost of more than $250 million. For example, in 2016, overall development cost growth for the portfolio of 12 development projects fell to 1.3 percent and launch delays averaged 4 months.[3] Both of these measures are at or near the lowest levels we have reported since we began our annual assessments in 2009.[4] These measures exclude the James Webb Space Telescope (JWST), which NASA rebaselined in September 2011 with significant cost increase and schedule delays.[5] As of December 2016, we found that program continues to meet its revised cost and schedule commitments.[6]

[1] GAO, NASA: Assessments of Major Projects, GAO-16-309SP (Washington, D.C.: Mar. 30, 2016); NASA: Assessments of Selected Large-Scale Projects, GAO-15-320SP (Washington, D.C.: Mar. 24, 2015); and NASA: Assessments of Selected Large-Scale Projects, GAO-14-338SP (Washington, D.C.: Apr. 15, 2014).

[2] GAO, High-Risk Series: An Update, GAO-15-290 (Washington, D.C.: Feb. 11, 2015).

[3] GAO-16-309SP.

[4] The explanatory statement of the House Committee on Appropriations accompanying the Consolidated Appropriations Act of 2008 directed us to prepare project status reports on selected large-scale NASA programs, projects, or activities—which we began in 2009. Each assessment is presented in a two-page summary that analyzes the project’s cost and schedule status and project challenges. We also provide general observations about the performance of NASA’s major projects and the agency’s management of those projects during development.

[5] NASA projects are rebaselined when their estimated development cost exceeds NASA’s baseline commitment development cost by 30 percent or more and Congress has reauthorized the project; events external to NASA make a rebaseline appropriate; or a NASA associate administrator determines that the project’s scope changed from the approved project baseline. NASA rebaselined the JWST program in 2011 with an estimated cost of $8.8 billion—a 78 percent increase over its fiscal year 2009 baseline—and a planned launch date of October 2018, a 52-month delay from its baseline. We excluded JWST cost and schedule growth from the calculations of the portfolio because including its cost and schedule growth masks any changes in the rest of the portfolio, as the magnitude of JWST, in terms of both schedule and cost growth, is larger than the other projects in the portfolio that are in implementation.

[6] GAO, James Webb Space Telescope: Project Meeting Cost and Schedule Commitments but Continues to Use Reserves to Address Challenges, GAO-17-71 (Washington, D.C.: Dec. 7, 2016).

Additional Details on What GAO Found are in the full report.

NASA manages a portfolio of projects that will always have inherent technical, design, and integration risks because its projects are complex, specialized, and often push the state of the art in space technology. NASA has already taken steps to reduce acquisition risk from both a technical and management standpoint. The next few years will certainly test the extent to which these measures have taken hold in NASA’s largest programs. However, more needs to be done with respect to anticipating and mitigating risks—especially with regard to large programs, estimating and forecasting costs for its largest projects, and implementing management tools. Actions that will be critical to improving NASA’s acquisition outcomes include the following:

  • Ensure that NASA conducts adequate and ongoing assessments of risks for larger programs—JWST, Space Launch System (SLS), Orion Multi-Purpose Crew Vehicle (Orion), and Exploration Ground Systems (EGS)—especially since each of these programs is at a different critical point in development and implementation, and the impacts of any potential miscalculations will be felt across NASA’s portfolio.
  • Ensure that NASA understands long-term human exploration program costs. While the three major exploration programs have been baselined, none of the three programs have a baseline that covers activities beyond the second planned flight. Long-term estimates, which could be revised as potential mission paths are narrowed and selected, would provide decision makers with a more informed understanding of costs and schedules associated with potential agency development paths.
  • Ensure that the Orion program analyzes the cost of deferred work in relation to levels of management reserves and unallocated future expenses, and actual contractor performance, and report the results of that analysis to NASA management.
  • Ensure that rebaselined projects report cost and schedule growth from original baselines in order to provide stakeholders and Congress with a more accurate view of project performance and to enhance accountability.
  • Ensure that program offices regularly and consistently update their Joint Cost and Schedule Confidence Levels (JCL) across the portfolio.  As a project reaches the later stages of development, especially integration and testing, its risk posture may change. An updated project JCL would provide both project and agency management with data on relevant risks that can guide project decisions.
  • Ensure that NASA continues its efforts to build capacity in areas such as cost and schedule estimating, and measuring contractor performance.
  • Revisit schedules to ensure programs have fully considered the effects of managing programs in order to meet aggressive schedule dates.

Our ongoing work assessing Commercial Crew, EGS, Orion, SLS, JWST, and the performance of the portfolio as a whole will provide insight into how well NASA is performing over the next several years.

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, Acquisition and Sourcing Management
    • (202) 512-4841