NASA Supplier Base:

Challenges Exist in Transitioning from the Space Shuttle Program to the Next Generation of Human Space Flight Systems

GAO-07-940: Published: Jul 25, 2007. Publicly Released: Jul 25, 2007.

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The Space Shuttle Program is currently supported by over 1,500 active suppliers, some of whom are the only known or certified source of a particular material, part or service. The retirement of the Shuttle and transition to planned exploration activities, as called for in the President's Vision for Space Exploration, creates the need for NASA to begin making decisions today about its supplier base needs for the future. GAO was asked to (1) describe NASA's plans and processes for managing its supplier base through the Shuttle's retirement and the transition to the Constellation's exploration activities; (2) address factors that could impact the effectiveness of those plans and processes; and (3) identify any other issues that NASA will likely encounter as the agency transitions to and implements the Constellation Program.

NASA is developing and implementing transition plans and processes to manage its supplier base through the retirement of the Shuttle and transition to the next generation of human space flight systems. Such efforts include: various transition plans; a decision-making structure that should enable the agency to make necessary supplier decisions; and a communications strategy and metrics to gauge the progress of transition activities. In addition, NASA has identified risks associated with the shuttle's retirement and has begun identifying capabilities and suppliers needed for future exploration activities. While NASA has developed plans and processes aimed at effectively managing the supplier base, several factors could impact their effectiveness. NASA may have to continue funding suppliers for work that would maintain the supplier's skills and capabilities, even when they are no longer working on Shuttle operations, until Constellation officials make a decision on whether or not they will be needed for future exploration activities due to a lack of detailed program requirements. In addition, relatively few supplier-related decisions have made it through the newly created decision-making process and NASA officials acknowledge the increasing number of decisions scheduled for upcoming years have the potential to overwhelm the transition decision-making process. Other issues have been identified that NASA will have to face in order to successfully transition from the shuttle program to its next generation human space flight systems. Challenges exist in the continued use of obsolescent materials, maintaining the overall viability of the supplier base, managing the overall workforce, disposing of property and equipment, and completing environmental cleanup. NASA has not developed cost estimates for transition and retirement activities past fiscal year 2010. Without cost estimates, NASA does not have the information needed to support the budget preparation process, assess the costs of addressing its supplier challenges, or account for how NASA will fund transition and retirement activities once the Space Shuttle Program comes to an end in 2010. Such knowledge is important because NASA and Congress will need to allocate funds among many competing priorities. In addition, it will be important for NASA to adjust its cost estimates every year as NASA gains more knowledge about its transition costs.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: NASA has deferred implementation of this recommendation until the submission of its fiscal year 2010 budget request. The Consolidated Appropriations Act for FY 2008 mandated that GAO assess NASA's plans and progress in transitioning and retiring NASA's Space Shuttle Program facilities and assets. GAO initiated work on this mandate in February 2008 under Job Code 120720. On May 21, 2008, we briefed House Appropriations Committee staff on the preliminary results of this work including our finding that NASA has deferred identification of full funding needs for Space Shuttle transition and retirement until the submission of its FY 2010 Budget Request. The Committee staff asked that we draft language for the Appropriations Bill directing NASA to identify the full cost of Space Shuttle Transition and retirement activities. We provided the Committee the following language on May 28, 2008. -- "The Appropriations Committees are concerned that NASA has not yet submitted an estimate of the full costs associated with transitioning Space Shuttle assets and facilities to the next generation of human space flight systems. According to NASA officials, the Agency's estimates of the full content and cost for Space Shuttle transition and retirement, including transition of assets and facilities, will be reflected for the first time in NASA's fiscal year 2010 budget submission to Congress. The Committees know that the bulk of transition and retirement funding will be included in the Space Shuttle program portion of NASA's budget request. However, based on GAO briefings, the Committees recognize that the broad scope of transition and retirement activities will involve many actors across NASA, both inside and outside the Space Shuttle program. To ensure the Committees have a complete understanding of the full costs associated with Space Shuttle transition and retirement, the Committees direct NASA to identify, not only those funds requested under the Space Shuttle program, but also all funds requested outside of the Space Shuttle program portion of the fiscal year 2010 budget submission that will be used to support Space Shuttle transition and retirement activities. This identification should contain those funds requested under Cross-Agency Support that will also be used to support transition and retirement, including environmental compliance and remediation, of the Space Shuttle program. The Committee further directs that NASA include in its fiscal year 2010 budget submission, estimates of the gross and net proceeds from exchange sales of excess Space Shuttle equipment, estimates of the costs to maintain required facilities at Kennedy Space Center during the gap in Human Spaceflight, and estimates of the costs associated with preservation of historic properties." The Committee included this language almost verbatim in the Congressional Record and an abbreviated version in the Omnibus Appropriation Act for 2009. Our September 2008 report on the challenges NASA faces in defining the scope and costs associated with retiring the Space Shuttle program contained a similar recommendation. In July 2009, NASA provided this information to the Appropriations Committee in a report entitled "Report on Costs for Space Shuttle Transition and Retirement Activities."

    Recommendation: Given the fact that many of NASA's transition and retirement activities will continue to occur following the Shuttle retirement in 2010, it is important that NASA identify and estimate the costs associated with these activities in an accountable and transparent manner. Therefore, the NASA Administrator should direct the Exploration Systems Mission Directorate and Space Operations Mission Directorate to jointly develop cost estimates for transition and retirement activities beyond fiscal year 2010 so that, in NASA's fiscal year 2009 budget submission, NASA can include transition and retirement funding needs for the required out-years through fiscal year 2013. We would expect these estimates to be adjusted every year and have more fidelity as NASA gains more knowledge and makes more decisions.

    Agency Affected: National Aeronautics and Space Administration


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