Space Shuttle:

Incomplete Data and Funding Approach Increase Cost Risk for Upgrade Program

NSIAD-94-23: Published: May 26, 1994. Publicly Released: Jun 27, 1994.

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Pursuant to a congressional request, GAO reviewed the National Aeronautics and Space Administration's (NASA) Space Shuttle program, focusing on NASA: (1) assumptions regarding the length of time the current Shuttle fleet will remain operational; and (2) processes and criteria for selecting needed safety and obsolescence upgrades.

GAO found that: (1) NASA has not made explicit assumptions about the current Shuttle fleet's operational status, but NASA budget projections and the new launch system approach suggest that the fleet cannot be replaced for at least another 12 to 15 years; (2) NASA does not plan to decide on a Shuttle replacement, which will take 7 to 10 years to develop, until at least 1998; (3) NASA has concluded that the best option is to develop a fully reusable single-stage-to-orbit launch vehicle fleet and phase out Shuttle use by 2008; (4) the NASA budget cannot simultaneously support development of the Space Station and a new launch system; (5) NASA does not always consider life-cycle cost as a criterion for evaluating potential safety upgrades or alternative approaches when selecting improvements; (6) NASA managers do not have a precise basis for estimating life-cycle costs because of the uncertainty about how long the current fleet will be operational, but NASA could use the 12-to-15-year operational period as a minimum basis for estimating life-cycle costs; and (7) the NASA approach to funding its shuttle upgrade program could increase program risks because of inadequate funding for approved upgrade projects, early design studies of other improvements, and unforseen contingencies.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: NASA agreed to use a 12 to 15 year timeframe in its life cycle cost analyses of space shuttle upgrades.

    Recommendation: Since NASA will have to use the Shuttle for at least 12 to 15 years, the Administrator, NASA, should direct Shuttle program managers to use that time frame as a basis for estimating the life-cycle costs of proposed upgrades. However, if circumstances change where the Shuttle would be used for a shorter or longer time frame, it may be necessary to reevaluate life-cycle costs of the upgrade.

    Agency Affected: National Aeronautics and Space Administration

  2. Status: Closed - Implemented

    Comments: NASA agreed to include alternatives in its life cycle analyses when reasonable alternatives are available.

    Recommendation: The Administrator, NASA, should require decision justifications that include life-cycle cost analysis of alternatives before requesting authority to start new Shuttle upgrade projects.

    Agency Affected: National Aeronautics and Space Administration

  3. Status: Closed - Implemented

    Comments: NASA agreed to assess the risk of having small reserves and evaluate the need to increase funding of early design studies.

    Recommendation: The Administrator, NASA, should require an assessment of the risk associated with not providing funds for early design studies and contingency reserves and consider whether in light of these risks the agency should begin two new upgrades in fiscal year 1995.

    Agency Affected: National Aeronautics and Space Administration


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