Space Shuttle:

NASA Must Reduce Costs Further to Operate Within Future Projected Funds

NSIAD-95-118: Published: Jun 15, 1995. Publicly Released: Aug 1, 1995.

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Louis J. Rodrigues
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Pursuant to a congressional request, GAO reviewed the National Aeronautics and Space Administration's (NASA) efforts to reduce space shuttle operating costs, focusing on the: (1) potential for further cost reductions; and (2) impact of cost reductions on shuttle safety.

GAO found that: (1) NASA has reduced its cumulative funding for shuttle operations by 22 percent from fiscal years (FY) 1992 to 1995 and its actual operating costs by 8.5 percent between FY 1992 and 1994; (2) additional funding reductions are needed to achieve NASA future budget projections, since program requirements will exceed budget estimates by at least 10 percent in FY 1996 through 2000; (3) it is unclear how NASA will further reduce its funding for shuttle operations; (4) if NASA cannot reduce its shuttle operating costs to match available funds in FY 1996 through 1999, the NASA budget must be increased or other program funding will have to be cut; and (5) although NASA has adequately considered shuttle safety in implementing these cost reductions, it is difficult for NASA to know how much further it can reduce costs without affecting safety.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: NASA claims that it has eliminated all unresolved budget reductions and, therefore, there is nothing to report.

    Recommendation: The Administrator, NASA, should specifically identify any significant unresolved reductions that remain so that Congress can provide oversight and make informed budget decisions.

    Agency Affected: National Aeronautics and Space Administration

  2. Status: Closed - Implemented

    Comments: NASA requested that the Aerospace Safety Advisory Council review the cost reduction actions that NASA should take in the future. The Council's report was issued in November 1996.

    Recommendation: The Administrator, NASA, should request an independent organization, such as the National Research Council, to review significant cost reduction actions to be taken in the future. This organization could bring added objectivity because it would not be subject to the same cost reduction measures that all NASA employees are experiencing.

    Agency Affected: National Aeronautics and Space Administration


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