Space Station: Cost Control Difficulties Continue

GAO discussed the risks involved in controlling the cost and maintaining the schedule of the National Aeronautics and Space Administration's (NASA) International Space Station Program. GAO noted that: (1) it will cost $17.4 billion to develop and operate the international space station; (2) $6.3 billion of this estimate covers the prime contractor's costs, $5.5 billion is for development of ground-based and on-orbit capabilities, $2.6 billion is for development of on-orbit research facilities and other research, and $3 billion is for financial reserves; (3) the program has been able to maintain sufficient reserves to fund additional station costs; (5) NASA did not budget the full amount of its contract estimates because it believes that it can negotiate authorized contract changes; (6) as of April 1996, the prime contractor was $89 million over budget and $88 million behind schedule; (7) there are several instances where the prime contractor's total cost estimates neglect to recognize over-budget conditions; (8) there is concern regarding Russia's financial participation in the space program; and (9) NASA has made progress towards ensuring that its contractors have an adequate performance measurement system.