International Space Station

The life-cycle cost is the sum of direct, indirect, recurring, and nonrecurring costs of a system during its entire life through disposal. Overall, the estimated cost to develop, assemble, and operate the space station has reached about $96 billion, an increase of almost $2 billion over GAO's last estimate made in 1995. Development costs represent the largest increase--more than 20 percent. This increase is attributable to schedule slippages, prime contract growth, additional crew return vehicle costs, and the effects of delays in the delivery of the Russian-made Service Module. Overall, the costs would have been significantly higher had there not been an offsetting reduction in shuttle support costs. The reduced shuttle costs have resulted from NASA's estimates that the average cost per flight throughout the station's era will be dramatically lower than had been estimated in 1995. GAO summarized this report in testimony before Congress; see: Space Station: U.S. Life-Cycle Funding Requirements, by Allen Li, Associate Director for Defense Acquisitions Issues, before the House Committee on Science. GAO/T-NSIAD-98-212, June 24 (nine pages).

GAO noted that: (1) life-cycle cost is the sum total of direct, indirect, recurring, and nonrecurring cost of a system over its entire life through disposal; (2) overall, the estimated U.S. cost to develop, assemble, and operate the space station is about $96 billion, an increase of almost $2 billion over GAO's last estimate made in 1995; (3) development costs represent the largest increase--more than 20 percent; (4) the development increase is attributable to schedule slippages, prime contract growth, additional crew return vehicle costs, and the effects of delays in delivery of the Russian-made Service Module; (5) overall costs would have been significantly higher had there not been an offsetting reduction in shuttle support costs; (6) a number of potential program changes could significantly increase the updated cost estimate; (7) they include the potential or additional schedule slippage and the need for shuttle launches to test and deliver the crew return vehicle; (8) at the current estimated spending rate, the program would incur additional costs of more than $100 million for every month of schedule slippage; (9) in addition, NASA may have to incur costs related to protecting the station from space debris; (10) in August 1997, the agency updated its overall space debris tracking requirement; (11) the new requirement, as it relates to supporting the space station, includes the ability to track and catalog objects as small as 1 centimeter; (12) the adequacy of the space station program's funding reserves has been a concern of GAO's; (13) the program has used, or identified potential uses for, a significant portion of its available reserves, with almost 6 years left before the last assembly flight is scheduled to be launched; (14) in October 1997, NASA granted approval to Boeing Corporation to begin tracking cost and schedule performance using a new performance measurement baseline; (15) the purpose of the change was to incorporate updated program schedules to reflect the most achievable recovery plans; (16) for reporting purposes, the change had the effect of resetting cost and schedule variances to zero; (17) the original baseline shows that the February 1998 cost variance would have been about $50 million higher than the $398 million Boeing reported prior to the change; and (18) while NASA approved the new baseline for reporting purposes, it continues to use Boeing's estimate of overrun at completion--$600 million--as the basis for calculating the contractor's incentive award fee.