Space Station

Contrary to NASA's recent estimate that Space Station Freedom as currently designed will cost $31.3 billion through the year 2000, GAO estimates the real cost at $43 billion, plus at least $78 billion more through 2027. NASA's estimate excludes substantial funds needed to successfully complete development and support the station during its planned 30-year life. In recent years, GAO has expressed concern that NASA has not been maintaining financial reserves commensurate with the program risks. NASA officials said in May 1993 that part of its adjustments to recent contractors' cost growth included restoring an average financial reserve margin of about 19 percent to the overall program estimates through 2000. Yet this margin is based on annual station development and operations appropriations of about $2.5 billion. Should these large annual funding levels fail to materialize, financial reserves after 1995 could not cope with problems arising during the building, testing, launching, and assembly of the station.

GAO found that: (1) the NASA cost estimate of $30 billion for the station did not include some cost elements attributable to the space station program; (2) some large NASA programs threaten to consume increasing shares of the agency's annual appropriations; (3) over $11.2 billion has been appropriated for the space station and related development through fiscal year 1993; (4) in fiscal years 1998 through 2000, all shuttle flights will be dedicated to assembling or using the existing space station design; (5) the space station program is not maintaining financial reserves to offset unanticipated program requirements, cost growth, and schedule delays; and (6) increased cost estimates for the current space station design exceed the reserves for the next 3 years.