Space Shuttle

NASA Must Reduce Costs Further to Operate Within Future Projected Funds Gao ID: NSIAD-95-118 June 15, 1995

The space shuttle is the single most expensive program in NASA's budget. In fiscal year 1992, NASA set a goal of substantially reducing the costs to operate the shuttle to provide more funding for other programs. NASA has made substantial cuts in funding for shuttle operations and plans to make further cuts. In some cases, however, the additional reductions are not yet defined. NASA reduced cumulative funding for fiscal years 1992-95 by 22 percent from projected requirements and actual operating costs by 8.5 percent during fiscal years 1992-94--the equivalent of a 12.3 percent reduction after inflation. Additional significant cuts are needed to achieve NASA's future budget projections for shuttle operations. NASA appears to have adequately considered safety while implementing cost reductions so far. It is difficult for NASA to know how much further it can cut costs without affecting safety, however.

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

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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