Space Station

Estimated Total U.S. Funding Requirements Gao ID: NSIAD-95-163 June 12, 1995

GAO estimates that it will cost about $94 billion to design and launch the space station through 2012. Although the program has made great progress since last year in defining its requirements, meeting its schedule milestones, and remaining within its annual operating budgets, the program still faces formidable challenges in meeting all its goals on time and within budget. Moreover, low financial reserves through fiscal year 1997 could lead to cost overruns and force postponement of some activities. In addition, the space station's current launch and assembly schedule is ambitious, and the shuttle program may have difficulty supporting it. If the contractor is unable to negotiate subcontractor agreements for the expected price, the target cost for the prime contract could increase. NASA plans to complete an independent internal assessment of space station costs later this fiscal year.

GAO found that: (1) the amount of U.S. funds it estimates are required to design, launch, and operate the International Space Station will total about $94 billion through 2012, about $77 billion in fiscal year (FY) 1995 constant dollars, which may decrease to the extent that NASA accomplishes its goal for achieving station operational efficiencies over the period 2003 to 2012, or that efficiencies currently being studied in the space shuttle program materialize; (2) the program has made progress in defining its requirements, meeting scheduled milestones, and remaining within its annual operating budgets, but it faces challenges in completing all its tasks on schedule and within budget; (3) program estimates through FY 1997 show limited annual financial reserves, about 6 to 11 percent of estimated costs, which are even lower when reduced by the estimated value of pending items that have a medium to high probability of being added to the program; (4) inadequate reserves would hinder program managers' ability to cope with unanticipated technical problems and, if a problem could not be covered by available reserves, program managers could be faced with either spending more than planned on the program or deferring or rephasing other activities, thus possibly delaying the space station's development schedule or increasing its future cost; (5) the space station's current launch and assembly schedule is ambitious, and the shuttle program may have difficulty supporting it; (6) the prime contract target cost could increase if the contractor is unable to negotiate subcontractor agreements for the expected price; and (7) NASA plans to complete an independent internal assessment of space station program costs later in FY 1995.



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