Space Station

The international space station, a joint venture involving NASA, Japan, Canada, the European Space Agency, and Russia, will be a permanently orbiting laboratory used to conduct scientific research under weightless conditions. NASA estimates its share of the costs to build the space station at $17.4 billion. The space station is now scheduled to be completed by 2002. As of April 1996, the prime contract for the space station was nearly $90 million over cost and about $88 million behind schedule. Overall, the prime contract is 45-percent complete and these variances are within planned funding levels. However, many cost threats remain, and financial reserves needed for unexpected contingencies remain limited during the next several years. If available resources prove inadequate, program managers either will be forced to exceed the annual funding limitation or will have to defer or rephase other activities, potentially delaying the space station's schedule and increasing its overall cost. NASA has tried to ensure that the prime development contractors and its major subcontractors implement effective performance measurement systems for managing their contractors, but a complete performance measurement system is still not in place. Also, NASA has made slower progress implementing effective performance measurement systems on its contractors for developing ground-based and on-orbit capabilities for using and operating the space station. GAO summarized this report in testimony before Congress; see: Space Station: Cost Control Difficulties Continue, by Thomas J. Schulz, Associate Director for Defense Acquisitions Issues, before the Subcommittee on Science, Technology, and Space, Senate Committee on Commerce, Science, and Transportation. GAO/T-NSIAD-96-210, July 24 (six pages).

GAO found that: (1) over the past several years, ISS flight hardware has been produced; (2) as of April 1996, the ISS prime contract was about $89 million over cost and about $88 million behind schedule; (3) overall, the prime contract is 45-percent complete and these variances are within planned funding levels; (4) however, many cost threats to the development program remain, and financial reserves needed for unexpected contingencies remain limited over the next few years; (5) if available reserves ultimately prove inadequate, program managers would have to either exceed the annual funding limitation or defer or rephase other activities, thus possibly delaying ISS's schedule and likely increasing its overall cost; (6) NASA has made progress toward ensuring that the ISS prime development contractor and its major subcontractors implement effective performance measurement systems for managing their contracts, but a complete performance measurement system is still not in place; and (7) also, NASA has made slower progress implementing effective performance measurement systems on its contracts for developing ground-based and on-orbit capabilities for using and operating ISS.