NASA Travel
Passenger Aircraft Services Annually Cost Taxpayers Millions More Than Commercial Airlines
Gao ID: GAO-05-818 August 26, 2005
Since its creation, the National Aeronautics and Space Administration (NASA) has operated passenger aircraft services. These operations have been questioned in several prior audit reports. GAO was asked to perform a series of audits of NASA's controls to prevent fraud, waste, and abuse of taxpayer dollars. In this audit, GAO assessed (1) the relative cost of NASA passenger aircraft services in comparison with commercial costs, (2) whether NASA aircraft services were retained and operated in accordance with governmentwide guidance, and (3) the effectiveness of NASA's oversight and management of this program.
NASA-owned and -chartered passenger aircraft services provide a perquisite to employees, but cost taxpayers an estimated five times more than flying on commercial airlines. While the majority of NASA air travel is on commercial airlines, NASA employees took at least 1,188 flights using NASA passenger aircraft services during fiscal years 2003 and 2004. Use of NASA passenger aircraft services can save time, provide more flexibility to meet senior executives' schedules, and provide other less tangible and quantifiable benefits. However, GAO's analysis of available reported data related to NASA passenger aircraft services during fiscal years 2003 and 2004 showed NASA reported costs were nearly $25 million compared with estimated commercial airline coach transportation costs of about $5 million. Further, this relative cost comparison, based on available NASA reported costs, did not take into account all applicable types of costs associated with its passenger aircraft services, including, for example, depreciation associated with the estimated $14 million NASA paid in 2001 to acquire several aircraft used for passenger transportation. Consequently, NASA's passenger air transportation services are much more costly than indicated by available data. Further, NASA is currently considering additional expenditures of about $77 million to upgrade and expand its existing passenger fleet. NASA's ownership of aircraft used to provide passenger transportation conflicts with federal policy allowing agencies to own aircraft only as needed to meet specified mission requirements, such as prisoner transportation and aeronautical research. GAO's analysis of NASA passenger aircraft flights for fiscal years 2003 and 2004 showed that an estimated 86 percent--about seven out of every eight flights--were taken to support routine business operations specifically prohibited by federal policy regarding aircraft ownership, including routine site visits, meetings, speeches, and conferences. Further, agencywide oversight and management of its passenger aircraft services was not effective. NASA's ability to make informed decisions on continued ownership of its passenger aircraft fleet and on flight-by-flight justifications was impaired by the lack of reliable agencywide data on aircraft costs and other weak management oversight practices.
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.
Director:
Team:
Phone:
GAO-05-818, NASA Travel: Passenger Aircraft Services Annually Cost Taxpayers Millions More Than Commercial Airlines
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Report to Congressional Requesters:
August 2005:
NASA Travel:
Passenger Aircraft Services Annually Cost Taxpayers Millions More Than
Commercial Airlines:
GAO-05-818:
GAO Highlights:
Highlights of GAO-05-818, a report to the Committee on Homeland
Security and Governmental Affairs, U.S. Senate:
Why GAO Did This Study:
Since its creation, the National Aeronautics and Space Administration
(NASA) has operated passenger aircraft services. These operations have
been questioned in several prior audit reports. GAO was asked to
perform a series of audits of NASA‘s controls to prevent fraud, waste,
and abuse of taxpayer dollars. In this audit, GAO assessed (1) the
relative cost of NASA passenger aircraft services in comparison with
commercial costs, (2) whether NASA aircraft services were retained and
operated in accordance with governmentwide guidance, and (3) the
effectiveness of NASA‘s oversight and management of this program.
What GAO Found:
NASA-owned and -chartered passenger aircraft services provide a
perquisite to employees, but cost taxpayers an estimated five times
more than flying on commercial airlines. While the majority of NASA air
travel is on commercial airlines, NASA employees took at least 1,188
flights using NASA passenger aircraft services during fiscal years 2003
and 2004.
Example of NASA Passenger Aircraft:
[See PDF for image]
[End of figure]
Use of NASA passenger aircraft services can save time, provide more
flexibility to meet senior executives‘ schedules, and provide other
less tangible and quantifiable benefits. However, GAO‘s analysis of
available reported data related to NASA passenger aircraft services
during fiscal years 2003 and 2004 showed NASA reported costs were
nearly $25 million compared with estimated commercial airline coach
transportation costs of about $5 million. Further, this relative cost
comparison, based on available NASA reported costs, did not take into
account all applicable types of costs associated with its passenger
aircraft services, including, for example, depreciation associated with
the estimated $14 million NASA paid in 2001 to acquire several aircraft
used for passenger transportation. Consequently, NASA‘s passenger air
transportation services are much more costly than indicated by
available data. Further, NASA is currently considering additional
expenditures of about $77 million to upgrade and expand its existing
passenger fleet.
NASA‘s ownership of aircraft used to provide passenger transportation
conflicts with federal policy allowing agencies to own aircraft only as
needed to meet specified mission requirements, such as prisoner
transportation and aeronautical research. GAO‘s analysis of NASA
passenger aircraft flights for fiscal years 2003 and 2004 showed that
an estimated 86 percent”about seven out of every eight flights”were
taken to support routine business operations specifically prohibited by
federal policy regarding aircraft ownership, including routine site
visits, meetings, speeches, and conferences. Further, agencywide
oversight and management of its passenger aircraft services was not
effective. NASA‘s ability to make informed decisions on continued
ownership of its passenger aircraft fleet and on flight-by-flight
justifications was impaired by the lack of reliable agencywide data on
aircraft costs and other weak management oversight practices.
What GAO Recommends:
Because NASA management has been largely unresponsive to similar prior
recommendations, this report includes a matter for congressional
consideration concerning legislation to restrict NASA‘s ownership of
passenger aircraft and funding for passenger aircraft services to those
needed solely to meet valid mission requirements. To the extent
Congress determines NASA should retain passenger aircraft services, GAO
makes recommendations to improve program management. NASA concurred
with GAO‘s recommendations and outlined various planned actions.
Depending on NASA actions, additional congressional action may also be
needed.
www.gao.gov/cgi-bin/getrpt?GAO-05-818.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gregory Kutz at (202) 512-
9505 or kutzg@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
NASA Passenger Aircraft Costs Are Substantially More Than Commercial
Airline Costs:
NASA Passenger Aircraft Ownership to Support Routine Business Not
Justified:
Ineffective Oversight and Management of Passenger Aircraft Services:
Conclusions:
Matters for Congressional Consideration:
Recommendations:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the National Aeronautics and Space
Administration:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Comparison of Commercial and NASA Passenger Transportation
Costs by Location or Charter Provider for Fiscal Years 2003 and 2004:
Table 2: Summary of Examples of Routine Business Flights Using NASA
Passenger Aircraft during Fiscal Years 2003-2004:
Table 3: Examples of Passenger Flights Not Included in Submissions NASA
Certified as Complete:
Figures:
Figure 1: Overview of NASA-Owned Passenger Aircraft Type and Location:
Figure 2: Percentage of NASA Passenger Aircraft Flights by Purpose:
Figure 3: Percentage of NASA Passenger Aircraft Flights by Purpose
(Excluding Flights Related to the Columbia Accident):
Figure 4: Overview of NASA Methodology for Comparing Its Flight-by-
Flight Variable Costs with Commercial Flight Costs:
Letter August 26, 2005:
The Honorable Susan M. Collins:
Chairman:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Ted Stevens:
Chairman:
Committee on Commerce, Science, and Transportation:
United States Senate:
Since its creation in 1958, the National Aeronautics and Space
Administration (NASA) has owned and operated a small fleet of aircraft
to provide passenger transportation. These aircraft are in addition to
approximately 80 aircraft that NASA reported using in its research and
development and program support operations. NASA also contracted with
charter carriers or had interagency agreements with other federal
agencies to obtain additional passenger air transportation services.
Collectively, these NASA-owned and -chartered aircraft constitute
NASA's passenger aircraft services.
As we have previously reported, NASA is now contending with urgent
fiscal challenges pressuring discretionary spending--requiring it to do
more with fewer resources--as it seeks to carry out its new vision for
space exploration.[Footnote 1] In this context, you asked us to focus
on controls to prevent wasteful or abusive activity with respect to
resources allocated to NASA's passenger aircraft services. In general,
federal policy provides that agencies should operate aircraft only as
necessary to meet mission requirements, such as prisoner transportation
or aeronautical research. Federal agencies' use of aircraft has been
the subject of numerous audit reports over the years, including a 1977
GAO report[Footnote 2] that concluded that agencies should determine
whether aircraft are "essential or merely nice to have" and whether
essential work could not be accomplished some cheaper way. In this
regard, you requested that our audit address (1) the relative cost of
NASA passenger aircraft services compared with commercial coach costs,
(2) whether NASA's retention and operation of aircraft for passenger
transportation was in accordance with applicable governmentwide
guidance, and (3) the effectiveness of NASA's oversight and management
of its passenger aircraft services.
To determine and assess the relative costs of NASA's passenger aircraft
with comparable commercial airline costs, we relied primarily on
available NASA cost data. However, wherever feasible we validated
NASA's cost data with comparable independent data sources, including
industry data from the manufacturers of both the Gulfstream and
Beechcraft aircraft NASA used to provide passenger transportation
services. Specifically, we validated the cost estimates used in our
analysis with cost metrics the manufacturers reported related to their
aircraft. In addition, because NASA did not maintain centralized
agencywide data, we obtained available flight-by-flight NASA passenger
aircraft cost and usage data from source documents maintained at NASA
centers and compiled the information into our database of agencywide
information. We did not attempt to determine the validity or
appropriateness of the travel, nor did we assess whether the type and
number of personnel using NASA passenger aircraft services were
appropriate given the stated flight purposes.
Further, while our audit focused on overall management controls in
place to prevent waste concerning NASA's passenger aircraft services,
it was not designed to, nor did it include, investigations of any
specific instances of potentially abusive activity associated with
travel on NASA's passenger aircraft. Nonetheless, based on our work, it
is clear NASA's current policies and practices result in significant
waste of taxpayer funds. Furthermore, given the weaknesses we found in
the agency's controls over its passenger aircraft services, significant
abuse of such services is possible. As a result, we are planning a
separate forensic audit and investigative review in this regard and
will report separately when it is completed. Further details on our
scope and methodology are included in appendix I. We performed our work
from November 2004 through June 2005 in accordance with U.S. generally
accepted government auditing standards and our investigative work in
accordance with investigative standards prescribed by the President's
Council on Integrity and Efficiency. We received written comments on a
draft of this report from the NASA Administrator which are reprinted in
appendix II.
Results in Brief:
NASA's passenger aircraft services--including aircraft owned by NASA
and chartered through the Federal Aviation Administration (FAA), the
Department of Defense (DOD), and private charter services--cost
taxpayers at least five times more per passenger than flying on
commercial airlines. While the majority of NASA air travel is carried
out using commercial airlines, NASA-provided data showed that NASA
employees took at least 1,188 flights using NASA passenger aircraft
services during fiscal years 2003 and 2004.
An analysis of available data on the cost of these NASA passenger
aircraft flights showed NASA passenger aircraft services were about $20
million more costly than comparable commercial coach ticket costs.
Costs associated with NASA's passenger aircraft services were in the
order of $25 million, while commercial coach tickets for the same
number of travelers would have been approximately $5 million. This cost
comparison is based primarily on available NASA cost reporting.
However, NASA's passenger air transportation services are much more
costly than reported because NASA's cost reporting did not take into
account all costs applicable to NASA's passenger transportation
services, including costs associated with acquiring NASA's existing
fleet of passenger aircraft, liability insurance costs, and costs
associated with capital improvement. For example, NASA aircraft costs
disclosed in its annual reporting did not reflect depreciation
associated with NASA's 2001 aircraft acquisition of at least $13.9
million. Further, NASA's costs of owning and operating passenger
aircraft may increase significantly in the near future with about $77
million that it is considering spending to upgrade and expand its
passenger aircraft fleet. These costs include costs associated with new
aircraft to replace its existing aging fleet and installation of noise
abatement packages. If NASA incurs these additional passenger
transportation service costs, the extent to which NASA's passenger air
transportation service costs exceed commercial costs will increase
further in the near term.
While costly, using NASA-owned and -chartered passenger aircraft
provides a perquisite to NASA employees. Passenger aircraft services
can save NASA employees' time, afford greater flexibility in meeting
senior executives' schedules, and provide opportunities for other less
tangible and quantifiable benefits over using commercial airlines.
Interviewed passengers stated that, while the travel could have been
completed using commercial airlines, travel on NASA-owned or -chartered
aircraft avoided airport delays and facilitated conducting NASA
business while in-flight.
Further, NASA's ownership of aircraft to provide passenger
transportation supporting routine business operations is not consistent
with OMB policy guidance.[Footnote 3] OMB's governmentwide guidance
directs agencies to acquire and retain only the number and size
aircraft needed to meet direct mission requirements (such as counter-
narcotics activities, troop transportation, and aeronautical research).
OMB's guidance expressly provides that routine site visits, meetings,
conferences, and speeches are not within its definition of mission-
required activities. In contrast, while NASA's implementing guidance
reiterates the OMB policy prohibition on using aircraft supporting
routine business operations as a basis for continuing aircraft
ownership, its guidance also provides that mission-required use of
aircraft includes support for activities "directly related to approved
NASA programs or projects." This guidance has been interpreted to allow
acquiring and retaining aircraft for any official travel related to
NASA's programs or projects, regardless of whether the travel was
mission required.
Our analysis of available documentation on flight purposes shows that
NASA's implementation of the provision in its guidance related to using
aircraft in direct program or project support is inconsistent with OMB
policy against owning aircraft to support meetings, conferences, and
speeches. Specifically, our analysis of NASA passenger air
transportation services for fiscal years 2003 and 2004 showed that
about 86 percent of the flights were taken to support the types of
routine business operations expressly prohibited by OMB's guidance for
aircraft ownership. In effect, NASA's implementation of its guidance
has resulted in NASA owning aircraft to provide passenger
transportation for any purpose related to NASA programs or projects,
regardless of whether it could have been as efficiently and effectively
carried out using commercial airline services.
With respect to oversight of its passenger aircraft services, NASA
lacked agencywide data on costs and usage. This limited the agency's
ability to provide complete, reliable cost and usage data to NASA top
leadership and congressional decision makers for consideration in
decisions on acquiring, operating, and retaining aircraft in support of
direct mission requirements. Because all applicable agencywide costs
associated with NASA's passenger aircraft services are not accumulated
and visible to agency managers for day-to-day decision making, NASA
program directorates requesting use of the aircraft may consider them
as a "free" resource because the costs are not directly assessed
against their budgets.
Because NASA did not maintain agencywide data on passenger aircraft
usage and costs for day-to-day management, we attempted to develop our
own database capturing available NASA data on the costs and purposes of
flights taken using NASA passenger aircraft services during fiscal
years 2003 and 2004. However, while NASA certified to us that it
provided complete data on all passenger flights, a comparison with FAA
records showed that NASA records were missing data on 97 passenger
flights. Further, our database did not include passenger flights by at
least two other NASA aircraft--aircraft NASA classified as "program
support" aircraft.
Additionally, NASA's process for overseeing and managing flight-by-
flight justifications was flawed. OMB policy requires agencies to
compare applicable agency flight-by-flight variable costs for proposed
flights to commercial airline costs, and to only use its own aircraft
services for passenger transportation if such proposed usage is cost
effective. Our analysis showed that although NASA flight-by-flight
justifications were shown as and approved as cost beneficial to the
government; in fact, in the majority of the cases the flights were not
cost effective. Available flight-by-flight documentation showed that
NASA systematically understated the variable costs associated with its
passenger aircraft and overstated commercial costs through use of cost
data that were 6 years out of date and use of a largely unsupported
multiplier of 2.5 applied to salary costs for the additional time
required to fly on commercial airlines. In addition, we found
weaknesses in the processes in place at NASA centers to identify and
collect reimbursements from nonofficial travelers on NASA-owned or
chartered aircraft.
Because NASA management has taken only limited action in response to
similar prior audit recommendations in this area, this report includes
a matter for congressional consideration concerning legislation to
ensure that (1) NASA disposes of all passenger aircraft not used in
accordance with OMB's explicit policy prohibition against owning
aircraft to support travel to meetings, speeches, conferences, and
routine site visits; and (2) funding for future NASA passenger aircraft
purchases and operations is restricted to the minimum amount necessary
to meet mission requirements consistent with OMB policy guidance
restrictions. In addition, to the extent Congress determines NASA needs
to continue to retain the ability to own or charter aircraft to provide
passenger transportation services, we recommend NASA take a number of
actions directed at establishing policies and procedures necessary to
ensure that such services are carried out efficiently and effectively,
including maximizing use of flexible cost-effective arrangements to
obtain passenger air transportation to meet mission requirements.
In its comments on a draft of this report, NASA concurred with the
recommendations directed at NASA and outlined various ongoing and
planned actions, including a comprehensive study of its passenger
aircraft program to be completed by October 31, 2005. If NASA's study
referred to above is carried out effectively and fully considers the
various matters discussed in this report, it should provide the
Congress valuable information for deciding whether legislation may be
needed on this matter.
Background:
Under the provisions of the National Aeronautics and Space Act of 1958,
NASA is authorized to acquire aircraft.[Footnote 4] Since its creation,
NASA has operated a small fleet of aircraft, primarily to provide
passenger transportation. According to the 2004 General Services
Administration's Federal Aviation Interactive Reporting System, NASA is
one of six civilian agencies[Footnote 5] that reported operating
aircraft primarily for the purpose of passenger transportation.
NASA's Aircraft Inventory:
In fiscal year 2003, NASA reported owning and operating a fleet of 85
aircraft valued at $362 million, including aircraft dedicated to
program support, research and development, and passenger
transportation.
Program Support:
NASA reported owning 53 aircraft that were used to provide support to
programs such as the Space Shuttle, International Space Station, and
Astronaut programs. The majority of these aircraft are located at the
Johnson Space Center. For example, shuttle trainers are one type of
program support aircraft. These aircraft have been modified to
duplicate the shuttle's approach profile, cockpit cues, and handling
qualities so that astronaut pilots can see and feel simulated
approaches and landings before attempting an actual shuttle landing.
Research and Development:
NASA reports owning 25 aircraft to support its research and development
efforts. These aircraft have been modified to support the agency's
mission to conduct aeronautical research at varying altitudes and
atmospheric conditions. For example, NASA operates a modified Learjet
23 as a research platform for the Airborne Terrestrial Land Application
Scanner.
Passenger Transportation:
NASA owns seven aircraft that are used to provide passenger
transportation.[Footnote 6] In fiscal year 2004, NASA reported its
seven passenger aircraft carried nearly 10,000 passengers and logged
nearly 4 million passenger miles. Figure 1 provides an overview of the
aircraft owned and operated by NASA to provide passenger transportation
and their location.
Figure 1: Overview of NASA-Owned Passenger Aircraft Type and Location:
[See PDF for image]
[End of figure]
In addition, NASA obtained passenger transportation services through
the Economy Act,[Footnote 7] a cooperative agreement, and a fractional
ownership contract with DOD, FAA, and Flexjet, respectively.
* DOD--Under provisions of the Economy Act, NASA acquired additional
passenger aircraft services from DOD using Gulfstream V aircraft. DOD
provided documentation for three NASA flights of more than 60 flight
hours during fiscal years 2003 and 2004. DOD billed NASA approximately
$290,000 for these services.
* FAA--During fiscal years 2003 and 2004, NASA and FAA entered into a
shared-use cooperative agreement for four aircraft, three of which were
owned by FAA and the other by NASA. All four aircraft were housed at
Reagan National Airport in Washington, D.C. In exchange for
contributing its one aircraft and $1.1 million annually during 2003 and
2004, NASA received the right to 450 total flight hours per year on any
of the four aircraft. Under this agreement, NASA could schedule flights
on these aircraft with a minimum of 24 hours advance notice. FAA agreed
to pay routine maintenance, fuel, and personnel costs associated with
the NASA aircraft. NASA was also allowed to purchase additional hours,
beyond the agreed 450 hours, at the hourly rate for the specific
aircraft used. During the 2-year period, NASA utilized the four
aircraft in this arrangement for approximately 1,600 flight hours for a
reported cost of $4.5 million, which included charges for the original
900-hour agreement plus charges for additional hours.
* Flexjet--In October 2000, conferees on the NASA fiscal year 2001
appropriation bills directed NASA to prepare a plan that considers
whether fractional ownership of passenger aircraft may be
beneficial.[Footnote 8] In July 2002, pursuant to the conferee
guidance, NASA awarded a contract with Flexjet for a 2-year
demonstration program to determine the viability of using fractional
ownership to meet NASA's administrative air transportation
requirements. Under the 2-year demonstration NASA reported cost of
approximately $3.5 million in return for a total of approximately 800
flight hours of passenger transportation services.
Federal Guidance on Aircraft Acquisition, Operation, and Retention:
OMB Circular No. A-126 (Revised), Improving the Management and Use of
Government Aircraft (May 22, 1992), prescribes policies for executive
agencies to follow in acquiring, managing, using, accounting for the
costs of, and disposing of government aircraft. This circular applies
to all government-owned, leased, chartered, and rental aircraft and
related services operated by executive agencies, except for aircraft
while in use by or in support of the President or Vice President. OMB
Circular No. A-126, section 6, a., provides that the number and size of
aircraft acquired and retained by an agency and the capacity of those
aircraft to carry passengers and cargo should not exceed the level
necessary to meet the agency's mission requirements. OMB Circular No. A-
126, section 5, b., defines mission requirements to include activities
related to the transport of troops and/or equipment, training,
evacuation (including medical evacuation), intelligence and counter
narcotics activities, search and rescue, transportation of prisoners,
use of defense attaché-controlled aircraft, and aeronautical research
and space and science applications. OMB Circular No. A-126, section 5,
b. explicitly states that mission requirements do not include official
travel to give speeches, attend conferences or meetings, or make
routine site visits.
In addition to the policies prescribed by OMB Circular No. A-126,
agencies must also follow the guidance of OMB Circular No. A-
76[Footnote 9] before purchasing, leasing, or otherwise acquiring
aircraft and related services, to assure that these services cannot be
obtained from and operated by the private sector more cost effectively.
Further, agencies must review periodically the continuing need for all
of their aircraft and the cost effectiveness of their aircraft
operations in accordance with the requirements of OMB Circular No. A-76
and report the results of these reviews to GSA and OMB. Agencies are to
report any excess aircraft and release all aircraft that are not fully
justified by these reviews.
Once an agency has justified that it has a valid mission requirement
for owning aircraft, OMB Circular No. A-126, section 8, a., permits
agencies to use aircraft for official, but nonmission-required travel
when:
* no commercial airline or aircraft service is reasonably available
(i.e., able to meet the traveler's departure and/or arrival
requirements within a 24-hour period, unless the traveler demonstrates
that extraordinary circumstances require a shorter period) to fulfill
effectively the agency requirement; or:
* actual cost of using a government aircraft is not more than the cost
of using commercial airlines.
OMB Circular No. A-126, section 14, also provides that agencies
maintain systems that will enable them to: (1) justify the cost-
effective use of government aircraft in lieu of commercially available
air transportation services, and the use of one government aircraft in
lieu of another; (2) recover the costs of operating government aircraft
when appropriate; (3) determine the cost effectiveness of various
aspects of their aircraft programs; and (4) conduct the cost
comparisons required by OMB Circular No. A-76 to justify in-house
operation of government aircraft versus procurement of commercially
available passenger aircraft services. Attachment B of OMB Circular No.
A-126 also provides that agency systems must accumulate and summarize
costs into the standard passenger aircraft program cost elements. For
example, standard cost elements would include items such as fixed and
variable crew costs, maintenance costs, fuel costs, and overhaul and
repair costs.
GSA Implementing Regulations:
In addition, the General Services Administration (GSA) established
governmentwide policy on the operation of aircraft by the federal
government--including policies for managing the acquisition, use, and
disposal of aircraft that the agencies own or hire. GSA publishes its
regulatory policies in the Code of Federal Regulations
(C.F.R.)[Footnote 10] GSA also publishes a number of other guides and
manuals to help agencies manage the acquisition, use, and disposal of
aircraft. These publications include the U.S. Government Aircraft Cost
Accounting Guide, which contains information on how agencies should
account for aircraft costs, and the Fleet Modernization Planning Guide,
which provides guidance on developing cost-effective fleet replacement
plans.
Past NASA Inspector General Reporting on NASA Passenger Aircraft:
NASA's Inspector General (IG) issued two reports on NASA's passenger
aircraft, one in 1995 and another in 1999.[Footnote 11] Both NASA IG
reports were critical of NASA's management of these aircraft,
identifying weaknesses in NASA's accounting and justification for its
passenger aircraft. In its 1995 report, the NASA IG reported that NASA
passenger aircraft cost an estimated $5.8 million more annually when
compared with commercial airline transportation. The IG recommended
actions with respect to NASA's (1) compliance with many of the
provisions of OMB Circular Nos. A-126 and A-76 (including fully
considering commercial airlines as an alternative to NASA operations of
passenger aircraft services), (2) use of outdated and incomplete cost
data to justify trips and approval of some trips without adequate
justifications, and (3) use of passenger aircraft that were more
expensive to operate than using commercial airline services.
The IG's 1999 report focused on one passenger aircraft located at
NASA's Marshall Space Flight Center and estimated that the cost of
commercial airlines in comparison with the NASA-owned aircraft was $2.9
million less over a 5-year period. Similar to the 1995 report, the 1999
report was also critical of NASA's implementation of guidance in OMB
Circular Nos. A-126 and A-76. Further, the report noted that the agency
had not effectively addressed actions recommended in the 1995 report
concerning the need to more fully and effectively evaluate the use of
commercial airlines. The IG recommended that NASA management dispose of
the passenger aircraft at Marshall and instead use commercial airlines
to satisfy Marshall's air transportation requirements. NASA management
disagreed with the findings of both IG reports, stating that commercial
airlines cannot effectively meet all the mission requirements and the
capability of NASA aircraft outweighs the marginal costs savings of
total reliance on commercial airlines.
NASA Passenger Aircraft Costs Are Substantially More Than Commercial
Airline Costs:
An analysis of NASA's reported costs for its passenger aircraft
services shows they are an estimated five times more costly than
commercial airline coach tickets. For purposes of this aggregate
comparative cost analysis, we considered available NASA reported data
on costs applicable to its passenger aircraft services--both variable
and fixed costs--in comparison with commercial airline service costs.
Specifically, to assess the aggregate costs associated with NASA-owned
and -chartered passenger aircraft, we accumulated available NASA annual
report passenger aircraft services cost data for fiscal years 2003 and
2004, validated to the extent feasible with industry standards, and
compared these cost estimates with total estimated commercial airline
costs based on the cost of an average coach ticket. We determined that
NASA's reported costs for the aircraft it owned or chartered were on
the order of about $20 million more costly over a 2-year period than if
NASA had used commercial airline services to carry out the same number
of business trips. Specifically, estimated costs associated with NASA's
passenger aircraft operations during fiscal years 2003 and 2004 were
almost $25 million, while we estimated the cost of commercial coach
tickets for the same number of travelers would have been approximately
$5 million--about $20 million more to provide NASA passenger aircraft
services than if commercial airlines were used to provide passenger
transportation over the 2-year period.
Table 1 summarizes our analysis of commercial and NASA passenger
transportation costs by types of NASA-owned or -chartered aircraft. We
identified the number of passengers from NASA's aircraft request forms
and NASA annual performance reports.[Footnote 12] We then multiplied
the identified number of passengers by our estimate of NASA's average
commercial coach round-trip ticket cost. We determined the average
coach round-trip ticket cost of approximately $426 by analyzing all
airfares purchased with NASA's travel cards in fiscal years 2003 and
2004. Specifically, we identified approximately $49,776,000 in round-
trip airfare tickets in NASA travel card purchases during fiscal years
2003 and 2004, and divided this dollar amount by the number of tickets
purchased (116,865) to determine an average ticket cost of
approximately $426. Finally, we compiled an estimate of NASA's
passenger aircraft service costs, which included costs related to
personnel, maintenance, and fuel, from annual cost reports and budget
information provided by NASA.
Table 1: Comparison of Commercial and NASA Passenger Transportation
Costs by Location or Charter Provider for Fiscal Years 2003 and 2004:
Location or charter provider (type of aircraft): Johnson Space Center
(Gulfstream I & Gulfstream II);
Passengers flown: 2,009[A];
NASA's reported cost: $5,069,000[B];
Estimated average coach ticket costs: $856,000;
Difference: $4,213,000.
Location or charter provider (type of aircraft): NASA Headquarters
(NASA Gulfstream III, FAA chartered Gulfstream IV, and two FAA
chartered Citation Excels);
Passengers flown: 2,109[A];
NASA's reported cost: $4,532,000[C];
Estimated average coach ticket costs: $898,000;
Difference: $3,634,000.
Location or charter provider (type of aircraft): Marshall Space Flight
Center (Gulfstream IISP);
Passengers flown: 2,374[A];
NASA's reported cost: $4,463,000[D];
Estimated average coach ticket costs: $1,011,000;
Difference: $3,452,000.
Location or charter provider (type of aircraft): Flexjet Chartered
Aircraft (Learjet Models 31A and 60);
Passengers flown: 1,337[A];
NASA's reported cost: $3,551,000[E];
Estimated average coach ticket costs: $570,000;
Difference: $2,981,000.
Location or charter provider (type of aircraft): Dryden Flight Research
Center (Beechcraft 200);
Passengers flown: 1,404[F];
NASA's reported cost: $3,380,000[D];
Estimated average coach ticket costs: $598,000;
Difference: $2,782,000.
Location or charter provider (type of aircraft): Kennedy Space Center
(Gulfstream II);
Passengers flown: 1,675[A];
NASA's reported cost: $2,548,000[D];
Estimated average coach ticket costs: $714,000;
Difference: $1,834,000.
Location or charter provider (type of aircraft): Wallops Flight
Facility (Beechcraft 200);
Passengers flown: 884[A];
NASA's reported cost: $856,000[D];
Estimated average coach ticket costs: $377,000;
Difference: $479,000.
Location or charter provider (type of aircraft): DOD Chartered Aircraft
(Gulfstream V);
Passengers flown: 34[A];
NASA's reported cost: $290,000[G];
Estimated average coach ticket costs: $14,000;
Difference: $276,000.
Total;
Passengers flown: 11,826;
NASA's reported cost: $24,689,000;
Estimated average coach ticket costs: $5,038,000;
Difference: $19,651,000.
Source: GAO analysis based primarily on NASA's costs disclosed in
various annual reports.
[A] Passenger numbers were taken from aircraft request forms provided
by NASA.
[B] Costs for Johnson Space Center aircraft were taken from annual
reports and budget information when passenger aircraft costs were not
separated from program support aircraft costs.
[C] Costs associated with the use of NASA's Gulfstream III and FAA
aircraft at Reagan National Airport were taken from NASA Headquarters
cost reports.
[D] Aircraft costs were taken from 2003 and 2004 annual aircraft cost
reports.
[E] Flexjet costs were taken from NASA's Report on the NASA Fractional
Aircraft Demonstration Program, July 2004.
[F] Passenger numbers were taken from 2003 and 2004 annual aircraft
performance reports.
[G] Costs for flights on DOD aircraft were taken from NASA's aircraft
request forms used to justify these flights.
[End of table]
This calculation of the difference between the relative cost of NASA-
provided passenger transportation services and commercial airline costs
does not consider per diem, in-transit salary and benefits, and other
factors associated with using NASA passenger services. NASA officials
believe that a comparison of NASA and commercial airline passenger
services should include estimates of such cost savings shown in its
passenger aircraft request forms. We recognize that, to the extent that
all passengers on the aircraft had a valid purpose for travel, there
may be personnel-related cost savings associated with use of NASA's
passenger aircraft services; however, it was not feasible for us to
reliably identify such costs using independent (non-NASA) sources.
Further, as discussed in a subsequent section of this report, we have
concerns about the reliability of some of NASA's cost and associated
savings data captured in its flight request documentation. In addition,
we also identified questionable savings attributed to non-official
travelers.
However, NASA's cost estimates do serve to provide indicators of
general ranges of costs that may be avoided by using NASA passenger
aircraft services. Using available NASA documentation of costs that
would have been incurred if commercial airlines were used would
increase the estimated commercial airline costs to approximately $11
million, and reduce the difference between NASA's passenger airline
services and commercial airlines to about $13 million over the 2-year
period.[Footnote 13] Specifically, available NASA passenger aircraft
services flight request documentation generally included estimated
costs associated with not only airline tickets, but also estimates for
salary and benefit costs associated with lost work time, per diem
expenses, and rental car costs associated with the additional time
required if commercial airlines were used to provide passenger
transportation. Consequently, even when available NASA estimates of
costs associated with commercial airline transportation services were
included, a comparison with the costs of its passenger air
transportation services shows that they are nearly 2.3 times more
costly than commercial airlines.
Additional Costs Associated with NASA Passenger Aircraft May Be
Substantial:
Our cost analysis, based primarily on data included in NASA's annual
reporting on its aircraft operations, did not include data on all
relevant types of costs attributable to NASA's passenger aircraft
services.[Footnote 14] Consequently, the full cost of continued
operation of NASA's passenger aircraft fleet in comparison with
commercial airline services would be substantially more than the $20
million estimate for fiscal years 2003 and 2004. Specifically, the
following types of costs were not accounted for in NASA's various
annual reports on its passenger aircraft services.
Acquisition and Capital Costs:
NASA' s current inventory of seven passenger aircraft is valued at more
than $33 million, including two Gulfstream II aircraft purchased in
2001 for a total of about $13.9 million. An allocable portion of the
acquisition and associated capital improvements to these assets is part
of NASA's annual cost of operating its passenger aircraft services. In
addition, these costs may increase in the near future. A July 2004
fleet plan prepared for NASA recommended upgrading and expanding its
passenger aircraft fleet as soon as possible with an initial investment
of $75 million. Further, NASA is considering an investment of an
estimated $1.5 million in a noise restriction package for its
Gulfstream III aircraft during fiscal year 2008, making the total
investment that NASA is currently considering about $77 million.
Hangar Costs:
NASA aircraft received hangar and maintenance services even though they
were housed on government property. Industry data on hangar costs show
that they total about 5 percent of total aircraft operation costs.
Liability Insurance Costs:
Although the government operates under a self-insurance policy, the
liability associated with operation of passenger aircraft is a cost
factor that must be considered given the significant number of
passenger flights taken using NASA-owned aircraft over the last 2
years. Industry estimates show liability insurance costs represent
approximately 2 percent of total aircraft operating costs.
NASA Passenger Aircraft Ownership to Support Routine Business Not
Justified:
Not only were NASA's passenger aircraft services significantly more
costly than commercial airlines, but NASA's continued ownership of
aircraft to provide air transportation supporting routine NASA business
operations was not in accordance with OMB guidance. OMB guidance (1)
limits the number and size of aircraft acquired and owned by an agency
to carry passengers to the level necessary to meet mission
requirements, including, for example, use of aircraft for prisoner
transportation, intelligence and counter narcotics activities, and
aeronautical research; and (2) explicitly prohibits owning aircraft to
support routine business functions, including providing air
transportation to attend meetings, conferences, and routine site
visits. In contrast, NASA's implementing guidance, while generally
consistent with OMB guidance, was interpreted to allow acquiring and
retaining aircraft for any official travel, regardless of the mission-
required nature of the travel. Our analysis of available flight data
showed that an overwhelming majority (86 percent) of the flights taken
during fiscal years 2003 and 2004 using NASA passenger aircraft
services were to support routine business operations, including
attending meetings, conferences, and site visits. Excluding flights
related to the Columbia accident, routine business flights accounted
for about 97 percent of NASA passenger aircraft flights. Further,
although OMB guidance required NASA to periodically prepare studies to
determine if continued ownership of passenger aircraft was justified,
the agency's studies were either incomplete or did not consider
commercial airline service alternatives.
Implementation of NASA Guidance Inconsistent with OMB Policy on
Aircraft Ownership:
NASA implementation is not consistent with OMB policy on aircraft
ownership. OMB Circular No. A-126, the governing federal policy
guidance in this area, provides that agencies should own aircraft only
to the extent needed to meet mission requirements, such as troop
transportation, prisoner transportation, intelligence and counter
narcotics activities, and aeronautical research. OMB's policy guidance
further provides that agencies should not own aircraft to provide
transportation to meetings, routine site visits, and speeches. However,
NASA implementing guidance, while generally consistent with OMB policy,
does not clearly and uniformly address the federal policy limiting
aircraft ownership to those assets needed to meet mission requirements.
NASA Procedural Requirements (NPR),[Footnote 15] section 3.3.2,
reiterates the OMB policy prohibition on using passenger aircraft to
provide transportation supporting routine business operations as a
basis for continuing to own aircraft. However, in the following
sections (sections 3.3.2.1 through 3.3.2.5), NASA's guidance provides
that mission-required use of aircraft includes support for activities
"directly related to approved NASA programs and projects." These
elaborating sections were mistakenly operationally determined to mean
that all travel using NASA passenger aircraft services was directly
related to NASA programs or projects, regardless of whether they were
of a routine, nonemergency nature.
The NASA IG's 1999 report[Footnote 16] on NASA's passenger aircraft at
its Marshall Space Flight Center also questioned whether that
aircraft's use was consistent with the OMB limitation on owning
aircraft only for mission-required purposes. The audit report
recommended that NASA change the definition of mission requirements in
its policy guidance to conform to the definition of mission requirement
stated in OMB guidance. However, in its response to the audit report,
NASA management stated that there was no difference between its
guidance and the OMB guidance and therefore it would not take any
action to clarify its policy guidance.
Most Flights on NASA Passenger Aircraft Do Not Meet OMB Definition of
Mission Requirements:
Our analysis of available documentation on flight purposes shows that
NASA's implementation of its guidance related to using aircraft in
direct program or project support has resulted in owning aircraft to
support meetings, conferences, and speeches in direct conflict with
OMB's policy prohibition in this area. In effect, NASA circumvented the
OMB policy on restricting aircraft ownership to those needed to carry
out mission requirements by operationally determining that nearly all
travel using passenger aircraft services was directly related to NASA
programs or projects. Our analysis of NASA passenger air transportation
services for fiscal years 2003 and 2004 showed that about 86 percent of
the flights were taken to support the types of routine business
operations that are expressly prohibited by OMB's guidance for aircraft
ownership.
Specifically, we categorized the documented flight purpose listed on
1,188 NASA aircraft request forms for NASA passenger aircraft usage
during fiscal years 2003 and 2004 into 10 categories in order to
determine the frequency of different uses for NASA's passenger aircraft
services.[Footnote 17] In conducting our analysis, we categorized any
flight as mission required if it could be linked to OMB's definition of
mission requirements, regardless of its apparent, non-emergency nature.
As a result, some flights we categorized as mission required may have
actually been routine in nature. For example, in response to the 1999
NASA IG report, NASA management stated that launch support flights were
required to transport NASA emergency response teams to launch sites
within hours to help resolve unexpected launch-related problems.
However, most launch support flights during our audit period were
scheduled more than 24 hours before the flight departure date. Of the
19 flights we identified as directly supporting NASA launches, only 7
were scheduled less than 2 days prior to the flight, and overall the
flights were scheduled an average of approximately 3 days prior to
departure. In one example, on July 29, 2003, Kennedy Space Center
requested the use of a NASA passenger aircraft to fly from Florida to
California as launch support for the joint Canadian Space Agency/NASA
Scientific Satellite Atmospheric Chemistry Experiment Mission. The
flight was requested on July 29, 2003, 12 days before the flight's
August 10, 2003, departure and 14 days before the August 12, 2003,
launch. We categorized this flight as being related to launch support.
However, the fact that the flight was scheduled nearly 2 weeks in
advance of the flight departure brings into question whether the flight
was time sensitive and indicates that commercial coach service could
have been used.
Figure 2 presents the results of our analysis and categorization of
NASA's use of owned and chartered aircraft over fiscal years 2003 and
2004 into 10 categories.
Figure 2: Percentage of NASA Passenger Aircraft Flights by Purpose:
[See PDF for image]
[End of figure]
As shown in figure 2, available data showed that about 14 percent of
the flights taken using NASA passenger aircraft had a stated purpose
that appeared to comply with OMB Circular No. A-126's definition of
mission required. As shown in figure 3, excluding flights related to
the Columbia accident investigation, only 3 percent of NASA's passenger
aircraft activity was related to mission-required travel.
Figure 3: Percentage of NASA Passenger Aircraft Flights by Purpose
(Excluding Flights Related to the Columbia Accident):
[See PDF for image]
[End of figure]
Table 2 highlights examples of flights in which NASA passenger aircraft
services were used to support non mission-critical NASA business
operations that are not consistent with OMB's definition of mission-
required use necessary to justify continued passenger aircraft
ownership.
Table 2: Summary of Examples of Routine Business Flights Using NASA
Passenger Aircraft during Fiscal Years 2003-2004:
Usage category: Internal meeting;
Flight purpose description: Budget reviews for space shuttle and space
station at the Johnson Space Center;
Flight itinerary: Dulles, VA to Houston, TX and return;
Estimated commercial ticket costs[A]: $3,000;
NASA-reported flight cost[B]: $11,000.
Usage category: Internal meeting;
Flight purpose description: Senior management budget meetings at NASA
headquarters;
Flight itinerary: Johnson Space Center, TX to Washington, DC and
return;
Estimated commercial ticket costs[A]: 3,000;
NASA-reported flight cost[B]: $24,000.
Usage category: External affairs;
Flight purpose description: Attendance at Pearl Harbor 60th anniversary
ceremony, attendance at heads of agency meeting;
Flight itinerary: Reagan National, VA to Anchorage, AK to Tokyo, Japan
to Honolulu, HI and return;
Estimated commercial ticket costs[A]: 28,000;
NASA-reported flight cost[B]: $59,000.
Usage category: External affairs;
Flight purpose description: Attendance at the 2003 inauguration
ceremony for the governor of Florida;
Flight itinerary: Kennedy Space Center, FL to Tallahassee, FL and
return;
Estimated commercial ticket costs[A]: 2,000;
NASA-reported flight cost[B]: $5,000.
Usage category: External meeting;
Flight purpose description: Travel by the Presidential Commission on
Implementation of U.S. Space Exploration Policy (PCSE) to conduct
required public hearings on the exploration policy;
Flight itinerary: Dulles, VA to San Francisco, CA and return;
Estimated commercial ticket costs[A]: 8,000;
NASA-reported flight cost[B]: $51,000.
Usage category: External meeting;
Flight purpose description: Attendance at an annual Engineer of the
Year Awards Conference;
Flight itinerary: Kennedy Space Center, FL to Baltimore, MD and return;
Estimated commercial ticket costs[A]: 3,000;
NASA-reported flight cost[B]: $14,000.
Usage category: Launch/landing viewing;
Flight purpose description: Attendance at the Jet Propulsion Laboratory
to observe the Cassini landing on Saturn;
Flight itinerary: Reagan National, VA to Burbank, CA and return;
Estimated commercial ticket costs[A]: 3,000;
NASA-reported flight cost[B]: $11,000.
Usage category: Executive retreat;
Flight purpose description: Attendance at the NASA Enterprise Council
Retreat in Blue Mountain Lake, NY and attendance at the Space Shuttle
112 Crew Ceremony at Johnson Space Center;
Flight itinerary: Kennedy Space Center, FL to Washington, DC to Saranac
Lake, NY to Johnson Space Center, TX to Washington, DC and return to
Kennedy;
Estimated commercial ticket costs[A]: 8,000;
NASA-reported flight cost[B]: $32,000.
Usage category: Executive retreat;
Flight purpose description: Participate in NASA Leadership Council
retreat;
Flight itinerary: Johnson Space Center, TX to Austin, TX to Washington,
DC and return;
Estimated commercial ticket costs[A]: 3,000;
NASA-reported flight cost[B]: $23,000.
Usage category: Training;
Flight purpose description: E-Payroll training at Marshall Space Flight
Center;
Flight itinerary: Kennedy Space Center, FL to Marshall Space Flight
Center, AL and return;
Estimated commercial ticket costs[A]: 2,000;
NASA-reported flight cost[B]: $18,000.
Source: GAO analysis of NASA aircraft request forms and other NASA
reports.
[A] From NASA aircraft request forms.
[B] Calculated by taking NASA's total reported costs, dividing by NASA
reported flight hours for each aircraft, and then multiplying by the
number of flight hours for the specific flight. NASA reported costs
were taken from NASA's 2003 and 2004 Aviation Financial Reports and
Johnson Space Center's Budgeted Costs for Mission Management Aircraft
Operations. NASA aircraft flight hour usage numbers were taken from
NASA's 2003 and 2004 Annual Aircraft Performance Reports. For aircraft
not owned by NASA, the reported cost includes the amount billed to NASA
as listed on the aircraft request form.
[End of table]
The results of our interviews with passengers on such flights showed
that, while use of the NASA aircraft was more convenient, better
accommodated busy NASA SES-level staff schedules, and was more
productive, the trip purposes could have been accomplished through
travel on regularly scheduled commercial airlines.
Flawed Implementation of OMB Guidance on Use of Government vs.
Commercial Resources:
OMB Circular No. A-126 policy guidance instructs agencies to
periodically conduct OMB Circular No. A-76 cost comparisons to
determine whether commercial activities should be conducted using
government resources or commercial sources. NASA's A-76 studies
conducted to date have asserted that because not all flight purposes
could be achieved using commercial airlines, commercial airlines are
not a viable alternative and were not considered in any of the studies.
However, as discussed previously, our analysis of NASA passenger
aircraft flights taken during fiscal years 2003 and 2004 as well as our
discussions with passengers on those flights disclosed that the vast
majority of the flights could have been accomplished using commercial
airlines. As a result, NASA's A-76 studies inappropriately excluded
potentially more cost-effective commercial airline services from
consideration.
Little supporting documentation is available for four of the seven
aircraft in NASA's passenger aircraft fleet that were acquired decades
ago. Consequently, it was difficult to determine how these aircraft
acquisitions were justified and if there was a mission requirement
justifying aircraft ownership at that time.[Footnote 18]
The five NASA A-76 studies on NASA-owned aircraft did not include a
comparison of NASA's passenger aircraft costs with commercial airline
costs.[Footnote 19] NASA's studies compared its aircraft ownership
costs against costs of NASA leasing aircraft to provide passenger
transportation services because "commercial airlines cannot effectively
meet all mission requirements." For example, NASA's March 2004 A-76
study was based on the assumption that NASA aircraft would be required
to support mission requirements of an estimated 400-450 flight hours a
year--essentially the total number of flight hours flown by that NASA
center's passenger aircraft during 2003 and 2004. While NASA may
continue to require access to some mission-required passenger aircraft
services for which commercial airlines would not be a viable
alternative, assuming that all prior flight hours were mission required
without first examining the purpose for these flights is not consistent
with the OMB guidance.
In addition to NASA-owned aircraft, as discussed previously, NASA
obtained passenger aircraft services through interagency agreements
with DOD and FAA, and a fractional ownership pilot demonstration
contract with Flexjet. These alternative approaches offer ready access
to passenger aircraft without the fixed cost investment and the need to
fund aircraft maintenance, pilot training, and other costs associated
with aircraft ownership. For example, under NASA's contract with
Flexjet, NASA had guaranteed availability to passenger air
transportation services. Specifically, the contract with Flexjet
allowed NASA to schedule flights with a minimum of 8 hours advance
notice. According to a NASA contractor's December 2004 study, such
arrangements to obtain passenger transportation services provide a cost-
effective alternative to agency ownership of aircraft when demand is
highly variable or less than 150 to 200 hours a year. Such flexible
arrangements could provide NASA with quick-turnaround access to air
passenger transportation services, and appear to have the ability to
have met NASA's limited mission-required needs during the period of our
review.
Further, NASA has not performed any A-76 studies for three of its
aircraft that were used as passenger aircraft. NASA purchased two
Gulfstream II aircraft in 2001 as contingency backups to, and eventual
replacements for, its existing shuttle trainer aircraft fleet. However,
since purchasing the aircraft, NASA has been using these aircraft as
part of its passenger aircraft services fleet. Subsequent changes in
NASA's long-term strategy for space flight now show that shuttles will
not be used after about 2010. As a result, the continuing mission-
required need to retain these aircraft is questionable.
In its 1995 and 1999 reports, the NASA IG[Footnote 20] expressed
concern over NASA's exclusion of commercial airline transportation from
its A-76 studies. In both reports, the IG reported that the A-76
studies NASA management performed with respect to its passenger
aircraft improperly excluded a cost comparison with commercial
airlines. While the IG recommended that NASA program offices
responsible for passenger aircraft operations perform A-76 studies to
include consideration of accomplishing air travel needs using
commercial airlines, NASA management contended that because of isolated
travel destinations and extremely short advance notice, commercial
airlines could not meet its travel needs. However, our analysis of
available documentation supporting flights taken during fiscal years
2003 and 2004 shows that most were requested more than 24 hours in
advance of flight departure and most NASA centers are located within an
hour's drive of commercial airports.
Ineffective Oversight and Management of Passenger Aircraft Services:
NASA's oversight and management controls over its passenger aircraft
operations were ineffective. NASA lacks the systems or procedures to
accumulate and use agencywide usage and cost data needed to provide the
transparency and accountability necessary to effectively support day-
to-day management of its passenger aircraft service operations.
Specifically, NASA did not:
* Maintain agencywide records on the purposes for which its passenger
aircraft are used and their costs. Such data are critical to (1)
determining whether usage is consistent with OMB guidance limiting
aircraft ownership to those agencies with mission requirement needs,
and (2) maintaining visibility and accountability for the full costs
associated with its passenger aircraft operations. Lacking such full
cost visibility and passenger accountability, NASA's passenger aircraft
services are sometimes viewed as a "free" resource by NASA project and
program officials.
* Correctly justify the cost effectiveness of individual flights. These
justifications were flawed in that they relied on (1) inaccurate cost
data and (2) other unsupported factors used in the cost-justification
calculation.
* Have processes in place to obtain reimbursements from nonofficial
passengers flying on NASA-owned or -chartered aircraft. This may
include NASA employee spouses and relatives, contractors, or other
federal agency personnel.
Flawed Procedures for Accumulating and Using Passenger Aircraft Usage
and Cost Data:
NASA systems or procedures in place to accumulate detailed usage and
cost data related to its passenger aircraft services were flawed. Other
than data compiled once a year to meet external reporting requirements,
neither NASA management nor congressional oversight officials had
agencywide aircraft usage and cost data needed to provide the
transparency and accountability needed to make informed decisions on
continued ownership of passenger aircraft.
Costs associated with ownership and operation of NASA's passenger
aircraft services were usually included in center overhead accounts
that were allocated to programs based on the number of personnel
assigned to programs without regard to the extent to which program
personnel actually used NASA passenger aircraft services. Therefore, it
is not surprising that some NASA personnel expressed the view that use
of NASA-owned or -chartered aircraft is a "free" resource to them in
that they did not have visibility or accountability over associated
costs as part of their program or project budget execution reporting.
Because NASA lacked a system for routinely collecting agencywide usage
and cost data, it could not provide us with the complete and accurate
agencywide information on aircraft usage and cost that we requested as
part of this audit. Although each center that possesses and manages
passenger aircraft is required to maintain a flight justification and
manifest for each trip, the flight usage data contained in these
documents are not compiled or analyzed on an agencywide basis to
support decisions related to mission-required needs. Specifically, NASA
data on the purposes and costs of its passenger aircraft services
during fiscal years 2003 and 2004 were contained in paper flight
justifications and manifests maintained at six different locations. We
created a database of descriptive cost and usage data for approximately
1,200 flights using NASA-owned or -chartered aircraft for which
sufficiently complete data were available. Although, as mentioned
previously, we obtained evidence that NASA also utilized at least two
additional program support aircraft to meet its passenger air
transportation needs, the limited data on use and costs associated with
flights using these aircraft did not allow us to include data on these
flights in our database. Further, data on passenger aircraft services
for about 200 flights at one center was missing most of the data
elements on the flight request justification forms, including flight
purpose and cost-justification calculations. Without agencywide data on
flight purposes and costs related to its passenger aircraft services,
NASA managers and Congress lack critical information they need to make
key aircraft ownership decisions.
In addition to the limited agencywide usage and cost data, we also
found that the data provided by NASA, although certified by NASA
management as complete and accurate, were not always complete or
accurate. Our comparison of NASA-supplied data on flights taken in
fiscal years 2003 and 2004 with FAA data showed that (1) data on 97
passenger flights were not included in the aircraft usage data NASA
certified as complete; and (2) as discussed in a subsequent section,
NASA-supplied data did not always include all legs of trips taken using
NASA passenger aircraft. After our identification of the flights, while
not complete in all cases, NASA was able to provide some form of
supporting documentation showing these flights occurred, including
proof of authorization, approval, or a determination of cost
effectiveness. Examples of some of the flights not included in the data
NASA officials certified as complete are summarized in table 3.
Table 3: Examples of Passenger Flights Not Included in Submissions NASA
Certified as Complete:
Stated flight purpose: Hurricane evacuation for select Kennedy Space
Center personnel and their families and parents, and aircraft pilots
and maintenance personnel and their families;
Destination: Two trips from Kennedy Space Center, FL to Washington, DC
and return;
Number of passengers: 9;
NASA's estimated commercial costs: $3,000;
Estimated NASA flight cost: $29,000.
Stated flight purpose: Presentation of a plaque to the city of
Shreveport, LA in appreciation for help during the Columbia disaster;
Destination: Kennedy Space Center, FL to Shreveport, LA and return;
Number of passengers: 7;
NASA's estimated commercial costs: $4,000;
Estimated NASA flight cost: $22,000.
Stated flight purpose: Two-day trip to Las Vegas to meet with a
contractor for a "technical interchange";
Destination: Johnson Space Center, TX to Las Vegas, NV;
Number of passengers: 11;
NASA's estimated commercial costs: $8,000;
Estimated NASA flight cost: $22,000.
Stated flight purpose: Participation in Brookhaven National Laboratory
ceremony dedicating a new NASA space radiation laboratory;
Destination: Johnson Space Center, TX to Long Island, NY;
Number of passengers: 10;
NASA's estimated commercial costs: $15,000;
Estimated NASA flight cost: $27,000.
Stated flight purpose: University research and affairs at Texas A&M
University;
Destination: Johnson Space Center, TX to College Station, TX;
Number of passengers: 11;
NASA's estimated commercial costs: $3,000;
Estimated NASA flight cost: $4,000.
Source: GAO analysis, based on NASA Aircraft Request forms and annual
reporting.
Note: We used NASA aircraft request forms to identify estimated
commercial ticket costs. We estimated NASA passenger aircraft costs by
dividing NASA's total reported costs by NASA's reported flight hours
for each aircraft. We then multiplied the result by the number of
flight hours for the specific flight. We used NASA's 2003 and 2004
Aviation Financial Reports and Johnson Space Center's Budgeted Costs
for Mission Management Aircraft Operations to identify NASA reported
costs. NASA aircraft flight hour usage numbers reflect usage hours
shown in NASA's 2003 and 2004 Annual Aircraft Performance Reports.
[End of table]
Further, we identified a breakdown in controls over flight data record
integrity at one center. Specifically, when we inquired about provided
documents that did not appear to be originals, NASA officials told us
that flight requests and approvals related to a 1-year period covering
parts of fiscal years 2003 and 2004 were lost and recreated after
flights took place. NASA officials stated that the loss of these
important aircraft usage data was apparently not discovered until after
our initial request for documentation as part of this audit. NASA
officials did not inform us that documents were recreated until after
we questioned inconsistencies in the documentation.
Cost data compiled by NASA did not disclose all passenger aircraft cost
as travel costs. First, the costs related to the operation of passenger
aircraft were not directly assigned to users, but were allocated
through center overhead accounts. These accounts, which include other
expenses such as facilities maintenance and auditing services, are
usually allocated to each NASA program based on the number of
employees. This allocation, which does not relate to use of aircraft
and does not reduce program travel budgets, essentially provides a free
resource to users, and does not encourage efficient use of the
aircraft. In commenting on air travel using NASA-chartered aircraft,
one NASA traveler stated,
"Although everything about the flight was very positive - convenience,
shorter trip time, professional service, etc. - the cost was
considerably more than flying a commercial airline. .. As much as I
enjoyed the door to door service, if the travel costs had been coming
out of my project I would have chosen to fly commercial."
This statement summarizes how NASA decision making on aircraft
operations is distorted by the lack of complete data on the cost of
using this resource. Second, NASA does not classify costs related to
passenger aircraft services in its annual financial and budget reports
to Congress as a cost of transportation of persons. In annual reports,
one specific object expense class, object class 21, is designed to
capture and disclose agencies' costs for transporting passengers.
Instead, the cost of NASA passenger aircraft services are included in
overhead cost accounts, which understates the true cost of transporting
NASA passengers.
Weaknesses In Justification Process for Individual Passenger Aircraft
Flights:
As discussed previously, our analysis of available estimates of NASA's
aggregate costs associated with its passenger aircraft services in
comparison with commercial airline ticket costs showed that NASA's
passenger aircraft services cost about $20 million more than commercial
airlines. In addition, NASA's individual flight cost justification
process for its passenger aircraft services was flawed. Our analysis of
cost-comparison documentation supporting passenger aircraft flights
taken during fiscal years 2003 and 2004 revealed critical flaws,
including variable cost data that were 6 years out of date and
unsupported cost factors. Available NASA documentation supporting
NASA's individual flight justifications for flights taken during 2003
and 2004 showed a total estimated savings of $6 million over the 2-year
period. However, if these justifications had included up-to-date NASA
variable costs and excluded unsupported cost factors attributed to the
additional time required to use commercial airline flights, most
flights would not have been approved because they would have been more
costly than commercial air travel.
Policy guidance in OMB Circular A-126 provides an agency may use
aircraft on a flight-by-flight approval basis for routine business
purposes to the extent that a comparison between the agency's specified
variable costs and the costs of commercial travel shows the proposed
flight is cost effective. Specifically, OMB Circular A-126, Attachment
A, provides that costs of commercial travel must be compared with the
variable costs of operating the agencies' passenger aircraft[Footnote
21] and that proposed flights using agencies' passenger aircraft for
routine business purposes should only be approved if they result in a
cost savings to the government. Further, OMB guidance provides that
variable cost estimates used in flight-by-flight cost justification
calculations are to be updated annually. This policy on flight-by-
flight variable cost justification does not replace the agencies' need
to first establish a valid mission requirement for owning aircraft, and
overall cost effectiveness. As discussed previously, our analysis of
flight purposes showed that about seven of every eight flights were for
routine business travel.
Consistent with OMB policy guidance, NASA regulations provide that
individual cost justifications comparing estimated commercial airline
travel costs with estimated variable costs associated with using NASA-
owned or -chartered aircraft should be prepared prior to all passenger
aircraft flights. Figure 4 provides an overview of the methodology NASA
used to compare NASA and commercial costs for its flight-by-flight
justifications.
Figure 4: Overview of NASA Methodology for Comparing Its Flight-by-
Flight Variable Costs with Commercial Flight Costs:
[See PDF for image]
[End of figure]
Several NASA centers had not updated the variable costs used in their
flight-by-flight cost-comparison calculations for over 6 years. Such
out-of-date variable costs significantly understated NASA's flight-by-
flight costs. For example, at two centers, the $964 variable cost per
flight hour used for flight-by-flight justifications during fiscal
years 2003 and 2004 was over 6 years out of date. According to NASA
aircraft management officials, this hourly rate was last adjusted in
1998. At one center, a recent recalculation, done in 2005 pursuant to
our audit, increased the center's variable cost rate from $964 to $1828
an hour, almost a 90 percent increase. Further, even this 90 percent
higher rate may understate NASA's actual variable costs. For example,
the aircraft manufacturer for the aircraft in use at that center
reported a direct cost per flight hour rate of approximately $3,000 a
flight hour, including estimated fuel costs alone in excess of $1,300
an hour.
NASA variable costs were also understated at one center because the
flight-by-flight justifications included only variable cost estimates
for one round trip when the aircraft actually made two round trips to
meet passengers' transportation requirements. Our analysis of FAA
flight information and flight documentation obtained from the center
showed that the flight request data we were provided included estimates
related to only two of four flight legs flown to complete 14 flight
requests over the 2-year period of our review. For example, on August
6, 2003, NASA's passenger aircraft transported passengers from Houston,
Texas, to Pueblo, Colorado, and then returned without passengers to
Houston the same day. Three days later, pilots flew an empty aircraft
to Pueblo to pick up passengers and return them to Houston. Center
officials stated that additional round trips were necessary to return
the flight crew to their home station where they could be more
productive performing other duties. Center officials stated that they
did not include the two extra flight legs in their calculations of the
variable costs associated with NASA's passenger transportation because
they classified these legs as crew training flights. Nonetheless, the
costs incurred by these additional flights should be considered among
the costs related to NASA's passenger air transportation services.
In addition to understatements of NASA's variable costs, NASA's flight-
by-flight cost comparisons were also flawed in that they increased the
cost associated with flying commercially by using a largely unsupported
multiplier of 2.5. NASA could not provide any specific NASA-related
empirical evidence to validate use of the multiplier in its flight-by-
flight justification process. NASA used this multiplier in addition to
factors for time and salary costs accounted for in its cost-
justification calculation. The use of a multiplier to increase the
value of an employee's time beyond his or her salary and fringe
benefits is not expressly provided as part of OMB's Circular No. A-126
guidance. Further, cognizant OMB officials told us that it was not
their intent that agencies use any such multiplier (beyond the salary
and fringe benefits associated with any time savings) in determining
whether proposed flights were cost effective. They also stated they
were not aware of any agencies using such a multiplier in their flight
justification calculations. While NASA officials informed us that they
had been using this multiplier for a number of years and that they
believed it was a conservative factor, they did not provide any
documentation demonstrating the appropriateness of the multiplier as it
applies specifically to the experiences of NASA personnel who used
these aircraft. Consequently, lacking such documentation, NASA's use of
a 2.5 multiplier improperly overstates the costs of commercial
alternatives.
The overall effect of understating NASA costs and overstating
commercial costs in NASA's flight-by-flight justifications was that
NASA incorrectly approved individual flights as cost effective. For
example, NASA justified one round trip from Kennedy Space Center, FL to
Burbank, CA as cost effective, calculating a savings of $4,800. NASA
calculated a cost savings for the flight because it used a 1998-based
variable cost factor for the NASA plane of $964 per hour and also
multiplied the travelers' salary costs savings by the unsupported 2.5
multiplier. If the variable cost was updated to NASA's 2004 estimate of
$2,528 per hour for that aircraft and the unsupported multiplier was
removed, the estimated variable costs associated with the proposed NASA
passenger aircraft flight would have exceeded estimated commercial
airline costs by $17,408. Further, even after incorporating NASA's
unsupported estimate that employee fringe benefits increase employee
direct salary costs by an additional 50 percent, the NASA aircraft
variable costs for this flight would still have exceeded commercial
costs by about $16,000.
NASA Procedures Not Effective in Consistently Identifying and
Collecting Reimbursements from Nonofficial Travelers:
NASA lacks procedures to consistently and effectively identify and
recover the applicable costs of operating government aircraft when
nonofficial passengers fly on NASA-owned or -chartered aircraft. As a
result, nonofficial travelers were provided free transportation using
NASA's passenger aircraft services. However, because of the lack of
procedures and documentation in place concerning the determination of
the official status of travelers, we could not determine, and more
importantly NASA could not determine, if any of the travelers should
have, but did not, reimburse the government for the cost of their
transportation.
According to OMB Circular No. A-126, travelers flying on a space-
available basis on government aircraft for a purpose other than the
conduct of official agency business generally must reimburse the
government for the full coach fare.[Footnote 22] Reimbursement for
travel at the government rate for the cost of coach tickets would have
covered about one fifth of NASA's reported costs associated with the
use of NASA's passenger aircraft services.
However, NASA has not implemented agencywide policies and procedures to
ensure that such travelers reimburse the government for the
corresponding coach cost. Processes in place at each of the six centers
to obtain reimbursements ranged from none at all to ad hoc procedures
that essentially relied on individual travelers to identify and submit
payments. For example, at one center, NASA's procedures consisted of
notifying NASA travelers of the need to obtain reimbursement from
nonofficial travelers flying on the aircraft, but did not provide for
any follow-up to monitor and collect the requisite amount from non-NASA
travelers.
For example, between September 2, 2004, and September 6, 2004, several
Kennedy Space Center employees and their families and contractors and
their families used the center's Gulfstream II aircraft to fly to
Washington, D.C. in advance of Hurricane Francis. According to center
officials, the center was required to evacuate the aircraft from the
path of the approaching hurricane, and a decision was made to transport
the contractor pilots, mechanics, and their families over 800 miles
north to Washington. After flying the contractors and their families
out of the area, the aircraft then returned to pick up other center
management personnel, personnel associated with the aircraft
management, and their families and flew them to Washington. A NASA
official stated that at least one of the passengers on these flights
should have reimbursed the government for a portion of the cost of
their transportation. However, the official did not know if such
reimbursement was obtained.
NASA officials at two other centers stated that they have not obtained
reimbursements or they had no documentation showing the extent to which
reimbursements from nonofficial passengers on NASA flights were
identified and obtained. In addition, we identified over 100 other
travelers that NASA classified as dependents flying on NASA passenger
aircraft that may have been nonofficial travelers. These passengers may
have been required to reimburse NASA for a portion of the costs of
their transportation.
Conclusions:
As NASA strives to carry out its new vision for the future of the
agency, using its resources as efficiently as possible will be a
growing fiscal challenge. Operating what is essentially its own small
passenger airline service, while potentially providing certain benefits
to the agency and its employees, costs an estimated five times more
than if commercial airlines were used to provide these services.
Further, NASA's ownership of aircraft to support essentially routine
business operations is in direct conflict with OMB's policy prohibition
on such uses and passenger interviews which showed that in almost all
cases, the travel could have been accomplished using commercial
airlines.
NASA management has disagreed with, and taken only limited action with
respect to similar prior audit recommendations in this area and
insufficient management attention and agencywide oversight has allowed
NASA to continue this costly program for decades. The cumulative effect
has been failures in effectively justifying the extent to which such
passenger aircraft services are needed to address critical, time-
sensitive mission requirements, as well as effectively determining the
extent to which these services could be accomplished without incurring
the substantial, fixed operation and maintenance costs associated with
aircraft ownership. Immediate actions to dispose of all aircraft not
needed to address mission requirements and adoption of more flexible,
less costly alternatives to satisfy future mission requirements would
best position NASA to meet its stewardship responsibilities for
taxpayer funds it receives, and better enable it to meet its current
fiscal challenges.
Matters for Congressional Consideration:
Congress should consider whether legislation is necessary to ensure
that (1) NASA disposes of all of its passenger aircraft not used in
accordance with OMB's explicit policy prohibition against owning
aircraft to support travel to routine site visits, meetings, speeches,
and conferences; and (2) funding for future NASA passenger aircraft
purchases and operations is restricted to those necessary to meet
mission requirements consistent with OMB guidance.
Recommendations:
To the extent that Congress determines that NASA should continue to
retain aircraft or passenger aircraft charter services to provide
passenger transportation, we recommend that the Administrator of NASA
take the following six actions:
* Establish policies and procedures for accumulating and reporting on
its passenger aircraft services to provide complete and accurate
agencywide cost and utilization data to support oversight and decision
making on operating and retaining such aircraft services.
* Clarify policies and procedures applicable to aircraft acquisition
and retention to limit the number and type of aircraft owned and
chartered for passenger transportation to those necessary to meet the
"mission-required" criteria in OMB guidance.
* Periodically assess the extent to which NASA has a continuing need to
own aircraft to provide passenger transportation in support of mission
requirements in accordance with OMB guidance.
* Maximize the use of flexible, cost-effective arrangements to meet
mission-required passenger air transportation service needs in lieu of
aircraft ownership.
* Revise existing policies and procedures used to determine if
individual flights are justified to include use of up-to-date variable
costs and limit commercial cost estimates to include airfare, in-
transit salaries and fringe benefits, and other costs directly related
to reasonable estimates of delays incurred in meeting commercial
airline flight schedules in accordance with OMB and GSA guidance.
* Establish agencywide policies and procedures for identifying and
recovering applicable costs associated with nonofficial personnel
traveling using NASA passenger aircraft services on a reimbursable
basis.
Agency Comments and Our Evaluation:
In its written comments, the NASA Administrator concurred with our
recommendations and set out several actions to address identified
deficiencies. Specifically, he said NASA would review its policies and
procedures related to aircraft management to ensure they are aligned
with OMB requirements and conduct a comprehensive study of the agency's
passenger aircraft operations to be completed by October 31, 2005.
These actions are consistent with the intent of our recommendations to
NASA and if carried out fully and effectively will help address the
deficiencies we found.
If NASA's study referred to above is carried out effectively and fully
considers the various matters discussed in this report, it should
provide the Congress valuable information for deciding whether
legislation may be needed on this matter. NASA's comments on a draft of
this report are reprinted in appendix II.
As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from the report date. At that time, we will send copies of the report
to interested congressional committees. We will also send copies of
this report to the Office of Management and Budget and the General
Services Administration. We will make copies available to others upon
request. In addition, the report will be available at no charge on the
GAO Web site at [Hyperlink, http://www.gao.gov]. If you or your staffs
have any questions regarding this report, please contact me at (202)
512-7455 or [Hyperlink, kutzg@gao.gov]. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made key contributions to this
report are listed in appendix III.
Signed by:
Gregory D. Kutz:
Managing Director, Forensic Audits and Special Investigations:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To assess reasonableness of costs, use, and agency oversight and
management of the National Aeronautics and Space Administration's
(NASA) passenger aircraft services, we met with officials of NASA's
Office of Infrastructure and Administration Aircraft Management Office
and appropriate officials at the Johnson Space Center, Houston, Texas;
Marshall Space Flight Center, Huntsville, Alabama; Kennedy Space
Center, Cape Canaveral, Florida; Wallops Flight Facility, Wallops
Island, Virginia; and Dryden Flight Research Center, Edwards,
California. We reviewed aircraft utilization and management reports
prepared by NASA and its contractor and aircraft operations budget/cost
information, including annual Aviation Financial Reports for fiscal
years 2003 and 2004, Annual Aviation Report: Aircraft Performance for
fiscal years 2003 and 2004, and NASA's 2004 Mission Management Aircraft
Fleet Plan. At each center, we observed and assessed the process for
managing passenger aircraft services and scheduling and justifying
costs for individual flights. We also reviewed available documentation
supporting the various cost-justification factors and multipliers NASA
used to estimate the variable costs of using its passenger aircraft as
well as the alternative costs of using commercial airline
transportation.
As part of our effort, we collected and compiled available flight-by-
flight NASA passenger aircraft cost and usage data from NASA mission
management aircraft request forms. These forms provided such
descriptive data as dates and purpose for travel, itinerary,
passengers, levels of approval, and cost justification for aircraft
use. We asked for all documentation maintained at NASA centers for
flights flown using NASA's passenger aircraft services during fiscal
years 2003 and 2004. We selected the most recently completed 2-year
period because NASA's regulations specify retaining source documents
related to passenger aircraft usage for at least 2 years. While
incomplete, we ultimately obtained some type of documentation
indicating that NASA passenger aircraft services during this 2-year
period included about 1,500 flights. However, because of the limited
amount of supporting documentation available for several hundred
flights, we included only 1,188 flights in our analysis. For example,
we could not use any of the approximate 200 flights from the Dryden
Flight Research Center in our analysis because few of the requested
documents included all the required usage and cost data necessary for
such an analysis. To independently verify the reliability and
completeness of individual flight source documentation maintained at
NASA centers, we compared the NASA-provided flight information with
information on NASA aircraft flights maintained by the Federal Aviation
Administration's (FAA) Enhanced Traffic Management System and
reconciled differences. Further, while not included in our analysis, we
obtained documentation showing that 2 of NASA's aircraft classified as
program support aircraft were also used to provide passenger
transportation, we did not attempt to determine if any of NASA's other
program support or research aircraft may have also been used to provide
passenger transportation as part of this audit. Also, we did not review
the effectiveness of safety or maintenance programs related to NASA's
passenger aircraft services.
To analyze the relative costs of NASA's passenger aircraft services
compared to commercial airline costs, we relied primarily on available
NASA cost data from NASA Aviation Financial Reports. We validated this
data wherever feasible with comparable independent data sources
including industry data. For example, we contacted the manufacturers of
both types of passenger aircraft used by NASA to validate that the cost
estimates used in our analysis were similar to the manufacturers' cost
metrics for operating those aircraft. We used fiscal year 2003 and 2004
cost data in annual Aviation Financial Reports reported by each center
that operated one or more of NASA's passenger aircraft and the costs
NASA incurred for chartering passenger aircraft from other government
agencies or contractors. At one center where reported cost data for
passenger aircraft in the Aviation Financial Report were combined with
data for other agency aircraft, we used annual budget data that were
limited to passenger aircraft operations. At NASA headquarters, we used
annual cost data provided by NASA because their annual Aviation
Financial Reports did not contain costs associated with NASA's use of
Federal Aviation Administration aircraft. Finally, costs from NASA's
Report on the Fractional Aircraft Demonstration Program were used to
determine the total cost of Flexjet flights. We used NASA Mission
Management Aircraft Request forms to determine the estimated cost for
flights taken on Department of Defense (DOD) aircraft. We then compared
reported costs of NASA aircraft operations and aircraft charter costs
with our estimates of travel costs that NASA would have incurred had
the passengers who flew on NASA's aircraft during our 2-year test
period used commercial airline transportation instead. To estimate the
commercial transportation costs of NASA employees who traveled using
NASA's passenger aircraft, we used the average commercial airline round-
trip fare of $426 for all flights flown by NASA employees during this
same time period as reported in a database of travel card transactions
for NASA provided by NASA's contractor, Bank of America.[Footnote 23]
This average commercial round-trip air fare estimate is intended to
approximate NASA's passenger transportation costs if it had used
commercial airline services instead of its own services. As such, it
may reflect amounts that in some cases would exceed NASA's actual
commercial costs. For example, to the extent to which unofficial
travelers were included in estimates of passengers, commercial costs
would be overstated. Conversely, in other cases our estimate may have
underestimated NASA's costs. For example, costs may have been
understated to the extent that such travel involved passenger aircraft
services to remote locations or locations with limited commercial air
service.
To determine the number of travelers who flew on NASA-owned and -
chartered aircraft during the 2-year period, we used the number of
passengers identified on individual hard-copy flight manifest
documentation NASA provided to us. During the course of our review, we
became aware of additional flights flown at some centers for which we
were not provided flight manifest documentation. However, we were
unable to obtain and analyze documentation for these additional flights
in time to complete our analysis. To the extent that the number of
passengers on flights for which individual flight documentation was not
provided to us, the estimate of commercial airfare costs is
understated. At the Dryden Flight Research Center, where individual
hard-copy flight documentation did not contain complete information, we
used the number of passengers the center reported to NASA headquarters
for inclusion in annual aircraft performance reports.
We did not use the numbers of passengers reported for all centers
because the centers reported their passenger counts inconsistently and
we were unable to validate them. Although the number of passengers
reported on individual flight manifests often included passengers who
flew only one way or on one or more legs of the trip, we counted these
partial-trip passengers as having flown round-trip for purposes of
estimating the commercial costs of passengers flown on NASA's aircraft.
Consequently, in this respect, our estimated savings are likely to be
understated in that including these partial-trip passengers in the
total number of passengers overstated our estimate of airfare costs
that NASA would have incurred had the passengers traveled on commercial
airlines. Conversely, our estimated savings may be overstated because
our estimated commercial travel costs did not include additional
lodging and other incidental costs that travelers would periodically
incur and salary costs for additional lost work time.
To estimate the lost work time associated with commercial airline
travel, including salary and benefit costs, per diem, rental cars,
commercial tickets, and other costs, we utilized cost estimates
included in NASA individual flight request forms. For the 1,188 flights
for which we received data, we used NASA's estimates for salary costs
multiplied by lost work hours, number of travelers, and NASA's benefit
factor of .5. Because accounting for fringe benefit costs was
recognized in OMB guidance, while unsupported, we used NASA's estimated
fringe benefits factor of .5 to increase passengers' salary costs. In
addition to salary costs, we also included available NASA estimates for
additional per diem, commercial tickets, rental cars, and other travel
costs associated with lost work time from using commercial airline
services. For one aircraft, we did not receive any flight justification
cost estimates. Instead, the location operating the aircraft had
developed standard calculations for the average commercial cost for
their two common flight patterns. We averaged the estimated commercial
cost for the two flight patterns to determine the average cost savings
per traveler for the aircraft. We then multiplied the commercial cost
by the number of travelers NASA reported for the aircraft during fiscal
years 2003 and 2004 to determine the total commercial cost of
transportation for travelers on the aircraft.
To assess whether NASA aircraft were operated and retained in
accordance with applicable governmentwide guidance, we primarily
reviewed the Office of Management and Budget (OMB) Circular No. A-126,
Improving the Management and Use of Government Aircraft; and Circular
No. A-76 (Revised), Performance of Commercial Activities. We also
reviewed applicable governmentwide guidance in OMB Circular No. A-11,
Preparation, Submission and Execution of the Budget Part 7: Planning,
Budgeting, Acquisition and Management of Capital Assets (Revised June
2005); General Services Administration's (GSA) Federal Property
Management Regulations, 41 C.F.R. Subtitle C; and Federal Travel
Regulations, 41 C.F.R. Subtitle F. We also reviewed NASA's implementing
publications, NASA Policy Directive (NPD) 7900.4B, NASA Aircraft
Operations Management (April 2004); NASA Policy Regulation (NPR)
7900.3A, Aircraft Operations Management (April 1999); and center-
specific implementing instructions. We held discussions regarding these
policies and procedures with officials of OMB's Office of Federal
Procurement Policy, Transportation/GSA Branch, and Science and Space
Branch; GSA's Office of Government-wide Policy; and NASA's Office of
General Counsel and NASA Center and program managers.
At each center, while we observed the process for managing aircraft
operations and scheduling and justifying individual flights, we
interviewed managers and program officials to discuss the importance to
which they assessed the need and justification for owning/leasing
passenger aircraft. We analyzed the purpose cited by NASA for
individual flights flown during our 2-year test period to determine
whether NASA's stated purpose complied with criteria established in OMB
and GSA guidance. We interviewed agency personnel who requested,
approved, and/or were passengers on approximately 80 flights during our
2-year test period to ensure that we understood the purpose for the
flights and the basis for utilizing NASA's aircraft. We did not assess
the adequacy of safety or maintenance programs related to NASA's
passenger aircraft. Further, we did not attempt to determine the
validity or appropriateness of travel using NASA's passenger aircraft,
nor did we assess if the type and number of personnel on the NASA
passenger aircraft were appropriate given the stated flight purposes.
To assess the effectiveness of NASA's oversight and management of its
passenger aircraft operations, we held discussions with appropriate
aircraft management officials at NASA headquarters and centers
operating passenger aircraft. We also identified and assessed (1)
NASA's implementing policies and procedures with respect to OMB and GSA
policy guidance, (2) the process used to approve and document passenger
aircraft utilization, (3) associated aircraft management reports, (4)
other recent assessments and studies done with respect to NASA
passenger aircraft services, and (5) the extent to which accurate,
current agencywide data were available to agency managers for day-to-
day decision making on passenger aircraft usage and costs.
We briefed NASA officials on the details of our audit, including
findings and their implications. On June 28, 2005, we requested
comments on a draft on this report. We received comments on July 28,
2005, and have summarized those comments in the Agency Comments and Our
Evaluation section of this report. NASA's comments are reprinted in
appendix II. We conducted our work from November 2004 through June 2005
in accordance with U.S. generally accepted government auditing
standards and quality standards for investigations as set forth by the
President's Council on Integrity and Efficiency.
[End of section]
Appendix II: Comments from the National Aeronautics and Space
Administration:
National Aeronautics and Space Administration:
Office of the Administrator:
Washington, DC 20546-0001:
July 28, 2005:
Mr. Gregory D. Kutz:
Managing Director:
Forensic Audits and Special Investigations:
Government Accountability Office:
Washington, DC 20548:
Dear Mr. Kutz:
Thank you for giving NASA an opportunity to review and comment on your
draft report on the effectiveness of our Aircraft Management Program
(GAO-05-818). I concur with the recommendations directed to the
National Aeronautics and Space Administration (NASA) in the draft
report.
Since 1958, NASA has used aircraft to support national aeronautical and
space research. Our goal is to fully comply with Federalwide aircraft
management policy. We will revisit our policies and procedures and
improve them where necessary to ensure our program is aligned with the
requirements of the Office of Management and Budget. For example, I
have directed that NASA use a new methodology to cost justify the use
of Government aircraft that does not use a multiplier to calculate lost
productivity. I have also ordered a comprehensive study of NASA's
Mission Management Aircraft Program. The review will include a baseline
analysis of NASA's mission requirement needs, recommend the number and
size of assets needed to fulfill those requirements, and consider
alternatives to aircraft ownership. It will also review our program
management, oversight, reporting, and cost-accounting processes. The
review will be conducted by NASA's Office of Program Analysis and
Evaluation, in coordination with the Office of the Chief Financial
Officer, and will be completed by October 31, 2005.
If you have any questions or would like additional information about
our Aircraft Management Program, please contact Jeffrey E. Sutton,
Assistant Administrator for Infrastructure and Administration, at (202)
358-2800.
Sincerely,
Signed by:
Michael D. Griffin:
Administrator:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gregory D. Kutz:
Acknowledgments:
In addition to the contact named above, Mario L. Artesiano, James D.
Berry, Fannie M. Bivins, Latasha L. Brown, Matthew S. Brown, Harold J.
Brumm, Carey L. Downs, Richard T. Cambosos, Francine M. Delvechio,
Francis L. Dymond, Dennis B. Fauber, Geoffrey B. Frank, Diane G.
Handley, Alison A. Heafitz, Christine A. Hodakievic, Jason M. Kelly,
Jonathan T. Meyer, George J. Ogilvie, James W. Pittrizzi, Kristen M.
Plungas, John J. Ryan, Sidney H. Schwartz, Joan K. Vogel, and Leonard
E. Zapata also made key contributions.
(192163):
FOOTNOTES
[1] GAO, Space Shuttle: Actions Needed to Better Position NASA to
Sustain Its Workforce through Retirement, GAO-05-230 (Washington, D.C.:
Mar. 9, 2005).
[2] GAO, Improvements Are Needed in Managing Aircraft Used By Federal
Agencies, LCD-77-430 (Washington, D.C: Dec. 22, 1977).
[3] OMB Circular No. A-126 (Revised), Improving the Management and Use
of Government Aircraft (May 22, 1992).
[4] 42 U.S.C. § 2473 (c) (3). This authorization is subject to Congress
making available appropriations.
[5] The other five civilian agencies that reported to GSA that they
owned and operated aircraft in fiscal year 2004 primarily for the
purpose of passenger transportation were the Departments of Homeland
Security, Justice, State, Interior, and Transportation.
[6] Three of NASA's seven passenger aircraft are classified as program
support because they were acquired as backups for existing shuttle
trainer aircraft. However, since shortly after their acquisition (one
in 1991 and two in 2001), these aircraft have been used primarily to
provide passenger transportation. In addition, one aircraft, a
Gulfstream I aircraft operated by the Johnson Space Center, was retired
from active service in March 2005.
[7] 31 U.S.C. § 1535. Under the Economy Act, federal agencies are
permitted to obtain services from other federal agencies when such
services cannot be provided as conveniently or cost-effectively from
commercial sources, and reimburse the other agencies for the cost of
the services obtained.
[8] H.R. Conf. Rep. No. 106-988, at 164 (2000) accompanying Pub. L. No.
106-377.
[9] OMB Circular No. A-76, (Revised), Performance of Commercial
Activities (May 29, 2003) establishes policies for competition of
agency commercial activities including the use of aircraft.
[10] 41 C.F.R. pt. 102-33 (2002).
[11] NASA Office of the Inspector General, Final Report, NASA Aircraft
Management, LA-95-001 (Washington, D.C.: Mar. 28, 1995) and NASA Office
of the Inspector General, A-76 Study of NASA 3 Aircraft, IG-99-057
(Washington, D.C.: Sept. 30, 1999).
[12] When request forms did not include data on passengers, we used
other NASA reports to identify the number of passengers on flights.
[13] Reported costs for NASA passenger aircraft services totaled
$24,689,000, and estimated commercial costs provided by NASA totaled
$11,311,000, yielding a difference of $13,378,000 between commercial
and NASA passenger aircraft costs.
[14] Statement 4 of the Statements of Federal Financial Accounting
Standards defines full cost as the total cost of direct and indirect
support used to produce an output.
[15] NPR 7900.3A, effective April 1999, expires December 2005.
[16] NASA Inspector General Report, IG-99-057.
[17] We were unable to identify a purpose for and categorize all
flights because of (1) missing documentation and (2) incomplete data.
For example, flights for Dryden Flight Research Center's Beechcraft 200
passenger aircraft were not included because descriptive flight data,
such as flight purposes, were not consistently listed on request forms.
In addition, we excluded flights on two other program-support aircraft
that were occasionally used to transport passengers. In addition,
request forms for approximately 97 flights were not provided by NASA
until after we identified the flights through a review of FAA flight
tracking records, and were therefore not provided in time for our
analysis.
[18] NASA acquired two of the aircraft in 2001 to serve as replacements
for two of the agency's four shuttle trainer aircraft. Those aircraft
were used for passenger transportation during the period of our review.
Another aircraft was acquired in 1991 to serve as a shuttle trainer,
but was never modified to serve in that role.
[19] Aviation Services Studies: Johnson Space Center, NASA 2 Mission
Management Aircraft, March 2004; Johnson Space Center, NASA 2
Gulfstream G-1, December 1999; Dryden Flight Research Center, NASA 7
King Air 200, February 2000; Goddard Space Flight Center - Wallops
Flight Facility, NASA 8 King Air 200, February 2000; NASA Headquarters,
NASA 1 Gulfstream III, February 2000.
[20] NASA Inspector General Report, IG-99-057 and NASA Inspector
General Report, LA-95-001.
[21] OMB Circular No. A-126, Attachment A, defines commercial cost to
include estimates of commercial tickets, additional per diem and rental
cars, and estimates of lost work time costs due to the extra time it
takes to travel commercially. OMB Circular No. A-126, Attachment B,
defines variable costs to the agency to include variable crew costs,
maintenance costs, labor, parts, contracts, engine overhauls, fuel, and
landing and tie down fees.
[22] Exceptions to required reimbursements are listed in section 9,c.
[23] To compute an average commercial round-trip air ticket cost, we
used Bank of America's Travel Card Air Transactions database for NASA
to develop a population of round-trip commercial nonpremium class
airline ticket purchases (debit transactions) during the period
covering October 1, 2002, through September 30, 2004. In total, the
nonpremium class airline ticket population consisted of 116,865
tickets, totaling approximately $49,775,733. Using this amount, we
computed the average cost of a commercial, round-trip, nonpremium class
airline ticket to be approximately $426 per ticket. We validated the
Bank's transaction database with comparable data reported by publicly
available GSA travel card information and found the data, both in
numbers of transactions and value, to be sufficiently reliable.
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