NASA
Sound Management and Oversight Key to Addressing Crew Exploration Vehicle Project Risks Gao ID: GAO-06-1127T September 28, 2006The National Aeronautics and Space Administration (NASA) plans to spend nearly $230 billion over the next two decades implementing the President's Vision for Space Exploration (Vision) plans. In July 2006, GAO issued a report that questioned the program's affordability, and particularly, NASA's acquisition approach for one of the program's major projects--the Crew Exploration Vehicle (CEV). This testimony, which is based upon that report and another recent GAO report evaluating NASA's acquisition policies, highlights GAO's continuing concerns with (1) the affordability of the exploration program; (2) the acquisition approach for the CEV, and; (3) NASA's acquisition policies that lack requirements for projects to proceed with adequate knowledge.
NASA's proposals for implementing the space exploration Vision raise a number of concerns. NASA cannot develop a firm cost estimate for the exploration program at this time because the program is in its early stages. The changes that have occurred to the program over the past year and the resulting refinement of its cost estimates are indicative of the evolving nature of the program. While changes are appropriate at this stage of the program, they leave the agency unable to firmly identify program requirements and needed resources and, therefore, not in the position to make a long term commitment to the program. NASA will likely be challenged to implement the program, as laid out in its Exploration Systems Architecture study (ESAS), due to the high costs associated with the program in some years and its long-term sustainability relative to anticipated funding. As we reported in July 2006, there are years when NASA, with some yearly shortfalls exceeding $1 billion, does not have sufficient funding to implement the architecture; while in other years the funding available exceeds needed resources. Despite initial surpluses, the long-term sustainability of the program is questionable, given its long-term funding outlook. NASA's preliminary projections show multibillion-dollar shortfalls for its exploration directorate in all fiscal years from 2014 to 2020, with an overall deficit through 2025 in excess of $18 billion. NASA's acquisition strategy for the CEV was not based upon obtaining an adequate level of knowledge when making key resources decisions, placing the program at risk for cost overruns, schedule delays, and performance shortfalls. These risks were evident in NASA's plan to commit to a long-term product development effort before establishing a sound business case for the project that includes well-defined requirements, mature technology, a preliminary design, and firm cost estimates. NASA adjusted its acquisition approach and the agency included the production and sustainment portions of the contract as options--a move that is consistent with the recommendation in our report because it lessens the government's financial obligation at this early stage. However, risks persist with NASA's approach. As we reported in 2005, NASA's acquisition policies lacked major decision reviews beyond the initial project approval gate and lacked a standard set of criteria with which to measure projects at crucial phases in the development life cycle. These decision reviews and development measures are key markers needed to ensure that projects are proceeding with and decisions are being based upon the appropriate level of knowledge and can help to lessen identified project risks. The CEV project would benefit from the application of such markers.
GAO-06-1127T, NASA: Sound Management and Oversight Key to Addressing Crew Exploration Vehicle Project Risks
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Testimony before the Committee on Science, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:00 p.m. EDT:
Thursday, September 28, 2006:
NASA:
Sound Management and Oversight Key to Addressing Crew Exploration
Vehicle Project Risks:
Statement of Allen Li, Director, Acquisition and Sourcing Management:
GAO-06-1127T:
GAO Highlights:
Highlights of GAO-06-1127T, a testimony before the Committee on
Science, House of Representatives
Why GAO Did This Study:
The National Aeronautics and Space Administration (NASA) plans to spend
nearly $230 billion over the next two decades implementing the
President‘s Vision for Space Exploration (Vision) plans. In July 2006,
GAO issued a report that questioned the program‘s affordability, and
particularly, NASA‘s acquisition approach for one of the program‘s
major projects”the Crew Exploration Vehicle (CEV). This testimony,
which is based upon that report and another recent GAO report
evaluating NASA‘s acquisition policies, highlights GAO‘s continuing
concerns with:
* the affordability of the exploration program;
* the acquisition approach for the CEV, and;
* NASA‘s acquisition policies that lack requirements for projects to
proceed with adequate knowledge.
Although GAO is not making recommendations in this testimony, we
previously recommended that NASA modify the CEV acquisition strategy to
ensure that a long-term commitment is not made prior to attaining of
key knowledge. NASA disagreed and stated that it had sufficient
knowledge for proceeding. Subsequent to our report, NASA changed its
strategy to lessen the government‘s fiscal obligation. GAO also made
recommendations regarding NASA‘s acquisition policies. The agency
agreed, but has yet to take major actions to implement them.
What GAO Found:
NASA‘s proposals for implementing the space exploration Vision raise a
number of concerns:
* NASA cannot develop a firm cost estimate for the exploration program
at this time because the program is in its early stages. The changes
that have occurred to the program over the past year and the resulting
refinement of its cost estimates are indicative of the evolving nature
of the program. While changes are appropriate at this stage of the
program, they leave the agency unable to firmly identify program
requirements and needed resources and, therefore, not in the position
to make a long term commitment to the program.
* NASA will likely be challenged to implement the program, as laid out
in its Exploration Systems Architecture study (ESAS), due to the high
costs associated with the program in some years and its long-term
sustainability relative to anticipated funding. As we reported in July
2006, there are years when NASA, with some yearly shortfalls exceeding
$1 billion, does not have sufficient funding to implement the
architecture; while in other years the funding available exceeds needed
resources. Despite initial surpluses, the long-term sustainability of
the program is questionable, given its long-term funding outlook.
NASA‘s preliminary projections show multibillion-dollar shortfalls for
its exploration directorate in all fiscal years from 2014 to 2020, with
an overall deficit through 2025 in excess of $18 billion.
* NASA‘s acquisition strategy for the CEV was not based upon obtaining
an adequate level of knowledge when making key resources decisions,
placing the program at risk for cost overruns, schedule delays, and
performance shortfalls. These risks were evident in NASA‘s plan to
commit to a long-term product development effort before establishing a
sound business case for the project that includes well-defined
requirements, mature technology, a preliminary design, and firm cost
estimates. NASA adjusted its acquisition approach and the agency
included the production and sustainment portions of the contract as
options”a move that is consistent with the recommendation in our report
because it lessens the government‘s financial obligation at this early
stage. However, risks persist with NASA‘s approach.
* As we reported in 2005, NASA‘s acquisition policies lacked major
decision reviews beyond the initial project approval gate and lacked a
standard set of criteria with which to measure projects at crucial
phases in the development life cycle. These decision reviews and
development measures are key markers needed to ensure that projects are
proceeding with and decisions are being based upon the appropriate
level of knowledge and can help to lessen identified project risks. The
CEV project would benefit from the application of such markers.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-1127T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Allen Li at (202) 512-
4841 or lia@gao.gov.
[End of Section]
Mr. Chairman and Members of the Committee:
I am pleased to be here today to discuss the National Aeronautics and
Space Administration's (NASA) plans for implementing the President's
Vision for Space Exploration (Vision).[Footnote 1] NASA plans to spend
nearly $230 billion over the next two decades--more than $31 billion of
which will be spent in the next 5 years--to bring the Vision to
reality.[Footnote 2] In July 2006, we issued a report that questioned
the program's affordability, and in particular, NASA's acquisition
approach for one of the program's major projects--the Crew Exploration
Vehicle (CEV).[Footnote 3] My statement today, which is based upon that
report and another report evaluating NASA's acquisition
policies,[Footnote 4] highlights our continuing concerns with the
affordability of the exploration program and the acquisition approach
for the CEV project, as well as the absence of firm requirements in
NASA's acquisition policies for projects to proceed with development
with the appropriate level of knowledge. Given the competing demands
facing the federal government and an already troubling funding profile
for the program, it is imperative that NASA implement the various
aspects of the Vision in a fiscally prudent and competent manner. Our
work was performed in accordance with generally accepted government
auditing standards.
Summary:
In summary, we found that because NASA's exploration program is in its
early stages, the agency cannot develop a firm cost estimate for the
program at this time. The changes that have occurred to the program
over the past year and the resulting refinement of its associated cost
estimates are indicative of the evolving nature of the program.
Furthermore, we found that it will likely be a challenge for NASA to
implement the program, as laid out in its Exploration Systems
Architecture study (ESAS)[Footnote 5] due to the high costs associated
with the program in some years and the long-term sustainability of the
program relative to anticipated funding. Finally, we found that NASA's
acquisition strategy for the CEV was not based upon obtaining an
adequate level of knowledge when making key resources decisions,
placing the program at risk for cost overruns, schedule delays, and
performance shortfalls. These risks were evident in NASA's plan to
commit to a long-term product development effort before establishing a
sound business case for the project that includes well-defined
requirements, mature technology, a preliminary design, and firm cost
estimates. Furthermore, in our 2005 report on NASA's acquisition
policies, we found that NASA's policies lacked major decision reviews
beyond the initial project approval gate and lacked a standard set of
criteria with which to measure projects at crucial phases in the
development life cycle. These decision reviews and development measures
are key markers needed to ensure that projects are proceeding with and
decisions are being based upon the appropriate level of knowledge and
can help to lessen project risks.
In our July 2006 report, we recommended that NASA adjust its
acquisition strategy to ensure that sufficient program knowledge--to
include well-defined requirements, mature technologies, a stable
design, and realistic cost estimates--be attained prior to committing
the government to a long-term contract. NASA did not concur with our
recommendation and in late August awarded a contract for the design,
development, production, and sustainment of the CEV to Lockheed Martin.
However, prior to awarding the contract, NASA adjusted its acquisition
approach and the agency included the production and sustainment
portions of the contract as options--a move that is consistent with the
recommendation in our report because it lessens the government's
financial obligation at this early stage. While these changes are
positive steps, the agency's acquisition strategy needs further
refinement to conform to acquisition best practices. Given the approach
that NASA has chosen, continued congressional oversight will be
critical for ensuring that the program stays within cost and schedule
goals. This is especially true given NASA's "go as you can afford to
pay" approach, wherein lower priority efforts will be deferred,
descoped, or discontinued to allow NASA stay within its budget profile.
Competing demands within the agency, coupled with a declining supply of
federal discretionary funding requires due diligence on the part the
agency and Congress to ensure successful program outcomes. As our work
has found, all too often, programs are allowed to proceed without
adequate knowledge being attained at key phases of development. Without
such knowledge, it is difficult to predict with any confidence how much
the program will cost, what technologies will or will not be available
to meet performance expectations, and when the vehicle will be ready
for use.
Background:
Despite many successes in the exploration of space, such as landing the
Pathfinder and Exploration Rovers on Mars, NASA has had difficulty
bringing a number of projects to completion, including several efforts
to build a second generation reusable human spaceflight vehicle to
replace the space shuttle. NASA has attempted several costly endeavors,
such as the National Aero-Space Plane, the X-33 and X-34, and the Space
Launch Initiative. While these endeavors have helped to advance
scientific and technical knowledge, none have completed their objective
of fielding a new reusable space vehicle. We estimate that these
unsuccessful development efforts have cost approximately $4.8 billion
since the 1980s. The high cost of these unsuccessful efforts and the
potential costs of implementing the Vision make it important that NASA
achieve success in its new exploration program beginning with the CEV
project.
Our past work has shown that developing a sound business case, based on
matching requirements to available and reasonably expected resources
before committing to a new product development effort, reduces risk and
increases the likelihood of success. High levels of knowledge should be
demonstrated before managers make significant program commitments,
specifically: (1) At program start, the customer's needs should match
the developer's available resources in terms of availability of mature
technologies, time, human capital, and funding; (2) Midway through
development, the product's design should be stable and demonstrate that
it is capable of meeting performance requirements; (3) By the time of
the production decision, the product must be shown to be producible
within cost, schedule, and quality targets, and have demonstrated its
reliability. Our work has shown that programs that have not attained
the level of knowledge needed to support a sound business case have
been plagued by cost overruns, schedule delays, decreased capability,
and overall poor performance. With regard to NASA, we have reported
that in some cases the agency's failure to define requirements
adequately and develop realistic cost estimates--two key elements of a
business case--resulted in projects costing more, taking longer, and
achieving less than originally planned.[Footnote 6]
Firm Cost Estimates Cannot Be Developed at This Time:
Although NASA is continuing to refine its exploration architecture cost
estimates, the agency cannot at this time provide a firm estimate of
what it will take to implement the architecture. The absence of firm
cost estimates is mainly due to the fact that the program is in the
early stages of its life cycle. NASA conducted a cost risk analysis of
its preliminary estimates through fiscal year 2011. On the basis of
this analysis and through the addition of programmatic reserves (20
percent on all development and 10 percent on all production costs),
NASA is 65 percent confident that the actual cost of the program will
either meet or be less than its estimate of $31.2 billion through
fiscal year 2011. For cost estimates beyond 2011, when most of the cost
risk for implementing the architecture will be realized, NASA has not
applied a confidence level distinction. Since NASA released its
preliminary estimates, the agency has continued to make architecture
changes and refine its estimates in an effort to establish a program
that will be sustainable within projected resources. While changes to
the program are appropriate at this stage when concepts are still being
developed, they leave the agency in the position of being unable to
firmly identify program requirements and needed resources. NASA plans
to commit to a firm cost estimate for the Constellation program at the
preliminary design review in 2008, when requirements, design, and
schedule will all be baselined. It is at this point where we advocate
program commitments should be made on the basis of the knowledge
secured.
Expected Budget and Competing Demands Will Challenge Architecture
Implementation:
NASA will be challenged to implement the ESAS recommended architecture
within its projected budget, particularly in the longer-term. As we
reported in July 2006, there are years when NASA has projected
insufficient funding to implement the architecture with some yearly
shortfalls exceeding $1 billion; while in other years the funding
available exceeds needed resources. Per NASA's approach, it plans to
use almost $1 billion in appropriated funds from fiscal years 2006 and
2007 in order to address the short-term funding shortfalls. NASA, using
a "go as you can afford to pay" approach, maintains that in the short-
term the architecture could be implemented within the projected
available budgets through fiscal year 2011 when funding is considered
cumulatively. However, despite initial surpluses, the long-term
sustainability of the program is questionable given the long-term
funding outlook for the program. NASA's preliminary projections show
multibillion-dollar shortfalls for its Exploration Systems Mission
Directorate in all fiscal years from 2014 to 2020, with an overall
deficit through 2025 in excess of $18 billion. According to NASA
officials, the agency will have to keep the program compelling for both
Congress and potential international partners, in terms of the
activities that will be conducted as part of the lunar program, in
order for the program to be sustainable over the long run.
NASA is attempting to address funding shortfalls within the
Constellation program by redirecting funds to that program from other
Exploration Systems Mission Directorate activities to provide a
significant surplus in fiscal years 2006 and 2007 to cover projected
shortfalls beginning in fiscal year 2009. Several Research and
Technology programs and missions were discontinued, descoped, or
deferred and that funding was shifted to the Constellation Program to
accelerate development of the CEV and CLV. In addition, the
Constellation program has requested more funds than required for its
projects in several early years to cover shortfalls in later years.
NASA officials stated the identified budget phasing problem could
worsen given the changes that were made to the exploration architecture
following issuance of the study. For example, while life cycle costs
may be lower in the long run, acceleration of development for the five
segment Reusable Solid Rocket Booster and J-2x engine will likely add
to the near-term development costs, where the funding is already
constrained. NASA has yet to provide cost estimates associated with
program changes.
NASA must also contend with competing budgetary demands within the
agency as implementation of the exploration program continues. NASA's
estimates beyond 2010 are based upon a surplus of well over $1 billion
in fiscal year 2011 due to the retirement of the space shuttle fleet in
2010. However, NASA officials said the costs for retiring the space
shuttle and transitioning to the new program are not fully understood;
thus, the expected surplus could be less than anticipated. This year,
NASA plans to spend over 39 percent of its annual budget for space
shuttle and International Space Station (ISS) operations--dollars that
will continue to be obligated each year as NASA completes construction
of the ISS by the end of fiscal year 2010. This does not include the
resources necessary to develop ISS crew rotation or logistics servicing
support capabilities for the ISS during the period between when the
space shuttle program retires and the CEV makes its first mission to
the ISS. While, generally, the budget for the space shuttle is
scheduled to decrease as the program moves closer to retirement, a
question mark remains concerning the dollars required to retire the
space shuttle fleet as well as transition portions of the
infrastructure and workforce to support implementation of the
exploration architecture. In addition, there is support within Congress
and the scientific community to restore money to the Science Mission
Directorate that was transferred to the space shuttle program to ensure
its viability through its planned retirement in 2010. Such a change
could have an impact on future exploration funding.
Lack of Sound Business Case Puts CEV Acquisition at Risk:
In July 2006, we reported that NASA's acquisition strategy for the CEV
placed the project at risk of significant cost overruns, schedule
delays, and performance shortfalls because it committed the government
to a long-term contract before establishing a sound business case. We
found that the CEV contract, as structured, committed the government to
pay for design, development, production and sustainment upon contract
award--with a period of performance through at least 2014 with the
possibility of extending through 2019.
Our report highlighted that NASA had yet to develop key elements of a
sound business case, including well-defined requirements, mature
technology, a preliminary design, and firm cost estimates that would
support such a long-term commitment. Without such knowledge, NASA
cannot predict with any confidence how much the program will cost, what
technologies will or will not be available to meet performance
expectations, and when the vehicle will be ready for use. NASA has
acknowledged that it will not have these elements in place until the
project's preliminary design review scheduled for fiscal year 2008. As
a result, we recommended that the NASA Administrator modify the current
CEV acquisition strategy to ensure that the agency does not commit
itself, and in turn the federal government, to a long-term contractual
obligation prior to establishing a sound business case at the project's
preliminary design review. In response to our recommendation, NASA
disagreed and stated that it had the appropriate level of knowledge to
proceed with its current acquisition strategy. NASA also indicated that
knowledge from the contractor is required in order to develop a
validated set of requirements and, therefore, it was important to get
the contractor on to the project as soon as possible. In addition,
according to NASA officials, selection of a contractor for the CEV
would enable the agency to work with the contractor to attain knowledge
about the project's required resources and, therefore, be better able
to produce firm estimates of project cost. In our report, we
highlighted that this is the type of information that should be
obtained prior to committing to a long-term contract. To our knowledge,
NASA did not explore the possibility of utilizing the contractor,
through a shorter-term contract, to conduct work needed to develop
valid requirements and establish higher-fidelity cost estimates--a far
less risky and costly strategy.
Subsequent to our report, NASA did, however, take steps to address some
of the concerns we raised. Specifically, NASA modified its acquisition
strategy for the CEV and made the production and sustainment schedules
of the contract--known as Schedules B and C--contract options that the
agency will decide whether to exercise after project's critical design
review in 2009. Therefore, NASA will only be liable for the minimum
quantities under Schedules B and C when and if it chooses to exercise
those options. These changes to the acquisition strategy lessen the
government's financial obligation at this early stage. Table 1 outlines
the information related to the CEV acquisition strategy found in the
request for proposal and changes that were made to that strategy prior
to contract award. While we view these changes as in line with our
recommendation and as a positive step to address some of the risks we
raised in our report, NASA still has no assurance that the project will
have the elements of a sound business case in place at the preliminary
design review. Therefore, NASA's commitment to efforts beyond the
project's preliminary design review--even when this commitment is
limited to design, development, test and evaluation activities (DDT&E)-
-is a risky approach. It is at this point that NASA should (a) have the
increased knowledge necessary to develop a sound business case that
includes high-fidelity, engineering-based estimates of life cycle cost
for the CEV project, (b) be in a better position to commit the
government to a long-term effort, and (c) have more certainty in
advising Congress on required resources.
Table 1: CEV Acquisition Strategy in the Request for Proposal and
Awarded Contract:
Contract schedule and type:
Schedule A-; DDT&E;
Cost plus award fee (CPAF)[A];
Indefinite delivery/ indefinite quantity (ID/IQ)[B];
Schedule activities and deliverables: Schedule A is for design
development, test and evaluation of the CEV. Deliverables under
Schedule A include all test articles and two operational CEV vehicles-
one human-rated variant and one pressurized cargo variant;
Request for proposal period of performance: * Contract award date
through 2013;
Contract period of performance: * 2006 through 2013;
Contract cost estimate: $3.9 billion (CPAF); Up to $750 million
(ID/IQ).
Contract schedule and type:
Schedule B-;
Production;
ID/IQ;
Schedule activities and deliverables: Schedule B is for production
beyond the two operational vehicles delivered under Schedule A. The CEV
request for proposal stated that the "guaranteed minimum" quantity for
Schedule B is "two CEV," the type of which, according to NASA officials
is undetermined;
Request for proposal period of performance:
* 2009 through 2014 (base period);
* 5-year option period through 2019;
Contract period of performance:
* Initial option period from 2009 through 2014;
* Additional option period from 2014 through 2019;
Contract cost estimate: $3.5 billion; (Not to exceed).
Contract schedule and type:
Schedule C-;
Sustaining Engineering;
ID/IQ;
Schedule activities and deliverables: Schedule C is for sustainment in
support of operations and in support of Schedule B activities;
Request for proposal period of performance:
* 2009 through 2014 (base period);
* 5-year option period through 2019;
Contract period of performance:
* Initial option period from 2009 through 2014;
* Additional option period from 2014 through 2019;
Contract cost estimate: $750 million.
Source: GAO Analysis of NASA's CEV Request for Proposal and Contract:
[A] A cost-plus-award-feed contract is a cost-reimbursement contract
that provides for a fee consisting of a base amount (which may be zero)
fixed at inception of the contract and an award amount, based upon a
judgmental evaluation by the government, sufficient to provide
motivation for excellence in contract performance.
[B] An indefinite quantity contract provides for an indefinite quantity
within stated limits, of supplier or services during a fixed period.
The government places orders for individual requirements. This type of
contract includes a minimum quantity and a maximum quantity.
[End of table]
Sound Management and Oversight Key to Addressing CEV Project Risks:
Sound project management and oversight will be key to addressing risks
that remain for the CEV project as it proceeds with its acquisition
approach. To help mitigate these risks, NASA should have in place the
markers necessary to help decision makers monitor the CEV project and
ensure that is following a knowledge based approach to its development.
However, in our 2005 report that assessed NASA's acquisition policies,
we found that NASA's policies lacked major decision reviews beyond the
initial project approval gate and a standard set of criteria with which
to measure projects at crucial phases in the development life cycle--
key markers for monitoring such progress. In our review of the
individual center policies, we found that the Johnson Space Center
project management policy, which is the policy that the CEV project
will be required to follow, also lacked such key criteria. We concluded
that without such requirements in place, decision makers have little
knowledge about the progress of the agency's projects and, therefore,
cannot be assured that they are making informed decisions about whether
continued investment in a program or project is warranted.
We recommended that NASA incorporate requirements in its new systems
engineering policy to capture specific product knowledge at key
junctures in project development. The demonstration of such knowledge
could then be used as exit criteria for decision making at the
following key junctures:
* Before projects are approved to transition in to implementation, we
suggested that projects be required to demonstrate that key
technologies have reached a high maturity level.
* Before projects are approved to transition from final design to
fabrication, assembly, and test, we suggested that projects be required
to demonstrate that the design is stable.
* Before projects are approved to transition to production, we
suggested that projects be required to demonstrate that the design can
be manufactured within cost, schedule, and quality targets.
In addition, we recommended that NASA institute additional major
decision reviews that are tied to these key junctures to allow decision
makers to reassess the project based upon demonstrated knowledge.
While NASA concurred with our recommendations, the agency has yet to
take significant actions to implement them. With regard to our first
recommendation, NASA stated that the agency would establish
requirements for success at the key junctures mentioned above. NASA
planned to include these requirements in the systems engineering policy
it issued in March 2006. Unfortunately, NASA did not include these
criteria as requirements in the new policy, but included them in an
appendix to the policy as recommended best practices criteria. In
response to our second recommendation, NASA stated it would revise its
program and project management policy for flight systems and ground
support projects, due to be completed in fall 2006. In the revised
policy, NASA indicated that it would require the results of the
critical design review and, for projects that enter a large-scale
production phase, the results of the production readiness review to be
reported to the appropriate decision authority in a timely manner so
that a decision about whether to proceed with the project can be made.
NASA has yet to issue its revised policy; therefore, it remains to be
seen as to whether the CEV project decision authorities will have the
opportunity to reassess and make decisions about the project using the
markers recommended above after the project has initially been
approved. Briefings that we have recently received indicate that NASA
plans to implement our recommendation in the revised policy.
The risks that NASA has accepted by moving ahead with awarding the
contract for DDT&E for CEV could be mitigated by implementing our
recommendations as it earlier agreed. Doing so would provide both NASA
and Congress with markers of the project's progress at key points. For
example, at the preliminary design review, decision makers would be
able to assess the status of the project by using the marker of
technology maturity. In addition, at the critical design review, the
agency could assess the status of the project using design stability
(i.e., a high percentage of engineering drawings completed). If NASA
has not demonstrated technology maturity at the preliminary design
review or design stability at the critical design review, decision
makers would have an indication that the project will likely be headed
for trouble. Without such knowledge, NASA cannot be confident that its
decisions about continued investments in projects are based upon the
appropriate knowledge. Furthermore, NASA's oversight committees could
also use the information when debating the agency's yearly budget and
authorizing funds not only for the CEV project, but also for making
choices among NASA's many competing programs. If provided this type of
information from NASA about its key projects, Congress will be in a
better position to make informed decisions about how to invest the
nation's limited discretionary funds.
NASA's ability to address a number of long-standing financial
management challenges could also impact management of NASA's key
projects. The lack of reliable, day-to-day information continues to
threaten NASA's ability to manage its programs, oversee its
contractors, and effectively allocate its budget across numerous
projects and programs. To its credit, NASA has recognized the need to
enhance the capabilities and improve the functioning of its core
financial management system, however, progress has been slow. NASA
contract management has been on GAO's high-risk list since 1990 because
of such concerns.
Conclusions:
In conclusion, implementing the Vision over the coming decades will
require hundreds of billions of dollars and a sustained commitment from
multiple administrations and Congresses. The realistic identification
of the resources needed to achieve the agency's short-term goals would
provide support for such a sustained commitment over the long term.
With a range of federal commitments binding the fiscal future of the
United States, competition for resources within the federal government
will only increase over the next several decades. Consequently, it is
incumbent upon NASA to ensure that it is wisely investing its existing
resources. As NASA proceeds with its acquisition strategy for the CEV
project and other key projects, it will be essential that the agency
ensure that the investment decisions it is making are sound and based
upon high levels of knowledge. NASA should require that the progress of
its projects are evaluated and reevaluated using knowledge based
criteria, thereby improving the quality of decisions that will be made
about which program warrant further investment. Furthermore, it will be
critical that NASA's financial management organization delivers the
kind of analysis and forward-looking information needed to effectively
manage its programs and projects. Clear, strong executive leadership
will be needed to ensure that these actions are carried out. Given the
nation's fiscal challenges and those that exist within NASA, the
availability of significant additional resources is unlikely. NASA has
the opportunity to establish a firm foundation for its entire
exploration program by ensuring that the level of knowledge necessary
to allow decision makers to make informed decisions about where
continued investment is justified. Doing so will enhance confidence in
the agency's ability to finally deliver a replacement vehicle for
future human space flight.
Mr. Chairman, this concludes my prepared statement. I would be pleased
to respond to any questions that you or other Members of the Committee
may have.
GAO Contact and Staff Acknowledgements:
For further information regarding this testimony, please contact Allen
Li at (202) 512-4841 or lia@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this testimony. GAO staff who made key contributions to this
testimony include Greg Campbell, Richard Cederholm, Hillary Loeffler,
James L. Morrison, Jeffrey M. Niblack, and Shelby S. Oakley.
FOOTNOTES
[1] The Vision includes a return to the moon that is intended
ultimately to enable exploration of Mars and other destinations. To
accomplish this, NASA initially plans to (1) complete its work on the
International Space Station by 2010, fulfilling its commitment to 15
international partner countries; (2) begin developing a new manned
exploration vehicle to replace the space shuttle; and (3) return to the
moon no later than 2020 in preparation for future, more ambitious
missions.
[2] All cost estimates related to the Vision are reported as inflated
("real year") dollars.
[3] GAO, NASA: Long-Term Commitment to and Investment in Space
Exploration Program Requires More Knowledge, GAO-06-817R (Washington,
D.C.: July 17, 2006).
[4] GAO, NASA: Implementing a Knowledge-Based Acquisition Framework
Could Lead to Better Investment Decisions and Project Outcomes, GAO-06-
218 (Washington, D.C.: Dec. 21, 2005).
[5] The ESAS was an effort to identify the best architecture and
strategy to implement the Vision. The architecture supports the
development of a new CEV, Crew Launch Vehicle (CLV), a Cargo Launch
Vehicle (CaLV), and other supporting systems. The architecture also
calls for various Research and Technology (R&T) and Robotic Lunar
Exploration Program (RLEP) projects. NASA's Exploration Systems Mission
Directorate's Constellation program is responsible for the development
of the CEV, CLV, and CaLV.
[6] GAO, NASA: Lack of Disciplined Cost-Estimating Processes Hinders
Effective Program Management, GAO-04-642 (Washington, D.C.: May 28,
2004).
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