NASA
Agency Faces Challenges Defining Scope and Costs of Space Shuttle Transition and Retirement Gao ID: GAO-08-1096 September 30, 2008The Space Shuttle Program (SSP) is scheduled to retire in 2010, and the transition and retirement of its facilities and assets will be an immense undertaking involving approximately 654 facilities worth an estimated $5.7 billion and equipment with an estimated value of more than $12 billion. NASA plans to retire the SSP in 2010 to make resources available for the Constellation program, which is producing the next generation of space vehicles by 2015. Many of the SSP's resources are expected to transition to Constellation while others will be dispositioned or preserved for their historic value. The Consolidated Appropriations Act, 2008 directed GAO to assess NASA's plans and progress in transitioning and retiring the SSP's facilities and equipment. More specifically, GAO examined 1) the challenges NASA faces in defining the scope and costs of transition and retirement activities, and 2) whether the cost of these efforts is transparent in NASA's budget requests. To address these objectives, GAO analyzed SSP plans, budget guidance, and other documents, and interviewed relevant government officials and contractors.
The National Aeronautics and Space Administration (NASA) faces disparate challenges defining the scope and cost of SSP transition and retirement activities. For example, because the Constellation program is still finalizing its requirements, the agency does not yet know what SSP property it needs to retain or the full cost of the transition effort. In addition, NASA faces other challenges that hamper its efforts to manage the transition and develop firm estimates of SSP transition and retirement scope and costs. For example, NASA has not developed final plans and/or cost estimates for making artifacts-- including the orbiters Atlantis, Discovery, and Endeavour--safe for public display. The total cost of SSP transition and retirement is not transparent in NASA's current budget request and is not expected to be reflected in its fiscal year 2010 budget request. This is due in part to delays in estimating costs, but also to where costs are being reflected. For example, although SSP's direct transition and retirement costs are identified in the SSP budget line, indirect costs related to environmental clean-up and restoration, maintenance of required real property facilities during the gap in human spaceflight, and demolition of excess facilities are not. In addition, NASA plans to offset some transition costs by utilizing an "exchange/sale" authority that allows executive agencies to exchange or sell non-excess, non-surplus personal property and apply the proceeds toward acquiring similar replacement property.
RecommendationsOur 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-08-1096, NASA: Agency Faces Challenges Defining Scope and Costs of Space Shuttle Transition and Retirement
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
September 2008:
NASA:
Agency Faces Challenges Defining Scope and Costs of Space Shuttle
Transition and Retirement:
GAO-08-1096:
GAO Highlights:
Highlights of GAO-08-1096, a report to congressional committees.
Why GAO Did This Study:
The Space Shuttle Program (SSP) is scheduled to retire in 2010, and the
transition and retirement of its facilities and assets will be an
immense undertaking involving approximately 654 facilities worth an
estimated $5.7 billion and equipment with an estimated value of more
than $12 billion. NASA plans to retire the SSP in 2010 to make
resources available for the Constellation program, which is producing
the next generation of space vehicles by 2015. Many of the SSP‘s
resources are expected to transition to Constellation while others will
be dispositioned or preserved for their historic value.
The Consolidated Appropriations Act, 2008 directed GAO to assess NASA‘s
plans and progress in transitioning and retiring the SSP‘s facilities
and equipment. More specifically, GAO examined 1) the challenges NASA
faces in defining the scope and costs of transition and retirement
activities, and 2) whether the cost of these efforts is transparent in
NASA‘s budget requests. To address these objectives, GAO analyzed SSP
plans, budget guidance, and other documents, and interviewed relevant
government officials and contractors.
What GAO Found:
The National Aeronautics and Space Administration (NASA) faces
disparate challenges defining the scope and cost of SSP transition and
retirement activities. For example, because the Constellation program
is still finalizing its requirements, the agency does not yet know what
SSP property it needs to retain or the full cost of the transition
effort. In addition, NASA faces other challenges that hamper its
efforts to manage the transition and develop firm estimates of SSP
transition and retirement scope and costs. For example, NASA has not
developed final plans and/or cost estimates for making artifacts”
including the orbiters Atlantis, Discovery, and Endeavour”safe for
public display.
The total cost of SSP transition and retirement is not transparent in
NASA‘s current budget request and is not expected to be reflected in
its fiscal year 2010 budget request. This is due in part to delays in
estimating costs, but also to where costs are being reflected. For
example, although SSP‘s direct transition and retirement costs are
identified in the SSP budget line, indirect costs related to
environmental clean-up and restoration, maintenance of required real
property facilities during the gap in human spaceflight, and demolition
of excess facilities are not. In addition, NASA plans to offset some
transition costs by utilizing an ’exchange/sale“ authority that allows
executive agencies to exchange or sell non-excess, non-surplus personal
property and apply the proceeds toward acquiring similar replacement
property.
Figure: The Space Shuttle Program Is Retiring in 2010 and NASA Is
Transitioning to Constellation Program Spaceflight Vehicles in 2015:
[Refer to PDF for image]
This figure is an illustration of a space shuttle and a Constellation
Program Spaceflight Vehicle.
Source: NASA.
[End of figure]
What GAO Recommends:
GAO recommends that NASA clearly identify all direct and indirect SSP
transition and retirement costs, including any potential exchange sale
proceeds in its 2010 and future budget requests. NASA concurred with
our recommendation.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1096]. For more
information, contact Cristina Chaplain at (202) 512-4841 or
chaplainc@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
NASA Faces Challenges Defining SSP Transition and Retirement Scope and
Costs:
SSP Transition and Retirement Costs Are Not Transparent in NASA's
Budget:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the National Aeronautics and Space
Administration:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Other SSP Transition and Retirement Challenges:
Table 2: Transition and Retirement Costs in the SSP Budget Line:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 30, 2008:
The Honorable Barbara A. Mikulski:
Chairman:
The Honorable Richard C. Shelby:
Ranking Member:
Subcommittee on Commerce, Justice, Science, and Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Alan B. Mollohan:
Chairman:
The Honorable Rodney P. Frelinghuysen:
Ranking Member:
Subcommittee on Commerce, Justice, Science, and Related Agencies:
Committee on Appropriations:
House of Representatives:
The Honorable Mark Udall:
Chairman:
Subcommittee on Space and Aeronautics:
Committee on Science and Technology:
House of Representatives:
After providing the United States unrivaled access to space for
decades, the space shuttle is slated to make its last flight in 2010.
The National Aeronautics and Space Administration (NASA) plans to
retire the Space Shuttle Program (SSP) to make resources[Footnote 1]
available for the Constellation program, which is expected to achieve
initial operational capability in 2015. The transition and retirement
of the SSP's facilities and assets represent an immense undertaking.
The SSP occupies approximately 654 real property facilities and holds
about 1.2 million line items of personal property.[Footnote 2] NASA
estimates the total replacement value of all SSP facilities is
approximately $5.7 billion, which accounts for nearly one-fourth of the
value of the agency's total facility inventory. The total SSP personal
property acquisition value is estimated by NASA at about $12 billion,
and there are numerous locations where government personal property is
used. The SSP transition and phase-out effort will be complex and
challenging, especially when coupled with simultaneously finalizing the
designs for the Ares I crew launch vehicle and Orion crew exploration
vehicle and conducting potentially the most complicated sequence of
shuttle flights ever attempted--completing the International Space
Station and conducting a fifth servicing mission to the Hubble Space
Telescope all by the end of 2010.
In light of the magnitude of this undertaking, in a joint explanatory
statement accompanying the Consolidated Appropriations Act, 2008 (Pub.
L. No. 110-161), you asked us to assess NASA's plans and progress in
transitioning and retiring the SSP's assets and facilities. More
specifically, GAO examined 1) the challenges NASA faces in defining the
scope and costs of transition and retirement activities, and 2) whether
the cost of these efforts is transparent in NASA's current and upcoming
budget requests. To address these objectives, we obtained and analyzed
SSP transition and retirement plans and schedules, budget formulation
guidance, and transition property assessments. We also interviewed
responsible and cognizant government and contractor officials at
relevant NASA centers and NASA headquarters. For our full scope and
methodology, see appendix I. We conducted this performance audit from
February 2008 to August 2008 in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Results in Brief:
NASA faces disparate challenges in defining the scope and cost of SSP
transition and retirement activities. Because the Constellation program
is still finalizing its requirements, the agency does not yet know the
full extent of SSP property it needs to retain or what the full cost of
the transition effort will be. In addition, NASA faces other challenges
that further hamper the agency's efforts to manage transition
activities and develop firm estimates of SSP transition and retirement
scope and cost. For example, NASA has yet to develop final plans and/or
cost estimates for "safing"[Footnote 3] artifacts, including the space
shuttle orbiters Atlantis, Discovery, and Endeavour.
The total cost of SSP transition and retirement is not transparent in
NASA's current budget request and is not expected to be fully reflected
as such in NASA's fiscal year 2010 budget request, when the agency
plans to include its first official estimate of the scope and cost.
Although SSP's direct transition and retirement costs are included in
the SSP budget line, the Cross-Agency Support portion of NASA's budget
request includes funding for significant SSP transition and retirement
activities the agency considers indirect costs, including environmental
compliance and remediation and demolition of excess facilities. These
funds, however, are not identified as SSP transition and retirement
costs, nor is it easy to discern that they could be in examining this
budget line. In addition, NASA plans to offset some transition costs by
utilizing an "exchange/sale" authority that allows executive agencies
to exchange or sell non-excess, non-surplus personal property and apply
the proceeds toward acquiring similar replacement property.
To provide congressional decision makers with a more transparent
assessment of funding needs for the SSP's property transition and
retirement activities, we are recommending that NASA include more
comprehensive estimates of transition and retirement costs in its
future budget requests to include identification of all direct and
indirect costs and potential exchange/sale proceeds.
Background:
In a major space policy address on January 14, 2004, President George
W. Bush announced his "Vision for U.S. Space Exploration" (Vision) and
directed NASA to retire the SSP after completing construction of the
International Space Station in 2010 and focus its future human space
exploration activities on a return to the Moon as a prelude to future
human missions to Mars and beyond. As part of the Vision, NASA is
developing new vehicles under the Constellation program, with an
initial operational capability currently scheduled for 2015. In order
to accelerate development and minimize development costs, NASA elected
to pursue shuttle-derived options and the use of heritage systems for
the new systems. The agency also found that shuttle-derived options are
more affordable, safe, and reliable and provide the use, in some
instances, of existing personnel, infrastructure, manufacturing and
processing facilities, transportation elements, and heritage system
hardware.
NASA will transfer whatever real (land, buildings, and facilities) and
personal (e.g., system hardware, tools, plant equipment) property is
practical given program requirements to Constellation and other
programs to offset the need for new acquisitions. Transferring property
provides NASA with distinct financial benefits. First, the receiving
program avoids the cost of acquiring the needed property. Second, the
SSP avoids the costs associated with disposing of the property. The SSP
and its contractors are currently conducting transition property
assessments (TPA) of property belonging to the SSP in two phases. In
Phase 1 the agency is identifying existing SSP personal property and
determining property category, item status, availability date, and
whether the property should be transferred or declared excess. This
process is ongoing and continues to identify SSP property. For example,
as of May 2007 NASA had identified about 1 million line items of SSP
personal property. By May 2008 this number had increased to about 1.2
million line items. During Phase 2 of the TPA process, the agency is
developing detailed plans for disposing of excess SSP personal property
including identifying hazardous materials, cataloging recoverable
precious metals, providing historical artifact justification, and
identifying final destinations. Based on discussions between the Space
Shuttle and Constellation programs, it is estimated that about 40 to 47
percent of SSP personal property will be transferred to Constellation
and other NASA programs and the remaining property will be declared
excess.
NASA has yet to include an official estimate of the total cost of the
SSP transition and retirement in any of its budget requests. Although
NASA has developed a series of cost estimates for it--ranging from the
$4.4 billion reported by the NASA Inspector General in January 2007,
[Footnote 4] to the approximately $1.8 billion estimate prepared by the
agency to support its fiscal year 2009 budget request--and has been
funding SSP transition and retirement activities out of its approved
Shuttle budget, the agency has not included any of the estimates for
fiscal years 2011 and beyond in its budget requests to the Congress.
NASA transition managers maintain that NASA made a strategic decision
not to release an estimate of transition and retirement costs for
fiscal years 2011 and later until the scope of the effort and the
associated costs and schedule were better defined. According to NASA
transition managers, the agency has now accomplished this better
definition and plans to include an estimate substantially lower than
the earlier $1.8 billion estimate for the total cost of SSP transition
and retirement in its fiscal year 2010 budget request.
We have previously reported on NASA's management of the billions of
dollars of government equipment under its control.[Footnote 5] We found
weaknesses in the design and operation of NASA's systems, processes,
and policies covering the control and accountability of equipment. We
made recommendations that focused on ways to strengthen NASA's internal
control environment and improve its property management.
NASA Faces Challenges Defining SSP Transition and Retirement Scope and
Costs:
NASA faces disparate challenges defining the scope and costs of SSP
transition and retirement activities. The Constellation program is
finalizing the requirements that will inform the SSP of what real and
personal property needs to be retained and what should be declared
excess. Furthermore, the property assessments needed to inform NASA's
budget planning process may not be completed in time to support the
cost estimates the agency plans to include in its fiscal year 2010
budget request. In addition, NASA faces other challenges that further
hamper the agency's efforts to develop firm estimates of SSP transition
and retirement scope and cost, including finalizing plans for safing
artifacts.
Lack of Finalized Constellation Program Requirements Contributes to SSP
Transition and Retirement Uncertainties:
The Constellation program is still finalizing its requirements and
defining needed capabilities; therefore, the agency does not know, in
all instances, what SSP property needs to be retained and what property
can be declared excess. According to SSP and Constellation transition
managers, there is a symbiotic push and pull relationship between the
SSP and the Constellation program. Ideally, in this relationship the
SSP would push the property that it no longer needs for the safe
operation of the space shuttle to the Constellation program in order to
avoid property maintenance and/or disposal costs. Likewise, in order to
avoid acquisition costs, the Constellation program would pull the SSP
property that it has designated as needed. Thus far, however, this
relationship has not worked as well as the agency has desired.
Essentially, the Constellation program has not finalized its
requirements for personal and real property from the SSP because it is
still in the process of defining its own programmatic requirements. For
example, at the time of our review, the Constellation program had yet
to hold its Preliminary Design Review during which it will finalize its
preliminary design and operations concepts, two key steps in
determining the Constellation program's hardware and processing
facility needs. Further, according to the Exploration Systems Mission
Directorate (ESMD) Transition Manager, the Constellation program is
just now realizing the importance of "pulling" SSP assets to avoid
costs, as any and all of the SSP transition and retirement costs post-
2010 will be borne by NASA at the expense of the follow-on program(s)
or Center Management and Operations budgets.
NASA Will Not Complete the TPA Process Until After the Agency's Budget
Request for Fiscal Year 2010 Is Submitted:
NASA will not complete the last phase of the TPA process until after
the agency's budget request for fiscal year 2010 is submitted and may
not complete all TPA activity until the end of fiscal year 2009. NASA
plans to complete Phase 1 of the TPA process by the end of September
2008. However, delays in finalizing system designs within the
Constellation program are hampering the efforts of the Solid Rocket
Booster element of the SSP to complete Phase 1 on time. In effect,
Phase 2 of the TPA process will develop the type of detailed
information needed to support accurate SSP transition and retirement
cost estimates. The TPA Phase 2 process, however, is not scheduled for
completion until January 2009--well after the fiscal year 2010 budget
request is formulated. Furthermore, the Space Shuttle Main Engine does
not anticipate completing TPA Phase 2 until August 2009, well after the
budget request is submitted to Congress.
Other Challenges Further Hamper NASA's Efforts:
NASA faces other challenges that further hamper the agency's efforts to
define the scope and cost of SSP transition and retirement. In addition
to the issues discussed above, NASA has not yet developed final plans
and/or cost estimates for safing artifacts, including the orbiters
Atlantis, Discovery, and Endeavour. Moreover, the SSP lacks a
centralized information system to track and control all SSP property. A
centralized system would be particularly useful as transition and
retirement activities are expected to rapidly increase in 2010. These
and other challenges are summarized in table 1 below.
Table 1: Other SSP Transition and Retirement Challenges:
Funding uncertainties:
NASA's transition plan indicates that the SSP transition and retirement
scope and schedule for each year are also constrained by the amount of
funding the SSP Program Manager is able to allocate from the SSP annual
operating budget for transition and retirement activities. Changes to
the SSP flight manifest have direct impacts on the amount of funding
available for SSP transition and retirement activities. Therefore, a
firm transition and retirement completion date cannot be determined.
Safing artifacts:
SSP transition and retirement costs associated with safing artifacts
for public museum display may be more difficult and expensive than
originally anticipated. Safing involves removing hazardous material
from SSP hardware so that it can be safely handled and displayed.
Another challenge with safing SSP hardware is removing hazardous items
from the orbiters, including self-igniting fuels. According to NASA
officials, every major aerospace museum in the country, including those
at NASA centers, wants one of the three operational orbiters, but the
museums may not have the resources or expertise for the necessary
safing. As an example, according to NASA officials, the National Museum
of the United States Air Force at Wright-Patterson Air Force Base
expressed interest in obtaining an orbiter to display as part of its
collection. The museum entered into discussions with NASA wherein the
museum considered offering to bear the costs of safing for the
privilege of displaying an orbiter permanently at its facility.
However, the Museum subsequently withdrew from the discussions,
acknowledging that it lacked the requisite technical knowledge to
accomplish the tasks.
Decentralized property management systems:
The SSP does not have a centralized database that identifies, tracks,
and/or controls all SSP property. Instead, SSP's property management
databases are decentralized and spread across the agency and its
contractors. The SSP relies on NASA's property management offices to
track and manage government real property and government-held personal
property. NASA's existing property management systems for government-
held personal property, however, do not track SSP personal property by
program. The SSP relies on its prime contractors to track and control
contractor-held SSP personal property. These contractors, however, use
a variety of different software and database systems for this purpose.
SSP transition managers indicated that there were literally "tens of
systems" in use at different locations. The key tasks of SSP transition
and retirement include identifying and categorizing SSP personal
property through the TPA process. The disparate nature of the SSP's
property management systems precludes the efficient execution of this
task.
Bow wave of disposition activity:
NASA's SSP transition and retirement effort is facing a "bow wave" of
activity that will occur upon retirement of the program in 2010. In
order for NASA to maintain the shuttle's flight capability, a stockpile
of spare, replacement, and contingency parts must be available for the
SSP. This means disposition of the majority of the shuttle's personal
property must wait until the program is retired. NASA plans to declare
excess over 700,000 lines of SSP property beginning in fiscal year 2009
through at least fiscal year 2016. About 67 percent, or about 472,000
lines, of this disposition, however, is scheduled for fiscal years 2011
and 2012. By comparison, NASA dispositioned 62,994 pieces of property
in 2007. The sudden and substantial increase, or bow wave, of
disposition activity following the shuttle's retirement has the
potential to overwhelm NASA's capacity to dispose of SSP property and
lead to schedule delays and cost overruns.
Export control:
NASA maintains that some SSP personal property is subject to varying
levels of export control by the U.S. State Department's International
Traffic in Arms Regulations and/or the U.S. Commerce Department's
Export Administration Regulation. According to NASA officials,
satisfying export control regulations for excess SSP personal property
should be accomplished through appropriate documentation such as end
use certificates. Additional processing, up to and including
demilitarization, may be required for items obtained from the
Department of Defense or appearing on the U.S. Munitions List. NASA is
still in the process of identifying potential export-controlled SSP
hardware. NASA will be unable to determine the level of export control
needed in each instance or accurately estimate the cost of enforcing
export controls until this process is completed.
Historic preservation:
The National Historic Preservation Act directs federal agencies to
establish a program that identifies and evaluates properties to be
nominated to the National Register of Historic Places, take
responsibility for the preservation of historic properties they own or
control, and take into account the effect of any undertaking on a site,
building, structure, or object that is included in or eligible for
inclusion in the National Register of Historic Places. NASA maintains
that the SSP has national, state or local importance to the history of
human spaceflight and that it has a responsibility to ensure
historically significant property is properly documented and considered
during SSP transition and retirement. NASA completed an agency-wide
survey of SSP-related historic properties in 2007.
Source: NASA.
[End of table]
All of these challenges further hamper NASA's efforts to develop firm
estimates of SSP transition and retirement scope and cost. Lastly, at
the time NASA will be experiencing an increase in transition activity,
it will simultaneously be finalizing the designs for the Ares I and
Orion vehicles and conducting potentially the most complicated sequence
of shuttle flights ever attempted--completing the International Space
Station and conducting a fifth servicing mission to the Hubble Space
Telescope all by the end of 2010. These activities will likely create
additional challenges for the transition efforts, as they may require
more attention than anticipated from the workforce as well as more
resources should unexpected problems occur.
SSP Transition and Retirement Costs Are Not Transparent in NASA's
Budget:
SSP transition and retirement costs are not transparent in NASA's
current budget request and are not expected to be fully reflected in
its 2010 request. This is partly due to challenges and delays in
finalizing cost estimates as described above as well as where costs are
being reflected in the budget. Specifically, in laying out its plans
for SSP transition and retirement, NASA elected to capture transition
and retirement costs within its existing budget structure rather than
display them separately. Consequently, the costs of the SSP transition
and retirement are dispersed throughout NASA's budget request. SSP's
direct transition and retirement costs are included in the SSP budget
line. The Cross-Agency Support portion of NASA's budget, however,
includes funding for significant SSP transition and retirement
activities that NASA considers indirect costs, including environmental
compliance and remediation and demolition of excess facilities. These
funds, however, are not identified as SSP transition and retirement
costs and it is not easy to discern that they are transition related.
Furthermore, NASA plans to offset some transition costs by utilizing an
exchange/sale authority that allows federal agencies to exchange or
sell non-excess, non-surplus personal property and apply the proceeds
toward acquiring similar replacement property.
SSP Budget Line:
The SSP budget request for fiscal year 2009 identifies a funding need
of about $370 million for transition and retirement through fiscal year
2010 to pay for activities within each of the SSP's three major
projects--flight and ground operations, flight hardware, and program
integration (see table 2). NASA will use these funds to cover the costs
of the prime contractor, SSP personnel, and support contractors working
on transition and retirement activities. These activities, however, do
not represent the full scope of SSP transition and retirement.
Table 2: Transition and Retirement Costs in the SSP Budget Line
(Dollars in millions):
Flight/ground operations;
Fiscal year: 2007: $4.2;
Fiscal year: 2008: $1.6;
Fiscal year: 2009: $2.0;
Fiscal year: 2010: $2.4;
Total: $10.2.
Flight hardware;
Fiscal year: 2007: $16.7;
Fiscal year: 2008: $60.1;
Fiscal year: 2009: $85.8;
Fiscal year: 2010: $189.4;
Total: $352.
Program integration;
Fiscal year: 2007: $2.7;
Fiscal year: 2008: $1.4;
Fiscal year: 2009: $1.5;
Fiscal year: 2010: $1.7;
Total: $7.3.
Totals;
Fiscal year: 2007: $23.6;
Fiscal year: 2008: $63.1;
Fiscal year: 2009: $89.3;
Fiscal year: 2010: $193.5;
Total: $369.5.
Source: NASA's Fiscal Year 2009 budget request.
[End of table]
Cross-Agency Support Appropriation Account:
The Cross-Agency Support appropriation account[Footnote 6] within
NASA's budget includes or will include funding for significant SSP
transition and retirement activities. This appropriation account--
which is not aligned with a specific program or project--includes what
are essentially NASA's administrative or overhead costs for all of its
centers and activities. Cross-Agency Support will include SSP
transition and retirement funding within its Environmental Compliance
and Restoration, Center Management and Operation, and Strategic
Institutional Investments budget lines. These funds, however, are not
identified as SSP transition and retirement costs. As such, it is
difficult to discern the full costs of the transition and retirement
effort.
Environmental Compliance and Restoration:
Funding for SSP-related environmental clean-up is included under NASA's
Environmental Compliance and Restoration program.[Footnote 7] NASA
currently estimates that the SSP has contributed to environmental
contamination at 94 of 163 sites and that the agency's total
environmental clean-up liability is about $1 billion over several
decades. Agency officials maintain that they are unable to separate the
cost of SSP environmental clean-up from the total estimate of the
agency's environmental liability because, in most instances, NASA is
unable to differentiate between clean-up associated with the SSP and
clean-up associated with legacy programs such as Apollo. Agency
officials indicate that historically NASA has spent about $51 million
annually on environmental compliance.[Footnote 8]
Center Management and Operation (CM&O):
The CM&O budget request is part of the Cross-Agency Support
appropriation account that funds the maintenance of facilities. Funding
for the property disposal offices at the centers that will physically
dispose of excess SSP personal property and funding to maintain real
property facilities is included in the CM&O line. The SSP is supposed
to provide funding to these offices for any level of SSP property
disposal above their normal level of activity, e.g., 62,994 pieces of
property in fiscal year 2007. The sheer volume of SSP disposal
activity, hundreds of thousands of line items of personal property,
however, will likely consume the near full attention of these offices
during the time frame of the SSP transition and retirement.
Consequently, the baseline CM&O funding will be applied primarily to
SSP transition and retirement activities. In terms of facilities
maintenance, centers and programs maintain a tenant/landlord-like
relationship wherein programs such as the SSP and Constellation in
effect pay the centers for the use of facilities, except where specific
facilities are entirely program funded. Any facility maintenance costs
beyond those covered by the lease-type arrangements between the centers
and the programs are offset by the CM&O budget.
Strategic Institutional Investments:
NASA plans to eventually demolish excess SSP facilities. According to
agency officials, NASA plans to fund the demolition of excess real
property within the Strategic Institutional Investments line within the
Cross-Agency Support appropriation account at a level of about $15
million annually. The officials noted that because NASA has already
scheduled demolition activities through 2015, NASA would probably not
request funds to demolish excess SSP facilities until after fiscal year
2015. However, facility demolition post retirement of the Space Shuttle
will occur when needed.
Exchange/Sale Authority:
NASA plans to offset some transition costs by utilizing an exchange/
sale authority that enables federal agencies to exchange or sell non-
excess, non-surplus personal property and apply the proceeds toward
acquiring similar replacement property. This authority may also enable
agencies to reduce certain costs, such as storage and administrative
costs associated with holding the property and processing it through
the normal disposal process. NASA intends to use proceeds from the
exchange/sale of SSP personal property to offset the cost of acquiring
replacement Constellation hardware.[Footnote 9] According to NASA,it
will use the General Services Administration (GSA) to conduct Federal
Asset Sales of all personal property located at or near NASA Centers
and the Defense Contract Management Agency for the disposition of
personal property located at vendor facilities.[Footnote 10]According
to agency officials, however, NASA has not prepared an estimate of
anticipated exchange/sale revenue. The officials indicated that
proceeds received from the exchange/sale of SSP property will be
transferred initially to an existing budget clearing account, wherein
the agency will move the funds to a lower-level direct budget work
breakdown structure element to supplement the acquisition of
replacement property by the Constellation Program.
Conclusions:
SSP transition and retirement is an immense undertaking involving
numerous actors across government and the aerospace industry. NASA
faces great challenges in completing all planned efforts between now
and the end of 2010. Effective implementation of these efforts requires
careful planning to safely complete the ISS and repair the Hubble Space
Telescope while expeditiously freeing SSP funding and facilities for
the Constellation program. NASA is still in the process of developing
the required plans. Incomplete planning, however, does not preclude the
agency from providing the Congress with a more informed basis for
decision making. Indeed, NASA's strategic decision to delay submission
of an estimate until planning is near complete has placed the Congress
at a knowledge deficit relative to available information when
considering the agency's total funding needs. In the current budget
environment, in which needs outpace available funding, it is imperative
that NASA provide the Congress with the best information available,
even if that information is incomplete or subject to change.
Recommendation for Executive Action:
To provide congressional decision makers with a more transparent
assessment of funding needs for the SSP's property transition and
retirement activities, we are recommending that the NASA Administrator
direct the Space Operations Mission Directorate to include in NASA's
fiscal year 2010 and future budget requests the agency's best estimates
of the total direct and indirect costs associated with transition and
retirement of space shuttle property, including estimates of potential
exchange/sale revenue. These estimates should include but not be
limited to:
* those costs borne directly by the SSP;
* those funds requested under Cross-Agency Support that will be used to
support property transition and retirement activities, such as:
* funds requested to demolish excess facilities and buildings, and:
* funds requested for environmental compliance and remediation, and;
* the potential proceeds from exchange/sales of excess space shuttle
property.
NASA's fiscal year 2010 and future budget requests should also identify
all required transition and retirement activities which NASA has
identified but not yet included in cost estimates and report NASA's
progress in completing SSP transition and retirement activities.
Agency Comments and Our Evaluation:
In written comments on a draft of this report (see app. II), NASA
concurred with our recommendation. NASA acknowledged that, thus far, it
had not included estimates of the full scope and cost of Space Shuttle
transition and retirement costs in any of its budget requests and that
the agency is still in the process of finalizing the scope and cost of
Space Shuttle transition and retirement activities. NASA stated that it
expects estimates for fiscal year 2011 and beyond to be sufficiently
mature to include in the President's budget proposal for 2010 and that
the agency intends, subject to approval by the Office of Management and
Budget, to include the estimates in its fiscal year 2010 budget
request. NASA also acknowledged the need to provide the Congress
estimates of anticipated revenue from exchange sales but noted that,
even taking into account the large amount of personal property to be
disposed after fiscal year 2010, the agency does not expect large
amounts of revenue from exchange sales. NASA also stated that the SSP
was only one contributing factor to specific sites requiring
environmental remediation and that NASA consolidates its budget for
environmental remediation. This report recognizes that legacy programs
contributed to environmental contamination and that NASA has a
consolidated budget for environmental remediation apart from individual
programs. Nevertheless, environmental remediation of SSP sites
represents a substantial portion of the total costs associated with
transition and retirement of the SSP. Separately, NASA provided
technical comments which have been addressed in the report as
appropriate.
We are sending copies of the report to NASA's Administrator and
interested congressional committees. We will also make copies available
to others upon request. In addition, the report will be available at no
charge on GAO's Web site at [hyperlink, http://www.gao.gov].
Should you or your staff have any questions on matters discussed in
this report, please contact me at (202) 512-4841 or at
ChaplainC@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 that made key contributions to this report are listed
in appendix III.
Signed by:
Cristina T. Chaplain:
Director, Acquisition and Sourcing Management:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To assess National Aeronautics and Space Administration's (NASA)
challenges in transitioning and retiring the Space Shuttle Program's
(SSP) assets and facilities and to determine if the cost of these
efforts is transparent in NASA's budget requests, we obtained and
reviewed NASA documents including the Human Space Flight Transition
Plan, Space Shuttle Program Transition Management Plan, Space Shuttle
Program Transition and Retirement Requirements, and the Space Shuttle
Program Risk Management Plan. We also examined NASA's contract
documentation, budget requests, and NASA's 2009 Planning, Programming,
Budgeting and Execution Guidance. We physically inspected property and
interviewed and received detailed briefings from NASA and contractor
transition management officials at NASA Headquarters in Washington,
D.C.; the Kennedy Space Center in Orlando, Florida; the Johnson Space
Center in Houston, Texas; the Marshall Space Flight Center in
Huntsville, Alabama; the Stennis Space Center in Mississippi; and the
Michoud Assembly Facility in New Orleans, Louisiana. We also attended
NASA's Transition Quarterly Program Manager's Review at the Stennis
Space Center. We discussed government property disposal policies and
practices with General Services Administration officials in Washington,
D.C., and Defense Contract Management Agency officials at the Kennedy
Space Center. In addition, we held discussions with Congressional
Research Service staff members on their prior and ongoing work related
to NASA's transition effort. Furthermore, we met with NASA's Office of
Inspector General to discuss its report on the Space Shuttle Program's
transition and retirement and reviewed previous GAO testimonies and
reports related to NASA's transition effort.
We conducted this performance audit from February 2008 to August 2008
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[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:
September 23, 2008:
Ms. Christina T. Chaplain:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Ms. Chaplain:
NASA appreciates the opportunity to comment on the Government
Accountability Office (GAO) report entitled "NASA: Agency Faces
Challenges Defining Scope and Costs of Space Shuttle Transition and
Retirement" (GAO-08-1096).
In the draft report, GAO makes one recommendation to the NASA
Administrator:
Recommendation: To provide congressional decision makers with a more
transparent assessment of funding needs for the SSP's property
transition and retirement activities, we are recommending that the NASA
Administrator direct the Space Operations Mission Directorate to
include in NASA's fiscal year 2010 and future budget requests the
agency's best estimates of the total direct and indirect costs
associated with transition and retirement of space shuttle property
including estimates of potential exchange/sale revenue. These estimates
should include but not be limited to:
* those costs borne directly by the SSP;
* those funds requested under Cross-Agency Support that will be used to
support property transition and retirement activities, such as:
- funds requested to maintain required facilities during the gap in
human spaceflight;
- funds requested to demolish excess facilities and buildings, and;
- funds requested for environmental compliance and remediation, and;
* the potential proceeds from exchange/sales of excess space shuttle
property. NASA's fiscal year 2010 and future budget requests should
also identify all required transition and retirement activities which
NASA has identified but not yet included in cost estimates and report
NASA's progress in completing SSP transition and retirement activities.
Response: NASA concurs with this recommendation.
Please note that NASA has previously notified the GAO of the tasks and
methods being used to develop the most efficient and cost-effective
work plan for Space Shuttle Program Transition and Retirement (SSP
T&R). The work and cost for SSP transition and retirement activities
that take place from FY 2006 to FY 2010 have been included in the
budget plan for the SSP since the President's Budget Proposal for FY
2007. This includes all direct work performed by SSP Prime Contractors
and NASA Centers to conduct T&R actions prior to FY 2011.
NASA is currently completing final analyses of refined work and budget
estimates for SSP T&R tasks for FY 2011 and beyond. The refined work
tasks have identified methods to minimize any Shuttle-specific disposal
costs that would be in addition to NASA's annual institutional
operations budget. As part of this work plan, NASA may request specific
actions to gain relief from regulatory or policy requirements for this
large volume, one-time personal property excess action. NASA has also
identified action plans to determine if the small, remaining funding
gaps will be closed by future work allocations or by facility
reductions. Any remaining facility gaps will be addressed in future
President's budgets. We expect that these work plans for FY 2011 and
beyond will possess sufficient maturity to be included in the
President's Budget Proposal for FY2010, although the Office of
Management and Budget (OMB), ultimately, determines the costs to be
included in the President's Budget Proposal. NASA will work with the
OMB to determine if these transition and retirement costs for FY 2011
and beyond will be included in the President's Budget Proposal for FY
2010.
In addition, please note that, while NASA will provide calculated
estimates of potential exchange/sale revenue based on NASA's historical
exchange/sale actual revenues, NASA's historical information does not
indicate large revenues from such sales, even taking into account the
large potential magnitude of SSP personal property to be excessed after
FY 2010. With regard to the portion of the recommendation involving
environmental compliance and restoration funds, SSP was only one
contributing factor to specific sites which have been determined to
require environmental compliance and restoration measures over the next
five years. The tasks and budgets for environmental compliance and
restoration are identified as a separate, consolidated effort and not
unique to SSP T&R.
Thank you for the opportunity to review and comment on this draft
report and for the insight it provides. If you have any questions,
please contact Mr. Joel Kearns at (202) 358-1223 or Dr. John Olson at
(202) 358-3626.
Sincerely,
Signed by:
Shana Dale:
Deputy Administrator:
[End of section]
Appendix III GAO Contact and Staff Acknowledgments:
GAO Contact:
Cristina Chaplain (202)512-4841 or chaplainc@gao.gov:
Acknowledgments:
In addition to the contact named above, Jim Morrison, Assistant
Director; William C. Allbritton; Helena Brink; Greg Campbell; Sylvia
Schatz; John S. Warren; and Alyssa Weir made key contributions to this
report.
[End of section]
Footnotes:
[1] In recent years, NASA has spent about $3.5 billion a year on the
SSP.
[2] NASA defines and groups property into two overarching
classifications, real property and personal property. Real property
includes land, buildings, and other structures that cannot be readily
moved without changing their essential character. Personal property is
property that can be transported elsewhere with relative ease.
[3] "Safing" entails removing hazardous material so the item can be
safely stored and/or displayed.
[4] NASA Inspector General, NASA's Plan for Space Shuttle Transition
Could Be Improved by Following Project Management Guidelines, IG-07-005
(Washington, D.C.: Jan. 29, 2007).
[5] GAO, Lack of Accountability and Weak Internal Controls Leave NASA
Equipment Vulnerable to Loss, Theft, and Misuse, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-432] (Washington, D.C.: June
25, 2007).
[6] The Consolidated Appropriations Act, 2008, required NASA to modify
and test its administrative financial management system in order for
the system to be able to budget, account, control and report on
appropriations it receives in Fiscal Year 2009 and thereafter under a
new appropriation account structure. The new structure will comprise
seven appropriation accounts within NASA's budget: Science,
Aeronautics, Exploration, Space Operations, Education, Cross-Agency
Support, and Inspector General.
[7] At NASA, the Environmental Compliance and Restoration program
provides for personnel, services, and activities necessary to complete
the clean-up of hazardous materials and wastes that have been released
to the surface or groundwater at NASA installations, NASA-owned
industrial plants supporting NASA activities, and other current or
former NASA sites where NASA operations have contributed to
environmental problems and where the agency is obligated to contribute
to clean-up costs.
[8] NASA's annual funding for Environmental Compliance and Restoration
increased in recent years to fund clean-up of the Plum Brook Nuclear
Reactor site.
[9] GSA issues regulations describing how and when the exchange/sale
authority may be used, as well as setting reporting requirements on
their use. 41 C.F.R. § 102-39. NASA sought and obtained GSA concurrence
that the proceeds from the sale of non-excess, non-surplus personal
property from SSP could be used to acquire replacement Constellation
assets needed for human spaceflight activities.
[10] The Memorandum of Agreement between GSA and NASA stipulates that
NASA will receive 80 percent of the gross proceeds from NASA (generic)
property sales. For those items designated by NASA as shuttle related
or unique, NASA negotiated to receive 90 percent of sales gross
proceeds. According to NASA, GSA recovers its costs by retaining this
portion of the proceeds from the sale of the property and DCMA recovers
its cost through per hour charges to NASA.
[End of section]
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