# NASA Ten-Year Look Back

Since its inception, NASA has been closely linked with the private and
academic sectors. From early on in its existence, NASA has contracted
with the private sector for most of the products and services it uses.
Today, less than 13 percent of the Agency\'s authorized funding is
expended on civil service salaries, benefits, travel, and training. The
remainder of the Agency\'s funding is dispersed widely in the national
economy through contracts, grants, and other agreements. Through these
expenditures NASA acquires a variety of scientific, technical, and
support services for the civilian aeronautics and space programs. The
total direct private sector employment that results from NASA
expenditures exceeds 100,000 work years of effort annually. In
comparison with other Federal agencies, NASA spends a higher percentage
of its discretionary budget on procurements than all but one other
Federal agency (Department of Energy). (Chart 1)

![](media/image1.png){width="5.121527777777778in"
height="3.5215277777777776in"}

Chart 1

Budget Authority Data Source: [Historical Spreadsheets; Discretionary
Budget authority by Agency]{.underline}

Procurements Data Source: [Federal Procurement Data Systems, Federal
Contract Actions & Dollars By Executive Department & Agency, federal
Year 2000 Through Fourth Quarter]{.underline}

**Note:** Procurements include contracts but exclude grants and other
agreements.

NASA began a transformation of itself with a comprehensive internal Zero
Base Review (ZBR) that redefined roles, missions, and program management
structures. The purpose of the ZBR was to make the Agency more
efficient. From the ZBR, emerged a set of principles that have been used
since then to guide workforce resizing and restructuring. Foremost among
those principles is that NASA, as a premier research and development
agency, should do only those things no one else can do. Work that can be
done by the private sector should be performed there.

NASA's transformation took place within a time of essentially flat
budgets. This put additional pressure on the Agency to reduce its
numbers of civil servants and to find innovative ways to carry out its
mission, a mission that was not scaled back. In fact, new programs, such
as the Space Launch Initiative, were started and additional requirements
placed on the Agency, e.g., Integrated Financial Management Program, the
annual FAIR Act inventories, and reporting under the Government
Performance and Requirements Act. The result of the combination of
directed reductions and the flat budgets was the significant reduction
in the Agency's civil service workforce. Since the transformation began,
NASA has gone from an agency of approximately 25,000 authorized civil
servants at its headquarters and centers to one that now has less than
19,000, a 24 percent reduction. (Chart 2)

![](media/image2.wmf)

> Chart 2

The effects of the civil servant reduction were felt across the entire
Agency, since virtually every occupation category was affected. The
following illustrates this point.

### Wage Grade Employees

NASA installations either never performed in-house or long ago
transferred to the private sector nearly all of the routine activities
that many agencies still have wage grade/blue collar employees perform.
Those activities include facilities maintenance, security services,
cafeteria management, mail services, copier support, and fabrication
services. Since 1992, the Agency has essentially gotten out of the
remaining routine technical and administrative activities typically
performed by blue-collar workers.

This is demonstrated by the reduction from 648 blue collar full time
permanent employees (FTPs)[^1] to the current 54 (92 percent). (Chart 3)
This number is in stark contrast with many other Federal agencies that
still use civil servants to perform many of these and other routine
activities. (Charts 4 and 5)

![](media/image3.wmf)Chart 3

![](media/image4.wmf) Chart 4

![](media/image5.wmf)Chart 5

### 

### Technicians 

Technicians assist the scientific and engineering mission of the Agency,
performing all aspects of the scientific and technical activities. For
example, technicians have supported the operation of the wind tunnels
located at several of the Agency's centers. Since 1992, NASA has
significantly reduced the number of civil servant technicians,
oftentimes by transferring the technical support activities performed by
them to contractors, as was the case with the wind tunnels. The number
of technicians has decreased by 725 FTPs, going from 2,420 to 1,695 (30
percent). (Chart 6) Furthermore, there are plans to make further
reductions in the number of technicians.

![](media/image6.wmf)Chart 6

### 

### Clerical

The ranks of clerical employees also have incurred major reductions as
they have declined by almost 52 percent, going down Agency wide from
2,599 FTPs to 1,256, a decrease of 1,343. (Chart 7) In many cases, their
activities were transferred to the private sector.

![](media/image7.wmf)Chart 7

### Scientists and Engineers

Although science and engineering are what NASA is best known for, the
scientist and engineering communities were also affected the Agency's
transformation. These occupations decreased their ranks by 2,722 FTPs,
going from 13321 to 10599 (20% reduction). (Chart 8) As with the other
occupations, a portion of the reduction was due to having work that was
performed in-house be performed by the private sector.

![](media/image8.wmf)Chart 8

### 

### Professional and Administration

These occupations, which cover the gamut of legal, program analysis,
facilities, and safety, among others, also incurred reductions though
not of the same magnitude as the others. These occupations decreased by
446 FTPs by 2002, a net reduction of 10 per cent over the period.
However, a significantly greater reduction of 17 percent had occurred
through 1998 as this occupation category contained all the fields
(personnel, procurement, budget, accounting, and audit) targeted by the
National Performance Review (NPR). These fields were expected to
experience a fifty percent decrease due to the projected benefits of
streamlining regulations and the use of new tools, such as the
Integrated Financial Management Program. These benefits did not
materialize to the degree projected. In addition, there was a belief
that the targeted fields and some others, such as general
administration, had been cut too severely. The combination of these
contributed to the increase in FTPs seen since 1998. (Chart 9) Even with
the increase since 1998, several of the NPR targeted fields, such as
procurement and personnel, did experience reductions between 1993 and
2002 in the 20%-30% range.

![](media/image9.wmf)Chart 9

### 

In addition to the above reductions by occupation categories, NASA
headquarters significantly reduced its number of civil servants since
1992, going from 2,029 FTEs to 1154, a 43 percent decrease.
Approximately 400 of the reduced FTEs were due to transfers to NASA
centers. Generally, those transfers were made to move operational
activities that were being performed at headquarters to those centers
where they would better support their programs. The headquarters
reductions are incorporated in the occupation categories identified
above.

## Tools Used

The Agency has been able to carry out its mission at the same time it
absorbed these reductions by doing the same work with fewer people. This
has been made possible by the Agency's utilizing various tools and
innovations to maximize efficiency and productivity. One tool used was
the elimination of redundancies by consolidating support service
contracts where it made sense. Examples of contract consolidations are
the Space Flight Operations Contract (SFOC), which is discussed below,
as well as the Consolidated Space Operations Contract. Another tool was
the conversion of contracts from level of effort arrangements to
performance based. This was a major exercise commencing in 1995 that
involved significantly changing the culture of the Agency. These tools
have enabled the Agency to reduce the number of civil servants required
to perform contract management, while at the same time receiving the
benefit of contractor innovation and lower costs.

Another tool used was the reorganization of headquarters and the centers
to eliminate layers of management and realign organizations to better
carry out their missions. A result of this was the elimination of close
to 2,000 supervisory positions across the Agency, which increased the
supervisor to employee ratio from 5.9:1 to 10:1. In addition, the
workforces at the centers and headquarters were rebalanced to a certain
extent in order to achieve the proper balance of skills. For example,
slots for clerical employees may have been used to fill needed
engineering positions. The rebalancing of skills is something that is
still occurring.

The Agency also developed a Strategic Plan, which established the
framework for making management decisions by separating the Agency's
programs into four strategic enterprises. In addition, specific missions
for each center and headquarters were established. This resulted in
eliminating duplication and allowing the centers and headquarters to
focus on those things they do best.

In addition, processes were streamlined and efficiencies achieved from
the use of information technology, such as Web-based systems and
information. The result was resources being freed up to perform
essential activities. The Agency also closed nonessential or redundant
facilities and reduced infrastructure, including reductions in facility
maintenance and support services. Examples of closed facilities are
the14-foot transonic wind tunnel located at the Ames Research Center,
the H1 test stand at the Stennis Space Center, and the manufacturing
facility located in Downey, California. Furthermore, the Agency
consolidated certain functions previously performed at multiple centers
at one center, such as payroll processing at the Marshall Space Flight
Center, and the Agency supercomputers at the Ames Research Center.

The Agency also used various innovative methods. For example, centers
have entered into cooperative contracting arrangements with other
agencies, such as the Joint Base Operations Support contract that is
discussed below. Such arrangements have benefited NASA and the
participating agencies by reducing the numbers of civil servants
required for contract management.

In addition, there also were numerous cases in which entire activities
were turned over to contractors where it was determined contractors
could do a better job. Examples of this are engineering manufacturing at
the Johnson Space Center, and the wind tunnel operations at the Langley
Research Center. There were also many cases where portions of activities
were contracted out.

Below are examples highlighting the Agency's use of contract
consolidations, the transfer of complex technical work to the private
sector, as well as innovative methods used by the Agency for
accomplishing its mission in an environment of directed civil service
reductions and flat budgets.

## Contract Consolidations 

The SFOC is probably the prime example of where the Agency has utilized
contract consolidations to generate savings on one of its major complex
technical programs. Prior to 1996, NASA embarked on a series of cost
reduction activities to significantly decrease the cost of space flight
operations. During this phase, emphasis was placed on consolidation,
synergy and productivity improvements within functional areas, and
"working smarter" by eliminating low priority products or processes. The
next logical step in this process was the Space Flight Operations
Contract (SFOC). This contract, which was awarded in 1996, consolidated
all the shuttle operations performed under twelve contracts under this
single prime contract. Subsequently, an additional 8 contracts were
consolidated into the SFOC. The consolidation process has resulted in
approximately 2,000 NASA civil servants FTEs being eliminated since
1993, while at the same time reducing the number of contractor
equivalent persons (EPs)[^2] by approximately 6,600. (Chart 10) These
reductions have been done while achieving the desired goals of flying
safely, meeting the shuttle manifest, and reducing costs. These civil
servant reductions are encompassed in the above described occupation
reductions and included here to provide an example of the programmatic
effects of the Agency's downsizing.

![](media/image10.wmf)Chart 10

## 

## Transfer of Complex Technical Work

In addition to transferring routine and administrative activities to the
private sector, the Agency has also transferred complex technical work,
such as that performed under the SFOC discussed above. Another prime
example of this is the Space Station. Prior to 1993, the Space Station
work was broken into three distinct work packages each of which were
performed by different prime contractors and managed by different NASA
centers. None of the work package contractors were responsible for
managing, integrating, and ultimately delivering the Space Station as a
fully functional space vehicle to the Government. Rather, NASA retained
these functions aided by a fourth contractor that was responsible for
Space Station systems engineering and integration analysis and support.

In 1993, NASA was directed to redesign the Space Station to
significantly reduce development, operations, and utilization costs
while achieving many of the goals for long duration scientific research.
In response to this direction, NASA developed new technical design
options, a streamlined management structure, and a more efficient and
accountable acquisition approach. This involved designating a single
prime contractor to be responsible for managing and integrating the
Space Station as a vehicle and coordinating the design and development
of all necessary hardware. It also included consolidating all the NASA
management offices into one central office responsible for managing the
entire contract. This was done in a way that would capitalize on the
work that had been done to date, eliminate the need to pay a new group
of contractors to duplicate the progress that had already been made,
keep the core of technical talent and expertise intact, and minimize the
disruption in transitioning to the redesigned Space Station. Although
the Station has had its problems, the redesign and management
consolidation have had significant benefits as it resulted in a
reduction of 521civil service FTEs, freeing up those resources to work
on other essential activities.

As in the case of SFOC, these reductions are included in those described
above for the occupation categories. The reductions are provided to
present an example of the programmatic impacts of the Agency downsizing.

While the Station is arguably the most significant example of where NASA
has contracted out complex technical services, it is not the only case.
Another example is the Wallops Sounding Rocket Program and Range
Operations that was contracted out in 1996. That resulted in the civil
servant workforce for that program going from 112 to 17, a reduction of
95 FTEs (85 percent). The Agency also began outsourcing more of its
research and development (R&D) through NASA Research Announcements
(NRAs), grants, and contracts. For example, the Ames Research Center
estimates that its R&D work went from seventy percent being performed
in-house in 1992 to fifty percent in 2002. There are many other examples
where work, previously performed by NASA civil servants, is now
performed by contractors. However, the data available is not always able
to segregate the number of FTEs outsourced due to their having been
other activities that also took place, e.g., restructuring of processes,
reorganization, and general downsizing.

## Innovative Methods

The Joint-Base Operations Support Contract (J-BOSC) is a prime example
of the innovative methods used by the Agency to get its mission
completed with reduced staffing and at lower costs. This contract, which
was awarded in September 1998, is a cooperative arrangement between the
Kennedy Space Center, the Cape Canaveral Air Force Station, and the
Patrick Air Force Base for a multitude of base operations support
activities (e.g., fire, security, facilities, systems, equipment, and
utilities). The contract provides its 25 major customers with one stop
shopping for base support services. NASA previously contracted out for
those activities, but the J-BOSC provided the opportunity to obtain the
benefits of consolidating 17 different contracts (combined NASA and Air
Force) to obtain the benefits of leveraging limited manpower and budget
resources. The contract utilizes 46 civil service FTEs where it
previously involved 100 and is planned to save approximately \$91
million over its five-year basic period of performance. The manpower
reduction and monetary savings has been achieved without mission impacts
in supporting expendable launch vehicle, Titan, and Shuttle launches,
while technical performance has been raised to a rating of excellent.

While the J-BOSC is probably the best example of a cooperative
arrangement with another Federal agency, it is not the only case. The
Dryden Flight Research Center (DFRC) also has a cooperative arrangement
through memorandums of agreement with the Air Force at Edwards Air Force
Base. In that arrangement which commenced in 1995, DFRC has experienced
a minimal impact on its civil servant FTEs. However, it has had
significant dollar savings - one time cost avoidance of \$13 million due
to using the Air Force hangar for NASA's Airborne Science Program, and a
net annual recurring cost avoidance of \$500,000 to \$1 million by using
Air Force shops and facilities.

The Outsourcing Desktop Initiative for NASA (ODIN) is another example of
the innovative approaches NASA has utilized to maximize its limited
resources and accomplish its mission. ODIN is a master contract awarded
in June 1998 covering headquarters and all the NASA centers. Prior to
ODIN, NASA had civil servants and multiple contractors who were
responsible for providing administration and support for the Agency's
computer and telecommunications systems. The Agency also was responsible
for the maintenance and replacement of its approximately 38,000 desktop
computers; 2,500 servers; and 51,000 phones. With the award of ODIN, the
Agency was able to turn all this over to three contractors, each of
which is responsible for certain NASA centers and headquarters. This
resulted in NASA being able to focus its civil servants on other
activities; to provide services to all customers regardless of platform;
and to provide consistent and predictable technology refreshment for
desktops, while reducing costs and improving cost management and cost
containment since the monthly cost per seat is known and the price does
not change.

To date, NASA has replaced 32,000 desktop computers with no additional
investment. In addition, NASA's monthly cost per seat has been reduced
from over \$400 per month in 1996 to less than \$250 a month currently.

## Affects of Downsizing

While the Agency has been able to accomplish its mission during the last
ten years with a significantly reduced civil servant workforce, it does
not mean that all is well. In some areas, such as the Office of Space
Flight, the years of downsizing have resulted in an aging workforce with
skills imbalances, and in some areas being only one deep in expertise.
In addition, environmental factor surveys have indicated that increased
stress was having negative effects on the workforce.

The Shuttle is a prime example where the results of the civil servant
downsizing have raised concerns. External oversight groups also have
recognized skill imbalances and an over-taxed and stressed workforce.
This is indicated by the December 1999 report by the Shuttle Independent
Assessment Team (SIAT) that stated, "The SIAT feels strongly that
workforce augmentation must be realized principally with NASA personnel
rather than with contractor personnel. The findings show that there are
important technical areas that are staffed one-deep." The NASA Chief
Engineer and the NASA Integrated Action Team also argued this position
in their December 2000 report. This report stated, "The success of NASA
depends on having a knowledgeable and skilled workforce, supported by
clearly understood processes and methodologies...Most importantly,
however, the workload on individuals must be managed to enable their
success." In order to address these and other issues, the Office of
Space Flight augmentation was approved. However, due to high levels of
attrition, only limited gains have been achieved to date in filling
critical skill shortage areas.

These same concerns, though not of the same severity, apply to other
parts of the Agency. They should be kept in mind when considering future
reductions in the NASA civil servant workforce.

In summary, the Agency has undergone a significant transformation in the
last ten years. That transformation has involved major downsizing; the
continued focusing of the Agency's resources on what it does best;
turning over to contractors those things they do best; and the
implementation of innovative approaches. These have all contributed to
NASA achieving its goal to continue being a premier research and
development organization.

[^1]: FTE and FTP are used depending upon the data available. FTP is
    used for a count at a particular point in time of employees on a
    particular appointment and schedule. FTE is a measure of staff hours
    equal to those of a full-time employee working 40 hours a week over
    the course of a fiscal year (NASA equals 2087 hours). An FTE may
    represent more than one FTP if the FTP employee works less than a
    full year.

[^2]: An EP is based on a contractor employee's work year, which varies
    from contractor to contractor.