Report to Congressional Requesters

United States General Accounting Office

GAO

June 2001 SPACE STATION

Inadequate Planning

and Design Led to

Propulsion Module

Project Failure

GAO-01-633
Page i GAO-01-633 Space Station

Letter 1

Appendix I Comments From the National Aeronautics and Space

Administration 15

Appendix II Staff Acknowledgments 17

Figures

Figure 1: Diagram of Node X Option 11

Contents
Page 1 GAO-01-633 Space Station

June 20, 2001

The Honorable Ernest F. Hollings

Chairman

The Honorable John McCain

Ranking Minority Member

Committee on Commerce, Science,

and Transportation

United States Senate

The Honorable Sherwood L. Boehlert

Chairman

The Honorable Ralph M. Hall

Ranking Minority Member

Committee on Science

House of Representatives

The National Aeronautics and Space Administration (NASA) faces many

challenges in developing and supporting the International Space Station.

These challenges, such as Russian difficulty in completing its components

on schedule, led NASA to pursue development of a U.S. propulsion

capability for the space station to serve as an alternative to the planned

Russian capability. In 1998, NASA accepted a proposal from Boeing

Reusable Space Systems for a U.S. propulsion module. NASA’s initial

effort to develop this module was not successful in meeting the program’s

performance, cost, and schedule goals. The effort failed to produce a

design that met mission requirements, increased its estimated cost by

$265 million (from $479 to $744 million), and slipped its schedule by about

2 years. NASA eventually canceled the program and initiated a follow-on

effort.

Although the follow-on propulsion module has since been terminated due

to projected cost increases in the space station as a whole, you asked that

we analyze the initial propulsion module project to help NASA avoid

similar problems in the future. Specifically, we assessed NASA’s processes

for program planning and ensuring that the proposed design met technical

requirements. In addition, this report describes NASA’s evaluation of

alternative approaches for the follow-on propulsion module effort and the

results of NASA’s lessons learned studies from the failed initial program.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-633 Space Station

We have reported separately on NASA’s decision to develop the initial

propulsion module under the Boeing space station prime contract.1

The initial propulsion module project did not meet performance, cost, and

schedule goals largely because NASA proceeded with Boeing’s proposal

without following fundamental processes involving project planning and

execution. NASA officials stated that, had these processes been followed,

they would have determined earlier in the program that the Boeing

proposal would not meet project goals. For example, NASA did not

complete a project plan or develop sufficient information in areas such as

systems analysis and risk management to guide the program. Having such

basic information is fundamental to sound project management. In

addition, Boeing’s design was accepted and implemented before the

propulsion module’s detailed technical requirements were fully

established. NASA later found that the design was not as mature as

anticipated and that it required substantial changes. This led to significant

delays, cost increases, and ultimately, project cancellation.

In May 2000, NASA began to assess alternatives to the Boeing-proposed

propulsion module. The assessment team defined mission success criteria,

identified key design assumptions, and performed comparative analyses

on competing designs. Based on its analyses, the team recommended a

follow-on design. According to NASA officials, this effort brought early

analytical rigor to requirements definition, which NASA had failed to do in

the initial project.

NASA acknowledged that its initial approach to developing a propulsion

module was inadequate and contributed to the project’s unsuccessful

conclusion. NASA officials performed lessons learned efforts on the

project in general and on one specific component—on-orbit fuel transfer—

hoping to avoid similar problems in managing future programs. In all

cases, NASA concluded that the lack of an early systems analysis

contributed to project failure. Regarding the failed attempt to design an

on-orbit fuel transfer component into the propulsion module, NASA cited

difficulty in establishing requirements, estimating cost and schedule, and

providing adequate resources.

 1 International Space Station Propulsion Module Procurement Process (GAO-01-576R,

Apr. 26, 2001).

Results in Brief
Page 3 GAO-01-633 Space Station

NASA commented on a draft of this report and agreed with our findings.

We are not making recommendations at this time because NASA has

canceled its effort to develop a propulsion module and is recognizing the

need to avoid similar problems in the future by identifying lessons learned.

NASA and its international partners (Japan, Canada, the European Space

Agency, and Russia) are building the space station as a permanently

orbiting laboratory to conduct materials and life sciences research and

earth observation and provide for commercial utilization and related uses

under nearly weightless conditions. Each partner is providing station

hardware and crew members and each is expected to share operating

costs and use of the station.

Russia became a partner in 1993. As a partner, Russia agreed to provide

hardware, such as the Service Module to provide station propulsion,

supply vehicles, and related launch services throughout the station’s life.

However, Russia’s funding problems delayed the launch of the Service

Module by more than 2 years and raised questions about Russia’s ability to

support the station during and after assembly.

Shortly after Russia came into the program, NASA began studying ways to

provide the required propulsion using existing designs and hardware.

Later, in response to continuing problems in the Russian space program,

such as declining launch rates and funding shortages, NASA initiated

additional studies at the Marshall Space Flight Center in Alabama. In the

spring of 1995, it focused on satisfying the space station’s command and

control and propulsion requirements. In 1996, Marshall proposed building

a propulsion module in-house, and in 1997, NASA considered using

existing Russian hardware to provide the needed propulsion.

In 1997, in response to continuing concerns over Russia’s ability to fulfill

its station commitments, NASA developed a contingency plan, which

included a strategy to mitigate the risk of both further delay on the Service

Module propulsion capabilities and Russia not being able to meet station

propulsion needs. Key elements of the plan involved developing an interim

control module for near-term needs and a propulsion module to provide a

permanent U.S. capability.

Background
Page 4 GAO-01-633 Space Station

In 1998, Boeing Reusable Space Systems proposed a propulsion module

concept that was to rely heavily on existing shuttle hardware, provide for

on-orbit refueling, and cost about $330 million.2 This proposal coincided

with renewed concern that Russia would not be able to fulfil its

commitment to provide station propulsion capability. NASA decided to

move ahead with the proposal based on a strategy that included refining

the design during subsequent requirements and design reviews. It adopted

this strategy based on its assumption that a propulsion module would be

required by early 2002 if Russia failed to launch the Service Module. In

July 2000, Russia successfully launched the Service Module, thus

mitigating NASA’s immediate concern that the space station would not

have adequate propulsion capability. However, the agency still proceeded

with the propulsion module project because of long-term concerns with

Russia’s ability to fulfil its commitments.

NASA proceeded with Boeing’s proposal without following fundamental

processes involving project planning and execution. Specifically, project

management never finalized its project plan or operational concept and

did not receive timely approval for its risk management plan. The design

ultimately required substantial changes.

To prudently manage the project, NASA should have prepared and

completed a number of planning documents and established baseline

goals.3

 Specifically, NASA did not do the following:

• Complete a project plan.4 Documented project plans help to define

realistic time frames for system acquisition and development and identify

responsibilities for key tasks, resources, and performance measures.

Without them, there is no yardstick by which to measure the progress of

the developmental effort.

 2

 This initial estimate did not include the cost for on-orbit fuel transfer or costs associated

with integrating the module into the station. In February 1999, the estimate was revised to

$479 million to include all programmatic costs.

3

 NASA Procedures and Guidelines 7120.5A. This document establishes the management

system for processes, requirements, and responsibilities for implementing NASA programs

and projects. This management system governs the formulation, approval, implementation,

and evaluation of all agency programs and projects.

4

 A draft project plan was in the process of being finalized when the project was canceled.

Basic Project

Management and

Requirements

Principles Not

Followed

Propulsion Module Project

Planning Was Inadequate
Page 5 GAO-01-633 Space Station

• Fully develop a concept of operations document. This document describes

the range of operational scenarios under which project hardware will have

to function. This document is necessary to define requirements,

operational plans, and associated training. The project began with a

rudimentary concept that was continually refined during the course of the

project.

• Complete an approved risk management plan in a timely manner.5 A

formal risk management plan helps management identify, assess, and

document risk associated with the cost, resource, schedule, and technical

aspects of the project. Without such a plan, organizations do not have a

disciplined means to predict and mitigate risks.

• Develop realistic cost and schedule estimates for the life of the project.

NASA guidance states that life-cycle cost estimates shall be developed as a

part of the project’s planning activity.

Because of its concerns that Russia would be unable to provide space

station propulsion capability, NASA approached the effort with a sense of

urgency. Its analysis indicated that the U.S. propulsion capability would be

needed by early 2002 if Russia did not meet its commitment. Given the

initial estimate of the time that would be needed to develop and launch the

propulsion module, NASA believed it was necessary to expedite the

project. As a result, NASA chose to simultaneously plan and execute the

project, thereby inhibiting use of fundamental planning documents during

project formulation.

According to NASA officials, the absence of approved planning

documentation and the urgency NASA perceived in executing the project

made it difficult to effectively guide the project or measure its progress.

For example, roles and responsibilities continued to change, impeding the

flow of information. In addition, the absence of accurate technical, cost,

and schedule estimates early in the project made it difficult for NASA to

track cost variances. As a result, NASA officials told us that the estimated

$265 million cost increase announced just before the program was

suspended came as a surprise. They also stated that, had more analytical

 5

 While a risk management plan was needed early in the project, it was not formally

approved until 3 months before the project ended. However, officials did provide evidence

of risk identification, assessment, and mitigation strategies prior to the plan’s approval.

Project officials recognized that the risk management process was incomplete and that the

possibility existed that an unnoticed risk could arise affecting performance, cost, and

schedule. Some of the steps NASA undertook to mitigate identified risks included

establishing assessment teams, imposing additional testing, and canceling high-risk

development activity.
Page 6 GAO-01-633 Space Station

rigor been applied, they would have determined earlier in the program that

the Boeing proposal would not meet project goals.

This procurement strategy also caused NASA to purchase long-lead items

before the project’s requirements, concept of operations, and costs were

fully understood. According to NASA, prior to the decision to cancel the

project, it had obligated about $40 million for the purchase of various longlead items. Some of these items could be used on the space station or

other NASA projects. However, other items were unique to the propulsion

module project.

Our findings on lapses in project planning are consistent with results from

a NASA independent assessment team, which reviewed the propulsion

module project between September 1999 and March 2000. This team

concluded that the project was at high risk due, in part, to the fact that

these critical project management processes were not followed.

Specifically, the team concluded that (1) the project would not be ready to

proceed through the design reviews until the project plan was fully

developed and approved, (2) a well-integrated risk management program

was not in place, and (3) the project could not be completed within the

budget or achieve its planned delivery date.

NASA proceeded to implement Boeing’s proposal before it determined

whether the design would fully meet the project’s technical requirements.

The following top-level requirements were established at the beginning of

the program:

• Provide reboost and attitude control capability.

• Provide up to 50 percent of total on-orbit space station propulsion needs.6

• Provide 12-year on-orbit life.

• Maintain orbiter compatibility and transfer capability (pressurized transfer

tunnel for crew and supplies).

• Provide capability to be launched and returned by the shuttle.

• Conform to NASA safety provisions.

Even though the top-level requirements provided a framework to guide

propulsion module development, NASA’s reviews of the module’s detailed

technical requirements identified major concerns. For example, an April

 6

 According to NASA, under this design concept a second module would be required to

provide a fully independent U.S. propulsion capability.

NASA Reviews Identified

Deficiencies in the

Propulsion Module Design
Page 7 GAO-01-633 Space Station

1999 systems requirements review found that NASA did not have detailed

analyses to quantify the amount of propulsion capability that would be

required. NASA space station program personnel later determined the

definition of what propulsive capability was required; however, this

definition was not available until a few months before the initial design

review and could not, therefore, be used to judge the design’s suitability.

Subsequent reviews found deficiencies with the design elements of the

module itself.

Although technical requirements were never finalized and continued to

change, NASA accepted and began to implement Boeing’s design.

Typically, technical requirements are determined prior to selecting a

design to ensure that it can satisfy established technical and safety needs.

NASA accepted Boeing’s proposed design and began to implement it

because the agency believed (1) the design was stable and mature because

some of the proposed hardware had been used on the space shuttle and

(2) costs were essentially fixed because the required development

activities were understood and would not change.

As NASA implemented the design—establishing the organization for and

responsibilities of the project office, purchasing long-lead items, etc.—it

discovered a number of unexpected technical complexities and other

obstacles in the design. These problems put into question the ability of the

design to meet the technical requirements, as indicated in the following

examples.

• A central requirement was for the propulsion module to be refueled while

in orbit. NASA began to question Boeing’s ability to incorporate on-orbit

fuel transfer into the design, citing significant cost, safety, operational, and

system design issues. Ultimately, NASA eliminated this requirement and

reduced the module’s on-orbit life expectancy from 12 to 6 years.

Eliminating these requirements meant that the propulsion module had to

return to earth for refueling; the concept of returnability had not been fully

analyzed; thus, a new design team had to be established to assess these

impacts.

• The design also proposed a tunnel diameter that proved too small to

accommodate crew operations and did not meet space station minimum

diameter requirements. In addition to crew passage, the tunnel served as

the primary path for equipment/supply movement from the shuttle to the

station. The tunnel size was later increased based on NASA’s concerns.

• The design made extensive use of existing shuttle flight hardware that had

not been designed for a 12-year application, and Boeing assumed NASA

would accept the hardware based on prior shuttle experience. However,
Page 8 GAO-01-633 Space Station

NASA assessed the hardware and found that much of it could not meet a

12-year life requirement. In addition, the development specification did not

fully address testing requirements because Boeing assumed a simplified

level of testing. However, testing requirements were later expanded.

The propulsion module project failed to successfully complete its

preliminary design review in December 1999, despite the fact that it had

been considered a mature design.7 The review concluded, in part, that the

initial propulsion system design did not meet the space station and space

shuttle safety requirements and that another review of propulsion related

issues was needed. In March 2000, NASA’s independent assessment team

concluded that the design was not mature, requirements were not

adequately defined, and major design impacts were likely.

The process by which NASA and Boeing attempted to execute the project

resulted in design changes, added effort, schedule slippage, and purchase

of long-lead items before the design was fully understood. As a result, the

project’s total cost estimate increased significantly. In February 1999,

Boeing estimated that total program cost would be $479 million and

maintained that estimate until April 2000. At that time, Boeing increased

its estimate by $265 million—from $479 million to $744 million.8

 Over this

period, the scheduled launch date slipped by almost 2 years—from August

2002 to July 2004. Based on Boeing’s revised estimates, NASA began to

question the project’s viability, and in July 2000 it informed Boeing that it

would not authorize any additional work on the project.9

 7

 The preliminary design review is the project’s initial formal review to establish a design

baseline. This is followed by the critical design review, after which the design is ready for

manufacture, assembly, and integration of subsystems.

8

 The cost estimate of $744 million did not include any contingency funding.

9

 At the time NASA decided to stop work on the propulsion module effort, NASA and

Boeing had not negotiated the final terms of the development contract. Boeing was

expected to submit a proposal by the end of May 2000, but the module design continued to

change significantly and the contractor was unable to meet that target date. When the

project was stopped, NASA had obligated about $135 million for the development effort.
Page 9 GAO-01-633 Space Station

Prior to abandoning its original propulsion module design, NASA

established an Alternative Propulsion Module Assessment Team in May

2000 to review design concepts for their potential to meet the space

station program’s propulsion requirements. According to NASA officials,

this effort brought early analytical rigor to requirements definition, which

NASA had failed to do in the initial project. During the preliminary phase

of the assessment, team members considered many diverse options. These

options varied in design factors such as module location, number of

propulsion elements, and propellant systems. Each option also had to

meet the basic top-level requirements. Specifically, the alternative

propulsion module had to provide space station attitude and orbit

maneuver control, be located on the U.S. segment of the station, leave two

ports available for other vehicles to dock to the station, meet space station

safety requirements, and initially provide 50 percent of the space station’s

propulsion needs. In addition, the design had to be adaptable to eventually

provide 100 percent of the station’s propulsion needs.

The assessment team identified five potential concepts, including two

modified versions of Boeing’s baseline propulsion module design; the Z1

truss option, which attached to the station’s truss system; the split element

option with separate propulsion and avionics elements; and the Node X

option that had the propulsion elements attached to the Node 1 structural

test article.10 The team designated a subteam to refine each option’s

design. In addition, the subteams consulted with a cost assessment group

to develop cost estimates for each option. The cost assessment group

considered both initial capability costs, such as development and

integration, and additional life-cycle cost elements, such as shuttle

launches, labor, and spare parts.

Using the subteams’ analyses, the assessment team ranked the propulsion

module alternatives in three categories—programmatic (composed of

schedule, cost, and risk), technical (including safety, design, and

performance), and integration issues (such as International Space Station

and shuttle impacts and logistics issues). The team weighted

programmatic issues the highest at 60 percent and technical and

integration issues at 20 percent each. NASA officials told us that these

 10 The structural test article was built to undergo various pressure and leak tests to support

Node 1 construction. Node 1 is a pressurized element that serves as the connecting

passageway for the space station’s other modules, and it was the first U.S. station element

launched.

Follow-on Propulsion

Module Effort

Included Comparative

Analyses of

Alternative Designs
Page 10 GAO-01-633 Space Station

weightings, typical for this kind of analysis, were approved by the space

station program management.

The assessment team concluded that the Z1 truss option was the best

choice. This option did not require the construction of a pressurized

element and was estimated to cost $515 million to develop. The next best

alternative was the Node X option, with an estimated cost of $700 million

to develop. According to NASA, this option was already well understood

because Boeing had already integrated a similar structure, Node 1, into the

space station.

Although the assessment team found the Z1 truss option superior, it

recommended a follow-on study because issues associated with this

option’s integration into the space station were not well understood.

Consequently, in July 2000, a joint NASA and Boeing integration evaluation

team examined integration risks and identified possible design

improvements for the Z1 truss and Node X options. NASA believed

Boeing’s involvement was important because as the prime contractor, it

would be responsible for integrating the alternative propulsion module

into the space station.

The methodology that the integration evaluation team used was similar to

that used by NASA’s assessment team in reviewing the propulsion module

options. The integration team designated individual teams to evaluate the

ZI truss and Node X options from various functional perspectives, such as

power; structures and mechanisms; guidance, navigation, and control; and

contamination. The functional teams developed criteria for their particular

discipline and evaluated the two options accordingly. For example, the

structures and mechanisms team evaluated the two options for peak loads

and structural fatigue, and the power team for average and peak power

consumption. Based on its evaluation, each team recommended a

preferred option. The integration team’s project manager then led an effort

to compile and analyze the functional teams’ recommendations.

Based on this analysis, the team selected the Node X option, which had the

highest overall mission suitability and lowest integration risk. In contrast,

the Z1 truss option created structural stress, station controllability, and

propellant inefficiency issues. The integration team then concluded that

Node X was the preferred choice as a follow-on effort to the initial

propulsion module project. Figure 1 depicts the Node X propulsion

module configuration.
Page 11 GAO-01-633 Space Station

Figure 1: Diagram of Node X Option

Source: Marshall Space Flight Center.

The cost assessment group incorporated the results of the integration

evaluation team into a new cost analysis for the ZI truss and Node X

options. According to the new cost analysis, the Z1 truss option’s

integration issues increased its estimated cost to $729 million. In contrast,

the cost estimate for the Node X option decreased to $675 million,

primarily because the outfitting costs for the structural test article were

lower than expected.

NASA accepted the integration team’s findings and issued a request for

proposal on the Node X option in January 2001. However, 2 months later,

NASA canceled the follow-on effort because of cost increases in the space

station program as a whole. In addition, NASA believed that the risk of

Russian nonperformance was reduced because of the Service Module’s

deployment.
Page 12 GAO-01-633 Space Station

NASA acknowledged that problems with the management of the initial

propulsion module project contributed to its unsuccessful conclusion, and

it is undertaking lessons learned efforts to help avoid similar problems in

managing future programs. These assessments include top down and

systems engineering reviews at the Marshall Space Flight Center and an

assessment by an engineer at the Johnson Space Center in Texas related

specifically to the on-orbit fuel transfer component of the module.

According to NASA officials, drafts of the Marshall assessments identified

the lack of early systems analysis and good teamwork as contributing to

project failure. For example, key components of the design—use of

existing hardware, on-orbit fuel transfer, and tunnel size—were never

tested for feasibility, partly because Boeing believed that NASA had fully

accepted the assumptions inherent in its design. Later, when these

assumptions became invalidated or retracted, it became apparent that the

original concept was no longer feasible.

The top down assessment also cited a lack of cooperation between NASA

and Boeing as inhibiting the timely completion of required design and risk

management analyses. In many cases, when NASA and Boeing teams tried

to work together, they became confrontational and nonproductive. It

concluded, in part, that, in the future, NASA should ensure that (1) early

planning documents define what roles the various project teams have and

how they interact, (2) government and contractor counterparts are

established to encourage collaboration, and (3) NASA and contractor

management monitor the interaction of the overall project team and

intercede if conflicts interfere with the project’s success.

Another lessons learned assessment was performed on the on-orbit fuel

transfer component of the Boeing proposal, a basic requirement of the

proposed design. This assessment concluded that, while some project

communication was good, internal contractor communication on this part

was less than desirable. For example, center-to-center communication was

aided by daily conversations between the on-orbit fuel transfer and

propulsion module project managers. However, contractor participation in

working group activities was not supported. The assessment also cited

NASA’s lack of systems analysis early in the program and its difficulty in

establishing requirements, estimating cost and schedule, and providing

human capital resources as contributing to the on-orbit fuel transfer

project failure.

NASA Recently

Identified Lessons

Learned to Apply to

Future Programs
Page 13 GAO-01-633 Space Station

The themes cited in NASA’s propulsion module project lessons learned

studies are consistent with those cited in previous program failure

assessments. In December 2000, NASA issued a report synthesizing the

findings and recommendations from earlier reports, arriving at five themes

it considered necessary for sound project management. The five themes

were developing and supporting exceptional people and teams, delivering

advanced technology, understanding and controlling risk, ensuring

formulation rigor and implementation discipline, and improving

communication.11

In commenting on a draft of this report, NASA stated that while it was in

agreement with the findings of the report, the project’s urgency

necessitated its management approach. However, NASA acknowledges

that its project execution could have been improved and that it will now

strive to apply lessons learned from the propulsion module project

experience.

Even though NASA perceived a schedule urgency in starting and

completing the project, it should have followed sound management

practices. The early analytical rigor NASA was applying to the follow-on

propulsion module effort would have served the agency well in its

execution of the initial project.

To assess the adequacy of project planning, we reviewed, analyzed, and

compared internal NASA guidance and project planning documents. We

also discussed planning requirements with cognizant project officials and

independent assessment team officials to obtain their views.

To assess the extent to which NASA had defined the technical

requirements for the propulsion module, we reviewed the results of

requirements meetings and approved requirements lists to gain an

understanding of the evolution of requirements determinations. We also

held discussions with NASA and Boeing officials to obtain their

perspectives on the validity of the technical requirements, as well as

reasons for requirements changes over the course of the program.

 11 Enhancing Mission Success – A Framework for the Future, a report by the NASA Chief

Engineer and the NASA Integrated Action Team (Dec. 2000).

Agency Comments

Scope and

Methodology
Page 14 GAO-01-633 Space Station

To describe NASA’s process for reviewing alternative designs, we

reviewed NASA briefing materials and other products related to the

establishment of the Alternative Propulsion Module Assessment Team and

others. We also discussed the teams’ charter, methodology, and results

with team members and other cognizant officials.

To describe lessons learned by NASA from the initial program, we

reviewed the results of NASA’s efforts and discussed their significance

with cognizant officials.

We conducted our review from July 2000 to April 2001 in accordance with

generally accepted government auditing standards.

Unless you publicly announce its contents earlier, we plan no further

distribution of this report until 10 days from its issue date. At that time, we

will send copies to the NASA Administrator; the Director, Office of

Management and Budget; and other interested parties. We will also make

copies available to others on request.

Please contact me at (202) 512-4841 if you or your staff have any questions

about this report. Other key contributors to this report are acknowledged

in appendix II.

Allen Li

Director,

Acquisition and Sourcing Management
Appendix I: Comments From the National

Aeronautics and Space Administration

Page 15 GAO-01-633 Space Station

Appendix I: Comments From the National

Aeronautics and Space Administration
Appendix I: Comments From the National

Aeronautics and Space Administration

Page 16 GAO-01-633 Space Station
Appendix II: Staff Acknowledgments

Page 17 GAO-01-633 Space Station

Jerry Herley, John Gilchrist, James Beard, Fred Felder, Belinda LaValle,

Vijay Barnabas, Diane Berry, Rick Eiserman, Susan Woodward, and

Cristina Chaplain made key contributions to this report.

Appendix II: Staff Acknowledgments

Acknowledgments

(707534)

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