NASA

Actions Needed to 

Improve 

Transparency and 

Assess Long-Term 

Affordability of Human 

Exploration Programs

Report to the Ranking Member, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

May 2014

GAO-14-385

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-385, a report to the 

Ranking Member, Committee on Homeland 

Security and Governmental Affairs, U.S.

Senate

May 2014

NASA

Actions Needed to Improve Transparency and Assess 

Long-Term Affordability of Human Exploration 

Programs

Why GAO Did This Study

NASA is undertaking a trio of closelyrelated programs to continue human 

space exploration beyond low-Earth 

orbit: the SLS vehicle; the Orion

capsule, which will launch atop the 

SLS and carry astronauts; and the 

supporting ground systems. As a 

whole, the efforts represent NASA's 

largest exploration investment over the 

next decade, potentially as much as 

$22 billion, to demonstrate initial 

capabilities. Beyond 2021, NASA plans 

to incrementally develop progressively

more-capable SLS launch vehicles 

complemented by Orion capsules and 

ground systems.

GAO was asked to assess the costs of 

NASA’s human exploration program. 

This report examines the scope of 

NASA’s preliminary cost estimates for 

the three programs. To conduct this 

work, GAO reviewed NASA information 

on cost estimates for the three 

programs, discussed the estimates 

with NASA officials, and assessed the 

estimates against best practices 

criteria in GAO’s cost estimating 

guidebook as well as NASA’s own 

requirements and guidance.

What GAO Recommends

NASA should establish separate cost 

baselines that address the life cycle of 

each SLS increment, as well as for any 

evolved Orion or ground systems 

capability, among other actions to 

enable assessment of affordability and 

enhance oversight.

In commenting on a draft of this report, 

NASA partially concurred with GAO’s 

recommendations, citing that actions 

taken to structure the programs and track 

costs met their intent. However, GAO 

believes NASA’s responses do not fully 

address the issues raised in this report. 

What GAO Found

The scope of the National Aeronautics and Space Administration’s (NASA)

preliminary cost estimates for the Space Launch System (SLS), Orion MultiPurpose Crew Vehicle (Orion), and associated ground systems encompasses 

only the programs’ initial capabilities and does not include the long-term, life 

cycle costs associated with the programs or significant prior costs: 

• The SLS estimate is based on the funding required to develop and operate 

the initial 70-metric ton variant through first flight in 2017 but not the costs for 

its second flight in 2021. NASA is now incurring some costs related to the 

second flight, but it is not currently tracking those costs for life cycle cost 

estimating purposes. Furthermore, the estimate does not include costs to 

incrementally design, develop, and produce future 105- and 130-metric ton 

SLS variants which NASA expects to use for decades. NASA is now funding 

concept development and analysis related to these capabilities. 

• The Orion estimate does not include costs for production, operations, or 

sustainment of additional crew capsules, despite plans to use and possibly 

enhance this capsule after 2021. It also does not include $4.7 billion in prior 

costs incurred during the approximately 4 years when Orion was being 

developed as part of NASA’s now-defunct Constellation program. 

• The ground systems estimate excludes costs to develop or operate the

ground systems infrastructure beyond 2017, although NASA intends to 

modify ground architecture to accommodate all SLS variants. 

NASA expects to use this same limited scope of work to establish the programs’ 

baseline cost estimates in 2014. According to NASA, the agency is developing a 

tailored definition for the programs’ life cycle cost estimates as allowed by NASA 

requirements. Agency officials stated that NASA chose its approach in part due 

to uncertainties about the programs’ end dates and missions beyond 2021.

GAO recognizes that defining life cycle costs can be difficult when uncertainties 

exist, and that best practices for cost estimating look favorably on evolutionary 

development. Even so, best practices expect that a high-quality cost estimate will 

account for program uncertainties, forecast a minimum and maximum range for 

all life cycle costs, and clearly define the characteristics of each increment of 

capability so that a rigorous life cycle cost estimate can be developed. According 

to these practices as well as NASA's requirements and guidance, life cycle cost 

estimates should encompass all past, present, and future costs for a program, 

including costs for operations, support, and disposal. The limited scope that the 

agency has chosen for constructing preliminary and baseline cost estimates, 

however, means that the estimates are unlikely to serve as a way to measure 

progress and track cost growth over the life of the programs. For example, cost 

growth on the current SLS variant could be masked as the addition of scope 

associated with work for future variants, and the baseline estimate would no 

longer be applicable. Insight into program costs helps decision makers 

understand the long-term affordability of programs—a key goal of the National 

Space Transportation Policy—and helps NASA assess management of its 

portfolio to achieve increasing capabilities as directed in the NASA Authorization 

Act of 2010.

View GAO-14-385. For more information, 

contact Cristina Chaplain at (202) 512-4841 or 

chaplainc@gao.gov.
Page i GAO-14-385 NASA Exploration Costs

Letter 1

Background 2

Limited Scope of Exploration Program Estimates Does Not 

Capture Life Cycle Costs 5

Conclusions 11

Recommendations for Executive Action 12

Agency Comments and Our Evaluation 13

Appendix I Comments from the National Aeronautics and Space Administration 17

Appendix II GAO Contact and Staff Acknowledgments 20

Table

Table 1: Scope of the SLS, Orion, and GSDO Preliminary Cost 

Estimates 6

Figure

Figure 1: SLS, Orion, and GSDO Capabilities 3

Contents

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-14-385 NASA Exploration Costs

441 G St. N.W.

Washington, DC 20548

May 8, 2014

The Honorable Tom Coburn, M.D.

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

Dear Senator Coburn:

The National Aeronautics and Space Administration’s (NASA) Human 

Exploration and Operations Mission Directorate (HEO) is undertaking a 

trio of closely-related programs to continue human space exploration 

beyond low-Earth orbit. These programs include the Space Launch 

System (SLS) vehicle to launch astronauts and carry cargo into space, 

the Orion Multi-Purpose Crew Vehicle (Orion) capsule that will launch 

atop the SLS and carry the astronauts, and the Ground Systems 

Development and Operations (GSDO) to support such activities as 

assembly, test, and launch of the SLS and Orion. As a whole, the efforts 

represent NASA’s largest exploration investment over the next decade 

and may cost as much as $22 billion to demonstrate initial capabilities 

that encompass the first SLS flight in 2017, the ground systems for that 

effort, and the first two Orion flights in 2017 and 2021.

GAO has designated NASA’s management of acquisitions as a high-risk 

area for more than two decades in view of persistent cost growth and 

schedule slippage in the majority of its major projects. Last year we 

reported that the agency had made progress in reducing risk on smallerscale, less complex projects after years of struggling with poor cost 

estimation, weak oversight, and risk underestimation. We also reported, 

however, that demonstrating that this progress can be translated to 

larger, more complex projects, such as SLS and Orion, will be especially 

important in an era of constrained budgets and competing priorities.1

Establishing an exploration program that will be affordable and 

sustainable for the long-term is also a key goal of the 2013 National 

Space Transportation Policy.2

 1 GAO, NASA: Assessments of Large-Scale Selected Projects, GAO-13-276SP, 

(Washington, D.C.: May 17, 2013).

2 National Space Transportation Policy, November 21, 2013. 
Page 2 GAO-14-385 NASA Exploration Costs

In light of these issues, you requested that we review the costs of NASA’s 

exploration programs. Thus, we examined the agency’s preliminary cost 

estimates for the SLS, Orion, and GSDO programs. Specifically, we 

identified the scope of the cost estimates and assessed whether that 

scope provided transparency into costs and enabled assessment of longterm affordability. This report provides the results of our review. In other 

on-going work, we are performing a more in-depth assessment 

addressing the credibility and reliability of NASA’s cost estimate for SLS.

To conduct this work, we reviewed NASA's preliminary cost estimates for 

the SLS, Orion, and associated ground systems programs and 

information related to the baseline cost estimates for the programs in 

order to determine the scope of the estimates. We assessed the 

estimates’ scope against best practices criteria outlined in GAO’s cost 

estimating guidebook.3

We conducted this performance audit from March 2014 through May 

2014 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 objectives.

We also discussed the estimates with NASA 

officials, including the rationale for the estimates’ scope and exclusions to 

that scope. We did not asses the reliability of the SLS, Orion, and GSDO 

cost estimates.

The National Aeronautics and Space Administration Authorization Act of 

2010 directed NASA to develop a Space Launch System as a follow-on to 

the Space Shuttle and as a key component in expanding human 

presence beyond low-earth orbit. The Act also directed NASA to continue 

development of a multi-purpose crew vehicle for use with that system.4

 3 GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, 

To 

that end, NASA plans to incrementally develop three progressively-larger 

SLS launch vehicle capabilities—70-, 105- and 130-metric ton (MT) 

variants—complemented by the Orion and supporting ground systems. 

GAO-09-3SP, (Washington, D.C.: March 2009). 

4 Pub. L. No. 111-267, §§ 302(a), 303(a) (codified at 42 U.S.C. §§ 18322, 18323).

Background
Page 3 GAO-14-385 NASA Exploration Costs

Figure 1 below illustrates NASA’s planned capabilities for the SLS, Orion, 

and some of the related GSDO efforts.

Figure 1: SLS, Orion, and GSDO Capabilities

a NASA plans for SLS Block IA to utilize advanced boosters, Block IB an exploration upper stage, and 

Block II the advanced boosters and exploration upper stage. The agency has not yet determined 

whether it will first develop the Block IA or Block IB variant. 

These capabilities follow the agency’s previous attempt to develop a nextgeneration human spaceflight system, the Constellation program, which 

was cancelled in 2010 when the program’s budget proved inadequate to 

resolve technical challenges. The first version of the SLS being 
Page 4 GAO-14-385 NASA Exploration Costs

developed is a 70-metric ton launch vehicle known as Block I. NASA 

expects to conduct two test flights of the Block I vehicle—the first in 2017 

and the second in 2021. The vehicle is scheduled to fly some 700,000 

kilometers beyond the moon during the first test flight, known as 

Exploration Mission-1 (EM-1), and to fly a second mission, known as 

Exploration Mission-2 (EM-2), to test additional aspects of its 

performance. After 2021, NASA intends to build 105- and 130-metric ton 

launch vehicles, known respectively as Block IA/B and Block II, which it 

expects to use as the backbone of manned spaceflight for decades. 

NASA anticipates that these launch vehicles will require the development 

of new systems to achieve the agency’s goals for carrying greater 

amounts of cargo and traveling farther into space. The agency has not yet 

selected specific missions for the increased capabilities to be provided by 

Block IA/B and Block II but, in keeping with the language contained in the 

2010 Authorization Act, anticipates using the vehicles for such deepspace destinations as near-Earth asteroids and Mars.

In concert with SLS, NASA expects to evolve the Orion and ground 

systems. The agency plans an un-crewed Orion capsule to fly atop the 

SLS during EM-1 in 2017, a crewed capsule during EM-2 in 2021, and 

ultimately, at a date to be determined, a crewed capsule with capability 

for such missions as a Mars landing. NASA is also modifying the existing 

ground systems so that they can support the SLS Block I variant and 

eventually accommodate the Block IA/B and Block II launch vehicles as 

well as enhanced versions of the Orion crew capsule. For example, 

NASA plans to add moveable floors to the vehicle assembly building at 

Kennedy Space Center so that the three launch vehicle variants can be 

more easily prepared for flight as the SLS capability evolves.

NASA established the preliminary cost estimates for the initial capabilities 

of the SLS, Orion, and associated GSDO as each of these programs 

entered the preliminary design and technology completion phase of 

development, known as key decision point B (KDP-B).5

 5 KDP-B occurs during a program’s formulation phase. The formulation phase is the first 

phase of a NASA program, wherein requirements are defined (i.e., what the program is 

designed to do), schedules and cost estimates established, and implementation plans 

produced.

At KDP-B, 

programs use a probability-based analysis to develop a range of 

preliminary cost and schedule estimates which are used to inform the 

budget planning for the programs. This phase culminates in a review at 
Page 5 GAO-14-385 NASA Exploration Costs

key decision point C (KDP-C), known as program confirmation, where 

cost and schedule baselines with point estimates are established and 

documented in the agency baseline commitment.6 After this review, 

programs are considered to be in the implementation phase of 

development, and program progress is subsequently measured against 

these baselines.7 NASA plans to hold the program confirmation review for 

SLS in spring 2014 and expects to conduct the KDP-C review for GSDO 

in May 2014 and Orion in December 2014. Because the life cycle costs of 

these programs are expected to exceed $250 million, NASA is required to 

report the programs’ baseline estimates to Congress once the programs 

are approved to move into implementation.8 The agency provides this 

information through its annual budget submission. NASA also uses the 

annual budget submission to inform Congress about the preliminary cost 

ranges for projects proceeding into formulation.

NASA’s preliminary cost estimates for the SLS, Orion, and associated 

GSDO programs do not provide a complete picture of the costs required 

to develop and operate the programs through the entire course of their 

respective life cycles. These preliminary estimates include the funding 

required for the scope of work related to initial capabilities—that is, 

development and operations through 2017 for the SLS launch vehicle and 

ground systems and through 2021 for the Orion. NASA also expects to 

use this same limited scope of work to develop the SLS, Orion, and 

GSDO baseline cost estimates. Moreover, NASA’s estimates do not 

capture the cost of the second flight of the 70-metric ton vehicle during 

EM-2, the costs of development work that will be necessary to fly the 

increased 105- and 130-metric ton SLS capabilities, and the costs 

 6 NASA defines baseline as the technical performance and content, technology 

application, schedule milestones, and budget (including contingency and allowance for 

program adjustment) that are documented in the approved program plans.

7 In the implementation phase, a program typically carries out plans made in formulation, 

performs final design and fabrication, tests components and system assembly, integrates 

these components and tests how the components work together, and launches on its 

intended mission(s).

8 Under the National Aeronautics and Space Administration Authorization Act of 2005, 

Pub. L. No. 109-161, §103; 42 U.S.C. § 16613(b(f)(4), Congress required NASA to report 

cost and schedule baselines—benchmarks against which changes can be measured— for 

all NASA programs and projects with estimated life cycle costs of at least $250 million that 

have been approved to proceed to implementation. 

Limited Scope of 

Exploration Program 

Estimates Does Not 

Capture Life Cycle 

Costs
Page 6 GAO-14-385 NASA Exploration Costs

associated with legacy hardware that will be used for the Orion program. 

In contrast, best practices for cost estimation call for “cradle to grave” life 

cycle cost estimates in order to help assess a program’s long-term 

affordability.

NASA’s preliminary cost estimates for the three programs’ initial 

capabilities total a low-to-high cost range of approximately $19 to $22 

billion. Table 1 below depicts the scope, including content and schedule, 

of the SLS, Orion, and GSDO initial capabilities’ preliminary cost 

estimates. As the SLS, Orion, and GSDO programs move from 

formulation into implementation phases, NASA plans to use the same 

content and scope for calculating the programs’ respective baseline cost 

estimates.

Table 1: Scope of the SLS, Orion, and GSDO Preliminary Cost Estimates

Preliminary Cost 

Estimate

(Fiscal Years 2012-

2018)

(Dollars in Billions)

Capability Time Frame

Associated 

Flight Content Minimum Maximum

Anticipated 

Date for 

Baseline Cost 

Estimate 

Space Launch 

System (SLS)

Flight in 

December 2017

Exploration

Mission-1 (EM-1)

• Design, develop, and 

build 70-metric ton 

launch vehicle

• Establish manufacturing 

facilities for that vehicle

• Conduct un-crewed first 

exploration flight in 2017

• Perform 3 months of 

post-flight data analysis

$7.7 $8.6 May 2014

Ground Systems 

Development and 

Operations (GSDO)

Flight in 

December 2017

EM-1 • Develop the ground 

systems infrastructure 

for assembly, test, 

launch, and recovery 

associated with EM-1

• Perform 3 months of 

post-flight Orion 

recovery and operations

$2.8 $3.1 May 2014

Cost for Initial SLS, Orion, 

and GSDO Capabilities 

Totals up to $22 Billion
Page 7 GAO-14-385 NASA Exploration Costs

Preliminary Cost 

Estimate

(Fiscal Years 2012-

2018)

(Dollars in Billions)

Capability Time Frame

Associated 

Flight Content Minimum Maximum

Anticipated 

Date for 

Baseline Cost 

Estimate 

Orion MultiPurpose Crew 

Vehicle (Orion)

Flights in 

December 2017 

and August 2021

EM-1 and EM-2 • Development, 

manufacturing, and 

operations for the uncrewed Orion flight on 

SLS in 2017 and crewed 

Orion flight on SLS in 

2021

• Perform 3 months of 

post-flight data analysis

$8.5 $10.3 December 2014

Total Estimated 

Costs

$19.0 $22.0

Source: GAO analysis of NASA documentation.

NASA’s preliminary cost estimates for SLS, Orion, and GSDO provide no 

information about the longer-term, life cycle costs of developing, 

manufacturing, and operating the launch vehicle, crew capsule, and 

ground systems:

• The SLS estimate does not cover the cost to build the second 70-

metric ton vehicle and conduct EM-2 in 2021 with that vehicle. NASA 

is already incurring costs for EM-2 because it is funding some EM-2 

development in concert with EM-1 efforts, such as work on the solid 

rocket boosters and core stage that are expected to help power the 

70-metric ton SLS. NASA officials indicated at one point in our review 

that they did not expect to begin formally tracking EM-2 costs until 

after the SLS design’s maturity was assessed at a critical design 

review scheduled for 2015; however, the agency stated in technical 

comments to this report that it is tracking those costs for budget 

purposes and plans to begin formally reporting them once SLS 

reaches the project confirmation phase. Additionally, the SLS estimate 

does not address the potential for costs NASA would incur to produce, 

operate, and sustain flights of the 70-MT Block I capability beyond 

2021. NASA officials stated that there are currently no plans to fly that 

vehicle beyond 2021, but that the agency could reassess its decision 

if a specific mission arises for the vehicle.

• The SLS estimate also does not include costs to design, develop, 

build, and produce the 105- or 130-metric ton Block IA/B and Block II 

NASA’s Estimates Do Not 

Include Life Cycle Costs
Page 8 GAO-14-385 NASA Exploration Costs

SLS variants that NASA intends to use well into the future. NASA 

indicated that these variants will require new systems development 

efforts—including advanced boosters and a new upper stage to meet 

the greater performance requirements associated with larger payloads 

as well as travel to Mars or other deep-space locations. NASA has 

started funding concept development, trades, and analyses related to 

these new designs, such as assessing the use of lightweight materials 

to construct the upper stage and selective laser melting to produce 

system components. In addition, NASA anticipates a re-start of the 

production line for the RS-25 engine that it plans to use to power the 

Block IA/B and Block II vehicles. Currently, the agency has enough 

residual RS-25 liquid-fuel engines from the Space Shuttle program to 

launch the SLS for up to 4 flights. NASA expects to need more of the 

engines beyond that, but it has not yet finalized acquisition plans to 

manufacture them. According to agency officials, re-starting the 

production line would entail at least 3 years, whereas development of 

a new engine would require a minimum of 8 years.

• The Orion estimate does not address costs for production, operations, 

or sustainment of additional crew capsules after 2021 nor does it 

address prior costs incurred when Orion was being developed as part 

of the now-defunct Constellation program. NASA initiated the crew

capsule’s development in 2006 as part of the Constellation program. 

During approximately 4 years that the capsule’s development 

occurred under Constellation, the agency spent about $4.7 billion for 

the capsule’s design and development. When Constellation was 

cancelled in 2010 and the work transitioned to the current Orion 

program, however, NASA excluded the Constellation-related costs 

from Orion’s current preliminary cost estimate of $8.5 to $10.3 billion 

through 2021.

• The GSDO estimate does not address the costs to develop or operate 

SLS ground systems infrastructure beyond EM-1 in 2017, although 

NASA intends to modify ground architecture to accommodate all SLS 

variants.

NASA officials have indicated that the road ahead involves many 

decisions about the programs beyond 2021, including how development 

will proceed, what missions will be performed, when the programs will 

end, and how each effort will be managed. They noted that the agency is 

using a capability-based approach to SLS, Orion, and the associated 

GSDO development, in which system capability grows over time. They 

indicated that the programs’ preliminary cost estimates are for attainment 

of capabilities rather than the full cost of the programs, and that it is 

difficult to define life cycle costs because the programs’ intended longterm uses and life spans have not been fully determined. According to 
Page 9 GAO-14-385 NASA Exploration Costs

NASA, the agency is developing a tailored definition for life cycle cost 

estimating that is allowed by NASA requirements. Because the missions 

drive the number and types of vehicles, crew capsules, and ground 

systems that would be required, as missions are defined, NASA officials 

said they would be in a better position to estimate the programs’ life cycle 

costs. The officials stated that NASA is looking ahead to future costs as 

much as possible, and NASA indicated in technical comments to this 

report that the SLS program plans to begin formally reporting costs for the 

launch vehicle’s EM-2 after the program’s anticipated confirmation in 

spring 2014.

We recognize that defining life cycle costs can be difficult when 

uncertainties exist. However, in contrast to NASA’s tailored approach, 

both widely-accepted best practices for cost estimation and the agency’s 

own requirements support the need for full life cycle cost estimates. Even 

when uncertainties exist, best practices maintain that a high-quality cost 

estimate takes into account those uncertainties while forecasting the 

minimum and maximum range of all life cycle costs. The best practices, 

developed by the GAO in concert with the public and private sector cost 

estimating communities, call for “cradle to grave” life cycle cost estimates 

and maintain that life cycle cost estimates should provide an exhaustive, 

structured accounting of all resources and associated cost elements 

required to develop, produce, deploy, and sustain a particular program. 

This entails identification of all pertinent cost elements, from initial 

concept through operations, support, and disposal. Likewise, NASA’s 

program management requirements direct that programs develop a 

preliminary full life cycle cost estimate. In accordance with the agency’s 

guidance regarding life cycle costs, such an estimate would encompass 

total costs from the formulation through the implementation phase, 

including design, development, mission operations, support, and disposal 

activities.

According to best practices, because life cycle estimates encompass all 

possible costs, they provide a wealth of information about how much 

programs are expected to cost over time. Life cycle cost estimates, 

including a range for preliminary costs as directed by NASA requirements 

for programs in the formulation phase, enhance decision making, 

especially in early planning and concept formulation of acquisition. Highquality cost estimates, as noted by best practices, can support budgetary 

decisions, key decision points, milestone reviews, and investment 

decisions. For example, a preliminary life cycle cost estimate provides the 

basis of the financial investment that the agency is committing the 

government to, while a baseline life cycle cost estimate forms the basis 
Page 10 GAO-14-385 NASA Exploration Costs

for measuring cost growth over time. Because NASA expects to continue 

with a limited scope for the SLS, Orion, and baseline estimates, however, 

cost growth over time within the programs will be difficult to identify and 

could be masked as growth in the SLS capability if the most current cost 

estimate did not contain the same content as the baseline estimate.

As noted in best practices for cost estimating, the quality of a program’s 

cost estimate is also key to determining its affordability, that is, the degree 

to which a program’s funding requirements fit within an agency’s overall 

portfolio plan. However, NASA’s preliminary cost estimates do not 

address the affordability of increased capabilities because they exclude 

the life cycle costs associated with the SLS Block IA/B and Block II launch 

vehicles that the agency intends to use well into the future. According to 

agency officials at the time of our review, NASA has not yet decided 

whether it will manage the Block IA/B and Block II development efforts as 

individual programs and, if so, what the programs’ scope would be. Best 

practices for cost estimating look favorably on the incremental 

development approach NASA has chosen for SLS, and they also state 

that programs following such an approach should clearly define the 

characteristics of each increment of capability so that a rigorous life cycle 

cost estimate can be developed. In addition, we have previously 

concluded that it is prudent for an agency to manage increasing 

capabilities of an existing program on par with the investments yet to 

come and in a way that is beneficial for oversight. For example, we have 

recommended that agencies developing weapon systems in increments 

consider establishing each increment of increased capability with its own 

cost and schedule baseline.9

 9 GAO, Tactical Aircraft: F-22A Modernization Program Faces Cost, Technical, and 

Sustainment Risks, 

According to cost estimating best practices, 

dividing programs into smaller pieces makes management and testing 

easier and helps avoid unrealistic cost estimates, resulting in more 

realistic long-range investment funding and more effective resource 

allocation. These are important considerations given that NASA is likely to 

spend billions of dollars beyond its initial investment of up to $22 billion to

develop the increased capabilities. Development of human-rated liquidfueled engines, for example, has been among the most difficult, timeintensive, and costly parts of launch vehicle development. As a case in 

point, NASA spent about 8 years and $1.5 billion to develop a humanGAO-12-447, (Washington D.C.: May 2, 2012).
Page 11 GAO-14-385 NASA Exploration Costs

rated engine known as J-2X for use on Ares launch vehicles within the 

agency’s now-defunct Constellation program.

NASA has faced issues with affordability of its manned space flight 

investments and other major projects in the past, and those affordability 

issues have sometimes contributed to a program’s cancellation. For 

example, NASA originally envisioned that the Space Shuttle would fly up 

to 100 times per vehicle at a cost of $7.7 million per launch.10 In reality, 

the Shuttle flew 135 times in total over a period of 30 years at a cost that 

was about $3.5 billion per year around the 2008 timeframe. Amid 

concerns that included the Shuttle’s costs and safety, the program ended. 

NASA then focused on building human spaceflight alternatives that 

included Constellation. In 2010, Constellation was canceled because, as 

noted by NASA’s Administrator, the program could not return astronauts 

to the moon at an affordable cost and would require far more funding to 

make the agency’s approach viable.

11 In a recent example noted in the 

agency’s 2015 presidential budget request, NASA may place in storage 

the Stratospheric Observatory for Infrared Astronomy, an airborne 

observatory for studying astronomical objects and phenomena, after 

spending some 23 years and more than $1 billion to develop the project. 

The agency cited high operating costs, estimated at some $1.8 billion 

over the project’s planned life, as a factor in its considerations.

The SLS, Orion, and GSDO programs NASA has established to fulfill its 

mandate of providing the capability for transporting humans to space are 

well underway. These programs represent a significant investment for the 

country—as much as $22 billion for initial capabilities and potentially 

billions more to field increased capabilities over time as envisioned in the 

2010 NASA Authorization Act. Given the goals that have been outlined for 

NASA as part of the National Space Transportation Policy, the success of 

these programs is to be measured not only by the capability that is 

achieved but also by NASA’s ability to achieve them within a reasonable 

timeframe and cost to the U.S. taxpayer. As such, establishing these 

programs with both near-term and long-term affordability in mind is key. 

The limited scope that NASA has chosen to use as the basis for 

 10 NASA, Columbia Accident Investigation Board, Report Volume I, August 2003.

11 NASA, Statement by Charles Bolden, NASA Administrator, February 1, 2010, NASA 

Budget Press Conference. 

Conclusions
Page 12 GAO-14-385 NASA Exploration Costs

formulating the programs’ cost baselines, however, does not provide the 

transparency necessary to assess long-term affordability and will hamper 

oversight by those tasked with assessing whether the agency is 

progressing in a cost-effective and affordable manner. If the SLS, Orion,

and GSDO baseline cost estimates cannot be compared to current costs, 

the baseline estimates lose their usefulness because they no longer 

serve as a means to hold NASA accountable for cost growth and program 

progress. Furthermore, if NASA does not clearly delineate costs for 

operations and sustainment of the initial capabilities or separate cost and 

schedule baselines for upcoming capabilities, then it will be difficult to 

assess program affordability and for the Congress to make informed, 

long-term budgetary decisions. Estimates that use all available 

information to establish a potential range of costs for the full scope of 

these upcoming capabilities can help inform such decisions.

To provide the Congress with the necessary insight into program 

affordability, ensure its ability to effectively monitor total program costs 

and execution, and to facilitate investment decisions, we recommend that 

NASA’s Administrator direct the Human Exploration and Operations 

Mission Directorate take the following 3 actions:

• Establish a separate cost and schedule baseline for work required to 

support the SLS Block I EM-2 and report this information to the 

Congress through NASA’s annual budget submission. If NASA 

decides to fly the SLS Block I beyond EM-2, establish separate life 

cycle cost and schedule baseline estimates for those efforts, to 

include funding for operations and sustainment, and report this 

information annually to Congress via the agency’s budget submission.

• Because NASA intends to use the increased capabilities of the SLS, 

Orion, and GSDO efforts well into the future and has chosen to 

estimate costs associated with achieving the capabilities, establish 

separate cost and schedule baselines for each additional capability 

that encompass all life cycle costs, to include operations and 

sustainment. When NASA cannot fully specify costs due to lack of 

well-defined missions or flight manifests, forecast a cost estimate 

range — including life cycle costs — having minimum and maximum 

boundaries. These baselines or ranges should be reported to 

Congress annually via the agency’s budget submission.

• Because a significant amount of the original Orion development work 

occurred under the Constellation program, include those costs in the 

baseline cost estimate for the Orion program.

Recommendations for 

Executive Action
Page 13 GAO-14-385 NASA Exploration Costs

NASA provided written comments on a draft of this report. These 

comments are reprinted in Appendix I. 

In responding to a draft of our report, NASA partially concurred with our 

three recommendations, citing among other reasons that actions already 

in place at the time of our review such as establishing SLS, Orion, GSDO 

as separate programs and a block upgrade approach for SLS—and 

actions it plans to take to track costs—met the intent of our 

recommendations. In most cases, the actions that NASA plans to take do 

not fully address the issues we raised in this report. We continue to 

believe that our recommendations are valid and should be fully addressed 

as discussed below. NASA also provided technical comments which we 

incorporated as appropriate.

NASA partially concurred with our first recommendation to establish a 

separate cost and schedule baseline for work required to support the SLS 

Block I EM-2, report this information to the Congress through NASA's 

annual budget submission, and establish separate life cycle cost and 

schedule baseline estimates for EM-2 if NASA decides to fly Block I 

beyond EM-2. NASA also partially concurred with our second 

recommendation to establish separate cost and schedule baselines that 

encompass life cycle costs, including operations and sustainment, for 

each additional SLS, Orion, and GSDO capability and to report cost 

estimates for the capabilities annually via the agency budget submission 

until key requirements are defined and baselines can be established. In 

its response, NASA stated that it had established separate programs for 

SLS, Orion, and GSDO and adopted a block upgrade approach for SLS.

This approach, NASA stated, is in concert with best practices and NASA 

policy. In addition, NASA indicated that it will establish cost and schedule 

estimates for initial demonstration of the three programs as they enter 

respective implementation phases and will begin reporting development, 

operations, and sustainment costs for SLS Block I and subsequent 

variants starting in fiscal year 2016 via its annual budget submission to 

Congress. Finally, the agency stated that it intends to conduct design 

reviews for upgraded SLS elements, including the upper stage and 

booster, and set up cost commitments similar to what it has done for 

Block I capability as part of that design review process, but that it does 

not intend to establish life cycle estimates for SLS through the end of the 

program because flight rates, mission destinations and other strategic 

parameters are yet unknown.

As discussed in the report, best practices for cost estimating recognize 

that NASA’s evolutionary development approach for SLS, Orion, and 

Agency Comments 

and Our Evaluation
Page 14 GAO-14-385 NASA Exploration Costs

GSDO helps reduce risk and provide capabilities more quickly. Given 

NASA’s planned long-term use of the SLS, Orion, and GSDO, its block 

upgrade approach and intention to conduct design reviews for each of the 

planned upgrades will provide some understanding of the development 

work and resources required. For example, such reviews are typically 

expected to yield information about technical progress against 

requirements. While NASA's prior establishment of SLS, Orion, and 

GSDO as separate programs lends some insight into expected costs and 

schedule at the broader program level, it does not meet the intent of our 

first two recommendations because cost and schedule identified at that 

level is unlikely to provide the detail necessary to monitor the progress of 

each block against a baseline. Furthermore, it is unclear from NASA's 

response whether the cost commitments the agency plans within the 

design review process will serve the same purpose as establishing a cost 

baseline for each respective upgrade. 

Additionally, NASA's planned approach for reporting costs associated 

with EM-2 and subsequent variants of SLS via its annual budget 

submission only partially meets the intent of our first two 

recommendations. Providing cost information at an early phase when 

baseline estimates have yet to be established is helpful to ensure costs 

associated with EM-1 and EM-2 are not conflated and funding 

requirements for future flights of the Block I SLS and future variants are 

somewhat understood. Reporting the costs via the budget process alone, 

however, will not provide information about potential costs over the longterm because budget requests neither offer all the same information as 

life cycle cost estimates nor serve the same purpose. Plainly, progress 

cannot be assessed without a baseline that serves as a means to 

compare current costs against expected costs. An agency’s budget 

submission reflects its current annual fiscal needs and anticipated shortterm needs up through an additional 4-year period for a particular

program, is subject to change based on fiscal negotiation, and is not 

necessarily linked to an established baseline that indicates how much the 

agency expects to invest to develop, operate, and sustain a capability 

over the long-term. Conversely, life cycle cost estimates establish a full 

accounting of all program costs for planning, procurement, operations and 

maintenance, and disposal and provide a long-term means to measure 

progress over a program’s life span. As NASA establishes parameters for 

the additional flights of the first SLS capability and upgraded capabilities, 

including flight rates, mission destinations, and other requirements, it will 

be well-poised to move from reporting costs in budget submissions to 

establishing baseline cost and schedule estimates for each capability and 

reporting progress against these respective baselines. Therefore, we 
Page 15 GAO-14-385 NASA Exploration Costs

continue to believe that NASA should baseline costs for EM-2 and each 

future variant of SLS and report progress against those established 

baselines.

NASA makes no specific mention of how it plans to account for future 

work associated with Orion and GSDO. We believe it is important to treat 

Orion and GSDO with the same significance as SLS because this trio of 

programs is expected to work in concert now and in the future to achieve 

NASA’s goals for human space exploration. Reporting Orion and GSDO 

development, operations, and sustainment costs in the annual budget 

request, as NASA plans for SLS, would be a logical first step. Just as with 

SLS, however, it will be important for NASA to establish and report 

progress against baseline costs and schedules for each block of Orion 

and GSDO efforts as flight rates, missions, and other strategic 

parameters are defined because doing so will help the agency more 

effectively manage not only each program but its human exploration 

portfolio as a whole. 

NASA partially concurred with our third recommendation to include the 

costs of Orion development work under the Constellation program as part 

of the baseline cost estimate for the Orion program. Agency officials 

stated that they agree those costs should be tracked and disclosed, but 

that the current Orion program has a new concept of operations, 

requirements, and budget plan than that under the Constellation effort.

The past costs incurred for Orion’s development are important because 

they provide visibility into the total cost of developing a crew capsule for 

human space exploration. Exclusion of these costs from Orion’s current 

estimate understates how much NASA will invest to put humans into 

space. Although NASA notes that it has changed Orion’s concept of 

operations and requirements, the agency nonetheless migrated Orion 

critical technology development efforts from Constellation to the SLS 

program. For example, NASA began efforts to develop the coating for 

Orion’s heat shield as part of Constellation, and the agency continues that 

development today in preparation for the capsule’s launch atop SLS. 

Therefore, we continue to believe our recommendation to include Orion 

development costs under Constellation in the baseline cost estimate for 

the current Orion program is valid and should be fully implemented.

We are sending this report to NASA’s Administrator and to interested 

congressional committees. In addition, the report will be available at no 

charge on GAO’s website at http://www.gao.gov. 
Page 16 GAO-14-385 NASA Exploration Costs

Should you or your staff have any questions on matters discussed in this 

report, please contact me at (202) 512-4841 or chaplainc@gao.gov.

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. Other key 

contributors to this report are listed in Appendix II. 

Sincerely yours,

Cristina T. Chaplain

Director

Acquisition and Sourcing Management
Appendix I: Comments from the National 

Aeronautics and Space Administration

Page 17 GAO-14-385 NASA Exploration Costs

Appendix I: Comments from the National 

Aeronautics and Space Administration
Appendix I: Comments from the National 

Aeronautics and Space Administration

Page 18 GAO-14-385 NASA Exploration Costs
Appendix I: Comments from the National 

Aeronautics and Space Administration

Page 19 GAO-14-385 NASA Exploration Costs
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 20 GAO-14-385 NASA Exploration Costs

Cristina Chaplain, 202-512-4841 or chaplainc@gao.gov

Key contributors to this report were Shelby S. Oakley, Assistant Director; 

Tana M. Davis; John S. Warren, Jr.; Jennifer Echard; Laura Greifner; 

Roxanna Sun; and Sylvia Schatz.

Appendix II: GAO Contact and Staff 

Acknowledgments

GAO Contact 

Staff 

Acknowledgments

(121201)
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