SPACE SHUTTLE

Human Capital

Challenges Require

Management Attention

Statement of Allen Li, Associate Director, Defense Acquisitions Issues,

National Security and International Affairs Division

United States General Accounting Office

GAO Testimony

Before the Subcommittee on Science, Technology, and

Space, Committee on Commerce, Science, and

Transportation, U.S. Senate

For Release on Delivery

Expected at

2:30 p.m., EST

Wednesday,

March 22, 2000

GAO/T-NSIAD-00-133
1

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss our ongoing work on the National

Aeronautics and Space Administration’s (NASA) space shuttle program. We are currently

responding to the Committee’s request to review NASA’s plans for meeting current and

future human capital needs. We plan to finalize our work and report on this issue in the

coming months. As a result, my statement today presents our preliminary observations.

NASA budget data shows that, since 1995, shuttle workforce levels have decreased from

about 3,000 to about 1,800 full time equivalent employees.1 NASA based its downsizing

efforts on optimistic programmatic assumptions. For example, NASA believed it could

reduce its workforce by consolidating contracts for flight, ground, and mission

operations under a single private sector contract. In October 1996, NASA awarded this

contract. Under the contract, NASA was to provide incentives to eliminate unnecessary

work and would no longer be involved in day-to-day shuttle operations. However,

because NASA was implementing a number of workforce reduction initiatives, NASA

could not directly attribute specific reductions to the contract consolidation. Also, in

1994 NASA froze the shuttle design in the expectation that it would be replaced. NASA

now expects to operate the shuttle for at least the next decade. As a consequence, it

initiated an upgrade program. In addition, NASA’s downsizing coincided with a

decreased number of shuttle flights: eight flights in fiscal year 1997, but only four each in

fiscal years 1998 and 1999. However, the number of flights is projected to increase

substantially as the International Space Station assembly schedule accelerates. NASA

plans nine flights in fiscal year 2001. NASA believes this will require more staff.

Today we will focus on the shuttle program’s civil service workforce. Specifically, we

will (1) summarize the results of studies on the impact of workforce reductions, (2)

describe NASA’s actions following these workforce assessments, (3) identify challenges

NASA faces in the anticipated heavy workload imposed by the International Space

1

Full time equivalent is a measure of staff hours equal to those of a full time employee working 40 hours

per week over the course of a year.
2

Station, and (4) suggest a structured approach NASA can take to analyze human capital

challenges.

RESULTS IN BRIEF

Several studies, one as recent as March 2000, have reported that the shuttle program’s

workforce has been affected negatively by the downsizing, much of which has occurred

since 1995. The studies concluded that the existing workforce is stretched thin to the

point where there is just one qualified person in many critical areas. NASA has identified

30 critical areas at Kennedy Space Center that do not have sufficient backup coverage.

These areas include shuttle range safety systems and solid rocket booster and external

tank electrical systems. In addition, the studies found that the workforce is showing

signs of overwork and fatigue. For example, indicators including forfeited leave,

absences from training courses, and stress-related employee assistance visits are all on

the rise. Moreover, the program’s workforce age distribution and skill mix now limit

opportunities for mentoring newer staff. For example, throughout the Office of Space

Flight, which includes the shuttle program, there are more than twice the number of

workers over 60 years of age than under 30 years of age. This jeopardizes the program’s

ability to “hand off” leadership roles to the next generation.

NASA has responded to the workforce problems in a number of ways. It has terminated

its downsizing program and is increasing its budget to provide an additional 95 full time

equivalent employees for the shuttle program in fiscal year 2000. NASA has also

increased its fiscal year 2001 budget request to provide an additional 278 full time

equivalent employees for the shuttle program. In addition, the administrator has directed

the agency’s managers to consider ways to reduce workforce stress.

NASA faces a number of challenges in addressing the current shuttle workforce

imbalance -- especially given the anticipated increased workload. This includes

accommodating increased training needs, ensuring adequate staffing levels for its safety

upgrade program, attracting and retaining technical skills, dealing with uncertainties
3

related to the future of shuttle privatization and commercialization plans, and achieving a

higher projected flight rate.

The challenge of ensuring NASA has the proper mix and number of staff to meet shuttle

objectives safely will require a structured approach. GAO’s internal control standards for

the federal government discuss the importance of human capital management in

achieving program results. The Comptroller General has brought additional attention to

human capital issues and the importance of long-term planning. In this regard, we

recently issued a checklist2for agency leaders to use, in order to help them develop

human capital strategies. This checklist will allow agency managers “to quickly

determine whether their approach to human capital supports their vision of who they are

and what they want to accomplish, and to identify those...policies that are in particular

need of attention.” The checklist follows a five-part framework, including strategic

planning, organizational alignment, leadership, talent, and performance culture. The

checklist helps to establish linkage between human capital programs and the agency’s

mission, goals, and strategies. We have provided copies of the checklist to NASA. We

believe NASA’s attention to human capital issues will be essential to ensuring the

agency’s ability to achieve the goals of the shuttle program.

RECENT STUDIES HIGHLIGHT

SHUTTLE WORKFORCE PROBLEMS

Over the past several years, NASA and its Aerospace Safety Advisory Panel have studied

the shuttle program civil service workforce.3The studies concluded that the shuttle

program workforce has suffered significantly from the downsizing, much of which has

occurred since 1995. For example, the studies conclude that the workforce may not be

sufficient to support the planned shuttle flight rate and many key positions are not

2

Human Capital: A Self-Assessment Checklist for Agency Leaders, Discussion Draft (GAO/GGD-99-179,

September 1999).

3

Independent Assessment of the Shuttle Processing Directorate Engineering and Management Processes,

NASA’s Human Exploration and Development of Space Independent Assessment Office (November 4,

1999); Report to Associate Administrator, Office of Space Flight, Space Shuttle Independent Assessment

Team (March 7, 2000); and Annual Report for 1999, Aerospace Safety Advisory Panel (February 2000).
4

sufficiently staffed by qualified workers. In addition, the studies found that stress levels

have reached the point of creating an unhealthy workforce. The results of these studies

are highlighted below.

• In its November 1999 report, NASA’s Human Exploration and Development of Space

Independent Assessment Office concluded that, even with a relatively low flight rate,

the Shuttle Processing Directorate at Kennedy Space Center had the “minimum”

workforce necessary to conduct daily business. For example, the report expressed

concerns with NASA’s ability to perform mandatory shuttle inspections. NASA

believed that these inspections could be performed under its flight operations

contract. However, after the departure of many inspectors, the agency determined

that a substantial number of inspections would still need to be performed in-house.

The report also found that NASA provided little evidence of structured training plans

for its staff, and the resources to support needed training were inadequate. Given

these concerns, the report concluded that NASA might not be able to support higher

shuttle flight rates projected in the future.

• During the fall of 1999, NASA chartered a team to review the overall shuttle systems

and maintenance practices. The team, chaired by the Ames Research Center Director,

assessed NASA’s standard practices in these areas and concluded that the current

workforce was inadequate. In addressing human capital issues, the study noted that

important technical areas were understaffed. For example, during a recent shuttle

wiring investigation, the team found that “workforce skill shortages created the need

to use...personnel inexperienced in wiring issues to perform critical inspections.” In

addition, the study team found that work stresses had impacted the downsized

shuttle workforce. For example, one center employee survey suggested that

hypertension, gastrointestinal, and cardiac conditions could have resulted from workrelated stress.

• In an internal study completed in June 1999, NASA concluded that the Office of Space

Flight, which includes the shuttle program, had (1) an inappropriate skill mix for
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current and future work, (2) a growing lack of younger staff to assume management

and technical roles, and (3) an overworked and aging workforce. The study also

concluded that there was an overall shortfall of workers. In response, NASA adjusted

the agency’s workforce targets by providing one new hire for every two additional

losses.

• In the fall of 1999, NASA decided to build on its earlier workforce study to further

define resource requirements. This second phase, completed in December 1999,

included an evaluation of stress-related issues. In terms of resources the study found

that a “revitalization” of the workforce was required to prevent “significant” safety

concerns. For example, at the Kennedy Space Center, the shuttle program has only

one qualified person in 304

critical systems areas. These areas include shuttle range

safety systems and solid rocket booster and external tank electrical systems. In

addition, the study found that, throughout the Office of Space Flight, there were more

than twice the number of workers over 60 years of age than under 30 years of age.

This represented a reversal of the age profile just 6 years ago, creating a potential

problem in developing future qualified leaders.

As for health issues, the study concluded that the agency was experiencing an

“unhealthy” and increasing level of stress. This conclusion was based on multiple

indicators including increased forfeited leave, absences from required training,

increased payment of overtime, and counseling visits through the employee

assistance program. This level of worker stress resulted in (1) problems in

concentrating, (2) difficulty in making decisions, (3) inability to cope, (4) insomnia,

and (5) anxiety.

• Perhaps the most persistent voice stressing the consequences of shuttle workforce

downsizing has been NASA’s Aerospace Safety Advisory Panel. This Panel is an

independent group of experts consisting of nine members appointed by the NASA

Administrator. Since 1996, the Panel has examined the potential safety impacts of

4

This study identified a total of 87 critical systems areas at Kennedy Space Center.
6

downsizing and has consistently cautioned that the program has been experiencing

an erosion of critical skills, a lack of younger people at entry-level positions,

insufficient training opportunities, and a decreasing capacity to accommodate higher

space shuttle flight rates for sustained periods. In its 1999 annual report, the Panel

recommended that NASA “...address its workforce problems aggressively” to ensure

safe operations. It added that “emphasis should be placed on eliminating critical skills

shortfalls and recruiting younger [engineers] who can develop into experienced and

skilled future leaders.”

NASA IS BEGINNING TO ADDRESS

WORKFORCE PROBLEMS

In response to the workforce studies, NASA is now implementing actions to address its

workforce problems. For example, the agency has terminated its downsizing plans and

expects to add 95 full time equivalent employees to the shuttle program in fiscal year

2000 to address critical skill shortages. In addition, in its fiscal year 2001 budget request,

NASA is seeking authority to add another 278 full time equivalent employees to the

shuttle workforce.

In addition to these immediate actions, NASA’s Administrator has announced that the

agency will soon begin a joint review with the Office of Management and Budget to

identify NASA’s overall future workforce needs. According to the Administrator, this

review will assess potential tools and approaches for overall personnel management for

the agency.

NASA believes the stress-related indicators that were reported in the December 1999

workforce study were critical evidence supporting the need for increasing NASA’s

workforce. In October 1999, NASA’s Administrator directed the agency’s highest level

managers to consider ways to reduce workplace stress. NASA subsequently included
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improved health monitoring as an objective in its fiscal year 2001 performance plan.5

According to the plan, NASA plans to develop and implement supervisor-specific and

individual training to identify, manage, and cope with stress in the workplace.

NASA WILL CONTINUE TO

FACE HUMAN CAPITAL CHALLENGES

In dealing with its workforce problems, the shuttle program will have to deal with a

number of complicating factors. These include accommodating increased training needs,

ensuring adequate staffing levels for its safety upgrade program, attracting and retaining

employees with critical skills, dealing with uncertainties related to the future of shuttle

privatization and commercialization plans, and achieving a higher projected flight rate.

For example, according to one NASA study, it could take 2 or more years to fully train

new engineers, while the current shuttle workload leaves little time for training. Also, the

shuttle program has just begun a 5-year safety upgrade initiative. This initiative involves

developing modifications to increase the safety of all major components of the shuttle

vehicle. According to Johnson Space Center officials, this initiative will require up to

three hundred engineers. Moreover, some critically needed skills, such as software

engineering will be hard to attract and retain. In August 1999, we reported on this

concern as it related to the space station program.6

In recent years, NASA has considered ways to maximize private sector involvement in

shuttle operations, including transitioning management functions and marketing of

payloads for commercial applications.7Regarding the future shuttle privatization and

commercialization plans, the Human Exploration and Development of Space

Independent Assessment Office study noted that strategic planning, workforce

5

The Government Performance and Results Act of 1993 requires agencies to prepare annual performance

plans.

6

Space Station: Russian Commitment and Cost Control Problems (GAO/NSIAD-99-175, August 17, 1999).

7

In the past, the shuttle program has performed commercial activities for which it has been reimbursed by

the private sector. However, it has been limited from flying reimbursable payloads by federal regulations.

NASA is in the process of reviewing these restrictive policies with their initiators with the objective of

removing them as obstacles to a fully commercialized shuttle program.
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deployment, and prioritization will be difficult. The study concluded that NASA “must

begin to analyze how its workforce will evolve in the [new] environments and prepare a

plan for this evolution.” All of these challenges will have to be faced while the program

attempts to double its current flight rate. In recent years, NASA has flown four flights a

year, but plans to fly nine times in fiscal year 2001, primarily to support the International

Space Station assembly.

STRUCTURED APPROACH FOR MEETING

HUMAN CAPITAL CHALLENGES IS NECESSARY

We believe NASA must build on its renewed emphasis on a healthy, diverse, and properly

deployed shuttle workforce. Our Standards for Internal Control in the Federal

Government, as updated in November 1999, address these workforce issues. The

standards state that “only when the right personnel for the job are on board and are

provided the right training, tools, structure, incentives, and responsibilities is operational

success possible.”

GAO’s Comptroller General has made improved human capital management throughout

the federal government one of his top priorities. In testimony8on March 9, 2000, he stated

that “...human capital management recognizes that employees are a critical asset for

success, and that an organization’s human capital policies and practices must be

designed, implemented, and assessed by the standard of how well they support the

organization’s mission and goals.” He also noted that we had recently published a human

capital self-assessment checklist that provides a structured approach to identifying and

addressing human capital issues. This checklist will allow agency managers “to quickly

determine whether their approach to human capital supports their vision of who they are

and what they want to accomplish, and to identify those...policies that are in particular

8

Testimony was given before the Subcommittee on Oversight of Government Management, Restructuring,

and theDistrict of Columbia, Senate Committee on Governmental Affairs (GAO/T-GGD-00-77). Also on

March 9, 2000, GAO testified on similar human capital concerns related to the Department of Defense. This

testimony was given at a joint hearing involving the Subcommittee on Military Readiness, House

Committee on Armed Services, and the Subcommittee on Civil Service, House Committee on Government

Reform (GAO/T-GGD/NSIAD-00-120).
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need of attention.” The checklist follows a five-part framework, including strategic

planning, organizational alignment, leadership, talent, and performance culture. It also

provides a linkage of human capital programs to the agency’s mission, goals, and

strategies.

We have applied some of the concepts contained in the checklist during our workforce

review at NASA and have provided copies of the checklist to NASA. We have been told

that human resource officials are currently using the checklist as a guide in their

workforce planning and the agency’s ongoing discussions with the Office of Management

and Budget. It is our hope that it will enable NASA and other agencies to perform more

comprehensive evaluations of their human capital systems in the coming years.

Mr. Chairman, this concludes our formal statement. We would be happy to answer any

questions that you or members of the Subcommittee may have.

CONTACT AND ACKNOWLEDGEMENT

For future contacts regarding this testimony, please contact Allen Li at (202) 512-4841.

Individuals making key contributions to this testimony included Jerry Herley, John

Gilchrist, Fred Felder, and James Beard.

(707492)
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