**GAO-09-436T**                      Published: Mar 05, 2009. Publicly Released: Mar 05, 2009.                  

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## Highlights

This testimony discusses the National Aeronautics and Space Administration's (NASA) oversight and management of its major projects. As you know, in 1990, GAO designated NASA's contract management as high risk in view of persistent cost growth and schedule slippage in the majority of its major projects. Since that time, GAO's high-risk work has focused on identifying a number of causal factors, including antiquated financial management systems, poor cost estimating, and undefinitized contracts. Because cost growth and schedule delays persist, this area - now titled acquisition management because of the scope of issues that need to be resolved - remains high risk. To its credit, NASA has recently made a concerted effort to improve its acquisition management. In 2007, NASA developed a comprehensive plan to address systemic weaknesses related to how it manages its acquisitions. The plan specifically seeks to strengthen program/project management, increase accuracy in cost estimating, facilitate monitoring of contractor cost performance, improve agency wide business processes, and improve financial management. While we applaud these efforts our recent work has shown that NASA needs to pay more attention to effective project management. It needs to adopt best practices that focus on closing gaps in knowledge about requirements, technologies, funding, time and other resources before it makes commitments to large-scale programs. For instance, the Mars Science Laboratory, which was already over budget, recently announced a 2-year launch delay. Current estimates suggest that the price of this delay may be $400 million--which drives the current project life-cycle cost estimate to $2.3 billion; up from its initial confirmation estimate of $1.6 billion. Also, in just one year, the development costs of NASA's Glory mission increased by 54 percent, or almost $100 million, because of problems NASA's contractor is having developing a key sensor. Total project costs for another project, Kepler have increased almost another $100 million within 2 fiscal years because of similar issues. Taken together, these and other unanticipated cost increases hamper NASA's ability to fund new projects, continue existing ones, and pave the way to a post-shuttle space exploration environment. Given the constrained fiscal environment and pressure on discretionary spending it is critical that NASA get the most out of its investment dollars for its space systems. The agency is increasingly being asked to expand its portfolio to support important scientific missions including the study of climate change. Therefore, it is exceedingly important that these resources be managed as effectively and efficiently as possible for success. The recent launch failure of the Orbiting Carbon Observatory is an all-too-grim reminder of how much time, hard work, and resources can be for naught when a space project cannot execute its mission.

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## Topics

Space

AccountabilityBest practicesContract administrationContract costsContract oversightContractsCost analysisCost overrunsFinancial managementInternal controlsMonitoringProcurement planningProcurement policyProgram evaluationProgram managementRisk managementSchedule slippagesStandardsStrategic planningSystems designTechnologyAgency missionsRequirements definitionContract mismanagementCost estimatesCost growthGovernment agency oversight