JUNE 22, 2011

AUDIT REPORT

REPORT NO. IG-11-020 (ASSIGNMENT NO. A-11-008-00)

OFFICE OF AUDITS

NASA’S HANGAR ONE RE-SIDING PROJECT

OFFICE OF INSPECTOR GENERAL

National Aeronautics and 

Space Administration
REPORT NO. IG-11-020

Final report released by:

Paul K. Martin

Inspector General

Acronyms

CoF Construction of Facilities

FY Fiscal Year

OIG Office of Inspector General

OMB Office of Management and Budget

PCB Polychlorinated Biphenyl
JUNE 22, 2011

REPORT NO. IG-11-020

OVERVIEW

NASA’S HANGAR ONE RE-SIDING PROJECT

The Issue

Hangar One – built in the 1930s to house the naval airship the USS Macon and located on 

Moffett Field, part of the Ames Research Center (Ames) – is one of the world’s largest 

freestanding structures, covering approximately 8 acres. The hangar and many of the 

surrounding buildings are listed on the National Register of Historic Places and as such 

are protected by the National Historic Preservation Act (the Preservation Act).

1

As part of its base realignment and closure process, the Navy transferred Moffett Field to 

NASA in July 1994. According to the memorandum of understanding governing the 

transfer, the Navy is responsible for “all actions related to the environmental restoration 

or remediation of any pollutant, contaminant or hazardous substance, including petroleum 

products, existing on or migrating from” Moffett Field. 

 

Between October 2002 and July 2003, NASA discovered that polychlorinated biphenyls 

(PCBs) were leaking from the siding of Hangar One. To contain the PCBs and minimize 

the environmental hazard in the short-term, the Navy coated the hangar with an asphalt 

emulsion in October 2003. Thereafter, NASA and the Navy discussed possible longerterm solutions to the environmental problem, as well as which agency would be 

responsible for the associated costs. In August 2009, the Navy began preparing to strip

away the siding and coat the exposed structural steel surfaces, but took the position that it 

was not responsible for re-siding the hangar. In March 2010, the Office of Management 

and Budget (OMB) settled the dispute between NASA and the Navy, determining that 

while the Navy would have to pay for the environmental cleanup, NASA was responsible 

for the cost of re-siding the hangar and making any additional upgrades and repairs 

necessary to prepare the hangar for reuse. In April 2011, the Navy began the work of 

removing the siding.

In February 2011, at OMB’s direction, NASA included the re-siding project in the 

supplemental information for the President’s fiscal year (FY) 2012 budget request at an 

estimated cost of $32.8 million. With these funds, NASA proposes to make the structure 

watertight by installing new but historically appropriate exterior siding, roofing, and 

windows.

 1 The Preservation Act, 16 U.S.C. § 470, authorizes the Secretary of the Interior to expand and maintain a 

National Register of Historic Places composed of districts, sites, buildings, structures, and objects 

significant in American history, architecture, archaeology, and engineering. 
OVERVIEW

ii REPORT NO. IG-11-020

For this audit, the Office of Inspector General (OIG) examined (1) whether the 

$32.8 million will cover the full costs of the Hangar One project (2) whether NASA has 

identified a NASA-related use or private tenants for the hangar; (3) the effect dedicating 

funds to hangar restoration may have on other NASA construction or renovation projects; 

and (4) whether NASA’s plans to re-side the hangar comply with historical preservation 

requirements. 

Results

The Hangar One Re-Siding Project was included in the President’s FY 2012 budget 

request as a discrete construction project with an estimated cost of $32.8 million. 

However, even after the re-siding is complete, additional funding will be required –

potentially tens of millions of dollars – for upgrades and repairs such as the connection of 

utilities, installation of lighting fixtures, and heating, cooling, and safety equipment to 

make the hangar fit for use. Moreover, although funds to re-side the hangar have been 

requested and estimates for additional work are being developed, NASA has neither 

identified a mission-related use for Hangar One nor identified private entities willing to 

commit to leasing the property. At the same time, other mission critical projects were 

removed from NASA’s FY 2012 budget request in order to accommodate inclusion of the 

Hangar One Project. Finally, while Hangar One is protected by the Preservation Act, 

NASA is not required to re-side the hangar to comply with the Act. 

In light of our findings and NASA’s overall challenges related to maintaining its aging 

facilities, we question whether preservation of Hangar One is the best use of limited 

NASA funds. Even after expending more than $32 million, NASA will have a building 

that has no immediate or near-term prospects for reuse. Moreover, without a substantial 

infusion of additional funds for improvements, the building will not be available for 

occupancy by Agency employees or private entities, or even suitable as an aircraft 

hangar. In addition, expending funds on Hangar One will mean the continued deferral of 

other critical Agency renovation projects. In our judgment, NASA should analyze the 

full range of options before moving forward with the Hangar One Re-Siding Project.

Management Action

We recommended that the Associate Administrator for Mission Support consider the 

following alternatives for Hangar One: (1) re-side the hangar as described in the budget 

request and identify the annual maintenance cost assuming no use; (2) re-side the hangar

and complete the upgrades and repairs necessary to allow for use as aircraft storage; 

(3) re-side the hangar and complete the upgrades and repairs necessary to allow for use as 

exhibition space or for other public assemblies; (4) demolish the hangar and carry out 

mitigation actions in accordance with the Preservation Act; and (5) transfer the hangar to 

another Government entity.
OVERVIEW

REPORT NO. IG-11-020 iii

In response to a draft of our report, the Associate Administrator concurred with our 

recommendation and stated that NASA will evaluate the full range of alternatives no later 

than November 30, 2011. We consider the Associate Administrator’s comments and 

proposed actions to be responsive to our recommendation. The recommendation is resolved 

and will be closed upon completion and verification of the proposed actions. 

JUNE 22, 2011

REPORT NO. IG-11-020

CONTENTS

INTRODUCTION

Background _________________________________________ 1

Objectives __________________________________________ 4

RESULTS

Costly Re-Siding Project Planned for Facility with No Identified 

Mission Use _______________________________________ 5

APPENDIX A

Scope and Methodology_______________________________ 13

Review of Internal Controls ____________________________ 13

Prior Coverage ______________________________________ 14

APPENDIX B

Shenandoah Historic District Properties___________________ 15

APPENDIX C

Management Comments ______________________________ 16

APPENDIX D

Report Distribution___________________________________ 18

JUNE 22, 2011

REPORT NO. IG-11-020 1

INTRODUCTION

Background

Hangar One, located at Moffett Field in California, is part of the Ames Research Center’s 

(Ames) NASA Research Park. Prior to its transfer to NASA in 1994, Moffett Field

served as the West Coast base for the Navy’s “lighter-than-air aviation program” and 

other military missions. Hangar One was built in 1933 and previously housed the naval 

airship the USS Macon.

2

 The hangar is one of 22 buildings, 9 houses, and 3 monuments 

in the Shenandoah Plaza Historic District (see Figure 1). The structure is listed on the 

National Register of Historic Places (National Register), and is protected by the National 

Historic Preservation Act of 1966 (the Preservation Act) for its military and engineering 

significance.

3

Figure 1. Example of a Building in the Spanish Colonial Style

 (See Appendix B for more information on the Shenandoah Plaza Historic 

District.)

Example of a building in the Spanish Colonial style in the Shenandoah Historic District at Ames. Hangar 

One is in the background.

Hangar One and its counterpart in Akron, Ohio, are the two largest structures in the 

United States without internal support.4

 2 The Macon was a rigid 784-foot long airship used by the Navy for scouting and as a flying aircraft 

carrier carrying five biplanes. The Macon was in service for less than 2 years before it was lost in a 

storm off the California coast in 1935.

 Hangar One is 1,133 feet long by 308 feet wide 

3 The Act, 16 U.S.C. § 470, authorizes the Secretary of the Interior to expand and maintain a National 

Register of Historic Places composed of districts, sites, buildings, structures, and objects significant in 

American history, architecture, archaeology, and engineering. The Act requires each federal agency to 

have a preservation program and sets forth the actions agencies must take when considering undertakings 

that affect a historic property. Hangar One was added to the National Register in 1992, and the larger 

historic district in 1994.

4 Hangar One’s sister structure, the Airdock, was built by the Goodyear Zeppelin Corporation in 1929.
INTRODUCTION

2 REPORT NO. IG-11-020

and 198 feet tall with approximately 8 acres of floor space (351,000 square feet). Hangar 

One is distinctive not only because of its massive size, but also because of its design, 

known as “Streamline Moderne.” The hangar’s north and south walls are comprised of 

pairs of gigantic “orange-peel” or “clamshell” doors that run on a curved track and weigh 

about 500 tons each (see Figure 2). 

Figure 2. Hangar One with Doors Opening

This photo of Hangar One, taken in 1992, shows the doors opening. The cars and airplanes provide a 

perspective of the hangar’s size. 

As part of the base realignment and closure process, the Navy identified Moffett Field for 

closure. However, NASA was using the airfield for research and development and 

wanted to retain access to it. In addition, local governments and Silicon Valley aerospace 

and research companies urged NASA to retain the airfield as a Federal joint-use facility 

in order to preserve the relationship between the airfield’s Federal tenants and Silicon 

Valley industries. As a result, the Navy and NASA signed a memorandum of 

understanding (MOU) in 1992 to transfer Moffett Field, including Hangar One, to NASA 

at no cost. NASA assumed possession of Moffett Field in July 1994 and in 1998 created 

the NASA Research Park. Since that time, other Government agencies, academic and 

non-profit institutions, and industry have leased space in various buildings in the 

Research Park.5

Toxins Discovered at Hangar One. Because of environmental contamination issues, 

Hangar One has been vacant and closed for over 8 years. In 1997, NASA discovered 

 5 These tenants include Airship Ventures, Carnegie Mellon University, E-Green Technologies, Google, 

and the University of California, Santa Cruz. 
INTRODUCTION

REPORT NO. IG-11-020 3

polychlorinated biphenyls (PCBs) in Ames’s storm drain settling basin.6

The Navy’s Environmental Remediation Plans and Community Resistance. To 

quickly contain the PCBs leaking from Hangar One’s siding and minimize the 

environmental hazard in the short-term, in October 2003 the Navy pressure washed and 

coated the siding with an asphalt emulsion. Thereafter, the Navy began to explore 

longer-term remediation options. In 2006, the Navy proposed demolishing Hangar One. 

However, to comply with the Preservation Act, the Navy was required to consult with the 

California State Historic Preservation Officer, the Advisory Council on Historic 

Preservation, and the public.

 Subsequent 

tests by NASA identified the source of the PCBs as the metal siding and lead-based paint 

that coats the steel frame structure and siding of Hangar One. According to the 1992 

MOU governing the transfer of Moffett Field to NASA, the Navy is responsible for “all 

actions related to the environmental restoration or remediation of any pollutant, 

contaminant or hazardous substance, including petroleum products, existing on or 

migrating from” Moffett Field. 

7

NASA’s Hangar One Responsibilities. NASA officials took the position that as part of 

its remediation responsibilities, the Navy should pay to re-side Hangar One. Ultimately, 

the dispute between the agencies was resolved by the Office of Management and Budget 

(OMB). In March 2010, OMB decided that although the Navy was responsible for 

environmental cleanup, this did not include the cost of re-siding the hangar. Accordingly, 

NASA would be responsible for the costs associated with re-siding and preparing the 

hangar for reuse.

 These consultations generated a significant amount of 

public and local congressional resistance to the proposed demolition, and in 2008 the 

Navy abandoned its plan to demolish the hangar. Instead, the Navy recommended

stripping away the siding and interiors to eliminate the source of the contamination, 

thereby leaving the building’s steel structure (see Figure 3). Under this plan, the Navy 

would not re-side the hangar. As discussed below, NASA did not agree with the Navy’s 

remediation plan because it would leave the hangar uncovered and not suited for use. 

Nevertheless, in August 2009 the Navy awarded a $22.4 million contract to remove the 

siding and interior of Hangar One.

 6 According to the Environmental Protection Agency, PCBs have been demonstrated to cause cancer as 

well as a variety of other adverse health effects on the immune system, reproductive system, nervous 

system, and endocrine system. 

7 Among the responsibilities of the State Historic Preservation Officer are to consult with the appropriate 

Federal agencies on Federal undertakings that may affect historic properties. The Advisory Council on 

Historic Preservation is an independent agency of the U.S. Government established by the Preservation 

Act with responsibility to advise the President and the Congress on matters relating to historic 

preservation and recommend measures to coordinate activities of Federal, state, and local agencies and 

private institutions and individuals relating to historic preservation.
INTRODUCTION

4 REPORT NO. IG-11-020 

Figure 3. Hangar One under Construction in 1933

This photograph shows the steel frame structure of Hangar One, which is essentially what will remain when 

the Navy’s contractor completes removal of the siding.

Community Interest in Preserving Hangar One. In 1995, the Navy created a 

Restoration Advisory Board (RAB) to provide a forum for public input regarding the 

restoration of facilities on Moffett Field including Hangar One. In addition to the RAB, 

concerned citizens formed the “Save Hangar One Committee” in 2005. “Save Hangar 

One” is an informal, ad hoc community group organized to raise awareness of the 

benefits of preserving Hangar One. According to a Committee official (who is also a 

member of the RAB), Hangar One is an important part of the local community and key to 

the area’s emphasis on scientific research and innovation. In the view of this official, the 

hangar would be an ideal location for an air and space museum or as a global hub for 

science, technology, engineering, and mathematics education. This official believes that 

the preservation of Hangar One is consistent with NASA’s mission to promote education 

and that private entities are likely to invest in the hangar given the tax incentives 

associated with reusing protected historic properties.

Objectives

The OIG reviewed NASA’s Hangar One Re-Siding Project to examine (1) whether the 

Agency’s cost estimates for the Project are complete and realistic; (2) whether NASA has 

identified an Agency use or potential private entities to rent Hangar One; (3) whether 

funds for the Project have been diverted from other Construction of Facilities (CoF) 

projects and the impact on those projects; and (4) if NASA’s re-siding plans comply with

historical preservation requirements. We also reviewed internal controls as they relate to 

the overall objective. See Appendix A for details of the audit’s scope and methodology, 

our review of internal controls, and a list of prior coverage. 
RESULTS

REPORT NO. IG-11-020 5

COSTLY RE-SIDING PROJECT PLANNED FOR 

FACILITY WITH NO IDENTIFIED USE

OMB directed NASA to include in the President’s fiscal year (FY) 2012 budget 

request $32.8 million to pay for the re-siding of Hangar One. However, this funding 

will not be sufficient to make the facility usable as a hangar or for office space. In 

addition, NASA has not identified a mission-related use for Hangar One or any 

outside entity willing to commit to leasing the property. Moreover, requests to repair 

other mission critical projects were removed from NASA’s FY 2012 budget request 

to accommodate the Hangar One Project. Although Hangar One is protected by the 

Preservation Act, the Act does not require that NASA re-side and continue to 

maintain the hangar. In light of NASA’s costly infrastructure challenges, we 

question whether spending approximately $33 million to re-side a facility that has no 

identified NASA -related use, no immediate prospect for use by other tenants, and 

that would require the expenditure of a substantial amount of additional funds to 

make usable is the best use of NASA’s limited resources.

Additional Funding Beyond the FY 2012 Budget Request Will Be 

Required to Make Hangar One Usable 

The Hangar One Re-Siding Project was included in the President’s FY 2012 budget 

request as a discrete CoF project for $32.8 million. As proposed, the Project consists of 

installing new but historically appropriate exterior siding, roofing, and windows. 

However, while this work will produce a watertight building, because items such as 

connecting utilities or installing lighting fixtures, heating, cooling, fire alarms, sprinklers, 

or other safety equipment are not included, the resulting structure will be neither 

habitable nor fit for other uses including as an aircraft hangar.

8

NASA Has Not Identified a Use for Hangar One

While the cost to make 

the building fully useable cannot be precisely determined until potential tenants and their 

requirements are identified, it is likely that an additional investment of tens of millions of 

dollars would be required. In addition, the cost estimate used to justify the $32.8 million 

for the re-siding project did not identify the cost of maintaining the hangar after it is 

completed. Consequently, the annual maintenance costs of the hangar after the re-siding 

project is completed are unknown. 

According to NASA officials, the Agency does not have a mission-related use for Hangar 

One and no NASA program offices have shown interest in occupying the hangar. 

 8 The Hangar One project is planned to adhere to Secretary of the Interior rehabilitation guidance for 

historic properties. 
RESULTS

6 REPORT NO. IG-11-020

Ames Research Center officials told us that they expect to recoup the cost of the re-siding 

project by leasing the hangar to outside organizations, and that these tenants will bear the 

cost of additional upgrades needed to make the facility fit for their needs. However, to 

date no external entity has committed to leasing the hangar or paying for the necessary 

upgrades. Although Ames officials told us they have received preliminary inquiries from 

external organizations regarding leasing all or part of the hangar, as of May 2011 no 

formal agreements have been executed. In addition, under 51 U.S.C. 20145, when 

leasing non-excess real property, NASA does not have the authority to allow tenants to 

receive in-kind payment to make repair, upgrades, or capital improvements to NASA 

property. 9

Adding to our doubts regarding the likelihood that Hangar One will be leased is the 

significant amount of existing space in two other historic hangars available for lease at 

Moffett Field that would not require significant investment from prospective tenants.

These hangars are shown in Figure 4 below. 

 Consequently, any potential lessee for Hangar One would be required to pay 

for improvements to Hangar One as well as paying the Agency fair market value in cash. 

Accordingly, it remains unclear whether a tenant or tenants will lease the space much less 

assume all of the costs needed to upgrade the facility.

Figure 4. Hangar Two and Hangar Three

Hangars Two and Three are approximately 1,100 feet long by 300 feet wide and 170 feet tall, and each has

approximately 240,000 square feet of floor space. These hangars are also part of the Shenandoah Plaza 

Historic District.

According to Ames personnel, NASA is currently leasing only 31 percent (132,349

square feet) of the available floor space (approximately 427,000 square feet) in these 

 9 Under 51 U.S.C. 20145, the Agency may lease non-excess real property at fair market value for cash 

consideration. In-kind consideration is not authorized under 51 U.S.C. 20145.
RESULTS

REPORT NO. IG-11-020 7

hangars.10

If the re-siding project is completed and the Center does not find a lessee for Hangar One 

as planned, Ames officials believe that the Hangar could be used for other purposes 

without further investment. However, in our judgment, these alternatives fail to recoup 

or justify the $32 million re-siding costs. For example, Ames officials indicated that the 

facility could be used for storage of non-combustible equipment or it could be used to

hold short duration public events if the south “clam shell” doors were left opened.

 In our judgment, this fact casts significant doubt that NASA’s plan to solicit a 

tenant or tenants for Hangar One will come to fruition.

11 

However, Ames officials have not identified a need for additional storage space and have 

not used the hangar to hold public events in over 8 years due to the environmental 

contamination.12

Other Mission Critical Projects Will Be Delayed to Fund Hangar 

One Re-siding 

 

Including the Hangar One Re-siding Project in NASA’s FY 2012 budget request means 

repairs to other important NASA facilities will be delayed. According to NASA officials, 

the Hangar One Re-Siding Project is not critical to NASA’s mission and would not have 

been included in NASA’s Budget Request absent explicit direction from OMB. In order 

to accommodate the Hangar One Project, NASA removed other planned construction 

projects from its budget submission. Specifically, one major renovation project costing 

$11 million, three minor renovation projects estimated at $6.1 million, and $15.7 million

in facility planning and design funds were removed from NASA’s FY 2012 budget 

request to offset the cost of the Hangar One Project. 

Moreover, NASA did not subject the Hangar One Project to the Agency’s normal review 

and prioritization process for institutional construction projects. The intent of this 

process is to ensure that construction requests from all the Centers are reviewed and that 

only the highest priority projects are funded. According to NASA officials, if the Hangar 

One Re-Siding Project had been subjected to this process it would not have been included 

in the budget submission because there were many higher priority projects that could 

pose a risk to NASA’s mission success if left unaddressed. As our recent Audit of 

 10 A portion of the hangars are unleasable fixed space (mechanical rooms and fire lanes). In addition, some 

of the available lease space is for offices that would need either to be refurbished or demolished before it 

could be occupied. Furthermore, while some of the space is being used by NASA for storage, this space 

was considered leasable because NASA could relocate the items to other locations or dispose of them if a 

lessee was identified. 

11 According to the Ames Fire Marshal, because the facility would not have the required safety measures 

such as a fire alarm system, storage would be limited to items that would not contain combustible liquids 

such as fuels, oils, and hydraulics. Additionally, because egress is a concern for public events, the south 

doors would be required to remain open to allow for quick evacuation in case of emergencies.

12 According to Ames personnel, the storage contained in Hangars 2 and 3 could be moved to Hangar One 

after the re-siding project is completed to free up additional space to lease in those hangars. However, 

Hangars 2 and 3 already have available space that is not leased. As such, we do not believe Ames has a 

need to free up additional space for the foreseeable future. 
RESULTS

8 REPORT NO. IG-11-020

NASA’s Facilities Maintenance showed, many of NASA’s facilities are in degraded 

condition and the Agency’s maintenance backlog has grown from $1.9 billion in FY 2005 

to $2.55 billion in FY 2010.

13

Important Utility Renovation Project Delayed. To accommodate the Hangar One 

Project, NASA removed from its budget request $11 million intended for restoration of 

Ames Research Center’s electrical distribution system. This project would have 

upgraded the failing high-voltage electrical distribution system at the Center.

 Continued deferral of facility renovation projects could 

result in unsafe working conditions, higher annual maintenance costs, and increased risks 

to mission success.

According to the justification for the power upgrade project: 

Typical service life for electrical distribution equipment is 20-30 years. Much of the 

electrical equipment at ARC [Ames Research Center] was built during the 1940s and 

50s and is well past average service life. This project will reduce the risk and 

frequency of high voltage electrical distribution system failures. The increase of 

maintenance requirements for existing facilities due to the age of equipment has 

adversely impacted safety and reliability at the Center. Existing equipment 

continuously requires significant manpower to repair, maintain, and replace 

components for which spare parts are not always available. Unplanned outages due to 

equipment failures have and will continue to cause lengthy downtimes and delays for 

projects, and significantly increase costs to those projects that will be interrupted. 

Outages could affect any or all buildings including research facilities such as wind 

tunnels, arc heaters, and vertical motion simulators. Approximately 90 buildings are 

impacted by a complete outage of both transmission lines, both main breakers, and 

both main buses at the main substation.

Other Renovation Projects Delayed. Three renovation projects totaling $6.1 million

were also removed from the FY 2012 budget request to accommodate the Hangar One 

Project. Two of these projects would have replaced roofs and upgraded energy 

conservation efforts at Ames, while the third would have replaced roofs at Goddard 

Space Flight Center.

The roofs on five buildings at Ames and five buildings at Goddard have re-occurring 

leaks that the Agency has only been able to patch temporarily due to the poor condition 

of the roof membranes. Most of the buildings house critical mission programs and 

expensive equipment. 

• One of the Ames buildings contains a high-pressure air compressor that was 

refurbished in 2008 at a cost of over $2.6 million. According to project 

justification records, a tarp is being used to shield the compressor from water 

leaking from the roof. Another building contains Ames’s central computer 

 13 NASA OIG. “Audit of NASA’s Facilities Maintenance” (IG-11-015, March 2, 2011).
RESULTS

REPORT NO. IG-11-020 9

facility that supports the campus local area network hub and all of its related 

services.14

• At Goddard, one of the buildings contains newly renovated labs and a high bay 

that holds flight hardware prior to entering the clean room. Other buildings

contain office space to support Center administration, the Center’s gymnasium, 

and the Research Aircraft and Operations Science Lab. 

 

The justifications for these roof repairs also noted that rapid deterioration of building 

support beams, ceilings, walls, floors, and finished trim as well as mold growth routinely 

result when roofing degrades to the point of failure.

The project to upgrade energy conservation efforts at Ames would have increased the 

effectiveness of the Facilities Management Control System that monitors and controls 

energy use.15

Facility Planning and Design Funds. In addition to removing funds from the projects

described above, inclusion of the Hangar One Project in NASA’s FY 2012 budget request 

also reduced planning and design funds for future CoF projects from $55.7 million to 

$40 million. While this amount represents an increase from the 2011 funding level of 

$27.7 million, the reduction will negatively affect Centers’ planning and design efforts. 

 For approximately $2.9 million in improvements, Ames estimated it could 

save approximately $3.7 million over 10 years in utility costs by better monitoring and 

managing Center environmental controls. 

Flexibilities for Compliance with National Historic Preservation 

Act 

Because of Hangar One’s historical significance, any actions NASA takes regarding the 

hangar must comply with the Preservation Act.16

• basic re-siding and determination of annual maintenance costs assuming no use; 

 Going forward, NASA is developing a 

Condition Assessment and Rehabilitation Plan for the hangar that lists several 

alternatives for re-siding and repairing the hangar. The options under consideration by 

NASA include:

• basic re-siding with upgrades and repairs that would allow the facility to be used 

as a hangar; 

 14 The other three Ames buildings are used by the Biosphere Science Branch and Thermal Protection 

Materials and Systems Branch.

15 This project also included upgrading 69 laboratory fume hoods to more energy efficient models.

16 Up to this point, NASA has been active in historic mitigation efforts with the Navy, assisting in 

preparation of the Historic American Engineering Record for Hangar One. In addition, the Agency has 

requested consultation with the California State Preservation Officer on the planned new facade for 

Hangar One. NASA’s planned rehabilitation of the roof and siding is for replacement with in-kind 

materials in accordance with the Secretary of the Interior’s standards for rehabilitation guidance for 

preservation of historic properties listed on the National Register.
RESULTS

10 REPORT NO. IG-11-020

• basic re-siding with upgrades and repairs that would allow the facility to be used 

for public assemblies such as exhibitions or other public events.

However, there are other less costly options for complying with the Preservation Act that 

we believe NASA should also consider. 

After the Navy completes its environmental remediation work in early 2012, NASA 

could take one of the following actions in lieu of re-siding the hangar: 

Transfer Hangar One to State or Local Governments. Under the National 

Park Service’s Historic Surplus Property Program, Federal property listed on the 

National Register may be transferred at no cost to state and local governments. 

Recipients of historic surplus properties are responsible for preserving and 

maintaining the property. The Historic Surplus Property Program would allow 

NASA to transfer ownership of Hangar One to state or local governments in the 

communities that have been active in trying to preserve the hangar. 

Demolish Hangar One. The Preservation Act does not require preservation of 

historic properties when preservation is not economically feasible or when the 

properties will not serve agency requirements.17 Under the Act, Federal agencies 

may alter or demolish historic properties provided they consult with the State 

Historic Preservation Officer and other interested parties and take steps to 

mitigate the effect of such an action. For example, an agency may make records 

of the property for future use and reference.18

In our judgment, only by carefully considering and documenting its analysis of all 

possible options for Hangar One can NASA demonstrate that it has made an informed

decision regarding the future of the facility. Any decision on the fate of Hangar One 

should be made in a timely manner as safety issues could arise after the Navy finishes 

removing the contaminated siding and the steel structure is left exposed.

Although we understand that there 

would be significant community and local congressional resistance to 

demolishing the hangar, given all of the factors discussed above we believe 

NASA should at least consider this option. 

19

 17 Section 110 of the Preservation Act (16 U.S.C. § 470) and “The Secretary of the Interior’s Standards and 

Guidelines for Federal Agency Historic Preservation Programs Pursuant to the National Historic 

Preservation Act.” 

18 For example, in 2006 when the Navy was planning to demolish Hangar One, the Navy and NASA jointly 

prepared a Historic American Engineering Record for Hangar One. The Navy estimated total costs for 

historic mitigation at the cost of approximately $350,000. NASA paid approximately $53,000 of this 

cost. 

19 These safety issues include the rusting or deterioration of structural joints from weather exposure and the 

increase risk of bird strikes to aircraft due to nesting in the exposed structure. 
RESULTS

REPORT NO. IG-11-020 11

Conclusion 

While we do not dispute that historic preservation is a worthy consideration, we question 

whether expending more than $32 million to re-side a hangar that has no prospects for 

reuse for the foreseeable future and would require substantial additional investment to 

make it habitable is the best use of NASA’s limited construction resources. Moreover, 

dedicating funds to Hangar One means that other critical renovation and repair projects 

will be delayed, which could result in unsafe working conditions, higher annual 

maintenance costs, and damage to Agency equipment. Given these risks, we believe 

NASA should analyze the full range of options before taking further action regarding 

Hangar One. 

Recommendation, Management’s Response, and Evaluation of 

Management’s Response

The Associate Administrator for Mission Support should include the following alternatives

in the Condition Assessment and Rehabilitation Plan for Hangar One: 

• Re-side Hangar One as described in the Budget Request and determine the annual 

maintenance cost assuming no intended use;

• Re-side Hangar One and make the necessary upgrades and repairs to enable use as a 

hangar;

• Re-side Hangar One and make the necessary upgrades and repairs to enable public 

assemblies;

• Demolish Hangar One and carry out historic preservation mitigation actions; and 

• Transfer Hangar One to another government entity under the Historic Surplus 

Property Program.

Management’s Response. The Associate Administrator for Mission Support concurred 

and stated that NASA is in the process of contracting for developing a Condition 

Assessment and Rehabilitation Plan to identify structural or other improvements to 

Hangar One that may be required to meet the needs of potential users. Based on our draft 

report, NASA has modified the statement of work to include alternatives equivalent to the 

first three items listed in the OIG Recommendation. According to the Associate 

Administrator, the fourth and fifth alternates will be evaluated by NASA staff. The final 

Condition Assessment and Rehabilitation Plan will include the first three alternatives, 

plus the government evaluations of the fourth and fifth as addenda. The final plan will be 

completed no later than November 30, 2011. 

Evaluation of Management’s Response. Management’s proposed actions are 

responsive to the intent of the recommendation; therefore, the recommendation is 

resolved and will be closed upon completion and verification of the proposed actions. 

APPENDIXES

REPORT NO. IG-11-020 13

APPENDIX A

Scope and Methodology

We performed this audit from January through June 2011 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 audit objectives.

We performed work at NASA Headquarters and Ames Research Center. We interviewed 

officials at NASA Headquarters and at the Ames Research Center and also reviewed 

Federal regulations, NASA guidance, and documentation pertaining to the Hangar One 

Project, planning for CoF projects, historical preservation, leasing, environmental 

remediation, and cost estimating. We analyzed FY 2012 budget submissions, CoF 

planning documents, and other documentation to determine whether funds to be used for 

the Hangar One project will come from other planned CoF projects and the impact of 

postponing those projects. We interviewed officials from Ames Research Center’s 

Center Operations Directorate to determine the efforts NASA is making to identify 

potential uses for Hangar One, including potential reimbursable tenants. We examined 

the independent cost estimate to determine if the cost estimate developed for the project 

is complete and realistic. We reviewed 1992 and 2008 memorandums of understanding 

between the Department of the Navy and NASA, associated correspondence, and Office 

of Management and Budget directions to determine if all NASA environmental liability 

and clean-up costs related to the facility were properly accounted for. We interviewed 

historical preservation officials and examined planning documentation to determine if 

NASA will be re-siding the Hangar in a manner in which the historical preservation 

requirements are met and if the hangar could be used by NASA programs or reimbursable 

tenants. 

Use of Computer-Processed Data. We did not use computer-processed data to perform 

this audit. 

Review of Internal Controls

We reviewed and evaluated the internal controls associated with the Hangar One project, 

including identifying the decision process used to assess whether the project should be 

funded, reviewing cost estimates, and determining the impact on NASA missions. Our 

review included an evaluation of the actions planned and taken by NASA Headquarters, 
APPENDIX A

14 REPORT NO. IG-11-020

Facilities Engineering and Real Property Division for the Ames Research Center on this 

project. We found deficiencies in these areas, as discussed in this report. 

Prior Coverage

During the last 5 years, the NASA Office of Inspector General (OIG) and the 

Government Accountability Office (GAO) have issued six reports of particular relevance 

to the subject of this report. Unrestricted reports can be accessed over the Internet at 

http://oig.nasa.gov/audits/reports/FY11 (NASA OIG) and http://www.gao.gov (GAO). 

NASA Office of Inspector General

“Audit of NASA’s Facilities Maintenance” (IG-11-015, March 2, 2011)

Government Accountability Office

“Federal Real Property: Progress Made on Planning and Data, but Unneeded Owned and 

Leased Facilities Remain” (GAO-11-520T, April 6, 2011)

“Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue” (GAO-11-318SP, March 2011)

“Federal Real Property: The Government Faces Challenges to Disposing of Unneeded 

Buildings” (GAO-11-370T, February 10, 2011)

“High-Risk Series: An Update” (GAO-11-278, February 2011)

“Federal Real Property: An Update on High Risk Issues” (GAO-09-801T, July 15, 2009)
APPENDIX B

REPORT NO. IG-11-020 15

SHENANDOAH HISTORIC DISTRICT PROPERTIES
APPENDIX C

16 REPORT NO. IG-11-020

MANAGEMENT COMMENTS
APPENDIX C

REPORT NO. IG-11-020 17
APPENDIX D

18 REPORT NO. IG-11-020

REPORT DISTRIBUTION

National Aeronautics and Space Administration

Administrator

Deputy Administrator

Chief of Staff

Associate Administrator for Mission Support

Director, Ames Research Center

NASA Advisory Council’s Audit, Finance, and Analysis Committee

Non-NASA Organizations and Individuals

Office of Management and Budget

Deputy Associate Director, Energy and Science Division

Branch Chief, Science and Space Programs Branch

Government Accountability Office

Director, NASA Financial Management, Office of Financial Management and 

Assurance

Director, NASA Issues, Office of Acquisition and Sourcing Management

Congressional Committees and Subcommittees, Chairman and 

Ranking Member

Senate Committee on Appropriations

Subcommittee on Commerce, Justice, Science, and Related Agencies

Senate Committee on Commerce, Science, and Transportation

Subcommittee on Science and Space

Senate Committee on Homeland Security and Governmental Affairs

House Committee on Appropriations

Subcommittee on Commerce, Justice, Science, and Related Agencies

House Committee on Oversight and Government Reform

Subcommittee on Government Organization, Efficiency, and Financial Management

House Committee on Science, Space, and Technology

Subcommittee on Investigations and Oversight

Subcommittee on Space and Aeronautics
REPORT NO. IG-11-020 19

Major Contributors to the Report:

Ridge Bowman, Director, Infrastructure and Facilities Management Directorate

Karen VanSant, Project Manager

Troy Zigler, Management Analyst

Janice Smith, Auditor
JUNE 22, 2011

REPORT No. IG-11-020

OFFICE OF AUDITS

OFFICE OF INSPECTOR GENERAL

ADDITIONAL COPIES

Visit http://oig.nasa.gov/audits/reports/FY11/ to obtain additional copies of this report, or contact the 

Assistant Inspector General for Audits at 202-358-1232.

COMMENTS ON THIS REPORT

In order to help us improve the quality of our products, if you wish to comment on the quality or 

usefulness of this report, please send your comments to Mr. Laurence Hawkins, Audit Operations and 

Quality Assurance Director, at Laurence.B.Hawkins@nasa.gov or call 202-358-1543.

SUGGESTIONS FOR FUTURE AUDITS

To suggest ideas for or to request future audits, contact the Assistant Inspector General for Audits. 

Ideas and requests can also be mailed to:

Assistant Inspector General for Audits

NASA Headquarters

Washington, DC 20546-0001

NASA HOTLINE

To report fraud, waste, abuse, or mismanagement, contact the NASA OIG Hotline at 800-424-9183 or 

800-535-8134 (TDD). You may also write to the NASA Inspector General, P.O. Box 23089, L’Enfant 

Plaza Station, Washington, DC 20026, or use http://oig.nasa.gov/hotline.html#form. The identity of 

each writer and caller can be kept confidential, upon request, to the extent permitted by law.