United States Government Accountability Office

GAO Testimony before the Subcommittee on 

Space, Aeronautics, and Related Sciences, 

Committee on Commerce, Science and 

Transportation, U.S. Senate 

NASA

Issues Surrounding the 

Transition from the Space 

Shuttle to the Next 

Generation of Human Space 

Flight Systems 

Statement of Allen Li, Director 

Acquisition and Sourcing Management 

For Release on Delivery

Expected at 2:30 p.m. EDT

Wednesday, March 28, 2007

 

GAO-07-595T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 28, 2007

NASA

Issues Surrounding the Transition from 

the Space Shuttle to the Next Generation 

of Human Space Flight Systems 

Highlights of GAO-07-595T, a testimony 

before the Subcommittee on Space, 

Aeronautics, and Related Sciences, 

Committee on Commerce, Science and 

Transportation, U. S. Senate 

On January 14, 2004, the President 

announced a new Vision for space 

exploration that directs the 

National Aeronautics and Space 

Administration (NASA) to focus its 

efforts on returning humans to the

moon by 2020 in preparation for 

future, more ambitions missions. 

Implementing the Vision will 

require hundreds of billions of 

dollars and a sustained 

commitment from multiple

administrations and Congresses.

Some of the funding for 

implementing exploration activities 

is expected to come from funding

freed up after the retirement of the 

Space Shuttle, scheduled for 2010, 

and projected termination of U.S. 

participation in the International 

Space Station by 2016. 

Congress, while supportive of the 

effort has voiced concern over the 

potential gap in human space flight.

In the NASA Authorization Act of

2005, Congress stated that it is the

policy of the United States to have

the capability for human access to 

space on a continuous basis. NASA 

has made it a priority to minimize 

the gap to the extent possible. 

GAO provides no 

recommendations in this 

statement. However, GAO 

continues to emphasize that given 

the Nation’s fiscal challenges and 

NASA’s past difficulty developing

systems within cost, schedule, and 

performance parameters, it is 

imperative that the agency

adequately manage this transition 

in a fiscally competent and prudent 

manner. 

NASA is in the midst of a transition effort of a magnitude not seen since the 

end of the Apollo program and the start of the Space Shuttle Program more 

than 3 decades ago. This transition will include a massive transfer of people, 

hardware, and infrastructure. Based on ongoing and work completed todate, we have identified a number of issues that pose unique challenges to 

NASA as it transitions from the shuttle to the next generation of human 

space flight systems while at the same time seeking to minimize the time the 

United States will be without its own means to put humans in space. These 

issues include: sustaining a viable workforce; effectively managing systems

development efforts; managing the supplier base; providing logistical

support to the International Space Station; identifying and disposing of 

property and equipment; ensuring adequate environmental remediation; and 

transforming its business processes and financial management system. 

 

NASA already has in place many processes, policies, procedures and support 

systems to carry out this transition. However, successful implementation of 

the transition will depend on thoughtful execution and effective oversight. 

How well NASA overcomes some of the challenges we have identified will

not only have an effect on NASA’s ability to effectively manage the gap in the 

U.S. human access to space, but will also affect the agency’s ability to secure 

a sound foundation for the President’s space exploration policy. 

Moving to the next generation of human space flight vehicles 

Transition

Apollo/Saturn

1958 -1975

Space shuttle

1972-2010

Orion/Ares I Ares V

Source: NASA images; GAO graphic . 

www.gao.gov/cgi-bin/getrpt?GAO-07-595T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Allen Li at (202) 

512-4841 or lia@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me to discuss the challenges faced by the National 

Aeronautics and Space Administration (NASA) in transitioning from the 

space shuttle to the next generation of human space flight systems. In 

2004, the President established a new exploration policy—A Renewed 

Spirit of Discovery: The President’s Vision for U.S. Space Exploration 

(Vision)—which calls for the retirement of the space shuttle and the 

development of a new family of exploration systems. NASA’s 

implementation of the Vision is expected to cost hundreds of billions of 

dollars. A NASA effort of this size and scope has not been seen since the 

end of the Apollo program and the start of the Space Shuttle Program 

more than 3 decades ago. The transition includes a massive transfer of 

people, hardware, and infrastructure. Although NASA has in place many 

processes, policies, procedures, and support systems to carry out this 

effort, successful transition will depend on thoughtful execution and 

effective oversight. 

The need for NASA to implement the Vision in a fiscally prudent and 

effective manner cannot be overemphasized given the competing fiscal 

demands facing the federal government and an already troubling funding 

profile projected for human spaceflight activities. We have issued a 

number of reports that touch on various aspects of retiring the space 

shuttle and transitioning its assets and people to exploration activities. 

These reports have questioned the affordability of the exploration 

program, NASA’s acquisition strategy for the development of new space 

vehicles, agencywide contract management, and workforce planning for 

current and future agency needs. We also have an ongoing body of work 

being performed at the request of the House Committee on Science and 

Technology regarding effective management of the industrial base, 

development of the Ares I Crew Launch Vehicle, and the logistical support 

needed by the International Space Station (ISS). In addition, at the request 

of the Senate Committee on Homeland Security and Governmental Affairs, 

Subcommittee on Oversight of Government Management, the Federal 

Workforce, and the District of Columbia, we are reviewing NASA’s ability 

to attract and retain a skilled workforce. My statement today will focus on 

the overarching challenges that NASA faces in transitioning from the 

shuttle to the next generation of human space flight systems and will 

discuss our prior work on shuttle workforce and development of the Orion 

Crew Exploration Vehicle, one of the agency’s complex programs. I will 

also discuss areas where we have related ongoing work. 

Page 1 GAO-07-595T 
This testimony is based on work conducted in accordance with generally

accepted government auditing standards. 

NASA faces numerous challenges as it transitions from the Space Shuttle 

Program to the next generation of human space flight systems. We have 

undertaken a body of work over the past 3 years that has highlighted two 

of these challenges—sustaining the shuttle workforce and developing new 

systems. Sustaining the shuttle workforce through retirement and ensuring

that the workforce is available to support future exploration activities 

presents an enormous challenge for NASA. In 2005, we reported that 

NASA has made limited progress toward developing a detailed strategy to

retain a critically skilled workforce for shuttle operations. We 

recommended that the agency begin identifying the shuttle program’s 

future workforce needs. NASA has recognized that shuttle workforce 

management and critical skills retention will be a major challenge and has 

taken action to address this issue. In 2006, we reported that NASA’s 

acquisition strategy for the Orion Crew Exploration Vehicle was risky 

because it committed the government to a long-term contract before 

establishing a sound business case. We recommended that NASA modify 

the current Orion Crew Exploration Vehicle acquisition strategy to ensure

that the agency does not commit itself to a long-term contractual 

obligation prior to establishing a sound business case. Although it initially 

disagreed with our recommendation, NASA subsequently revised its 

acquisition strategy to address some of the concerns we raised. 

We are currently conducting a body of work relating to the transition, 

including NASA’s management of the supplier base, development of the 

Crew Launch Vehicle, and logistical support of the space station. Our work 

to date has also identified other issues that NASA will face during the 

transition, including disposing of property and equipment, completing 

environmental clean up, managing the overall workforce, and integrating

financial information into how NASA does business. Each area contains its 

own set of unique challenges, but they are all critical to NASA’s overall 

transition effort and will require significant management attention. 

The President’s Vision for Space Exploration for NASA announced in 2004 

calls for the retirement of the shuttle upon completion of the ISS and the 

creation of new vehicles for human space flight that will allow a return to 

Summary 

Background 

Page 2 GAO-07-595T 
the moon by 2020 and voyages to Mars and points beyond. The shuttle 

manifest currently consists of 16 flights—15 to complete assembly and 

integration of the ISS and a servicing mission1

 to the Hubble Space 

Telescope. The first new space vehicles currently are targeted to begin 

operating no later than 2014—thereby creating a potential gap in U.S. 

human space flight. Congress has voiced concern over the United States 

not having continuous access to space. NASA has made it a priority to 

minimize the gap to the extent possible. 

NASA has begun planning for the retirement of the shuttle, scheduled for 

2010, by identifying best practices in closing facilities and the transitioning 

of capabilities. Specifically, NASA has conducted a number of 

benchmarking studies of previous closures and realignment of large 

programs, including the Titan IV rocket fly-out, the F/A-18 C/D fighter 

production close, and the Navy Base Realignment and Closure activities. 

The benchmarking efforts have highlighted to NASA the importance of 

having a plan, effective communication, human capital management, and

effective program management tools. NASA’s benchmarking effort also 

showed that closing and transitioning facilities, equipment, and people is 

expensive and time consuming. Among the lessons learned is that, 

historically, it has taken 3.5 years to close down an installation and 

another 3 years to complete the transition of the property. NASA’s Office 

of the Inspector General has recently reviewed NASA’s plan for the space

shuttle transition and recommended, among other improvements, that the 

two affected space directorates finalize and implement the Human Space 

Flight Transition Plan.2

Development of the Orion crew capsule, Ares I launch vehicle, and other 

exploration systems needed to implement the Vision is dependent on a 

“go as you can afford to pay” approach, wherein lower-priority efforts will 

be deferred, descoped, or discontinued to allow NASA to stay within its 

available budget profile. In recent testimony, the NASA Administrator said 

that the cost associated with returning the shuttle to flight, continued 

shuttle operations, and recent budget reductions had the combined effect 

 1

 The servicing mission includes installing the Cosmic Origins Spectrograph and Wide Field 

Camera 3, installing a refurbished Fine Guidance Sensor that replaces one degrading unit 

of the three already onboard, and an attempt will also be made to repair the Space

Telescope Imaging Spectrograph, which stopped working in 2004. 

2

 NASA Office of Inspector General. NASA's Plan for Space Shuttle Transition Could Be

Improved by Following Project Management Guidelines, IG-07-005, (Washington, D.C.: 

Jan. 29, 2007). 

Page 3 GAO-07-595T 
of increasing the gap by delaying the first manned Orion test flight by 

6 months. 

In an effort to address the gap in U.S. capability to resupply the space 

station following retirement of the shuttle, NASA is investing in 

commercial space transportation services. NASA’s expectation is that by 

acquiring domestic orbital transportation services it will be able to send 

cargo and, in the future, transport crews to the ISS in a cost-effective 

manner. NASA refers to this as the Commercial Orbital Transportation 

Services project. The project is in the early stages of development. Should 

these commercial services prove to be unreliable or more costly than 

anticipated, NASA will need to purchase space transportation from its 

international partners to meet obligations to the ISS until the new Orion 

spacecraft become operational. 

We have undertaken a substantial body of work over the past 3 years that 

has highlighted the significant challenges that NASA will face as it retires 

the shuttle and transitions to exploration activities. One key challenge is 

sustaining the shuttle workforce through the retirement of the shuttle 

while ensuring that a viable workforce is available to support future 

activities. Another key challenge will be developing the Orion Crew 

Exploration Vehicle within cost, schedule, and performance goals. 

Additionally, our ongoing work has identified a number of other areas that 

may present challenges during the transition period. Some of these 

challenges include managing the supplier base to ensure its continued 

viability, developing the Ares I Crew Launch Vehicle, and completing and 

supporting the space station. 

NASA Faces 

Significant Challenges 

in Retiring the Space 

Shuttle Program and 

Transitioning to 

Exploration Activities 

Maintaining a Skilled 

Workforce 

The Space Shuttle Program’s workforce is critical to the success of the 

Vision. The shuttle workforce currently consists of approximately 

2,000 civil service and 15,000 contractor personnel, including a large 

number of engineers and scientists. In 2005, we reported that NASA had 

made limited progress toward developing a detailed strategy for sustaining 

a critically skilled shuttle workforce to support space shuttle operations. 

We reported that significant delays in implementing a strategy to sustain 

the shuttle workforce would likely lead to larger problems, such as 

funding and failure to meet NASA program schedules. Accordingly, we 

concluded that timely action to address workforce issues is critical given 

their potential impact on NASA-wide goals such as closing the gap in 

human spaceflight. 

Page 4 GAO-07-595T 
When we performed our work several factors hampered the ability of the 

Space Shuttle Program to develop a detailed long-term strategy for 

sustaining the critically skilled workforce necessary to support safe space 

shuttle operations through retirement. For example, at that time, the 

program’s focus was on returning the shuttle to flight, and other efforts 

such as determining workforce requirements were delayed. In our report, 

we recommended that NASA begin identifying the Space Shuttle 

Program’s future workforce needs based upon various future scenarios. 

Scenario planning could better enable NASA to develop strategies for 

meeting future needs. NASA concurred with our recommendation. It has 

acknowledged that shuttle workforce management and critical skills 

retention will be a major challenge for the agency as it progresses toward 

retirement of the space shuttle and has taken action to address this issue. 

For example, since we made our recommendation, NASA has developed 

an agencywide strategic human capital plan and developed workforce 

analysis tools to assist it in identifying critical skills needs. NASA has also 

developed a human capital plan specifically for sustaining the shuttle 

workforce through the retirement and, then transitioning the workforce. 

Additionally, in March 2006, the Senate Appropriations Subcommittee on 

Commerce, Justice, Science, and Related Agencies, and NASA asked the 

National Academy of Public Administration (NAPA) to assist the agency in

planning for the space shuttle’s retirement and transition to future 

exploration activities. In February 2007, a NAPA panel recommended that

the Space Shuttle Program adopt a RAND model for projecting a core

workforce because of its emphasis on “long-term scheduling projections, 

quantification of core competencies and proficiencies, and analysis of 

overlapping mission needs.”3

 Under the RAND model, an organization 

maintains a core capability for any competency that will be needed in the 

future. According to NAPA, this model is useful where a given expertise is

not immediately required, but is likely to be needed in the future—in this 

case, for the Orion Crew Exploration Vehicle. 

Developing New 

Exploration Systems 

In July 2006, we reported that NASA’s acquisition strategy for the Orion 

Crew Exploration Vehicle placed the project at risk of significant cost 

overruns, schedule delays, and performance shortfalls because it 

committed the government to a long-term contract before establishing a 

 3

NAPA also recommended that NASA adopt scenario planning into its agencywide 

workforce planning processes and use the results to inform decisionmaking.

Page 5 GAO-07-595T 
sound business case.4

 Our past work has shown that developing a sound 

business case—one that matches requirements to available and reasonably 

expected resources before committing to a new product development 

effort—reduces risk and increases the likelihood of successful outcomes.5

For a program to increase its chances of success, high levels of knowledge 

should be demonstrated before significant commitments are made 

(i.e., they should be following a knowledge-based approach to product 

development). 

At the time of our report, NASA had yet to develop key elements of a 

sound business case, including well-defined requirements, mature 

technology, a preliminary design, and firm cost estimates that would 

support its plans for making a long-term commitment. Without such 

knowledge, NASA cannot predict with any confidence how much the 

program will cost, what technologies will or will not be available to meet 

performance expectations, and when the vehicle will be ready for use. 

NASA acknowledged that it would not have these elements in place until

the project’s Preliminary Design Review scheduled for fiscal year 2008. As 

a result, we recommended that the NASA Administrator modify the 

agency’s acquisition strategy for the Orion Crew Exploration Vehicle to

ensure that the agency does not commit itself, and in turn the federal 

government, to a long-term contractual obligation prior to establishing a 

sound business case at the project’s Preliminary Design Review. 

Although it initially disagreed with our recommendation, NASA 

subsequently took steps to address some of the concerns we raised. 

Specifically, NASA modified its acquisition strategy for the Orion project 

and changed the production and sustainment portions of the contract into

options. The agency will decide whether to exercise these options after 

the project’s critical design review in 2009. While these changes are in line

with our recommendation and a step in a positive direction, we continue 

 4

 GAO, NASA: Long-Term Commitment to and Investment in Space Exploration Program 

Requires More Knowledge, GAO-06-817R (Washington, D.C.: July 17, 2006). 

5

 Examples of our best practices reports include GAO, Best Practices: Using a KnowledgeBased Approach to Improve Weapon Acquisition, GAO-04-386SP (Washington, D.C.: Jan.

2004); Space Acquisitions: Committing Prematurely to the Transformational Satellite 

Program Elevates Risks for Poor Cost, Schedule, and Performance Outcomes, GAO-04-71R 

(Washington, D.C.: Dec. 4, 2003); Best Practices: Capturing Design and Manufacturing 

Knowledge Early Improves Acquisition Outcomes, GAO-02-701 (Washington, D.C.: July 15,

2002); and Best Practices: Better Matching of Needs and Resources Will Lead to Better 

Weapon System Outcomes, GAO-01-288 (Washington, D.C.: Mar. 8, 2001). 

Page 6 GAO-07-595T 
to believe NASA’s acquisition strategy is risky because it does not fully 

conform to a knowledge-based acquisition approach. Attempting to close 

that gap by pushing forward development of the Orion Crew Exploration 

Vehicle without first obtaining the requisite knowledge at key points could 

very well result in the production of a system that not only does not meet 

expectations but ends up costing more and actually increases the gap. 

Since we last testified on this subject in September 2006,6

 NASA has 

successfully completed its first major milestone for the Orion project. It 

has completed the Systems Requirements Review.7

 This was a major step 

toward obtaining the information critical for making informed decisions. 

According to NASA’s Orion contracting officer, NASA is also in the 

process of renegotiating the Orion contract to extend the Initial 

Operational Capability date of the system to 2014. Further, while this 

change will increase contract costs, the increase has already been 

accounted for in the Orion budget because the agency has been planning

the change for over a year. In addition, risks associated with schedule, 

cost, and weight continue to be identified for the Orion project. 

As we have previously testified, sound project management and oversight

will be key to addressing the risks that remain for the Orion project as it 

proceeds with its acquisition approach. To help mitigate the risks, we have

recommended in the past that NASA have in place markers (i.e., criteria) 

to assist decision makers in their monitoring of the project at key 

junctures in the development process. Such markers are needed to provide 

assurance that projects are proceeding with and decisions are being based

upon the appropriate level of knowledge and can help to lessen project 

risks. NASA has recently issued its updated program and project 

management requirements for flight systems in response to our 

recommendation. Changes to the policy,8

 including the incorporation of 

key decision points throughout the project development life cycle, should 

 6

 GAO, NASA: Sound Management and Oversight Key to Addressing Crew Exploration 

Vehicle Project Risks, GAO-06-1127T (Washington, D.C.: Sept. 28, 2006). 

7

 According to NASA’s Systems Engineering Procedural Requirements (NASA Procedural

Requirements NPR 7123.1), the SRR examines the functional and performance 

requirements defined for the system and the preliminary program or project plan and

ensures that the requirements and the selected concept will satisfy the mission. 

8

 NASA Procedural Requirements (NPR) 7120.5D establishes the requirements by which 

NASA will formulate and implement space flight programs and projects. NPR 7120.5D 

became effective on March 6, 2007, and supersedes the previous version of the document, 

NPR 7120.5C, for space flight programs and projects. 

Page 7 GAO-07-595T 
provide an avenue for decision makers to reassess project decisions at key 

points in the development process to ensure that continued investment is 

appropriate. However, it should be noted that implementation of the 

policy in a disciplined manner will ensure success, not the existence of the 

policy itself. 

Currently, we are evaluating the development of NASA’s latest humanrated launch vehicle—the Ares I Crew Launch Vehicle. When completed,

the Ares I vehicle will be capable of delivering the Orion spacecraft to low 

earth orbit for ISS missions and for exploration missions to the moon. As 

initially conceived by NASA in the Exploration Systems Architecture Study 

completed in 2005, the Ares I design would rely on the existing solid 

rocket boosters and main engines from the space shuttle as major 

components of its two stages. The current design for the Ares I, however, 

diverges from the initial design set forth in the architecture study and now 

includes elements from the Apollo-era Saturn V launch vehicle. Current 

plans are for Ares I to evolve the solid rocket boosters from the Space

Shuttle Program from four segments to five segments and to build a new 

upper-stage engine based on an original Saturn V design. NASA maintains 

that these changes are necessary to increase commonality between the 

Ares I and the planned Ares V cargo launch vehicle and to reduce overall

development costs for implementing the Vision. As NASA’s design for the 

Ares I continues to evolve, careful planning and coordination between the 

Orion and Ares I development teams will be critical to ensuring that 

current developmental efforts result in hardware that satisfies the future 

requirements of these systems. Subsequently, any development problems 

on either of these systems could result in increasing the gap.

Our ongoing work is aimed at assessing whether NASA’s acquisition 

strategy for Ares I reflects the effect of changes to the Ares I design 

incorporated since the Ares I was first conceived in the Exploration 

Systems Architecture Study as a shuttle-derived alternative. Also, we are 

evaluating the extent to which NASA’s Ares I acquisition strategy 

incorporates knowledge-based concepts designed to minimize technical 

and programmatic risk. 

The Orion Crew Exploration Vehicle and the Ares I Crew Launch Vehicle 

are the first in a series of new systems to be developed in support of 

exploration activities. NASA’s careful management of these projects must 

preclude historical instances of cost and schedule growth. Indeed, while 

NASA has had many successes in the exploration of space, such as landing

the Pathfinder and Exploration Rovers on Mars, NASA has also 

experienced its share of unsuccessful missions, unforeseen cost overruns, 

Page 8 GAO-07-595T 
and difficulty bringing a number of projects to completion. For example, 

NASA has made several attempts to build a second generation of reusable

human spaceflight vehicle to replace the space shuttle, such as the 

National Aero-Space Plane, the X-33 and X-34, and the Space Launch 

Initiative, that never accomplished its objective of fielding a new reusable 

space vehicle. We estimate that these unsuccessful development efforts 

have cost approximately $4.8 billion since the 1980s. The high cost of these

unsuccessful efforts and the potential costs of implementing the Vision

make it important that NASA achieve success in developing new systems 

for its new exploration program. 

NASA’s plans to retire the shuttle have the potential to greatly impact the 

supplier base that has been supporting that program for the last several 

decades, as well as mold the future supplier base needed for its 

exploration program. Over the next few years, NASA will be making 

decisions about its supplier base needs, including which suppliers will be 

required for the remainder of the Space Shuttle Program, which will no 

longer be required for the program, and which will be needed to support 

exploration efforts. One concern is that NASA will be unable to sustain 

suppliers necessary to support the exploration program during the period 

between the shuttle’s retirement and resumption of human space flight. 

Also of concern is that those suppliers determined by NASA as not needed

for the exploration program will prematurely end their services, thus 

jeopardizing the safe and efficient completion of shuttle activities. In 

addition, issues such as obsolescence—already being experienced by

some shuttle projects—could have an impact on the exploration program 

given the planned use of heritage hardware for some components of the 

Constellation projects. In an attempt to address these potential issues, 

NASA has been developing and implementing plans and processes to 

manage the transition of its supplier base. 

We are in the process of assessing how well NASA is positioning itself to 

effectively manage its supplier base to ensure both sustainment of the 

Space Shuttle Program through its scheduled retirement in 2010 and 

successful transition to planned exploration activities. 

Managing the Supplier 

Base Throughout 

Retirement and Transition 

Providing Logistical 

Support to the 

International Space Station 

The shuttle is uniquely suited for transporting crew and cargo to and from

the ISS. However, with scheduled retirement of the shuttle in 2010, NASA 

and its international partners will be challenged to fully support ISS 

operations until 2014, when the new crew exploration vehicle is scheduled

to come on line. To fill this gap, NASA plans to rely on its international 

Page 9 GAO-07-595T 
partners and commercial services to provide ISS logistics and crew 

rotation. 

Two recent studies have raised serious concerns about whether future ISS

operations can be continuously supported. A 2006 report by the National 

Research Council noted that the capabilities, schedules, and funding 

requirements for NASA, international partners, and commercial cargo and 

crew vehicles were not yet firm enough to give the panel confidence that 

ISS exploration mission objectives have a high likelihood of being 

fulfilled.9

 A February 2007 report by the International Space Station 

Independent Safety Task Force, which was required by the NASA 

Authorization Act of 200510, noted that the transition from the space shuttle 

to post-shuttle systems for logistical support to the ISS will require careful 

planning and phasing of new capabilities. Specifically, care must be taken

to ensure adequate logistics and spares are provided to maintain a viable 

station.11 The task force report went on to say that if a commitment is 

made to an emerging logistics delivery capability and the capability does 

not materialize, then logistical support to the ISS could be lost for some 

time, seriously decreasing the utility of the space station and possibly 

resulting in its abandonment. 

We are reviewing NASA’s plans for meeting ISS logistics and maintenance 

requirements after the shuttle retires, identifying the main risks to meeting 

ISS logistics and maintenance requirements, and assessing NASA’s plans 

for addressing the risks. 

Disposing of Property and 

Equipment 

NASA has not developed a comprehensive cost estimate for transitioning 

or disposing of Space Shuttle Program facilities and equipment. This poses 

a financial risk to the agency. As NASA executes the remaining missions 

needed to complete the assembly of and provide support for the ISS, it will

simultaneously begin the process of disposing of shuttle facilities and 

hardware that the Space Shuttle Program will no longer need, or, 

 9

Review of NASA Plans for the International Space Station, National Research Council, 

Washington, D.C., 2006. 

10Pub. L. No. 109-155, §§ 802, 804 (2005). 

11Final Report of the International Space Station Independent Safety Task Force, February

2007. 

Page 10 GAO-07-595T 
transitioning such facilities and hardware to the other NASA programs.12

As the ninth largest federal government property holder, NASA owns more 

than 100,000 acres, as well as over 3,000 buildings and 3,000 other 

structures totaling over 44 million square feet. Currently, the Space Shuttle 

Program uses 654 facilities valued in excess of $5 billion. The Space 

Shuttle Program also manages equipment dispersed across government 

and its contractors valued at more than $12 billion. NASA is in the process 

of evaluating its Space Shuttle Program facilities and equipment 

requirements and identifying existing facilities and equipment that will no 

longer be needed to support shuttle operations. Constellation and other 

NASA programs will determine whether they need any of the facilities or 

equipment released by the Space Shuttle Program. According to NASA 

officials, assessments currently project that only 70 to 80 of the existing 

facilities are needed to support the development or operation of future 

exploration systems. In cases where facilities or equipment are no longer 

required by the Space Shuttle Program, no other use is identified, or it is 

selected for disposal, it will transition to the resident NASA field center for 

disposition. 

It is worth noting that even before the retirement of the shuttle, over 

10 percent of NASA’s facilities are underutilized or not utilized at all. One 

option NASA has is to lease underutilized facilities in exchange for cash 

and/or in-kind consideration, such as improvement of NASA’s facilities or 

the provision of services to NASA. As directed by the NASA Authorization 

Act of 2005, we recently reported on NASA’s Enhanced Use-Leasing 

Program.13 Congress authorized NASA to employ enhanced-use leasing at 

two demonstration centers. This allowed the agency to retain the proceeds 

from leasing out underutilized real property and to accept in-kind 

consideration in lieu of cash for rent. The act allows NASA to deposit the 

net proceeds (i.e., net of leasing costs) in a no-year capital account to use 

later for maintenance, capital revitalization, and improvement of the 

facilities, albeit only at the demonstration centers—Ames Research Center 

and Kennedy Space Center. However, unlike other agencies with 

enhanced-use leasing authority, NASA is not authorized to lease back the

property during the term of the lease. Furthermore, we found that the 

 12Facilities refers to real property such as land, buildings and other structures that cannot 

be readily moved, and equipment refers to personal property that could be transported

elsewhere with relative ease. 

13Pub. L. No. 109-155, § 710 (2005) and GAO, NASA: Enhanced Use Leasing Program Needs 

Additional Controls, GAO-07-306R (Washington, D.C.: Mar. 1, 2007).

Page 11 GAO-07-595T 
agency does not have adequate controls in place to ensure accountability 

and transparency and to protect the government. We recommended that

the NASA Administrator develop an agencywide enhanced use leasing 

policy that establishes controls and processes to ensure accountability and 

protect the government’s interests including developing mechanisms to 

keep the Congress fully informed of the agency’s enhanced use leasing 

activity. NASA concurred with our recommendations. After not receiving

additional authority in the NASA Authorization Act of 2005, the agency is

again requesting that the Congress extend enhanced use leasing authority 

to at least six NASA centers. NASA currently has other leasing authorities,

but they require the agency to return to the U.S. Treasury any amounts 

exceeding cost. Further, NASA has indicated that it is preparing a package

of legislative and administrative tools to help in the transition from the 

Space Shuttle Program to the Constellation Program. For example, in 

addition to requesting authority for increased use of enhanced use leasing, 

a NASA official informed us that one tool the agency might consider 

pursuing is the ability to keep the funds within NASA from the sale of 

facilities and equipment, rather than returning such funds to the Treasury.

Completing Environmental 

Clean Up 

NASA does not have a comprehensive estimate of the environmental clean 

up costs associated with the transition and disposal of Space Shuttle 

Program facilities and equipment. The agency must comply with federal 

and state environmental laws and regulations, such as the National 

Environmental Policy Act of 1969, as amended,14 the Resource, 

Conservation, and Recovery Act of 1976, as amended,15 and the 

Comprehensive Environmental Response, Compensation, and Liability Act 

of 1980, as amended,16 in identifying and mitigating the environmental 

concerns. Although NASA has an approach for identifying environmental 

risks, in our report on major challenges facing the nation in the 21st 

century, we pointed out that progress in cleaning up sites frequently does 

not meet expected time frames and the costs dramatically exceed 

available funding levels.17 For example, it cost the Titan IV program 

approximately $300 million over six years on cleaning facilities, 

 1442 U.S.C. § 4321, et seq.

1542 U.S.C. § 6901, et seq.

1642 U.S.C. § 9601 et seq. 

17GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, 

GAO-05-325SP (Washington, D.C.: February 2005). 

Page 12 GAO-07-595T 
equipment, and tools. At this time, the extent of the Space Shuttle 

Program’s environmental liabilities is not yet fully known. Paying for this 

liability may require a significant future outflow of funds at the same time 

that NASA will be facing many other competing demands for its limited 

dollars, such as development of Orion, Ares I, and other exploration 

projects. 

Positioning the Science, 

Engineering, and Technical 

Workforce 

As it moves away from flying the shuttle, the NASA acknowledges that it 

must realign where necessary and plan for a workforce that will not be 

quite as large. NASA projects fewer resources will be required for 

operating and sustaining hardware, especially during vehicle processing 

and launch operations. The reduction in reusability of future space 

systems will also result in less refurbishing. In addition, as new space 

systems are designed, emphasis will shift to personnel with skills in 

systems development and engineering, program management and systems 

integration. Unfortunately, these skills will be in high demand at a time 

when other federal agencies and the private sector have similar needs. 

NASA projects that by fiscal year 2012 the total number of personnel 

needed to meet its strategic goals will decrease from 18,100 to 17,000. The 

agency is taking advantage of the flexibilities outlined in the NASA 

Flexibility Act of 200418 to attract highly qualified candidates, however, 

continued buy-outs and the threat of a reduction in force have created a 

feeling of instability among the science and engineering workforce. 

NASA’s senior leaders recognize the need for an effective workforce 

strategy in achieving mission success. NASA has a strategic human capital

plan, but more work is needed in workforce planning and deployment. In

addition, NASA’s transition to full cost accounting in fiscal year 2004 

resulted in a number of its centers experiencing less than Full Time 

Equivalent utilization, a situation referred to by NASA as “uncovered 

capacity.” The Administrator has committed to operating and maintaining 

10 centers and transferred work to those centers with identified 

uncovered capacity. 

We are examining whether several federal agencies, including NASA, are 

taking sufficient steps to address their workforce challenges in a timely 

and comprehensive manner, while sustaining focus on its mission and 

programmatic goals. Specifically, we are assessing the extent to which 

 18Pub. L. No. 108-201. 

Page 13 GAO-07-595T 
NASA’s human capital framework is aligned with its strategic mission and 

programmatic goals; whether NASA is effectively recruiting, developing, 

and retaining critically skilled staff; and what internal or external 

challenges NASA faces in achieving its workforce needs. As noted earlier, 

NAPA recently completed a study that made recommendations to NASA 

on how to achieve a flexible and scalable workforce by integrating its 

acquisition and workforce planning processes. 

Since 1990, GAO has designated NASA’s contract management as high risk 

principally because NASA has lacked a modern financial management 

system that can provide accurate and reliable information on contract 

spending and has placed little emphasis on product performance, cost 

controls, and program outcomes.19 NASA has made progress toward 

implementing a disciplined project management processes, but it has 

made only limited progress in certain areas such as reengineering NASA’s 

contractor cost reporting process. As we reported, the current Integrated

Enterprise Management Program does not provide the cost information 

that program managers and cost estimators need to develop credible 

estimates and compare budgeted and actual cost with the work performed 

on the contract. NASA plans to spend billions of dollars to develop a 

number of new capabilities, supporting technologies, and facilities that are 

critical to enabling space exploration missions. The development of such 

capabilities will be largely dependent on NASA contractors—on which 

NASA spends about 85 percent of its annual budget. Because of such a 

large reliance on contractors to achieve its mission, it is imperative that 

NASA be able to track costs and the means to integrate financial 

decisionmaking with scientific and technical leadership by providing 

decisionmakers accurate information. To its credit, NASA is working to 

improve business processes and integrating disparate systems in order to 

improve efficiencies, reduce redundant systems, and improve business 

information available to the acquisition community and mission support 

organizations. However, more effort will be needed to make the cultural 

transformation a reality.

The Vision for Space Exploration puts NASA on a bold new mission. 

Implementing the Vision over the coming decades will require hundreds 

of billions of dollars and a sustained commitment from multiple 

Transforming the Way 

Financial Information Is 

Used 

Concluding 

Observations 

 19GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: Jan. 2007). 

Page 14 GAO-07-595T 
administrations and Congresses over the length of the program. How well 

NASA overcomes the transition challenges that we and others have 

identified will not only have an effect on NASA’s ability to effectively 

manage the gap in the U. S. human access to space, but also will affect the 

agency’s ability to secure a sound foundation of support for the President’s 

space exploration policy. Consequently, it is incumbent upon NASA to 

ensure that these challenges are being addressed in a way that establishes 

accountability and transparency to the effort. 

Mr. Chairman and Members of the Subcommittee, this concludes my 

prepared statement. I would be happy to answer any questions you may 

have at this time. 

For further information regarding this testimony, please contact Allen Li at

(202) 512-4841 or lia@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this testimony. GAO staff who made key contributions to this testimony 

include Greg Campbell, Richard Eiserman, Yanina Golburt, 

James L. Morrison, Jeffrey M. Niblack, Shelby S. Oakley, Jose A. Ramos, 

Sylvia Schatz, and John Warren. 

Page 15 GAO-07-595T 

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