United States General Accounting Office

GAO Report to Congressional Requesters

June 1995 SPACE STATION

Estimated Total U.S.

Funding Requirements

GAO/NSIAD-95-163

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-261547 

June 12, 1995

The Honorable Dale Bumpers

United States Senate

The Honorable Dick Zimmer

The Honorable Gerald Solomon

House of Representatives

As you requested, we have reviewed the current estimated costs of the

National Aeronautics and Space Administration’s (NASA) space station

program. More specifically, we estimated the total U.S. funding

requirements for the program and identified program uncertainties that

may affect those requirements.

Background The space station program was initially approved in the mid-1980s. Since

then, NASA has had to redesign the station several times to meet decreasing

budgets. The most recent redesign was done in late 1993 to compensate

for additional funding cuts and bring Russia into the program as a full

partner with Japan, Canada, the European Space Agency, and the United

States.

NASA estimates that the International Space Station can be built and

completely assembled in orbit by June 2002. NASA said that the

International Space Station would provide more research capacity,

support more crew, and cost less than prior space station configurations.

NASA is currently planning a 10-year operational life for the space station

following completion of assembly.

The program is divided into three phases. The first phase involves seven

space shuttle flights to the Russian Space Station MIR on the orbiter

Atlantis to provide flight experience, demonstrate joint procedures with

the Russians, reduce technical risk during space station assembly, and

conduct scientific research and operations. The second phase comprises

the launch and assembly of the first elements of the space station on seven

shuttle flights to establish crew capability for three persons and the initial

laboratory environment. The second phase also consists of Russian flights

to launch the functional energy block, service module, a Soyuz rescue

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vehicle, universal docking module, and two science platforms. The last

phase involves the completion of the development and assembly of all

international partners’ hardware and the habitation module to establish

the station’s permanent six-person crew capability.

Results in Brief We estimate U.S. funds required to design, launch, and operate the

International Space Station will total about $94 billion through 2012 (about

$77 billion in fiscal year 1995 constant dollars).1

 This total may decrease to

the extent NASA accomplishes its goal for achieving station operational

efficiencies over the period 2003 to 2012, or efficiencies currently being

studied in the space shuttle program materialize.

The program has made major progress since last year in defining its

requirements, meeting its schedule milestones, and remaining within its

annual operating budgets. Nevertheless, the program faces formidable

challenges in completing all its tasks on schedule and within its budget.

The program estimates through fiscal year 1997 show limited annual

financial reserves—about 6 percent to 11 percent of estimated costs.

These reserves are even lower when reduced by the estimated value of

pending items that have a medium to high probability of being added to

the program. Inadequate reserves would hinder program managers’ ability

to cope with unanticipated technical problems. If a problem could not be

covered by available reserves, program managers could be faced with

either spending more than planned on the program or deferring or

rephasing other activities, thus possibly delaying the space station’s

development schedule or increasing its future cost.

In addition, the space station’s current launch and assembly schedule is

ambitious, and the shuttle program may have difficulty supporting it.

Moreover, the prime contract target cost could increase if the contractor is

unable to negotiate subcontractor agreements for the expected price. NASA

plans to complete an independent internal assessment of space station

program costs later this fiscal year.

U.S. Funding

Requirements for the

Space Station

Estimating total funding requirements requires aggregating past spending,

current budgets, and estimated future funding needs related to the

development and operation of the space station. As shown in table 1, we

estimate U.S. funding requirements for the design, launch, assembly, and

1

Constant 1995 dollars do not include estimated future years’ inflation. All dollar estimates in this

report include inflation unless stated in 1995 dollars.

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10-year operation of the International Space Station at about

$94 billion—over $48 billion to complete the assembly in June 2002 and

almost $46 billion to operate and conduct research for 10 years thereafter.2

The $94 billion estimate is discussed by program component after the

table.

2

These amounts represent NASA’s funding requirements and do not include the value of the

international partners’ contributions to the International Space Station program. A NASA official

estimated the contributions to be about $9.4 billion through June 2002, exclusive of Russia’s

contribution.

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Table 1: Estimated U.S. Funding

Requirements for Space Station

Requirement

Current dollars in billions

Program component

Contract and in-house costs from 1985 through 1993 $11.2

Current development budget from 1994 to June 2002

Developmenta $8.1

Utilization supportb 0.7

Operationsc 3.0

Payloadsd 2.6

Financial reserves 3.1 $17.4e

Station-related requirements through June 2002

In-house personnel $0.9

Principal investigator support 0.3

Contract with Russia 0.4

Shuttle performance enhancements 0.3

Shuttle launch support 17.8 $19.6

Subtotal—requirements through June 2002 $48.2

U.S. requirements after assembly is completedf

Operations/utilization $13.0

Shuttle launch support 32.7 $45.7

Total $93.9

Note: Totals may not add due to rounding.

aIncludes funding for the prime development contract and other contracts to develop operational

ground-based and on-orbit capability.

bIncludes funding to provide the capability to support researchers and use station resources.

cIncludes funding to provide the capability to conduct ground and on-orbit sustaining engineering

for maintaining and operating the space station.

dIncludes funds for developing the primary space station research facilities, such as the

centrifuge and furnace; flying payloads to the MIR during the first phase; and modifying the

shuttle and acquiring docking hardware for the MIR missions. This portion of the space station

program is managed by NASA’s Office of Life and Microgravity Sciences and Applications.

eNASA agreed that it could design and develop the space station for this amount under a

$2.1 billion annual funding cap imposed by the executive branch in June 1993.

f

Does not include funding for in-house personnel to operate and utilize the station, station

disassembly and disposal, or any development activities after June 2002.

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Contract and In-House

Costs From 1985 Through

1993

NASA spent $11.2 billion designing and developing earlier versions of the

space station during fiscal years 1985 through 1993, including contractor

costs and the cost of NASA’s civil service staff working on the program.

When the International Space Station design was adopted, NASA estimated

that about 75 percent of the previously prepared design work could be

incorporated into the new configuration.

Current Development

Budget From 1994 to

June 2002

During the past year, program managers refined their development

estimate for the program’s elements. However, while cost estimates for the

individual elements changed, NASA’s total development estimate remained

at $17.4 billion. As a result of the refinements, NASA program managers

recognized significant increases in the costs of flight hardware items that

they had excluded from prior budgets and increased total financial

reserves. The managers also identified cost reductions by negotiating with

contractors, economizing and modifying user requirements and operating

methods, delaying the procurement of some spares and replacement parts,

and reducing the amount of testing.

For example, in one case, program managers identified about $93 million

in savings in the utilization support category by eliminating the

requirement for developing payload analytical software. This requirement

was eliminated when station managers opted to make station users—that

is, principal investigators (researchers)—responsible for developing the

software needed to run their experiments. The research community’s

representative to the space station program office generally concurred

with these changes. However, users may require additional support to

finance their software development activities.

Program managers also reduced budget estimates by transferring

management responsibility for developing station hardware to

organizations that are more directly responsible for carrying out such

missions. For example, officials of NASA’s Office of Life and Microgravity

Sciences and Applications agreed to manage the development of some

laboratory support equipment and a rack to accommodate small payloads.

Transferring these items decreased the value of the space station

program’s utilization support budget by about $151 million but increased

the program’s payload category by $99 million, a tentative savings of about

$52 million. However, precise equipment needs are still being studied.

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Station-Related

Requirements Through

June 2002

In addition to NASA’s space station development budget and prior year

costs, we included in our life-cycle estimate other funding requirements

that are related to the International Space Station program. These total

about $19.6 billion through June 2002 and are discussed as follows.

In-House Personnel NASA estimated that approximately 1,285 civil service staff will be required

annually through the completion of assembly at approximately $77,000 per

year—a total of $892 million. NASA expects some reductions in the number

of in-house personnel during the assembly period, but estimates of such

reductions are not yet available.

Principal Investigator Support NASA plans to conduct scientific research during the space station’s

development and assembly. NASA estimates it will spend about $134 million

through 2000 to fund principal investigators’ preparation of scientific

experiments to be flown on the partially assembled station and on flights

to MIR during the first phase. We extrapolated NASA’s estimates for the

remaining 2 years of the development program, for a total of about

$300 million.

Contract With Russia Before bringing Russia into the space station program as a full partner,

NASA negotiated a $400 million contract with the Russian government for

hardware and managerial and technical expertise useful to space station

development.

Shuttle Performance

Enhancements

The space shuttle program is funding shuttle upgrades to provide

additional lift capability needed to support station element launches to the

space station’s 51.6-degree inclination orbit. Enhancements, currently

estimated about $300 million, include the super lightweight external tank

and other modifications and operational changes to increase the shuttle’s

performance.3

Shuttle Launch Support The space station’s development program requires 35 shuttle flights to

carry out all three phases. The sequence consists of 7 flights to MIR as part

of the technology development program during the first phase, 6 utilization

flights to the partly completed space station to begin conducting research,

and 22 station assembly flights. At estimated average costs, these flights

total about $17.8 billion.

NASA plans 21 station assembly flights, but it has not included a flight to

launch the crew rescue vehicle, a necessity to outfit the space station for

3

This estimate excludes funding requirements that are already included in NASA’s average

cost-per-flight estimates.

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B-261547 

permanent habitation. The launch vehicle for the crew rescue vehicle is

yet to be determined, but providing the crew rescue capability at the

completion of assembly is NASA’s responsibility. Program officials told us

they are taking steps to negotiate with the international partners the

provision of the crew rescue vehicle and its launch requirement, which

could reduce the U.S. portion of total funding requirements. However,

since no agreement has yet been reached, we included an extra station

assembly flight in our estimate.

Costs of shuttle launches are based on NASA’s estimates of the average cost

per flight.4

 Because NASA has budgeted to launch seven shuttle flights a

year, the average cost per flight has increased over prior years’ estimates

as total shuttle costs are averaged over fewer flights. NASA estimates that

the average shuttle flight will cost over $475 million in fiscal year 1998,

when the shuttle begins launching space station hardware.

We have used average launch costs as the basis for costing shuttle

launches instead of marginal costs.5

 Marginal costs are expenses that are

incurred or avoided when one flight is added to or deleted from the shuttle

program. The use of average launch costs is appropriate because the

majority of shuttle flights will be devoted to the space station for many

years. The space station either lengthens the life of the shuttle program,

requiring ground support facilities to be operated for additional years, or

displaces years of shuttle flights devoted to other uses.

U.S. Requirements After

Assembly Is Completed

NASA estimated that the space station will require an average of $1.3 billion

annually for operations, research, and utilization support during the

10 years after completion of assembly. NASA is studying how to reduce

operating costs to approximately $800 million annually. If NASA achieves

these station operational efficiencies, total estimated development and

operations costs of the space station would drop to about $89 billion.

NASA planning models predict that an annual average of five of seven

available shuttle flights will be needed to support or use the space station.

4

NASA’s average cost of a shuttle flight includes the estimated cost of safety and performance upgrade

projects of a recurring nature. NASA estimated the average cost of a shuttle flight for each year up to

2000. For subsequent years, we inflated the average cost per flight using the gross domestic product

inflation index.

5

See Space Station: Program Instability and Cost Growth Continue Pending Redesign

(GAO/NSIAD-93-187, May 18, 1993); Space Transportation: The Content and Uses of Shuttle Cost

Estimates (GAO/NSIAD-93-115, Jan. 28, 1993; and Questions Remain on the Costs, Uses, and Risks of

the Redesigned Space Station (GAO/T-NSIAD-91-26, May 1, 1991).

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At estimated average costs, shuttle launch support during this period

totals about $32.7 billion. NASA is currently studying how to further reduce

its shuttle operations costs. The station-related funding requirements

would decrease further if additional shuttle program efficiencies were

realized. NASA has not yet estimated these potential shuttle operations

savings.

When using average costs per flight, total shuttle launch costs to support

the space station during assembly and 10-year operational life are an

estimated $50.5 billion, or about 54 percent of the total space station

funding requirement.

Major Challenges to

the Program’s Cost

and Schedule

Since 1994, station managers have made progress in better defining

requirements and identifying potential costs and risks. However, they still

have a difficult task in completing the program on schedule and within the

estimated budget. Among their challenges are (1) the low financial

reserves for the next few years; (2) significant cost, schedule, and

technical risk for the shuttle program in supporting the space station’s

assembly schedule; and (3) the lack of final agreements between the prime

contractor and all its major subcontractors.

Financial Reserves Low in

Certain Years

Maintaining adequate financial reserves for the space station program

appears prudent to compensate for unanticipated program requirements.

However, low reserves in fiscal years 1996 and 1997 raise questions as to

whether NASA can implement the program within the $2.1 billion annual

funding cap the administration established in June 1993.

NASA is planning to hold about $3 billion of the total development estimate

of $17.4 billion as financial reserves. However, as shown in table 2, the

estimated reserve levels for fiscal years 1996 and 1997 are 0.3 and

5.3 percent, respectively, after deducting possible cost increases that

program officials believe have a medium to high likelihood of occurring.

Because the funding requirements for many of these potential increases

are not well defined, the actual remaining reserves could be less. The

estimated value and a brief description of these potential increases are

discussed in appendix I. NASA officials pointed out that these estimates

represent only a point in time and are considered internal planning

numbers.

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Table 2: Estimated Status of Financial

Reserves

Fiscal year

Current dollars in millions

1995 1996 1997 1998 1999 2000 2001 2002

Station program

baselinea

$2,159 $1,819 $1,600 $1,217 $1,097 $929 $802 $584

Financial reserves 98 102 182 525 621 603 534 394

Potential cost

increases

52 97 97 121 170 377 280 79

Balance of

reserves

46 5 85 404 451 226 254 315

Reserves as a

percent of station

program baseline

4.5 5.6 11.4 43.1 56.6 64.9 66.6 67.5

Reserves as a

percent of station

program baseline

after potential

cost increases

2.1 .3 5.3 33.2 41.1 24.3 31.7 53.9

Note: Percentages have been rounded.

aThis baseline excludes financial reserves, and the payload funding requirements managed by

NASA’s Office of Life and Microgravity Sciences and Applications.

Inadequate reserves would hinder program managers’ ability to cope with

unanticipated technical problems. If a problem could not be covered by

available reserves, program managers could be faced with either

exceeding the annual cost cap or deferring or rephasing other activities,

thus possibly delaying the space station’s development schedule or

increasing its future cost.

Other Possible Significant

Challenges

NASA’s list of potential cost increases does not include at least two items

that could have significant future cost and/or schedule impacts. These

items are (1) the possibility that the prime contract target cost could

increase if the contractor is unable to reach agreement with its major

subcontractors for the expected price and (2) the ability of the shuttle

program to support the space station’s launch requirements.

In January 1995, NASA and the prime contractor signed a contract for

$5.6 billion, about $600 million less than the original target figure agreed to

in August 1994. However, because the prime contractor had not completed

negotiations with all of its major subcontractors, the contract contains a

clause that allows an increase in the target cost if the prime contractor is

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B-261547 

unable to negotiate subcontractor agreements within the $5.6 billion price.

The prime contractor has reached agreement with two of its three major

subcontractors and is continuing negotiations with the third. If the prime

contractor is unsuccessful in negotiating a price with this subcontractor

that is within the $5.6 billion figure, the contract costs could increase. Any

increase would have to be funded by available financial reserves or by

reductions made elsewhere. However, program managers are not

considering this possibility on the list of potential cost increases. Thus,

any increase in the contract price could further erode the already slim

margin of reserves in the early years and further decrease program

managers’ flexibility to deal with unanticipated program cost increases.

The prime contract contains incentive features that encourage the prime

contractor to effectively manage its subcontract negotiations and costs.6

The ability of the space shuttle program to adequately support its planned

station assembly schedule is uncertain, particularly in view of the ongoing

efforts to reduce program costs. A February 1995 NASA workforce review

concluded that the cost reductions had increased the risk that NASA could

not meet future flight schedules.7

 A space shuttle program official told us

in May 1995 that the shuttle program would be facing its most demanding

operational challenge—supporting the space station’s assembly

schedule—at a time when, due to budget cuts, it will have lost much of its

flexibility to adjust for contingencies. In addition, any problems with the

modifications needed to increase the shuttle’s lift capacity so that it can

support assembly of the station at the 51.6-degree inclination orbit would

also adversely impact the station’s assembly schedule. We will be issuing a

report later this year that provides more detail about the shuttle program’s

requirements for supporting the station. NASA managers said that the

shuttle program is committed to meet the challenge and that the current

performance upgrade program is proceeding well with adequate technical,

schedule, and budget margins. As evidence, the managers said that they

recently canceled two of the higher cost hardware items (lightweight

booster and extended nozzle) because they were not needed.

NASA is planning to complete an independent assessment of the space

station program’s cost estimate by the end of fiscal year 1995. This

assessment is being done to provide the NASA Administrator’s Program

6

The contract allows for adjustment of the contractor’s potentially available fee. The available fee is

adjustable based on the outcome of negotiations at a rate of 25 percent of any increase or decrease in

target subcontract costs. For example, an increase in target subcontract costs would result in the

amount of potentially available fee being reduced by 25 percent of such increase.

7

NASA Budgets: Gap Between Funding Requirements and Projected Budgets Has Been Reopened

(GAO/NSIAD-95-155BR, May 12, 1995).

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Management Council8 an independent internal review of the program’s

technical and financial status.

Agency Comments

and Our Evaluation

In commenting on a draft of this report, NASA said that our report implied

that a significant portion of the total life-cycle cost estimate would

represent budget savings if the space station was canceled. NASA said that

unless the space shuttle program was also terminated, a substantial life

and microgravity sciences effort would be conducted aboard the shuttle in

the event of the termination of the space station program. We have

previously reported that we believe that space shuttle costs should be

included in any life-cycle cost estimate for the space station program. We

continue to believe it is appropriate to include requirements related to the

space shuttle. The use that might be made of the space shuttle should the

space station program be terminated would have to be separately

considered.

NASA’s complete comments and our evaluation of them are reprinted in full

in appendix II.

Scope and

Methodology

We reviewed NASA program planning and budgeting documents and

interviewed officials in the Space Station Program Office, the Space

Shuttle Program Office, the Office of Human Space Flight, the Office of

Life and Microgravity Sciences and Applications, and the Office of the

Comptroller. We reviewed actual to-date costs, budget and future-year

cost information for fiscal years 1995 through 2002, and estimated future

cost information through the current design life of the project. The

information provided in this report is based on NASA estimates. We

performed our review from March to June 1995 in accordance with

generally accepted government auditing standards.

Unless you publicly announce its contents earlier, we plan no further

distribution of this report until 30 days from its issue date. At that time, we

will send copies of this report to appropriate congressional committees,

the NASA Administrator, and the Director of the Office of Management and

Budget. We will also make copies available to others on request.

8

The Program Management Council is composed of the Associate Administrators of NASA and is

chaired by the Deputy NASA Administrator. The council annually reviews major NASA programs

throughout their life cycles and makes recommendations to the Administrator.

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Please contact me at (202) 512-8412 if you or your staff have any questions

about this report. Major contributors to this report were Frank Degnan,

James Berry, and Vijay Barnabas.

David R. Warren

Director, Defense Management and NASA Issues

Page 12 GAO/NSIAD-95-163 Space Station Funding
Page 13 GAO/NSIAD-95-163 Space Station Funding
Contents

Letter 1

Appendix I 

Potential Program

Cost Increases That

Threaten Space

Station Financial

Reserves

16

Crew Rescue Vehicle 16

Logistics and Maintenance 17

Prime Contract Changes 17

EESII Implementation 17

Centrifuge Accommodations 18

Shuttle Integration 18

FGB 18

Pending Changes 18

Water Unit Processes 19

International Partners 19

Freedom Closeout 19

CLDF Operations and Maintenance/Liaison Office Support 19

Appendix II 

Comments From the

National Aeronautics

and Space

Administration

20

Tables Table 1: Estimated U.S. Funding Requirements for Space Station 4

Table 2: Estimated Status of Financial Reserves 9

Table I.1: Potential Cost Increases That Threaten Space Station

Financial Reserves

16

Abbreviations

CLDF Clear Lake Development Facility

EESII element-to-element systems interface integrity

FGB Functional Energy Block

NASA National Aeronautics and Space Administration

Page 14 GAO/NSIAD-95-163 Space Station Funding
Page 15 GAO/NSIAD-95-163 Space Station Funding
Appendix I 

Potential Program Cost Increases That

Threaten Space Station Financial Reserves

Table I.1 shows the space station reserves and the items that managers

categorize as having a medium or high likelihood of having to be

incorporated into the space station program and funded. A brief

explanation of each item follows the table.

Table I.1: Potential Cost Increases That Threaten Space Station Financial Reserves

Fiscal year

Current dollars in millions

1995 1996 1997 1998 1999 2000 2001 2002 Total

Financial reserves $98 $102 $182 $525 $621 $603 $534 $394 $3,059

Threats against reserves

Crew rescue vehicle 0 0 0 0 112 237 181 56 586

Logistics and

maintenance

1 23 19 44 3 100 83 17 290

Prime contract changes 20 20 20 24 0 0 0 0 84

EESII implementationa 1 24 18 12 10 0 0 0 65

Centrifuge

accommodations

1 1 1 5 15 22 10 0 55

Shuttle integration 0 10 12 5 11 7 3 3 51

FGBb 0 5 10 5 0 0 0 0 20

Pending changes 1 1 1 9 2 2 0 0 16

Water unit processes 2 2 0 14 14 6 0 0 38

International partners 5 9 13 0 0 0 0 0 27

Freedom closeout 21 0 0 0 0 0 0 0 21

CLDFc operations and

maintenance/liaison

office support

0 2 3 3 3 3 3 3 20

Subtotal 52 97 97 121 170 377 280 79 1,273

Balance $46 $5 $85 $404 $451 $226 $254 $315 $1,786

aElement-to-element systems interface integrity.

bFunctional energy block.

cClear Lake Development Facility.

Crew Rescue Vehicle As we reported in 1994, the National Aeronautics and Space

Administration (NASA) initially anticipated that Russia would provide

Soyuz vehicles that would serve as crew return vehicles.1

 However, Russia

1

Space Station: Update on the Impact of the Expanded Russian Role (GAO/NSIAD-94-248, July 29,

1994).

Page 16 GAO/NSIAD-95-163 Space Station Funding
Appendix I 

Potential Program Cost Increases That

Threaten Space Station Financial Reserves

has agreed to provide Soyuz vehicles only through the completion of

station assembly. NASA will be responsible for providing a crew

return/rescue capability after assembly is completed. NASA is studying

various options to determine the best way to provide this capability. The

$586 million estimate is based on a contractor’s estimate for using an

Apollo-era capsule as the return vehicle. However, if a different option is

chosen, the estimate may change. NASA is also considering purchasing

Soyuz vehicles from Russia or having the European Space Agency develop

and provide a crew rescue vehicle. According to space station program

control office personnel, NASA has time to decide which option to pick

because development does not have to start until 1998 for the vehicle to be

available in 2002.

Logistics and

Maintenance

The logistics and maintenance figure represents the procurement of flight

hardware spares. Funding for many spares was deferred during a prior

cost-reduction exercise until spares’ requirements could be better defined.

However, program managers recognize that it may be preferable to

purchase spares while the manufacturer has an ongoing production

capability. Purchasing spares once the production line has been shut down

could be more expensive and, in some instances, not feasible (for

example, if the manufacturer went out of business). The $290 million is an

estimate; the actual amount of spares to be purchased is under study using

a Navy-developed computer model.

Prime Contract

Changes

Although NASA and the prime contractor signed the contract in

January 1995, they had not agreed on certain technical requirements for

developing the space station. At issue was the amount of analysis

necessary to verify that the hardware provided by international partners

could be effectively integrated with U.S. components. To avoid further

delaying the program, both parties agreed that the contractor would

continue studies to determine if any additional integration and verification

work was necessary. An amount of $24 million was set aside to support

these efforts. Program managers also reserved about $60 million to fund

additional technical requirements, if necessary.

EESII Implementation EESII tests and analyses are required to ensure that all the interfaces in the

flight hardware will function as planned. During cost-reduction exercises

in 1994, some of this testing was eliminated. However, program managers

have since realized that it would be required. The $65 million estimate is

Page 17 GAO/NSIAD-95-163 Space Station Funding
Appendix I 

Potential Program Cost Increases That

Threaten Space Station Financial Reserves

based on earlier estimates of the resources required to conduct such

testing. NASA teams are currently studying how much testing will actually

be required and the best way to accomplish it. A better estimate of

required funding may also result from the teams’ work. Space station

program control officials told us that this item would be incorporated into

the program and funded during the next budget cycle.

Centrifuge

Accommodations

NASA will have to provide housing for the centrifuge facility and is

reviewing four options: a duplicate U.S. laboratory module provided by

Boeing-Huntsville, a Spacelab “long module” provided by McDonnell

Douglas, a Spacelab double module provided by McDonnell Douglas, and

an additional Mini Payload Logistics Module provided by Alenia Spazio of

Italy. Space station program officials told us that the $55-million figure is

based on a rough order of magnitude estimate from the various

competitors, and that this item would be incorporated into the program

and funded during the next budget cycle.

Shuttle Integration Currently, station and shuttle program managers are evaluating

requirements and the allocation of costs among programs. Station program

managers have estimated that up to $51 million of reserves would be

needed if requirements cannot be reduced. NASA headquarters officials

plan to include these integration issues in the fiscal year 1997 budget

formulation process for resolution.

FGB The FGB spacecraft will be the first space station element to be launched. It

will provide the initial propulsion, guidance, navigation, and control

functions for the space station. The FGB is a Russian-built spacecraft that

NASA is purchasing, and funding for it is included in the space station

development budget. The $20-million threat against reserves is for

installing a backup command and control ability for the FGB in the mission

control center in Houston, Texas, and changing the FGB specifications so

that it can function in a depressurized environment. According to NASA

officials, this amount decreased from an initial estimate of $25 million

because NASA will not have to pay for a remote manual docking capability.

Pending Changes The $16 million shown represents several modifications that need to be

included in the baseline but have not been approved by space station

program management.

Page 18 GAO/NSIAD-95-163 Space Station Funding
Appendix I 

Potential Program Cost Increases That

Threaten Space Station Financial Reserves

Water Unit Processes The amounts shown for fiscal years 1995 and 1996 are to fund flight

experiments during the shuttle flights to the Russian MIR space station to

verify the design for the water processing system that will be used in the

U.S. habitation module. The total amount of $38 million also includes

funds earmarked in later years for any design changes that may be needed

based on the results of the early flight experiments.

International Partners The $27 million is for purchasing, modifying, and repairing components

provided by international partners.

Freedom Closeout The $21 million shown reflects an indirect rate issue with

Boeing-Huntsville related to the closeout of the space station Freedom

contract for Work Package 1. This issue is pending resolution by the

Defense Contract Audit Agency.

CLDF Operations and

Maintenance/Liaison

Office Support

NASA plans to build the Neutral Buoyancy Laboratory, a large underwater

facility for simulating a weightless environment, at the newly acquired

CLDF near the Johnson Space Center in Houston, Texas. The new

laboratory will be used to train astronauts for space station assembly and

other space shuttle operations and will replace an older facility at

Johnson. Currently under negotiation is the station program’s share of the

new facility’s operations and maintenance costs and the program’s share

of the costs to support liaison offices in international partner countries.

Program managers have earmarked $20 million for these purposes.

Page 19 GAO/NSIAD-95-163 Space Station Funding
Appendix II 

Comments From the National Aeronautics

and Space Administration

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

See comment 2.

See comment 3.

See comment 4.

Page 20 GAO/NSIAD-95-163 Space Station Funding
Appendix II 

Comments From the National Aeronautics

and Space Administration

See comment 5.

See comment 6.

Page 21 GAO/NSIAD-95-163 Space Station Funding
Appendix II 

Comments From the National Aeronautics

and Space Administration

The following are GAO’s comments on the NASA’s letter dated June 6, 1995.

GAO Comments 1. We added this position to the report.

2. Our report addresses program life-cycle cost. We have included

language in the report to recognize NASA’s concerns and emphasized our

reporting objectives.

3. We revised our estimate to use the gross domestic product inflation

index. We initially used NASA’s “new start” index to project future shuttle

and other outyear costs principally because NASA used it to estimate

average costs per shuttle flight through 2000.

4. Our purpose was to show that shuttle development costs were not part

of the estimated cost to launch the space station and not to imply that

these costs should be allocated to the space station program. To clarify,

we deleted the footnote reference to shuttle development costs.

5. We revised the report to reflect that NASA has no plans to operate beyond

the planned 10-year period. Accordingly, we did not include costs in our

estimate of operating the space station longer than 10 years. However, it is

possible that the space station life could be extended. In the event that

Congress and the administration decide to continue using the station

beyond the planned 10-year period, we estimate funding requirements

would be about $5.1 billion a year. This is based on estimates of projected

operations and launch costs at the end of the 10-year operations period.

6. We recalculated the reserves as a percentage of the space station

baseline program. We also added language to reflect the tentative nature of

these potential cost increase estimates.

(709132) Page 22 GAO/NSIAD-95-163 Space Station Funding
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