Testimony 

Before the Columbia Accident 

Investigation Board 

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 9:00 a.m. EDT 

Thursday, June 12, 2003 NASA

Major Management 

Challenges and Program 

Risks 

Statement of Allen Li, Director 

Acquisition and Sourcing Management 

GAO-03-849T 
Page 1 GAO-03-849T NASA Challenges and Risks 

Chairman Gehman and Members of the Columbia Accident Investigation 

Board: 

Thank you for inviting me to discuss the challenges and risks facing the 

National Aeronautics and Space Administration (NASA). You asked that 

we provide information concerning NASA, particularly the management of 

the Space Shuttle Program. We recognize the complexity and difficulty in 

establishing not only the cause of the Columbia accident, but also in 

understanding the agency’s environment in which management decisions 

are made. We believe our body of work can help the Board in this area. 

Since its inception, NASA has undertaken numerous programs that have 

greatly advanced scientific and technological knowledge. As you are 

aware, NASA’s activities span a broad range of complex and technical 

endeavors. But the agency is at a critical juncture, and major management 

improvements are needed. In January of this year, we identified four 

challenges facing NASA.1

• Strengthening strategic human capital management. 

• Improving contract management. 

• Controlling International Space Station costs. 

• Reducing space launch costs. 

Weak contract management and financial controls pose risks across the 

agency. Therefore, we have placed this area on our high-risk list. 

In summary, these challenges affect NASA’s ability to effectively run its 

largest programs. NASA’s ultimate challenge will be in tackling the root 

problems impeding those programs. This will require (1) instituting a 

results-oriented culture that fosters knowledge sharing and empowers its 

workforce to accomplish programmatic goals; (2) ensuring that the agency 

adheres to management controls to prevent cost overruns and scheduling 

problems; (3) transforming the financial management organization so it 

better supports NASA’s core mission; and (4) sustaining commitment to 

change. 

 1

See U.S. General Accounting Office, Major Management Challenges and Program Risks: 

National Aeronautics and Space Administration, GAO-03-114 (Washington, D.C.: January 

2003). 

Results in Brief 
Page 2 GAO-03-849T NASA Challenges and Risks 

An agency’s most important organizational asset is its people—they define 

the agency’s culture, drive its performance, and embody its knowledge 

base. Leading public organizations worldwide have found that strategic 

human capital management must be the centerpiece of any serious change 

management initiative. However, NASA, like many federal agencies, is 

facing substantial challenges in attracting and retaining a highly skilled 

workforce, thus putting the agency’s missions at risk. While NASA is 

taking comprehensive steps to address this problem across all mission 

areas, implementing a strategic approach to marshal, manage, and 

maintain human capital has been a significant challenge. 

In January 2001, we reported that NASA’s shuttle workforce had declined 

significantly to the point of reducing NASA’s ability to safely support the 

shuttle program.2

 Many key areas were not sufficiently staffed by qualified 

workers, and the remaining workforce showed signs of overwork and 

fatigue. Recognizing the need to revitalize the shuttle program’s 

workforce, NASA discontinued its downsizing plans in December 1999 and 

initiated efforts to hire new staff. In September 2001, we testified that 

NASA was hiring approximately 200 full-time equivalent staff and that it 

had focused more attention on human capital in its annual performance 

plan by outlining an overall strategy to attract and retain skilled workers.3

However, considerable challenges remain, including the training of new 

staff and addressing the potential loss of key personnel through 

retirement. 

As we reported in January 2003, these challenges have not been mitigated, 

and work climate indicators, such as forfeited leave and absences from 

training courses continue to reflect high levels of job stress. In addition, 

staffing shortages in many key skill areas of the shuttle program remain a 

problem, despite the recent hires. These areas include subsystems 

engineering, flight software engineering, electrical engineering, 

environmental control, and shuttle resources management. NASA’s hiring 

posture for fiscal year 2003 has been to target areas where skill imbalances 

still exist in the shuttle program. 

 2

See U.S. General Accounting Office, Major Management Challenges and Program Risks: 

National Aeronautics and Space Administration, GAO-01-258 (Washington, D.C.: January 

2001). 

3

See U.S. General Accounting Office, Space Shuttle Safety: Update on NASA’s Progress in 

Revitalizing the Shuttle Workforce and Making Safety Upgrades GAO-01-1122T

(Washington, D.C.: Sept. 6, 2001). 

Strengthening 

Strategic Human 

Capital Management 
Page 3 GAO-03-849T NASA Challenges and Risks 

NASA believes that similar workforce problems affect the entire agency 

and that, as a result, its ability to perform future missions and manage its 

programs may be at risk. Currently, the average age of NASA’s workforce 

is over 45, and 15 percent of NASA’s science and engineering employees 

are eligible to retire; within 5 years, about 25 percent will be retirement 

eligible. At the same time, the agency is finding it difficult to hire people 

with science, engineering, and information technology skills—fields 

critical to NASA’s missions. Within the science and engineering workforce, 

the over-60 population currently outnumbers the under-30 population 

nearly 3 to 1. As the pool of scientists and engineers shrinks, competition 

for these workers intensifies. The agency also faces the loss of significant 

procurement expertise through 2007, according to NASA’s Inspector 

General.4

 Coupled with these concerns, NASA has limited capability for 

personnel tracking and planning, particularly on an agencywide or 

programwide basis. Furthermore, NASA acknowledges that it needs to 

complete and submit to the Office of Management and Budget (OMB) a 

transformation workforce restructuring plan, which it notes that, in 

conjunction with its strategic human capital plan, will be critical to 

ensuring that skill gaps or deficiencies do not exist in mission- critical 

occupations.5

NASA is taking steps to address its workforce challenges. For example: 

• NASA is developing an agencywide integrated workforce planning and 

analysis system that aims to track the distribution of NASA’s workforce 

across programs, capture critical competencies and skills, determine 

management and leadership depth, and facilitate gap analyses. NASA has 

completed a pilot of an interim competency management system to 

facilitate analyses of gaps in skills and competencies. NASA plans to 

implement the interim system agencywide in 2003 and integrate it with the 

new comprehensive workforce planning and analysis system in 2005. The 

new system should foster better management of the existing workforce 

and enable better strategic decisions about future workforce needs. 

• NASA has developed a strategic human capital plan, which identifies 

human capital goals, problems, improvement initiatives, and intended 

 4

See National Aeronautics and Space Administration, Audit Report: Procurement 

Workforce Planning, IG-01-041 (Washington, D.C.: September 2001). 

5

As stated in President’s Management Agenda Action Plans for the National Aeronautics 

And Space Administration, (Washington, D.C.: May 9, 2002). This document is an 

agreement between NASA and OMB on NASA’s plans for addressing the governmentwide 

initiatives in The President’s Management Agenda. 
Page 4 GAO-03-849T NASA Challenges and Risks 

outcomes and incorporates strategies and metrics to support the goals.6

The plan has been approved by OMB and the Office of Personnel 

Management (OPM). According to NASA, the plan is based on OMB’s 

scorecard of human capital standards and OPM’s scorecard of supporting 

human capital dimensions, as well as our own model, which we published 

in March 2002.7

• NASA has renewed its attention to hiring applicants just out of college and 

intends to pursue this even more aggressively in coming years. The agency 

is undertaking a number of initiatives and activities aimed at acquiring and 

retaining critically needed skills, such as using the new Federal Career 

Intern Program to hire recent science and engineering graduates, 

supplementing the workforce with nonpermanent civil servants where it 

makes sense, and implementing a program to repay student loans to 

attract and retain employees in critical positions. 

• Finally, NASA has included an objective in its most recently updated 

strategic plan8

 and fiscal year 2004 performance plan9 to implement an 

integrated agencywide approach to human capital management. The plans 

state that this approach will attract and maintain a workforce that 

represents America’s diversity and will include the competencies that 

NASA needs to deliver the sustained levels of high performance that the 

agency’s challenging mission requires. 

The 108th Congress is currently considering a series of legislative 

proposals developed by NASA to provide it with further flexibilities and 

authorities for attracting, retaining, developing, and reshaping a skilled 

workforce. These include a scholarship-for-service program; a streamlined 

hiring authority for certain scientific positions; larger and more flexible 

recruitment, relocation, and retention bonuses; noncompetitive 

conversions of term employees to permanent status; a more flexible 

critical pay authority; a more flexible limited-term appointment authority 

for the senior executive service; and greater flexibility in determining 

annual leave accrual rate for new hires. 

 6

NASA has also developed a companion strategic human capital implementation plan that 

contains detailed action plans for the improvement initiatives. 

7

See U.S. General Accounting Office, A Model of Strategic Human Capital Management, 

GAO-02-373SP (Washington, D.C.: Mar. 15, 2002). 

8

See National Aeronautics and Space Administration, 2003 Strategic Plan (Washington, 

D.C.: 2003). 

9

NASA’s fiscal year 2004 performance plan is integrated with its fiscal year 2004 budget 

request. 
Page 5 GAO-03-849T NASA Challenges and Risks 

We continue to monitor NASA’s progress in resolving its human capital 

problems, including how well its human capital initiatives and reforms and 

any new and existing flexibilities and authorities are helping to 

strategically manage and reshape its workforce. 

Much of NASA’s success depends on the success of its contractors—who 

received more than 85 percent, or $13.3 billion, of NASA’s funds in fiscal 

year 2002. However, since 1990, we have identified NASA’s contract 

management function as an area at high risk because of its ineffective 

systems and processes for overseeing contractor activities. Specifically, 

NASA has lacked accurate and reliable information on contract spending 

and has placed little emphasis on end results, product performance, and 

cost control. NASA has addressed many of these acquisition-related 

weaknesses, but key tasks remain, including completing the design and 

implementation of a new integrated financial management system. 

Since 1990, our reports and testimonies have repeatedly demonstrated just 

how debilitating these weaknesses in contract management and oversight 

have been. For example, our July 2002 report on the International Space 

Station found that NASA did not effectively control costs or technical and 

scheduling risks, provide adequate oversight review, or effectively 

coordinate efforts with its partners. In other examples, we found that 

NASA lacked effective systems and processes for overseeing contractor 

activities and did not emphasize controlling costs. 

Center-level accounting systems and nonstandard cost-reporting 

capabilities have weakened NASA’s ability to ensure that contracts are 

being efficiently and effectively implemented and that budgets are 

executed as planned. The agency’s financial management environment 

is comprised of decentralized, nonintegrated systems with policies, 

procedures, and practices unique to each of its field centers. For the 

most part, data formats are not standardized, automated systems are not 

interfaced, and on-line financial information is not readily available to 

program managers. NASA’s lack of a fully integrated financial management 

system also hurts its ability to collect, maintain, and report the full cost of 

its projects and programs. For example, in March 2002, we testified that 

NASA was unable to provide us with detailed support for amounts that it 

reported to the Congress as obligated against space station and related 

Correcting 

Weaknesses in 

Contract Management 
Page 6 GAO-03-849T NASA Challenges and Risks 

shuttle program cost limits,10 as required by the National Aeronautics and 

Space Administration Authorization Act of 2000.11

In recent years, NASA made progress in addressing its contract 

management challenges. For example: 

• In July 1998, we reported that NASA was developing systems to provide 

oversight and information needed to improve contract management and 

that it had made progress in evaluating its field centers’ procurement 

activities on the basis of international quality standards and its own 

procurement surveys. In January 1999, we reported that NASA was 

implementing its new system for measuring procurement-related activities 

and had made progress in evaluating procurement functions in its 

field centers. 

• NASA has also made progress reducing its use of undefinitized contract 

actions (UCA)12—that is, unnegotiated, or uncosted, contract changes. In 

2000, we reported that NASA’s frequent use of undefinitized contract 

changes could result in contract cost overruns and cost growth in the 

International Space Station program. In March 2003, NASA’s Office of 

Inspector General reported that NASA had significantly reduced both the 

number and dollar amount of undefinitized contract actions since we 

highlighted UCAs as one reason for designating NASA’s contract 

management as a major management challenge. 

• NASA has also recognized the urgency of implementing a fully integrated 

financial management system. We recently reported that NASA has 

estimated the life-cycle cost of this effort through 2008 to be $861 

million.13, 14 While this is NASA’s third attempt at implementing a new 

financial management system (NASA’s first two efforts covered 12 years 

 10See U.S. General Accounting Office, National Aeronautics and Space Administration: 

Leadership and Systems Needed to Effect Financial Management Improvements, 

GAO-02-551T (Washington, D.C.: Mar. 20, 2002). 

11Section 202 of P.L. 106-391. 

12An undefinitized contract action means a unilateral or bilateral contract modification or 

delivery/task order in which the final price or estimated cost and fee have not been 

negotiated and mutually agreed to by NASA and the contractor. 48 C.F.R. 1843.7001. 

13See U.S. General Accounting Office, Business Modernization: Improvements Needed in 

Management of NASA’s Integrated Financial Management Program, GAO-03-507

(Washington, D.C.: Apr. 30, 2003). 

14For this estimate, NASA has defined life-cycle costs to include implementation efforts 

through fiscal year 2008 and major upgrades, plus operation and support costs for each 

system module for the first 2 years after the module goes live. 
Page 7 GAO-03-849T NASA Challenges and Risks 

and cost $180 million), this effort is expected to produce an integrated, 

NASA-wide financial management system through the acquisition and 

incremental implementation of commercial software packages and related 

hardware and software components.15 The core financial management 

module, which NASA considers to be the backbone of the Integrated 

Financial Management Program, is currently operating at 6 of NASA’s 10 

centers16 and is expected to be fully operational in June 2003. According to 

NASA’s business case analysis for the system, the core financial module 

will provide NASA’s financial and program managers with timely, 

consistent, and reliable cost and performance information for 

management decisions. 

While NASA has made noteworthy progress in strengthening its contract 

oversight, much work remains. As NASA moves ahead in acquiring and 

implementing its new financial management system, NASA needs to 

ensure that its systems and processes provide the right data to oversee 

its programs and contractors—specifically, data to allow comparisons of 

actual costs to estimates, provide an early warning of cost overruns or 

other related difficulties, and monitor contract performance and make 

program requirement trade-off decisions. In addition, NASA must employ 

proven best practices, including (1) aligning its selection of commercial 

components of the system with a NASA-wide blueprint, or “enterprise 

architecture;” (2) analyzing and understanding the dependencies among 

the commercial components before acquiring and implementing them; 

(3) following an event-driven system acquisition strategy; (4) employing 

effective acquisition management processes, such as those governing 

requirements management, risk management, and test management; 

(5) ensuring that legacy system data are accurate to avoid loading and 

perpetuating data errors in the new system; and (6) proactively positioning 

NASA for the business process changes embedded in the new system, for 

example, by providing adequate formal and on-the-job training. 

However, as we reported in April 2003, the core financial module is not 

being designed to accommodate much of the information needed by 

 15The system is to consist of nine modules: core financial management, resume 

management, travel management, position description management, human resource 

management, payroll, budget formulation, contract administration, and asset management. 

16NASA is comprised of its headquarters offices, nine centers located throughout the 

country, and the Jet Propulsion Laboratory. The Jet Propulsion Laboratory is operated by 

the California Institute of Technology, but for the purpose of this testimony, we treat the 

Jet Propulsion Laboratory as a center. 
Page 8 GAO-03-849T NASA Challenges and Risks 

program managers and cost estimators.17 For example, to adequately 

oversee NASA’s largest contracts, program managers need reliable 

contract cost data—both budgeted and actual—and the ability to integrate 

these data with contract schedule information to monitor progress on the 

contract. However, because program managers were not involved in 

defining system requirements or reengineering business processes, the 

core financial module is not being designed to integrate cost and schedule 

data needed by program managers. In addition, because NASA has 

embedded in the core financial module the same accounting code 

structure that it uses in its legacy reporting system, the core financial 

module is not being implemented to capture cost information at the same 

level of detail that it has received from NASA’s contractors. Finally, 

because NASA has done little to reengineer its acquisition management 

processes to ensure that its contractors consistently provide the cost and 

performance information needed, the core financial module does not 

provide cost estimators with the detailed cost data needed to prepare 

credible cost estimates. 

Because more work is needed to demonstrate substantial progress in 

resolving the root causes of NASA’s contract management weaknesses, 

our 2003 Performance and Accountability Series continued to report 

contract management as a major management challenge for NASA and a 

high-risk area. We are continuing to monitor NASA’s progress in 

addressing contract management weaknesses. In response to a request 

from the Senate Commerce, Science, and Transportation Committee and 

the House Science Committee, we continue to assess the extent to which 

NASA’s financial management system acquisition is in accordance with 

effective system acquisition practices and is designed to support NASA’s 

decision-making needs and external reporting requirements. 

The International Space Station represents an important effort to foster 

international cooperation in scientific research and space exploration. It is 

also considered one of the most challenging engineering feats ever 

attempted. The estimated cost of the space station has mushroomed, and 

expected completion has been pushed out several years. NASA is taking 

action to keep costs in check, but its success in this area still faces 

considerable challenges. In the meantime, NASA has had to make 

 17See GAO-03-507. 

Controlling 

International Space 

Station Costs 
Page 9 GAO-03-849T NASA Challenges and Risks 

substantial cuts in the program, negatively impacting its credibility with 

the Congress, international partners, and the scientific community. 

The grounding of the shuttle fleet following the Columbia accident has had 

a significant impact on the continued assembly and operation of the 

International Space Station. The shuttle is the primary vehicle for 

transferring crew and equipment to and from the station and is used to 

periodically reboost the station into a higher orbit. Although on-orbit 

assembly of the station has stopped, NASA must continue to address the 

challenges of developing and sustaining the station and conducting 

scientific experiments until shuttle flights resume. While controlling cost 

and schedule and retaining proper workforce levels have been difficult in 

the past, the shuttle grounding will likely exacerbate these challenges. 

Because the return-to-flight date for the shuttle fleet is unknown at this 

time and manifest changes are likely, the final cost and schedule impact on 

the station is undefined at this time. 

NASA has had difficulty predicting and controlling costs and scheduling 

for the space station since the program’s inception in 1984. In 

September 1997, we reported that the cost and schedule performance of 

its prime development contractor, which showed signs of deterioration in 

1996, had continued to worsen and that the program’s financial reserves 

for contingencies had all but evaporated. In our January 2001 Performance 

and Accountability Series, we reported that the prime contract was 

initially expected to cost over $5.2 billion and that the assembly of the 

station was expected to be completed in June 2002. But by October 2000, 

the prime contractor’s cost had grown to about $9 billion—$986 million of 

which was for cost overruns—and the current estimate is about $11 

billion. Because of on-going negotiations with the international partners 

and uncertainty associated with the shuttle’s return to flight, the station’s 

final configuration and assembly date cannot be determined at this time. 

NASA’s Office of Inspector General also reported cost overruns in a 

February 2000 audit report, and based on recommendations in that report, 

NASA agreed to take several actions, including discussing the prime 

contractor’s cost performance at regularly scheduled meetings and 

preparing monthly reports to senior management on the overrun status. 

However, in July 2002, we reported continued cost growth due to an 

inadequate definition of requirements, changes in program content, 

schedule delays, and inadequate program oversight.18 While NASA’s 

 18See U.S. General Accounting Office, Space Station: Actions Under Way to Manage Cost, 

but Significant Challenges Remain, GAO-02-735 (Washington, D.C.: July 17, 2002). 
Page 10 GAO-03-849T NASA Challenges and Risks 

controls should have alerted management to the growing cost problem 

and the need for action, they were largely ignored because NASA focused 

on fiscal year budget management rather than on total program 

cost management. 

NASA is instituting a number of management and cost-estimating reforms, 

but significant challenges threaten their successful implementation. First, 

NASA’s new life-cycle cost estimate for the program—which is based on a 

three-person crew instead of a seven-person crew, as originally planned—

will now have to be revised because of changes to the program’s baseline. 

The lack of an adequate financial management system for collecting space 

station cost data only exacerbates this challenge. Second, NASA must still 

determine how research can be maximized with only a limited crew. Last, 

NASA has yet to reach agreement with its international partners on an 

acceptable on-orbit configuration and sharing of research facilities and 

costs. As a result, the capacity and capabilities of the space station, the 

scope of research that can be accomplished, and the partners’ share of 

operating costs are unknown at this time. 

Ongoing cost and schedule weaknesses have profoundly affected the 

utility of the space station—with substantial cutbacks in construction, the 

number of crew members, and scientific research. As a part of the space 

station’s restructuring, further work and funding for the habitation module 

and crew return vehicle have been deferred, which led to the on-orbit crew 

being reduced from seven to three members, limiting the crewmember 

hours that can be devoted to research. Additionally, the number of 

facilities available for research has been cut from 27 to 20. NASA’s 

international partners and the scientific community are not satisfied with 

these and other reductions in capabilities and have raised concerns about 

the viability of the space station science program. 

In our earlier identification of costs to build the International Space 

Station, we identified space shuttle launch costs as being a substantial cost 

component—almost $50 billion.19 NASA recognized the need to reduce 

such costs as it considered alternatives to the space shuttle. Indeed, a key 

goal of the agency’s earlier effort to develop a reusable launch vehicle was 

to reduce launch costs from $10,000 per pound on the Space Shuttle to 

 19U.S. General Accounting Office, International Space Station: U.S. Life-Cycle Funding 

Requirements, GAO/NSIAD-98-147 (Washington, D.C.: May 22, 1998). 

Reducing Space 

Launch Costs 
Page 11 GAO-03-849T NASA Challenges and Risks 

$1,000 through the use of such a vehicle. As we testified in June 2001, 

NASA’s X-33 program—an attempt to develop and demonstrate advanced 

technologies needed for future reusable launch vehicles—ended when the 

agency chose not to fund continued development of the demonstrator 

vehicle in February 2001.20

Subsequently, until November 2002, NASA was pursuing its Space Launch 

Initiative (SLI)—a 5-year, $4.8 billion program to build a new generation of 

space vehicles to replace its aging space shuttle fleet. SLI was part of 

NASA’s broader Integrated Space Transportation Plan, which involves 

operating the space shuttle program through 2020 as successive 

generations of space transportation vehicles are developed and deployed, 

beginning around 2011. The primary goals for SLI were to reduce the risk 

of crew loss as well as substantially lower the cost of space transportation 

so that more funds could be made available for scientific research, 

technology development, and exploration activities. Currently, NASA 

spends nearly one-third of its budget on space transportation. 

In September 2002, we reported that SLI was a considerably complex and 

challenging endeavor for NASA—from both a technical and business 

standpoint.21 For example, SLI would require NASA to develop and 

advance new technologies for the new vehicle, including (1) new airframe 

technologies that will include robust, low-cost, low-maintenance structure, 

tanks, and thermal protection systems, using advanced ceramic and 

metallic composite materials, and (2) new propulsion technologies, 

including main propulsion systems, orbital maneuvering systems, main 

engines, and propellant management. The program would also require 

NASA to carefully coordinate and communicate with industry and 

government partners in order to reach agreements on the basic 

capabilities of the new vehicle, the designs or architectures that should be 

pursued, the sharing of development costs, and individual partner 

responsibilities. Last, the SLI project would require careful oversight, 

especially in view of past difficulties NASA has had in developing the 

technologies for reusable launch vehicles to replace the space shuttle. 

These efforts did not achieve their goals primarily because NASA did not 

 20U.S. General Accounting Office, Space Transportation: Critical Areas NASA Needs to 

Address in Managing Its Reusable Launch Vehicle Program, GAO-01-826T (Washington, 

D.C.: June 20, 2001). 

21See U.S. General Accounting Office, Space Transportation: Challenges Facing NASA’s 

Space Launch Initiative, GAO-02-1020 (Washington, D.C.: Sept. 17, 2002). 
Page 12 GAO-03-849T NASA Challenges and Risks 

develop realistic requirements and, thus, cost estimates, timely acquisition 

and risk management plans, or adequate and realistic performance goals. 

Most importantly, however, we reported that NASA was incurring a high 

level of risk in pursuing its plans to select potential designs for the new 

vehicle without first making other critical decisions, including defining the 

Department of Defense’s (DOD) role in the program; determining the final 

configuration of the International Space Station; and identifying the 

overall direction of NASA’s Integrated Space Transportation Plan. At the 

time, indications were that NASA and DOD differed on program priorities 

and requirements; NASA had yet to reach agreement with its international 

partners on issues that could dramatically impact SLI requirements, such 

as how many crew members would operate the station. 

NASA agreed with our findings and, in October 2002, postponed its 

systems requirements review for SLI so that it could focus on defining 

DOD’s role, determine the future requirements of the International Space 

Station, and firm up the agency’s future space transportation needs. In 

November 2002, the administration submitted to the Congress an 

amendment to NASA’s fiscal year 2003 budget request to implement a 

new Integrated Space Transportation Plan. The new plan makes 

investments to extend the space shuttle’s operational life for continued 

safe operations and refocuses the SLI program on developing an 

orbital space plane—which provides a crew transfer capability to and 

from the space station—and next-generation launch technology. The 

Integrated Space Transportation Plan is an integral part of our ongoing 

work assessing NASA’s plans to assure flight safety through space shuttle 

modernization through 2020. 

As NASA proceeds with its revised plans, it will still be important for 

NASA to implement management controls that can effectively predict 

what the total costs of the program will be and minimize risks. These 

include cost estimates, controls designed to provide early warnings of cost 

and schedule overruns, and risk mitigation plans. With such controls in 

place, NASA would be better positioned to provide its managers and the 

Congress with the information needed to ensure that the program is on 

track and able to meet expectations. 
Page 13 GAO-03-849T NASA Challenges and Risks 

In addition to taking actions to address its management challenges, NASA 

uses various mechanisms to communicate lessons garnered from past 

programs and projects. In 1995, NASA established the Lessons Learned 

Information System (LLIS), a Web-based lessons database that managers 

are required to review on an ongoing basis. NASA uses several 

mechanisms to capture and communicate lessons learned—including 

training, program reviews, and periodic revisions to agency policies and 

guidelines—but LLIS is the principal source for sharing lessons 

agencywide. In January 2002, we reported that NASA had recognized the 

importance of learning from the past to ensure future mission success and 

had implemented mechanisms to capture and share lessons learned.22

However, spacecraft failures persist, and there is no assurance that 

lessons are being applied toward future mission success. We reported that 

insufficient risk assessment and planning, poor team communications, 

inadequate review process, and inadequate system engineering were often 

cited as major contributors to mishaps. (See table 1.) 

 22See U.S. General Accounting Office, NASA: Better Mechanisms Needed for Sharing 

Lessons Learned, GAO-02-195 (Washington, D.C.: January 2002). 

Better Mechanisms 

Needed for Sharing 

Lessons Learned 
Page 14 GAO-03-849T NASA Challenges and Risks 

Table 1: Persistent Reasons for Spacecraft Failures 

At that time, we also reported on a survey we conducted of NASA’s 

program and project managers. The survey revealed that lessons are not 

routinely identified, collected, or shared by programs and project 

managers. The survey found that less than one-quarter of the respondents 

reported that they had submitted lessons to LLIS; almost one-third did not 

even know whether they had submitted lessons. In addition, most 

respondents could not identify helpful lessons for their program or 

project. 

Furthermore, many respondents indicated that they were dissatisfied with 

NASA’s lessons learned processes and systems. Managers also identified 

challenges or cultural barriers to the sharing of lessons learned, such as 

the lack of time to capture or submit lessons and a perception of 

intolerance for mistakes. They further offered suggestions for areas of 
Page 15 GAO-03-849T NASA Challenges and Risks 

improvement, including enhancements to LLIS and implementing 

mentoring and “storytelling,” or after-action reviews, as additional 

mechanisms for lessons learning. 

While NASA’ s current knowledge management efforts should lead to 

some improvement in the sharing of agency lessons and knowledge, they 

lack ingredients that have been shown to be critical to the success of 

knowledge management at leading organizations. Cultural resistance to 

sharing knowledge and the lack of strong support from agency leaders 

often make it difficult to implement an effective lessons-learning and 

knowledge-sharing environment. We found that successful industry and 

government organizations had overcome barriers by making a strong 

management commitment to knowledge sharing, developing a welldefined business plan for implementing knowledge management, 

providing incentives to encourage knowledge sharing, and building 

technology systems to facilitate easier access to information. The 

application of these principles could increase opportunities for NASA to 

perform its basic mission of exploring space more effectively. 

To fulfill its vision, NASA is taking on a major transformation aimed at 

becoming more integrated and results-oriented, and at reducing risks 

while working more economically and efficiently. However, to 

successfully implement its human capital, financial management, and 

other reforms, NASA will need sustained commitment from senior leaders. 

Given the high stakes involved, it is critical that NASA’s leadership provide 

direction, oversight, and sustained attention to ensure that reforms stay on 

track. NASA’s Administrator, who comes to the position with a strong 

management background and expertise in financial management, has 

made a personal commitment to change the way NASA does business and 

has appointed a chief operating officer to provide sustained management 

attention to strategic planning, organizational alignment, human capital 

strategy, performance management, and other elements necessary for 

transformation success. The challenge ahead for NASA will be to achieve 

the same level of commitment from managers at NASA centers so that 

NASA can effectively use existing and new authorities to manage its 

people strategically and quickly implement the tools needed to strengthen 

management and oversight. 
Page 16 GAO-03-849T NASA Challenges and Risks 

This testimony was drawn from the most recent23 in a series of GAO 

reports first issued in 1999 as well as additional reports that summarize 

numerous individual GAO reviews that identify important management, 

oversight, and workforce issues facing NASA. The purpose of the series is 

to help sustain congressional attention and an agency focus on continuing 

to make progress in addressing these issues. The individual reviews were 

conducted in accordance with generally accepted government auditing 

standards. 

Chairman Gehman, this concludes my statement. I will be happy to answer 

any questions you or members of the board may have. 

Contacts and Acknowledgments 

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

(202) 512-4841. Individuals making key contributions to this testimony 

included Jerry Herley, Shirley Johnson, Charles Malphurs, and Karen 

Sloan. 

 23GAO-03-114. 

Objectives, Scope, 

and Methodology 

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