Kennedy Space Center

ANNUAL

REPORT

FY 1997

ANNUAL

REPORT

FY 1997

Preserving the Past Preserving the Past Leading the Present Leading the Present Building the Future Building the Future
ANNUAL

REPORT

FY 1997

Kennedy Space Center

ON BACK COVER: A Delta II expendable launch vehicle lifts off with NASA’s

Advanced Composition Explorer (ACE) spacecraft from Cape Canaveral Air

Station.

ON FRONT COVER: (Background photo) The Space Shuttle Discovery soars

into space. (From left) Kennedy Space Center visitors gaze at the powerful

engines of the restored Saturn V rocket in the Apollo/Saturn V Center; KSC

employees prepare the Node 1 for launch on the first Space Shuttle mission to

build the International Space Station; the Checkout and Launch Control System is under development at KSC.

Table of Contents

Introduction and Overview ................................................................. 1

Mission Achievements and Initiatives ................................................. 7

Institutional Achievements and Initiatives......................................... 13

Preparing for the Future ................................................................... 19

Reaching Out ................................................................................... 25

Statement of the Chief Financial Officer .......................................... 33

Financial Statements........................................................................ 34
Introduction

and

Overview

The John F. Kennedy Space Center (KSC) has a nearly

40-year tradition of excellence in processing and launching space vehicles and their payloads. The Center’s outstanding record of achievements in America’s space program has earned it an honored place in history and an

essential role in the present; KSC also intends to play a

vital part in the future of space exploration.

The Center’s unique capabilities and expertise have been recognized by the National Aeronautics and Space Administration

(NASA), which has designated KSC as the Center of Excellence

for Launch and Payload Processing Systems.

In further recognition of its core capabilities and strengths,

Kennedy Space Center was assigned the following lead center

responsibilities in Fiscal Year 1997 (FY 97):

• Lead Center for Acquisition and Management of Expendable

Launch Vehicle Services (assigned in FY 97, still in transition)

• Lead Center for Payload Carriers and Support

• Lead Center for Occupational Health

• Lead Center for NASA’s Benchmarking activities in Continual

Improvement

1
• Lead Center for the National Electronic Key Management System and the NASA Central Office of Record for Communications Security, and Federal Arrest Authority Training

• Lead Center for managing the Outsourcing Desktop Initiative

for the Office of Space Flight Centers, including KSC, Johnson

Space Center, Marshall Space Flight Center and Stennis Space

Center

• Lead Center for NASA Consolidated Helium Acquisition

Kennedy Space Center was the first NASA field center to be

honored in the President’s Quality Award Program. In 1995, the

Center won the Quality Improvement Prototype Award and a year

later was a Presidential Award for Quality finalist, receiving a Special Achievement Award for its accomplishments in the application

of quality management principles and practices.

New Leadership

During FY 97, the mantle of leadership at Kennedy Space Center transferred from Jay F. Honeycutt, center director since January 1995, to Roy D. Bridges Jr., who came on board March 2,

1997.

After his appointment by NASA Administrator Daniel S. Goldin,

Bridges quickly put together a top management team to oversee

all aspects of Center operations:

Loren J. Shriver as deputy director for Launch and Payload

Processing; James L. Jennings

as deputy director for Business

Operations; and JoAnn H. Morgan as associate director for Advanced Development and

Shuttle Upgrades.

NASA Administrator Daniel S. Goldin (center) welcomes new Kennedy Space

Center Director Roy D. Bridges Jr. (left) and thanks retiring KSC Director Jay F.

Honeycutt for his many years of service to the space program.

2
Implementation Plan and Road Map

With the participation of the work force, and after extensive

consultations with customers and suppliers, the KSC leadership

team developed an Implementation Plan for NASA’s Strategic Plan

and a Road Map for KSC’s future through 2025. The process of

developing the Implementation Plan and Road Map produced a

Core Business (mission) statement, a set of four Guiding Principles and four Strategic Goals which all members of the KSC

team now share as a guide for future decisions.

Core Business: The KSC Core Business is to provide space

systems processes, test, and launch techniques and develop associated technologies.

Guiding Principles:

• Safety and Health First

• Build Reliance and Teamwork Everywhere

• Satisfy Our Customers’ Needs Anytime, Anywhere

• Environmental Leadership

Strategic Goals: The Center’s goals help implement the NASA

Strategic Plan and its four strategic enterprises: Human Exploration and Development of Space; Aeronautics and Space Transportation Technology; Space Science; and Earth Science.

The Center’s Strategic Goals are:

1) Assure safe, sound, and efficient practices and processes are in place for private/commercialized launch

site processing;

2) Increase the use of KSC’s operational expertise to contribute to the design and development of new payloads

and launch vehicles;

3) Utilize KSC operational expertise in partnership with

other entities (NASA Centers, industry, academia) to

develop new technologies for future space initiatives;

4) Continually enhance core capabilities (people, facilities,

equipment and systems) to meet NASA objectives and

customer needs for faster, better, cheaper development

and operations of space systems.

Loren J. Shriver

James L. Jennings

JoAnn H. Morgan

Roy D. Bridges Jr.

3
Road Map: The Road Map identifies specific objectives and strategies to accomplish the Center’s

goals and meet the objectives of the Agency and its

strategic enterprises. The plan identifies an initial set

of performance indicators in areas such as cost,

safety and reliability. Kennedy Space Center will

monitor the performance indicators to ensure that it

continues to bring the most value to its customers.

The KSC Road Map envisions a carefully executed transition from a predominantly operations role

to a development role for the civil service work force.

The Road Map will continue to be refined and updated to meet current and projected needs.

Restructuring and Refocusing Resources

Along with the formation of the new top management team,

there was a major refocus of Center resources as well as a renewed push to improve processes.

In line with NASA’s work force restructuring plans, the KSC

civil service work force was further reduced, from 2,099 to 1,886,

through buyout incentives and an aggressive outplacement plan.

1997 was the first full year under the Space Flight Operations

Contract (SFOC) awarded to United Space Alliance (USA) for consolidation of ground processing and operations. SFOC assigns

greater responsibility to the contractor, reducing the government’s

role in overseeing day-to-day Shuttle operations. During FY 97,

NASA made considerable strides in the transition from an oversight role to an insight role in space flight operations.

As part of the structured approach to transition to SFOC, the

Center’s Safety Assurance Program was significantly improved

by consolidating 20 safety-related documents into a single policy

which details safety requirements without mandating how compliance is to be achieved.

Also in the Safety and Mission Assurance Directorate, substantial progress was made to reduce the Government Mandatory Inspection Points in accordance with the Agency’s plan to

turn over responsibility for day-to-day Shuttle operations to the

contractor.

A significant milestone in the transition of NASA functions to

USA occurred in 1997 with transfer of test management oversight

of many daily Shuttle processing operations from the NASA Test

Directors Office to the contractor.

KSC employees fill out paperwork

for the third civil service buyout.

The Center’s environmental stewardship allows wildlife such as this

famous pair of Southern Bald

Eagles to coexist with technology,

as represented by the Vehicle Assembly Building (background at

right).

4
The transition of all 1997 targeted NASA logistics functions to

the SFOC contractor was completed, and SFOC logistics initiatives to improve efficiency and reduce costs made substantial

progress.

The SFOC contract represented only one of the recent ways

Kennedy Space Center signaled that it is changing the way it does

business. The two other largest contracts at the Center, the Payload Ground Operations Contract and the Base Operations Contract, were renegotiated to performance-based contracts. A Structured Surveillance System was developed — and will be implemented — to automate much of the work necessary to provide

assessment of contract performance.

For the Payload Ground Operations

Contract alone, the conversion to a performance-based contract reduced the

number of pages in the Statement of

Work by 88 percent, decreased the data

requirements by 62 percent, and reduced the overall contract cost by 37

percent over five years.

Also, Kennedy Space Center and

the Air Force 45th Space Wing are making history in a unique partnership

formed to award a contract for joint base

operations and support in FY 98. The

joint contract is expected to lower costs

and increase responsiveness of services for space customers at Kennedy

Space Center, Cape Canaveral Air Station and Patrick Air Force Base.

Other significant advances during FY 97 occurred in the fields

of quality management and process improvement.

In response to a directive by the NASA Administrator, the Center launched a major effort to obtain certification in ISO 9001, an

international set of standards for quality management systems.

The Integrated Logistics Division of United Space Alliance was

the first KSC organization to earn the ISO 9001 certification.

KSC’s Ground Safety Review Panel was recognized as one of

the best processes in NASA in the Department of Navy’s Best

Manufacturing Practices Report. The report also cited the KSC

Technology Programs and Commercialization Office for its impleUnited Space Alliance closeout crew members assist an STS-82

astronaut into the Space Shuttle Discovery.

5
mentation of a superior system for new technology development

and commercialization.

KSC’s innovative use of information technology (IT) earned it

a spot as one of the year’s top 100 IT performers on the Chief

Information Officer 100 (CIO 100) list published by CIO magazine.

KSC: A Business Doing Government Work

The Center Director established the Business Innovation Group

(BIG) to focus and integrate the centerwide efforts in strategic planning, International Organization for Standardization (ISO) 9001

certification, performance measurements, benchmarking and Continual Improvement activities. Besides helping senior management

with the development of a Strategic Implementation Plan and Road

Map for KSC’s future, the Business Innovation Group developed

a structured electronic Business Management System, and a World

Wide Web-based information resource, Business World. Other

innovative products are a Business System Manual and Business

Objectives & Agreement documents which link the organizations

with the goals, objectives and strategies of the KSC Road Map.

Kennedy Space Center has developed the knowledge, process and tools to support NASA’s strategic management process

at the Center level. With a firm commitment to use benchmarking

as an integral part of the strategy for improvement, KSC has initiated significant benchmarking activities in areas of critical importance to the Center such as safety and quality.

In recognition of this leadership, KSC was named the lead center for NASA’s benchmarking activities.

6
Kennedy Space Center is a world leader in space launch,

landing and payload processing operations. The KSC

team is responsible for ground turnaround and support

operations, prelaunch checkout and launch of the Space

Shuttle and its payloads, and the landing and recovery

of the Shuttle orbiter and payloads, as well as the

recovery of the reusable solid rocket boosters. The space

center also provides launch support and oversight for

NASA activities related to expendable launch vehicle

(ELV) missions, primarily from adjacent Cape Canaveral

Air Station in Florida and Vandenberg Air Force Base in

California.

Mission

Achievements

and Initiatives

Framed by a flock of birds in the

foreground, the Space Shuttle

Atlantis lifts off on Mission STS-84,

one of four night launches in FY 97.

7
Space Shuttle

One of the most significant indicators of operational performance at Kennedy Space Center is the cost per Shuttle flight, as

shown in the chart below. In 1990, the Center’s cost per flight was

$165 million; by 1997, it had decreased to $93 million, which represents a $72 million cost savings (avoidance) per flight. The reduction in the cost-per-flight is a result of a broad spectrum of

Continual Improvement initiatives, including improved equipment

and work package design, better scheduling, and higher production quality. Safety remains the number one priority.

0

50

100

150

200

250

300

350

Equivalent Flts

Total Cost per Flt

Launch & P/L Ops**

Orbiter Logistics

*OTHER

*ROS

R&PM

97$

208

112

44

14

20

18

FY90

5.7

FY91

6.2

FY92

7.3

FY93

6.9

FY94

7.3

FY95

7.2

FY96

7.6

FY97

8.1

RY$

163

89

34

11

15

14

RY$

148

79

30

13

13

13

RY$

155

84

30

20

8

13

RY$

137

76

23

18

7

13

RY$

124

68

22

18

5

11

RY$

114

63

18

18

5

10

RY$

93

49

16

16

4

8

RY$

165

89

35

11

16

14

97$

199

108

42

13

19

17

97$

171

91

35

15

15

15

97$

174

93

34

23

9

15

97$

147

82

25

19

7

14 

97$

131

71

23

19

6

12 

97$

116

64

19

18

5

10 

97$

93

49

16

16

4

8 

R&PM

* ROS

* Other

Orbiter Logistics

Launch & P/L Ops

Cost (97$)

in Millions 97$147

(RY$137)

97$208

(RY$165) 97$199

(RY$163) 97$171

(RY$148)

97$174

(RY$155)

97$131

(RY$124) 97$116

(RY$114) 97$93

(RY$93)

Kennedy Space Center

Cost Per Flight***

(Equivalent Flight)

*Charges between OTHER & ROS due to institutional budget restructuring

**Includes SFOC-KSC Processing (Data Furnished by JSC)

***As of 4th QTR FY 97

8
Flights

During FY 97, eight Space Shuttles lifted off, carrying 45 crew

members into space, logging more than 35 million miles, and taking several major payloads into orbit. The Shuttle orbiters on all

eight missions returned home safely to KSC’s Shuttle Landing

Facility, the preferred Shuttle landing site.

Seven missions were planned, but an eighth, STS-94, was

added as a reflight of the STS-83 mission with the Microgravity

Science Laboratory-1 payload. STS-83 was cut short by 12 days

because of concerns about a fuel cell.

The STS-94 flight three months later was the first reflight of

the same payload and crew in Shuttle history. The KSC launch

team processed the orbiter Columbia for reflight in 56 calendar

days, a post-return-to-flight record.

The total flight time of the Space

Shuttle program passed the twoyear mark during STS-86, the

eighth and last mission of FY 97,

which lifted off in September.

The orbiter Endeavour rejoined

the four-vehicle fleet in March after returning from its first scheduled

Orbiter Maintenance Down Period

(OMDP) in California. Atlantis, veteran of 20 Space Shuttle flights and

seven Mir docking missions, was

readied for ferry flight to California

for its second OMDP.

Also during FY 97, the two

NASA ships that retrieve spent

solid rocket boosters for the Space Shuttle program received an

additional job – delivering the Shuttle external tanks that are manufactured in Michoud, LA, to Kennedy Space Center. The first tow

operation was not scheduled until the spring of 1998, but the hardware was delivered in 1997 to NASA’s Hangar AF on Cape

Canaveral Air Station, home port for the two retrieval ships.

Payloads

The KSC team processed 23 payloads to fly in the Shuttle

payload bay and more than 30 middeck payloads during FY 97.

Atlantis glides in for a landing

on Runway 33 at KSC’s

Shuttle Landing Facility.

9
The Microgravity Science Laboratory-1 (MSL1) payload was prepared for flight twice, on STS83 and STS-94, and the quick turnaround between those two missions was accomplished in

part by the efficient reservicing of the MSL-1 payload in Columbia. It marked the first time a primary payload was reserviced in the orbiter.

Two major payloads flew on STS-80: The

Orbiting Retrievable Far and Extreme Ultraviolet

Spectrometer-Shuttle Pallet Satellite (ORFEUSSPAS) made its second flight and the Wake

Shield Facility flew for the third time. The primary

payload on STS-85 was the Cryogenic Infrared

Spectrometers and Telescopes for the Atmosphere-Shuttle Pallet

Satellite (CRISTA-SPAS). The KSC team also prepared the payload for the second servicing of the Hubble Space Telescope on

STS-82.

The SPACEHAB Double Module was used as a cargo container for hardware and supplies to and from the Russian Space

Station Mir on three Shuttle flights.

The KSC team routinely was asked to accommodate unusual

or late cargo additions to the Shuttle-Mir docking missions. A Russian oxygen generator was added to the cargo manifest of STS84 only a few weeks before launch to replace a malfunctioning

unit on the Mir. On STS-86, KSC was asked to fulfill a unique

request under a tight timetable because of the collision of a Russian cargo vehicle with a Mir module. The KSC team worked with

the Russians to fill three air pressurization units with highly compressed air for breathing. The task was a first for Shuttle payload

workers because of the extremely high air pressurization requirements.

The KSC team also processed hardware and payloads for several future missions, beyond FY 97, preserving the processing

schedule even in the case of design problems and late hardware

deliveries, as occurred with the Neurolab payload targeted to fly

on STS-90 in 1998.

Through a payload customer workshop and new partnerships

with universities and commercial firms, changes in payload policies and processes were identified to streamline payload operations and make them more cost-effective.

The Microgravity Science Laboratory-1 Spacelab module is lowered

into Columbia’s payload bay during

STS-83 prelaunch preparations.

Payload workers perform final prelaunch processing of the Near Infrared Camera and Multi-Object

Spectrometer (NICMOS) to be installed on the Hubble Space Telescope during STS-82.

Technicians look over a Russianmade oxygen generator that Space

Shuttle Atlantis will transport to the

Russian Space Station Mir on Mission STS-84.

10
KSC managed several Shuttle payload packages with science

experiments, including Biological Research in Canisters on STS85, Biorack on STS-81 and STS-84, and a Shuttle/Mir Phase 1

experiment.

The Life Science Aquatic Laboratory at Kennedy Space Center opened in FY 97, offering dedicated science labs to payload

customers who require launch/landing processing of aquatic specimens.

Expendable Launch Vehicles and Payloads

In 1997, KSC was assigned lead center responsibility for

NASA’s acquisition and management of expendable launch vehicle (ELV) launch services. Transition plans got under way with

scheduled completion by the end of FY 2002.

The KSC ELV team processed five major payloads for expendable vehicle launches during FY 97. In November and December

1996, it provided launch day management and processing insight

for two Mars exploratory missions — Mars Global Surveyor and

Mars Pathfinder — both launched on Boeing Delta II rockets from

Cape Canaveral Air Station. Another Delta II rocket in August 1997

carried NASA’s Advanced Composition Explorer (ACE) to study

low-energy particles of solar origin and high-energy galactic particles.

From May through September, the ELV team worked with contractors Boeing and Motorola to use NASA’s launch facilities at

Vandenberg for commercial launches of four Iridium telecommunications satellites.

The KSC team performed similar support for two Pegasus

launches during this time: the Satelite de Aplicaciones Cientificas

(SAC-B) and the High Energy Transient Experiment (HETE) in

November 1996 from Wallops Flight Facility; and Seastar from

Vandenberg Air Force Base (VAFB), CA, in August 1997.

KSC also provided engineering assessment and launch management for the third in a series of sophisticated weather satellites called Geostationary Operational Environmental Satellites

(GOES) which lifted off from the Eastern Range on an Atlas-Centaur rocket in April.

KSC provided vehicle assessment functions for the Cassini

mission to Saturn in preparation for its launch on a Titan IVB/CenThe Sojourner rover undergoes a

final functional check at KSC before

being attached to the Mars Pathfinder lander.

The Saturn-bound Cassini spacecraft is lifted inside a KSC processing facility in preparation for its

transport to the launch pad at adjacent Cape Canaveral Air Station.

11
taur vehicle in early FY 98. The Center also played a key role in

contingency planning and field support to radiological operations

for the processing and launch of the Cassini spacecraft.

The KSC ELV team enhanced its partnerships with NASA’s

Jet Propulsion Laboratory in California and Goddard Space Flight

Center in Maryland, developing new approaches for payload processing to reduce cycle time and improve payload design.

Advanced Life Support

Kennedy Space Center scientists contributed to important research in advanced life support systems for current and future

missions.

In the area of plant space biology, KSC completed the development of an experiment to test an innovative nutrient delivery

system in microgravity. The Center received approval from NASA

Headquarters to begin development of a flight experiment to study

plant photosynthesis in microgravity.

KSC scientists also wrapped up the first largescale evaluation of rice grown in the Biomass

Production Chamber, and assisted in a human

test of the Advanced Life Support Program at

Johnson Space Center. KSC’s responsibility in

the test was to recycle minerals from inedible

plant biomass, and assist in the growth of a wheat

crop.

Center researchers and payload engineers

also completed most of their prelaunch work on

the Collaborative Ukrainian Experiment (CUE),

the largest and most comprehensive KSC-developed payload to date. A set of 10 plant space

biology experiments, CUE was developed to fly

on Space Shuttle Mission STS-87 in November

1997.

Kennedy Space Center also initiated a joint

project with the Department of Energy to evaluate remote sensing instruments to determine their

capability to detect plant stress at an early stage

of growth. The project is on display at Walt Disney

World’s Epcot®.

An Atlas-Centaur expendable

launch vehicle carrying the Geostationary Operational Environmental

Satellite (GOES-K) lifts off from

Cape Canaveral Air Station.

Plant researchers examine a harvest of lettuce grown in

the KSC Biomass Production Chamber.

12
With its 140,000 acres containing over 20 major facilities, Kennedy Space Center has more than the average

size – and many of the same resources – of a small city.

It has been called “a community within a community.”

The environmentally unique federal property coexists with

the Merritt Island National Wildlife Refuge and is home

to more than 500 species of wildlife, including 21 on

threatened or endangered lists. Stewardship of the refuge and the many one-of-a-kind operational facilities is

an essential aspect of the Center’s mission.

Institutional

Achievements

and Initiatives

The Great White Heron is one of

more than 300 species of birds

which make their home in and

around operational areas of

Kennedy Space Center.

13
Facilities

Kennedy Space Center made major progress in preserving

the legacy of the Apollo era, and planning for the future through

upgrades and construction of facilities during FY 97. A major new

attraction, the Apollo/Saturn V Center, opened as part of the

Kennedy Space Center Visitor Complex in January. The 100,000-

square-foot facility houses a restored 363-foot-long Saturn V rocket

just like those that took Americans to the moon in the late 1960s

and early 70s.

Construction also began on two other new tour sites for public

visitors – a 60-foot-high observation gantry in the heart of Launch

Complex 39 and an International Space Station exhibit facility,

both of which officially opened in January 1998. These improvements are made with non-appropriated funds generated by sales

to the nearly three million visitors annually at the KSC Visitor Complex.

Construction of new and upgrade or renovation of

existing operational facilities continued in FY 97. Construction began on the 34,600-square-foot Space

Shuttle Main Engine Processing Facility which is an

addition to Orbiter Processing Facility Bay 3. Space

Shuttle main engine operations now housed in the

nearby Vehicle Assembly Building will be moved into

the new facility in 1998 to increase the capacity and

efficiency of engine operations.

Construction was completed on the Component Refurbishment and Chemical Analysis Facility, which is

scheduled to be fully operational in September 1998.

Extensive modifications were made to Launch Pad

39B, and to facilities serving both Space Shuttle pads. Two elevators dating back to the 1960s and instrumentation cables were

replaced, the Firex fire suppression system got a facelift, the pumping station that services both pads was modernized, and new pipelines to each pad were installed.

The largest electrical project at Kennedy Space Center since

the 1960s was completed with a major upgrade and restoration of

the C5 Substation, the primary interface between the Florida Power

& Light Co. and critical facilities in the Launch Complex 39 area.

New runway centerline lights were installed at KSC’s Shuttle

Landing Facility, an additional 7,500 tons of cooling capacity was

Launch Pad 39B gets an extensive

overhaul during FY 97.

The Space Shuttle Main Engine

Processing Facility takes shape in

the Launch Complex 39 area.

14
added to the Industrial Area Chiller Plant, and major upgrades

were completed of the 32-mile gaseous nitrogen pipeline which

supplies KSC and Cape Canaveral Air Station and of the fire alarm

and detection system at the Operations and Checkout Building.

The Schwartz Road landfill was closed, and a new Class III landfill opened.

The conversion of the KSC Print Shop into a Duplicating Facility was completed, upgrading equipment and refurbishing those

work areas for the first time in 20 years.

Environmental Initiatives

The Center continued to make significant strides in protecting

and enhancing its natural resources. KSC developed an innovative Memorandum of Agreement with the U.S. Fish and Wildlife

Service on restoration activities for wetlands and scrub habitat at

the Center.

The Center also advanced in its efforts to remediate contamination sites by developing and implementing new technologies to

assess and clean up past contamination. Two hazardous waste

streams at the Center were reduced and the KSC hazardous waste

reduction goal was exceeded during FY 97. A small solar distillation system for minimizing hazardous waste was designed, fabricated and tested.

While the Center already recycled its paper and cardboard, in FY 97 it also implemented a program to recycle aluminum cans.

KSC efforts in developing advanced environmental

decision support systems led to enhanced mapping of

manatee use areas in the Banana River, and scrub jay

habitat on Kennedy Space Center and adjacent Cape

Canaveral Air Station.

Kennedy Space Center also began a joint venture

with the U.S. Air Force to develop and test a system to

recover and convert unused rocket propellant oxidizer,

a hazardous waste, into liquid fertilizer. The effort is

expected to save $83,000 annually, while reducing

waste byproducts, lowering operational costs, and eliminating the

second largest hazardous waste stream at KSC and the Air Forceoperated Cape Canaveral Air Station.

Space Shuttle commanders have

new runway centerline lights to help

them guide orbiters home to KSC’s

Shuttle Landing Facility.

Center officials kick off a new KSC

environmental initiative to recycle

aluminum cans.

15
Energy Conservation Initiatives

During FY 1997, Kennedy Space Center earned $201,000 in

utility rebates from Florida Power & Light Co., bringing the total

amount to nearly $886,000 since KSC’s first rebate in FY 94. The

rebates are used as incentives for implementing energy-efficient

projects. Included in the 1997 rebates was $195,000, KSC’s largest single-project rebate, awarded for installing energy-efficient

equipment during the Industrial Area Chiller Plant expansion.

KSC also became the first NASA installation to participate in

the Department of Energy (DOE) Super Energy Savings Performance Contracting program which enables federal organizations

to use DOE-contracted energy service companies to perform energy efficient projects from energy bill savings. Award of the KSC

project is expected during FY 98.

The space center already has exceeded the requirement set

by Executive Order 12902 to reduce energy consumption by 20

percent by the year 2000, based on a FY 85 baseline.

Health Initiatives

KSC was named the Agency’s lead center for occupational

health in 1997. Kennedy Space Center already has completed

assessments of occupational health programs for all the NASA

centers, identifying strengths and weaknesses that can be addressed to enhance the health and well-being

of the Agency’s work force. Also, a new system

linking environmental health professionals on

the Internet allows centers to share problems

and expertise.

At Kennedy Space Center, new health services were provided to employees.

RehabWorks was established to provide physical rehabilitative therapy for employees while

reducing medical expenses and the use of sick

leave.

Significant progress was made in evaluation of new methods of preventing heat stress

in workers who must wear personal protective

equipment.

Kennedy Space Center Director

Roy D. Bridges Jr. (right) receives

a $195,000 rebate check for energy

conservation from Florida Power &

Light Co.

A KSC employee undergoes ultrasound treatment to an injured knee as part of the new RehabWorks program.

16
Other Efficiency, Safety and Cost-Savings

Initiatives

Kennedy Space Center has a well-established tradition of Continual Improvement initiatives to increase efficiency and reduce

costs. Quality management has evolved as an integral part of KSC

operations since the Center was established in 1962.

The Engineering Development Directorate alone

lists 17 examples of FY 97 initiatives to reduce operations time, increase safety and improve reliability. They include the development of: a prototype

cable line inspection mechanism to remotely inspect,

measure and videotape inaccessible cable lines; advanced cryogenic and hypergolic hazardous gas and

fire detection systems; and the Automated Window

Inspection Device for locating and measuring micrometeoroid damage to Shuttle orbiter windows.

The Payload Processing Technical Documentation Archive was

designed, developed and activated in 1997. The system eliminates the need for microfiche in the Payload Processing Directorate and brings the information to the user via the World Wide Web.

Currently a repository of about 50,000 documents, this system is

growing at an average of 2,500 new documents a month.

KSC demonstrated its commitment to its foremost guiding principle, “Safety and Health First,” by adopting the DuPont Executive

Leadership and Operations Managers Safety Training program in

FY 97.

Technology Innovations

FY 97 proved to be another successful year for innovations in

technology at Kennedy Space Center. Under the auspices of the

Center’s technology transfer and commercialization programs, nine

patents were filed and seven new patents were issued for KSCdeveloped technologies.

The Center also received $23,000 in royalties on KSC-licensed

technologies, and over 200 cash Space Act Awards were presented

to employees for their support in developing and commercializing

new technologies.

The technology used to develop insulation for protecting the

Space Shuttle orbiter from temperatures up to 3,000 degrees Fahrenheit was transferred to BSR/TPS Products Inc., Mooresville,

KSC senior managers participate in

the DuPont Executive Leadership

and Operations Managers Safety

Training program.

17
N.C., for manufacture of thermal protection system materials for

race cars. The BSR thermal protection kit was the first product to

bear the Mission HOME official seal, which indicates that the product was developed directly from U.S. space program technology.

Other examples of recent technology innovations at KSC are:

• Development of a two-phase quality/flow meter for use in

cryogenic fluid systems. This technology may be commercialized by Air Products in Allentown, PA.

• Completion of development for new cryogenic thermal insulation with Small Business Innovative Research Program

partner, Aerospace Design and Development.

• Development of an advanced ultrasonic leak detection and

location device.

• Commercialization of a Universal Signal Conditioning Amplifier, the key component of the new KSC-developed Automated Data Acquisition System which monitors temperature, pressure and vibration measurements at the Shuttle

launch pads.

KSC had a key leadership role in establishment of an international technology advancement discussion forum, The Humionics

Society, which focuses on the potential benefits of advancing stateof-the-art technologies associated with wearable computers. The

society includes representatives of other NASA centers, other government agencies, and academia.

A KSC employee (above) installs a

Universal Signal Conditioning Amplifier (USCA) for testing at the

Launch Equipment Test Facility. The

USCA is a key component of the Automated Data Acquisition System

(ADAS), which includes a circuit

board as shown in the photo at left.

ADAS monitors temperature, pressure and vibration measurements at

the Center’s launch pads.

18
The diversity of work performed by the KSC work force

in 1997 reflected the Center’s commitment to keeping

the Space Shuttle operational and the International Space

Station program on track, as well as laying the groundwork for Kennedy Space Center to perform an integral

role in future Moon/Mars initiatives and the development

of new technologies. The civil service work force will move

from an operations role to a developmental role as KSC

positions itself for the future.

Preparing for

the Future

The Hubble Space Telescope

(HST) captures this 1997 image of

the planet Mars.

19
International Space Station

Preparations for the on-orbit assembly of the International

Space Station (ISS) accelerated at the space center during

1997 with arrival of the elements for the first U.S. assembly

flight, STS-88, scheduled for 1998. The Space Shuttle Endeavour will carry into space the Node 1, with two Pressurized Mating Adapters (PMAs) attached, to provide the interface between the U.S. and Russian-built elements of the

station.

With KSC as the final checkpoint for U.S.-launched station hardware, other ISS elements are undergoing preflight

processing in the Space Station Processing Facility. Approximately 45 Shuttle missions are scheduled to deliver components for the on-orbit construction of the International Space

Station.

KSC’s Space Station Hardware Integration Office is the

program’s primary agent for the management and integration of all U.S.-launched elements. KSC teams assigned by

missions under Phase II and Phase III of the program worked

at the primary U.S. manufacturing locations (Huntsville, AL; Huntington

Beach, CA; and Canoga Park, CA)

to accomplish the on-time delivery of

the Node 1 and PMAs, and initiate

the Phase III hardware integration

operations.

The Center’s Space Station and

Shuttle Payloads Directorate provided processing support for hardware in the Space Station Processing Facility, while completing preparations for processing the Mini Pressurized Logistics Modules in FY 98.

Teams worked to incorporate Multi

Element Integrated Testing into the

ISS program, to manage the arrival

and processing of trusses and other elements, to develop a

vacuum chamber capability at KSC for leak testing, and to

devise a Certificate of Flight Readiness Plan.

The Node 1 and Pressurized Mating Adapter-1 undergo prelaunch

processing at KSC’s Space Station

Processing Facility.

The first International Space Station

assembly flight will be highlighted

by the mating of the Russian-built

Control Module, suspended above

the orbiter Endeavour’s payload

bay (upper right) to the conical

mating adapter at the top of the

U.S.-built Node 1 (center) using the

orbiter’s mechanical arm.

20
Engineering Development designed, fabricated, installed

and tested ground support equipment and systems for International Space Station operations at KSC.

The Payload Carriers Program transferred three Spacelab

pallets to the Space Station Processing Facility for integration on early ISS assembly flights; three more pallets have

been committed to future space station missions.

During FY 97, Kennedy Space Center continued to perform a critical prelaunch processing role in the successful

docking missions of the Space Shuttle with the Russian

Space Station Mir under Phase I of the International Space

Station. Three of the nine planned Shuttle-Mir docking missions occurred in 1997.

Space Shuttle Upgrades

Kennedy Space Center is providing major contributions

to NASA’s plan to assure safe and continuous operation of

the Shuttle fleet through the year 2012 and to incorporate

major improvements.

One of the primary upgrades is the Checkout and Launch

Control System (CLCS), under development at KSC to replace the Launch Processing System which has been used

since the 1970s. The CLCS will reduce launch processing

time while lowering system operating costs by 50 percent. It

will feature several major improvements over the Launch

Processing System, including the capability to monitor more

than one orbiter from the same firing

room. The first major milestone in the design and development of the CLCS was

reached in March 1997 with the opening

of an experimental control room in KSC’s

Launch Control Center. The CLCS is

slated to be fully operational by September 2001.

Another important Shuttle upgrade

project in which KSC plays a key role is

the Integrated Vehicle Health Monitoring

System, designed to reduce planned

ground processing work, streamline unplanned work, enhance visibility into orbiter systems operation and improve vehicle safety.

The International Space Station

(ISS) will be the largest and most

complex international cooperative

science and engineering program

ever attempted.

STS-84 Space Shuttle astronauts

capture this image of the Russian

Space Station Mir on orbit around

Earth.

The new Checkout and Launch

Control System undergoing development and testing at the Center

will replace the 1970s-era Launch

Processing System.

21
During FY 97, a significant Shuttle upgrade was implemented as a result of efforts of the Integrated Vehicle Health

Management Team and the

CLCS Team. After a fuel cell

anomaly cut short the STS-83

mission, a team from Kennedy

Space Center, Johnson Space

Center and contractor Boeing

North American quickly developed a new Fuel Cell Monitoring System for the orbiter fleet.

This team compressed a standard development cycle from

two-and-a-half years to five

months, readying the new system for installation in Columbia for the STS-87 mission in

November 1997. The team

since has installed this upgrade on three of the orbiters.

Other KSC teams are working on proposed Shuttle upgrades varying from liquid flyback boosters and less-toxic

waterproofing for Thermal Protection System tiles, to a new

payload carrier.

KSC’s Shuttle Payload Upgrades Team initiated a fiberoptic flight experiment which is scheduled to fly on STS-95

in 1998. This pathfinder experiment is designed to validate

fiber-optic performance in the Shuttle environment, with the

long-term goal of reducing launch processing cycle time.

Reducing turnaround time in ground processing will be

particularly important as the Shuttle fleet prepares for up to

15 flights a year in the next century.

“KSC’s future depends on bringing the most

value to where the Agency and our customers

are going . . .Making the move to a more developmental role is a tough balancing act. We must

perform the critical role we have today with the

Shuttle and expendable launch vehicles, while

creating the new roles which will allow us to build

the International Space Station and go on to

Mars and beyond.”

Roy D. Bridges Jr., Center Director

This is one conceptual view of liquid fly-back boosters, flanking the

external tank (center), for the Space

Shuttle program.

22
Next-Generation Launch Vehicles

KSC entered into a partnership with other NASA centers

and industry in the development of next-generation crewed

launch vehicles. A team of KSC employees is working with

the X-34 program to support the flight

design and any KSC operations involving the X-34 demonstrator vehicle.

Kennedy Space Center will provide

landing support for some of the test

flights.

NASA and the Spaceport Florida

Authority signed a Memorandum of Understanding agreeing to partner in the

construction of a launch and landing

support facility at Kennedy Space Center to be used for the X-34 program.

The KSC environmental staff also

played a major role in writing the environmental impact statement for the X33, a subscale technology prototype

which Lockheed Martin Skunk Works

hopes to develop in the next century as a full-scale, commercial single-stage-to-orbit reusable launch vehicle called

VentureStarTM.

Among the KSC initiatives in future vehicle development

undertaken by KSC’s Engineering Development Directorate were:

• A study of hydrogen entrapment, acoustics and cryogenic/pneumatic systems for Evolved Expendable

Launch Vehicles;

• Design of X-33 ground support equipment;

• Development of an umbilical system for future launch

vehicle ground support;

• Consultation and technical expertise to the Bantam

booster and Sea Launch projects.

This recent artist’s concept shows

the design of the X-34 vehicle.

Like the Space Shuttle, the X-33

subscale technology prototype

vehicle will launch vertically and

land horizontally.

23
Lunar/Mars Missions

During FY 97, Kennedy Space Center formed an Exploration Think Tank to integrate planning for future robotic and

human missions to Mars. The Think Tank identified strong

KSC core capabilities in cryogenics, autonomous processing,

bioregenerative plant growth, advanced instrumentation, electrostatic discharge analysis and testing, and integrated vehicle health

management.

Kennedy Space Center is leading the effort in the NASA Logistics Benchmarking Study of Antarctic Long Duration Expeditions.

The purpose of the study is to research and assess the logistics processes and innovations

used today to explore Antarctica with its isolation, frigid temperatures and high winds, in an effort to better understand

the complex logistical requirements for a long-duration

manned mission to the planet Mars.

The Mars Pathfinder arrives on

Mars on July 4, 1997.

The first humans to land on Mars will need this Cargo Lander-1

which would include an automated fuel manufacturing plant, an

inflatable habitation module and a rover for transporting the module to the vehicle that carried the crew to the Red Planet.

24
Reaching Out . . .

Outreach is at the heart of NASA’s and Kennedy

Space Center’s mission, and FY 97 was particularly

noteworthy in the Center’s long tradition of reaching out

to a world audience, to the community at large, to

educators and students, and to businesses and other

organizations which can benefit from KSC’s unique

knowledge and expertise.

Local elementary students use

surplus computer equipment

donated by Kennedy Space Center.

25
To the World

Kennedy Space Center reaches out to a world audience

through its popular World Wide Web pages. During FY 97, the

Home Page Redesign Team undertook

a major redesign effort to establish for

the first time a consistent look and feel

for the Center’s top Web pages. Implementation began in October 1997.

The Kennedy Space Center Visitor Complex celebrated its 30th anniversary as a NASA visitor center, welcoming an estimated 2.7 million visitors from around the world to Florida’s

fifth most popular tourist attraction, and

the best-attended of all NASA’s visitor

centers. A major undertaking to expand services and open new

attractions at the Visitor Complex was well under way in 1997,

with the opening of the new Apollo/Saturn V Center and construction of two new tour destinations. Also, the Space Shuttle mockup

was completed in 1997 with the addition of the final major element, a full-scale external tank. One of three original test articles,

the tank had been on display at Stennis Space Center in Mississippi.

A global audience also emerged from the worldwide coverage

of KSC activities by more than 2,500 accredited press members

representing 33 countries.

 The space center continued to be a moviemaking mecca as it

hosted the filming of two major motion pictures, Contact and Armageddon, and two television series, The Cape and HBO’s From

the Earth to the Moon, as well as a number of smaller productions. For Contact alone, more than 2,300 cast, crew, extras and

KSC staff were involved with filming on a single day. KSC was

reimbursed for use of its facilities.

The British rock group, Genesis, launched its new album with

a space theme, Calling All Stations, in a concert broadcast on the

radio and over the Internet from KSC’s Apollo/Saturn V Center.

To the Community at Large

Months of planning and coordination across the Center culminated on Oct. 19, 1996, when an estimated 32,000 people drove

through the gates to attend KSC’s first Community Appreciation

“We will communicate widely the content, relevancy, and excitement of NASA’s missions

and discoveries to inspire and to increase understanding and the broad application of science and technology.”

NASA Strategic Plan Goal

A 60-foot-high observation tower is

one of two new tour destinations

under construction in FY 97.

Filming for the Home Box Office

(HBO) series, From the Earth to the

Moon, includes a scene shot in the

Operations and Checkout Building

and featuring the Apollo 18 Lunar

Module.

26
Day. Many area residents got a close-up look for the first time at

sights normally off-limits to the general public. Distribution of the

booklets/placards and sign-up sheets was accomplished through

a cooperative effort with the Brevard County Library System.

Fifty-two area non-profit service organizations set up booths

at two Center locations for KSC’s second annual Community Expo

held in 1997. The Expo introduced KSC employees to services

available in the area; it also served as a source of new volunteers

for the organizations.

KSC civil service employees set a new

record in donations to the Combined Federal

Campaign, which provides funds to national

and local charitable organizations.

Center employees also participated in several blood drives and were honored for their

record-setting response to a bone marrow

registration drive held at KSC. More than 900

potential donors were added to the National

Bone Marrow Registry as a result of the 1997

KSC drive – a new record for the most people

registered in a single day in a three-state region.

The Space Coast’s Federally Employed Women chapter participated in the sixth annual Make a Difference Day, a national day

of helping others, by working to improve the lives and living conditions of children at a state home in the area. The NASA Kennedy

Space Center Management Association (NKMA) was recognized

by Keep Brevard Beautiful Inc. for its participation in the Adopt-AShore program.

KSC representatives under the auspices of the popular Speakers Bureau made nearly 300 presentations reaching a total audience of more than 70,000 people during 1997. One presentation

sparked the KSC-assisted redecoration of two rooms at the Pediatric Unit of Florida Hospital Waterman in Eustis with space-related murals.

KSC also participated in area trade shows and other events,

among them the weeklong Lakeland (FL) Fun ‘n Sun Air Show

with an exhibit on NASA-developed technologies that have contributed to aviation.

Area residents attending KSC’s first

Community Appreciation Day got

close-up views of many sights usually off-limits to the public such as

the three main engines (in background at left) of orbiter Discovery.

A Kennedy Space Center security

dog is a hit with children at

Community Appreciation Day.

27
To Students and Teachers

Kennedy Space Center directly reached more than 125,000

students and teachers through its diverse educational outreach

efforts in 1997. Many of KSC’s education programs for the first

time were measured and tracked on the NASA Education Computer Aided Tracking System (EDCATS) to meet the requirements

of the Government Performance and Results Act of 1993, the

National Performance Review and the NASA Metrics Program.

Kennedy Space Center employees and resources were involved in a wide array of education programs: from teacher workshops to Spacemobile visits; from Exploration Station programs

to reactivation of the engineering co-operative program: from participation in Engineers/Scientists Education Outreach to forming

new partnerships with universities, K-12 schools and the state.

Among the KSC highlights, the Center or its employees:

• Worked with 19 community colleges around the country to

develop a new first-and second-year math curriculum based

on real-world space vehicle processing activities at the

Center.

• Initiated several Internet-related programs, including the Virtual Science Mentor Program and Space Team On-line, to

provide additional resources to faculty and students and to

stimulate interest in math and science,

• Donated surplus computer equipment and established a

surplus software loan program for schools. Since the surplus equipment program began in 1994 under the

Stevenson-Wydler Act, the space center has donated to

schools more than 14,000 items valued in excess of $38

million.

• Completed a pilot program, the KSC Technical Resources

for Education Program, which places newly retired NASA

employees in public schools as technical consultants.

• Established the NASA Minority Parternership Awards program which is designed to provide students and faculty with

exposure to high-technology small businesses.

• Led a student team which participated in the For Inspiration and Recognition of Science and Technology (FIRST)

national engineering contest. The FIRST teams competed

in conceiving, designing and constructing robotic devices.

The KSC-led team placed 14th nationally and was the top

NASA team.

Robot 4608 demonstrates its abilities at the national finals of an engineering contest sponsored by For

Inspiration and Recognition of Science and Technology (FIRST). KSC

engineers joined with local high

school students to participate in the

robotic competition.

Space Coast FIRST team high

school students assemble the robot

for the competition.

Area students participate in the

KidSat educational project by tracking the orbiter’s position during the

STS-81 mission.

28
• Helped to coordinate an effort by local schools to participate in KidSat, a pilot project which enables students to

make Earth observations by remotely commanding KidSat

cameras onboard Shuttle orbiters, and downlinking the

images for use in classroom studies. KidSat flew twice in

FY 97, on STS-81 and STS-86.

• Participated in the Center for High-Tech Training for Individuals with Disabilities program which trains the disabled

in computer-related skills. For its participation, KSC was

named corporate sponsor of the year.

• Met with all Brevard County school principals in a major

push to expand the Southeastern Consortium for Minorities in Engineering (SECME) program. SECME is designed

to increase the number of minority and female students

who are qualified for entering and completing studies in

engineering, science and math by enriching their academic

preparation.

• Sponsored several summer educational programs to give

students real-world work experience, including the NASA

Scholars Program, the Summer Aid program, the Summer

High School Apprenticeship Research Program, and the

Space Life Sciences Training Program.

• Completed and tested NASA’s Scott Carpenter Space Analog Station, a functional, human-tended simulator designed

for use underwater to demonstrate concepts of life support

systems to students from kindergarten through grade 12.

The station operated for 31 days on the sea floor near Key

Largo, FL, exposing several million tomato seeds to a pressure of 1.7 atmospheres, while an identical cargo was exposed to the vacuum of space aboard Atlantis on the nearly

11-day STS-86 mission. The seeds from the joint experiment will be distributed to schools for testing as an educational outreach project. The underwater station was designed by KSC engineers and outfitted with instrumentation by KSC technicians. It was commissioned in November 1997.

To Businesses and Other Organizations

KSC sponsors programs to help companies do business with

NASA, as well as programs which promote the transfer of NASAdeveloped technology to the private sector for commercialization.

A University of Central Florida student participates in the NASA Scholars Program at KSC.

KSC engineers and technicians

designed and outfitted NASA’s Scott

Carpenter Space Analog Station, a

human-tended simulator for underwater use.

29
Kennedy Space Center’s seventh annual Business Opportunities Expo in December 1996 attracted more than 200 vendors

from around the country. Considered to be one of the premier business opportunity events in the Southeast, the Expo brought together representatives from industry, NASA and contractors to

share information about needs and services.

KSC’s Central Industry Assistance Center, located just outside

the Center’s gate, gives companies a central location for describing their products and services while at the same time learning

about the Center’s needs.

The Center’s efforts in enhancing competition for federal contracts by easing the

bidding process for all businesses once

again was recognized nationally during FY

97 with the prestigious Competition Advocacy Award from NASA Headquarters. KSC

has won the award in three of the last four

years.

The Florida/NASA Business Incubator

Center celebrated the graduation of its first

tenant in June 1997. The center is managed through a joint partnership of Kennedy

Space Center, Brevard Community College

and the Technological Research and Development Authority. It was created in 1996 to increase the number of successful technology-based small businesses in the area

by providing necessary resources such as office space and computer access.

The KSC Technology Programs and Commercialization Office

evaluated the commercial potential of 22 Small Business Innovation Research projects which resulted in $5.7 million in contracts

to small businesses supporting KSC mission needs.

During FY 97, 14 new partnership agreements were signed

with commercial organizations for joint NASA/commercial development of mission-required technologies. Other KSC-developed

technologies were transferred to private industry for commercial

applications.

The KSC Technology Transfer

booth is a highlight of the Center’s

seventh annual Business Opportunities Expo at Port Canaveral.

The first tenant to graduate from the

Florida/NASA Business Incubator

Center demonstrates the software

package he developed.

30
For example, firefighters and other rescue workers around the

world may soon use the KSC-developed liquid air pack which can

provide twice as much breathing air per pound than conventional

units. More than a decade ago, KSC employees designed the compact air packs for hazardous operations around the Center and

for Space Shuttle astronaut rescue crews who must enter the narrow orbiter passages in case of an emergency at the launch pad.

Commercial development had been hampered by the lack of a

means to produce small amounts of liquid air at the sites of fires

and other emergencies. But a new KSC-developed mobile liquid

air mixing unit will enable commercialization of the advanced air

pack technology.

Kennedy Space Center also continued to help other agencies

and organizations find solutions to problems. During FY 97, the

NASA Materials Science Laboratory analyzed debris samples from

two airplane accidents, including the TWA Flight 800 disaster in

which a Paris-bound plane crashed shortly after takeoff from New

York in July 1996, killing all 230 people on board.

The laboratory also provided assistance

to the Brooksville (FL) Regional Medical

Center when water from a broken sprinkler

nozzle soaked hundreds of patient records.

The records were then frozen and delivered

to KSC. Armed with heat and a large vacuum

chamber, KSC laboratory personnel dried 37

boxes of records over a three-and-a-halfweek period using the sublimation process

to prevent ink smearing by removing the

water before it turned liquid. The recovered

records were then digitally scanned and no

data was lost. NASA expenses for this

project were reimbursed through a Space

Act agreement.

A Spelman College student and

Women in Science and Engineering Scholar at KSC demonstrates

use of the X-ray Photo Electron

Spectrometer in the Materials Science Laboratory.

A KSC technician connects a liquid

air mixing device to dewars of liquid nitrogen and liquid oxygen. The

mobile liquid air mixing unit will enable commercialization of a liquid

air pack for firefighting and other

rescue uses.

31
“Kennedy Space Center is in a unique

position to carry the U.S. space

program into the next century. Our work

force has no equal in the launch and

payload processing business, and our ability to look to

the future and prepare for the natural evolution of

missions and technology will ensure that we are

strategically positioned to respond to those needs. While

we look forward to preparing for the on-orbit assembly

and operation of the International Space Station, we also

eagerly embrace the challenge of what lies beyond,

whether it be a return human mission to the moon or the

first crewed expedition to Mars. We’ll be ready.”

Roy D. Bridges Jr., Center Director

32
STATEMENT OF THE CHIEF FINANCIAL OFFICER

The Fiscal Year (FY) 1997 financial statements (unaudited) have been prepared to report the financial

position and results of NASA’s operations, pursuant to the requirements of the Chief Financial Officers

(CFOs) Act of 1990 and the Government Management Reform Act of 1994. These statements include

the Statement of Financial Position and the Statement of Operations and Changes in Net Position.

These statements include all Kennedy Space Center’s activities and 100 percent of the Center’s

budget authority.

While the statements have been prepared from the books and records of NASA, in accordance with

formats prescribed by the Office of Management and Budget (OMB) Bulletin 94-01, the statements

are different from financial reports used to monitor and control budgetary resources which are prepared from the same books and records.

The statements should be read with the realization that they are for an agency of the U.S. Government, a sovereign entity. Liabilities not covered by budgetary resources cannot be liquidated without

the enactment of an appropriation, and payment of all liabilities, other than for contracts, can be

abrogated by the sovereign entity.

These financial statements were prepared in accordance with Federal accounting standards. These

standards are evolving through the efforts of the Federal Accounting Standards Advisory Board

(FASAB). This board includes members from the Office of Management and Budget (OMB), the

General Accounting Office (GAO), and the Department of Treasury (Treasury). Numerous standards

have been developed and promulgated. Some will not become effective until 1998. Currently, NASA

observes the following hierarchy of accounting standards as required by OMB:

• individual FASAB standards published by OMB, GAO, and Treasury;

• OMB guidance on the form and content of financial statements;

• Agency accounting guidance, which represents prevalent practice; and

• accounting principles published by other authoritative sources.

NASA Headquarters, which receives its funding through annual Congressional appropriations, authorizes

and funds KSC operations. KSC’s total operational expenses for FY 1997 were:

 Amount

Appropriation (in thousands)

Human Space Flight $ 341,608

Mission Support 254,115

Science, Aeronautics, and Technology 43,941

Construction of Facilities 3,738

Space Flight Control and Data Communications (144)

Research and Development (27)

Research and Program Management (16)

Total Expenses $ 643,215

The preparation of this Annual Report was made possible through the teamwork and diligence of the

professionals at KSC.

James L. Jennings

Acting, Chief Financial Officer

National Aeronautics and

Space Administration

John F. Kennedy Space Center

Kennedy Space Center, FL 32899

33
FINANCIAL STATEMENTS

1997 1996

Assets:

Intragovernmental Assets:

 Fund Balance With Treasury (Note 2) $ 257,903 $ 438,177

 Accounts Receivable, Net (Note 3) 6,238 6,580

Governmental Assets:

 Accounts Receivable, Net (Note 3) 703 1,304

 Advances and Prepayments 0 41

Property, Plant and Equipment (Note 4) 2,314,963 8,032,066

Other Assets (Note 5) 166,959 350,303

 Total Assets $ 2,746,766 $ 8,828,471

Liabilities:

Liabilities Covered by Budgetary Resources:

 Intragovernmental Liabilities:

 Accounts Payable $ 19,918 $ 32,132

 Other Liabilities (Note 6) 364 1,057

 Governmental Liabilities:

 Accounts Payable 95,448 162,618

 Other Liabilities (Note 6) 7,149 7,769

 Total $ 122,879 $ 203,576

Liabilities not Covered by Budgetary Resources:

 Intragovernmental Liabilities:

 Other Liabilities (Note 6) $ 57 $ 52

 Governmental Liabilities:

 Other Liabilities (Note 6) 16,468 17,808

 Total $ 16,525 $ 17,860

 Total Liabilities $ 139,404 $ 221,436

Net Position (Note 8):

 Unexpended Appropriations $ 141,965 $ 242,022

 Invested Capital 2,481,923 8,382,369

 Cumulative Results of Operations 0 0

 Future Funding Requirements (16,526) (17,356)

 Total Net Position $ 2,607,362 $ 8,607,035

Total Liabilities and Net Position $ 2,746,766 $ 8,828,471

The accompanying notes are an integral part of these statements.

National Aeronautics and Space Administration

John F. Kennedy Space Center

Statement of Financial Position

As of September 30 (In Thousands)

34
FINANCIAL STATEMENTS

1997 1996

Revenues and Financing Sources:

Appropriated Capital Used $ 622,162 $ 1,511,279

Revenues from Sales of Goods and Services:

 To the Public 4,414 1,830

 Intragovernmental 16,639 15,779

Other Revenues and Financing Sources (Note 9) 302 1,434

Less: Receipts Transferred to Treasury (302) (1,434)

 Total Revenues and Financing Sources $ 643,215 $ 1,528,888

Expenses:

Program or Operating Expenses by Appropriation:

 Human Space Flight $ 326,109 $ 1,221,788

 Mission Support 250,838 235,208

 Science, Aeronautics and Technology 41,632 36,598

 Construction of Facilities 3,718 807

 Space Flight Control and Data Communications (92) 1,446

 Research and Development (27) 13,374

 Research and Program Management (16) 2,057

Reimbursable Expenses 21,053 17,609

 Total Expenses $ 643,215 $ 1,528,888

Total Expenses in Excess of

Revenues and Financing Sources 0 0

Nonoperating Changes:

Unexpended Appropriations (Note 8) $ (100,056) $ 6,036

Invested Capital (Note 8) (5,900,447) (414,727)

Future Funding Requirements (Note 8) 830 (2,238)

 Total Nonoperating Changes $ (5,999,673) $ (410,929)

Change in Net Position $ (5,999,673) $ (410,929)

Net Position, Beginning Balance 8,607,035 9,017,964

Net Position, Ending Balance $ 2,607,362 $ 8,607,035

The accompanying notes are an integral part of these statements.

National Aeronautics and Space Administration

John F. Kennedy Space Center

Statement of Operations and Changes in Net Position

For the Year Ended September 30 (In Thousands)

35
FINANCIAL STATEMENTS

National Aeronautics and Space Administration

Kennedy Space Center

Notes to the Financial Statements

For the Year Ended September 30, 1997

1. Summary of Accounting Policies and Operations

Basis of Presentation

These financial statements were prepared to report the financial position

and results of operations of Kennedy Space Center, pursuant to the requirements of the Chief Financial Officers Act of 1990. The statements

were prepared from the books and records of KSC, in accordance with the

comprehensive basis of accounting specified in OMB Bulletin 94-01.

Reporting Entity

KSC is one of nine NASA field centers established to aid NASA in its mission to provide for aeronautical and space activities. Financial management of its operations is the responsibility of Center officials at all organizational levels. KSC’s accounting system is one of ten distinct operations

located at nine NASA Centers and Headquarters. Although KSC, like the

other Centers, is independent and has its own deputy chief financial officer

for finance, it operates under Agencywide financial management regulations. KSC provides payroll accounting for approximately 1,886 civilian employees and processes approximately 7,158 non-payroll related accounting

transactions monthly. This data provides the basic information necessary

to meet internal and external financial reporting requirements and provides

both funds control and accountability.

Seven appropriations require individual treatment in the KSC accounting

and control system.

(1) The Human Space Flight (HSF) appropriation supports human space

flight research and development activities for space flight, spacecraft control, and communications actions. This includes research,

development, operations, services, maintenance, and construction

of facilities, which encompasses the repair, rehabilitation, and modification of real and personal property.

(2) The Science Aeronautics and Technology (SAT) appropriation provides for the conduct and support of science, aeronautics, and technology. This includes research, development, operations, services,

maintenance, and construction of facilities, which encompasses the

repair, rehabilitation, and modification of real and personal property.

(3) The Mission Support (MS) appropriation provides for safety, reliability, and quality assurance activities supporting Agency programs,

space communication services for NASA programs, salaries and

related expenses in support of research in NASA Field Centers, and

construction of facilities, which encompasses the repair, rehabilitation, and modification of real and personal property.

36
(4) The Research and Development (R&D) appropriation, which was

FINANCIAL STATEMENTS

restructured and replaced in the 1995 budget, includes research

and development of aeronautics and space, space vehicles, space

systems effort, related institutional activities, minor construction repair, maintenance, rehabilitation, and modifications.

(5) The Space Flight, Control, and Data Communications (SFCDC) appropriation, which was restructured and replaced in the 1995 budget, includes production, operations and support activities for the

Space Transportation System which includes the Space Shuttle and

expendable launch vehicles and for tracking, telemetry, command

and data acquisition support of all flight projects.

(6) The Construction of Facilities (CofF) appropriation, which was restructured and replaced in the 1995 budget, includes the construction of new facilities and the repair, rehabilitation, and modification

of facilities.

(7) The Research and Program Management (R&PM) appropriation

which was restructured and replaced in the 1995 budget, includes

salaries, travel, and related expenses for the civil servants in support of NASA programs.

In addition to the basic operating programs described above, KSC expenditures in FY 1997 included $20 million of reimbursable activity.

Basis of Accounting

KSC accounts are maintained on an accrual basis (i.e., expense and revenue are recorded in the accounts in the period in which they are incurred

or earned). Expenses are classified in the accounts according to the appropriation that financed the activity. These expenses are coded in accordance with the Agencywide coding structure, which sets forth a uniform

classification of financial activity that is used for planning, budgeting, accounting, and reporting. The expenses are further categorized in the General Ledger as operating expenses or capitalized expenses.

Funds with the U.S. Treasury and Cash

KSC’s cash receipts and disbursements are processed by the U.S. Treasury. The funds with the U.S. Treasury include appropriated funds and

deposit funds for advances received for reimbursable services. Balances

are not held outside the U.S. Treasury.

Advances

KSC funds its University Contracts and Grants program through the use of

predetermined payment schedules where letters of credit are not used; recipients are required to schedule drawdowns to coincide with actual, immediate cash requirements, in accordance with OMB Circular A-125 and Department of Treasury regulations. Quarterly financial reporting of cash transactions is provided on Federal Cash Transactions Reports (SF 272’s). De37
FINANCIAL STATEMENTStailed monitoring and accountability records are maintained; monitoring

includes audits by the Defense Contract Audit Agency and NASA’s Office of

Inspector General.

Accounts Receivable

The largest portion of accounts receivable is due from other Federal agencies and includes research and development of satellites as well as launch

services. Nongovernment customers are required to provide advance payments which are placed on deposit with the U.S. Treasury until services are

performed. In unusual cases, exceptions and waivers to this general rule

have been granted under the Space Act, allowing customers to postpone

advance payments.

Property, Plant and Equipment

KSC-owned Property, Plant and Equipment may be held by the Center or

its contractors. Under the provisions of the Federal Acquisition Regulation

(FAR), contractors are responsible for control over and accountability for

such property in their possession.

Property, Plant and Equipment is not depreciated. NASA does, however,

calculate a “use” charge for application to commercial reimbursable customers, which includes factor for depreciation of facilities and equipment.

Automated data processing software is costed when acquired rather than

capitalized.

Equipment with a unit cost of $5,000 or more and a useful life of 2 years or

more, that will not be consumed in an experiment, is capitalized. Capitalized cost includes unit cost, transportation, installation, and handling and

storage costs.

Real property such as land, buildings, and other structures and facilities, is

capitalized when the asset value is $1,000 or more. The capitalized value

represents the total cost to NASA, including both acquisition and preparation costs. Land values are recorded at original acquisition cost and do not

reflect current value or include the cost of improvements. Buildings are

also valued at acquisition cost, including the cost of capital improvements

and fixed equipment required for functional use of the facility. Other structures include the acquisition cost of capital improvements.

Government-owned/Contractor-held property includes KSC materials, plant

equipment, space hardware, special tooling, and special test equipment.

Contractors are directed to annually report plant equipment costing $5,000

or more and having a useful life of 2 years and which will not be consumed

in an experiment. Reporting is also required for special test equipment,

special tooling, materials, and space hardware which, for the most part,

includes items that are in excess of $5,000; however, reporting on all such

items is required and their total value is included in the Statement of Financial Position. Contractors report, as of September 30, on a NASA Form

38
1018, Report of Government-owned/Contractor-held property, which is cerFINANCIAL STATEMENTS

tified by the contractor’s representative and reviewed by a Government property administrator.

Contractor-held space hardware includes flight pallets, mission peculiar experiment support structure, Spacelab, transfer tunnel, igloo assembly and

similar components unique to NASA space programs and held by NASA

prime contractors or their first-tier subcontractors who are responsible for

building, refurbishing and launching the hardware. Contractor reporting is

required for cost-type contracts exceeding $500,000 where space hardware costs exceed $75,000. These items are priced in accordance with

guidance set forth in a NASA supplement to the FAR. The valuation policy

allows for use of actual or estimated costs, which may be abstracts of data

from contractors’ records, computations based upon engineering estimates,

estimates from NASA contractor financial management reports, formula

procedures, latest acquisition/pricing estimates or other approved methods.

Based on a long-standing NASA practice, these items generally do not include profit or fees in the valuation basis because certain assets are not yet

completed. NASA is reevaluating this valuation practice in conjunction with

a broader property valuation analysis pursuant to emerging Federal property accounting standards.

Other Assets

Other assets include Government-owned/Contractor-held materials and

property held by disposal officers.

Liabilities

Accounts payable includes amounts recorded for receipt of goods or services furnished to the Center, based on receiving reports and billings rendered. Additionally, KSC accrues cost and recognizes liability based on

information that is provided monthly by contractors on cost and performance

reports (NASA Form 533, Contractor Financial Management Report). KSC

relies on independent audits by the DCAA to ensure the reliability of reported costs and estimates. To provide further assurance, financial managers are required to test the accuracy of cost accruals generated from the NF

533’s, and NASA Headquarters independently analyzes the validity of KSC’s

data.

Revenues and Other Financing Sources

KSC receives the majority of its funding through multi-year appropriations.

These include 3-year appropriations for construction activities, 2-year appropriations for operational and space flight activities, and a single year

appropriation for civil service payroll and travel. In addition to appropriated

funds, the Center performs services for other Federal agencies and the

public and receives reimbursable funding authority.

39
FINANCIAL STATEMENTS2. Fund Balance with Treasury: (In Thousands)

 Fund Balances:

Appropriated Funds $ 229,316 $ 25,497 $ 3,012 $ 257,824

 Deposit Funds 0

 Suspense/Clearing Accounts 79

 Total Fund Balance with Treasury $ 257,903

3. Accounts Receivable, Net: (In Thousands)

 Intragovernmental $ 6,238 $ 0 $ 0 $ 6,238

 Governmental 283 1,080 (660) 703

Total $ 6,521 $ 1,080 $ (660) $ 6,941

 Non-entity accounts receivable represent amounts that will be deposited to miscellaneous

 receipts when collected.

4. Property, Plant and Equipment: (In Thousands)

1997 1996 Change

 Government-owned/Government-held:

 Land $ 73,672 $ 73,672 $ 0

 Structures, Facilities and Leasehold 1,363,460 1,366,536 (3,076)

 Improvements

 Equipment 101,603 99,014 2,589

 Work in Process 81,785 119,553 (37,768)

 Total 1,620,520 1,658,775 (38,255)

 Government-owned/Contractor-held:

 Equipment 134,669 733,990 (599,321)

 Special Tooling 21,958 40,735 (18,777)

 Special Test Equipment 76,613 109,943 (33,330)

 Space Hardware 459,920 5,473,790 (5,013,871)

 Work in Process 1,283 14,833 (13,550)

 Total 694,443 6,373,291 (5,678,848)

 Total Property, Plant and Equipment $ 2,314,963 $ 8,032,066 $ (5,717,103)

 See Note 1 for further discussion on property, plant and equipment.

Obligated Unobligated

Available

Fund

Balance

Unobligated

Restricted

Entity

Accounts

Receivable

Non-Entity

Accounts

Receivable

Allowance for

Uncollectible

Receivables

Net Amount

Due

40
5. Other Assets: (In Thousands)

1997 1996 Change

FINANCIAL STATEMENTS

 Contractor-held Materials $ 166,959 $ 345,513 $ (178,554)

 Personal Property Held by the 0 4,790 (4,790)

 Disposal Officer

 Total $ 166,959 $ 350,303 $ (183,344)

 Personal Property Held by the Disposal Officer was transferred to Invested Capital.

 NASA changed, during Fiscal Year 1997, its accounting policies related to Personal Property

 Held by the Disposal Officer. This asset category represented excess property and the

 amounts were reduced to zero with a corresponding decrease to invested capital. Had this policy

 not been changed in FY 1997, the balance in this account would have been $47 million,

 as of September 30, 1997.

6. Other Liabilities: (In Thousands)

 Liabilities Covered by Budgetary Resources:

Current Non-Current Total

 Intragovernmental Liabilities:

 Liability for Deposit and Suspense Funds $ 364 $ 0 $ 364

 Total $ 364 $ 0 $ 364

 Governmental Liabilities:

 Liability for Deposit and Suspense Funds $ 237 $ 0 $ 237

 Accrued Funded Payroll and Benefits 6,912 0 6,912

 Total $ 7,149 $ 0 $ 7,149

 The liability for deposit and suspense funds includes cash advances received from other

 Government agencies and public reimbursable customers. Also included are funds on deposit

 with the U. S. Treasury for employees’ savings bonds and state tax withholdings.

 Liabilities Not Covered by Budgetary Resources:

Current Non-Current Total

 Intragovernmental Liabilities:

 Accounts Payable for Closed Appropriations $ 57 $ 0 $ 57

 Total $ 57 $ 0 $ 57

 Governmental Liabilities:

 Accounts Payable for Closed Appropriations $ 2,609 $ 0 $ 2,609

 Contingent Liabilities 390 0 390

 Unfunded Annual Leave 0 13,469 13,469

 Total $ 2,999 $ 13,469 $ 16,468

 See Note 1 for further discussion of liabilities not covered by budgetary resources.

41
FINANCIAL STATEMENTS7. Leases: (In Thousands)

 Entity as Lessor:

 Operating Leases:

 NASA leases and allows the use of its land, facilities, and equipment by the

 public and other Government agencies for a fee.

 Future Projected Receipts:

Land, Facilities

& Equipment

Year 1 $ 25

Year 2 25

Year 3 21

Year 4 1

Year 5 1

After 5 years 1

Total $ 74

8. Net Position: (In Thousands)

Appropriated Funds Total

 Unexpended Appropriations:

 Undelivered $ 113,456 $ 113,456

 Unobligated:

 Available 25,497 25,497

 Unavailable 3,012 3,012

 Invested Capital 2,481,923 2,481,923

 Cumulative Results 0 0

 Future Funding Requirements:

 Annual leave (13,469) (13,469)

 Closed appropriations (2,667) (2,667)

 Other (390) (390)

Total $ 2,607,362 $ 2,607,362

9. Other Revenues and Financing Resources: (In Thousands)

1997 1996

 General Fund Proprietary Receipts $ 302 $ 1,434

Total $ 302 $ 1,434

 General Fund Proprietary Receipts represent user fees, gifts, fines or interest penalties.

42