NASA Travel: Passenger Aircraft Services Annually Cost Taxpayers Millions More Than Commercial Airlines
Published: 2005-08-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since its creation, the National Aeronautics and Space Administration (NASA) has operated passenger aircraft services. These operations have been questioned in several prior audit reports. GAO was asked to perform a series of audits of NASA's controls to prevent fraud, waste, and abuse of taxpayer dollars. In this audit, GAO assessed (1) the relative cost of NASA passenger aircraft services in comparison with commercial costs, (2) whether NASA aircraft services were retained and operated in accordance with governmentwide guidance, and (3) the effectiveness of NASA's oversight and management of this program.
section_title: What GAO Found
paragraphs: NASA-owned and -chartered passenger aircraft services provide a perquisite to employees, but cost taxpayers an estimated five times more than flying on commercial airlines. While the majority of NASA air travel is on commercial airlines, NASA employees took at least 1,188 flights using NASA passenger aircraft services during fiscal years 2003 and 2004. Use of NASA passenger aircraft services can save time, provide more flexibility to meet senior executives' schedules, and provide other less tangible and quantifiable benefits. However, GAO's analysis of available reported data related to NASA passenger aircraft services during fiscal years 2003 and 2004 showed NASA reported costs were nearly $25 million compared with estimated commercial airline coach transportation costs of about $5 million. Further, this relative cost comparison, based on available NASA reported costs, did not take into account all applicable types of costs associated with its passenger aircraft services, including, for example, depreciation associated with the estimated $14 million NASA paid in 2001 to acquire several aircraft used for passenger transportation. Consequently, NASA's passenger air transportation services are much more costly than indicated by available data. Further, NASA is currently considering additional expenditures of about $77 million to upgrade and expand its existing passenger fleet. NASA's ownership of aircraft used to provide passenger transportation conflicts with federal policy allowing agencies to own aircraft only as needed to meet specified mission requirements, such as prisoner transportation and aeronautical research. GAO's analysis of NASA passenger aircraft flights for fiscal years 2003 and 2004 showed that an estimated 86 percent--about seven out of every eight flights--were taken to support routine business operations specifically prohibited by federal policy regarding aircraft ownership, including routine site visits, meetings, speeches, and conferences. Further, agencywide oversight and management of its passenger aircraft services was not effective. NASA's ability to make informed decisions on continued ownership of its passenger aircraft fleet and on flight-by-flight justifications was impaired by the lack of reliable agencywide data on aircraft costs and other weak management oversight practices.

section_title: Letter
paragraphs: Since its creation in 1958, the National Aeronautics and Space  Administration (NASA) has owned and operated a small fleet of aircraft to  provide passenger transportation.  These aircraft are in addition to  approximately 80 aircraft that NASA reported using in its research and  development and program support operations.  NASA also contracted with  charter carriers or had interagency agreements with other federal agencies  to obtain additional passenger air transportation services.  Collectively,  these NASA-owned and -chartered aircraft constitute NASA’s passenger  aircraft services.
As we have previously reported, NASA is now contending with urgent fiscal  challenges pressuring discretionary spending—requiring it to do more with  fewer resources--as it seeks to carry out its new vision for space  exploration.  In this context, you asked us to focus on controls to prevent  wasteful or abusive activity with respect to resources allocated to NASA’s  passenger aircraft services.  In general, federal policy provides that  agencies should operate aircraft only as necessary to meet mission  requirements, such as prisoner transportation or aeronautical research.   Federal agencies’ use of aircraft has been the subject of numerous audit  reports over the years, including a 1977 GAO report that concluded that  agencies should determine whether aircraft are “essential or merely nice to  have” and whether essential work could not be accomplished some  cheaper way.  In this regard, you requested that our audit address (1) the  relative cost of NASA passenger aircraft services compared with  commercial coach costs, (2) whether NASA’s retention and operation of  aircraft for passenger transportation was in accordance with applicable  governmentwide guidance, and (3) the effectiveness of NASA’s oversight  and management of its passenger aircraft services.
To determine and assess the relative costs of NASA’s passenger aircraft  with comparable commercial airline costs, we relied primarily on available  NASA cost data.  However, wherever feasible we validated NASA’s cost  data with comparable independent data sources, including industry data  from the manufacturers of both the Gulfstream and Beechcraft aircraft  NASA used to provide passenger transportation services.  Specifically, we  validated the cost estimates used in our analysis with cost metrics the  manufacturers reported related to their aircraft.  In addition, because  NASA did not maintain centralized agencywide data, we obtained available  flight-by-flight NASA passenger aircraft cost and usage data from source  documents maintained at NASA centers and compiled the information into  our database of agencywide information.  We did not attempt to determine  the validity or appropriateness of the travel, nor did we assess whether the  type and number of personnel using NASA passenger aircraft services were  appropriate given the stated flight purposes.
Further, while our audit focused on overall management controls in place  to prevent waste concerning NASA’s passenger aircraft services, it was not  designed to, nor did it include, investigations of any specific instances of  potentially abusive activity associated with travel on NASA’s passenger  aircraft.  Nonetheless, based on our work, it is clear NASA’s current policies  and practices result in significant waste of taxpayer funds.  Furthermore,  given the weaknesses we found in the agency’s controls over its passenger  aircraft services, significant abuse of such services is possible.  As a result,  we are planning a separate forensic audit and investigative review in this  regard and will report separately when it is completed.  Further details on  our scope and methodology are included in appendix I.  We performed our  work from November 2004 through June 2005 in accordance with U.S.  generally accepted government auditing standards and our investigative  work in accordance with investigative standards prescribed by the  President’s Council on Integrity and Efficiency.  We received written  comments on a draft of this report from the NASA Administrator which are  reprinted in appendix II.
subsections: section_title: Background
paragraphs: Under the provisions of the National Aeronautics and Space Act of 1958,  NASA is authorized to acquire aircraft.  Since its creation, NASA has  operated a small fleet of aircraft, primarily to provide passenger  transportation.  According to the 2004 General Services Administration’s  Federal Aviation Interactive Reporting System, NASA is one of six civilian  agencies that reported operating aircraft primarily for the purpose of  passenger transportation.
subsections: section_title: NASA’s Aircraft Inventory
paragraphs: In fiscal year 2003, NASA reported owning and operating a fleet of 85  aircraft valued at $362 million, including aircraft dedicated to program  support, research and development, and passenger transportation.
section_title: Program Support
paragraphs: NASA reported owning 53 aircraft that were used to provide support to  programs such as the Space Shuttle, International Space Station, and  Astronaut programs. The majority of these aircraft are located at the  Johnson Space Center.  For example, shuttle trainers are one type of  program support aircraft.  These aircraft have been modified to duplicate  the shuttle’s approach profile, cockpit cues, and handling qualities so that  astronaut pilots can see and feel simulated approaches and landings before  attempting an actual shuttle landing.
section_title: Research and Development
paragraphs: NASA reports owning 25 aircraft to support its research and development  efforts.  These aircraft have been modified to support the agency’s mission  to conduct aeronautical research at varying altitudes and atmospheric  conditions.  For example, NASA operates a modified Learjet 23 as a  research platform for the Airborne Terrestrial Land Application Scanner.
section_title: Passenger Transportation
paragraphs: NASA owns seven aircraft that are used to provide passenger  transportation.  In fiscal year 2004, NASA reported its seven passenger  aircraft carried nearly 10,000 passengers and logged nearly 4 million  passenger miles.  Figure 1 provides an overview of the aircraft owned and  operated by NASA to provide passenger transportation and their location.
In addition, NASA obtained passenger transportation services through the  Economy Act, a cooperative agreement, and a fractional ownership  contract with DOD, FAA, and Flexjet, respectively.
DOD–-Under provisions of the Economy Act, NASA acquired additional  passenger aircraft services from DOD using Gulfstream V aircraft.  DOD  provided documentation for three NASA flights of more than 60 flight  hours during fiscal years 2003 and 2004.  DOD billed NASA  approximately $290,000 for these services.
FAA—During fiscal years 2003 and 2004, NASA and FAA entered into a  shared-use cooperative agreement for four aircraft, three of which were  owned by FAA and the other by NASA.  All four aircraft were housed at  Reagan National Airport in Washington, D.C.  In exchange for  contributing its one aircraft and $1.1 million annually during 2003 and  2004, NASA received the right to 450 total flight hours per year on any of  the four aircraft.  Under this agreement, NASA could schedule flights on  these aircraft with a minimum of 24 hours advance notice.  FAA agreed  to pay routine maintenance, fuel, and personnel costs associated with  the NASA aircraft.  NASA was also allowed to purchase additional  hours, beyond the agreed 450 hours, at the hourly rate for the specific  aircraft used.  During the 2-year period, NASA utilized the four aircraft  in this arrangement for approximately 1,600 flight hours for a reported  cost of $4.5 million, which included charges for the original 900-hour  agreement plus charges for additional hours.
Flexjet–-In October 2000, conferees on the NASA fiscal year 2001  appropriation bills directed NASA to prepare a plan that considers  whether fractional ownership of passenger aircraft may be beneficial.   In July 2002, pursuant to the conferee guidance, NASA awarded a  contract with Flexjet for a 2-year demonstration program to determine  the viability of using fractional ownership to meet NASA’s administrative  air transportation requirements.  Under the 2-year demonstration NASA  reported cost of approximately $3.5 million in return for a total of  approximately 800 flight hours of passenger transportation services.
section_title: Federal Guidance on Aircraft Acquisition, Operation, and Retention
paragraphs: OMB Circular No. A-126 (Revised), Improving the Management and Use of  Government Aircraft (May 22, 1992), prescribes policies for executive  agencies to follow in acquiring, managing, using, accounting for the costs  of, and disposing of government aircraft.  This circular applies to all  government-owned, leased, chartered, and rental aircraft and related  services operated by executive agencies, except for aircraft while in use by  or in support of the President or Vice President.  OMB Circular No. A-126,  section 6, a., provides that the number and size of aircraft acquired and  retained by an agency and the capacity of those aircraft to carry passengers  and cargo should not exceed the level necessary to meet the agency’s  mission requirements.  OMB Circular No. A-126, section 5, b., defines  mission requirements to include activities related to the transport of troops  and/or equipment, training, evacuation (including medical evacuation),  intelligence and counter narcotics activities, search and rescue,  transportation of prisoners, use of defense attaché-controlled aircraft, and  aeronautical research and space and science applications.  OMB Circular  No. A-126, section 5, b. explicitly states that mission requirements do not  include official travel to give speeches, attend conferences or meetings, or  make routine site visits.
In addition to the policies prescribed by OMB Circular No. A-126, agencies  must also follow the guidance of OMB Circular No. A-76 before  purchasing, leasing, or otherwise acquiring aircraft and related services, to  assure that these services cannot be obtained from and operated by the  private sector more cost effectively.  Further, agencies must review  periodically the continuing need for all of their aircraft and the cost  effectiveness of their aircraft operations in accordance with the  requirements of OMB Circular No. A-76 and report the results of these  reviews to GSA and OMB.  Agencies are to report any excess aircraft and  release all aircraft that are not fully justified by these reviews.
Once an agency has justified that it has a valid mission requirement for  owning aircraft, OMB Circular No. A-126, section 8, a., permits agencies to  use aircraft for official, but nonmission-required travel when:   no commercial airline or aircraft service is reasonably available (i.e.,  able to meet the traveler’s departure and/or arrival requirements within  a 24-hour period, unless the traveler demonstrates that extraordinary  circumstances require a shorter period) to fulfill effectively the agency  requirement; or   actual cost of using a government aircraft is not more than the cost of  using commercial airlines.
OMB Circular No. A-126, section 14, also provides that agencies maintain  systems that will enable them to: (1) justify the cost-effective use of  government aircraft in lieu of commercially available air transportation  services, and the use of one government aircraft in lieu of another; (2)  recover the costs of operating government aircraft when appropriate; (3)  determine the cost effectiveness of various aspects of their aircraft  programs; and (4) conduct the cost comparisons required by OMB Circular  No. A-76 to justify in-house operation of government aircraft versus  procurement of commercially available passenger aircraft services.   Attachment B of OMB Circular No. A-126 also provides that agency systems  must accumulate and summarize costs into the standard passenger aircraft  program cost elements.  For example, standard cost elements would  include items such as fixed and variable crew costs, maintenance costs,  fuel costs, and overhaul and repair costs.
section_title: GSA Implementing Regulations
paragraphs: In addition, the General Services Administration (GSA) established  governmentwide policy on the operation of aircraft by the federal  government—including policies for managing the acquisition, use, and  disposal of aircraft that the agencies own or hire.  GSA publishes its  regulatory policies in the Code of Federal Regulations (C.F.R.).  GSA also  publishes a number of other guides and manuals to help agencies manage  the acquisition, use, and disposal of aircraft.  These publications include  the U.S. Government Aircraft Cost Accounting Guide, which contains  information on how agencies should account for aircraft costs, and the  Fleet Modernization Planning Guide, which provides guidance on  developing cost-effective fleet replacement plans.
section_title: Past NASA Inspector General Reporting on NASA Passenger Aircraft
paragraphs: NASA’s Inspector General (IG) issued two reports on NASA’s passenger  aircraft, one in 1995 and another in 1999.  Both NASA IG reports were  critical of NASA’s management of these aircraft, identifying weaknesses in  NASA’s accounting and justification for its passenger aircraft.  In its 1995  report, the NASA IG reported that NASA passenger aircraft cost an  estimated $5.8 million more annually when compared with commercial  airline transportation.  The IG recommended actions with respect to  NASA’s (1) compliance with many of the provisions of OMB Circular Nos.  A-126 and A-76 (including fully considering commercial airlines as an  alternative to NASA operations of passenger aircraft services), (2) use of  outdated and incomplete cost data to justify trips and approval of some  trips without adequate justifications, and (3) use of passenger aircraft that  were more expensive to operate than using commercial airline services.
The IG’s 1999 report focused on one passenger aircraft located at NASA’s  Marshall Space Flight Center and estimated that the cost of commercial  airlines in comparison with the NASA-owned aircraft was $2.9 million less  over a 5-year period.   Similar to the 1995 report, the 1999 report was also  critical of NASA’s implementation of guidance in OMB Circular Nos. A-126  and A-76.  Further, the report noted that the agency had not effectively  addressed actions recommended in the 1995 report concerning the need to  more fully and effectively evaluate the use of commercial airlines.  The IG  recommended that NASA management dispose of the passenger aircraft at  Marshall and instead use commercial airlines to satisfy Marshall’s air  transportation requirements.  NASA management disagreed with the  findings of both IG reports, stating that commercial airlines cannot  effectively meet all the mission requirements and the capability of NASA  aircraft outweighs the marginal costs savings of total reliance on  commercial airlines.
section_title: NASA Passenger Aircraft Costs Are Substantially More Than Commercial Airline Costs
paragraphs: An analysis of NASA’s reported costs for its passenger aircraft services  shows they are an estimated five times more costly than commercial airline  coach tickets.  For purposes of this aggregate comparative cost analysis,  we considered available NASA reported data on costs applicable to its  passenger aircraft services—both variable and fixed costs--in comparison  with commercial airline service costs.  Specifically, to assess the aggregate  costs associated with NASA-owned and -chartered passenger aircraft, we  accumulated available NASA annual report passenger aircraft services cost  data for fiscal years 2003 and 2004, validated to the extent feasible with  industry standards, and compared these cost estimates with total estimated  commercial airline costs based on the cost of an average coach ticket.  We  determined that NASA’s reported costs for the aircraft it owned or  chartered were on the order of about $20 million more costly over a 2-year  period than if NASA had used commercial airline services to carry out the  same number of business trips.  Specifically, estimated costs associated  with NASA’s passenger aircraft operations during fiscal years 2003 and 2004  were almost $25 million, while we estimated the cost of commercial coach  tickets for the same number of travelers would have been approximately $5  million—about $20 million more to provide NASA passenger aircraft  services than if commercial airlines were used to provide passenger  transportation over the 2-year period.
Table 1 summarizes our analysis of commercial and NASA passenger  transportation costs by types of NASA-owned or -chartered aircraft.  We  identified the number of passengers from NASA’s aircraft request forms and  NASA annual performance reports.  We then multiplied the identified  number of passengers by our estimate of NASA’s average commercial  coach round-trip ticket cost.  We determined the average coach round-trip  ticket cost of approximately $426 by analyzing all airfares purchased with  NASA’s travel cards in fiscal years 2003 and 2004.  Specifically, we identified  approximately $49,776,000 in round-trip airfare tickets in NASA travel card  purchases during fiscal years 2003 and 2004, and divided this dollar amount  by the number of tickets purchased (116,865) to determine an average  ticket cost of approximately $426.  Finally, we compiled an estimate of  NASA’s passenger aircraft service costs, which included costs related to  personnel, maintenance, and fuel, from annual cost reports and budget  information provided by NASA.
This calculation of the difference between the relative cost of NASA- provided passenger transportation services and commercial airline costs  does not consider per diem, in-transit salary and benefits, and other factors  associated with using NASA passenger services.  NASA officials believe  that a comparison of NASA and commercial airline passenger services  should include estimates of such cost savings shown in its passenger  aircraft request forms.  We recognize that, to the extent that all passengers  on the aircraft had a valid purpose for travel, there may be personnel- related cost savings associated with use of NASA’s passenger aircraft  services; however, it was not feasible for us to reliably identify such costs  using independent (non-NASA) sources.  Further, as discussed in a  subsequent section of this report, we have concerns about the reliability of  some of NASA’s cost and associated savings data captured in its flight  request documentation.  In addition, we also identified questionable  savings attributed to non-official travelers.
However, NASA’s cost estimates do serve to provide indicators of general  ranges of costs that may be avoided by using NASA passenger aircraft  services.  Using available NASA documentation of costs that would have  been incurred if commercial airlines were used would increase the  estimated commercial airline costs to approximately $11 million, and  reduce the difference between NASA’s passenger airline services and  commercial airlines to about $13 million over the 2-year period.   Specifically, available NASA passenger aircraft services flight request  documentation generally included estimated costs associated with not only  airline tickets, but also estimates for salary and benefit costs associated  with lost work time, per diem expenses, and rental car costs associated  with the additional time required if commercial airlines were used to  provide passenger transportation.  Consequently, even when available  NASA estimates of costs associated with commercial airline transportation  services were included, a comparison with the costs of its passenger air  transportation services shows that they are nearly 2.3 times more costly  than commercial airlines.
subsections: section_title: Additional Costs Associated with NASA Passenger Aircraft May Be Substantial
paragraphs: Our cost analysis, based primarily on data included in NASA’s annual  reporting on its aircraft operations, did not include data on all relevant  types of costs attributable to NASA’s passenger aircraft services.   Consequently, the full cost of continued operation of NASA’s passenger  aircraft fleet in comparison with commercial airline services would be  substantially more than the $20 million estimate for fiscal years 2003 and  2004.  Specifically, the following types of costs were not accounted for in  NASA’s various annual reports on its passenger aircraft services.
subsections: section_title: Acquisition and Capital Costs
paragraphs: NASA’ s current inventory of seven passenger aircraft is valued at more  than $33 million, including two Gulfstream II aircraft purchased in 2001 for  a total of about $13.9 million.  An allocable portion of the acquisition and  associated capital improvements to these assets is part of NASA’s annual  cost of operating its passenger aircraft services.  In addition, these costs  may increase in the near future.  A July 2004 fleet plan prepared for NASA  recommended upgrading and expanding its passenger aircraft fleet as soon  as possible with an initial investment of $75 million.  Further, NASA is  considering an investment of an estimated $1.5 million in a noise restriction  package for its Gulfstream III aircraft during fiscal year 2008, making the  total investment that NASA is currently considering about $77 million.
section_title: Hangar Costs
paragraphs: NASA aircraft received hangar and maintenance services even though they  were housed on government property.  Industry data on hangar costs show  that they total about 5 percent of total aircraft operation costs.
section_title: Liability Insurance Costs
paragraphs: Although the government operates under a self-insurance policy, the  liability associated with operation of passenger aircraft is a cost factor that  must be considered given the significant number of passenger flights taken  using NASA-owned aircraft over the last 2 years.  Industry estimates show  liability insurance costs represent approximately 2 percent of total aircraft  operating costs.
section_title: NASA Passenger Aircraft Ownership to Support Routine Business Not Justified
paragraphs: Not only were NASA’s passenger aircraft services significantly more costly  than commercial airlines, but NASA’s continued ownership of aircraft to  provide air transportation supporting routine NASA business operations  was not in accordance with OMB guidance.  OMB guidance (1) limits the  number and size of aircraft acquired and owned by an agency to carry  passengers to the level necessary to meet mission requirements, including,  for example, use of aircraft for prisoner transportation, intelligence and  counter narcotics activities, and aeronautical research; and (2) explicitly  prohibits owning aircraft to support routine business functions, including  providing air transportation to attend meetings, conferences, and routine  site visits.  In contrast, NASA’s implementing guidance, while generally  consistent with OMB guidance, was interpreted to allow acquiring and  retaining aircraft for any official travel, regardless of the mission-required  nature of the travel.  Our analysis of available flight data showed that an  overwhelming majority (86 percent) of the flights taken during fiscal years  2003 and 2004 using NASA passenger aircraft services were to support  routine business operations, including attending meetings, conferences,  and site visits.  Excluding flights related to the Columbia accident, routine  business flights accounted for about 97 percent of NASA passenger aircraft  flights.  Further, although OMB guidance required NASA to periodically  prepare studies to determine if continued ownership of passenger aircraft  was justified, the agency’s studies were either incomplete or did not  consider commercial airline service alternatives.
subsections: section_title: Implementation of NASA Guidance Inconsistent with OMB Policy on Aircraft Ownership
paragraphs: NASA implementation is not consistent with OMB policy on aircraft  ownership.  OMB Circular No. A-126, the governing federal policy guidance  in this area, provides that agencies should own aircraft only to the extent  needed to meet mission requirements, such as troop transportation,  prisoner transportation, intelligence and counter narcotics activities, and  aeronautical research.  OMB’s policy guidance further provides that  agencies should not own aircraft to provide transportation to meetings,  routine site visits, and speeches.  However, NASA implementing guidance,  while generally consistent with OMB policy, does not clearly and uniformly  address the federal policy limiting aircraft ownership to those assets  needed to meet mission requirements.  NASA Procedural Requirements  (NPR), section 3.3.2, reiterates the OMB policy prohibition on using  passenger aircraft to provide transportation supporting routine business  operations as a basis for continuing to own aircraft.  However, in the  following sections (sections 3.3.2.1 through 3.3.2.5), NASA’s guidance  provides that mission-required use of aircraft includes support for activities  “directly related to approved NASA programs and projects.”  These  elaborating sections were mistakenly operationally determined to mean  that all travel using NASA passenger aircraft services was directly related  to NASA programs or projects, regardless of whether they were of a  routine, nonemergency nature.
The NASA IG’s 1999 report on NASA’s passenger aircraft at its Marshall  Space Flight Center also questioned whether that aircraft’s use was  consistent with the OMB limitation on owning aircraft only for mission- required purposes.  The audit report recommended that NASA change the  definition of mission requirements in its policy guidance to conform to the  definition of mission requirement stated in OMB guidance.  However, in its  response to the audit report, NASA management stated that there was no  difference between its guidance and the OMB guidance and therefore it  would not take any action to clarify its policy guidance.
section_title: Most Flights on NASA Passenger Aircraft Do Not Meet OMB Definition of Mission Requirements
paragraphs: Our analysis of available documentation on flight purposes shows that  NASA’s implementation of its guidance related to using aircraft in direct  program or project support has resulted in owning aircraft to support  meetings, conferences, and speeches in direct conflict with OMB’s policy  prohibition in this area.   In effect, NASA circumvented the OMB policy on  restricting aircraft ownership to those needed to carry out mission  requirements by operationally determining that nearly all travel using  passenger aircraft services was directly related to NASA programs or  projects.  Our analysis of NASA passenger air transportation services for  fiscal years 2003 and 2004 showed that about 86 percent of the flights were  taken to support the types of routine business operations that are expressly  prohibited by OMB’s guidance for aircraft ownership.
Specifically, we categorized the documented flight purpose listed on 1,188  NASA aircraft request forms for NASA passenger aircraft usage during  fiscal years 2003 and 2004 into 10 categories in order to determine the  frequency of different uses for NASA’s passenger aircraft services.  In  conducting our analysis, we categorized any flight as mission required if it  could be linked to OMB’s definition of mission requirements, regardless of  its apparent, non-emergency nature.  As a result, some flights we  categorized as mission required may have actually been routine in nature.   For example, in response to the 1999 NASA IG report, NASA management  stated that launch support flights were required to transport NASA  emergency response teams to launch sites within hours to help resolve  unexpected launch-related problems.  However, most launch support  flights during our audit period were scheduled more than 24 hours before  the flight departure date.  Of the 19 flights we identified as directly  supporting NASA launches, only 7 were scheduled less than 2 days prior to  the flight, and overall the flights were scheduled an average of  approximately 3 days prior to departure.  In one example, on July 29, 2003,  Kennedy Space Center requested the use of a NASA passenger aircraft to  fly from Florida to California as launch support for the joint Canadian  Space Agency/NASA Scientific Satellite Atmospheric Chemistry  Experiment Mission.  The flight was requested on July 29, 2003, 12 days  before the flight’s August 10, 2003, departure and 14 days before the August  12, 2003, launch.  We categorized this flight as being related to launch  support.  However, the fact that the flight was scheduled nearly 2 weeks in  advance of the flight departure brings into question whether the flight was  time sensitive and indicates that commercial coach service could have  been used.
Figure 2 presents the results of our analysis and categorization of NASA’s  use of owned and chartered aircraft over fiscal years 2003 and 2004 into 10  categories.
As shown in figure 2, available data showed that about 14 percent of the  flights taken using NASA passenger aircraft had a stated purpose that  appeared to comply with OMB Circular No. A-126’s definition of mission  required.  As shown in figure 3, excluding flights related to the Columbia  accident investigation, only 3 percent of NASA’s passenger aircraft activity  was related to mission-required travel.
Table 2 highlights examples of flights in which NASA passenger aircraft  services were used to support non mission-critical NASA business  operations that are not consistent with OMB’s definition of mission- required use necessary to justify continued passenger aircraft ownership.
The results of our interviews with passengers on such flights showed that,  while use of the NASA aircraft was more convenient, better accommodated  busy NASA SES-level staff schedules, and was more productive, the trip  purposes could have been accomplished through travel on regularly  scheduled commercial airlines.
section_title: Flawed Implementation of OMB Guidance on Use of Government vs. Commercial Resources
paragraphs: OMB Circular No. A-126 policy guidance instructs agencies to periodically  conduct OMB Circular No. A-76 cost comparisons to determine whether  commercial activities should be conducted using government resources or  commercial sources.  NASA’s A-76 studies conducted to date have asserted  that because not all flight purposes could be achieved using commercial  airlines, commercial airlines are not a viable alternative and were not  considered in any of the studies.  However, as discussed previously, our  analysis of NASA passenger aircraft flights taken during fiscal years 2003  and 2004 as well as our discussions with passengers on those flights  disclosed that the vast majority of the flights could have been  accomplished using commercial airlines.  As a result, NASA’s A-76 studies  inappropriately excluded potentially more cost-effective commercial  airline services from consideration.
Little supporting documentation is available for four of the seven aircraft in  NASA’s passenger aircraft fleet that were acquired decades ago.   Consequently, it was difficult to determine how these aircraft acquisitions  were justified and if there was a mission requirement justifying aircraft  ownership at that time.
The five NASA A-76 studies on NASA-owned aircraft did not include a  comparison of NASA’s passenger aircraft costs with commercial airline costs.  NASA’s studies compared its aircraft ownership costs against costs  of NASA leasing aircraft to provide passenger transportation services  because “commercial airlines cannot effectively meet all mission  requirements.”  For example, NASA’s March 2004 A-76 study was based on  the assumption that NASA aircraft would be required to support mission  requirements of an estimated 400-450 flight hours a year--essentially the  total number of flight hours flown by that NASA center’s passenger aircraft  during 2003 and 2004.  While NASA may continue to require access to some  mission-required passenger aircraft services for which commercial airlines  would not be a viable alternative, assuming that all prior flight hours were  mission required without first examining the purpose for these flights is not  consistent with the OMB guidance.
In addition to NASA-owned aircraft, as discussed previously, NASA  obtained passenger aircraft services through interagency agreements with  DOD and FAA, and a fractional ownership pilot demonstration contract  with Flexjet.  These alternative approaches offer ready access to passenger  aircraft without the fixed cost investment and the need to fund aircraft  maintenance, pilot training, and other costs associated with aircraft  ownership.  For example, under NASA’s contract with Flexjet, NASA had  guaranteed availability to passenger air transportation services.    Specifically, the contract with Flexjet allowed NASA to schedule flights  with a minimum of 8 hours advance notice.  According to a NASA  contractor’s December 2004 study, such arrangements to obtain passenger  transportation services provide a cost-effective alternative to agency  ownership of aircraft when demand is highly variable or less than 150 to  200 hours a year.   Such flexible arrangements could provide NASA with  quick-turnaround access to air passenger transportation services, and  appear to have the ability to have met NASA’s limited mission-required  needs during the period of our review.
Further, NASA has not performed any A-76 studies for three of its aircraft  that were used as passenger aircraft.  NASA purchased two Gulfstream II  aircraft in 2001 as contingency backups to, and eventual replacements for,  its existing shuttle trainer aircraft fleet.  However, since purchasing the  aircraft, NASA has been using these aircraft as part of its passenger aircraft  services fleet.  Subsequent changes in NASA’s long-term strategy for space  flight now show that shuttles will not be used after about 2010.  As a result,  the continuing mission-required need to retain these aircraft is  questionable.
In its 1995 and 1999 reports, the NASA IG expressed concern over NASA’s  exclusion of commercial airline transportation from its A-76 studies.  In  both reports, the IG reported that the A-76 studies NASA management  performed with respect to its passenger aircraft improperly excluded a cost  comparison with commercial airlines.  While the IG recommended that  NASA program offices responsible for passenger aircraft operations  perform A-76 studies to include consideration of accomplishing air travel  needs using commercial airlines, NASA management contended that  because of isolated travel destinations and extremely short advance notice,  commercial airlines could not meet its travel needs.  However, our analysis  of available documentation supporting flights taken during fiscal years  2003 and 2004 shows that most were requested more than 24 hours in  advance of flight departure and most NASA centers are located within an  hour’s drive of commercial airports.
section_title: Ineffective Oversight and Management of Passenger Aircraft Services
paragraphs: NASA’s oversight and management controls over its passenger aircraft  operations were ineffective.  NASA lacks the systems or procedures to  accumulate and use agencywide usage and cost data needed to provide the  transparency and accountability necessary to effectively support day-to- day management of its passenger aircraft service operations.  Specifically,  NASA did not  Maintain agencywide records on the purposes for which its passenger  aircraft are used and their costs.  Such data are critical to  (1) determining whether usage is consistent with OMB guidance limiting  aircraft ownership to those agencies with mission requirement needs,  and (2) maintaining visibility and accountability for the full costs  associated with its passenger aircraft operations.  Lacking such full cost  visibility and passenger accountability, NASA’s passenger aircraft  services are sometimes viewed as a “free” resource by NASA project and  program officials.
Correctly justify the cost effectiveness of individual flights.  These  justifications were flawed in that they relied on (1) inaccurate cost data  and (2) other unsupported factors used in the cost-justification  calculation.
Have processes in place to obtain reimbursements from nonofficial  passengers flying on NASA-owned or -chartered aircraft.  This may  include NASA employee spouses and relatives, contractors, or other  federal agency personnel.
subsections: section_title: Flawed Procedures for Accumulating and Using Passenger Aircraft Usage and Cost Data
paragraphs: NASA systems or procedures in place to accumulate detailed usage and  cost data related to its passenger aircraft services were flawed.  Other than  data compiled once a year to meet external reporting requirements, neither  NASA management nor congressional oversight officials had agencywide  aircraft usage and cost data needed to provide the transparency and  accountability needed to make informed decisions on continued ownership  of passenger aircraft.
Costs associated with ownership and operation of NASA’s passenger  aircraft services were usually included in center overhead accounts that  were allocated to programs based on the number of personnel assigned to  programs without regard to the extent to which program personnel actually  used NASA passenger aircraft services.  Therefore, it is not surprising that  some NASA personnel expressed the view that use of NASA-owned or -chartered aircraft is a “free” resource to them in that they did not have  visibility or accountability over associated costs as part of their program or  project budget execution reporting.
Because NASA lacked a system for routinely collecting agencywide usage  and cost data, it could not provide us with the complete and accurate  agencywide information on aircraft usage and cost that we requested as  part of this audit.  Although each center that possesses and manages  passenger aircraft is required to maintain a flight justification and manifest  for each trip, the flight usage data contained in these documents are not  compiled or analyzed on an agencywide basis to support decisions related  to mission-required needs.  Specifically, NASA data on the purposes and  costs of its passenger aircraft services during fiscal years 2003 and 2004  were contained in paper flight justifications and manifests maintained at  six different locations.  We created a database of descriptive cost and usage  data for approximately 1,200 flights using NASA-owned or -chartered  aircraft for which sufficiently complete data were available.  Although, as  mentioned previously, we obtained evidence that NASA also utilized at  least two additional program support aircraft to meet its passenger air  transportation needs, the limited data on use and costs associated with  flights using these aircraft did not allow us to include data on these flights  in our database.  Further, data on passenger aircraft services for about 200  flights at one center was missing most of the data elements on the flight  request justification forms, including flight purpose and cost-justification  calculations.  Without agencywide data on flight purposes and costs related  to its passenger aircraft services, NASA managers and Congress lack  critical information they need to make key aircraft ownership decisions.
In addition to the limited agencywide usage and cost data, we also found  that the data provided by NASA, although certified by NASA management  as complete and accurate, were not always complete or accurate.  Our  comparison of NASA-supplied data on flights taken in fiscal years 2003 and  2004 with FAA data showed that (1) data on 97 passenger flights were not  included in the aircraft usage data NASA certified as complete; and (2) as  discussed in a subsequent section, NASA-supplied data did not always  include all legs of trips taken using NASA passenger aircraft.  After our  identification of the flights, while not complete in all cases, NASA was able  to provide some form of supporting documentation showing these flights  occurred, including proof of authorization, approval, or a determination of  cost effectiveness.  Examples of some of the flights not included in the data  NASA officials certified as complete are summarized in table 3.
Further, we identified a breakdown in controls over flight data record  integrity at one center.  Specifically, when we inquired about provided  documents that did not appear to be originals, NASA officials told us that  flight requests and approvals related to a 1-year period covering parts of  fiscal years 2003 and 2004 were lost and recreated after flights took place.   NASA officials stated that the loss of these important aircraft usage data  was apparently not discovered until after our initial request for  documentation as part of this audit.  NASA officials did not inform us that  documents were recreated until after we questioned inconsistencies in the  documentation. “Although everything about the flight was very positive – convenience, shorter trip time,  professional service, etc. – the cost was considerably more than flying a commercial airline.   ...  As much as I enjoyed the door to door service, if the travel costs had been coming out of  my project I would have chosen to fly commercial.”
This statement summarizes how NASA decision making on aircraft  operations is distorted by the lack of complete data on the cost of using this  resource.  Second, NASA does not classify costs related to passenger  aircraft services in its annual financial and budget reports to Congress as a  cost of transportation of persons.  In annual reports, one specific object  expense class, object class 21, is designed to capture and disclose agencies’  costs for transporting passengers.  Instead, the cost of NASA passenger  aircraft services are included in overhead cost accounts, which understates  the true cost of transporting NASA passengers.
section_title: Weaknesses In Justification Process for Individual Passenger Aircraft Flights
paragraphs: As discussed previously, our analysis of available estimates of NASA’s  aggregate costs associated with its passenger aircraft services in  comparison with commercial airline ticket costs showed that NASA’s  passenger aircraft services cost about $20 million more than commercial  airlines.  In addition, NASA’s individual flight cost justification process for  its passenger aircraft services was flawed.  Our analysis of cost-comparison  documentation supporting passenger aircraft flights taken during fiscal  years 2003 and 2004 revealed critical flaws, including variable cost data  that were 6 years out of date and unsupported cost factors.  Available  NASA documentation supporting NASA’s individual flight justifications for  flights taken during 2003 and 2004 showed a total estimated savings of $6  million over the 2-year period.  However, if these justifications had included  up-to-date NASA variable costs and excluded unsupported cost factors  attributed to the additional time required to use commercial airline flights,  most flights would not have been approved because they would have been  more costly than commercial air travel.
Policy guidance in OMB Circular A-126 provides an agency may use aircraft  on a flight-by-flight approval basis for routine business purposes to the  extent that a comparison between the agency’s specified variable costs and  the costs of commercial travel shows the proposed flight is cost effective.
Specifically, OMB Circular A-126, Attachment A, provides that costs of  commercial travel must be compared with the variable costs of operating  the agencies’ passenger aircraft and that proposed flights using agencies’  passenger aircraft for routine business purposes should only be approved if  they result in a cost savings to the government. Further, OMB guidance  provides that variable cost estimates used in flight-by-flight cost  justification calculations are to be updated annually.  This policy on flight- by-flight variable cost justification does not replace the agencies’ need to  first establish a valid mission requirement for owning aircraft, and overall  cost effectiveness.  As discussed previously, our analysis of flight purposes  showed that about seven of every eight flights were for routine business  travel.
Consistent with OMB policy guidance, NASA regulations provide that  individual cost justifications comparing estimated commercial airline  travel costs with estimated variable costs associated with using NASA- owned or -chartered aircraft should be prepared prior to all passenger  aircraft flights.  Figure 4 provides an overview of the methodology NASA  used to compare NASA and commercial costs for its flight-by-flight  justifications. vs.
2.5 (multiplier)
Several NASA centers had not updated the variable costs used in their  flight-by-flight cost-comparison calculations for over 6 years.  Such out-of- date variable costs significantly understated NASA’s flight-by-flight costs.   For example, at two centers, the $964 variable cost per flight hour used for  flight-by-flight justifications during fiscal years 2003 and 2004 was over 6  years out of date.  According to NASA aircraft management officials, this  hourly rate was last adjusted in 1998.  At one center, a recent recalculation,  done in 2005 pursuant to our audit, increased the center’s variable cost rate  from $964 to $1828 an hour, almost a 90 percent increase.  Further, even  this 90 percent higher rate may understate NASA’s actual variable costs.   For example, the aircraft manufacturer for the aircraft in use at that center  reported a direct cost per flight hour rate of approximately $3,000 a flight  hour, including estimated fuel costs alone in excess of $1,300 an hour.
NASA variable costs were also understated at one center because the flight- by-flight justifications included only variable cost estimates for one round  trip when the aircraft actually made two round trips to meet passengers’  transportation requirements.  Our analysis of FAA flight information and  flight documentation obtained from the center showed that the flight  request data we were provided included estimates related to only two of  four flight legs flown to complete 14 flight requests over the 2-year period  of our review.  For example, on August 6, 2003, NASA’s passenger aircraft  transported passengers from Houston, Texas, to Pueblo, Colorado, and  then returned without passengers to Houston the same day.  Three days  later, pilots flew an empty aircraft to Pueblo to pick up passengers and  return them to Houston.  Center officials stated that additional round trips  were necessary to return the flight crew to their home station where they  could be more productive performing other duties.  Center officials stated  that they did not include the two extra flight legs in their calculations of the  variable costs associated with NASA’s passenger transportation because  they classified these legs as crew training flights.  Nonetheless, the costs  incurred by these additional flights should be considered among the costs  related to NASA’s passenger air transportation services.
In addition to understatements of NASA’s variable costs, NASA’s flight-by- flight cost comparisons were also flawed in that they increased the cost  associated with flying commercially by using a largely unsupported  multiplier of 2.5.  NASA could not provide any specific NASA-related  empirical evidence to validate use of the multiplier in its flight-by-flight  justification process.  NASA used this multiplier in addition to factors for  time and salary costs accounted for in its cost-justification calculation.  The  use of a multiplier to increase the value of an employee’s time beyond his or  her salary and fringe benefits is not expressly provided as part of OMB’s  Circular No. A-126 guidance.  Further, cognizant OMB officials told us that  it was not their intent that agencies use any such multiplier (beyond the  salary and fringe benefits associated with any time savings) in determining  whether proposed flights were cost effective.  They also stated they were  not aware of any agencies using such a multiplier in their flight justification  calculations.  While NASA officials informed us that they had been using  this multiplier for a number of years and that they believed it was a  conservative factor, they did not provide any documentation demonstrating  the appropriateness of the multiplier as it applies specifically to the  experiences of NASA personnel who used these aircraft.  Consequently,  lacking such documentation, NASA’s use of a 2.5 multiplier improperly  overstates the costs of commercial alternatives.
The overall effect of understating NASA costs and overstating commercial  costs in NASA’s flight-by-flight justifications was that NASA incorrectly  approved individual flights as cost effective.  For example, NASA justified  one round trip from Kennedy Space Center, FL to Burbank, CA as cost  effective, calculating a savings of $4,800.  NASA calculated a cost savings  for the flight because it used a 1998-based variable cost factor for the NASA  plane of $964 per hour and also multiplied the travelers’ salary costs  savings by the unsupported 2.5 multiplier.  If the variable cost was updated  to NASA’s 2004 estimate of $2,528 per hour for that aircraft and the  unsupported multiplier was removed, the estimated variable costs  associated with the proposed NASA passenger aircraft flight would have  exceeded estimated commercial airline costs by $17,408.  Further, even  after incorporating NASA’s unsupported estimate that employee fringe  benefits increase employee direct salary costs by an additional 50 percent,  the NASA aircraft variable costs for this flight would still have exceeded  commercial costs by about $16,000.
section_title: NASA Procedures Not Effective in Consistently Identifying and Collecting Reimbursements from Nonofficial Travelers
paragraphs: NASA lacks procedures to consistently and effectively identify and recover  the applicable costs of operating government aircraft when nonofficial  passengers fly on NASA-owned or -chartered aircraft.  As a result,  nonofficial travelers were provided free transportation using NASA’s  passenger aircraft services.  However, because of the lack of procedures  and documentation in place concerning the determination of the official  status of travelers, we could not determine, and more importantly NASA  could not determine, if any of the travelers should have, but did not,  reimburse the government for the cost of their transportation.
According to OMB Circular No. A-126, travelers flying on a space-available  basis on government aircraft for a purpose other than the conduct of  official agency business generally must reimburse the government for the  full coach fare.  Reimbursement for travel at the government rate for the  cost of coach tickets would have covered about one fifth of NASA’s  reported costs associated with the use of NASA’s passenger aircraft  services.
However, NASA has not implemented agencywide policies and procedures  to ensure that such travelers reimburse the government for the  corresponding coach cost.  Processes in place at each of the six centers to  obtain reimbursements ranged from none at all to ad hoc procedures that  essentially relied on individual travelers to identify and submit payments.   For example, at one center, NASA’s procedures consisted of notifying  NASA travelers of the need to obtain reimbursement from nonofficial  travelers flying on the aircraft, but did not provide for any follow-up to  monitor and collect the requisite amount from non-NASA travelers.
For example, between September 2, 2004, and September 6, 2004, several  Kennedy Space Center employees and their families and contractors and  their families used the center’s Gulfstream II aircraft to fly to Washington,  D.C. in advance of Hurricane Francis.  According to center officials, the  center was required to evacuate the aircraft from the path of the  approaching hurricane, and a decision was made to transport the  contractor pilots, mechanics, and their families over 800 miles north to  Washington.  After flying the contractors and their families out of the area,  the aircraft then returned to pick up other center management personnel,  personnel associated with the aircraft management, and their families and  flew them to Washington.  A NASA official stated that at least one of the  passengers on these flights should have reimbursed the government for a  portion of the cost of their transportation.  However, the official did not  know if such reimbursement was obtained.
NASA officials at two other centers stated that they have not obtained  reimbursements or they had no documentation showing the extent to  which reimbursements from nonofficial passengers on NASA flights were  identified and obtained.  In addition, we identified over 100 other travelers  that NASA classified as dependents flying on NASA passenger aircraft that  may have been nonofficial travelers.  These passengers may have been  required to reimburse NASA for a portion of the costs of their  transportation.
section_title: Conclusions
paragraphs: As NASA strives to carry out its new vision for the future of the agency,  using its resources as efficiently as possible will be a growing fiscal  challenge.  Operating what is essentially its own small passenger airline  service, while potentially providing certain benefits to the agency and its  employees, costs an estimated five times more than if commercial airlines  were used to provide these services.  Further, NASA’s ownership of aircraft  to support essentially routine business operations is in direct conflict with  OMB’s policy prohibition on such uses and passenger interviews which  showed that in almost all cases, the travel could have been accomplished  using commercial airlines.
NASA management has disagreed with, and taken only limited action with  respect to similar prior audit recommendations in this area and insufficient  management attention and agencywide oversight has allowed NASA to  continue this costly program for decades.  The cumulative effect has been  failures in effectively justifying the extent to which such passenger aircraft  services are needed to address critical, time-sensitive mission  requirements, as well as effectively determining the extent to which these  services could be accomplished without incurring the substantial, fixed  operation and maintenance costs associated with aircraft ownership.    Immediate actions to dispose of all aircraft not needed to address mission  requirements and adoption of more flexible, less costly alternatives to  satisfy future mission requirements would best position NASA to meet its  stewardship responsibilities for taxpayer funds it receives, and better  enable it to meet its current fiscal challenges.
section_title: Matters for Congressional Consideration
paragraphs: Congress should consider whether legislation is necessary to ensure that  (1) NASA disposes of all of its passenger aircraft not used in accordance  with OMB’s explicit policy prohibition against owning aircraft to support  travel to routine site visits, meetings, speeches, and conferences; and (2)  funding for future NASA passenger aircraft purchases and operations is  restricted to those necessary to meet mission requirements consistent with  OMB guidance.
section_title: Recommendations
paragraphs: To the extent that Congress determines that NASA should continue to  retain aircraft or passenger aircraft charter services to provide passenger  transportation, we recommend that the Administrator of NASA take the  following six actions:   Establish policies and procedures for accumulating and reporting on its  passenger aircraft services to provide complete and accurate  agencywide cost and utilization data to support oversight and decision  making on operating and retaining such aircraft services.
Clarify policies and procedures applicable to aircraft acquisition and  retention to limit the number and type of aircraft owned and chartered  for passenger transportation to those necessary to meet the “mission- required” criteria in OMB guidance.
Periodically assess the extent to which NASA has a continuing need to  own aircraft to provide passenger transportation in support of mission  requirements in accordance with OMB guidance.
Maximize the use of flexible, cost-effective arrangements to meet  mission-required passenger air transportation service needs in lieu of  aircraft ownership.
Revise existing policies and procedures used to determine if individual  flights are justified to include use of up-to-date variable costs and limit  commercial cost estimates to include airfare, in-transit salaries and  fringe benefits, and other costs directly related to reasonable estimates  of delays incurred in meeting commercial airline flight schedules in  accordance with OMB and GSA guidance.
Establish agencywide policies and procedures for identifying and  recovering applicable costs associated with nonofficial personnel  traveling using NASA passenger aircraft services on a reimbursable  basis.
section_title: Agency Comments and Our Evaluation
paragraphs: In its written comments, the NASA Administrator concurred with our  recommendations and set out several actions to address identified  deficiencies.  Specifically, he said NASA would review its policies and  procedures related to aircraft management to ensure they are aligned with  OMB requirements and conduct a comprehensive study of the agency’s  passenger aircraft operations to be completed by October 31, 2005.  These  actions are consistent with the intent of our recommendations to NASA  and if carried out fully and effectively will help address the deficiencies we  found.
If NASA's study referred to above is carried out effectively and fully  considers the various matters discussed in this report, it should provide   the Congress valuable information for deciding whether legislation may be  needed on this matter.  NASA’s comments on a draft of this report are  reprinted in appendix II.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from the  report date.  At that time, we will send copies of the report to interested  congressional committees.  We will also send copies of this report to the  Office of Management and Budget and the General Services  Administration.  We will make copies available to others upon request.  In  addition, the report will be available at no charge on the GAO Web site at  http://www.gao.gov.  If you or your staffs have any questions regarding this  report, please contact me at (202) 512-7455 or kutzg@gao.gov.  Contact  points for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this report.  GAO staff who made key  contributions to this report are listed in appendix III.
section_title: Scope and Methodology
paragraphs: To assess reasonableness of costs, use, and agency oversight and  management of the National Aeronautics and Space Administration’s  (NASA) passenger aircraft services, we met with officials of NASA’s Office  of Infrastructure and Administration Aircraft Management Office and  appropriate officials at the Johnson Space Center, Houston, Texas;  Marshall Space Flight Center, Huntsville, Alabama; Kennedy Space Center,  Cape Canaveral, Florida; Wallops Flight Facility, Wallops Island, Virginia;  and Dryden Flight Research Center, Edwards, California.  We reviewed  aircraft utilization and management reports prepared by NASA and its  contractor and aircraft operations budget/cost information, including  annual Aviation Financial Reports for fiscal years 2003 and 2004, Annual  Aviation Report: Aircraft Performance for fiscal years 2003 and 2004, and  NASA’s 2004 Mission Management Aircraft Fleet Plan.  At each center, we  observed and assessed the process for managing passenger aircraft  services and scheduling and justifying costs for individual flights.  We also  reviewed available documentation supporting the various cost-justification  factors and multipliers NASA used to estimate the variable costs of using  its passenger aircraft as well as the alternative costs of using commercial  airline transportation.
As part of our effort, we collected and compiled available flight-by-flight  NASA passenger aircraft cost and usage data from NASA mission  management aircraft request forms.  These forms provided such  descriptive data as dates and purpose for travel, itinerary, passengers,  levels of approval, and cost justification for aircraft use.  We asked for all  documentation maintained at NASA centers for flights flown using NASA’s  passenger aircraft services during fiscal years 2003 and 2004.  We selected  the most recently completed 2-year period because NASA’s regulations  specify retaining source documents related to passenger aircraft usage for  at least 2 years.  While incomplete, we ultimately obtained some type of  documentation indicating that NASA passenger aircraft services during this  2-year period included about 1,500 flights.  However, because of the limited  amount of supporting documentation available for several hundred flights,  we included only 1,188 flights in our analysis.  For example, we could not  use any of the approximate 200 flights from the Dryden Flight Research  Center in our analysis because few of the requested documents included all  the required usage and cost data necessary for such an analysis.  To  independently verify the reliability and completeness of individual flight  source documentation maintained at NASA centers, we compared the  NASA-provided flight information with information on NASA aircraft  flights maintained by the Federal Aviation Administration’s (FAA)  Enhanced Traffic Management System and reconciled differences.  Further,  while not included in our analysis, we obtained documentation showing  that 2 of NASA’s aircraft classified as program support aircraft were also  used to provide passenger transportation, we did not attempt to determine  if any of NASA’s other program support or research aircraft may have also  been used to provide passenger transportation as part of this audit.  Also,  we did not review the effectiveness of safety or maintenance programs  related to NASA’s passenger aircraft services.
To analyze the relative costs of NASA’s passenger aircraft services  compared to commercial airline costs, we relied primarily on available  NASA cost data from NASA Aviation Financial Reports.  We validated this  data wherever feasible with comparable independent data sources  including industry data.  For example, we contacted the manufacturers of  both types of passenger aircraft used by NASA to validate that the cost  estimates used in our analysis were similar to the manufacturers’ cost  metrics for operating those aircraft.  We used fiscal year 2003 and 2004 cost  data in annual Aviation Financial Reports reported by each center that  operated one or more of NASA’s passenger aircraft and the costs NASA  incurred for chartering passenger aircraft from other government agencies  or contractors.  At one center where reported cost data for passenger  aircraft in the Aviation Financial Report were combined with data for other  agency aircraft, we used annual budget data that were limited to passenger  aircraft operations.  At NASA headquarters, we used annual cost data  provided by NASA because their annual Aviation Financial Reports did not  contain costs associated with NASA’s use of Federal Aviation  Administration aircraft.  Finally, costs from NASA’s Report on the  Fractional Aircraft Demonstration Program were used to determine the  total cost of Flexjet flights.  We used NASA Mission Management Aircraft  Request forms to determine the estimated cost for flights taken on  Department of Defense (DOD) aircraft.  We then compared reported costs  of NASA aircraft operations and aircraft charter costs with our estimates of  travel costs that NASA would have incurred had the passengers who flew  on NASA’s aircraft during our 2-year test period used commercial airline  transportation instead.  To estimate the commercial transportation costs of  NASA employees who traveled using NASA’s passenger aircraft, we used  the average commercial airline round-trip fare of $426 for all flights flown  by NASA employees during this same time period as reported in a database  of travel card transactions for NASA provided by NASA’s contractor, Bank of America.  This average commercial round-trip air fare estimate is  intended to approximate NASA’s passenger transportation costs if it had  used commercial airline services instead of its own services.  As such, it  may reflect amounts that in some cases would exceed NASA’s actual  commercial costs.  For example, to the extent to which unofficial travelers  were included in estimates of passengers, commercial costs would be  overstated.  Conversely, in other cases our estimate may have  underestimated NASA’s costs.  For example, costs may have been  understated to the extent that such travel involved passenger aircraft  services to remote locations or locations with limited commercial air  service.
To determine the number of travelers who flew on NASA-owned and  -chartered aircraft during the 2-year period, we used the number of  passengers identified on individual hard-copy flight manifest  documentation NASA provided to us.  During the course of our review, we  became aware of additional flights flown at some centers for which we  were not provided flight manifest documentation.  However, we were  unable to obtain and analyze documentation for these additional flights in  time to complete our analysis.  To the extent that the number of passengers  on flights for which individual flight documentation was not provided to us,  the estimate of commercial airfare costs is understated.  At the Dryden  Flight Research Center, where individual hard-copy flight documentation  did not contain complete information, we used the number of passengers  the center reported to NASA headquarters for inclusion in annual aircraft  performance reports.
We did not use the numbers of passengers reported for all centers because  the centers reported their passenger counts inconsistently and we were  unable to validate them.  Although the number of passengers reported on  individual flight manifests often included passengers who flew only one  way or on one or more legs of the trip, we counted these partial-trip  passengers as having flown round-trip for purposes of estimating the  commercial costs of passengers flown on NASA’s aircraft.  Consequently, in  this respect, our estimated savings are likely to be understated in that  including these partial-trip passengers in the total number of passengers  overstated our estimate of airfare costs that NASA would have incurred  had the passengers traveled on commercial airlines.  Conversely, our  estimated savings may be overstated because our estimated commercial  travel costs did not include additional lodging and other incidental costs  that travelers would periodically incur and salary costs for additional lost  work time.
To estimate the lost work time associated with commercial airline travel,  including salary and benefit costs, per diem, rental cars, commercial  tickets, and other costs, we utilized cost estimates included in NASA  individual flight request forms.  For the 1,188 flights for which we received  data, we used NASA’s estimates for salary costs multiplied by lost work  hours, number of travelers, and NASA’s benefit factor of .5.  Because  accounting for fringe benefit costs was recognized in OMB guidance, while  unsupported, we used NASA’s estimated fringe benefits factor of .5 to  increase passengers’ salary costs.  In addition to salary costs, we also  included available NASA estimates for additional per diem, commercial  tickets, rental cars, and other travel costs associated with lost work time  from using commercial airline services.  For one aircraft, we did not  receive any flight justification cost estimates.  Instead, the location  operating the aircraft had developed standard calculations for the average  commercial cost for their two common flight patterns.  We averaged the  estimated commercial cost for the two flight patterns to determine the  average cost savings per traveler for the aircraft.  We then multiplied the  commercial cost by the number of travelers NASA reported for the aircraft  during fiscal years 2003 and 2004 to determine the total commercial cost of  transportation for travelers on the aircraft.
To assess whether NASA aircraft were operated and retained in accordance  with applicable governmentwide guidance, we primarily reviewed the  Office of Management and Budget (OMB) Circular No. A-126, Improving  the Management and Use of Government Aircraft; and Circular No. A-76  (Revised), Performance of Commercial Activities.  We also reviewed  applicable governmentwide guidance in OMB Circular No. A-11,  Preparation, Submission and Execution of the Budget Part 7: Planning,  Budgeting, Acquisition and Management of Capital Assets (Revised June  2005); General Services Administration’s (GSA) Federal Property  Management Regulations, 41 C.F.R. Subtitle C; and Federal Travel  Regulations, 41 C.F.R. Subtitle F.  We also reviewed NASA’s implementing  publications, NASA Policy Directive (NPD) 7900.4B, NASA Aircraft  Operations Management (April 2004); NASA Policy Regulation (NPR)  7900.3A, Aircraft Operations Management (April 1999); and center- specific implementing instructions.  We held discussions regarding these  policies and procedures with officials of OMB’s Office of Federal  Procurement Policy, Transportation/GSA Branch, and Science and Space  Branch; GSA’s Office of Government-wide Policy; and NASA’s Office of  General Counsel and NASA Center and program managers.
At each center, while we observed the process for managing aircraft  operations and scheduling and justifying individual flights, we interviewed  managers and program officials to discuss the importance to which they  assessed the need and justification for owning/leasing passenger aircraft.   We analyzed the purpose cited by NASA for individual flights flown during  our 2-year test period to determine whether NASA’s stated purpose  complied with criteria established in OMB and GSA guidance.  We  interviewed agency personnel who requested, approved, and/or were  passengers on approximately 80 flights during our 2-year test period to  ensure that we understood the purpose for the flights and the basis for  utilizing NASA’s aircraft.  We did not assess the adequacy of safety or  maintenance programs related to NASA’s passenger aircraft.  Further, we  did not attempt to determine the validity or appropriateness of travel using  NASA’s passenger aircraft, nor did we assess if the type and number of  personnel on the NASA passenger aircraft were appropriate given the  stated flight purposes.
To assess the effectiveness of NASA’s oversight and management of its  passenger aircraft operations, we held discussions with appropriate  aircraft management officials at NASA headquarters and centers operating  passenger aircraft.  We also identified and assessed (1) NASA’s  implementing policies and procedures with respect to OMB and GSA policy  guidance, (2) the process used to approve and document passenger aircraft  utilization, (3) associated aircraft management reports, (4) other recent  assessments and studies done with respect to NASA passenger aircraft  services, and (5) the extent to which accurate, current agencywide data  were available to agency managers for day-to-day decision making on  passenger aircraft usage and costs.
We briefed NASA officials on the details of our audit, including findings and  their implications.  On June 28, 2005, we requested comments on a draft on  this report.  We received comments on July 28, 2005, and have summarized  those comments in the Agency Comments and Our Evaluation section of  this report.  NASA’s comments are reprinted in appendix II.  We conducted  our work from November 2004 through June 2005 in accordance with U.S.  generally accepted government auditing standards and quality standards  for investigations as set forth by the President’s Council on Integrity and  Efficiency.
section_title: Comments from the National Aeronautics and Space Administration
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: In addition to the contact named above, Mario L. Artesiano, James D. Berry,  Fannie M. Bivins, Latasha L. Brown, Matthew S. Brown, Harold J. Brumm,  Carey L. Downs, Richard T. Cambosos, Francine M. Delvechio, Francis L.  Dymond, Dennis B. Fauber, Geoffrey B. Frank, Diane G. Handley, Alison A.  Heafitz, Christine A. Hodakievic, Jason M. Kelly, Jonathan T. Meyer, George  J. Ogilvie, James W. Pittrizzi, Kristen M. Plungas, John J. Ryan, Sidney H.  Schwartz, Joan K. Vogel, and Leonard E. Zapata also made key  contributions.