NASA Supplier Base: Challenges Exist in Transitioning from the Space Shuttle Program to the Next Generation of Human Space Flight Systems
Published: 2007-07-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Space Shuttle Program is currently supported by over 1,500 active suppliers, some of whom are the only known or certified source of a particular material, part or service. The retirement of the Shuttle and transition to planned exploration activities, as called for in the President's Vision for Space Exploration, creates the need for NASA to begin making decisions today about its supplier base needs for the future. GAO was asked to (1) describe NASA's plans and processes for managing its supplier base through the Shuttle's retirement and the transition to the Constellation's exploration activities; (2) address factors that could impact the effectiveness of those plans and processes; and (3) identify any other issues that NASA will likely encounter as the agency transitions to and implements the Constellation Program.
section_title: What GAO Found
paragraphs: NASA is developing and implementing transition plans and processes to manage its supplier base through the retirement of the Shuttle and transition to the next generation of human space flight systems. Such efforts include: various transition plans; a decision-making structure that should enable the agency to make necessary supplier decisions; and a communications strategy and metrics to gauge the progress of transition activities. In addition, NASA has identified risks associated with the shuttle's retirement and has begun identifying capabilities and suppliers needed for future exploration activities. While NASA has developed plans and processes aimed at effectively managing the supplier base, several factors could impact their effectiveness. NASA may have to continue funding suppliers for work that would maintain the supplier's skills and capabilities, even when they are no longer working on Shuttle operations, until Constellation officials make a decision on whether or not they will be needed for future exploration activities due to a lack of detailed program requirements. In addition, relatively few supplier-related decisions have made it through the newly created decision-making process and NASA officials acknowledge the increasing number of decisions scheduled for upcoming years have the potential to overwhelm the transition decision-making process. Other issues have been identified that NASA will have to face in order to successfully transition from the shuttle program to its next generation human space flight systems. Challenges exist in the continued use of obsolescent materials, maintaining the overall viability of the supplier base, managing the overall workforce, disposing of property and equipment, and completing environmental cleanup. NASA has not developed cost estimates for transition and retirement activities past fiscal year 2010. Without cost estimates, NASA does not have the information needed to support the budget preparation process, assess the costs of addressing its supplier challenges, or account for how NASA will fund transition and retirement activities once the Space Shuttle Program comes to an end in 2010. Such knowledge is important because NASA and Congress will need to allocate funds among many competing priorities. In addition, it will be important for NASA to adjust its cost estimates every year as NASA gains more knowledge about its transition costs.

section_title: Letter
paragraphs: The National Aeronautics and Space Administration (NASA) is in the  The National Aeronautics and Space Administration (NASA) is in the  midst of phasing out the Space Shuttle Program and beginning another  midst of phasing out the Space Shuttle Program and beginning another  major undertaking, the Constellation Program, which will create the next  major undertaking, the Constellation Program, which will create the next  generation of spacecraft for human spaceflight. This is NASA’s biggest  generation of spacecraft for human spaceflight. This is NASA’s biggest  transition effort since landing humans on the moon more than 3 decades  transition effort since landing humans on the moon more than 3 decades  ago and then initiating the Space Shuttle Program a few years later.  ago and then initiating the Space Shuttle Program a few years later.  Numerous people, hardware, and infrastructures will be impacted by  Numerous people, hardware, and infrastructures will be impacted by  coming changes. Indeed, the supplier base that has been supporting the  coming changes. Indeed, the supplier base that has been supporting the  Space Shuttle since its infancy is already in flux as NASA seeks to  Space Shuttle since its infancy is already in flux as NASA seeks to  determine which suppliers will no longer be needed after the last Shuttle  determine which suppliers will no longer be needed after the last Shuttle  mission is flown, which will transfer to the Constellation Program, and  mission is flown, which will transfer to the Constellation Program, and  what will happen to mission-critical suppliers who have to wait years for  what will happen to mission-critical suppliers who have to wait years for  new exploration activities to begin. Over 230 of the Space Shuttle  new exploration activities to begin. Over 230 of the Space Shuttle  Program’s 1,500 or so active suppliers are considered critical single source  Program’s 1,500 or so active suppliers are considered critical single source  suppliers, that is, suppliers for items (parts/materials) or providers of  suppliers, that is, suppliers for items (parts/materials) or providers of  services for which there is no direct or immediate replacement available.  services for which there is no direct or immediate replacement available.  Due to the recent budget reductions, NASA officials acknowledge that the  Due to the recent budget reductions, NASA officials acknowledge that the  agency will not be able to launch its new exploration vehicles until 2015,  agency will not be able to launch its new exploration vehicles until 2015,  later than the scheduled first launch date in 2014. This results in a  later than the scheduled first launch date in 2014. This results in a  prolonged gap of over 4 years between the end of the Shuttle Program and  prolonged gap of over 4 years between the end of the Shuttle Program and  when the Constellation’s Orion and the Ares 1 vehicles come online.  when the Constellation’s Orion and the Ares 1 vehicles come online.
Given the magnitude of the overall transition effort, you requested that we  Given the magnitude of the overall transition effort, you requested that we  (1) describe NASA’s plans and processes for managing its supplier base  (1) describe NASA’s plans and processes for managing its supplier base  through the Shuttle’s retirement and the transition to the Constellation’s  through the Shuttle’s retirement and the transition to the Constellation’s  exploration activities; (2) address factors that could impact the  exploration activities; (2) address factors that could impact the  effectiveness of those plans and processes; and (3) identify any other  effectiveness of those plans and processes; and (3) identify any other  issues that NASA will likely encounter as the agency transitions to and  issues that NASA will likely encounter as the agency transitions to and  implements the Constellation Program.  implements the Constellation Program.
To conduct our work, we reviewed NASA plans and processes related to  To conduct our work, we reviewed NASA plans and processes related to  transition and retirement. We reviewed project-specific documentation  transition and retirement. We reviewed project-specific documentation  related to transition and retirement within NASA as well as various NASA  reports and studies on similar efforts elsewhere in the federal government.  We reviewed budgetary information and guidance related to transition and  retirement costs. We conducted interviews with NASA officials in the  Space Operations Mission Directorate (SOMD) and the Exploration  Systems Mission Directorate (ESMD) who are responsible for transition  and retirement efforts, including the transition managers. In addition, we  interviewed NASA and prime contractor officials within the Space Shuttle  and Constellation Program and project offices about the transition and  retirement effort and met with NASA officials from the International Space  Station Program. More details about our scope and methodology are in  appendix I.
subsections: section_title: Background
paragraphs: In January 2004, following the Space Shuttle Columbia disaster in 2003, the  President announced a new exploration policy entitled A Renewed Spirit  of Discovery: The President’s Vision for U.S. Space Exploration. The  President’s vision calls for retiring the Space Shuttle upon completion of  the International Space Station in 2010 and creating a new family of  exploratory vehicles for human spaceflight that will allow a return to the  moon and voyages to Mars and points beyond. To implement the  President’s vision, NASA embarked on a major study and made  recommendations for technologies and potential approaches for vehicle  design. NASA incorporated these recommendations into the Constellation  Program along with exploration activities called for in the President’s  vision. NASA’s newly created Exploration Systems Mission Directorate  manages the Constellation program, which will oversee three major  projects—Orion Crew Exploration Vehicle, the Ares I Crew Launch  Vehicle, and the Ares V Cargo Launch Vehicle. Figure 1 shows the general  design of the Constellation vehicles and how they differ from the Shuttle.
The Space Operations Mission Directorate manages the Space Shuttle  Program. In order to support the 5 major projects—orbiter, Space Shuttle  main engine, solid rocket booster, reusable solid rocket motor, and  external tank—that comprise the Space Shuttle Program, NASA has   654 facilities that utilize more than 980,000 line items of equipment and  employs over 2,000 civil service and more than 15,000 contractor  personnel. NASA has several space centers, but the three that hold the  majority of this workforce are Johnson Space Center in Houston; Kennedy  Space Center, in Cape Canaveral, Fla.; and Marshall Space Flight Center in  Huntsville, Ala. The Space Operations Mission Directorate also manages  the International Space Station.
section_title: NASA’s New Plans and Processes Establish a Foundation for Managing Transition, Retirement, and the Supplier Base
paragraphs: NASA has developed plans intended to help the agency sort through a  myriad of decisions relating to transition and retirement, with some  aspects focused on NASA’s transition management structure and others  specifically addressing the supplier base. NASA has an overarching  agency-level transition plan, a joint acquisition plan, and a Space Shuttle  Program Transition Management Plan, which demonstrate an initial effort  to establish a strategy for managing change. Monitoring risk at different  levels of the agency is one of the issues addressed in the plans. Also  addressed, in general, is the decision-making process related to  transitioning the supplier based from the Space Shuttle Program to the  Constellation Program.
subsections: section_title: New Plans Reflect NASA’s Overall Strategy to Manage Transition and Retirement
paragraphs: In response to a legislative mandate, NASA developed the Human Space  Flight Transition Plan. This agencywide plan describes the overarching  strategy for transition from the Shuttle to the Constellation Program’s new  exploration activities and discusses desired outcomes, processes, roles,  responsibilities, and certain program-level requirements. The plan also  includes a range of issues that NASA will need to address to achieve a  successful transition—budget, acquisition, human capital, and property  and environmental management. NASA expects the Human Space Flight  Transition Plan to serve as initial, top-level strategic guidance and a  governance framework for the development of lower-level directorate,  program, and project transition planning guidance documents. NASA  officials say they are revising the plan to incorporate guidelines that the  inspector general recommended with respect to program and project  management.
The Space Operations and Exploration Systems Mission Directorates are  developing a joint acquisition road map to avoid substantial duplication of  acquisition costs. For example, the Constellation Program has begun work  under a current NASA follow-on contract for Shuttle-related support to the  Constellation Program and intends to begin work on the engine that will  be used in the Ares V Cargo Launch Vehicle through an interagency  agreement with the Air Force and National Reconnaissance Office.
NASA also recently approved the Space Shuttle Program Transition  Management Plan, which defines how the Space Shuttle Program should  organize and manage its retirement and transition activities to support the  agency-level Human Space Flight Transition Plan and overall Vision. The  plan describes the organizational structure, management approach,  processes, products, and tools used to manage the transition and  retirement of Space Shuttle Program capabilities. The shuttle program’s  five project offices are developing separate transition plans, as are three of  NASA’s space centers. Figure 2 shows the various plans and the NASA  organizations affected by the plans.
In addition to the plans mentioned above, NASA has developed a  communications strategy to keep the Shuttle workforce informed about  the activities, intentions, and goals related to retirement of the Shuttle and  transition to new exploration activities. Weekly teleconferences, monthly  reports, quarterly newsletters and magazines, and Transition Quarterly  Program Manager’s Reviews will strive to lessen confusion and frustration  in this environment of change. NASA and the prime contractors are  conducting supplier visits to better inform the subcontractor workforce  about transition activities and the opportunities available for future work.
To measure progress on Shuttle retirement and transition, NASA has  identified a collection of metrics that can be used at an agencywide or  program level to assess cost, schedule, technical, and risks. NASA officials  say they intend, on a quarterly basis, to analyze progress made and to look  ahead for opportunities to, for example, save money, mitigate risks, and  see what decisions need to be made about which suppliers. Key metrics at  the agency level include cost avoidance, schedule variances, and  government personnel time charges for work on single versus multiple  programs. Various tools will be used to track risks related to transition and  retirement activities. Such risks include loss of critical Shuttle personnel,  transfer of facilities funding from the Space Shuttle Program to the  Constellation Program, and cargo transportation shortfalls for the  International Space Station after 2010.
section_title: NASA Has Developed New Decision-Making Process to Manage Supplier Base
paragraphs: NASA has developed a new decision-making process to manage supplier  decisions related to the retirement of the Shuttle and transition to the  Constellation Program. The new process defines key areas of authority  and responsibility and lines of reporting. Control boards, comprising  representatives from the Space Shuttle, Constellation, and International  Space Station programs, are expected to provide guidance and facilitate  decisions on important transition issues. Transition managers have been  appointed at the directorate, program, and center levels. Table 1 provides  an overview of the various processes.
To make better informed decisions, the boards obtain supplier  assessments, known as Space Shuttle Management Resource Transition  (SMRT) documents, usually completed by the project offices, which  provide rationale and potential impact for recommended courses of  action. Shuttle capabilities with potential use for the Constellation  Program are usually elevated to Transition Control Board for coordination  and review.
NASA is using the Critical Single Source Supplier List and the new  Strategic Capabilities Assessment database to manage its supplier base  through the retirement of the Shuttle and transition to the Constellation  Program. The Critical Single Source Supplier List existed prior to the  announcement of the Shuttle’s retirement and is used to monitor the  unique capabilities provided by critical single source suppliers and note  any supportability issues that could arise. NASA considers a supplier to be  a critical single source supplier if it is the only known or only certified  source of particular hardware or services and has received hardware or  services from them in the past 5 years or expects to do business with them  again in the future. The list contains over 230 suppliers identified by each  of the five major Shuttle project offices (see app. II for a list of NASA’s  critical single source suppliers). NASA can exercise various options to  ensure that certain key capabilities and the critical suppliers associated  with those capabilities are maintained until no longer needed. For  example, a skills retention contract can be put in place by Shuttle program  officials through the prime contractor to ensure that a subcontractor will  maintain the minimum skills necessary to perform failure analysis until the  end of the Shuttle Program.
The Strategic Capabilities Assessment database, created after the Shuttle’s  retirement was announced, provides an initial review and categorization of  Shuttle’s assets and is used for tracking, controlling, maintaining, and  updating information associated with Shuttle capabilities. Each capability  comes bundled with property, personnel, suppliers, contracts, and Shuttle  last-need date, which together produce a product or service, and the  database tracks risk associated with each capability. Using the information  gathered in the database, NASA can generate a master schedule that  provides the basis for transition plans and adds insight into the progress of  transition and retirement activities. The Transition Program Requirements  Control Board plans to use the master schedule to estimate how many  decisions need to be made each quarter. The Shuttle Program has  identified most of the last-need dates and release dates for the 300 or so  capabilities that are contained in the Strategic Capabilities Assessment  database, according to NASA officials. Constellation Program officials  have completed in the spring of 2007 a preliminary assessment of which  capabilities will be needed in the future, but acknowledged that further  requirements refinement and definitions are needed.
section_title: Effectiveness of NASA’s Transition Plans and Processes Not Known until Constellation’s Supplier Base Needs Become Clearer and More Decisions Have Been Processed
paragraphs: Whether NASA’s transition plans and processes will be effective is unclear  because NASA has not set requirements for Constellation’s supplier base  needs and few decisions about suppliers have worked their way through  the new processes.
subsections: section_title: Constellation Lacks Detailed Supplier Base Needs Requirements
paragraphs: While the Shuttle is, in some cases, ready to release or transfer certain  suppliers, its ability to do so has been impacted by the lack of detailed  requirements from the Constellation Program. According to NASA  officials, because the Constellation Program is early in its design cycle, it  is not able to “pull” suppliers to Constellation as a counter to the “push”  from the Shuttle Program to release or transfer suppliers. For instance,  according to the Space Shuttle Main Engine (SSME) project manager, even  though his office has identified, to the best of its abilities, the suppliers  that could be needed for the J-2X engine (which will be used on the Crew  Launch Vehicle), the Constellation Program is still working on the  requirements for the J-2X and has not made any determinations about  which Shuttle suppliers will be needed. The SSME project office was able  to identify suppliers that could be used for new exploration activities  because the same prime contractor that produces the Shuttle main engines  will produce the J-2X engine. There is a risk that the SSME project will  have to make decisions prior to the establishment of defined requirements  at a risk of losing some key capabilities. When NASA makes decisions as  whether to maintain an existing supplier that might not be needed in the  future, NASA is attempting to balance the risk associated with losing that  supplier and unnecessarily spending funds that could be used for other  priorities. As a result of Constellation’s lack of detailed requirements,  there are cases where NASA has provided funding for certain Shuttle  suppliers’ work through its prime contractor’s subcontracts because of a  possible future need for the suppliers with the Constellation Program and  the need to maintain the critical skills. Following are examples of such  cases.
One subcontractor is a critical single source supplier that makes tubes  for nozzles and heat exchange coils. At the time of our review, the last  delivery from the subcontractor is scheduled for summer of 2007, after  which the prime contractor could end its relationship with the  subcontractor. However, the SSME project office will seek gap funding  for work that would maintain the subcontractor’s capability/skills  because SSME project office officials believe that Constellation  Program will likely have a future, but not an immediate need for the  subcontractor’s services. SSME project office officials pointed out that  the subcontractor may go out of business without NASA funding.
Another subcontractor is a critical single source supplier certified to  refurbish and re-certify the post-flight Solid Rocket Booster (SRB)  actuators. The SRB project currently has inventories that can support  the remaining Shuttle flights plus eight spares. Therefore, the SRB  project office could have informed the prime contractor that it no  longer needed the subcontractor’s services as of January 2007.  However, because the subcontractor’s refurbishment capability may be  needed for the Ares 1 Crew Launch Vehicle (CLV), the SRB project  office sought and obtained $1.8 million in gap funding from the  Transition Program Requirements Control Board for work that would  preserve the subcontractor’s capability/skills for the CLV through the  end of fiscal year 2007. Otherwise, according to analysis completed by  NASA, if the Constellation Program needed to restart the  subcontractor’s refurbishment capability in the future through a new  subcontract with the CLV’s prime, it would cost $15 million. At the time  of our review, the Space Shuttle Program Transition Manager stated  that the Constellation Program should decide by summer of 2007  whether it needs the subcontractor as its supplier.
The lack of a “pull” from the Constellation Program—that would identify  current Shuttle suppliers that will be used in the new exploration  program—may result in additional gap funding for some critical suppliers,  costly production restarts in the event that some suppliers are let go but  found to be needed later, or the capability could be lost altogether.
section_title: Increasing Number of Supplier and Capability Decisions to Be Made in Coming Years Could Overwhelm NASA’s Processes
paragraphs: The lack of requirements for the Constellation Program is not the only  factor impacting NASA’s transition plans and decision-making processes.  NASA’s plans and decision-making processes are relatively untested  because only a small number of supplier decisions have been vetted  through the decision-making process thus far. The Strategic Capability  Assessment database, as described earlier, was created to efficiently and  effectively manage the transition and retirement of Shuttle capabilities.  The database divides each Shuttle project element into a list of capabilities  that comprise the entire project. Each capability covers property,  personnel, suppliers, and contracts data. A key decision date, last-need  date, and estimated release date are determined for each capability.
Documenting decisions is an important part of the decision-making  process. Each transition-ready capability in the Strategic Capabilities  Assessment database should be paired with a corresponding SMRT  document that will wind its way through the decision-making process and  then be approved by the program-level Transition Program Requirements  Control Board and/or the Transition Control Board at the directorate level.  The document provides a body of relevant information from which  decisions can be rendered, communicated, documented, and tracked. This  paperwork is needed for any Shuttle capability that is being partially or  fully terminated before the Shuttle Program ends—including those to be  transferred to the Constellation Program.
As of January 2007, Shuttle program officials predicted they would need to  set 42 key decision dates for fiscal year 2007; in May 2007, after realizing  that this target was too optimistic, officials reduced the number to 21 and  rescheduled a number of key decision dates to later years. Future dates  also were adjusted. Figure 3 shows the number of dates set in January  2007 and then revised in May 2007.
As the number of key decision dates and the corresponding SMRT  documents to be processed increase in the coming years, the ability of the  transition process to function effectively will be tested. NASA officials  acknowledge that the increasing number of SMRT documents scheduled  for upcoming years has the potential to overwhelm the transition decision- making process.
section_title: Obsolescence, Workforce Issues, and Transition Cost Estimates Pose Other Challenges to NASA’s Transition Efforts
paragraphs: NASA is likely to encounter other issues as it transitions to new  exploration activities, including:    obsolescence, particularly with regard to outdated materials for which  no replacements have yet been developed;    supplier viability;    potential loss of NASA personnel with science and engineering    safe disposal and cleanup of Shuttle facilities and equipment; and    developing estimates of transition costs.
subsections: section_title: Obsolescence
paragraphs: To lower development costs for the Constellation Program, NASA plans to  leverage some of the Space Shuttle Program’s existing technologies. In  doing so, the Constellation Program stands to inherit problems, such as  the continued use of obsolete materials for which replacements have yet  to be found. Some long-used Shuttle materials are now known to pose  environmental or health hazards. Examples include chrysotile fiber  (asbestos), a component in rubber insulation; hydrazine, a type of fuel;  methyl chloroform, a cleaning solvent and degreaser; and HCFC-141b, a  foam-blowing agent. The Environmental Protection Agency classifies  asbestos as a known carcinogen and hydrazine as a probable carcinogen,  while both methyl chloroform and the foam-blowing agent are classified as  ozone-depleting substances. If the Constellation Program continues to use  these materials, health and environmental concerns will persist and  administrative and technical burdens will likely increase.
section_title: Supplier Viability
paragraphs: Supplier viability presents another challenge. Over the years, the Shuttle  Program has experienced many instances of suppliers dropping off  unpredictably, making supply chain management more difficult and costly.  The Integrated Space Operations Summit, attended by representatives  from NASA, industry, and academia, issued a report in April of 2005 that  stated the following: “the average mitigation cost from a loss of supplier,  based on over 100 industry case studies, is between $200,000 and   $700,000. Inventory, tooling, design, freight, people time, rush premiums,  and extraordinary costs add to this figure.” NASA created the Critical  Single Source Supplier List as a way to monitor critical suppliers that were  the only known source or only certified source of a certain component or  material. In addition, the statement of work in Shuttle’s Space Program  Operations contract specifies that the prime contractors need to identify  and resolve issues pertaining to loss of repair capabilities, failure analysis,  or production capabilities. This information allows Space Shuttle Program  officials to proactively monitor the supplier base and formulate  appropriate risk mitigation plans, if needed. Given that the Constellation  Program is the Shuttle’s replacement and will likely span decades, supplier  viability issues could arise as they did during the Shuttle Program.  Appropriately monitoring the supplier base early on, especially during the  production and sustainment phases of the Constellation Program, could  help to mitigate potential supplier viability issues.
section_title: Potential Loss of NASA Expertise
paragraphs: NASA acknowledges that it must realign employee resources and plan for  a smaller workforce. NASA projects fewer resources will be required for  operating and sustaining hardware, especially during vehicle processing  and launch operations. By fiscal year 2012, the total number of personnel  needed to meet NASA’s strategic goals is likely to drop from 18,100 to  17,000. As new space systems are designed, emphasis will shift to  personnel with skills in systems development and engineering, program  management, and systems integration. NASA made the decision to  maintain program management and systems engineering competencies  within the civil service workforce to ensure that it has the capabilities it  needs to develop programs and projects for its missions. NASA  acknowledges that, in coming years, these very skills will be in high  demand across the federal government and in the private sector. NASA’s  senior leaders recognize the need for an effective workforce in achieving  mission success and to ensure the agency has the scientific and technical  expertise necessary to preserve the nation’s role as a leader in aeronautics,  earth and space science, and technology. NASA has a strategic human  capital plan and Shuttle strategic human capital plan, but more work is  needed in workforce planning and deployment. In a separate review  requested by Congress, GAO is assessing the extent to which NASA’s  human framework is aligned with its strategic mission and programmatic  goals; whether NASA is effectively recruiting, developing, and retaining  critically skilled staff; and what internal or external challenges NASA faces  in achieving its workforce needs.
section_title: Environmental Disposal and Cleanup
paragraphs: While executing the remaining Shuttle missions, NASA will simultaneously  begin the process of disposing Shuttle facilities that are no longer needed  and transitioning facilities that can be used by other NASA programs.  NASA officials say that a much smaller number of facilities than the  current 654 Shuttle facilities will probably be required to support the  development or operation of future exploration systems. Environmental  management encompasses a wide range of activities, including identifying  and mitigating the environmental consequences of program and project  activities, informing systems engineering decisions to enhance safety,  preventing pollution, correcting environmental damage from past  operations, and maintaining compliance with federal, state, and local  environmental laws and regulations. Although NASA has an approach for  identifying environmental risks, the agency does not have a  comprehensive estimate of the environmental cleanup costs associated  with the transition and disposal of the Shuttle Program’s facilities and  equipment. In our report on major challenges facing the nation in the 21st  century, we pointed out that frequently the costs associated with  environmental cleanup dramatically exceed available funding levels. For  example, it cost the Titan IV Program approximately $300 million over   6 years on cleaning facilities, equipment, and tools. Paying for  environmental cleanup may require a significant future outflow of funds at  the same time that NASA will be facing many other competing demands  for its limited dollars, such as development of Orion, Ares I, and other  exploration projects.
section_title: Transition Cost Estimates
paragraphs: Developing cost estimates is a complex task for a transition of this  magnitude. Although NASA has identified its funding needs through fiscal  year 2010 for transition activities—such as planning and initial  asset/facilities screening and disposition—the total cost of retiring the  Shuttle and transitioning to new exploration activities is currently being  developed. The last Shuttle flight is scheduled to be flown in 2010, but  many transition and retirement activities will occur after that date.  Disposal of program facilities, contract closeouts, and transition and/or  severance of the remaining workforce are among the tasks ahead.  According to NASA officials, such efforts could last through 2020. At this  time, NASA does not know the extent of the Shuttle Program’s  environmental liabilities. Paying for such liabilities later may complicate  NASA’s future fiscal landscape, especially when there will be other  competing demands, such as Constellation’s crew exploration vehicle, the  crew launch vehicle, and other new exploration activities.
In 2006, NASA developed a cost estimate of $2.8 billion for transition and  retirement activities through fiscal year 2020. NASA officials say the  estimate was based on a preliminary set of assumptions that were not  properly validated and was calculated without the involvement of the  NASA’s space centers and other institutions. Thus, NASA officials consider  the estimate immature and, in its fiscal year 2008 budget submission to  Congress identifying funding needs for fiscal year 2008 plus the required   4 out-years through fiscal year 2012, NASA elected not to include any  funds for transition and retirement activities for fiscal years 2011 and 2012.  Without cost estimates, NASA does not have the information needed to  support the budget preparation process or assess the costs of addressing  its supplier challenges. The Shuttle Program’s risk assessment states that  not having secured funds for transition and retirement activities for fiscal  year 2011 and 2012 is a risk to follow-on programs and institutions and to  the agency as a whole.
As stated in NASA’s Inspector General report issued in January 2007,  NASA’s own program and project management guidelines, the Integrated  Space Operations Summit Transition Panel Report, and one of the  Shuttle’s benchmarking studies (the Titan IV Program) all call for the  establishment of a detailed cost estimate for the Shuttle’s retirement and  transition. NASA officials say they are in the process of recalculating the  total cost estimate through fiscal year 2020 and are deciding how to budget  for transition and retirement activities beyond 2010. NASA officials told us  that transition and retirement costs past 2010 will likely be absorbed by  the other NASA programs—including the Constellation Program—and the  space centers when the Shuttle Program ceases to exist. This will likely  affect the scope of those activities as well.
section_title: Conclusions
paragraphs: NASA’s transition plans and processes increase the chances that key  decisions about the supplier base will be made with sufficient input from  the right people with the right expertise. The lack of defined requirements  for the Constellation Program is having an impact on supplier transition  decisions. Even if all of Constellation’s requirements were known today,  NASA still may not be prepared to process the myriad of decisions ahead.  Only after NASA funnels more supplier decisions through its new  processes will the agency be able to declare success or failure. The sheer  volume of decisions could create bottlenecks, with some critical suppliers  getting lost in the mix, dropping out altogether before NASA makes up its  mind, and adding risk that NASA will have nowhere to turn for certain  capabilities. Lastly, the costs of transition and managing suppliers will be  affected by many decisions yet to be made, including gap funding  requirements and environmental remediation efforts. As a result, it is  important that NASA begin estimating its transition and retirement costs  and continually revisit these estimates to reflect final decisions on  requirements and additional knowledge gained on technology  development and supplier needs. Such cost estimates also need to be part  of NASA’s budget submission to ensure Congress and NASA can balance  investments and negotiate between competing priorities.
section_title: Recommendation
paragraphs: Given the fact that many of NASA’s transition and retirement activities will  continue to occur following the Shuttle retirement in 2010, it is important  that NASA identify and estimate the costs associated with these activities  in an accountable and transparent manner. Therefore, we are  recommending that the NASA Administrator direct the Exploration  Systems Mission Directorate and Space Operations Mission Directorate to  jointly develop cost estimates for transition and retirement activities  beyond fiscal year 2010 so that, in NASA’s fiscal year 2009 budget  submission, NASA can include transition and retirement funding needs for  the required out-years through fiscal year 2013. We would expect these  estimates to be adjusted every year and have more fidelity as NASA gains  more knowledge and makes more decisions.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report (see app. IV), NASA  concurred with our recommendation, but stated that NASA management  will work with the Office of Management and Budget to determine the  appropriate timing for including transition and retirement costs in the  President’s Budget Proposal. We also received technical comments from  NASA, which have been addressed in the report, as appropriate.
We are sending copies of the report to NASA’s Administrator and  interested congressional committees. We will also make copies available  to others upon request. In addition, the report will be available at no  charge on GAO’s Web site at http://www.gao.gov.
Should you or your staff have any questions on matters discussed in this  report, please contact me at (202) 512-4841 or at ChaplainC@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 that made  key contributions to this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: (1) To determine what plans and processes the National Aeronautics and  Space Administration (NASA) has established to effectively manage its  supplier base to ensure both sustainment of the Shuttle Program and  successful transition to planned exploration activities, we performed the  following:    Obtained and reviewed documents from NASA describing plans and  processes for managing retirement and transition activities, including  the Human Space Flight Transition Plan, Space Shuttle Program  Transition Management Plan, Space Shuttle Program Transition and  Retirement Requirements, and the Space Shuttle Program Risk  Management Plan.
Reviewed various NASA reports and studies on similar retirement and  transition efforts elsewhere in the federal government.
Examined databases relevant to NASA’s transition, specifically the  Strategic Capabilities Assessment database and the Shuttle Integrated  Risk Management Application.
Reviewed Space Shuttle Management Resource Transition documents  and meeting minutes.  Interviewed NASA’s transition management officials at NASA  Headquarters and the NASA Centers.
Compared NASA’s plans and processes to GAO’s Standards for Internal  Control in the Federal Government.  (2) To describe factors that could impact the effectiveness of such plans  and processes for managing NASA’s supplier base and to (3) identify any  other issues that NASA will likely encounter as the agency transitions to  and implements its planned exploration activities, we performed the  following:    Reviewed NASA’s 2008 Budget Request along with Planning,  Programming, Budgeting and Execution Guidance for 2008 and 2009.
Collected and analyzed information derived from the Strategic  Capabilities Assessment Database, including last need dates and key  decision dates.  Interviewed NASA Constellation, Space Shuttle, and International  Space Station Program officials for information on coordination  between programs.
Discussed transition challenges with NASA officials at the agency,  program, and project level, with prime contractors for the Space  Shuttle and Exploration programs, and with representatives of the  Aerospace Industries Association.
Reviewed past GAO testimonies and reports.
Identified obsolescence and supplier viability issues noted in NASA and  contractor reports and briefing charts that might impact new  exploration activities.
To accomplish our work, we interviewed NASA and prime contractor  officials for the Orbiter project at Kennedy Space Center in Cape  Canaveral, Florida; NASA and prime contractor officials for the External  Tank, Solid Rocket Booster, Reusable Solid Rocket Motor and Space  Shuttle Main Engine projects at Marshall Space Flight Center in Huntsville,  Alabama; and NASA officials for the Constellation, Space Shuttle and  International Space Station programs at Johnson Space Center in Houston,  Texas. We also attended the January 2007 Transition Quarterly Program  Manager’s Review to garner information on the status of transition. At  NASA Headquarters in Washington, D.C., we met with the SOMD and  ESMD Transition Managers, the Deputy Associate Administrator for  Program Integration, the ESMD Special Procurement Advisor, and  representatives from the SOMD and ESMD Resources Management  Offices.
We conducted our work from September 2006 to June 2007 in accordance  with generally accepted government auditing standards.
section_title: Appendix II: Space Shuttle Program Critical Single Source Suppliers
paragraphs: MADS Recorder  Thermal Protection System - Reusable Surface Insulation  Auxiliary Power Units, Flight Control Hardware  Emergency Egress Slide, Thruster Assembly, Window Pyrotechnic Devices  O2/N2 Sensors, PPO2 Sensors, Valves  ECLSS Waste and Potable Water Tank, Bellows Assembly (Lines, Tanks)
Shell Assembly (Salad Bowl)
MPS Feed Lines/Gimble Joints/ Re-circulation Manifold, GN2 Isolation Valve  Bellows Assembly for Class I GSE  RTVs (Room Temperature Vulcanization Adhesives), Adhesives  Sensor, Heater (Thermocouple)
RCC, LESS, RFCA (Used in the Thermal Protection System)
Hydraulic 3-Way Valves, Hydraulic Control Valve & Bootstrap Reservoir  MLG-NLG Landing Gear Production and Storage for Special Tooling/Special   Test Equipment  Honeywell International, Inc. - Glendale, AZ  Enhanced Multiplexer/De-multiplexer, Multifunction Electronic Display System  Honeywell International, Inc. - Tucson, AZ  Air Data Transducer Assembly, Annunciator Control Unit  Kearfott Guidance and Navigation Corp.
Inertial Measurement Units (IMU)
Frequency Division Multiplexer (FDM)
TACAN, GPS, DDU, HIS (Used for Guidance, Navigation and/or Control)
Microwave Scan Beam Landing System Decoders, Transmitters, Antenna, RF  Assemblies  Advanced Master Events Controller, Enhanced Master Events Controller  Filters, Valves, Regulators, Disconnects  Device Drive Unit (DDU)
Hypergolic & Power Reactant Storage and Distribution Bellow Assembly for   Quick Disconnects  Dimethylethoxysilane (DMES)
Permabond, Sealing Compound, & Molykote 321  Cork (External)
Railcar, End Grain, and Nozzle Shipping Covers  MAPO (Inhibitor Curative)
Glass, Carbon, Silica Cloth  Glass, Carbon, Silica Cloth  Rayon Fabric Weaver (Nozzle)
Phenolic Resin (Nozzle)
Aerojet General Corp. - Propulsion Division  Gas Generator   Pacific Scientific Energetic Materials Co.
Frangible Nut, Separation Nuts, Separation Bolts  Linear Shaped Charges (LSC), Nose Cap Thrusters, Pressure Cartridges, Confined  Detonating Fuse Manifold, Range Safety System LSC, Frustum LSC  ET Bolt Catchers, Struts, ETA Rings, Spherical Washers  ET Strut Cover & Fairing Assembly, Zinc Anodes  Forward Skirt Door Seal, Gaskets  PR 855, Sealant 1422  Epoxy Resin (2216)
Cab-o-Sil, Fumed Silicon Dioxide  Sea Water Activated Release (SWAR) (parachute line cutting system), SWAR batteries  Hysol EA 934 NA (Epoxy Paste Adhesive), Thixotropic Epoxy Adhesive  RCAS 2400 (Anti-static Packaging Material)  6077 Foam, RTV, DC 1200  Adhesive (RTV 133)
Epoxy Primer  Auxiliary Power Unit Flush & Purge Filter  Liner - Main Combustion Chamber (MCC), Forging Inlet Manifold Splitter  Heat Exchange Coil Assembly, Nozzle Coolant Tubes, Nozzle Steerhorn Tubes   Nickel Plating of Nozzle Tubes  Forging Jacket MCC, Forging Inducer Low Pressure Fuel Turbopump (LPFTP)
Industrial Tectonics Bearing (ITB) Corp. -  (Subsidiary of Roller Bearing Co.)
MCC AFT Manifold; FWD Manifold   Balls for Bearings (Metal & SiN3)
Precious Metal and Nickel Plating  Complex Machine Parts, Housings  Protective Covers, Closers, Caps   Hard Anodize of Low Pressure Oxidizer Turbopump (LPOTP) Housing  Seals, HPTP Turbine Inlet Bellows  Turbine Blade and Vane Fabrication  Howmet Corp. - Hampton Casting Division  Large Castings for Turbopumps  Bellows Assembly (Lines, Tanks)
Fluorinated Ethylene-Propylene Coating for Bearing Cages  Propellant Valve/Hydraulic Actuator Main Oxidizer Valve Actuator (MOVA), Main Fuel  Valve Actuator (MFVA), Preburner Fuel Oxidizer Valve Actuator (FPOVA), Oxidizer  Preburner Oxidizer Valve Actuator(OPOVA), Chamber Coolant Valve Actuator( CCVA)
HPOTP, HPFTP (High Pressure Oxidizer and Fuel Turbopumps)
section_title: Appendix III: Comments from the National Aeronautics and Space Administration
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: In addition to the contact named above, James L. Morrison, Assistant  Director; Lily Chin; Hillary Loeffler; Jeffrey Niblack; Shelby S. Oakley;  Sylvia Schatz; and John P.K. Ting made key contributions to this report.