NASA: Issues Surrounding the Transition from the Space Shuttle to the Next Generation of Human Space Flight Systems
Published: 2007-03-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: On January 14, 2004, the President announced a new Vision for space exploration that directs the National Aeronautics and Space Administration (NASA) to focus its efforts on returning humans to the moon by 2020 in preparation for future, more ambitions missions. Implementing the Vision will require hundreds of billions of dollars and a sustained commitment from multiple administrations and Congresses. Some of the funding for implementing exploration activities is expected to come from funding freed up after the retirement of the Space Shuttle, scheduled for 2010, and projected termination of U.S. participation in the International Space Station by 2016. Congress, while supportive of the effort has voiced concern over the potential gap in human space flight. In the NASA Authorization Act of 2005, Congress stated that it is the policy of the United States to have the capability for human access to space on a continuous basis. NASA has made it a priority to minimize the gap to the extent possible. GAO provides no recommendations in this statement. However, GAO continues to emphasize that given the Nation's fiscal challenges and NASA's past difficulty developing systems within cost, schedule, and performance parameters, it is imperative that the agency adequately manage this transition in a fiscally competent and prudent manner.
section_title: What GAO Found
paragraphs: NASA is in the midst of a transition effort of a magnitude not seen since the end of the Apollo program and the start of the Space Shuttle Program more than 3 decades ago. This transition will include a massive transfer of people, hardware, and infrastructure. Based on ongoing and work completed to-date, we have identified a number of issues that pose unique challenges to NASA as it transitions from the shuttle to the next generation of human space flight systems while at the same time seeking to minimize the time the United States will be without its own means to put humans in space. These issues include: sustaining a viable workforce; effectively managing systems development efforts; managing the supplier base; providing logistical support to the International Space Station; identifying and disposing of property and equipment; ensuring adequate environmental remediation; and transforming its business processes and financial management system. NASA already has in place many processes, policies, procedures and support systems to carry out this transition. However, successful implementation of the transition will depend on thoughtful execution and effective oversight. How well NASA overcomes some of the challenges we have identified will not only have an effect on NASA's ability to effectively manage the gap in the U.S. human access to space, but will also affect the agency's ability to secure a sound foundation for the President's space exploration policy.

section_title: Letter
paragraphs: Thank you for inviting me to discuss the challenges faced by the National  Aeronautics and Space Administration (NASA) in transitioning from the  space shuttle to the next generation of human space flight systems. In  2004, the President established a new exploration policy—A Renewed  Spirit of Discovery: The President’s Vision for U.S. Space Exploration  (Vision)—which calls for the retirement of the space shuttle and the  development of a new family of exploration systems. NASA’s  implementation of the Vision is expected to cost hundreds of billions of  dollars. A NASA effort of this size and scope has not been seen since the  end of the Apollo program and the start of the Space Shuttle Program  more than 3 decades ago. The transition includes a massive transfer of  people, hardware, and infrastructure. Although NASA has in place many  processes, policies, procedures, and support systems to carry out this  effort, successful transition will depend on thoughtful execution and  effective oversight.
The need for NASA to implement the Vision in a fiscally prudent and  effective manner cannot be overemphasized given the competing fiscal  demands facing the federal government and an already troubling funding  profile projected for human spaceflight activities. We have issued a  number of reports that touch on various aspects of retiring the space  shuttle and transitioning its assets and people to exploration activities.  These reports have questioned the affordability of the exploration  program, NASA’s acquisition strategy for the development of new space  vehicles, agencywide contract management, and workforce planning for  current and future agency needs. We also have an ongoing body of work  being performed at the request of the House Committee on Science and  Technology regarding effective management of the industrial base,  development of the Ares I Crew Launch Vehicle, and the logistical support  needed by the International Space Station (ISS). In addition, at the request  of the Senate Committee on Homeland Security and Governmental Affairs,  Subcommittee on Oversight of Government Management, the Federal  Workforce, and the District of Columbia, we are reviewing NASA’s ability  to attract and retain a skilled workforce. My statement today will focus on  the overarching challenges that NASA faces in transitioning from the  shuttle to the next generation of human space flight systems and will  discuss our prior work on shuttle workforce and development of the Orion  Crew Exploration Vehicle, one of the agency’s complex programs. I will  also discuss areas where we have related ongoing work.
This testimony is based on work conducted in accordance with generally  accepted government auditing standards.
subsections: section_title: Background
paragraphs: The President’s Vision for Space Exploration for NASA announced in 2004  calls for the retirement of the shuttle upon completion of the ISS and the  creation of new vehicles for human space flight that will allow a return to  the moon by 2020 and voyages to Mars and points beyond. The shuttle  manifest currently consists of 16 flights—15 to complete assembly and  integration of the ISS and a servicing mission to the Hubble Space  Telescope. The first new space vehicles currently are targeted to begin  operating no later than 2014—thereby creating a potential gap in U.S.  human space flight. Congress has voiced concern over the United States  not having continuous access to space. NASA has made it a priority to  minimize the gap to the extent possible.
NASA has begun planning for the retirement of the shuttle, scheduled for  2010, by identifying best practices in closing facilities and the transitioning  of capabilities. Specifically, NASA has conducted a number of  benchmarking studies of previous closures and realignment of large  programs, including the Titan IV rocket fly-out, the F/A-18 C/D fighter  production close, and the Navy Base Realignment and Closure activities.  The benchmarking efforts have highlighted to NASA the importance of  having a plan, effective communication, human capital management, and  effective program management tools. NASA’s benchmarking effort also  showed that closing and transitioning facilities, equipment, and people is  expensive and time consuming. Among the lessons learned is that,  historically, it has taken 3.5 years to close down an installation and  another 3 years to complete the transition of the property. NASA’s Office  of the Inspector General has recently reviewed NASA’s plan for the space  shuttle transition and recommended, among other improvements, that the  two affected space directorates finalize and implement the Human Space  Flight Transition Plan.
Development of the Orion crew capsule, Ares I launch vehicle, and other  exploration systems needed to implement the Vision is dependent on a  “go as you can afford to pay” approach, wherein lower-priority efforts will  be deferred, descoped, or discontinued to allow NASA to stay within its  available budget profile. In recent testimony, the NASA Administrator said  that the cost associated with returning the shuttle to flight, continued  shuttle operations, and recent budget reductions had the combined effect  of increasing the gap by delaying the first manned Orion test flight by   6 months.
In an effort to address the gap in U.S. capability to resupply the space  station following retirement of the shuttle, NASA is investing in  commercial space transportation services. NASA’s expectation is that by  acquiring domestic orbital transportation services it will be able to send  cargo and, in the future, transport crews to the ISS in a cost-effective  manner. NASA refers to this as the Commercial Orbital Transportation  Services project. The project is in the early stages of development. Should  these commercial services prove to be unreliable or more costly than  anticipated, NASA will need to purchase space transportation from its  international partners to meet obligations to the ISS until the new Orion  spacecraft become operational.
section_title: NASA Faces Significant Challenges in Retiring the Space Shuttle Program and Transitioning to Exploration Activities
paragraphs: We have undertaken a substantial body of work over the past 3 years that  has highlighted the significant challenges that NASA will face as it retires  the shuttle and transitions to exploration activities. One key challenge is  sustaining the shuttle workforce through the retirement of the shuttle  while ensuring that a viable workforce is available to support future  activities. Another key challenge will be developing the Orion Crew  Exploration Vehicle within cost, schedule, and performance goals.  Additionally, our ongoing work has identified a number of other areas that  may present challenges during the transition period. Some of these  challenges include managing the supplier base to ensure its continued  viability, developing the Ares I Crew Launch Vehicle, and completing and  supporting the space station.
subsections: section_title: Maintaining a Skilled Workforce
paragraphs: The Space Shuttle Program’s workforce is critical to the success of the  Vision. The shuttle workforce currently consists of approximately   2,000 civil service and 15,000 contractor personnel, including a large  number of engineers and scientists. In 2005, we reported that NASA had  made limited progress toward developing a detailed strategy for sustaining  a critically skilled shuttle workforce to support space shuttle operations.  We reported that significant delays in implementing a strategy to sustain  the shuttle workforce would likely lead to larger problems, such as  funding and failure to meet NASA program schedules. Accordingly, we  concluded that timely action to address workforce issues is critical given  their potential impact on NASA-wide goals such as closing the gap in  human spaceflight.
When we performed our work several factors hampered the ability of the  Space Shuttle Program to develop a detailed long-term strategy for  sustaining the critically skilled workforce necessary to support safe space  shuttle operations through retirement. For example, at that time, the  program’s focus was on returning the shuttle to flight, and other efforts  such as determining workforce requirements were delayed. In our report,  we recommended that NASA begin identifying the Space Shuttle  Program’s future workforce needs based upon various future scenarios.  Scenario planning could better enable NASA to develop strategies for  meeting future needs. NASA concurred with our recommendation. It has  acknowledged that shuttle workforce management and critical skills  retention will be a major challenge for the agency as it progresses toward  retirement of the space shuttle and has taken action to address this issue.  For example, since we made our recommendation, NASA has developed  an agencywide strategic human capital plan and developed workforce  analysis tools to assist it in identifying critical skills needs. NASA has also  developed a human capital plan specifically for sustaining the shuttle  workforce through the retirement and, then transitioning the workforce.
Additionally, in March 2006, the Senate Appropriations Subcommittee on  Commerce, Justice, Science, and Related Agencies, and NASA asked the  National Academy of Public Administration (NAPA) to assist the agency in  planning for the space shuttle’s retirement and transition to future  exploration activities. In February 2007, a NAPA panel recommended that  the Space Shuttle Program adopt a RAND model for projecting a core  workforce because of its emphasis on “long-term scheduling projections,  quantification of core competencies and proficiencies, and analysis of  overlapping mission needs.” Under the RAND model, an organization  maintains a core capability for any competency that will be needed in the  future. According to NAPA, this model is useful where a given expertise is  not immediately required, but is likely to be needed in the future—in this  case, for the Orion Crew Exploration Vehicle.
section_title: Developing New Exploration Systems
paragraphs: In July 2006, we reported that NASA’s acquisition strategy for the Orion  Crew Exploration Vehicle placed the project at risk of significant cost  overruns, schedule delays, and performance shortfalls because it  committed the government to a long-term contract before establishing a  sound business case. Our past work has shown that developing a sound  business case—one that matches requirements to available and reasonably  expected resources before committing to a new product development  effort—reduces risk and increases the likelihood of successful outcomes.  For a program to increase its chances of success, high levels of knowledge  should be demonstrated before significant commitments are made   (i.e., they should be following a knowledge-based approach to product  development).
At the time of our report, NASA had yet to develop key elements of a  sound business case, including well-defined requirements, mature  technology, a preliminary design, and firm cost estimates that would  support its plans for making a long-term commitment. Without such  knowledge, NASA cannot predict with any confidence how much the  program will cost, what technologies will or will not be available to meet  performance expectations, and when the vehicle will be ready for use.  NASA acknowledged that it would not have these elements in place until  the project’s Preliminary Design Review scheduled for fiscal year 2008. As  a result, we recommended that the NASA Administrator modify the  agency’s acquisition strategy for the Orion Crew Exploration Vehicle to  ensure that the agency does not commit itself, and in turn the federal  government, to a long-term contractual obligation prior to establishing a  sound business case at the project’s Preliminary Design Review.
Although it initially disagreed with our recommendation, NASA  subsequently took steps to address some of the concerns we raised.  Specifically, NASA modified its acquisition strategy for the Orion project  and changed the production and sustainment portions of the contract into  options. The agency will decide whether to exercise these options after  the project’s critical design review in 2009. While these changes are in line  with our recommendation and a step in a positive direction, we continue  to believe NASA’s acquisition strategy is risky because it does not fully  conform to a knowledge-based acquisition approach. Attempting to close  that gap by pushing forward development of the Orion Crew Exploration  Vehicle without first obtaining the requisite knowledge at key points could  very well result in the production of a system that not only does not meet  expectations but ends up costing more and actually increases the gap.
Since we last testified on this subject in September 2006, NASA has  successfully completed its first major milestone for the Orion project. It  has completed the Systems Requirements Review. This was a major step  toward obtaining the information critical for making informed decisions.  According to NASA’s Orion contracting officer, NASA is also in the  process of renegotiating the Orion contract to extend the Initial  Operational Capability date of the system to 2014. Further, while this  change will increase contract costs, the increase has already been  accounted for in the Orion budget because the agency has been planning  the change for over a year. In addition, risks associated with schedule,  cost, and weight continue to be identified for the Orion project.
As we have previously testified, sound project management and oversight  will be key to addressing the risks that remain for the Orion project as it  proceeds with its acquisition approach. To help mitigate the risks, we have  recommended in the past that NASA have in place markers (i.e., criteria)  to assist decision makers in their monitoring of the project at key  junctures in the development process. Such markers are needed to provide  assurance that projects are proceeding with and decisions are being based  upon the appropriate level of knowledge and can help to lessen project  risks. NASA has recently issued its updated program and project  management requirements for flight systems in response to our  recommendation. Changes to the policy, including the incorporation of  key decision points throughout the project development life cycle, should  provide an avenue for decision makers to reassess project decisions at key  points in the development process to ensure that continued investment is  appropriate. However, it should be noted that implementation of the  policy in a disciplined manner will ensure success, not the existence of the  policy itself.
Currently, we are evaluating the development of NASA’s latest human- rated launch vehicle—the Ares I Crew Launch Vehicle. When completed,  the Ares I vehicle will be capable of delivering the Orion spacecraft to low  earth orbit for ISS missions and for exploration missions to the moon. As  initially conceived by NASA in the Exploration Systems Architecture Study  completed in 2005, the Ares I design would rely on the existing solid  rocket boosters and main engines from the space shuttle as major  components of its two stages. The current design for the Ares I, however,  diverges from the initial design set forth in the architecture study and now  includes elements from the Apollo-era Saturn V launch vehicle. Current  plans are for Ares I to evolve the solid rocket boosters from the Space  Shuttle Program from four segments to five segments and to build a new  upper-stage engine based on an original Saturn V design. NASA maintains  that these changes are necessary to increase commonality between the  Ares I and the planned Ares V cargo launch vehicle and to reduce overall  development costs for implementing the Vision. As NASA’s design for the  Ares I continues to evolve, careful planning and coordination between the  Orion and Ares I development teams will be critical to ensuring that  current developmental efforts result in hardware that satisfies the future  requirements of these systems. Subsequently, any development problems  on either of these systems could result in increasing the gap.
Our ongoing work is aimed at assessing whether NASA’s acquisition  strategy for Ares I reflects the effect of changes to the Ares I design  incorporated since the Ares I was first conceived in the Exploration  Systems Architecture Study as a shuttle-derived alternative. Also, we are  evaluating the extent to which NASA’s Ares I acquisition strategy  incorporates knowledge-based concepts designed to minimize technical  and programmatic risk.
The Orion Crew Exploration Vehicle and the Ares I Crew Launch Vehicle  are the first in a series of new systems to be developed in support of  exploration activities. NASA’s careful management of these projects must  preclude historical instances of cost and schedule growth. Indeed, while  NASA has had many successes in the exploration of space, such as landing  the Pathfinder and Exploration Rovers on Mars, NASA has also  experienced its share of unsuccessful missions, unforeseen cost overruns,  and difficulty bringing a number of projects to completion. For example,  NASA has made several attempts to build a second generation of reusable  human spaceflight vehicle to replace the space shuttle, such as the  National Aero-Space Plane, the X-33 and X-34, and the Space Launch  Initiative, that never accomplished its objective of fielding a new reusable  space vehicle. We estimate that these unsuccessful development efforts  have cost approximately $4.8 billion since the 1980s. The high cost of these  unsuccessful efforts and the potential costs of implementing the Vision  make it important that NASA achieve success in developing new systems  for its new exploration program.
section_title: Managing the Supplier Base Throughout Retirement and Transition
paragraphs: NASA’s plans to retire the shuttle have the potential to greatly impact the  supplier base that has been supporting that program for the last several  decades, as well as mold the future supplier base needed for its  exploration program. Over the next few years, NASA will be making  decisions about its supplier base needs, including which suppliers will be  required for the remainder of the Space Shuttle Program, which will no  longer be required for the program, and which will be needed to support  exploration efforts. One concern is that NASA will be unable to sustain  suppliers necessary to support the exploration program during the period  between the shuttle’s retirement and resumption of human space flight.  Also of concern is that those suppliers determined by NASA as not needed  for the exploration program will prematurely end their services, thus  jeopardizing the safe and efficient completion of shuttle activities. In  addition, issues such as obsolescence—already being experienced by  some shuttle projects—could have an impact on the exploration program  given the planned use of heritage hardware for some components of the  Constellation projects. In an attempt to address these potential issues,  NASA has been developing and implementing plans and processes to  manage the transition of its supplier base.
We are in the process of assessing how well NASA is positioning itself to  effectively manage its supplier base to ensure both sustainment of the  Space Shuttle Program through its scheduled retirement in 2010 and  successful transition to planned exploration activities.
section_title: Providing Logistical Support to the International Space Station
paragraphs: The shuttle is uniquely suited for transporting crew and cargo to and from  the ISS. However, with scheduled retirement of the shuttle in 2010, NASA  and its international partners will be challenged to fully support ISS  operations until 2014, when the new crew exploration vehicle is scheduled  to come on line. To fill this gap, NASA plans to rely on its international  partners and commercial services to provide ISS logistics and crew  rotation.
Two recent studies have raised serious concerns about whether future ISS  operations can be continuously supported. A 2006 report by the National  Research Council noted that the capabilities, schedules, and funding  requirements for NASA, international partners, and commercial cargo and  crew vehicles were not yet firm enough to give the panel confidence that  ISS exploration mission objectives have a high likelihood of being  fulfilled. A February 2007 report by the International Space Station  Independent Safety Task Force, which was required by the NASA  Authorization Act of 2005, noted that the transition from the space shuttle  to post-shuttle systems for logistical support to the ISS will require careful  planning and phasing of new capabilities. Specifically, care must be taken  to ensure adequate logistics and spares are provided to maintain a viable  station. The task force report went on to say that if a commitment is  made to an emerging logistics delivery capability and the capability does  not materialize, then logistical support to the ISS could be lost for some  time, seriously decreasing the utility of the space station and possibly  resulting in its abandonment.
We are reviewing NASA’s plans for meeting ISS logistics and maintenance  requirements after the shuttle retires, identifying the main risks to meeting  ISS logistics and maintenance requirements, and assessing NASA’s plans  for addressing the risks.
section_title: Disposing of Property and Equipment
paragraphs: NASA has not developed a comprehensive cost estimate for transitioning  or disposing of Space Shuttle Program facilities and equipment. This poses  a financial risk to the agency. As NASA executes the remaining missions  needed to complete the assembly of and provide support for the ISS, it will  simultaneously begin the process of disposing of shuttle facilities and  hardware that the Space Shuttle Program will no longer need, or,  transitioning such facilities and hardware to the other NASA programs.  As the ninth largest federal government property holder, NASA owns more  than 100,000 acres, as well as over 3,000 buildings and 3,000 other  structures totaling over 44 million square feet. Currently, the Space Shuttle  Program uses 654 facilities valued in excess of $5 billion. The Space  Shuttle Program also manages equipment dispersed across government  and its contractors valued at more than $12 billion. NASA is in the process  of evaluating its Space Shuttle Program facilities and equipment  requirements and identifying existing facilities and equipment that will no  longer be needed to support shuttle operations. Constellation and other  NASA programs will determine whether they need any of the facilities or  equipment released by the Space Shuttle Program. According to NASA  officials, assessments currently project that only 70 to 80 of the existing  facilities are needed to support the development or operation of future  exploration systems. In cases where facilities or equipment are no longer  required by the Space Shuttle Program, no other use is identified, or it is  selected for disposal, it will transition to the resident NASA field center for  disposition.
It is worth noting that even before the retirement of the shuttle, over   10 percent of NASA’s facilities are underutilized or not utilized at all. One  option NASA has is to lease underutilized facilities in exchange for cash  and/or in-kind consideration, such as improvement of NASA’s facilities or  the provision of services to NASA. As directed by the NASA Authorization  Act of 2005, we recently reported on NASA’s Enhanced Use-Leasing  Program. Congress authorized NASA to employ enhanced-use leasing at  two demonstration centers. This allowed the agency to retain the proceeds  from leasing out underutilized real property and to accept in-kind  consideration in lieu of cash for rent. The act allows NASA to deposit the  net proceeds (i.e., net of leasing costs) in a no-year capital account to use  later for maintenance, capital revitalization, and improvement of the  facilities, albeit only at the demonstration centers—Ames Research Center  and Kennedy Space Center. However, unlike other agencies with  enhanced-use leasing authority, NASA is not authorized to lease back the  property during the term of the lease. Furthermore, we found that the  agency does not have adequate controls in place to ensure accountability  and transparency and to protect the government. We recommended that  the NASA Administrator develop an agencywide enhanced use leasing  policy that establishes controls and processes to ensure accountability and  protect the government’s interests including developing mechanisms to  keep the Congress fully informed of the agency’s enhanced use leasing  activity. NASA concurred with our recommendations. After not receiving  additional authority in the NASA Authorization Act of 2005, the agency is  again requesting that the Congress extend enhanced use leasing authority  to at least six NASA centers. NASA currently has other leasing authorities,  but they require the agency to return to the U.S. Treasury any amounts  exceeding cost. Further, NASA has indicated that it is preparing a package  of legislative and administrative tools to help in the transition from the  Space Shuttle Program to the Constellation Program. For example, in  addition to requesting authority for increased use of enhanced use leasing,  a NASA official informed us that one tool the agency might consider  pursuing is the ability to keep the funds within NASA from the sale of  facilities and equipment, rather than returning such funds to the Treasury.
section_title: Completing Environmental Clean Up
paragraphs: NASA does not have a comprehensive estimate of the environmental clean  up costs associated with the transition and disposal of Space Shuttle  Program facilities and equipment. The agency must comply with federal  and state environmental laws and regulations, such as the National  Environmental Policy Act of 1969, as amended, the Resource,  Conservation, and Recovery Act of 1976, as amended, and the  Comprehensive Environmental Response, Compensation, and Liability Act  of 1980, as amended, in identifying and mitigating the environmental  concerns. Although NASA has an approach for identifying environmental  risks, in our report on major challenges facing the nation in the 21st  century, we pointed out that progress in cleaning up sites frequently does  not meet expected time frames and the costs dramatically exceed  available funding levels. For example, it cost the Titan IV program  approximately $300 million over six years on cleaning facilities,  equipment, and tools. At this time, the extent of the Space Shuttle  Program’s environmental liabilities is not yet fully known. Paying for this  liability 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: Positioning the Science, Engineering, and Technical Workforce
paragraphs: As it moves away from flying the shuttle, the NASA acknowledges that it  must realign where necessary and plan for a workforce that will not be  quite as large. NASA projects fewer resources will be required for  operating and sustaining hardware, especially during vehicle processing  and launch operations.  The reduction in reusability of future space  systems will also result in less refurbishing.  In addition, as new space  systems are designed, emphasis will shift to personnel with skills in  systems development and engineering, program management and systems  integration.  Unfortunately, these skills will be in high demand at a time  when other federal agencies and the private sector have similar needs.
NASA projects that by fiscal year 2012 the total number of personnel  needed to meet its strategic goals will decrease from 18,100 to 17,000. The  agency is taking advantage of the flexibilities outlined in the NASA  Flexibility Act of 2004 to attract highly qualified candidates, however,  continued buy-outs and the threat of a reduction in force have created a  feeling of instability among the science and engineering workforce.  NASA’s senior leaders recognize the need for an effective workforce  strategy in achieving mission success. NASA has a strategic human capital  plan, but more work is needed in workforce planning and deployment. In  addition, NASA’s transition to full cost accounting in fiscal year 2004  resulted in a number of its centers experiencing less than Full Time  Equivalent utilization, a situation referred to by NASA as “uncovered  capacity.” The Administrator has committed to operating and maintaining  10 centers and transferred work to those centers with identified  uncovered capacity.
We are examining whether several federal agencies, including NASA, are  taking sufficient steps to address their workforce challenges in a timely  and comprehensive manner, while sustaining focus on its mission and  programmatic goals. Specifically, we are assessing the extent to which  NASA’s human capital 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. As noted earlier,  NAPA recently completed a study that made recommendations to NASA  on how to achieve a flexible and scalable workforce by integrating its  acquisition and workforce planning processes.
section_title: Transforming the Way Financial Information Is Used
paragraphs: Since 1990, GAO has designated NASA’s contract management as high risk  principally because NASA has lacked a modern financial management  system that can provide accurate and reliable information on contract  spending and has placed little emphasis on product performance, cost  controls, and program outcomes. NASA has made progress toward  implementing a disciplined project management processes, but it has  made only limited progress in certain areas such as reengineering NASA’s  contractor cost reporting process. As we reported, the current Integrated  Enterprise Management Program does not provide the cost information  that program managers and cost estimators need to develop credible  estimates and compare budgeted and actual cost with the work performed  on the contract. NASA plans to spend billions of dollars to develop a  number of new capabilities, supporting technologies, and facilities that are  critical to enabling space exploration missions. The development of such  capabilities will be largely dependent on NASA contractors—on which  NASA spends about 85 percent of its annual budget. Because of such a  large reliance on contractors to achieve its mission, it is imperative that  NASA be able to track costs and the means to integrate financial  decisionmaking with scientific and technical leadership by providing  decisionmakers accurate information. To its credit, NASA is working to  improve business processes and integrating disparate systems in order to  improve efficiencies, reduce redundant systems, and improve business  information available to the acquisition community and mission support  organizations. However, more effort will be needed to make the cultural  transformation a reality.
section_title: Concluding Observations
paragraphs: The Vision for Space Exploration puts NASA on a bold new mission.  Implementing the Vision over the coming decades will require hundreds  of billions of dollars and a sustained commitment from multiple  administrations and Congresses over the length of the program. How well  NASA overcomes the transition challenges that we and others have  identified will not only have an effect on NASA’s ability to effectively  manage the gap in the U. S. human access to space, but also will affect the  agency’s ability to secure a sound foundation of support for the President’s  space exploration policy. Consequently, it is incumbent upon NASA to  ensure that these challenges are being addressed in a way that establishes  accountability and transparency to the effort.
Mr. Chairman and Members of the Subcommittee, this concludes my  prepared statement. I would be happy to answer any questions you may  have at this time.
section_title: GAO Contact and Acknowledgments
paragraphs: For further information regarding this testimony, please contact Allen Li at  (202) 512-4841 or lia@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this testimony. GAO staff who made key contributions to this testimony  include Greg Campbell, Richard Eiserman, Yanina Golburt,  James L. Morrison, Jeffrey M. Niblack, Shelby S. Oakley, Jose A. Ramos,  Sylvia Schatz, and John Warren.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.