NASA: Preliminary Observations on Major Acquisition Projects and Management Challenges
Published: 2016-02-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The proposed Space Leadership Preservation Act of 2015, which includes provisions related to NASA's leadership structure, budget development, and contracting authorities, would affect the way NASA develops its vision for space exploration and executes the projects that implement it. It could also have implications for NASA's acquisition management, which is an area on GAO's High Risk list. In March 2015, GAO found that projects continued a general positive trend of limiting cost and schedule growth, maturing technologies, and stabilizing designs, but that NASA faced several challenges that could affect its ability to effectively manage its portfolio.
This statement provides our preliminary observations on (1) the cost and schedule performance of NASA's portfolio of major projects and the implementation of product development best practices on these projects and (2) management challenges. This statement also provides observations on the proposed legislation. This statement is based on ongoing work to be published in March 2016 and GAO's February 2015 High Risk Update, as well as GAO's extensive prior body of work on NASA's major acquisitions.
section_title: What GAO Found
paragraphs: GAO's ongoing work indicates that the National Aeronautics and Space Administration (NASA) has made progress over the past 5 years in a number of key acquisition management areas, but it faces significant risks in some of its major projects. On the positive side, the cost and schedule performance of NASA's portfolio of major projects in development has improved and most current projects are adhering to their committed cost and schedule baselines. In addition, NASA has maintained recent improvements in the implementation of key product development best practices, which can help reduce risk in projects. Although NASA's overall performance has improved, GAO's preliminary results show that NASA has rebaselined a major project for each year 8 out of the last 9 years, which means the projects experienced significant cost or schedule growth. This often occurs as projects prepare to begin system assembly, integration, and test; nine projects will be in that phase of development in 2016, including the Orion Multi-Purpose Crew Vehicle (Orion) and Space Launch System, which are human spaceflight programs with significant development risks.
As NASA continues its efforts to reduce acquisition risk, GAO's ongoing and prior work highlights three areas of management challenges that, if addressed, will help the agency appropriately direct future investments:
Implementing Management Tools. NASA has continued to implement improved project management tools to manage acquisition risks, but these efforts have not always been consistent with best practices in areas such as cost estimating or fully addressed GAO's prior recommendations. For example, NASA has made progress rolling out earned value management (EVM)—a key project management tool—at its centers but has not implemented formal EVM surveillance, which is considered a best practice by both NASA and GAO.
Demonstrating Sustained Cost and Schedule Performance. A key management challenge that NASA faces is whether the improvement in the cost and schedule performance GAO has seen in the agency's overall portfolio of major projects can be translated to large, recently baselined projects that have been added to the portfolio. This includes its human spaceflight projects, which are at critical points of implementation.
Long-Term Planning and Stability. NASA has established cost and schedule baselines for Space Launch System, Orion, and Exploration Ground Systems—a program that is developing systems and infrastructure to support assembly, test, and launch of the Space Launch System and Orion—but the baselines provide little visibility into long-term planning and costs. NASA recently issued a strategy for its journey to Mars, but the document does not provide details on future exploration missions making it difficult to understand NASA's vision for what type and how many missions it will take to get to Mars.
The proposed Space Leadership Preservation Act of 2015 is aimed, in part, at achieving greater stability at NASA. From an acquisition perspective, GAO's prior work indicates that one of the most important factors for achieving stability is having a sound business case that balances program requirements and resources, such as technology, funding, and time.
section_title: What GAO Recommends
paragraphs: GAO is not making any new recommendations in this statement, but has made recommendations in prior related reports, which NASA has not yet fully addressed.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the National Aeronautics and  Space Administration’s (NASA) management of its major acquisition  projects and the legislation that is being considered by this committee.  NASA’s major projects are the key enablers for the agency to achieve its  vision and its mission. They include the Space Launch System and Orion  Multi-Purpose Crew Vehicle (Orion), which are the centerpieces of  NASA’s human exploration plans; Mars 2020 and Europa, which will  further our understanding of the habitability of other planets; and the Ice,  Cloud, and Land Elevation Satellite-2, which will provide better data on  changes in the Earth. In fiscal year 2016, NASA plans to spend over $6  billion on its 18 major projects, each with a life-cycle cost of over $250  million. In total, these projects represent an expected investment of  almost $54 billion with more expected for the human spaceflight efforts  over the longer run.
The proposed Space Leadership Preservation Act of 2015, which  includes provisions related to NASA’s leadership structure, budget  development, and contracting authorities, would affect the way NASA  develops its vision for space exploration and executes the projects that  implement it. It could also have implications for acquisition management.  Acquisition management has been a long-standing challenge at NASA,  although we have reported on improvements the agency has made in  recent years. We first designated NASA’s acquisition management as a  high-risk area in 1990 in view of NASA’s history of persistent cost growth  and schedule slippage in the majority of its major projects. Our work has  identified a number of causal factors related to these issues, including  poor cost estimating and underestimation of risks associated with the  development of its major systems, as well as a set of best practices that  can help agencies manage development risks. NASA leadership has  made concerted efforts to address these causal factors, but our work has  found that more can be done, particularly for NASA’s largest and most  critical projects.
My statement today provides our preliminary observations on (1) the cost  and schedule performance of NASA’s current portfolio of major projects  and the implementation of product development best practices on these  projects and (2) NASA’s management challenges. I will also offer a few  observations on the proposed legislation based on our work on  acquisition management.
My statement today is based on our ongoing work for this committee and  others on the status of NASA’s major projects, as well as our February  2015 High Risk Update and other past reports. To assess the cost and  schedule performance, technology maturity, and design stability of  NASA’s major projects, we collected information on these areas from  projects using a data collection instrument, analyzed projects’ monthly  status reports, interviewed NASA project and headquarters officials, and  reviewed project documentation. There are 18 major projects in total, but  the information available depends on where a project is in its life cycle.  For the 12 projects in the implementation phase we compared current  cost and schedule estimates to their original cost and schedule baselines,  identified the number of technologies being developed and assessed their  technology maturity against GAO-identified best practices and NASA  policy, and compared the number of releasable design drawings at the  critical design review against GAO-identified best practices and analyzed  subsequent design drawings changes. We also reviewed historical data  on cost and schedule performance, technology maturity, and design  stability for major projects from our prior reports and compared it to the  performance of NASA’s current portfolio of major projects. To assess  major management challenges, we examined NASA’s efforts to address  issues identified in our prior work, such as the quality of the cost and  schedule risk analyses and earned value management implementation  issues, and our February 2015 High Risk Update.
We are conducting the work on which this statement is based in  accordance with generally accepted government auditing standards. We  plan to issue a final report on our annual assessments of NASA’s major  projects in late March 2016. NASA provided us technical comments on  the major projects we reviewed and other information that is included in  this statement.
subsections: section_title: Background
paragraphs: NASA’s mission is to drive advances in science, technology, aeronautics,  and space exploration and contribute to education, innovation, our  country’s economic vitality, and the stewardship of the Earth. To  accomplish this mission, NASA establishes programs and projects that  rely on complex instruments and spacecraft. NASA’s portfolio of major  projects ranges from space satellites equipped with advanced sensors to  study the Earth to a spacecraft which plans to return a sample from an  asteroid to a telescope intended to explore the universe to spacecraft to  transport humans and cargo to and beyond low-Earth orbit. Some of  NASA’s projects are expected to incorporate new and sophisticated  technologies that must operate in harsh, distant environments.
The life cycle for NASA space flight projects consists of two phases— formulation, which takes a project from concept to preliminary design, and  implementation, which includes building, launching, and operating the  system, among other activities. NASA further divides formulation and  implementation into phase A through phase F. Major projects must get  approval from senior NASA officials at key decision points before they  can enter each new phase. Figure 1 depicts NASA’s life cycle for space  flight projects.
Formulation culminates in a review at key decision point C, known as  project confirmation, where cost and schedule baselines are established  and documented in a decision memorandum. To inform those baselines,  each project with a life-cycle cost estimated to be greater than $250  million must also develop a joint cost and schedule confidence level  (JCL). The JCL initiative, adopted in January 2009, is a point-in-time  estimate that, among other things, includes all cost and schedule  elements, incorporates and quantifies known risks, assesses the impacts  of cost and schedule to date, and addresses available annual resources.  NASA policy requires that projects be baselined and budgeted at the 70  percent confidence level.
Our ongoing work on NASA’s major projects includes assessments of 18  major NASA projects. Figure 2 includes more information on the projects.
section_title: NASA Cost and Schedule Performance and Implementation of Best Practices
paragraphs: Our ongoing work indicates that NASA has made progress over the past  5 years in a number of key acquisition management areas, but it faces  significant risks in some of its major projects. On the positive side, the  cost and schedule performance of NASA’s portfolio of major projects in  development has improved and most current projects are adhering to  their committed cost and schedule baselines. In addition, NASA has  maintained recent improvements in the implementation of key product  development best practices, which can help reduce risk in projects. Our  preliminary results indicate that although NASA’s overall performance has  improved, its portfolio of major projects continues to experience cost and  schedule growth and development risks in major projects, such as Orion  and the Space Launch System, warrant the committee’s continued  attention.
subsections: section_title: Overall Cost Performance of the Portfolio
paragraphs: Our preliminary results show that the cost and schedule performance of  NASA’s portfolio of major projects in development continues to improve.  In 2016, overall development cost growth for the portfolio of 12  development projects, excluding the James Webb Space Telescope  (JWST), fell to 1.3 percent and launch delays averaged 4 months. Both of  those measures are at or near the lowest levels we have reported since  we began our annual reviews in 2009 (see fig. 3).
NASA has made positive changes in the past 5 years that have helped  contribute to the improved performance of its projects. Among other  things, we previously reported that NASA adopted a new policy to help  project officials with management, cost and schedule estimating, and  maintenance of adequate levels of reserves; established a management  review process to enable NASA’s senior management to more effectively  monitor a project’s performance, including cost, schedule, and cross- cutting technical and nontechnical issues; and has improved external  oversight by increasing transparency into project costs. Congressional  action has also helped improve visibility into NASA’s cost and schedule  performance. In 2005, Congress required NASA to report cost and  schedule baselines for all programs and projects with estimated life-cycle  costs of at least $250 million that have been approved to proceed to  implementation. Congress also required NASA to report to it when  development cost growth or schedule delays exceeded certain  thresholds.
Our ongoing work indicates that NASA’s most recent improvements in its  overall cost performance have also been driven, in part, by the addition of  new, large programs to the portfolio. The cost and schedule performance  of any portfolio is affected by its composition. New projects are less likely  to have experienced cost and schedule growth than older ones, so they  generally help improve portfolio performance. Eight of the 12 major  projects in development established baselines within the last 2 years, and  cost and schedule performance collectively has improved as projects in  the portfolio have become, on average, younger. We will continue to  monitor these trends as NASA’s current major projects progress through  the project life cycle to see if the improvements in the portfolio’s cost and  schedule performance are sustained.
section_title: Project Rebaselines
paragraphs: Our ongoing work shows that most current NASA projects have stayed  within the cost and schedule estimates in their development baselines,  both this year and throughout their life cycles, but the portfolio continues  to experience cost and schedule growth. This growth was driven by  projects that experienced significant cost growth and exceeded their  development cost baselines. When a project exceeds its development  cost baseline by 30 percent, it is rebaselined if it is to be continued. NASA  has rebaselined a major project each year for 8 out of the last 9 years.  Table 1 shows the development cost growth for each of the rebaselined  projects.
Our ongoing work also shows that the cost growth associated with  rebaselined projects often overwhelms the positive cost performance  within the remainder of the portfolio both on an annual and life-cycle  basis. In July 2015, NASA approved a new baseline for the Space  Network Ground Segment Sustainment (SGSS) project, which increased  its estimated development costs from $368 million to $677 million and  extended its completion date from June 2017 to September 2019. Cost  growth from the SGSS was not offset by better performing projects, such  as the Origins-Spectral Interpretation-Resource Identification-Security- Regolith Explorer (OSIRIS-REx) asteroid sampling mission. OSIRIS-REx  reported lower than expected development costs for the second  consecutive year, even though it is at a stage in the life cycle when  projects often realize cost growth. The project attributes its $78.2 million  decrease in development cost to several factors, including a mature  mission concept and rigorous risk management process.
Our preliminary results indicate that the projects in NASA’s current  portfolio with the highest development costs, including Space Launch  System and Orion, are entering the stage when most rebaselines occur.  Projects appear most likely to rebaseline between their critical design and  system integration reviews. All eight major projects that rebaselined  during the last 9 years did so after their critical design review and the  three projects in the 2016 portfolio that rebaselined did so before holding  their systems integration review. Nine projects in the current portfolio are  in this stage of development—Exploration Ground Systems; Ice, Cloud,  and Land Elevation Satellite-2 (ICESat-2); Ionospheric Connection  (ICON); JWST; Orion; SGSS; Space Launch System; Solar Probe Plus  (SPP); and Transiting Exoplanet Survey Satellite (TESS). Three  projects—ICESat-2, JWST, and SGSS—have already rebaselined. If a  rebaseline occurs on any of the other six projects, it could add anywhere  from almost $60 million to more than $2 billion to the development cost of  the portfolio. We will continue to examine these nine projects as part of  our annual assessments until they launch, but they also warrant the  committee’s continued oversight attention.
Our ongoing work has also found that the Space Launch System and  Orion, the two largest projects in this critical stage of development, face  cost, schedule, and technical risks. For example, the Space Launch  System program has expended significant amounts of schedule reserve  over the past year to address delays with development of the core stage,  which is the Space Launch System’s propellant tank and structural  backbone. The Orion program continues to face design challenges,  including redesigning the heat shield following the determination that the  previous design used in the first flight test in December 2014 would not  meet requirements for the first uncrewed flight. The standing review  boards for each program have raised concerns about the programs’  ability to remain within their cost and schedule baselines. If cost overruns  materialize on these programs, they could have a ripple effect on the  portfolio and result in the potential postponement or even force the  cancellation of projects in earlier stages of development. We have  ongoing work on both of these programs and we plan to issue reports on  them later this summer.
section_title: Implementation of Development Best Practices
paragraphs: Our ongoing work indicates that NASA has maintained recent  improvements in the technology maturity and design stability of its  projects as measured against best practices. As of 2015, 9 of the 11  major projects in NASA’s 2016 portfolio that have passed the preliminary  design review have matured all heritage or critical technologies to a  technology readiness level (TRL) 6—a large increase since 2010 (see fig.  4). The 12th project in development, Exploration Ground Systems, did not  report any critical or heritage technologies, so it was omitted from this  analysis.
Our prior best practices work has shown that reaching a TRL 6—which  indicates that a representative prototype of the technology has been  demonstrated in a relevant environment that simulates the harsh  conditions of space—can minimize risks for space systems entering  product development. Projects falling short of this standard before the  preliminary design review, a milestone that generally precedes the  project’s final design and fabrication phase, may experience subsequent  technical problems, which can result in cost growth and schedule delays.
Our ongoing work indicates that NASA has also sustained improvements  it has made since 2010 in the design stability of its major projects. The  average percentage of engineering drawings released at critical design  review for NASA’s 2016 portfolio of major projects was 72 percent,  roughly the same percentage as last year. This is a significant  improvement since 2010, but is still short of the GAO-identified best  practice of 90 percent (see fig. 5). Further, a majority of projects in  development maintained mass and power reserves that met or exceeded  NASA requirements. NASA projects have also continued to minimize  design changes after the critical design review—another measure of  design stability.
Our prior work on product development best practices shows that at least  90 percent of engineering drawings should be releasable by the critical  design review to lower the risk of subsequent cost and schedule growth.  The NASA Systems Engineering Handbook also includes this metric. In  2012, NASA established additional technical leading indicators to assess  design maturity. These indicators include (1) the percentage of actual  mass margin versus planned mass margin and (2) the percentage of  actual power margin versus planned power margin. NASA has updated  its project management policy and its systems engineering policy to  require projects to track these metrics. Projects that do not achieve  design stability by critical design review may experience design changes  and manufacturing problems, which can result in cost growth and  schedule delays.
section_title: Management Challenges
paragraphs: NASA’s portfolio is composed of a few large projects that face a lot of  pressures and challenges. Any cost growth within these projects can  have grave consequences for smaller projects that are critical to a  number of scientific endeavors. In November 2015, the NASA Office of  the Inspector General issued its annual report on NASA’s top  management and performance challenges. Examples of challenges  identified in the report include managing NASA’s science portfolio, space  flight operations in low earth orbit, positioning NASA for deep space  exploration, and securing NASA’s information technology systems and  data. We agree with the challenges identified by the Inspector General  and our ongoing and prior work has highlighted additional areas where it  will be important for NASA to continue its efforts to reduce acquisition  risk, including implementing project management tools, demonstrating  sustained cost and schedule performance, and developing plans that will  help the agency appropriately direct future investments.
subsections: section_title: Implementation of Management Tools
paragraphs: As part of our ongoing work, we found that NASA is taking steps to  improve its project management tools but has not yet fully implemented  best practices.
Earned Value Management. NASA has made progress implementing  earned value management (EVM) analysis—a key project management  tool—but the agency has not yet fully implemented a formal EVM  surveillance plan in accordance with best practices. EVM has been a  critical part of the agency’s efforts to understand project development  needs and to reduce cost and schedule growth. When implemented well,  EVM integrates information on a project’s cost, schedule, and technical  efforts for management and decision makers by measuring the value of  work accomplished in a given period and comparing it with the planned  value of work scheduled for that period and the actual cost of work  accomplished. NASA has made progress rolling out EVM at its centers  and is supporting these efforts with training, including classroom and  online training to projects at its various centers.
In 2012, we recommended that NASA require projects to implement  formal EVM surveillance programs. NASA partially concurred, but  according to NASA officials, they have not implemented the  recommendation due to resource constraints. Proper surveillance of  EVM contractor data is a best practice in the NASA Earned Value  Management Implementation Handbook and GAO’s Cost Estimating and  Assessment Guide. Without implementing proper surveillance, a project  may be utilizing unreliable EVM data to inform its cost and schedule  decision making. NASA has taken other steps to address the intent of our  recommendation, but we continue to find issues with the quality of EVM  data. In our December 2015 review of the James Webb Space  Telescope, we found project EVM data anomalies and recommended that  project officials require the contractors to explain and document all such  anomalies in their monthly EVM reports. A continuous surveillance  program could have identified these anomalies earlier, allowing the  project to pursue corrective action with its contractors. NASA concurred  with this recommendation and recently sent us documentation concerning  steps it has taken to address it. We are currently reviewing that  information to determine if NASA has implemented the recommendation.
Joint Confidence Level. In 2009, in order to ensure that cost and  schedule estimates were realistic and projects thoroughly planned for  anticipated risks, NASA began requiring that programs and projects with  estimated life-cycle costs of $250 million or more develop a JCL prior to  key decision point C. However, there is no requirement for NASA  projects to update their JCLs and our prior work has found that projects  do not regularly update cost risk analyses to take into account newly  emerged risks. Our cost estimating best practices recommend that cost  estimates should be updated to reflect changes to a program or kept  current as it moves through milestones. As new risks emerge on a  project, an updated cost risk analysis can provide realistic estimates to  decision-makers, including the Congress. This is especially true for  NASA’s largest projects as updated estimates may require the Congress  to consider a variety of actions.
Schedule Development. Our best practices work stresses the  importance of a reliable schedule because not only is it a road map for  systematic project execution, but also a means by which to gauge  progress, identify and resolve potential problems, and promote  accountability. According to NASA officials, a project’s ability to  efficiently execute a quality JCL analysis is directly tied to the quality of  the underlying data, especially a project schedule. Independent  assessors—a group of technical experts within NASA who do not actively  work on a specific project or program—noted that when they are  reviewing a project’s JCL, one of the most common areas that projects  struggle with is developing a reliable schedule. For example, our ongoing  work found that the Orion program’s standing review board raised  concerns that the program’s schedule is missing activities which could  affect the program’s ability to accurately identify what is driving the  schedule. Officials in NASA’s Cost Analysis Division told us that various  schedule related tools have been developed and already made available  to projects and additional tools are in development.
section_title: Sustained Cost and Schedule Performance
paragraphs: A key management challenge that NASA faces is whether the  improvement in the cost and schedule performance we have seen in the  agency’s overall portfolio of major projects can be translated to new, large  projects that have been recently baselined and added to the portfolio.  These additions include its human spaceflight projects, which includes the  Space Launch System, Orion, and Exploration Ground Systems program  that is developing systems and infrastructure to support assembly, test,  and launch of the Space Launch System and Orion. In our February 2015  High Risk Update, we noted that NASA’s human spaceflight projects are  at critical points in implementation and, as I noted earlier, we found that  all three projects are entering the stage where most project rebaselines  appear most likely to occur—between their critical design and system  integrations reviews. This is an area where the agency has not been  tested since a similarly large and complex project, the James Webb  Space Telescope, underwent a replan in September 2011 that resulted in  a 78 percent increase in life-cycle costs—increasing to $8.835 billion— and a schedule delay of 52 months—delaying the planned launch date to  October 2018. In addition, NASA will have to demonstrate that it is able to  sustain cost and schedule performance in its Commercial Crew Program,  which is NASA’s effort to facilitate the private demonstration of safe and  reliable transportation services to carry NASA astronauts and cargo to  and from the International Space Station. NASA is partnering with  commercial providers and its approach includes tailoring its spaceflight  project life cycle. Our high-risk report identified key areas where NASA  could better anticipate and mitigate risks with respect to these human  spaceflight programs, including ensuring that adequate and ongoing  assessments of risks are conducted given that the impacts of any  potential miscalculations will be felt across the portfolio, ensuring that  projects’ JCLs are updated regularly, and ensuring that the long-term  project costs are understood.
section_title: Long-Term Planning and Stability
paragraphs: Our ongoing and prior work has also found that NASA has established  cost and schedule baselines for the Space Launch System, Orion, and  Exploration Ground Systems, but the baselines provide little visibility into  long-term planning and costs. The baselines for the Space Launch  System and Exploration Ground Systems are through the first Exploration  Mission (EM-1), during which NASA plans to fly an uncrewed Orion some  70,000 kilometers beyond the moon, and the Orion program’s baseline is  through the second Exploration Mission (EM-2), which NASA plans to fly  beyond the moon to further test performance with a crewed Orion vehicle.  In October 2015, NASA issued its Journey to Mars, which NASA identifies  as a document that, among other things, communicates its strategy and  plans to get to Mars. However, the document does not provide  additional details on future exploration missions, making it difficult to  understand NASA’s vision for what type and how many missions it will  take to get to Mars. Without this information, decisionmakers do not have  visibility into how NASA expects to invest to develop, operate, and sustain  a capability over the long term. Having a complete picture of costs can  enable both the Congress and the administration to set priorities for both  the short and long term. In May 2014, we recommended that NASA  establish separate cost and schedule baselines for each additional  capability that encompass all life-cycle costs, to include operations and  sustainment. NASA partially concurred with our recommendation and  stated that it had established separate programs for Space Launch  System, Orion, and Exploration Ground Systems. Further, NASA stated  that the Space Launch System program had gone further by adopting a  block upgrade approach to ensure more realistic long-range investment  planning and more effective resource allocations through the budget  process. However, NASA stated that it does not intend to carry life-cycle  estimates for the Space Launch System program through an end-of- program date because the strategic parameters of such analysis are in  the process of being defined. NASA has yet to take action on this  recommendation.
section_title: The Space Leadership Preservation Act of 2015
paragraphs: The various provisions of the act being discussed today propose changes  in NASA’s leadership structure and long-term contracting authorities,  among other areas. In a prior testimony, sponsors of the act emphasized  that the provisions are aimed at making NASA more professional and less  political by giving the agency greater stability. The concept of stability is  an important one for NASA since projects require heavy investments— both in terms of time and money—and require cooperation and support  from a variety of communities, who sometimes have competing interests,  including academic institutions, partnering countries, the science  community, and industry, to name a few. We have not studied how the  act’s specific provisions, including the types of leadership structures being  proposed, could affect stability for NASA’s projects. However, based on  our prior work on NASA’s and the Department of Defense’s (DOD)  acquisition management efforts, we would like to offer the following  observations:  If NASA were to implement a board of directors as outlined in the  proposed legislation, the board itself must be willing to hold program  managers and leadership accountable by canceling programs that do  not perform well. If programs with an unsound business case are  allowed to continue, their poor performance could have dramatic  consequences on the overall portfolio. Insight into program  performance, independent assessments, and regular reporting on  progress are all necessary tools to enable leadership to hold  managers accountable.
DOD has used multiyear contracts under other authorities to acquire  weapon systems and believes these tools are helpful in negotiating  lower prices. However, longer term commitments to contracts will not  necessarily produce better results if they are not accompanied by best  practices.
Our past work at DOD has found that it is difficult to precisely  determine the impact of multiyear contracting executed under a  different authority on actual procurement costs and that savings did  not appear to have materialized as expected in budget justifications to  Congress in three case studies we looked at, and ultimately more  funding was needed to buy the systems. Further, multiyear  procurement contracts can provide stability for contractors doing  business with the government, but they also can reduce Congress’s  and NASA’s flexibility in making changes to programs and budgets  unless the government is willing to pay the cancellation fees  associated with doing so.
In closing, I would like to emphasize that achieving stability through  leadership and contracting changes may offer benefits, but one of the  most important factors in achieving stability is a sound business case that  balances the necessary resources—technologies, design knowledge,  funding, and time—needed to transform a chosen concept into a product.  As our ongoing and prior work shows, more effort is still needed to  improve NASA’s cost estimating, scheduling practices, and contractor  oversight. Robust, long-term plans and realistic estimates are also  needed to guide decisions and to secure longer term support. We look  forward to continuing to work with NASA and this Committee in instituting  these improvements.
Chairman Smith, Ranking Member Johnson, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: If you or your staff have any questions about this testimony, please  contact Cristina T. Chaplain, Director, Acquisition and Sourcing  Management at (202) 512-4841 or chaplainc@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this statement. GAO staff who made key contributions  to this statement include Ronald Schwenn, Assistant Director; Molly Traci,  Assistant Director; Laura Greifner; Kurt Gurka; Katherine Lenane; Erin  Preston; Roxanna Sun; and Kristin Van Wychen.
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