The National Aeronautics and Space Administration Authorization Act of 2010 directed NASA to develop a Space Launch System as a follow-on to the Space Shuttle and as a key component in expanding human presence beyond low-earth orbit. The Act also directed NASA to continue development of a multi-purpose crew vehicle for use with that system.that end, NASA plans to incrementally develop three progressively-larger SLS launch vehicle capabilities—70-, 105- and 130-metric ton (MT) variants—complemented by the Orion and supporting ground systems. To Figure 1 below illustrates NASA’s planned capabilities for the SLS, Orion, and some of the related GSDO efforts. These capabilities follow the agency’s previous attempt to develop a next- generation human spaceflight system, the Constellation program, which was cancelled in 2010 when the program’s budget proved inadequate to resolve technical challenges. The first version of the SLS being developed is a 70-metric ton launch vehicle known as Block I. NASA expects to conduct two test flights of the Block I vehicle—the first in 2017 and the second in 2021. The vehicle is scheduled to fly some 700,000 kilometers beyond the moon during the first test flight, known as Exploration Mission-1 (EM-1), and to fly a second mission, known as Exploration Mission-2 (EM-2), to test additional aspects of its performance. After 2021, NASA intends to build 105- and 130-metric ton launch vehicles, known respectively as Block IA/B and Block II, which it expects to use as the backbone of manned spaceflight for decades. NASA anticipates that these launch vehicles will require the development of new systems to achieve the agency’s goals for carrying greater amounts of cargo and traveling farther into space. The agency has not yet selected specific missions for the increased capabilities to be provided by Block IA/B and Block II but, in keeping with the language contained in the 2010 Authorization Act, anticipates using the vehicles for such deep- space destinations as near-Earth asteroids and Mars. In concert with SLS, NASA expects to evolve the Orion and ground systems. The agency plans an un-crewed Orion capsule to fly atop the SLS during EM-1 in 2017, a crewed capsule during EM-2 in 2021, and ultimately, at a date to be determined, a crewed capsule with capability for such missions as a Mars landing. NASA is also modifying the existing ground systems so that they can support the SLS Block I variant and eventually accommodate the Block IA/B and Block II launch vehicles as well as enhanced versions of the Orion crew capsule. For example, NASA plans to add moveable floors to the vehicle assembly building at Kennedy Space Center so that the three launch vehicle variants can be more easily prepared for flight as the SLS capability evolves. NASA established the preliminary cost estimates for the initial capabilities of the SLS, Orion, and associated GSDO as each of these programs entered the preliminary design and technology completion phase of development, known as key decision point B (KDP-B). At KDP-B, programs use a probability-based analysis to develop a range of preliminary cost and schedule estimates which are used to inform the budget planning for the programs. This phase culminates in a review at key decision point C (KDP-C), known as program confirmation, where cost and schedule baselines with point estimates are established and documented in the agency baseline commitment. After this review, programs are considered to be in the implementation phase of development, and program progress is subsequently measured against these baselines. NASA plans to hold the program confirmation review for SLS in spring 2014 and expects to conduct the KDP-C review for GSDO in May 2014 and Orion in December 2014. Because the life cycle costs of these programs are expected to exceed $250 million, NASA is required to report the programs’ baseline estimates to Congress once the programs are approved to move into implementation. The agency provides this information through its annual budget submission. NASA also uses the annual budget submission to inform Congress about the preliminary cost ranges for projects proceeding into formulation. NASA’s preliminary cost estimates for the SLS, Orion, and associated GSDO programs do not provide a complete picture of the costs required to develop and operate the programs through the entire course of their respective life cycles. These preliminary estimates include the funding required for the scope of work related to initial capabilities—that is, development and operations through 2017 for the SLS launch vehicle and ground systems and through 2021 for the Orion. NASA also expects to use this same limited scope of work to develop the SLS, Orion, and GSDO baseline cost estimates. Moreover, NASA’s estimates do not capture the cost of the second flight of the 70-metric ton vehicle during EM-2, the costs of development work that will be necessary to fly the increased 105- and 130-metric ton SLS capabilities, and the costs associated with legacy hardware that will be used for the Orion program. In contrast, best practices for cost estimation call for “cradle to grave” life cycle cost estimates in order to help assess a program’s long-term affordability. NASA’s preliminary cost estimates for the three programs’ initial capabilities total a low-to-high cost range of approximately $19 to $22 billion. Table 1 below depicts the scope, including content and schedule, of the SLS, Orion, and GSDO initial capabilities’ preliminary cost estimates. As the SLS, Orion, and GSDO programs move from formulation into implementation phases, NASA plans to use the same content and scope for calculating the programs’ respective baseline cost estimates. NASA’s preliminary cost estimates for SLS, Orion, and GSDO provide no information about the longer-term, life cycle costs of developing, manufacturing, and operating the launch vehicle, crew capsule, and ground systems: The SLS estimate does not cover the cost to build the second 70- metric ton vehicle and conduct EM-2 in 2021 with that vehicle. NASA is already incurring costs for EM-2 because it is funding some EM-2 development in concert with EM-1 efforts, such as work on the solid rocket boosters and core stage that are expected to help power the 70-metric ton SLS. NASA officials indicated at one point in our review that they did not expect to begin formally tracking EM-2 costs until after the SLS design’s maturity was assessed at a critical design review scheduled for 2015; however, the agency stated in technical comments to this report that it is tracking those costs for budget purposes and plans to begin formally reporting them once SLS reaches the project confirmation phase. Additionally, the SLS estimate does not address the potential for costs NASA would incur to produce, operate, and sustain flights of the 70-MT Block I capability beyond 2021. NASA officials stated that there are currently no plans to fly that vehicle beyond 2021, but that the agency could reassess its decision if a specific mission arises for the vehicle. The SLS estimate also does not include costs to design, develop, build, and produce the 105- or 130-metric ton Block IA/B and Block II SLS variants that NASA intends to use well into the future. NASA indicated that these variants will require new systems development efforts—including advanced boosters and a new upper stage to meet the greater performance requirements associated with larger payloads as well as travel to Mars or other deep-space locations. NASA has started funding concept development, trades, and analyses related to these new designs, such as assessing the use of lightweight materials to construct the upper stage and selective laser melting to produce system components. In addition, NASA anticipates a re-start of the production line for the RS-25 engine that it plans to use to power the Block IA/B and Block II vehicles. Currently, the agency has enough residual RS-25 liquid-fuel engines from the Space Shuttle program to launch the SLS for up to 4 flights. NASA expects to need more of the engines beyond that, but it has not yet finalized acquisition plans to manufacture them. According to agency officials, re-starting the production line would entail at least 3 years, whereas development of a new engine would require a minimum of 8 years. The Orion estimate does not address costs for production, operations, or sustainment of additional crew capsules after 2021 nor does it address prior costs incurred when Orion was being developed as part of the now-defunct Constellation program. NASA initiated the crew capsule’s development in 2006 as part of the Constellation program. During approximately 4 years that the capsule’s development occurred under Constellation, the agency spent about $4.7 billion for the capsule’s design and development. When Constellation was cancelled in 2010 and the work transitioned to the current Orion program, however, NASA excluded the Constellation-related costs from Orion’s current preliminary cost estimate of $8.5 to $10.3 billion through 2021. The GSDO estimate does not address the costs to develop or operate SLS ground systems infrastructure beyond EM-1 in 2017, although NASA intends to modify ground architecture to accommodate all SLS variants. NASA officials have indicated that the road ahead involves many decisions about the programs beyond 2021, including how development will proceed, what missions will be performed, when the programs will end, and how each effort will be managed. They noted that the agency is using a capability-based approach to SLS, Orion, and the associated GSDO development, in which system capability grows over time. They indicated that the programs’ preliminary cost estimates are for attainment of capabilities rather than the full cost of the programs, and that it is difficult to define life cycle costs because the programs’ intended long- term uses and life spans have not been fully determined.