In the early 1990s, NASA was planning an infrastructure to support a projected annual budget of more than $20 billion and a civil service workforce of about 25,000 by the turn of the century. However, over the last several years, NASA has been directed by the Administration to reduce its future years’ budget levels. In the fiscal year 1994 budget request, NASA’s total funding for fiscal years 1994 through 2000 was reduced by 18 percent, or $22 billion. In the fiscal year 1995 budget request, total funding was reduced again by almost $13 billion, or an additional 13 percent. To absorb these major reductions, NASA focused on adjusting programs. For example, the Space Station program was restructured and given an annual budget ceiling of $2.1 billion. Similarly, the scope of the Earth Observing System program was reduced, and the program is being restructured once again. Also, funding was terminated for the Space Exploration Initiative, the National Launch System, and the National Aerospace Plane, and the Comet Rendezvous and Asteroid Flyby project was canceled. As part of the executive branch’s development of NASA’s $14.2-billion budget request for fiscal year 1996, NASA was directed once again to lower its projected budget through fiscal year 2000, this time by an additional 5 percent, or $4.6 billion. Rather than terminating or delaying core science, aeronautics, or exploration programs, NASA announced it would absorb this funding decrease by reducing infrastructure, including closing and consolidating facilities. NASA also said it would reduce its use of support contractors and decrease the size of its workforce to about 17,500 by the turn of the century—the lowest level since the early 1960s. While NASA’s actual and planned budgets and staffing levels have decreased sharply, the value of its facilities infrastructure has actually increased. From fiscal years 1990 through 1995, the current replacement value of NASA’s facilities increased by about 14 percent, not including inflation. At the end of fiscal year 1995, the agency’s facilities had an estimated current replacement value of $17 billion. The agency owned or leased about 3,000 buildings on nearly 130,000 acres of land at 71 locations. NASA’s facilities range in size from small buildings to large industrial plants. Appendix I provides information about facilities at NASA’s 10 field centers. As part of its infrastructure reduction efforts, NASA is also looking at ways to cut the cost of its field center support activities. Each NASA field center operates a wide range of such activities, with some support-unique missions at particular centers. Common activities include building maintenance, fire protection, security, printing, and medical services. NASA provides these services primarily through a combination of civil service employees, contractor labor, and arrangements with the Department of Defense (DOD) where facilities are collocated. NASA’s current facility closure and consolidation plans will not fully achieve the agency’s goal of decreasing the current replacement value of its facilities by about 25 percent (about $4 billion in 1994 dollars) by the end of fiscal year 2000. More importantly, these plans will not result in substantial cost reductions by that date. By the end of fiscal year 1997, NASA plans to have closed or converted facilities to cost-reimbursable status that have a current replacement value of $1.9 billion. Also, as of March 1996, planned reductions through fiscal year 2000 were $2.8 billion, or about 30 percent below NASA’s goal of reducing the current replacement value of its facilities by about $4 billion in 1994 dollars. Agency officials noted that the $4-billion reduction goal was a “stretch,” or aggressive goal, which they were never certain could be achieved. Additional reductions are unlikely in research and development facilities, but there may be opportunities for further reductions in office space, according to NASA officials. NASA classifies building space based on its primary use, such as office space. NASA was providing general purpose office space for about 53,000 civil service and contractor personnel at the end of fiscal year 1995. Agencywide, the average square feet of office space available per person, including substandard space, exceeded NASA’s standard by nearly 43 percent and the ceiling by over 25 percent. When substandard space is not included, this average exceeded the standard by over 27 percent and the ceiling by 12 percent. Future reductions in the number of on-site contractor personnel and NASA employees (almost 4,000) by fiscal year 2000 will make even more office space available. NASA estimates that the planned $2.8-billion reduction in the current replacement value of facilities will yield only about $250 million in cost reductions through fiscal year 2000. Although some of these cost reductions are from lowering facilities’ operations and maintenance costs, most result from four centers bringing contractor personnel from off-site leased space onto the centers to fill space left vacant because of reductions in NASA personnel and support contractors. Moreover, some cost reductions may be offset by increased costs in future years. For example, according to a NASA official, about three-quarters of NASA facilities are 30 or more years old and keeping these facilities operational may lead to higher operations and modernization costs. NASA has had problems in identifying, assessing, or implementing some cost-reduction opportunities. NASA personnel (1) did not thoroughly evaluate potential larger cost-reduction options, (2) limited the scope of consideration for consolidation, (3) performed questionable initial cost-reduction studies, (4) made inappropriate closure recommendations, and (5) substantially overstated cost-reduction estimates. Some of these problems resulted when NASA acted quickly in an attempt to achieve near-term cost reductions. NASA officials said that some cost-reduction estimates were “interim” estimates because NASA was pressured into prematurely providing what turned out to be imprecise savings estimates to Congress. Also, some NASA staff lacked experience in developing estimates, according to NASA officials. Although there were problems with some evaluations, which are discussed below, others appear to have been done better. For example, the Office of Space Flight reviewed in detail a proposed consolidation of automated data processing functions at a single location before developing a plan that offered several options. Concerns about closing facilities, relocating activities, and consolidating operations have sometimes been exacerbated by perceptions of the lack of fairness and impartiality in the decision-making process. In the past, we have expressed concerns about NASA’s ability to accurately and independently develop cost estimates to support its decisions on new and ongoing programs and projects. Just recently, the NASA Inspector Generaland NASA management have been discussing the structure required to meet NASA’s continuing need for independent, impartial, and technically credible systems analysis and program evaluation. NASA did not thoroughly evaluate potential larger cost-reduction options for consolidating wide area telecommunications networks. NASA has five such networks operating or being developed, and they provide a variety of communications services among headquarters, field centers, major contractors, affiliated academic institutions, and international partners. Due to advances in technology, NASA no longer needs to operate multiple telecommunications networks, and consolidating network operations at a single site offers economies of scale, as well as reduced administrative overhead. Last year, NASA’s Zero Base Review team recommended that the field centers compete to determine which one could consolidate the five wide area networks most cost-effectively. Goddard Space Flight Center, Ames Research Center, and Marshall Space Flight Center prepared consolidation proposals. NASA’s Office of Space Communications, which oversees the two largest networks, decided against a competition and did not formally consider the proposals offered by Goddard and Ames. Instead, with the objective of obtaining some budget cost reductions in 1997, it endorsed the Marshall proposal without determining which of the three proposals was the most cost-effective. However, Marshall’s proposal did not project cost reductions in the near term as aggressively as the others. For example, Goddard’s proposal estimated potential cost reductions over the next 6 years totaling $94.5 million more than the reductions in the Marshall proposal. Earlier this year, we recommended that NASA conduct an objective review of network consolidation to determine whether its chosen approach should be modified to achieve greater cost reductions. NASA agreed with this recommendation and arranged for an independent group to conduct the review. It indicated the agency’s telecommunications experts were not participating in the review because they would have a “biased” perspective. The independent review is scheduled to be completed this month. NASA’s initial network consolidation efforts were hampered by the lack of clear direction within NASA to include all five wide area networks in the consolidation effort. The Office of Space Communications, which directed the consolidation effort at Marshall, does not have authority over three of the five networks. The agencywide telecommunications network consolidation or streamlining efforts did not have a strong central advocate. NASA’s Chief Information Officer, who would be a logical choice to fill this role, was not directly involved in this effort. NASA initially excluded almost 40 percent of its supercomputer systems, which were used mostly for research and development, from the scope of a supercomputer consolidation study. The agency uses supercomputers to support some space mission operations and a variety of research projects, including developing new supercomputer technologies. In March 1995, NASA began studying ways to cut its supercomputer costs by consolidating their management and operation. However, its initial studies considered only some of the agency’s supercomputers and focused on nonresearch and development supercomputing systems. Although NASA’s consolidation study team had identified 29 supercomputers, NASA management excluded 12 existing machines and some planned for future procurement from consideration because (1) some are being managed under existing contracts that could be affected by a consolidation decision and (2) others were used in research programs primarily to develop new supercomputer technologies. We spoke with NASA program, field center, and supercomputer consolidation study officials about the reasons for, and appropriateness of, limiting the scope of NASA’s consolidation study.