The Prometheus 1 project is part of NASA’s Prometheus Nuclear Systems and Technology program to develop nuclear power technologies capable of providing power and propulsion for a new generation of missions. The Prometheus 1 spacecraft is being designed to use nuclear power and electric propulsion technologies to explore the outer reaches of the solar system. The Jupiter Icy Moons Orbiter (JIMO) mission—a 4 to 6-year study of three of Jupiter’s moons: Callisto, Europa, and Ganymede—was the original destination identified by NASA. The JIMO mission’s overarching science objectives were to (1) investigate the origin and evolution of the three moons; (2) scout their potential for sustaining life; and (3) determine the current rate of movement of surface ice and the rates at which the moons are weathered. With an unprecedented level of power, Prometheus 1, the first in a potential series of spacecraft, is expected to support the use of high capability science instruments and high power communications systems to provide scientists with an a unprecedented amount of scientific information. Figure 1 depicts the notional Prometheus 1 spacecraft. NASA contracted with the Jet Propulsion Laboratory (JPL) to manage the Prometheus 1 project and to manage development of the science mission payload. In turn, JPL awarded a $400-million contract for the initial development of the Prometheus 1 spacecraft to Northrop Grumman Space Technology in September 2004. NASA is collaborating with the Department of Energy’s Office of Naval Reactors to develop and handle all issues related to the spacecraft’s nuclear reactor. The Prometheus 1 project will have to compete for funding with other NASA programs. In January 2004, the President charged NASA with implementing a new strategy for space exploration—which includes the Prometheus 1 project—while simultaneously returning the shuttle to flight status and completing the International Space Station. NASA laid out its plan for implementing the strategy in its fiscal year 2005 budget request. In essence, NASA’s implementation plan holds aeronautics, science, and other activities at near constant levels and transitions funding levels currently dedicated to the Space Station and shuttle programs to the space exploration strategy as the Space Station and shuttle programs phase out. This plan was predicated upon NASA’s annual funding level receiving increases to about $18 billion a year by fiscal year 2008 and then remaining near that level, except for inflation, through at least 2020. In the last several years, we have undertaken a best practices body of work on how leading developers in industry and government use a knowledge-based approach to develop products that reduces risks and increases the likelihood of successful outcomes. Development of a sound business case based on this best practices model enables decision makers to be reasonably certain about their products at critical junctures during development and helps them make informed investment decisions. Our best practice work has shown that developing a sound business case based on matching requirements to resources is essential to implementing a knowledge-based approach. A sound business case includes the following elements well-defined requirements, preliminary design, realistic cost estimates, and mature technology. A knowledge-based business case also involves the use of controls or exit criteria to ensure that the required knowledge has been attained at each critical juncture. It ensures that managers will (1) conduct activities to capture relevant product development knowledge, (2) provide evidence that knowledge was captured, and (3) hold decision reviews to determine that appropriate knowledge was captured to allow a move to the next phase. If the knowledge attained at each juncture does not confirm the business case on which the effort was originally justified, the program does not go forward. Use of this approach has enabled leading organizations to deliver high quality products on time and within budget. Product development efforts that have not followed a knowledge-based business case approach can be frequently characterized by poor cost, schedule, and performance outcomes. Although NASA does not require projects to develop a formal business case based on matching requirements to resources, JPL project implementation policy, which establishes JPL’s institutional structure for implementation and management of JPL flight projects in accordance with NASA policies, does require projects to develop documentation that includes elements essential to a sound business case. For example, before entering the preliminary design phase, JPL projects are required to develop preliminary requirements, a conceptual design, realistic cost estimates, and technology development plans. JPL projects are required to update and improve the fidelity of information in these documents by PDR. The information in these documents could provide NASA decision makers with the information necessary to support sound business case decisions based on matching requirements to resources at preliminary mission and systems review (PMSR) and PDR. In September 2004, the Congressional Budget Office reported that if NASA’s costs for implementing the strategy were similar to prior analogous NASA programs—such as Apollo, Viking, and Mars Exploration Rover—NASA’s funding needs could increase by 15 to 23 percent—or $40 billion to $61 billion—over the 16-year estimate. The Congressional Budget Office concluded that if funding were held constant, NASA would likely have to either eliminate mission content or delay schedules. NASA is still in the process of preparing initial justification for the Prometheus 1 project to enter the preliminary design phase. Consequently, at this time the level of funding NASA needs to execute the project is not fully defined. According to project officials, however, funding levels would need to be increased to support the planned launch of Prometheus 1 to Jupiter’s Icy Moons. While NASA plans to have defined preliminary system requirements and an initial estimate of the life-cycle cost for Prometheus 1 by summer 2005—when the project enters the preliminary design phase— the agency faces significant challenges in doing so. According to Prometheus 1 project management, current funding is inadequate to support a 2015 launch of Prometheus 1 as initially planned. Following small funding increases from fiscal years 2005 through 2007, the budget profile becomes relatively flat through fiscal year 2009 (see fig. 2). Project officials believe that the current profile would need to be increased beginning in fiscal year 2007 to reflect project needs of a Jupiter Icy Moons mission. Decision makers will not get their first comprehensive picture of the project’s requirements and the resources needed to meet those requirements—the first basis for funding decisions—until PMSR scheduled for summer 2005. While the fiscal year 2006 request includes an updated Prometheus 1 funding profile, a funding profile based on life-cycle cost estimates—which NASA plans to have when it enters the preliminary design phase—will not be included until NASA’s fiscal year 2007 request. The Prometheus 1 project office is required to develop preliminary requirements by PMSR. Defining the project’s requirements and developing life-cycle cost estimates by then could be challenging, given the short time frames and NASA’s past difficulties developing requirements and estimates. While it is not unusual for a project at this stage in acquisition to still be defining requirements, several factors could make it difficult for NASA to develop preliminary requirements by PMSR. The contractor, Northrop Grumman, was only recently selected, and according to project officials, input from both the contractor and Office of Naval Reactors is needed to finalize the preliminary ground, space, and launch systems requirements mandatory for PMSR. In addition, NASA continues to refine its requirements. For example, Prometheus 1 project management increased requirements for reactor lifetime, reactor power, and propellant tank capacity to ensure that the Prometheus 1 spacecraft and reactor designs could be used to support follow-on missions. Currently, project managers are working with broad NASA requirements for deep space exploration and more refined project requirements specific to the Prometheus 1 ground, space, and launch systems. NASA is also required to have an initial life-cycle cost estimate for Prometheus 1 at PMSR. However, because the estimate is based on a conceptual design, preliminary system requirements, and detailed technology development plans that are not yet complete, it will be difficult for NASA to develop an estimate in the short time available by PMSR. The project office is working with Northrop Grumman to merge and finalize the conceptual design. Once the conceptual design is finalized, the project office will update the work breakdown structure and develop a “grass roots” estimate of the spacecraft cost. However, project officials do not expect to receive cost estimates from the Office of Naval Reactors and Northrop Grumman, which are also needed to develop the estimate, until the end of February 2005. The JPL Costing Office will prepare a separate cost estimate based on its experiences with prior programs, and both JPL and NASA will contract for additional independent cost estimates. Adding to these complexities, NASA has historically had difficulty establishing life-cycle cost estimates. In May 2004, we reported that NASA’s basic cost-estimating processes—an important tool for managing programs—lack the discipline needed to ensure that program estimates are reasonable. Specifically, we found that 10 NASA programs that we reviewed in detail did not meet all of our cost-estimating criteria—based on criteria developed by Carnegie Mellon University’s Software Engineering Institute. Moreover, none of the 10 programs fully met certain key criteria—including clearly defining the program’s life cycle to establish program commitment and manage program costs, as required by NASA. In addition, only three programs provided a breakdown of the work to be performed. Without this knowledge, we reported that the programs’ estimated costs may be understated and thereby subject to underfunding and cost overruns, putting programs at risk of being reduced in scope or requiring additional funding to meet their objectives. In this report we recommended that NASA take a number of actions to improve its cost - estimating practices. NASA concurred noting that our recommendations validated and reinforced the importance of activities underway at NASA.