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. 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. 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. 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. 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.