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GAO: NASA Performance on Major Projects Continues to Deteriorate

By Doug Messier
Parabolic Arc
June 7, 2020
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The Government Accountability Office (GAO) released its latest assessment of NASA’s major projects at the end of April. It found that NASA’s performance on its major projects continued to deteriorate on cost and schedule. (Full Report)

Below are key excerpts from the report that provide an overview of where NASA stands on its major projects. Although GAO did not analyze the Artemis program to return astronauts to the moon, the watchdog warned the Trump Administration’s decision to move the landing date up from 2028 to 2024 will put more pressure on the space agency.

“Looking ahead, NASA will continue to face significant cost and schedule risks as it undertakes complex efforts to return to the moon under an aggressive time frame,” the report stated.

NASA: Assessments of Major Projects
Report to Congressional Committees

Government Accountability Office
April 2020

Full Report

What We Found

The National Aeronautics and Space Administration’s (NASA) portfolio of major projects continued to experience significant cost and schedule growth this year and the performance is expected to worsen.

Since GAO last reported on the portfolio in May 2019, cost growth was approximately 31 percent over project baselines—the third consecutive year that cost growth has worsened after a period of decline. The average launch delay was 12 months, compared to 13 months last year. See figure.

Credit: GAO

Additional cost growth and schedule delays are likely after NASA establishes a new launch date for Artemis I—an uncrewed test flight of the Space Launch System, Orion crew capsule, and associated ground systems.

Further, in 2019, GAO found that the Space Launch System (SLS) and Orion programs have under reported cost growth. GAO recommended that SLS calculate cost growth based on costs that are currently included in the first mission and that the Orion program update its cost estimate to reflect the schedule agreed to in its baseline. Both recommendations still require action to address.

Looking ahead, NASA will continue to face significant cost and schedule risks as it undertakes complex efforts to return to the moon under an aggressive time frame.

NASA has taken actions to identify and address challenges contributing to its chronic difficulty meeting cost and schedule goals. For example, in response to a GAO recommendation, NASA plans to broaden its use of a project management process known as earned value management.

In addition, NASA plans to assess and update its cost and schedule estimates at more points in the acquisition process and bolster its training for analysts who oversee projects. Such actions will help to provide a better foundation for decision-making, but it will take time to assess the extent to which these efforts are having an effect.

Further, GAO’s work has found that success also hinges on leadership commitment, accountability, and demonstrated progress.

NASA Projects Reviewed in GAO’s Annual Assessment

NASA’s portfolio of major projects includes satellites equipped with advanced sensors to study the Earth, a rover that plans to collect soil and rock samples on Mars, telescopes intended to explore the universe, and spacecraft to transport humans and cargo beyond low-Earth orbit.

When NASA determines that a project will have an estimated life cycle cost of more than $250 million, we include that project in our annual review. After a project launches or reaches full operational capability and holds its key decision point E, we no longer include an assessment of it in our annual report.

Credit: GAO

Table 1 includes a list of all projects included in this report. Four projects are being assessed for the first time this year: 1) Spectro-Photometer for the History of the Universe, Epoch of Reionization and Ices Explorer (SPHEREx), 2) Dragonfly, 3) Power and Propulsion Element (PPE), and 4) Solar Electric Propulsion (SEP).

NASA’s Major Project Portfolio’s Cost and Schedule Performance Expected to Worsen and Challenging Lunar Programs Beginning

The cost performance of NASA’s portfolio of major projects has worsened for the third consecutive year, while the average schedule delay has decreased. Since we last reported in May 2019, cost growth has increased from 27.6 percent to approximately 31 percent. The average launch delay decreased from 13 months to approximately 12 months.

Our analysis shows that NASA’s cost and schedule performance is expected to deteriorate as a result of several factors, including likely Artemis I delays and understated cost growth for the Orion and SLS programs.

According to NASA officials, the partial government shutdown that occurred between December 2018 and January 2019 did not affect projects’ cost and schedule baselines, but these officials identified varying other effects including the use of cost and schedule reserves.

Looking forward, programs that will be part of NASA’s plans to conduct a lunar landing in 2024 will begin to enter the portfolio and present additional cost and schedule risks as NASA works toward this aggressive target date.

Negative Cost and Schedule Performance Will Be Further Exacerbated by Pending Artemis I Delay

The cost performance of NASA’s portfolio of major projects continues to deteriorate for the third consecutive year and both cost and schedule performance are expected to worsen when NASA announces a new schedule for the Artemis I mission.

Overall development cost growth was approximately 31 percent, compared with 27.6 percent cost growth reported last year, and the average launch delay was approximately 12 months, compared with the 13 month delay that we reported last year (see fig. 3).

Credit: GAO

Since we last reported, our analysis found that six projects reported development cost growth, with four of these projects also reporting schedule delays. Two projects reported a development cost decrease. The remaining projects stayed within cost and schedule estimates since we last reported.

Table 2 provides data on the cost and schedule performance of the 18 major projects in development that have cost and schedules baselines since our last assessment.

Credit: GAO

Cost growth and schedule delays since our last assessment occurred for the following reasons:

  • The Orion program reported $539.2 million in development cost growth since our last assessment due to effects from the Artemis I uncrewed test flight’s schedule slipping and poor contractor performance. The program reported no schedule delays because it has not delayed its launch readiness date of April 2023 for the crewed Artemis II test flight. This test flight is the milestone against which NASA assesses the Orion program’s schedule performance.
  • The SLS and EGS programs reported a combined $764.3 million in development cost growth since our last assessment due to poor SLS program performance and schedule delays. Both programs are now estimating costs to achieve a launch readiness date of March 2021. This represents an additional 9 months of delay since our last assessment, but, as of January 2020, this date was still under review by NASA leadership.
  • The Mars 2020 program reported development cost growth of $310.9 million due to multiple development difficulties, delayed deliveries, and higher than anticipated procurement costs. The program reported no schedule delays as it continues to work towards its July 2020 launch readiness date.
  • The Laser Communications Relay Demonstration (LCRD) program reported development cost growth of $36.8 million due to a slip in the launch readiness date of its host spacecraft from November 2019 to January 2021 and unexpected work on a key component.
  • The Ionospheric Connection Explorer’s (ICON) program reported $7.2 million cost growth and experienced an additional 10-month delay due to delays related to its launch vehicle. The project successfully launched in October 2019.

Two projects reported a cost decrease since the last update:

  • Lucy reported $8 million less in development costs due the launch vehicle procurement cost being less than originally estimated when NASA approved the project’s cost and schedule baseline.
  • The NASA Indian Space Research Organisation Synthetic Aperture Radar (NISAR) reported a development cost decrease. NASA reduced NISAR’s reserves by $20.6 million because it had assessed that the project’s risk posture had improved and these reserves were no longer necessary.

    We previously reported that NISAR was not meeting its cost baseline because of $30 million in cost growth associated with plans to collect additional soil moisture and natural hazard data of value to other federal agencies and the science community.

    While NISAR is continuing to develop the capabilities to collect these additional data, NASA has subsequently made a decision to no longer include these costs as part of NISAR’s cost estimate because they were not part of the baseline plan.

While our analysis reflects the status of cost and schedule for these major programs as of January 2020, it does not account for expected changes to the portfolio’s cost and schedule performance due to pending schedule revisions and under reported costs for human exploration programs. Specifically, the portfolio analysis does not reflect an agency-approved schedule for the Artemis I mission because it had not been finalized at the time of our review.

In July 2019—following the reassignment of key leadership that oversees the programs—the NASA Administrator stated that one of the first tasks once new leadership is in place would be to reexamine the Artemis I schedule.

According to officials, the new Associate Administrator for Human Exploration and Operations joined NASA on December 2, 2019. As of January 2020, this schedule revision was still pending and both programs were estimating costs to a March 2021 launch date. In June 2019, we found the date could be as late as June 2021 when all risks at that time were taken into account.

In addition, the SLS and Orion programs are under reporting their cost growth. Specifically, in 2019, we found that the Orion program was not estimating costs to its committed Artemis II baseline launch date of April 2023. Rather, at that time, the program was estimating costs to an October 2022 launch date.

We recommended that NASA direct the Orion program to update its cost estimate to reflect the later schedule. NASA partially concurred with this recommendation stating that the program followed standard estimation processes. Further action is needed to implement this recommendation.

Similarly, while NASA acknowledges cost growth for the SLS program, the amount is understated. In 2019, we found this gap resulted because NASA shifted some planned SLS scope to future missions but did not reduce the program’s cost baseline accordingly. At that time, when we reduced the baseline to account for the reduced scope, the cost growth was about $1.8 billion or approximately 29 percent.

We recommended that SLS update its development cost to be consistent with costs and scope, including costs NASA determined are not in the scope of the first flight. NASA agreed with this recommendation and said it would update the SLS development cost estimate as it proceeds with lunar planning efforts, but this effort is not yet complete.

Government Shutdown Had Various Effects on Projects but Did Not Affect Cost and Schedule Baselines

For 35 days between December 2018 and January 2019, NASA was subject to a partial government shutdown due to a lapse in fiscal year 2019 appropriations. The shutdown resulted in varying effects on NASA’s major projects. Effects included delaying key milestone reviews and procurements, but, according to a senior NASA project official, it did not result in breaches of cost and schedule baselines for any projects in the major project portfolio.

Fourteen of 23 projects continued work during the shutdown. Of these 14 projects, seven projects are managed at the Applied Physics Laboratory—a University Affiliated Research Center—and the Jet Propulsion Laboratory (JPL)—a Federally Funded Research and Development Center—both of which continued operations throughout the shutdown.

NASA granted exceptions to the remaining seven projects to continue work, but not all projects received immediate exceptions and officials stated that there were still effects from the shutdown.

For example, Landsat 9 was granted an exception approximately 2 weeks into the shutdown. Project officials stated that they accommodated schedule delays by adjusting projected delivery dates for two instruments and using project cost reserves to address cost impacts. The project still plans to launch by its committed launch readiness date.

Additionally, officials from various projects that continued to operate noted that NASA was closed, which delayed key meetings and normal coordination with civil-service personnel.

The remaining nine projects in the portfolio that did not operate during the shutdown experienced varying effects from the shutdown, including delaying key milestone reviews, procurements, and hiring, as well as the inability to process invoices and loss of critical skills.

Specific examples reported to us from projects in the implementation phase at the time of the shutdown include:

  • LBFD delayed several of the project’s key milestone dates, including the project’s critical design review and flight readiness review, by approximately 5 weeks. Project officials stated they used $5.4 million in cost reserves to absorb the effects of the shutdown.

    However, officials noted that the decrease of the project’s reserves increases risk going forward. The project requested the restoration of the $5.4 million in funds expended as a result of the shutdown through NASA’s annual budget process. NASA officials told us a decision will not be made before spring 2020.
  • EGS, according to project officials, experienced a schedule delay of around 27 days to Multi-element Verification and Validation. This is a test process to ensure that systems at Kennedy Space Center can operate together to successfully process and launch the integrated SLS and Orion Systems. NASA officials estimated a $2 million cost associated with this delay.

    In addition, officials noted that, while construction activities were allowed to proceed, some critical skills such as iron and tubing workers were lost due to uncertainty regarding the duration of the government shutdown and the inability to process contractor invoices.
  • SGSS—a project that has reported long-standing issues with contractor performance—reported cost and schedule impacts caused by the project not having access to NASA’s White Sands Complex, the government shutdown, and a decline in contractor performance. As a result, the project was unable to perform integration and testing activities that were on the project’s critical path, affecting the date for the project’s first operational readiness review.
  • Orion and SLS received partial exceptions to continue critical path work on Artemis I. However, both projects reported effects from the shutdown beyond Artemis I work including delays to procurement activities.

Specific examples reported to us among projects in the formulation phase at the time of the shutdown include:

  • PACE established its cost and schedule baselines in August 2019, at which time it included approximately $34 million in costs above its preliminary cost estimate due to delays resulting from the government shutdown.
  • WFIRST had to revise its schedule to accommodate 5 weeks of schedule impacts, but the project has not yet established a cost or schedule baseline so the government shutdown did not affect a launch readiness date. Project officials stated they used cost reserves to address $25 million of cost impacts.
  • Restore-L incurred a 1-month delay to the project’s overall schedule, the consumption of 1-month of schedule margin, and the use of $14 million of the project’s cost reserves. The shutdown also resulted in delayed hiring of key positions.
  • PPE delayed its planned contract start date from March 2019 to the end of May 2019, which also resulted in a delay to the project’s preliminary launch readiness date.

One response to “GAO: NASA Performance on Major Projects Continues to Deteriorate”

  1. gunsandrockets says:

    In addition, the SLS and Orion programs are under reporting their cost growth. Specifically, in 2019, we found that the Orion program was not estimating costs to its committed Artemis II baseline launch date of April 2023. Rather, at that time, the program was estimating costs to an October 2022 launch date.

    Oh, so now it’s April 2023? Of course it is.

    Nothing but more bad news for poor NASA.

    What the heck is going on over there? Is there some systematic problem with NASA management? Is it mere program specific? Something rotten with the flagship projects? That might be the least troubling explanation…

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