GAO Report – NASA Admits SLS Unaffordable

Senior NASA officials believe the Space Launch System (SLS) is unaffordable at current cost levels, making the agency’s Artemis program to return astronauts to the Moon unsustainable if nothing changes, according to a new report from the Government Accountability Office (GAO).

In the September 7 report, Space Launch System, Cost Transparency Needed to Monitor Program Affordability, GAO found that NASA is looking at both short-term and long-term options to reduce the cost of manufacturing and operating the rocket, which is expected to serve as the primary launch vehicle for NASA’s lunar Artemis missions. The report was provided to Congressional committees that oversee NASA.

“The program’s short-term strategies are to: (1) stabilize the flight schedule, (2) achieve learning curve efficiencies, (3) encourage innovation, and (4) adjust acquisition strategies to reduce cost risk,” the report said. “NASA, however, has not yet identified specific program-level cost-saving goals which it hopes to achieve. NASA has made some progress toward implementing these strategies, but it is too early to fully evaluate their effect on cost.”

But, at the same time, the report noted, NASA has no plans to determine what it’s costing the space agency to produce SLS.

“NASA does not plan to measure production costs to monitor the affordability of the SLS program. After SLS’s first launch, Artemis I in November 2022, NASA plans to spend billions of dollars to continue producing multiple SLS components, such as core stages and rocket engines, needed for future Artemis missions. These ongoing production costs to support the SLS program for Artemis missions are not captured in a cost baseline, which limits transparency and efforts to monitor the program’s long-term affordability,” the GAO said.

In the new report, the government watchdog agency reiterated recommendations it made to NASA nine years ago.

“In 2014, GAO recommended that NASA develop a cost baseline that captures production costs for the missions beyond Artemis I that fly SLS Block I. NASA intends to fly SLS Block I for Artemis II, planned for 2024, and Artemis III, planned for 2025. NASA partially concurred, but has not yet implemented this recommendation,” the report said.

“We also recommended that NASA establish separate cost and schedule baselines for each additional capability that encompass all costs, including production costs, because NASA intends to use the increased capabilities of the SLS well into the future and has chosen to estimate costs associated with achieving the capabilities,” the document added.

The summary section of the report is reproduced below.

Space Launch System: Cost Transparency Needed to Monitor Program Affordability
Report to Congressional Committees
Government Accountability Office
GAO-23-105609
September 2023

GAO Highlights

Why GAO Did This Study

The SLS is the world’s most powerful rocket and will enable NASA to return humans to the moon. NASA requested $11.2 billion in the fiscal year 2024 president’s budget request to fund the program through fiscal year 2028, in addition to the $11.8 billion spent developing the initial capability. In November 2022, NASA successfully demonstrated SLS Block 1 during its Artemis I flight test. NASA intends to fly a series of increasingly difficult missions, including Artemis II—a crewed test flight—and Artemis III—a crewed lunar landing.

GAO’s April 2023 high-risk report noted that NASA needed to improve transparency into the long-term costs and affordability of human spaceflight programs, including by establishing cost and schedule baselines for additional SLS capabilities.

A House report to an appropriations bill included a provision for GAO to review NASA’s human exploration programs, including the SLS program. GAO assessed the extent to which (1) NASA has established plans to measure the SLS program costs post-Artemis I, and (2) the program has made progress with its plans to reduce projected SLS costs. GAO reviewed NASA documents and plans and interviewed agency officials.

What GAO Found

The National Aeronautics and Space Administration (NASA) does not plan to measure production costs to monitor the affordability of its most powerful rocket, the Space Launch System (SLS). After SLS’s first launch, Artemis I in November 2022, NASA plans to spend billions of dollars to continue producing multiple SLS components, such as core stages and rocket engines, needed for future Artemis missions. The program is also concurrently producing hardware for more capable versions of the SLS, the Block 1B and Block 2, for use on later missions.

Because the original SLS version’s cost and schedule commitments, or baselines, were tied to the launch of Artemis I, ongoing production and other costs needed to sustain the program going forward are not monitored. Instead, NASA created a rolling 5-year estimate of production and operations costs to ensure that the costs fit within NASA’s overall budget. However, neither the estimate nor the annual budget request track costs by Artemis mission or for recurring production items. As a result, the 5-year estimate and the budget requests are poor measures of cost performance over time. In 2014, GAO recommended that NASA develop a cost baseline that captures production costs for the missions beyond Artemis I that fly SLS Block I. NASA intends to fly SLS Block I for Artemis II, planned for 2024, and Artemis III, planned for 2025. NASA partially concurred, but has not yet implemented this recommendation. A cost baseline would increase the transparency of ongoing costs associated with SLS production and provide necessary insights to monitor program affordability.

Senior NASA officials told GAO that at current cost levels, the SLS program is unaffordable. The SLS program developed a roadmap outlining short-term and long-term cost-saving strategies for future missions. For example, NASA plans to use contract types that shift cost risk from the government to the contractors and that achieve manufacturing efficiencies, but it is too early to determine the effects of such strategies. NASA is also considering long-term options, including purchasing future SLS launches and payload capabilities from a contractor who would own, operate, and integrate the SLS rocket.

What GAO Recommends

GAO has made three past recommendations in this area—two of which GAO considers priority
recommendations. GAO maintains that implementing these recommendations would provide necessary insight to improve program affordability.