[Senate Hearing 108-985]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 108-985
 
                    COLUMBIA ACCIDENT INVESTIGATION 
                         BOARD'S REPORT ON THE 
                    SPACE SHUTTLE COLUMBIA ACCIDENT 

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 3, 2003

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South 
CONRAD BURNS, Montana                    Carolina, Ranking
TRENT LOTT, Mississippi              DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          JOHN D. ROCKEFELLER IV, West 
OLYMPIA J. SNOWE, Maine                  Virginia
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois        BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  RON WYDEN, Oregon
GEORGE ALLEN, Virginia               BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
                                     MARIA CANTWELL, Washington
                                     FRANK R. LAUTENBERG, New Jersey
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Robert W. Chamberlin, Republican Chief Counsel
      Kevin D. Kayes, Democratic Staff Director and Chief Counsel
                Gregg Elias, Democratic General Counsel



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 3, 2003................................     1
Statement of Senator Breaux......................................    10
Statement of Senator Brownback...................................     9
Statement of Senator Burns.......................................     8
    Prepared statement...........................................     8
Statemnent of Senator Dorgan.....................................    54
Statement of Senator Hollings....................................     2
    Prepared statement...........................................     4
Statement of Senator Hutchison...................................     5
Statement of Senator Inouye......................................    12
Statement of Senator Lautenberg..................................     5
    Prepared statement...........................................     5
    Report dated March 2003 entitled ``Effectiveness of NASA's 
      Workforce and Contractor Policies'' from the International 
      Federation of Professional Technical Engineers, AFL-CIO....    33
Statement of Senator McCain......................................     1
Statement of Senator Nelson......................................     9
Statement of Senator Snowe.......................................    11
Statement of Senator Sununu......................................     7
Statement of Senator Wyden.......................................     7

                               Witnesses

Gehman, Jr., Harold W., Chairman, Columbia Accident Investigation 
  Board..........................................................    16
    Prepared statement...........................................    18
    Letter dated July 23, 2003 to Hon. John McCain from Sean 
      O'Keefe, Administrator, National Aeronautics and Space 
      Administration.............................................    20
O'Keefe, Hon. Sean, Administrator, National Aeronautics and Space 
  Administration (NASA)..........................................    12
    Prepared statement...........................................    14

                                Appendix

Letter dated July 29, 2003 from Douglas Holtz-Eakin, Director, 
  Congressional Budget Office to Hon. Ted Stevens................    61
Report dated July 29, 2003 from the Congressional Budget Office 
  entitled ``NASA's Space Flight Operations and Other 
  Technologically Complex Government Activities Conducted by 
  Contractors''..................................................    62
Response to written questions submitted to Hon. Sean O'Keefe by:
    Hon. Frank R. Lautenberg.....................................    83
    Hon. John McCain.............................................    77
    Hon. Olympia J. Snowe........................................    82
Response to written questions submitted to Harold W. Gehman, Jr. 
  by:
    Hon. Frank R. Lautenberg.....................................    88
    Hon. John McCain.............................................    84


                    COLUMBIA ACCIDENT INVESTIGATION

                         BOARD'S REPORT ON THE

                    SPACE SHUTTLE COLUMBIA ACCIDENT

                              ----------                              


                      WEDNESDAY, SEPTEMBER 3, 2003

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:32 a.m. in room 
SR-253, Russell Senate Office Building, Hon. John McCain, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    The Chairman. Good morning. Last week, the Columbia 
Accident Investigation Board released its report on the causes 
of the space shuttle accident that occurred 7 months ago. Today 
the Committee will begin a thorough examination of its 
conclusions.
    The Board's final report is one of the most comprehensive 
ever produced concerning the management and operations at NASA. 
It must serve as a wake-up call to NASA and to the Nation that 
we have, for too long, put off hard choices and forced the 
space program to limp along without adequate guidance or 
funding. As stated in the report, ``Unless the technical, 
organizational, and cultural recommendations made in this 
report are implemented, little will have been accomplished to 
lessen the chance that another accident will follow.'' That's a 
very chilling and powerful statement, and I hope all Members of 
Congress will pay close attention to that statement, if nothing 
else in this report.
    The report reminds us that we are still in the 
developmental stage of space transportation and that space is 
an unforgiving environment which challenges our technical 
expertise. It also raises a number of important issues that 
will have to be considered as we plan for the future of the 
space program. Most importantly, we will have to figure out 
where we want the space program to go and what we expect to get 
out of it. Then we will have to ensure that adequate and un-
earmarked funds are provided for these missions. It is 
imperative that we eliminate wasteful spending and make 
efficient use of resources we commit to space exploration.
    The Board worked tirelessly to identify and clarify the 
causes of this accident, and I'm deeply grateful to its members 
for their dedication. Although the technical causes of the 
accident have been suspected for some time, the Board's 
findings concerning the role that NASA's organizational 
structure and culture played in this tragedy are as troubling 
as they are valuable.
    As the Board reported, ``Complex systems almost always fail 
in complex ways.'' The many factors that contributed to the 
accident largely demonstrate how far NASA has regressed--its 
incomplete and invalid impact analysis, its rejection to seek 
satellite images of the damaged shuttle, its reliance on past 
successes as a substitute for sound engineering practices, its 
organizational barriers that prevented effective communication 
of critical information and stifled professional differences of 
opinion, and its lack of integrated management across program 
elements.
    The report further describes NASA's culture as including, 
``flawed decisionmaking, self-deception, introversion, and 
diminished curiosity about the world outside.'' We'll want to 
hear from Administrator O'Keefe about precisely how and when 
this culture can be changed.
    I welcome Administrator O'Keefe and Admiral Gehman, and 
look forward to hearing their testimony on the Investigation 
Board's findings and recommendations and NASA's plan to return 
the space shuttle program to flight.
    Again, I thank Admiral Gehman and his Board members for 
their outstanding work. I also think it's appropriate to note 
that Mr. O'Keefe and his staff were completely cooperative and 
helpful in the Board's investigation. That's not always true in 
the past. But I think they deserve credit for being helpful, 
even though sometimes it was obviously painful.
    I'd like to turn to my friend of many years, and Ranking 
Member of the Committee, Senator Hollings, who, as we all know, 
made an announcement that he would not seek reelection. I know 
that Senator Hollings, until the last moment he is here, will 
continue to pursue with vigor, passion, and always non-
controversially, issues that have interested him.
    [Laughter.]
    The Chairman. And I must say to my friend--he is not gone--
but I and all Members of this Committee will miss him because 
of his long and outstanding and courageous service on this 
Committee and as a Member of the U.S. Senate.
    Senator Hollings?

             STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator Hollings. I thank our distinguished Chairman and my 
good friend, John McCain. When I left town in the first of 
August, I was a bum. I had been serving almost--well, over 50 
years in some public office. And as long as you continue to 
serve, you're a bum. But soon as I said I was going to get out 
of the way, I became a statesman.
    [Laughter.]
    Senator Hollings. You ought to see the crap that----
    [Laughter.]
    Senator Hollings.--that they put out. I mean, you've never 
seen such stuff.
    [Laughter.]
    Senator Hollings. I mean, I've invented everything, I've 
thought of everything, and everything else of that kind.
    [Laughter.]
    Senator Hollings. But it has been a distinct pleasure, and 
serving seven terms in the U.S. Senate is enough. I'm delighted 
to have an additional year here to see if we can straighten out 
a few things.
    I commend Admiral Gehman and the Columbia Accident 
Investigation Board. For example, I was only reading last 
night, an article in the London Economist titled, ``Old, Unsafe 
and Costly,'' the article detailed why it's time to ``scuttle 
the shuttle.'' And that's exactly what you recommend, that the 
shuttle be scuttled.
    However, I'm sort of intrigued with the findings regarding 
the culture of NASA. As an admiral, Mr. Gehman, you understand 
that a Navy board of inquiry, would immediately found 
responsibility, and whoever was captain of that ship would have 
been cashiered. I don't find that in the report--the fixing of 
responsibility. That intrigues me. If you were the coach of a 
football team, they'd buy up the contract, having lost seven 
members of the team.
    Let me get right to the point. I think this Committee and 
the whole blooming setup is part of the culture. I've been 
here, as the distinguished Chairman just commented, for years, 
since we've had a Space Committee. Never have I heard anything 
about being unsafe.
    I'll never forget when the Challenger went down. I talked 
to them out there at Morton Thiokol. If I remember the name, it 
was an Alan McDonald. And he said, ``We told them, at the Cape, 
it was unsafe.'' With those O-rings, particularly the cold 
around there, and they were taking too great a risk.`` And he 
said, ``There we all were gathered together in the hearing room 
there at Morton Thiokol, up there in Iowa, and when the 
Challenger blasted off, Jimmy said, `There she goes.' And Henry 
said, `Like a piece of cake.' And then all of a sudden she 
blew. And everyone in the room knew why. I said, ``Mr. 
McDonald, will you come and tell the Committee that?'' And he 
said, ``I'd be glad to.'' They headed him off, and he never 
testified.
    Now, we thought, after the Rogers Committee had gotten into 
it, that the Commission had cleaned it up, but, you didn't find 
it's been cleaned up. And we came with an independent safety 
office. But the independent safety office within NASA itself 
has not worked. We've lost seven astronauts.
    So rather than part of the culture that you get up here on 
the Hill, ``Oh, we're going to get them. We're going to get 
that. We're going to be back up in space.'' Uh-uh. We're not 
going to get up there until we get a decent shuttle and it's 
certified safe by others than in NASA, in my opinion.
    I would hope that we had learned a lesson here, because 
we're the ones that put the pressure on Mr. O'Keefe. I know we 
all had worked with him on the Appropriations Committee, and 
when he got appointed that blooming Space Station was--or is, I 
think, about $40 billion, or $20 billion--that's right, it's 
about $20 billion over budget and about only 40 percent 
complete. So when we had the head of the Office of Management 
and Budget go over there, we were all concerned about money. We 
weren't concerned about safety. So we're part of the culture 
right up here on this Committee. And rather than praising each 
other how thorough you have been--and it has been a very 
thorough--you all have really done a way better job than I 
thought was going to happen and get done. You all have really 
worked hard, and you've got a very comprehensive report, except 
the actual fixing of the responsibility.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina
    Thank you Mr. Chairman. I would like to begin by thanking Admiral 
Gehman and his colleagues for an excellent report. When you first came 
before this committee in February, some members wondered whether your 
group had the wherewithal to be critical enough of NASA. You reassured 
us then and the product of your work is excellent. Now we must begin 
the process of understanding and implementing your recommendations.
    Mr. O'Keefe, I am glad that you are here as well. You certainly 
inherited more than you bargained for when you joined NASA. You have 
made the commitment that NASA will follow these recommendations. I hope 
so. I don't know how you will accomplish that, and the Board appears to 
have that doubt, too. Many of us have a sense of deja vu. We tried to 
change NASA in 1986 and now we know it just got worse. We have a NASA 
Administrator who is saying all of the right things, but having been 
here before we wonder if NASA can really heal itself or if Congress 
needs to step in--forcefully.
    We have many decisions before us. First, we must ensure that we 
understand and have the proper insight into the return to flight 
process. What is the right thing to do and when should we do it? While 
NASA has appointed the Stafford-Covey team, I wonder whether this is 
enough. Perhaps we should have a Congressional Review Panel with 
experts appointed by the Congress to review this process.
    These experts could also help us with our second task--provide a 
comprehensive, long-term vision for the space program. Here we are 40 
years after the birth of space flight, and we don't have a very good 
idea of what we're doing and why, and what we are doing we aren't doing 
all that well. NASA made its goal to complete and service a space 
station, but even that's changed over the years. Regardless of what you 
think of the Station and I'm one who doesn't think much of it-the 
reality is that it's there and we need to service it. But it's time to 
think beyond Station. What's next for human spaceflight and what is a 
purpose to which we can all agree? Obviously, there aren't good answers 
to this question today.
    Third, we need to figure out how to change NASA's culture. Admiral 
Gehman, your report was chilling on this point, and makes us wonder 
what on Earth we can do, particularly when the experts we relied on 
seemed to have failed us. The Rogers Commission that examined the 
Challenger accident recommended a strong, independent NASA safety 
organization, strong central control of the Shuttle Program, and 
broader participation by authorities who could ensure that safety was 
the highest priority. All that failed us, and NASA actively sought to 
unravel those changes. I understand your report argues that NASA was 
not just complacent and blind about safety, but was proactive about 
stopping safe, smart procedures on this mission-and still thinks its 
safety culture is top-notch. I think you said their culture was in 
denial. My gosh, what are we to make of all this!
    The CAIB has once again recommended an independent safety office, 
as well as independent technical requirements management so that 
schedule worries don't impact decisions about what is safe to fly. My 
concern is that we have been here before and that NASA has a terrible 
track record. I'm not sure that NASA can reform itself. We in the 
Congress may need to help them, whether it's through new institutions 
or by changing the Program's responsibilities.
    Finally, we'll have to figure out how to do all of this in an era 
of dwindling resources. It will take a lot of money to do this right. 
We need to weigh our options moving forward and make some hard choices. 
I look forward to working with you, Mr. Chairman, and the other members 
of the Committee to do just that.

    The Chairman. Thank you, Senator Hollings. And, obviously, 
I would ask my colleagues to make their comments as briefly as 
possible, since we would like to hear from the witnesses.
    Senator Hutchison?

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Senator McCain, Mr. Chairman.
    First, I do want to commend the report, the open 
investigation that was done. I thank you, Admiral Gehman, for 
doing a great job. And I thank you, Administrator O'Keefe, for 
letting him do a great job. That says a lot, and it was very 
different from the Challenger experience. We appreciate that. 
Now we have a blueprint of where to go.
    One of the most important things in your report concludes 
that the present shuttle is not inherently unsafe, but it does 
call for a massive recertification process to ensure flight 
safety. I will look to Administrator O'Keefe for his commitment 
to the project of recertifying shuttles before they go back in 
the air.
    The report is a devastating attack on NASA's procedure and 
lines of communication. I hope that the Administrator regards 
this report as a blueprint for change, and I hope that it is 
acknowledged that there can never again be business as usual at 
NASA.
    You cannot have your most innovative research, your most 
technologically advanced challenge done with a bureaucratic 
mentality. This doesn't mean you open the treasury, but it 
means you lock your vision on a few very big goals, and you do 
them right. ``Faster, better, cheaper'' should be thrown in the 
wastebasket.
    When Senator Nelson and I, particularly, along with the 
whole Committee, asked questions of previous administrators, 
``Are we sacrificing safety?'' we always got the answer, 
``Absolutely not. Safety is the first priority.'' Now we need 
to make sure that we have the vision, the scientific 
background, and the total change in the bureaucracy at NASA, 
from the very top to the very bottom, in line with the 
recommendations of the report.
    Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Lautenberg?

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thanks very much, Mr. Chairman. I will 
be brief. And I ask consent that my full statement be included 
in the record.
    The Chairman. Without objection.
    [The prepared statement of Senator Lautenberg follows:]

            Prepared Statement of Hon. Frank R. Lautenberg, 
                      U.S. Senator from New Jersey
    Mr. Chairman, thank you for holding this hearing.
    The Columbia Accident Investigation Board's report is a critical 
document that will help those of us in Congress and the public 
understand the causes of the Columbia tragedy.
    While there appears to be little disagreement about the physical 
cause of the accident, the troubling aspect of the report is that it 
forces us to ask some very difficult questions about the management of 
Federal programs and, the future of the space program itself.
    This is not a time to simply assign blame--I believe we need to 
look ahead and learn from the lessons highlighted from this report. 
It's an appropriate time to examine the improvements needed to 
strengthen NASA's workforce and foster a culture of open communication 
at NASA.
    I believe it's time to look at the effect that NASA's scheme of 
outsourcing work on this critical program has had on the safety of the 
program.
    I have criticized this Administration for being content with buying 
``safety on the cheap'' and ``security on the cheap.'' We have seen 
this with the Administration's air traffic control privatization plan 
and its ill-fated proposal to cut air marshals.
    With their zeal to ``outsource,'' just how does the Administration 
prevent the budget cutters from cutting out safety and security 
protections with the slash of a pen?
    But what has the Administration so fired up about its competitive 
outsourcing agenda is that it is touted to save money. The accident 
investigation report reminds us that ``NASA led the way toward 
privatization, serving as an example to other government agencies.'' If 
this is truly the case, then I don't think the American people want 
other safety-critical work to be handled under a similar program 
structure.
    It's been reported that at one time only about 1,800 NASA employees 
were responsible to oversee some 17,000 contractors. Those numbers have 
clear implications for the capacity of NASA to exercise appropriate 
oversight--to maintain the flow of vital information--and to assure 
full implementation of safety processes. This is not how our government 
should be run.
    The desire to reach for the stars is as old as human history and 
the ambitions embodied in our manned space program are noble ones. But 
we have had two fatal accidents in 113 Shuttle missions. Many people 
have become inured to the dangers inherent in sending people into space 
and bringing them back safely. But the fact is, it's a high-risk 
venture. Some risk is unavoidable--that's what makes our astronauts 
such brave individuals.
    Manned space exploration isn't cheap. If we try to do it on the 
cheap, we put safety and people's lives--at risk.
    I'm sure we will hear in testimony today and in the future that 
safety has never been compromised. But NASA has always had problems 
overseeing its contractors. And the National Research Council has 
concluded that the contract to manage the Shuttle program awarded to 
United Space Alliance in 1996 contained financial incentives for 
investments in efficiency, but not for investments in modernization and 
safety improvements.
    I look forward to hearing from our witnesses today--not just on the 
technical causes of the Columbia accident--but also on the 
organizational faultlines which promoted the potential for such a 
disaster like this. I also hope to hear testimony on NASA's 
relationship with its contractors, Congress's relationship with NASA, 
and an analysis of Administration budget requests for NASA past and 
present.
    Thank you.

    Senator Lautenberg. I would just like to make a couple of 
quick points. And my hat's off to Admiral Gehman and you, Mr. 
O'Keefe, for the very tough task that you took on, and the 
outcome that is described in your report, I think, is 
understandable and will have an effect on how we think about 
things in the future. And I hope that we will learn enough 
directly about the safety requirement so that something as 
terrible as happened here, the Columbia tragedy, will never 
happen again.
    But I would go to something of principle and make a note of 
the fact that the privatization program that we see in 
government almost began with NASA. And now we see that we have 
some 1,800 people, I believe the number is, who are overseeing 
private contractors, in the multiple thousands, whether or not 
they have enough ability, enough structure to make sure that 
they're doing what they have to do.
    And I'll close with this. On page 109 of your report, 
Admiral Gehman, ``The major annual savings resulting from this 
spaceflight operations contract, which, in 1996, were touted to 
be some 500 million to a billion a year by the early 2000, have 
not materialized.'' And I highlight that, because throughout 
that paragraph it talks to the lack of success in achieving the 
cost efficiencies. And what is it that permitted the costs to 
be overrun and still this terrible thing to take place?
    And I hope, Mr. Chairman, that we'll find out about the 
relationship of the private side of the force and what impact 
it had. And I thank you very much and congratulate you again 
for the excellent work you've done.
    The Chairman. Senator Sununu?

               STATEMENT OF HON. JOHN E. SUNUNU, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Sununu. Thank you, Mr. Chairman.
    I simply want to thank Admiral Gehman and Administrator 
O'Keefe for their work, and reiterate Chairman McCain's 
emphasis on the level of cooperation that was provided, the 
service of the members of the Board. I can't imagine an 
emotionally or physically more difficult task than the one that 
we gave to you, and we owe a great deal of thanks, of course, 
to the Board members, but also to the staff--the staff at NASA 
and the staff on the Board--that performed a lot of the more 
difficult tasks and probably spent at least as much time as the 
Board members themselves. So we're very grateful for your 
service and very appreciative of the work product.
    The Chairman. Senator Wyden?

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman.
    And I think you, Mr. Chairman, and Senator Hollings have 
both put your hands on the central question, and that's looking 
again at NASA's mission. And my view is that you cannot resolve 
the issue about NASA's basic mission without looking carefully 
and in a fresh way at the direction of the manned space 
program.
    And toward that end, Mr. Chairman and colleagues, I'd like 
to make a modest proposal this morning. I believe that, within 
90 days or, at most, 6 months, NASA should prepare and furnish 
this Committee a cost-benefit analysis on the manned space 
program. What I would like to learn and what I think would be 
helpful to all of us in the Senate is to learn more precisely 
what can be accomplished with manned spaceflight and at what 
price, and what cannot. Once this information would be made 
available to the Committee, then we're in a position, I think, 
for the first time in a long time, to look carefully at how 
manned spaceflight fits into NASA's future and what can be 
accomplished with unmanned spaceflight that would also achieve 
the scientific discoveries that have been envisaged for the 
agency for some time.
    There are other issues that I'm going to want to explore, 
but I intend to ask the Administrator about whether he would 
prepare a cost-benefit analysis quickly for the Senate on the 
manned spaceflight program. The other areas that I want to 
explore, particularly how this time we would ensure compliance 
with the Admiral's fine recommendations. I think if you look 
historically at this issue, after the last tragedy many of the 
same recommendations were made that Admiral Gehman is making 
now, and clearly many of them were not followed up on. I know 
that the Administrator, Sean O'Keefe, feels strongly about 
this, as well, and I intend to ask some questions about how 
it's going to be different this time and the recommendations 
will be followed up on.
    But I thank you, Mr. Chairman and Senator Hollings, for 
convening this hearing. I think the country wanted us to do 
this quickly, and you all have done that, and I thank you.
    The Chairman. Senator Burns?

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Thank you, Mr. Chairman. And I'll just 
submit my statement for the record.
    The Chairman. Without objection.
    Senator Burns. I'd like to just offer a small comment. I, 
like the Chairman, appreciate the work that the Director has 
done and this Board has done. It took a great deal of courage 
to release the report that you did. It needed to be released. 
And it took a look at the inside of us, and we're going to have 
to reexamine just exactly what we found in there.
    I think we now have to redirect our focus now on the vision 
and the R&D that goes along with NASA. We know that going into 
space will always be risky, at best. And so that work must go 
on. I think we will now look at different areas of a more 
moderate way to enter space and to move cargo. I think we'll 
take another look now at reusables and unmanned. I think, in 
our probes, our unmanned probes into the--further out in space 
is--they'll be a very important part of this Nation. And so we 
have a lot of work ahead of us. But, again, I want to 
congratulate you.
    And, Senator Hollings, it may just seem like a year to you, 
but we'll miss you.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Burns follows:]

   Prepared Statement of Hon. Conrad Burns, U.S. Senator from Montana
    Thank you, Mr. Chairman, for convening this important hearing. It 
has been more than seven months since our Nation was shocked and deeply 
sorrowed by the loss of the Space Shuttle Columbia and its brave and 
courageous crew. As a long time supporter of NASA and of manned space 
flight, I was particularly concerned about the impact of the accident 
on our continuing endeavors in space. It was important for us to look 
into the cause of the accident in an objective and expeditious manner, 
and I believe that constituting the Columbia Accident Investigation 
Board was the right step to accomplish this goal. The Board had an 
enormous task, looking not only at where technology let us down but 
also human factors that may have contributed to this terrible tragedy.
    The accident investigation team has concluded with a fair degree of 
confidence the sequence of events that led to the loss of the space 
shuttle Columbia. Technical problems, once identified, can be resolved 
with sufficient time and resources. What we continue to ponder and 
debate is what else can be done to better guard against such mishaps in 
the future. In looking over the investigation report, I was pleased to 
note that the Board has examined this issue as well, with a special 
emphasis on the existing organizational culture within our space 
agency.
    The Board has put together a comprehensive report that includes 29 
different recommendations, including 15 that must be implemented prior 
to any 'return to flight'. These recommendations, once implemented, 
will undoubtedly add a measure of safety to what is an inherently risky 
enterprise--space exploration will continue to challenge our technical 
capabilities just as it does our pioneering spirit. It is my hope that 
our Nation does not yield ground on either position.
    As we analyze and dissect the findings of the report, we in 
Congress should be especially mindful of actions that signal our level 
of support for the space program. Committing to human presence in space 
cannot go hand in-hand with under-funding and unrealistic 
expectations--these eventually contribute to the very culture that is 
alluded to in the Board's report. While additional oversight will help 
alleviate some of these problems, Congress must do its part to 
establish clearer priorities for our space agency. I hope that we 
continue to look at this issue in the days ahead.
    Mr. Chairman, I applaud the efforts of the Columbia Accident 
Investigation Board in this obviously difficult task. I look forward to 
hearing from Admiral Gehman on the findings of the Board and from Mr. 
O'Keefe on his thoughts in this matter.

    The Chairman. Senator Nelson?

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Mr. Chairman, I want to thank you for 
calling this hearing today. Thank you for your leadership in 
the oversight role that is going to be needed by this Committee 
as we proceed. And thanks to both of you gentlemen for the 
extraordinary leadership that you have offered.
    Admiral Gehman, I particularly want to commend you, who 
I've worked with over the course of the past several months. 
Having read a lot of your interviews, having talked to your 
very professional staff, talked to the members of your Board, I 
think you have done an excellent work product.
    I expected what you came out and talked about, the 
decisionmaking being influenced by the culture, and we need 
very much to attend to that. What I did not expect, but was 
pleasantly surprised in your report, that you addressed head-
on, the question of the funding and how, over time--I can draw 
my own conclusions, as I have railed in this Committee on 
several occasions, that you can't do spaceflight on the cheap, 
that there are just too many things in a risky business that 
have got to be attended to, and particularly when safety is 
overlooked because money is siphoned off of the space shuttle 
program to put it onto something else, which has occurred over 
the past decade. And so thank you for bringing up that aspect.
    And, Mr. Chairman, I will close by saying, again, thank you 
for the oversight hearings. And I think this is going to be 
extremely important, that in our oversight capacity, that 
although we can't lead the space program--that has to go all 
the way to the top, to the White House--we can certainly let, 
as Senator Hutchison has already said, our expressions of 
concern be known of what is adequately funding the program so 
that safety is not sacrificed like it has been.
    We went through this drill 17 years ago, and safety was 
going to be number one. And it was, for about two or 3 years. 
And then the hard reality set in of siphoning the money off, of 
relegating the safety considerations--because of the day-to-day 
financial decisions, they were being relegated to the back 
seat.
    So thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Brownback?

               STATEMENT OF HON. SAM BROWNBACK, 
                    U.S. SENATOR FROM KANSAS

    Senator Brownback. Thank you, Mr. Chairman.
    February 1, this country certainly suffered, and the world 
suffered, a terrible and tragic loss of the Shuttle Columbia 
and her crew, the seven astronauts that were explorers and they 
wished to serve their countries, and they did just that. While 
certainly saddened by the events that took place on that 
fateful day; however, true to this country's resolve, we've 
been determined to find and correct the cause and move forward. 
That is what this hearing is about today.
    I believe it is imperative that America remains at the 
forefront of space exploration and discovery, and it's our job 
here in Congress to take this report, move forward 
expeditiously in getting America back in space safely aboard an 
American vehicle. I'm committed to authoring and working on 
reauthorizing a bill for NASA during this Congress and use this 
report to provide some of the guidelines for that bill. I'm 
also pleased to see that the Board recognizes the importance of 
a vision for America's future in manned space exploration. And 
I believe it's time for us to step back and to really review 
that and to establish that vision, and I'm hopeful we can see 
created a Presidential commission on the future of space 
exploration to establish a common vision for space exploration 
by America.
    I've held several subcommittee hearings over the last few 
months, with not only NASA but other Federal officials, but 
also with the private sector companies and entrepreneurs in an 
effort to ascertain what America's vision for future space 
exploration should be. In all these hearings, one thing has 
stood clear: Americans continue to support human spaceflight 
and exploration. We cannot allow ourselves to give up and turn 
our backs on exploring space and the universe because we have 
suffered loss of life. Those are the risks we acknowledge and 
accept for the opportunity to improve the quality of life here 
on Earth and beyond.
    We are tasked today with moving forward to ensure America's 
return to flight, and I'm anxious to hear what NASA's response 
is to the Board's report. But I'm also very interested in where 
they plan to go from here with America's vision in space 
exploration.
    Thank you, Mr. Chairman, for holding the hearing.
    The Chairman. Senator Breaux?

               STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. Thank you, Mr. Chairman.
    And let me join with all of our colleagues on the Committee 
who, I think, have a universal agreement on the quality of the 
work that was done, Admiral, after this great tragedy, and the 
cooperation, Mr. O'Keefe, that NASA had and the role that NASA 
played in working out this very detailed investigation of a 
very tragic set of circumstances.
    It, indeed, is very tragic and is very, very high profile. 
If you think that we lose about 40,000 American lives on 
accidents every year on our Nation's highways, although this is 
an accident involving seven real American heroes, it really 
speaks to the essence of what America is all about. In a sense 
the quest for conquering outer space is really something that 
affects every American very deeply when you see something so 
visible as the shuttle tragedy that occurred.
    So I have a number of questions about the recommendations 
and the culture that, Admiral, you talked about, and how we 
change that. But let me just say now that the report, I think, 
is well done. And the cooperation, I think, that was exhibited 
is also to be commended. And I'll thank you both.
    The Chairman. Senator Snowe?

              STATEMENT OF HON. OLYMPIA J. SNOWE, 
                    U.S. SENATOR FROM MAINE

    Senator Snowe. Thank you, Mr. Chairman. I thank you for 
holding this hearing so promptly and responsibly. And I 
certainly want to welcome Admiral Gehman and Administrator 
O'Keefe here this morning.
    This report, as everybody's indicated, is about moving 
forward, but the question is how we do so in a manner that 
honors the memories of those brave astronauts who lost their 
lives, and to prevent a reoccurrence of this tragedy from 
occurring in the future.
    This report does, I think, represent a giant leap forward 
in understanding that which needs to be fixed. I think the 
question is the change that needs to occur and the 
implementation of that change.
    And, Admiral Gehman, I want to congratulate you and the 
Board for your extraordinary efforts that you invested in 
developing this report, reaching beyond and not just 
ascertaining the last thing that occurred, but also 
understanding the whole system and patterns of failures and 
shortcomings. I think that that is essential for understanding 
the complete picture in order to address the inequities and 
also the failures overall.
    I would also say that we know that this is--as you 
indicated, Admiral Gehman, ``complex systems always fail in 
complex ways.'' So obviously the solution is going to be 
equally complicated. I think what becomes abundantly clear in 
this whole process is that the execution and the perpetuation 
of comprehensive changes must occur in order for the manned 
spaceflight program to continue, and prevent the loss of life 
in the future.
    And I think we were all shocked by the revelations of the 
shortcomings, of miscommunications, obviously the bureaucratic 
misfirings. And I think, as a result, we have to know how and 
what must be done. But more importantly is establishing a 
perpetuity of vigilance in making sure that these things are 
implemented for the long-haul and the longevity that it's going 
to require. We cannot allow our outrage or concern to atrophy. 
You know, we have seen past reports, many of which were 
overlooked, and that cannot occur again in this instance.
    And so when the spotlight is off, I would hope that we will 
be able to be assured that what has been recommended in this 
report is going to go forward. And it's not a question of just 
depending on previous successes, however tenuous, to predict 
future success. The question is, how do we create a permanent 
management structure that will enable NASA to succeed in the 
future with this program?
    And I know we have a lot of remarkable people at NASA, and 
I know that your leadership, Administrator O'Keefe, and your 
extraordinary work at the Board, Admiral Gehman, that it is 
possible and that when we look back at this time of tragic loss 
that we can view it as a turning point in the history of 
America's manned spaceflight program.
    Thank you, Mr. Chairman.
    The Chairman. Senator Inouye?

              STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    Senator Inouye. Thank you very much, Mr. Chairman.
    I wish to commend Administrator O'Keefe and Admiral Gehman 
for this careful, candid, and courageous report. Thank you very 
much.
    I ask that the complete statement be made part of the 
record.
    The Chairman. Without objection.
    Welcome to the witnesses. We'll begin with you, 
Administrator O'Keefe. Thank you for appearing today.

         STATEMENT OF HON. SEAN O'KEEFE, ADMINISTRATOR,

      NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA)

    Mr. O'Keefe. Thank you, Mr. Chairman.
    I have a statement I'd like to submit for the record, if 
you would, and I'll briefly summarize.
    The Chairman. And if you'd pull the microphone a little 
closer, please.
    Mr. O'Keefe. Sure. Is that resonating a little better?
    Over our 45 years as an agency, when NASA was founded in 
1958, we have found in the course of that history that our time 
has been defined by the great successes and the great failures. 
In each of these defining moments, our strength and resolve as 
professionals has been tested, to be sure. And this one of the 
seminal moments in our history. It is defined by a failure.
    On February 1, we pledged to the families of the Columbia 
seven that we would find the problem, fix it, and return to 
exploration objectives that their loved ones dedicated their 
lives to. The Columbia Accident Investigation Board's report 
completes the first of these commitments, and we are indebted 
to Admiral Gehman and his Board members for their exceptional 
public service and extraordinary diligence in this difficult 
task. We wanted an unvarnished answer, and we got it.
    As we begin to fulfill the second commitment to the 
families to fix the problem, our first step, critical first 
step, is to accept the findings, comply with the 
recommendations, and embrace this report. There is no 
equivocation on that pledge. This report, as many of you have 
observed, is a blueprint. It's a roadmap to achieve that second 
objective.
    Now, in the course of the proceedings of this 
investigation, the Board has given us an extraordinary head 
start by their candor, their openness, and the release of 
findings and recommendations during the course of the 
investigation. This has all been conducted in a very open 
setting, and they have telegraphed all along the way, in the 
course of their public hearings, commentary, exactly what their 
findings were as they found them and moved forward, and we've 
been listening.
    So, again, to start, thanks to their good work and the 
manner in which they conducted it, in developing an 
implementation plan, and the implementation plan will be 
released here later this week with the intent to be updated all 
the time on the findings and recommendations--and you'll see 
that in this initial effort at it--and divided into two primary 
categories, the 29 recommendations of the Columbia Accident 
Investigation Board, and then a second approach, which is 
raising the bar to a standard higher than that. And we will 
include in that category everything and anything that's going 
to improve this process, as well as the capabilities of the 
hardware itself.
    As we work through these recommendations, we'll have to 
choose options to implement them very wisely in order to be 
fully compliant with those recommendations, and we've got to 
continually improve and upgrade the plan itself to incorporate 
every aspect we find along the way in our implementation effort 
and any other observation, from wherever it may come, that 
needs to be addressed as we work our way through that in our 
commitment to fix the problem.
    The report covers hardware failures and human failures and 
how our culture needs to change to mitigate against succumbing 
to failures of both kind. We must go forward and resolve to 
follow this blueprint, and do it in a way that is our very best 
effort, to make this a stronger organization. There is no 
question about that.
    It will require all of us in the agency--not just the human 
spaceflight effort, not any one center, not any one program--
all of us at NASA to recognize this is an institutional set of 
findings that has application to everything we do. And that's a 
profound set of recommendations. We wanted that unvarnished 
assessment, and we got it.
    This is a very different NASA today than it was on February 
1. Our lives are forever changed by this tragic event, but not 
nearly to the extent that the lives of the Columbia families 
have been changed for the rest of their time.
    In taking inspiration from their approach, we must be as 
resolute and courageous in our efforts as they have been in 
working through this tragedy, and committing ourselves to 
accepting these findings, complying with these recommendations, 
and embracing this report. We know that how we respond in the 
days, weeks, and months ahead will matter as much as what we 
decide to do and whether there will be a lasting change that 
will withstand the years from now, I think has been observed by 
so many here, as well.
    We must also resolve that definition and be definitive in 
our acceptance of our failures and in following through on our 
commitment to the families to fix the problem and return to the 
exploration objectives their loved ones dedicated their lives 
to. And in that effort we know we've got a lot of work ahead of 
us, and we've accepted that.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. O'Keefe follows:]

Prepared Statement of Sean O'Keefe, Administrator, National Aeronautics 
                    and Space Administration (NASA)
    Mr. Chairman and Members of the Committee, I appreciate the 
opportunity to appear before you here today with Admiral Gehman, who 
along with the other members of the Columbia Accident Investigation 
Board (CAIB) has selflessly performed a valuable and patriotic public 
service these past seven months.
    Shortly after the tragic loss of the Space Shuttle and its heroic 
crew, I made a solemn pledge to the families of Columbia's crew that we 
will find out what caused the loss of the Space Shuttle Columbia and 
its crew, correct what problems we find, and safely continue with the 
important work in space that motivates our astronauts and inspire 
millions throughout the world. Thanks to the CAIB's thorough report, we 
now definitively know what caused the accident. It was a combination of 
hardware, process and human failures. We also have a more complete 
understanding of the problems that must be fixed at NASA to ensure that 
Space Shuttle operations are conducted as safely as humanly possible on 
behalf of our Nation's space exploration and research agenda.
    Indeed, the CAIB has provided NASA with a very helpful roadmap for 
returning to safe flight activities, one that we intend to faithfully 
follow. I can assure you, that we will not only implement the CAIB's 
recommendations to the best of our ability, but we are also seeking 
ways to go beyond their recommendations.
    Today's focus is on the hard lessons we've learned from the 
Columbia accident and about the hard work that lies ahead before we are 
ready to launch the Space Shuttle Atlantis for the STS-114 mission. I 
want to emphasize, as we undertake this work, we will be ever mindful 
of and appreciative of the people who have helped NASA and our entire 
country recover from that terrible first day of February.
    First and foremost, we owe enormous gratitude to the brave families 
of the Columbia crew. Through their steadfast courage and dignity they 
have provided inspiration to the Nation. A fitting memorial for the 
crew will be constructed at Arlington National Cemetery. We thank the 
members of this Committee for your strong support of the Columbia 
Orbiter Memorial Act, which President Bush signed into law on April 16, 
2003.
    One month ago, the family members demonstrated an incredible spirit 
of exploration and discovery in their own right as they joined 
astronaut Scott Parazynski in climbing to the top of the recently named 
Columbia Point, a prominent vista on Colorado's Kit Carson Mountain 
that now honors the memory of the Columbia STS-107 crew.
    We are also indebted to the over 14,000 people from the 
Environmental Protection Agency, Federal Emergency Management Agency, 
the Federal Bureau of Investigation, Defense Department, U.S. Forest 
Service, Texas and Louisiana National Guards and many state and local 
law enforcement and emergency service units who contributed to the 
recovery of Columbia's debris. As a result of this unprecedented 
interagency and intergovernmental cooperative effort, an area in 
eastern Texas and western Louisiana about the size of Rhode Island was 
carefully searched, resulting in the recovery of thirty-eight percent 
of the dry weight of the orbiter, including several key parts from the 
left wing, the part of the Orbiter damaged by a foam strike during 
liftoff, and the critical Orbiter Experimental Recorder--the data 
recorder that verified an validated much of what was learned about the 
accident from NASA's Mission Control during Columbia's reentry. We are 
deeply saddened to note that one of the helicopters searching for 
debris from the Shuttle Columbia crashed in the Angelina National 
Forest in east Texas on March 27 killing the pilot and a Forest Service 
Ranger. Our thoughts and prayers go out to the families of the 
helicopter crew members killed in the accident.
    In support of this unprecedented operation, we received tremendous 
hospitality and support from the Texas communities of Lufkin, Hemphill, 
Nagadoches, Palestine and Corsicana, as well as the Louisiana 
communities of Shreveport and Leesville, particularly in support of 
activities at Barksdale AFB and Fort Polk. NASA vows not to forget the 
many kindnesses bestowed upon our people and the other recovery 
workers. We will use the resources and people of our Education 
Enterprise to help nurture the spirit of discovery and exploration in 
the young people who grow up in the region, just as we are working to 
help inspire and motivate school children throughout the country as 
they embark on their studies this fall.
    Finally, we are grateful for the diligent work of the Columbia 
Accident Investigation Board members and staff. As many of you know, 
the Board has worked non-stop since they were given this important 
responsibility. Admiral Gehman has performed many tremendous acts of 
public service throughout his distinguished career, and I'm certain 
that the history books will regard his work on this report as among his 
most significant contributions to his country.
    We accept the findings of the Board and will comply with their 
recommendations. The Columbia Accident Investigation Board's report 
recommendations will be our benchmark for return to flight. Using the 
Board's recommendations as NASA's organizing principles for emerging 
from the Columbia accident as a safer, stronger and smarter 
organization, we are in the process of completing a preliminary return 
to flight Implementation Plan which will detail the Agency's evolving 
blueprint for returning to flight safely and reliably. This 
Implementation Plan will be a living plan and will be updated on a 
regular and frequent basis, with input from across our entire Agency 
The plan will lay out how NASA will implement the recommendations of 
the CAIB, as well as a comprehensive set of self-initiated corrective 
actions.
    Following the logic of the Board's report, our implementation plan 
strategy focuses on making improvements in the following key areas:

   Technical excellence--Making specific technical engineering 
        changes that will enhance our overall technical capabilities. 
        Among these changes is the establishment of our new NASA 
        Engineering and Safety Center at the Langley Research Center in 
        Hampton, Virginia that will draw upon talent throughout our 
        Agency to take a no holds barred approach to mission safety. If 
        people in the center spot a problem or potential problem during 
        their engineering and safety assessments of all our programs, 
        they will be empowered to get the entire Agency, if necessary, 
        focused on finding and implementing solutions.

   Management--Putting in place more effective management 
        procedures, safeguards, and decision-making processes.

   Organizational Culture--NASA recognizes that prior to the 
        Columbia, mission cultural traits and organizational practices 
        within the Agency detrimental to safety were allowed to 
        develop. We will now work diligently to develop an 
        organizational culture that reflects the best characteristics 
        of a learning organization, one based on clear and open 
        communications throughout our Mission Teams, with a management 
        culture that empowers both dialogue and achievement.

    At the same time the CAIB was developing its report, NASA pursued 
an intensive, Agency-wide effort to identify additional actions that 
will further improve the Space Shuttle Program. We took a fresh look at 
all aspects of the Program, from technical requirements to management 
processes, and developed a set of internally generated actions that 
complement and go beyond the CAIB recommendations. For example, some of 
the types of activities we are focusing on include rudder speed brake 
actuator inspections and re-evaluation of catastrophic hazard analysis, 
to name a few.
    Our implementation plan integrates both the CAIB recommendations 
and our self-initiated actions. It is the first installment in a living 
document that will be periodically updated to reflect our progress 
toward safe return to flight and faithful implementation of the CAIB 
recommendations.
    We are now determined to move forward with a careful, milestone 
driven return to spaceflight activities, to do so with the utmost 
concern for safety, incorporating all the lessons learned form the 
tragic events of February 1. That's exactly what we will do.
    Our Return to Flight effort will involve a team of spaceflight 
professionals, led at NASA headquarters by Dr. Michael Greenfield, our 
Associate Deputy Administrator for Technical Programs and astronaut 
veteran Bill Readdy, our Associate Administrator for Space Flight.
    Another astronaut veteran, Jim Halsell, who has flown on five 
Shuttle missions, will oversee the day-to-day work required for our 
return to flight. As the commander of an upcoming Shuttle Mission, STS-
120, Jim has a very personal interest in ensuring we get Return to 
Flight done right. I can assure you we will also rely on the advice and 
judgment of all members of the astronaut corps, the men and women who 
have the most vested interest in safe operations of the Shuttle 
program.
    We will also have the benefit of the wisdom and guidance of a 
seasoned Return to Flight Task Group, led by two veteran astronauts, 
Apollo commander Thomas Stafford and Space Shuttle commander Richard 
Covey. Members of the Stafford-Covey Task Group were chosen from among 
leading industry, academia and government experts. Members have 
knowledge and expertise in fields relevant to safety and space flight, 
as well as experience in leadership and management of complex programs. 
The diverse membership of the Task Group will carefully evaluate and 
publicly report on the progress of our response to implement the CAIB's 
recommendations.
    There is another body that NASA will greatly rely on in the Return 
to Flight process: this committee, and the other Members of Congress 
who have a vital interest in how NASA performs our work on behalf of 
the American public. We very much respect and value your oversight 
responsibility, and I personally look forward to working with you in 
the weeks and months ahead to ensure that we do our job right.
    Building upon work already underway to address issues previously 
identified by the CAIB, the upcoming release of our preliminary 
Implementation Plan will mark an important step in our efforts to 
address and fix the problems that led to the Columbia accident. We are 
about to begin a new chapter in NASA history, one that will be marked 
by a renewed commitment to excellence in all aspects of our work, a 
strengthening of a safety ethos throughout our culture and an 
enhancement of our technical capabilities.
    No doubt as we proceed along this path, all of us will be 
challenged. I am absolutely certain that the dedicated men and women of 
NASA are up to this challenge and we will not let the families of the 
Columbia astronauts and the American people down.
    Finally, I believe it is important that all 13 CAIB members arrived 
at and agreed to the final conclusion of their report: ``The United 
States should continue with a Human Space Flight Program consistent 
with the resolve voiced by President George W. Bush on February 1, 
2003: `Mankind is led into darkness beyond our world by the inspiration 
of discovery and the longing to understand. Our journey into space will 
go on.' ''
    Thank you again for the opportunity to appear before the Committee.

    The Chairman. Thank you very much.
    Admiral Gehman, I want to extend not only our appreciation 
to you, but to all members of your Commission, for the 
outstanding work they did. Welcome.

         STATEMENT OF HAROLD W. GEHMAN, JR., CHAIRMAN, 
             COLUMBIA ACCIDENT INVESTIGATION BOARD

    Admiral Gehman. Thank you, Mr. Chairman. Good morning, Mr. 
Chairman. I'll just say a very few comments and ask that my 
opening statement be entered for the record.
    The Chairman. Without objection.
    Admiral Gehman. I thank the Committee for their compliments 
to the Board this morning, and on behalf of the Board, I accept 
your compliments. And I also know that the Members of this 
Committee share the feelings of the Board that the price this 
Nation paid on the first of February was so dear that it 
demands now that we do our part to ensure that an accident like 
this never happens again.
    I would like to return the compliment to the Congress. As 
the Congress is aware, we were not a Presidential-appointed 
commission. But due to your oversight guidance and cooperation 
with this Board, the issue of our pedigree was removed from the 
table early on, and all the comments around town this week are 
about the merits of the report and not the process by how the 
report was written. And the Congress shares in the credit for 
turning that situation into a very positive situation, and I 
thank every Member of this Committee for assisting us.
    I also would like to join in thanking my 12 colleagues, who 
essentially gave up 7 months of their life to do this report, 
and the over 100 full-time investigators and the thousands of 
NASA engineers and scientists who helped us with this project.
    When I appeared before you on the 14th of May of this year, 
I made a commitment that our report would put this accident 
into context. There are many contexts, of course. There's the 
context of history, of budgets, of management, the context of 
what previous reviews of NASA have told us, and the context of 
our Nation's vision about human space travel. I believe that 
our report satisfies that requirement and has put this accident 
into all these contexts.
    First of all, of course, we did establish the physical 
cause of this accident. The foam did it. And, by the way, for 
those of you who have never actually seen one of these objects, 
I brought it along. This object sitting on the floor over 
beside me, this is the famous left bipod ramp made out of the 
actual foam, and the little black line is approximately where 
the fracture occurred that caused this accident. So if you've 
never seen one, this is what one looks like.
    Thank you, Tom.
    The Board was very deliberate in coming to the conclusion 
that the foam did it. And the time that it took us to come to 
that conclusion allowed us to look rather introspectively and 
intrusively into management at NASA.
    While we were working on the physical cause, we had many 
other people that were looking at how NASA did their business, 
particularly the space shuttle program. And we had to ask 
ourselves, ``If the foam did it, was this a legitimate 
surprise, a new event that caught everybody by surprise? Or, if 
not, what is the history behind attempts to understand and fix 
this event if it was not a legitimate surprise?''
    And what we found, of course, was that this was not a 
surprise. NASA had experienced this foam coming off many times 
in the past. And then when we got into the issue of learning 
how they dealt with this, in a scientific and engineering point 
of view, we got into the business about how the shuttle program 
handles unknowns, how they handle risk, how they provide for 
research or development to understand the processes that 
they're dealing with, and how they learn, as an institution. We 
were concerned with what we found. And that is really what--
about half of our report is about what we found.
    Being concerned with what we found, we then embarked upon 
two paths of investigation simultaneously. The first path was 
an academic review of how high-risk operations ought to be 
conducted and managed. And simultaneously we conducted a review 
to see whether or not there were practical instances where 
high-risk enterprises around the United States are being 
managed reliably and successfully in other areas. And we found 
plenty of cases where people deal with high-risk technology and 
high-risk enterprises, and do so successfully.
    We took a menu or a recipe from the academic review and 
some examples from the best safety practices around the 
country, put them together in a template, and then judged 
NASA's space shuttle program by that template and found it to 
be wanting.
    Our report then documents extensively, in detail, each of 
the issues that we are concerned about, along with documentary 
evidence, interviews, statements, pieces of paper, reports that 
support our conclusion. And also our report, we feel, concludes 
with specific actionable recommendations to make the shuttle 
operations more safe.
    I'll conclude, Mr. Chairman, by adding one comment, because 
it was brought up by the Members several times, and that is the 
issue of accountability. The Board does not feel that people 
should not be held accountable for their actions. The Board 
does believe in accountability. And we believe very strongly 
that we have included in our report plenty of documentary 
evidence to support accountability if the proper authorities 
want to hold people accountable. It's all in the report.
    We decided long ago, made it public, and I have defended 
the position before this Committee before, that we were not 
going to make those judgments. But we put it all in the report. 
It's all there. If somebody, the Administrator of NASA or this 
Committee, wants to find out whose performance was not up to 
standard, it's all in the report and it should be fairly easy 
to sort that out.
    We just elected that in order to pursue the issues that we 
wanted to pursue, we would be better off if we let the proper 
authorities take care of accountability and we did not come to 
the judgments. But we put all the stuff in the report.
    Thank you, Mr. Chairman. I'm pleased to be here and ready 
to answer any questions.
    [The prepared statement of Admiral Gehman follows:]

        Prepared Statement of Harold W. Gehman, Jr., Chairman, 
                 Columbia Accident Investigation Board
    Good Morning Mr. Chairman, Senator Hollings, distinguished Members 
of the Committee.
    I know members of this Committee feel as we on the Board do: that 
the price this Nation paid on February 1, 2003 was so dear, it demands 
we do our part to ensure an accident like this never happens again.
    It is an honor to appear today before the Committee on Commerce, 
Science and Transportation. I thank you for inviting me to pay tribute 
to the legacy of Rick Husband, Willy McCool, Mike Anderson, Dave Brown, 
K.C. Chawla, Laurel Clark, and Ilan Ramon in presenting the findings of 
the investigation into the tragic loss of the Space Shuttle Columbia.
    Before I begin, I would like to commend the efforts of my 12 fellow 
board members, 120 investigation staff members, 400 NASA engineers, and 
more than 25,000 debris searchers who have contributed immensely to the 
investigation.
    Today I will provide the Committee with the final conclusions of 
the board with respect to the following three areas:

   The physical cause of the accident

   The organizational characteristics of NASA that contributed 
        to the accident

   Recommendations the Board has made in regards to the Space 
        Shuttle Program
I. Physical Cause
    The Board has determined that the physical cause of the loss of 
Columbia and its crew was a breach in the Thermal Protection System on 
the leading edge of the left wing. The breach was initiated by a piece 
of insulating foam that separated from the left bipod ramp of the 
External Tank and struck the wing in the vicinity of the lower half of 
Reinforced Carbon-Carbon (RCC) panel 8 at 81.9 seconds after launch. 
During entry, this breach in the Thermal Protection System allowed 
superheated air to penetrate through the leading-edge insulation and 
progressively melt the aluminum structure of the left wing, resulting 
in a weakening of the structure until increasing aerodynamic forces 
caused loss of control, failure of the wing, and breakup of the 
orbiter.
    Entry data demonstrated that the flaw in the left wing was extant 
prior to entry. The flight events are well documented, and establish 
that progressive destruction occurred as the orbiter entered the 
atmosphere. Superheated air damaged the structure of the wing first, 
leading to the abnormal aerodynamic forces that caused the eventual 
breakup. Once the orbiter began entry, there was no possibility of 
recovery.
    The Board reached this conclusion after extensive analysis of five 
lines of evidence:

   The aerodynamic scenario

   The thermodynamic scenario

   The detailed system timeline from telemetry and recovered 
        on-board recorder

   The videographic and photographic scenario

   Debris reconstruction and forensics

    Additionally, the Board conducted foam impact tests in order to 
determine that this potential cause was indeed plausible. The tests 
proved this, and much more. The tests demonstrated that External Tank 
foam shed during launch could create considerable damage to the RCC 
panels and the tests also added to the body of knowledge regarding RCC 
strength. The foam impact testing ends for all time the common belief 
within NASA that foam strikes are just a flight turnaround issue, and 
also serves as a dramatic stimulus to change some people's attitudes 
about what we really ``know.'' Furthermore, it demonstrates the Board's 
finding that the characterization of the Space Shuttle as operational 
rather than experimental was flawed. The direct result of this mindset 
was the lack of testing on such matters as the cause of foam shedding, 
the force of foam projectiles, and the strength of the RCC panels to 
withstand such debris strikes.
II. Organizational Causes
    Mr. Chairman, the Board believes very strongly that complex systems 
almost always fail in complex ways. Most accident investigations fail 
to dig deeply enough into the causes beyond identifying the actual 
physical cause of the accident; for example, the part that failed and 
the person in the chain of command responsible for that failure. While 
this ensures that the failed part receives due attention and most 
likely will not fail again, such a narrow definition of causation 
usually does not lead to the fixes that prevent future accidents.
    Our investigation into the loss of the Columbia was designed to get 
to the heart of the accident, and reveal the characteristics of NASA 
that allowed the accident to occur. As everyone knows, NASA is an 
outstanding organization, with highly skilled and motivated people and 
a long history of amazing accomplishments. However, there are long-
standing management issues that led to the Columbia disaster.
    The organizational causes of this accident are rooted in the Space 
Shuttle Program's history and culture, including the original 
compromises that were required to gain approval for the Shuttle 
Program, subsequent years of resource constraints, fluctuating 
priorities, schedule pressures, mischaracterization of the Shuttle as 
operational rather than developmental, and lack of an agreed upon 
national vision for human spaceflight.
    Cultural traits and organizational practices detrimental to safety 
were allowed to develop, including:

   Reliance on past success as a substitute for sound 
        engineering practices (such as testing to understand why 
        systems were not performing in accordance with requirements)

   Organizational barriers that prevented effective 
        communication of critical safety information and stifled 
        professional differences of opinion

   Lack of integrated management across program elements

   The evolution of an informal chain of command and decision-
        making processes that operated outside the organization's rules

    The Board believes that these factors are just as much to blame as 
the foam. We began an analysis of how high reliability organizations 
handle risky enterprises, creating a template for us to use to examine 
management and culture at the Space Shuttle Program. The Board has 
concluded that the Space Shuttle Program does not have the 
characteristics of a high reliability organization. Furthermore, 
history and previous studies demonstrate that NASA, as a whole, does 
not ``learn'' well.
    The results of our very intrusive investigation into the Space 
Shuttle Program demonstrate clearly that gradually and over a period of 
many years, the original system of checks and balances has atrophied. 
Instead of using a system of checks and balances provided by 
independent engineering and safety organizations, the Shuttle Program 
placed all responsibility and authority for schedule, manifest, cost, 
budgeting, personnel assignments, technical specifications and the 
waivers to those specifications and safety in one office. That action 
created an office that could make programmatic trades to achieve 
whatever goals were set for it by a higher authority. For example, if 
meeting the schedule were priority number one, the program could trade 
safety upgrades against schedule. We find this to be an excellent 
system if one's goal is to know whom to blame if something goes wrong, 
but NOT an excellent system if one's goal is to maximize safety.
III. Recommendations
    The Board does not believe that the Space Shuttle is inherently 
unsafe, and we were under no pressure to say that it was safe. However, 
there are things that must be done to make it more safe than it is and 
many of these things must be accomplished before return to flight. 
Furthermore, if the Shuttle is to continue flying past the next few 
years, there are even more safety requirements necessary. Our 
recommendations and observations also constitute an attempt to find 
items that might be dangers in the future.
    There are three types of recommendations in the report. The 15 
Short-Term recommendations outline the fixes needed for return to 
flight. The 14 Mid-Term recommendations refer to the needs for 
continuing to fly for the next three to 12 years. The Long-Term 
recommendations discuss the considerations that must be made for 
continuing to fly the Space Shuttle beyond 12 years, including 
recommendations for replacing the Shuttle.
    In addition to the cultural and organizational considerations that 
NASA must address, there are several recommendations that stand out. 
One of these is the call for NASA to take an integrated approach to the 
issue of the danger posed by debris by combining steps to reduce debris 
creation in the first place, an overall toughening of the orbiter, both 
in the RCC components and the other parts of the Thermal Protection 
System, including the tiles, and developing a capability for on-orbit 
inspection and repair. The Board studied scores of other findings of 
significance with respect to how exactly to prevent the next accident. 
Among the numerous recommendations is the need for better engineering 
drawings, better safety and quality assurance programs, and improved 
documentation. Additionally, there are specific ways to improve the 
orbiter maintenance down period without sacrificing safety, as well as 
recommendations on what to look for on bolt fractures, holdpost 
anomalies, Solid Rocket Booster attach rings, test equipment and 
training needs.
Conclusion
    Mr. Chairman, during my last testimony before this committee, I 
promised a final report that places this accident in context, rendering 
the complete picture of how the loss of the Columbia fits into the 
complicated mosaic of budget trends, the myriad previous external 
reviews of NASA and the Shuttle Program, the implementation of Rogers 
Commission recommendations, changing Administrations and changing 
priorities, previous declarations of estimates of risk, workforce 
trends, management issues and several other factors. We have done this 
to the best of our ability and I believe we have succeeded.
    It is our intent that this report be the basis for an important 
public policy debate that needs to follow. We must establish the 
Nation's vision for human space flight, and determine how willing we 
are to resource that vision. From these decisions will flow the debate 
on how urgent it is to replace the Shuttle and what the balance should 
be between robotic and human space flight, as well as many other 
pressing questions on the future of human space flight. Let the debate 
begin.
    Thank you Mr. Chairman. This concludes my prepared remarks and I 
look forward to your questions.
                                 ______
                                 
              National Aeronautics and Space Administration
                                Office of the Administrator
                                      Washington, DC, July 23, 2003
Hon. John McCain,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.

Dear Mr. Chairman:

    Pursuant to Section 9(c) of the Federal Advisory Committee Act 
(FACA) (5 U.S.C. App.), this letter is to notify the Committee that 
NASA establishing a Return to Flight Task Group. I have determined that 
the establishment of the Return to Flight Task Group is necessary and 
in the public interest in connection with the performance of duties 
imposed upon NASA by law. The Return to Flight Task Group will perform 
an independent assessment of NASA's actions to implement the 
recommendations of the Columbia Accident Investigation Board (CAIB), as 
they to the safety and readiness of STS-114. While the Task Group will 
not attempt to assess the adequacy CAIB recommendations, it will report 
on the progress of NASA's response to meet the of the recommendations. 
The Task Group will draw on the expertise of its members and other 
sources to provide its assessment to me, and will hold meetings and 
make site visits as necessary to accomplish its fact-finding. The Task 
Group will function solely as an advisory body and will comply fully 
with the provisions of the FACA. A copy of the charter for the Return 
to Flight Task Group is enclosed.
    The General Services Administration has concurred with the 
establishment of this Task Group and has approved its charter. The 
filing date for this charter under FACA is today. All information 
required by FACA is included in the charter.
    We would be pleased to discuss the establishment of the Return to 
Flight Task Group with you or your staff.
            Cordially,
                                              Sean O'Keefe,
                                                     Administrator.
                                 ______
                                 
                  RETURN TO FLIGHT TASK GROUP CHARTER
Establishment and Authority
    The NASA Administrator, having determined that it is in the public 
interest in connection with performance of the Agency duties under the 
law, and with the concurrence of the General Services Administration, 
establishes the NASA Return to Flight Task Group (``Task Group''), 
pursuant to the Federal Advisory Committee Act (FACA), 5 U.S.C. App. 
Sec. Sec. 1 et seq.
Purpose and Duties
  1.  The Task Group will perform an independent assessment of NASA's 
        actions to implement the recommendations of the Columbia 
        Accident Investigation Board (CAIB), as they relate to the 
        safety and operational readiness of STS-114. As necessary to 
        their activities, the Task Group will consult with former 
        members of the CAIB.

  2.  While the Task Group will not attempt to assess the adequacy of 
        the CAIB recommendations, it will report on the progress of 
        NASA's response to meet theirintent.

  3.  The Task Group may make other such observations on safety or 
        operational readiness; as it believes appropriate.

  4.  The Task Group will draw on the expertise of its members and 
        other sources to provide its assessment to the Administrator. 
        The Task Group will hold meetings and make site visits as 
        necessary to accomplish its fact-finding. The Task Group will 
        be provided information necessary to perform its advisory 
        functions, including activities of both the Agency and its 
        contractors.

  5.  The Task Group will function solely as an advisory body and will 
        comply fully with the provisions of the FACA.
Organization
    The Task Group is authorized to establish panels in areas related 
to its work. The panels will report their findings and recommendations 
to the Task Group.
Membership
  1.  In order to reflect a balance of views, the Task Group will 
        consist of non-NASA employees and one NASA non-voting, ex 
        officio member, the Deputy Associate Administrator for Safety 
        and Mission Assurance. In addition, there may be associate 
        members selected for Task Group panels. The Task Group may also 
        request appointment of consultants to support specific tasks. 
        Members of the Task Group and panels will be chosen from among 
        industry, academia, and government with recognized knowledge 
        and expertise in fields relevant to safety and space flight.

  2.  Task Group members and the Co-Chairs of the Task Group will be 
        appointed by the Administrator. At the request of the Task 
        Group, associate members and consultants will be appointed by 
        the Associate Deputy Administrator (Technical Programs).
Administrative Provisions
  1.  The Task Group will formally report its results to NASA on a 
        continuing basis at appropriate intervals, including a final 
        written report.

  2.  The Task Group will meet as often as required to complete its 
        duties and will conduct at least two public meetings. Meetings 
        will be open to the public, except when the General Counsel and 
        the Agency Committee Management Officer determine that the 
        meeting or a portion of it will be closed pursuant to the 
        Government in the Sunshine Act or that the. meeting is not 
        covered by the Federal Advisory Committee Act Panel meetings 
        will be held as required.

  3.  The Executive Secretary will be appointed by the Administrator 
        and will serve as the Designated Federal Officer.

  4.  The Office of Space Flight will provide technical and staff 
        support through the Task Force on International Space Station 
        Operational Readiness. The Office of Space Flight will provide 
        operating funds for the Task Group and panels. The estimated 
        operating costs total approximately $2 million, including 17.5 
        workyears for staff support.

  5.  Members of the Task Group are entitled to be compensated for 
        their services at the rate equivalent to a GS 15, step 10. 
        Members of the Task Group will also be allowed per diem and 
        travel expenses as authorized by 5 U.S.C. Sec. 5701 et seq.
Duration
    The Task Group will terminate 2 years from the date of this 
charter, unless terminated earlier or renewed by the NASA 
Administrator.
                                               Sean O'Keefe
                                                      Administrator
July 18, 2003
Date
                                 ______
                                 
                       Stafford-Covey Task Group
                              Biographies
Col. James C. Adamson, U.S. Army (Ret.)
CEO, Monarch Precision, LLC, Consulting firm
   Background: Astronaut (STS-28 & 43); President, Allied 
        Signal Systems Technical Services Corporation, which later 
        became Honeywell Technology Solutions, Inc. (retired, March 
        2001); Chief Operating Officer United Space Alliance (1995-
        1999). Current member, NASA Advisory Council Task Force on ISS 
        Operational Readiness.
Maj. Gen. Bill Anders, USAF Reserve, (Ret.)
Retired Chair and CEO of General Dynamics Corp. (1990-1994)
   Background: Astronaut (Apollo 8); Executive Secretary of the 
        Aeronautics & Space Council; Chairman of the Nuclear Regulatory 
        Commission; Vice President of General Electric; U.S. Ambassador 
        to Norway; Member, National Academy of Engineering; President, 
        Heritage Flight Museum.
Dr. Walter Broadnax
President Clark University, Atlanta, Ga.
   Background: Just prior to coming to Clark, he was Dean of 
        the School of Public Affairs at American University in 
        Washington. Previously, he was Professor of Public Policy and 
        Management in the School of Public Affairs at the University of 
        Maryland, College Park, Md., where he also directed The Bureau 
        of Governmental Research.
RADM Walter H. Cantrell, USN (Ret.)
Aerospace Safety Advisory Panel
   Background: Commander, Space and Naval Warfare Systems 
        Command; Executive Director, Technology and Systems, and later 
        President of Signal Processing Systems Division at Global 
        Associates Limited; Program Director, Land Level Transfer 
        Facility, Bath Iron Works, responsible for the design and 
        construction of a $260M state of-the-art shipbuilding facility.
Dr. Kathryn Clark
Vice President for Education at TIVY, Inc.
   Background: Clark is also consultant in the fields of space, 
        oceans and education. She consults for the Jean-Michel Cousteau 
        Society, the National Marine Sanctuaries, and the Sea World--
        Hubbs Institute to enhance the study of oceans and marine 
        wildlife and use the data for education and awareness of the 
        environment of the seas.
Mr. Benjamin A. Cosgrove
Senior Vice President, Boeing Commercial Airplane Group (Retired)
   Background: 44 years at Boeing as engineer and manager 
        associated with almost all Boeing jet aircraft programs, 
        including chief project engineer and director of engineering 
        for the 767 program. Current member, NASA Advisory Council Task 
        Force on ISS Operational Readiness.
Mr. Richard O. Covey, USAF (Ret.)
Co-Chairman, NASA Return to Flight Task Group
Vice President, Support Operations, Boeing Homeland Security and 
Services
   Background: Astronaut (STS-511, STS-26, STS-38, STS-61); 
        test pilot; held key management positions in the Astronaut 
        Office and Flight Crew Operations.
Dan L. Crippen, Ph.D.
Former Director of the Congressional Budget Office
   Background: Chief Counsel and Economic Policy Adviser to the 
        U.S. Senate Majority Leader; Domestic Policy Advisor and 
        Assistant to the President for Domestic Affairs; Senior Vice 
        President of the consulting firm The Duberstein Group; 
        Principal in the consulting firm Washington Counsel.
Mr. Joseph W. Cuzzupoli
Vice President and K-1 Program Manager, Kistler Aerospace Corporation
   Background: Aerospace engineer and manager for over 40 
        years. Vice President and Program Manager for Space Shuttle 
        Orbiter Project for Rockwell International during development 
        and served earlier as an Assistant Program Manager on Apollo. 
        Current Member, NAC Task Force on ISS Operational Readiness.
Charles C. Daniel, Ph.D.
Engineering Consultant
   Background: Over 35 years experience as an engineer and 
        manager in the fields of space flight vehicle design, analysis, 
        integration and test at the Marshall Space Flight Center--from 
        Saturn V to ISS. He was SRB flight operations lead for STS-1 
        through STS-8 and Chief Engineer for Space Station. Current 
        member, NASA Advisory Council Task Force on ISS Operational 
        Readiness.
Richard Danzig, Ph.D.
A Director of National Semiconductor Corporation, Human Genome 
Sciences, and Saffron Hill Ventures
   Background: Former Secretary and Under Secretary of the 
        Navy. Former partner at the law firm of Latham and Watkins. 
        Current Chairman of the Board of the Center for Strategic and 
        Budgetary Assessments, Senior Fellow at the CNA Corporation, 
        and member of the NASA Advisory Council.
Dr. Amy K. Donahue
An Assistant Professor of Public Administration at the University of 
Connecticut Institute of Public Affairs
   Background: Under the Intergovernmental Personnel Act, 
        Donahue serves as Senior Advisor to the NASA Administrator for 
        Homeland Security. She teaches graduate courses in public 
        organizations and management, policy analysis, 
        intergovernmental relations, and research methods.
Gen. Ron Fogleman, USAF (Ret.)
President and Chief Operating Officer of Durango Aerospace Incorporated
   Background: Former Chief of Staff of the United States Air 
        Force. Managed the Air Mobility Command and served as Commander 
        and Chief, U.S. Transportation Command. Current member of the 
        NASA Advisory Council.
Col. Gary S. Geyer, USAF (Ret.)
Consultant
   Background: 35 years experience in space engineering and 
        program management, primarily in senior positions in the 
        government and industry. Served for 26 years with the National 
        Reconnaissance Office. Named NRO 2000 Pioneer. Vice President 
        for Lockheed Martin on major classified programs.
Maj. Gen. Ralph H. Jacobson, USAF (Ret.)
Consultant
   Background: USAF Assistant Deputy Chief of Staff for Space 
        Shuttle Development and Operations and later as Director of 
        Special Projects, Office of the Secretary of the Air Force. 
        President Emeritus, Charles Stark Draper Laboratory. Current 
        member, NASA Advisory Council Task Force on ISS Operational 
        Readiness.
Mr. Richard Kohrs
Chief Engineer, Kistler Aerospace Corporation
   Background: Over 40 years of experience in systems 
        engineering and integration of NASA Apollo, Shuttle, and Space 
        Station programs. Managed the daily engineering, processing, 
        and operations activities of the Shuttle program from 1985 
        through 1989. Director of Space Station Freedom in 1989 with 
        overall responsibility for development and operation. Prior to 
        joining Kistler in 1997, he was Director of the ANSER Center 
        for International Aerospace Cooperation.
Susan M. Livingstone
Policy & management consultant
   Background: She serves as a member of the National Security 
        Studies Board of Advisors (Maxwell School, Syracuse 
        University), is again a board member of the Procurement Round 
        Table and was appointed to NASA's Return-to-Flight Task Group 
        for safe return of Shuttle flight operations.
Mr. James D. Lloyd
Deputy Associate Administrator, Office of Safety and Mission Assurance, 
NASA
   Background: Extensive background in system safety 
        engineering and management for U.S. Army research and 
        development programs. Came to NASA in aftermath of Challenger 
        to help reconstitute the NASA safety and mission assurance 
        program. Recently selected as the Deputy AA for the Office of 
        Safety and Mission Assurance.
Lt. General Forrest S. McCartney, USAF (Ret.)
Consultant
   Background: Former Director of Kennedy Space Center (1986-
        1992). Lockheed Martin Vice President for Launch Operations, 
        responsible for the Atlas, Titan, and Athena launch operations/
        activities at Cape Canaveral, Florida, and Vandenberg Air Force 
        Base. USAF Program Director for several major satellite 
        programs. Current Vice Chairman, NASA Aerospace Safety Advisory 
        Panel.
Rosemary O'Leary J.D., Ph.D.
Professor of Public Administration & Political Science at the Maxwell 
School of Citizenship and Public Affairs, Syracuse University
   Background: An elected member of the U.S. National Academy 
        of Public Administration, she was recently a senior Fulbright 
        scholar conducting research on environmental policy in 
        Malaysia. O'Leary was professor of public and environmental 
        affairs at Indiana University and cofounder and co director of 
        the Indiana Conflict Resolution Institute.
Mr. David Raspet
Consultant
   Background: Former senior manager, USAF, McDonnell-Douglas 
        and Boeing. Experiences include leading the Future Imaging 
        Architecture Space Segment IPT, and working on EELV Program 
        Mission Assurance and Titan IVB-30 Readiness.
Dr. Decatur B. Rogers, P.E.
Dean Tennessee State University College of Engineering, Technology and 
Computer Science
   Background: Since 1988, Dr. Rogers has served as the Dean, 
        College of Engineering, Technology and Computer Science and 
        Professor of Mechanical Engineering at Tennessee State 
        University in Nashville, Tenn. Rogers served in professorship 
        and dean positions at Florida State University, Tallahassee; 
        Fla., Prairie View A&M University, Prairie View, Texas, and 
        Federal City College, Washington.
Mr. Sy Rubenstein
Aerospace Consultant
   Background: Former Rockwell International and McDonnell 
        Douglas Employee. Served as President Rockwell International 
        Space Systems Division responsible for Space Shuttle and Space 
        Station activities. Former Vice President of Engineering and 
        Orbiter Chief Engineer during the development and early 
        operations of the Space Shuttle. Over 25 years of experience in 
        the design, development and operation of manned space systems.
Mr. Robert Sieck
Aerospace Consultant
   Background: Former Director of Shuttle Processing, Kennedy 
        Space Center. Served as Launch Director for 52 Space Shuttle 
        launches and has been an engineer on aerospace projects 
        including Gemini, Apollo, and the Space Shuttle. Current member 
        of the NASA Aerospace Safety Advisory Panel.
Lt. General Thomas Stafford, USAF (Ret.)
Co-Chairman, NASA Return to Flight Task Group
President, Stafford, Burke & Hecker Inc., technical consulting
   Background: Astronaut (Gemini 6A, Gemini 9A, Apollo 10, CDR 
        of the Apollo-Soyuz Test Project); Commandant of the USAF 
        Flight Test Center; Deputy Chief of Staff, Research, 
        Development and Acquisition at USAF HQ; served as a consultant 
        to the President in various capacities and to NASA for the 
        coordination of Shuttle-Mir activities. Current Chairman, NASA 
        Advisory Council Task Force on International Space Station 
        Operational Readiness.
Tom Tate
Vice President of Legislative Affairs for the Aerospace Industries 
Association (AIA)
   Background: With AlA, the trade association representing the 
        Nation's manufacturers of commercial, military and business 
        aircraft, helicopters, aircraft engines, missiles, spacecraft, 
        and related components, he directs the activities of the 
        association's Office of Legislative Affairs.
Mr. William Wegner
Consultant
   Background: Naval nuclear propulsion authority. Deputy 
        Director to Admiral Rickover in Nuclear Navy Program. Founded 
        Basic Energy Technology Associates and consulted in the area of 
        civilian nuclear power plant safety. Board of Directors, 
        Detroit Edison.
            Executive Secretary, Return to Flight Task Group
Mr. David Lengyel
Executive Secretary, Return to Flight Task Group
   Background: Executive Director of the Aerospace Safety 
        Advisory Panel. Former Manager of NASA's Moscow Technical 
        Liaison Office. Several years' experience with ISS, Shuttle-Mir 
        Programs. Extensive knowledge of Columbia Accident 
        Investigation Board work.

    The Chairman. Thank you, Admiral.
    Mr. O'Keefe, it's a perfect segue into my first question: 
accountability. Culture needs to be fixed. How and when and 
what accountability do you expect to enforce here, in light of 
Admiral Gehman's statement that there's ample evidence of 
individuals, as well as institutions, that should be held 
accountable?
    Mr. O'Keefe. Yes, sir. No, I think, as I mentioned in the 
opening statement, the manner in which the Board conducted its 
activities was so open, so clear, in terms of their approach to 
it; and again the approach we used of releasing all the 
information that supported that investigative activity, has led 
to this result, and it's pretty clear, in terms of what's 
involved here, and we've been acting on that as we've moved 
through.
    The shuttle program management team is a completely new 
team today, started--from the program manager all the way 
through all the key players, 14 or 15 of the senior folks are 
completely new folks in their capacities just in the last 
couple of months.
    The Chairman. It seems to me that's half of accountability, 
Mr. O'Keefe. Have you held others accountable?
    Mr. O'Keefe. Yes, sir. As we've worked our way through 
this, there are a range of other participants in this, and I 
think what you see is a management team in place that's 
different today than it was a year ago, to be sure, and 
certainly very different than it was 7 months ago. This is----
    The Chairman. Does that mean that those who are replaced 
are accountable?
    Mr. O'Keefe. The folks who are in positions today will lead 
in the future and be accountable for this activity. Those who 
are not there, I think you can draw the conclusion from that.
    The Chairman. When do you expect this culture to be fixed?
    Mr. O'Keefe. I think Admiral Gehman and the Board observed 
in the report this is going to be a long, long haul. There's no 
question about it. Again, the first step has got to be, without 
equivocation, that we accept the findings, we'll comply with 
the recommendations, and we'll embrace this report. That's the 
first critical step in moving toward the role of, I think, a 
full acceptance of a culture change.
    And in doing so, I think that's going to take time. We've 
got to be very consistent in that message. We've got to be very 
consistent in the direction we're going to go. And any 
equivocation to that point, I think, is going to falter that 
effort. So we've got to be, on the long haul, proceeding in 
that direction. But I fully anticipate we will see the 
beginnings of that change within 6 months to a year, to be 
sure. And we've begun that process as immediately as the day 
the report released to assure that everyone understands there 
is no equivocation on accepting these findings, complying with 
these recommendations, and embracing this report.
    The Chairman. Admiral Gehman, would you describe how 
Congressional earmarks and NASA's transfer of funding from the 
shuttle program to other programs and the declining NASA budget 
affected the space shuttle operations and safety?
    Admiral Gehman. I certainly will. And we included in our 
report the plain facts of the matter, just so that anybody who 
wants to do the research can come to the conclusion that over a 
period of about a decade the buying power or purchasing power 
of the shuttle program has been reduced by over 40 percent.
    Really, though, what has happened, in the Board's opinion, 
is the very insidious, the powerful but nearly invisible force 
of dissatisfaction--dissatisfaction among several 
administrations, dissatisfaction among several Committees of 
Congress, and even the Administrator of NASA--with the 
extremely expensive cost of operating the shuttle. It costs 
much more to operate the shuttle than everybody will ever 
admit, and over the years, what has happened is that, for one 
reason or another, people have tried to wring money out of the 
shuttle program in order to pay for other projects.
    NASA has essentially been operating under a flat budget, 
that flat top line. In order to do other things, there has been 
a steady, consistent attempt to wring money out of the shuttle 
program, some of it legitimately, by efficiency and 
effectiveness. But, nevertheless, since the shuttle program is 
so expensive, there have been efforts to squeeze money out of 
the shuttle program.
    It is the Board's opinion that the effect of this is that--
for a number of years after the Challenger accident, the 
management scheme of the shuttle program has been changed to a 
very vertical scheme in which the program manager, over a 
period of years, had become responsible for schedules, 
manifests, costs, budgets, personnel assignments, technical 
specifications and requirements, the waivers to technical 
specifications and requirements, and safety. And because people 
were naturally trying to get money out of this very expensive 
program, the program manager began to make trades in that trade 
space. And he began to trade things like research and 
development into why foam comes off, for measures to make the 
schedule. And he began to make trades like that. And the Board 
was very concerned that that was too much power in one person's 
hands.
    If it is your goal to know who to blame if something goes 
wrong, having a scheme in which all of that responsibility is 
placed in the program manager's hands is a really good scheme 
if you want to know who to blame. But if you want to operate 
safely, our study of both the theory and the academics and the 
best business practices indicates you need to separate the 
engineering and the safety from the guy who's responsible for 
the cost and schedule, because inevitably they're going to 
fight with each other and you're going to get a conflict. And 
the person who is being hammered over cost and schedule is 
going to trade safety and engineering in order to achieve cost 
and schedule.
    The Chairman. And Congressional earmarks?
    Admiral Gehman. Congressional earmarks do a couple of 
things. One thing they do is, they give an overinflated number 
of the total value of NASA's budget, because there might be 
$400 million or $500 million worth of earmarks, but that's not 
really NASA's money to spend because they can't move it around. 
The administrator loses his flexibility. He can't buy more 
safety and all that kind of stuff.
    Probably most of the earmarks that we looked at are 
actually adds. Most of them, but not all, were adds. But even 
if they were adds, it makes the NASA budget look bigger than it 
is, and it reduces the administrator's flexibility for moving 
money around.
    The Chairman. Senator Hollings?
    Senator Hollings. Admiral Gehman, Mr. O'Keefe appointed 
you. Did you find him accountable?
    Admiral Gehman. I did find him accountable, and I did find 
him to be cooperative, and I found him to take full 
responsibility for everything that happened on his watch.
    Senator Hollings. And by that answer, would you find him 
responsible for this ``disaster,'' let's call it?
    Admiral Gehman. I find that leadership--all leaders, 
including Mr. O'Keefe, including the Congress, including the 
White House--are responsible for the conditions that they set 
and that set for the conditions for the performance of their 
organization. Almost everything that we complain about--every 
management trait, every communications problem, every 
engineering problem that we complain about in this report--was 
set in motion between five and 15 years ago, so they didn't 
happen on his watch.
    Senator Hollings. It didn't happen on his watch?
    Admiral Gehman. That's correct. Almost all of these traits 
that we're talking about are traits that happened from two to 5 
years after the Challenger accident. That is, right after the 
Challenger accident, as Senator Nelson had indicated, all the 
energy and zeal and diligence associated with the tragedy 
causes everybody to do their job really well.
    Let me give you a case in point. The management of the 
human spaceflight program, which used to be in Washington, 
D.C., in the mid 1990s was shifted back down to Houston again. 
And Mr. O'Keefe brought it back up to Washington, as Rogers had 
recommended. That's an example of how we kind of migrated away 
from the Rogers recommendations.
    Senator Hollings. Admiral, I understand. But you've taken 
over a ship as a Navy admiral time and again, perhaps at a 
different rank, and you didn't put off what happened 15 years 
ago to the ship and 10 years ago to the ship. I'm not trying to 
embarrass anybody. We're all friends. But I'm trying to break 
past this ``culture'' finding and fix responsibility. And you 
have categorically said you didn't attempt to do that, fix 
responsibility. You have enough facts that would indicate they 
didn't hold safety up to standard. Now, Mr. O'Keefe has made a 
very categorical and convincing statement about, ``We've got 
the message,'' and everything else that----
    Mr. O'Keefe, right after this occurred, Chairman McCain and 
myself were informed immediately that they had tried their best 
to take images, take pictures of the damage done of the shuttle 
in flight. And I think it was two, perhaps three, times they--
that is, the Defense Department--were ready to do it, but there 
was a formality about requesting it. And the request was made 
and then was canceled. In fact, I understand that Linda Hamm, 
the Chairman of the Management Team, was responsible. She 
consulted with Ralph Roe, the Manager of the Space Shuttle 
Vehicle Engineering Office, and that the imagery request having 
been made to the Defense Department was canceled by none other 
than Linda Hamm, who's now been just reassigned over to Houston 
in another office.
    And, of all things, when you say, ``I get it, or we're 
going to do it categorically, we're going to take every issue, 
we're going to do everything,'' we've put Mr. Roe as number two 
at the new safety office. That doesn't indicate to me that 
you've got it.
    Mr. O'Keefe. Yes, sir. Again, the approach we've taken here 
is to completely designate, for the management effort, the 
folks who are prepared to lead in the time ahead. And in 
dealing with the range of folks who participated in this 
activity--and clearly the report lays it out, as does Admiral 
Gehman's commentary--I think the approach we've got to take is 
put the best judgment to picking a leadership team for the 
program management office, as well as all the efforts we're 
engaged in here in Washington and across the centers toward 
this activity, and picking the best people to do that. That's 
who's in place today. This is the best leadership there. And 
that's the approach we've taken to this, and it certainly is a 
measure of accountability.
    On that point, there is no question--and I appreciate 
Admiral Gehman's observation of this point--I am personally 
accountable for this. I view this as my personal 
responsibility. I serve at the pleasure of the President, at 
which point he decides that is no longer to his pleasure. I'm 
certainly ready to adhere to that. And my obligation between 
now and the time he may reach that decision is do my level best 
to assure that we accept these findings, comply with these 
recommendations, and embrace this report, and we intend to do 
just that.
    Senator Hollings. Well, if that's the best you can do, is 
take Mr. Ralph Roe, who failed in safety and said, ``I don't 
want the pictures. I don't want to find out about this 
safety,'' and make him responsible for safety. In fact, we all 
saw this on TV. NASA officials kept dissembling. We found all 
kind of defensiveness. We mentioned this last February when we 
had the hearing. And now we find out, having ``got it,'' and 
making plans to do this and to do that, we've heard it all 
before. Senator Inouye, Senator Stevens, and myself were the 
only three on the Committee at the time of the Challenger. We 
heard all this before.
    So there's no education in the second kick of a mule. I 
mean, I'm finding out and listening to the same thing I 
listened to 17 years ago, and we've lost seven astronauts. Now, 
they talk about an accident, but it was an avoidable accident. 
You talk about failures, but it was an avoidable failure. And 
here, to make sure that we don't have that same failure again 
you take the man who failed in safety and appoint him the 
number-two in the safety office.
    Mr. O'Keefe. Well, sir, no. Just to be technically clear 
about this, that's not the position he's assuming here. What 
we've set up and we're creating as of this time next month is 
an engineering and safety center which will perform, at least 
at minimum among these recommendations of the 29, trend 
analysis. In other words, be removed from the operational 
conduct of the activity and look at what the prior trends would 
be to see if we can identify those cases in which we have 
missed things. And we clearly missed the foam on this one. 
That's the point that's raised in this report very clearly. 
There were seven instances. And had we conducted that trend 
analysis, independent of the operational imperatives of flying 
the shuttle, we might have caught it. And that's what this new 
organization is going to do. And in that regard, we're trying 
to assemble engineers who will be removed from that operational 
activity and be able to step back with a fresh set of eyes, who 
are knowledgeable about the mechanics of this process and, at 
the Langley Research Center, organize all those disciplines 
among structures and aerospace engineers in order to look at 
those observable trends and see if we can identify what that 
next instance might be. And you need the folks who have got the 
experience to do that. And, in my judgment, to borrow a page 
from Wernher Von Braun, when you make a mistake you become that 
much more valuable the next time around to seeing exactly where 
that'll never be repeated again. And there's great value in 
some of that, and it's something we'll certainly test.
    And let the measure of what we do be the final conclusion 
of your assessment on this, as opposed to what we say. If we 
follow through what we're saying we're going to do, let that be 
the measure of proof. And, in that regard, Senator, I view that 
as a very high standard we need to meet.
    The Chairman. Senator Sununu?
    Senator Sununu. Thank you.
    Administrator O'Keefe, could you talk a little bit about 
the return-to-flight team--the makeup of the team, the timeline 
that they're going to operate under, and what you think their 
biggest challenges will be in getting the job done before we 
can even entertain the idea of the shuttle returning to space?
    Mr. O'Keefe. Yes, sir. No, thank you very much for the 
question.
    The return-to-flight team is composed and led by Colonel 
Jim Halsey, who's an Air Force colonel and an astronaut of four 
different flights previously. He is slated to be the commander 
of the STS-120 flight, which is six flights after the return-
to-flight activity--had been slated before the accident--so he 
has a very, very strong vested interest in making sure we get 
this right. He is ably assisted by a very extensive team 
throughout the four spaceflight centers--Johnson, Marshall, 
Kennedy, and Stennis--in the effort in order to assure that we 
have pulled together all 29 of these recommendations, as well 
as, again, the raise-the-bar objectives that we've established. 
And it'll be included in this report, which we'll be releasing 
here later this week, early next, which encompasses and covers 
all of those recommendations plus all the observations and 
every other issue that we have come across to raise the bar, 
raise the standard that we're anticipating before we return to 
flight.
    That's overseen by an internal senior management team of 
Bill Readdy, who is also a veteran astronaut, who is the 
Associate Administrator for Space Flight, and Michael 
Greenfield, who is the Associate Deputy Administrator for 
Technical Programs. And they're managing across the entire 
agency. So we gather all of the information from the other six 
centers that are not spaceflight related in dealing with this 
particular set of objectives. There's a range of capabilities 
we have across the agency, all of which will be brought to bear 
and employed, and there isn't any ambiguity, I think, among the 
leadership of the agency. This is all of our agency objective.
    Finally, the oversight of our activities will be reviewed 
by a external panel led by Tom Stafford, a veteran Apollo and 
Gemini astronaut, and Dick Covey, who was the pilot on the 
flight immediately after Challenger, in September 1988, and 25 
other experts in the fields of engineering, of management 
change, of culture change, academics, industry folks, the full 
range of background of management, as well as technical 
expertise, to assure that we have implemented these 
recommendations and that we have selected options that are 
compliant and will make this agency stronger.
    All those folks are external experts in that regard. They 
have already met once. They've got the framework of the 
implementation plan. They'll meet again early next week. 
They'll be working through this all the way through that time 
and beyond our return-to-flight efforts. So we've got this at 
three different levels in order to assure that we are not 
singing ourselves to sleep on any individual solution here, or 
picking our favorite option at the expense of what may be a 
better approach.
    Senator Sununu. Will their focus be on the 15 or so return-
to-flight recommendations, or are they going to have a broader 
task of looking at all 29 recommendations plus the ones that, 
in your words, ``would raise the bar'' for NASA?
    Mr. O'Keefe. Yes, sir. The entire package. Everything. And 
we certainly--you know, I mean, taking the Board's statements 
absolutely literally, it says these 15 ``must be implemented'' 
prior to that time, and we take that as being a fact, a 
finding, that we are not going to dispute and will certainly 
move toward. But nothing is being done on those 15 at the 
expense of all the others that are engaged in there. Because we 
may find, and we certainly have dealt with, a number of 
different aspects, during the course of aiding this 
investigation, that we believe rise to that same kind of 
standard of the 15, as well, that we will be implementing prior 
to return to flight.
    Senator Sununu. Admiral Gehman, you talk about it, and the 
report, I think, is pretty clear, about identifying the causal 
relationship between the foam striking the leading edge of the 
wing and that leading to the accident. And just following this 
through the press and through the work of the Board, it's clear 
that a lot of technical effort went into assessing the cause of 
the accident.
    My question, however, is, Where are the greatest 
uncertainties? I mean, we can't know everything about the 
accident. So where, in the mind of the Board, collective mind 
of the Board, are the greatest uncertainties with regard to the 
physical causes of the accident or the physical findings of how 
the shuttle came down?
    Admiral Gehman. Well, the Board deliberated long and hard, 
and we had quite a wrestling match over the words that we would 
use to describe the physical cause. By that, I mean we could 
have used words like ``all the evidence supports that the foam 
did it'' or ``the most probable cause is the foam did it,'' and 
we elected not to do that. We elected to say the foam did it. 
And that is based on overwhelming confirming evidence, multiple 
different avenues of investigation, all of which point to the 
same thing.
    We do not have a picture of a leading-edge system with a 
hole in it. That would have been nice. That would have been 
confirmation that the foam did it. We don't have any such a 
thing as that. But we are absolutely, positively convinced, 
without--beyond a shadow of a doubt, of the physical cause of 
this accident, and there's no doubt in our mind whatsoever.
    We were concerned, though, that in order for us to reach 
that conclusion we had to do some physical tests and conduct 
some tests that we thought NASA should have been doing all 
along.
    Senator Sununu. There's no element of the system or the 
technical work that you did that frustrated the Board members? 
Again, absent a picture. But were there any other areas of 
technical investigation where you had to walk away, saying, 
``We don't have all the information we would like about the 
nature of the failure''--damage inside the wing, the way that 
the shuttle eventually came apart--no uncertainties there?
    Admiral Gehman. Only one. Just one, and that is that--and 
it's in our report. There's a nice little chart in there that 
shows the roll-and-yaw moments that are reconstructed from the 
very extensive data recorders which are onboard the shuttle. 
And both of the roll-and-yaw moments show the shuttle left wing 
losing lift, due to damage, and roll and the yaw starting in 
one direction. And then, for some reason, one of them, the roll 
moment reverses, and we can't explain why that happens. It's 
probably due to a deformation of the wing of some sort.
    But of the hundreds of pieces of technical data that we 
looked at, all of which point to a hole in the left leading 
edge, that's the only one that we can't absolutely 
scientifically explain.
    Mr. O'Keefe. Mr. Chairman, could I add just one point very 
quickly? The approach that the Board took that I found to be 
very impressive was, they never fell in love with one scenario. 
They, by process of elimination, worked their way through a 
fault-tree analysis that included every possible permutation, 
and then closed those avenues to reach the conclusions they 
did. So we're as informed by the things that they examined that 
have nothing to do with this accident, in their judgment, as we 
are about the things that they claim do have a specific 
contribution. Because there are a number of things they found 
that are equally problematic on some future activity unless we 
correct it. And so this is a very thorough, extremely extensive 
investigation that I believe in our 45-year history has never 
been conducted to this depth. Ever. And so it has uncovered a 
number of things that are extremely helpful in our pursuit of 
the return to flight, which has then informed that raise-the-
bar set of standards of where we intend to go in our pursuit of 
return to flight when we're fit to fly.
    The Chairman. Senator Lautenberg?
    Senator Lautenberg. Thanks very much, Mr. Chairman.
    And I start by saying to our friend and colleague, Senator 
Hollings, that your commentary this morning just confirms that 
we listen and listen carefully, have good things to say. And 
just because you're out of here doesn't mean that you have to 
go quiet. Just remember that.
    [Laughter.]
    Senator Lautenberg. And to you, Mr. Chairman, for holding 
this hearing and the hearings that we've traditionally had here 
have been very informative and very open. And, Admiral Gehman, 
I commend you. I haven't had a chance to fully read your 
report, but it's sprinkled with a candor that we rarely see in 
reports to government, because there's always a program to make 
sure that we don't attend this party or that party. And I think 
that you went right to it.
    And how this particular tragic accident happened is 
critical because of the loss of life and the loss of confidence 
and all of those things. But more importantly is how did we get 
there in the first place? And when I look at the executive 
summary of your report and you say that, ``the organizational 
causes of the accident are rooted in the space shuttle 
program's history and culture,'' that means there are things 
been going on for a long time, at least you felt so and so did 
your colleagues on the report who approved this statement.
    The fact of the matter is that, in some ways, it was a 
tragedy waiting to happen, because I see in reports----
    And, Mr. Chairman, I want to submit a report that comes 
from the International Federation of Professional Technical 
Engineers. It's their report on the effectiveness of NASA's 
workforce and contractor policies, and I think there's 
something to be learned from this. And I, again, ask the 
request that this be included in the record.
    The Chairman. Without objection.
    [The information referred to follows:]

   International Federation of Professional and Technical Engineers, 
                                AFL-CIO

 IFPTE Report on the Effectiveness of NASA's Workforce and Contractor 
                                Policies

                               March 2003

    With the tragic loss of the seven astronauts on the shuttle 
Columbia, NASA is facing a challenge to its current role and future 
mission. Though the agency with the most ambitious scientific mission 
in the Federal Government has faced public scrutiny before, the tragedy 
provides an opportunity to evaluate and review NASA performance and 
management policies.
    NASA faced serious challenges well before the recent Columbia 
tragedy. A combination of budget cuts, workforce downsizing, and 
contracting out of key NASA operations negatively affected the safety 
of NASA's manned space program, its ability to retain and pass along 
core technical knowledge, and its oversight of the contractor 
workforce. NASA's problems arose after the agency went through a 
drastic reorganization in the early 1990s. This reorganization was 
motivated in large part by the political pressure from Congress and the 
White House to replace government work with private sector contracting. 
NASA's senior management maintained that they could increase efficiency 
and performance while cutting its civil service workforce and relying 
on contractors to do the job. Yet, as the process of downsizing and 
contracting out proceeded, NASA workers, government reports and space 
policy experts warned of the consequences of performing critical 
projects, with little-to-no margin for error, with an insufficient 
budget and workforce.
    The recent history of NASA's reorganization is all the more 
relevant in light of the Bush Administration's commitment of eventually 
contracting out half the current Federal workforce. Through the Reagan 
and Bush Sr. administrations, increasing political pressure to downsize 
government intensified. Under the Clinton administration, Vice 
President Gore drafted and directed the policy of ``Reinventing 
Government,'' downsizing civil servant jobs and contracting out to the 
private sector that eliminated some 426,200 Federal jobs. NASA, which 
faced scrutiny for over-budget projects after the Challenger accident, 
was targeted for major cuts.
    Under presidential and Congressional direction, NASA contracted out 
much of its work to achieve budget cuts. In 2003, NASA and all Federal 
departments and independent agencies are facing quotas to contract out 
work. The rationale cited by proponents of moving government work to 
the private sector is that the private sector is more accountable, has 
incentive to produce at lower cost, and more able to operate at higher 
efficiency. NASA's commitment to privatization extends to the most 
safety critical operations in the agency. Just before the Columbia 
accident, NASA commissioned a study on privatizing the entire shuttle 
operation, completely eliminating any NASA work on shuttle maintenance 
and operation. Yet there are no comprehensive long-term studies on 
Federal contracting, and there remains little evidence to support 
privatization proponents' argument that the private sector outperforms 
the Federal Government at a lower cost. However, NASA's example offers 
some insight to the problems that arise when Federal agencies rely 
heavily on contractors.
    Today, with NASA relying increasingly on contractors than ever 
before, the Columbia shuttle tragedy and the issues surrounding NASA 
recall the Challenger shuttle accident in 1986, seventeen years before 
the Columbia accident. The Federal investigation into the Challenger 
accident revealed the complexities inherent in the NASA management 
contractor relationship and the decision-making process that involved 
both NASA and NASA contractor Morton Thiokol. Beyond the direct 
mechanical causes of the Challenger accident, that episode revealed 
larger administrative and managerial problems: the unclear 
accountability issues between contractors and NASA; NASA management's 
institutional pressure to maintain launch schedules (as promised by 
NASA to Congress); the lack of management control between managers; and 
the organizational layers between the civil service workforce and the 
contract workforce. While the Columbia investigation will likely take 
months to return conclusive findings, recent reports from within NASA 
and the Federal Government's investigative body suggest similar 
conditions currently exist.i
NASA Workforce and Its Critical Mission
    At the onset of its creation in 1958, NASA used contractors to 
provide many of the services the agency needed. In 1962, NASA employed 
23,000 civil servants and used the services of 3,500 contractor 
personnel. By 1964, the agency had grown to 32,000 civil servants and 
79,000 contractors. Although contractors played a significant role 
during the mission to the moon, the agency maintained a civil servant 
workforce to provide technical expertise, effectively manage 
contractors and perform operations. At that time, NASA also began using 
contractors when the agency could not find the talent to fill its 
workforce. Though contractors have historically played a role at NASA, 
the recent growth of the contractor workforce has made NASA into more 
of a contract management agency than a research and development agency.
    NASA's contractors perform various services and provide the agency 
almost all aircraft and spacecraft. NASA always used contractors to 
build spacecraft, design hardware, and control some management 
functions. The NASA contracting philosophy stated that any work not 
related to planning and evaluation could and should be contracted out. 
This philosophy did not leave out the civil service workforce however. 
To understand and maintain the products and services purchased through 
contractors, NASA needed experienced engineers and scientists. Further, 
some scientific and engineering work has no equivalent in the private 
sector. Certain jobs, such as the astronaut corps, are part of the 
civil service and military because of their critical and governmental 
nature. NASA's civil service workforce also provided mission support 
services that had no equivalent in the private sector. Though NASA 
relied extensively on contractors to accomplish its Apollo moon 
missions and valuable aeronautics research of the 1960s, NASA managers, 
including eminent program director Werner Von Braun, questioned the use 
of contractors over in-house civil servants. Marshall Space Flight 
Center's Robert Gilruth, in a letter to George Mueller, Director of 
Manned Space Flight, claimed ``the most effective management of future 
programs calls for greater in-house engineering capability.'' 
ii
    While NASA kept the contractor workforce during periods of growth 
and shrinkage throughout the 1970s and 1980s, in the 1990s contractors 
at NASA increased significantly. Although the Federal Government keeps 
no official headcount of contract workers, data pulled from Federal 
contract information shows an increasing presence of contractors while 
civil service jobs disappear. In fact, while NASA aggressively cut 
costs in the 1990s and trimmed its civil service workforce, the ratio 
of contractors to civil service employees more than doubled. As 
evidenced in the data complied by Paul C. Light, a scholar at the 
Brookings Institute, NASA civil service jobs fell from 22,100 in 1984 
to 20,100 in 1996. Meanwhile, workers employed through NASA contracts 
grew from 171,000 in 1984 to 350,600 in 1996. During the same period, 
workers employed through NASA grants increased from 7,700 to 26,900. 
After staying level throughout the late 1980s at approximately 21,000 
full time civil servants, NASA's civil service workforce grew to 24,416 
in 1991, then shrunk to a 40 year low of 17,500. The majority of the 
civil service reductions were achieved through buyouts, starting in 
1995 and ending in 2000. With less than 13 percent of NASA's budget 
spent on its civil service workforce (including salary, benefits, and 
training), NASA has the second highest contractor to civil servant 
workforce ratio in the Federal Government.iii
    These workforce shifts occurred as NASA's budget was cut under 
Daniel Goldin, NASA's Administrator from 1992 to 2001. He was appointed 
in 1992 by President Bush Sr. and directed to cut NASA's budget and 
bring the fiscal discipline of the business world to the Nation's 
premier science, research and development agency. Under the Clinton 
Administration, the NASA budget was cut for seven out of eight years. 
Goldin saved the agency some $40 billion under a management plan he 
called ``Faster, Better, Cheaper'' (FBC). While the principle behind 
FBC was vague and open to interpretation for most of Goldin's tenure, 
FBC attempted to ``shorten development times, reduce costs, and 
increase the scientific return by flying more missions in less time.'' 
Using FBC as a way to contract out services and move more of NASA's 
resources into the private sector, Goldin eliminated much of the civil 
service infrastructure that monitored and held technical knowledge of 
the service and products contractors provided and oversaw NASA's safe 
and successful operation.
    Critics of FBC always doubted NASA's ability to fulfill FBC without 
sacrificing either the ``faster,'' the ``better'', or the ``cheaper''. 
Concerns became widespread after the highly publicized Mars missions 
failed in 1999. Further concerns arose as NASA's workforce reductions 
and increased contractor workforce, jeopardized the safety of space 
shuttle operations. Enough evidence existed in failed missions, close 
calls, and government reports that suggested the tradeoffs of FBC were 
inexperienced and reduced workforce capability; increased safety risks; 
and minor oversights that resulted in lost spacecraft.iv
    In 2000, the Government Accounting Office (GAO) and the NASA 
Inspector Generals office took note of the safety lapses in the space 
shuttle program caused by the reduction of workforce. NASA's 
independent safety review body, the Aerospace Safety Awareness Panel 
(ASAP), as well as NASA's Space Shuttle Independent Assessment Team 
(SIAT), later echoed these concerns. The studies pointed to one 
critical factor: while NASA reduced its space shuttle operating costs 
by $1.2 billion, or 30 percent, personnel reductions in its civil 
service workforce from 3,000 in 1995 to 1,800 in 2000 placed the 
shuttle at greater risk. A 3 percent spending increase came in Fiscal 
Year 2000 after space probe failures, repeated warnings about safety 
and understaffing, and a Columbia shuttle mission that included 
alarming malfunctions such as a short circuit and ruptured cooling 
tubes. Although NASA's budget has increased over the last three years, 
Congress still expects increased performance from an under-funded and 
understaffed workforce. In 2001 Congress, canceled some $530 million of 
the proposed $2.2 billion safety upgrades for the space shuttle fleet 
which were to span over five years.v
    Goldin's NASA targeted the shuttle program for civil service 
workforce reductions and improved efficiency by consolidating the space 
shuttle's maintenance and reducing the civil service role to monitoring 
safety. In 1996, NASA handed over shuttle maintenance to the United 
Space Alliance (USA), a contractor partnership between Lockheed Martin 
and Rockwell (now Boeing). The six-year contract worth $8 billion was 
extended this past summer for two years for $2.5 billion. Currently 
some 6,000 USA workers oversee launch operations at Kennedy Space 
Center in Florida, while 4,000 workers at Johnson Space Center are USA 
employees. Thus, contractors, not NASA employees, do the majority of 
the space shuttle work.
    In 1999, NASA's SIAT cited concerns that the space shuttle's safety 
is eroding due to workforce problems. While both NASA and contractor 
employees hold safety in the highest regard, the SIAT report found that 
``the workforce has received a conflicting message due to emphasis on 
achieving cost and staff reductions.'' With a reduced workforce 
directly involved in maintenance of the shuttle fleet, NASA could only 
perform safety monitoring, without much control over contractor 
procedures.
    With a smaller civil service workforce, the GAO found that NASA is 
unable to properly monitor contractors' adherence to safety guidelines. 
Furthermore, NASA lost technical competence during the workforce 
reduction process, as senior employees departed before new civil 
service employees and contractors could learn from them.
    In testimony before the House Subcommittee on Space and Aeronautics 
on April 18, 2002, ASAP Chairman Richard Blomberg spoke of the 
``strongest safety concern the Panel has voiced in the 15 years 
[Blomberg] was involved with it.'' In the 2001 Annual Report, the 
ASAP--a NASA safety watchdog created by Congress in 1967, after a 
launch pad fire claimed the lives of three Apollo 1 astronauts--stated, 
``inadequate budget levels can have a deleterious effect on safety.'' 
From 1999 to its latest report released in 2002, ASAP cited grave 
concerns for the safe operation of the space shuttle. According to the 
report, along with budget and personnel cutbacks at NASA throughout the 
1990s, contractors at NASA also provided their services with a reduced 
workforce. Regarding NASA's consideration to further privatize the 
space shuttle operation, ASAP noted that such a move would inherently 
introduce new risks to safe operation.vi
    Downsizing also has implications for the future of NASA's workforce 
capability. Although NASA halted its downsizing by 1999, its in-house 
competency had suffered greatly. A 1999 internal assessment of its 
workforce found NASA experiencing skills shortfalls in avionics, 
mechanical engineering, computer systems, and software assurance 
engineering. GAO also brought attention to much needed space shuttle 
safety upgrades that had not been budgeted. By 2000, GAO reported that 
NASA's downsized civil service workforce was stretched thin and 
overworked.
Fallout From Downsizing
    As a result of extensive downsizing and contracting out as much as 
possible, NASA is facing a critical human resources problem: how to 
replenish a soon-to-retire workforce. While costs have been cut, its 
workforce is weaker and less experienced. The civil service workforce 
has to do more tasks with fewer staff, and the contractor workforce is 
working overtime due to their own staffing shortages. Though NASA hired 
200 full-time workers for the shuttle operations in 2002, the shortfall 
remains. During the downsizing of the 1990s, 14,268 civil servant 
employees left NASA, while only 8,173 employees were hired. Hiring new 
workers brings with it new challenges. Training new staff and 
incorporating them into the work processes and structure of NASA will 
take a great commitment of resources and time.vii
    NASA's workforce demographics are expected to compound the problem 
further. Within NASA's science and engineering workforce, those over 60 
years old outnumber the under 30 population by a ratio of 3 to 1. With 
15 percent of science and engineering employees currently at retirement 
age and another 25 percent eligible within the next 5 years, NASA has 
begun tracking skills, competencies, and measuring what skills are 
lacking in the workforce. However, as the GAO reported to Congress in 
2002, new hires needed considerable training and faced the challenge of 
having to replace more experienced workers, and staffing shortfalls are 
expected to continue if not worsen.viii
    NASA also faces the challenge of recruiting engineering and science 
talent away from higher paying private sector jobs. With many of NASA's 
operations in high-cost labor markets, NASA's salaries can be as much 
as $20,000 below private sector jobs in the same market. NASA also 
looses recruits to the private sector because the hiring process can 
take up to six months. Though NASA is looking to implement incentives 
to attract, retain and replenish their aging workforce, its budget has 
limited their implementation. Furthermore, incentives to retain 
experienced workers would also be necessary for new hires to gain 
knowledge from the experienced workers. The obvious solution of 
providing competitive salaries for all NASA employees has yet to 
receive serious political attention.ix
    With NASA's workforce is stretched thin, work conditions have 
deteriorated. Recent GAO reports on NASA concluded that the civil 
service workforce is ``showing signs of overwork and fatigue as a 
result of downsizing.'' Unmanned space launch failures in 1998 and 1999 
have been attributed to overworked civil service employees. 
Overstressed and overworked employees at NASA's contractors also played 
a role in recent failures and safety lapses.x
    Though NASA is looking to contractors to fill the workforce gap, 
various studies have reported the unintended consequence of using 
contractor employees over ci vii servants. The SIAT reported that it 
``feels strongly that workforce augmentation must be realized 
principally with NASA personnel rather than with contract personnel.'' 
The report found instances where important technical knowledge was 
possessed by only one civil servant. If that employee were to leave 
NASA, that technical knowledge leaves NASA as well.xi
Contractors, Safety, and Performance
    For over twenty years, presidential administrations have planned 
for NASA's privatization. Though previous plans to privatize the 
shuttle fleet in the 1980s were placed on hold after the Challenger 
accident, the Reagan Administration set the course for NASA's 
privatization. In 1984, Congress amended NASA's charter ``to seek and 
encourage to the maximum extent possible the fullest commercial use of 
space activities.'' Under Goldin, NASA moved to privatize both manned 
space programs, the space shuttle and the International Space Station 
(ISS). In 1998, Congress passed the Commercial Space Act with 
bipartisan support. The law forbade NASA from building space launch 
vehicles and directed NASA to plan for the privatization of the shuttle 
and the ISS while encouraging private sector development and operation 
of future reusable launch vehicles.xii
    NASA's most apparent attempt to privatize major operations is the 
space shuttle. In 1995, a NASA commissioned study called the Kraft 
Report recommended that shuttle operations be contracted to one single 
contractor. The report cited that restructuring of the shuttle program 
was needed to reduce an overabundance of engineers and man-hours spent 
on each shuttle mission. The report suggested the shuttle could now be 
considered ``operational'' rather than ``experimental,'' suggesting 
risks associated with the shuttle had been mitigated since the 
Challenger accident. The report concluded with a recommendation that a 
consolidated shuttle operations contract could serve as a precursor to 
``further industry involvement and progression toward the privatization 
of the space shuttle.'' xiii
    As a result of the Kraft Report, NASA awarded a non-competitive 
contract for shuttle flight operations to a joint-venture by Lockheed 
Martin and Rockwell called United Space Alliance (USA). Boeing acquired 
Rockwell's space business in 1996 and took its place in USA. Though the 
intended goal of reducing costs was achieved, the contracting of NASA's 
most safety-critical operations had repercussions.
    After NASA awarded USA the shuttle operations contract, many 
commentators and investigative reports warned of the potential dangers 
of increased privatization. Criticism came from within NASA, as well as 
outside critics, warning of the workforce and safety implications. 
Space policy analyst John Pike of the Federation of American Scientists 
predicted the reports' recommendations would one day be considered as 
``the turning point that led to the next shuttle accident.'' Apollo 
Astronaut John Young warned ``you can't reduce people without 
introducing a lot of risk because you just work people too hard.'' In a 
letter to President Clinton, Jose Garcia, a NASA manager with over 30 
years of experience expressed urgent concern regarding the pressure to 
downsize the workforce and extensive contracting of shuttle operations. 
Because ``the shuttle is a complex R&D vehicle that requires NASA to 
play an important oversight role'', Garcia wrote to Clinton, ``it would 
be better to cancel the manned space flight program than to recklessly 
endanger a future shuttle and its crew'' by contracting out and 
reducing NASA's role in shuttle operations.xiv
    During the past two years, NASA has been moving closer toward 
privatizing shuttle operations. A 2001 study conducted by a NASA team 
at Johnson Space Center concluded that compete privatization of the 
space shuttle was necessary as NASA's workforce entered retirement. 
Under a privatized scheme, the private shuttle operator would handle 
NASA's current role of overseeing safety and technical requirements. In 
the fall 2002, the Rand Corporation delivered similar findings on 
privatizing the shuttle workforce in a follow-up study.xv
    However, the NASA body responsible for evaluating manned aerospace 
programs warned that privatization could exacerbate safety risks. In 
2002, the ASAP Chair Richard Blomberg told the House Subcommittee on 
Space and Aeronautics that NASA would have to indemnify any privatized 
shuttle operator from financial risk and require a technically 
experienced workforce to assess and regulate that risk. However, 
Blomberg reported that, ``it is difficult to cultivate and maintain 
this government workforce when all operations have been turned over to 
the private sector.'' Blomberg also noted that a departure from the 
``traditional government/contractor checks and balances'' to privatized 
operation ``would increase risk significantly for a time,'' and would 
not improve safety from current levels.xvi
    Direct evidence of contractor failure to perform efficiently came 
in 1999 with the failure of a series of Mars spacecraft. The failures 
highlight how NASA contractors and NASA's managerial commitment to FBC 
traded avoidable risk for lower cost. In September 1999, the $125 
million Mars Climate Orbiter crashed into Mars. It was later revealed 
that contractor Lockheed Martin had used English measurements to 
calculate trajectory while NASA specified and navigated the craft using 
metric units. In December the same year, the $165 million Mars Polar 
Lander crashed into the planet's surface as its braking thrusters 
failed to fire properly. NASA's internal investigation revealed that no 
system wide tests had been done on the Mars Polar Lander before launch. 
Two Deep Probe 2 microprobes accompanying the Polar Lander were also 
lost without contact and, according to a Mars Independent Assessment 
Team head Tom Young, simply were ``not ready to launch.''
    Under budget constraints, the renowned Jet Propulsion Laboratory 
(JPL) and Lockheed Martin tried to perform a mission they did not have 
the resources. Lockheed Martin significantly understaffed the 
development of the Polar Lander, Mars Observer and Deep Space 2 
hardware, and then increased staffing by 80 percent halfway through the 
project. After additional engineers and technicians were brought on, 
Lockheed Martin required them to work in excess of 70 hours a week. Not 
only did this increase the costs of the spacecraft by $121 million, 44 
percent over the original costs, but it also resulted in an overworked 
and poorly managed staff producing slipshod spacecrafts. Because launch 
dates were fixed and calculated so that the spacecrafts would 
rendezvous with Mars, Lockheed Martin rushed to meet their deadlines, 
while making simple yet critical mistakes.
    Though JPL--an academic center under exclusive NASA contract to 
operate space probes--has a unique technical capability, it did not 
provide the necessary support the missions needed. Lack of review and 
analysis of risks allowed for consecutive failures. NASA's 
investigation into the probe failures also noted ``competent, but 
inexperienced, project managers'' and inadequately trained navigation 
personnel at JPL did not catch Lockheed Martin's mistakes. Though 
Lockheed Martin's Mars Climate Orbiter navigation software used English 
units rather than the NASA specified metric units, JPL personnel could 
have saved the spacecraft before it crashed. However, with an 
understaffed workforce that did not fully understand the Climate 
Orbiter craft, JPL navigators failed to recognize anomalies caused by 
the spacecraft's navigation. NASA's mangers also lacked experience to 
understand the risks and potential for failure involved in planetary 
space missions. The inadequacy of testing and oversight on construction 
of Deep Space 2 probes was so severe that NASA does not have insight 
into why it failed beyond that it was not tested for 
operations.xvii
    While NASA did score successful low-cost robotic missions under 
FBC, such as the Mars Pathfinder and the Mars Global Surveyor, the 
overall results were not successful. NASA contracted an investigation 
through the Aerospace Corporation to compare the new mission regime to 
the traditional robotic probe projects. The study found that the 
failure rate under FBC missions was 44 percent compared to 30 percent 
for traditional missions. FBC missions were 57 percent more cost-
effective than the traditional model. The faster, better, cheaper 
missions provided an average of 79 instrument months, over three times 
less than the average 305 instrument months that traditional robotic 
missions provided. The Aerospace Corporation report concluded that to 
achieve ``faster'' and ``cheaper'', the mission must give up ``better'' 
by reducing scope and science return on a ``per mission basis.'' 
xviii
    Contractor fault was also cited in a string of unmanned commercial 
and military space launch vehicle failures in 1998 and 1999. With seven 
launch failures over two years, launch vehicle builders Boeing, builder 
of two of the failed rockets, and Lockheed Martin, builder of the 
remaining five failed launches, faced intense scrutiny. With three of 
the undelivered payloads being military satellites, the Air Force 
investigated the cause of the failures. At the risk of losing 
commercial business, Boeing and Lockheed Martin also conducted their 
own internal investigations. Beyond the direct technical causes, all 
the investigations came to similar conclusions: the companies' poor 
oversight and evaluation and understaffed workforce allowed engineering 
and workmanship deficiencies. Even the Defense Department contractor 
responsible for assessing and certifying the operability of defense 
launch systems, the Aerospace Corporation, cited its own reduced 
workforce and limited resources under a $3.65 million 
contract.xix
    Though NASA's recent experience with contractors shows the limits 
of performing dangerous and difficult work through the private sector, 
a privatized NASA may be even more detrimental. NASA's core mission is 
research and development of new technologies in aerospace, expanding 
human knowledge of airflight, spaceflight and space and earth sciences 
for the benefit of the public, including the engineering and scientific 
communities, as well as the private sector. Privatizing NASA would move 
aerospace and earth and space science research out of the sphere of 
public goods and into private hands.
    As a public good, the data and research that NASA produces from its 
projects are publicly available. A telling example of private ownership 
of space research is the privatization of the Landsat remote sensing 
satellite system. The Carter Administration's 1978 proposed plan to 
privatize the satellites was realized in 1985 when EOSAT, a joint 
venture by Hughes and RCA, took over the operation of the system. The 
Landsat data that was once available to the international science and 
research community was now EOSAT's proprietary data. The cost of 
purchasing Landsat data increased from $400 to $4,400 an image, out of 
the reach of many researchers in the scientific community. After NASA 
and the National Oceanic and Atmospheric Administration requested 
relief from high prices, Congress passed and President Bush Sr. signed, 
the Land Remote Sensing Policy Act of 1992, putting the satellite 
system back in the government's hands again. The bill acknowledged that 
privatizing Landsat, a research program that provides essential data, 
had deleterious effects and is not likely to work in the 
future.xx
    Privatization allows for the possibility that profitability and 
market value, rather than scientific value, will prioritize the 
scientific and research work that NASA currently does. Even though a 
privatization scheme can be developed to give the Federal Government 
some oversight into strategic planning, the Federal Government would be 
unable to staff a workforce without some operational knowledge. 
Further, the lack of safety and risk oversight that results from NASA's 
understaffed civil service workforce, demonstrates how a privatized 
aerospace venture would be prone to safety issues.
    For the purposes of securing funding and winning contracts, 
contractors have an incentive to aggressively price their service and 
products. The space launch failures in 1999 point to private sector 
managers cutting staff and diminishing engineering quality to 
competitively price their launch services. As NASA's independent 
investigation into the 1999 Mars spacecraft failures shows, both 
Lockheed Martin and JPL, the academic contractor, placed concern with 
cost before success. While Lockheed Martin's proposal was aggressively 
priced, they were not able to provide an effective product. Instead of 
relaying risk assessments and concerns to NASA, JPL's communication 
with NASA ``was more one of advocacy for the program and presenting a 
positive image to the customer (NASA Headquarters).'' xxi
    In recent years, NASA's mission has been defined by budgets, not 
science. With private sector salaries significantly higher than 
government's, NASA is losing its ability to attract talented 
individuals, as ambitious science and engineering are secondary to 
contracting, privatizing, and cost cutting. While a publicly funded 
aerospace program can invest in developing projects that have a high 
scientific value but no immediate profit, private industry's 
involvement in aerospace is justified by profit first and foremost. 
Before the decision to launch the doomed Challenger in January 1986, 
shuttle contractor Morton Thiokol's senior managers overruled a 
contractor engineers concerns for the safety of the launch and gave 
NASA the go-ahead to launch. The contractor's management chose not to 
contradict NASA managers who were eager to launch. With the contract up 
for renewal, Morton Thiokol was eager to please NASA 
managers.xxii
    In the coming months, the investigation into the Columbia accident 
will answer where accountability for the critical failure lies. With 
the majority of the shuttle's functions under the control of one 
contractor, United Space Alliance is already facing scrutiny. With a 
chorus of warnings about the dangers of contracting out a manned space 
vehicle that offers little room for a safety lapse, presidential 
administrations, Congressional budget appropriations committees and 
NASA senior managers that pushed for lower costs over successful 
operation, may also have to face scrutiny for their decisions that 
reduced the effectiveness of NASA.
Endnotes
    i Chun Wei Chao, The Knowing Organization (Oxford, 
1998), ch. 5. Chao discusses management lapses at NASA and Morton 
Thiokol, the Thiokol engineers recommendation against the launch of the 
Challenger in cold temperatures and the organization deficiencies in 
the NASA-contractor relationship that permitted managerial decisions to 
override engineering concerns.
    ii Arnold S. Levine, Managing NASA in the Apollo ERA, 
(NASA, 1982).
    iii Paul Light, Paul Light, True Size of Government, 
Appendix A. Light modeled his estimates on FPDS data by using agency 
contract purchase information and types of contracts purchased. Because 
the FPDS system was implemented in 1984, that year is the earliest an 
estimate can be made for.
    iv Goldin quoted in Jason Peckenpaugh, ``Doing Fewer 
Projects More Safely,'' Government Executive, August 1, 2001.
    v NASA FBC Taskforce Final Report, March 13, 2000. For 
data on NASA workforce numbers, see http://www.hq.nasa.gov/office/
codef/workforce/.
    vi Aerospace Safety Advisory Panel, Annual Report for 
2001, March 2002, p 9.
    vii GAO Report, Space Shuttle Safety: Update on NASA's 
Progress in Revitalizing The Shuttle Workforce and Making Safety 
Upgrades, September 6, 2001; Roberta Gross, Inspector General NASA, 
Testimony before the Senate Subcommittee on Oversight of Government 
Management, 106th Congress May 2, 2000.
    viii David Walker, GAO Director, Testimony before House 
of Representatives Committee on Science Subcommittee on Science and 
Aerospace, 107th Congress, July 18, 2002.
    ix Roberta Gross, Inspector General NASA, Testimony 
before the Senate Subcommittee on Oversight of Government Management, 
106th Congress May 2, 2000.
    x GAO Report, Space Human Capital Challenges, August 15, 
2000.
    xi Space Shuttle Independent Assessment Team, Report to 
Associate Administrator--Office of Space Flight, March 9, 2000.
    xii Equals Three Communications and Booz Allen Hamilton, 
Commercial Market Outreach Plan for the International Space Station, 
prepared for NASA, February 2002.
    xiii Report of the Space Shuttle Management Independent 
Review Team (Kraft Report), NASA, February 1995.
    xiv Kathy Sawyer, NASA Plans Privatization for Shuttle; 
Cost-Cutting Will Hurt Safety, Critics Contend, Washington Post, June 
7, 1995, A1. Jose Garcia, Letter to President Clinton, August 29, 1995.
    xv Craig Covault, ``Shuttle Privatization Raises Safety 
Issues,'' Aviation Week & Space Technology, December 24, 2001; Craig 
Covault. ``Shuttle Shakeup Eyed for Cost, Safety Goals,'' Aviation Week 
& Space Technology, September 23, 2002.
    xvi Richard Blomberg, Former Chair Aerospace Safety 
Advisory Panel, Testimony before the House Subcommittee on Space and 
Aeronautics, 107th Congress, April 18, 2002.
    xvii Mars Independent Assessment Team Report, NASA, 
March 2000; Tom Young, MPIAT Chairman, Testimony before House Science 
Committee, 107th Congress, March 14, 2000.
    xviii Beth Dickey, Midcourse Correction, Government 
Executive, September 1, 2000. Michael A. Dornheim ``Aerospace Corp. 
Study Shows Limits of Faster-Better-Cheaper,'' Aviation Week & Space 
Technology, June 12, 2000; Todd Mosher, Robert Bitten, et al., 
``Evaluating Small Satellites: Is the Risk Worth It? [Aerospace 
Corporation Report]'' presented at AIAA/USU Conference on Small 
Satellites, August 1999.
    xix Frank Sietzen, Launch Failures and Recovery Shape 
1999's Space Competition, Space.com, posted December 28, 1999; Pete 
Aldridge, Aerospace Corporation President, Testimony before House 
Permanent Select Committee on Intelligence, 106th Congress, July 15, 
1999.
    xx National Research Council, Bits of Power: Issues in 
Global Access to Scientific Data (National Academy: 1997).
    xxi Mars Independent Assessment Team Report, NASA, March 
2000.
    xxii James Colvard, ``Savings Can Have a High Price,'' 
Government Executive, November 1, 1998.

    Senator Lautenberg. One of the things that they noted in 
their report was that when a previous administrator--and I 
can't be delicate here, and it's not in criticism; it's just 
the information that I looked at this--Daniel Goldin, NASA's 
Administrator from 1992 to 2001, appointed and directed to make 
the cut on NASA's budget and to bring fiscal discipline of the 
business world to the Nation's premier science organization. 
The agency was then put under a management plan called FBC, 
``faster, better, cheaper.'' And I wonder if you'd make a 
comment about the availability of resources. Did the 1,700 NASA 
employees have the capacity--and I mentioned this in my 
comments earlier--to supervise 18,000 contractor workers? Was 
there any failure, in your view, that lay heavily at the 
doorstep of the contractors to provide the kinds of service 
that might have averted this catastrophe?
    Admiral Gehman. Thank you, Senator. The Board found--and we 
looked at this extraordinarily hard. We interviewed hundreds of 
people. We walked the shop floors of all the centers all over 
the country where components are made. And we did not find 
cases where the contractors were taking shortcuts or were 
cheating or weren't doing their job well. We didn't find any 
cases like that.
    The Board did find, however--and it's in our report--that 
the management level--that is, the vertical level--that the 
program has decided to contract to seemed to us to be a little 
too high. By that, I mean it appeared to us that they were 
contracting out management functions. They were almost to the 
point where they were contracting out government functions. And 
it appeared to us that we didn't find anything wrong. I mean, 
we didn't find anybody doing anything wrong in that case. But 
what we found was--then was that when the Government had to 
make a decision, they no longer had the technical expertise, 
because the function that they were supposed to be supervising 
was being done by a contractor. And if you look at the mission 
management team decisionmaking, you see them consulting people 
that are experts on whether or not this is a problem. And 
they're all contractors. And there doesn't seem to be a 
government person who has the technical knowledge anymore, 
because they contracted it all out.
    So we didn't find any wrongdoing.
    Senator Lautenberg. I understand.
    Admiral Gehman. But we did find that perhaps, because so 
many of the oversight functions were being done by contractors, 
the expertise goes with the function, we found that the U.S. 
Government seemed to be shortchanged.
    Senator Lautenberg. So if there isn't blame--and I 
understand very clearly what you said--then structure certainly 
was one of the problems. And I assume, therefore, it's a 
continuing, or might be a continuing, problem.
    The question is whether or not we're prepared to devote the 
resources to building this organization's capacity to the point 
that it needs to go on these relatively dangerous missions. We 
know they're dangerous, and we try our best to protect 
everybody involved with the program. But are there enough 
resources? Senator McCain's question about what earmarks do. 
Well, it robs the program of its appropriate funds to get this 
job done.
    Mr. O'Keefe, what do you think about the resource on this?
    Mr. O'Keefe. Again, it is a very subjective matter, and it 
is one that----
    Senator Lautenberg. That's why we hired you.
    Mr. O'Keefe. Yes, sir.
    Senator Lautenberg. To be subjective.
    Mr. O'Keefe. I fully understand. And my judgment on it is 
that we have the resources necessary to continue operations in 
a way that is responsible. The points that Admiral Gehman has 
raised, I think, has been echoed in a Congressional Budget 
Office report released this last month. If you'd permit me, Mr. 
Chairman, I'll submit it for the record, that compares this 
effort and the resources and what they refer to as 
``technologically complex tasks'' performed similarly at other 
agencies and departments across the Federal Government, and 
find no remarkable distinctions in that regard.
    Having said that, the depth of this investigation is deeper 
than any I have ever been involved in, in my public-service 
time. And as a consequence, the observations of the Board and 
the findings of the Board are going to inform us as we go 
through the examination of the spaceflight operations contract, 
which comes up for renewal in a year, in order to figure out 
exactly how we change that alteration, based on the findings, 
recommendations, and basic views expressed in this report. 
There's a lot to be learned from that. And while the surface 
coverage, even from CBO, says ``not a lot of comparability 
between other major systems integration programs,'' that's not 
good enough, as far as we're concerned, because the findings of 
this Board are fact, and we intend to run that to ground to 
find out how we alter the contractual arrangements, as well as 
our own conduct, in order to do this stronger and a better way.
    Senator Lautenberg. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Hutchison?
    Senator Hutchison. Thank you, Mr. Chairman.
    Mr. O'Keefe, were you ever advised or aware, during the 
Columbia mission, that there was a serious problem, or any 
problem, from the foam strike on liftoff?
    Mr. O'Keefe. No.
    Senator Hutchison. I'd like to pursue the issue of 
resources again. Mr. O'Keefe, you had a scientific advisory 
board that you asked to determine what the resources of NASA 
should cover, What should be the mission? You got the report 
back. I would ask you if you think you have the resources to 
implement that report and establish a vision that not only is 
scientifically viable, but that the American people can see the 
necessity to continue?
    Mr. O'Keefe. Yes, ma'am. The very specific review that we 
asked, and I think you're referring to, is the scientific 
prioritization to be conducted aboard the International Space 
Station. That was conducted last summer and early fall. We 
have, in fact, assessed that. The prioritization is the 
scientific objective agenda that we will pursue on 
International Space Station, and the funds necessary to conduct 
that activity is contained in the President's budget that's 
before the Congress pending now to pursue that for Fiscal Year 
2004 through 2008 as a projection. So that clearly is our 
intent. We're going to follow that prioritization. That's what 
the findings of that scientific group was, representing all the 
disciplines of what could be conducted on an International 
Space Station, and proceed from there.
    To the larger question you posed, though, I think the issue 
that we've tried to codify and is to codify, and it's part of 
this year's strategic plan that was released along with the 
budget, as well, is an effort to be very selective about the 
areas we intend to pursue and apply those resources as 
extensively as need be in order to do an extraordinary job in 
those areas. And then for those areas that don't fit within the 
category of our three primary mission areas, that we simply not 
attempt to do them passingly, but just elect not do them at all 
and, instead, be very selective about what we do. And I think 
the budget and the strategy that's before you is our attempt to 
try to pursue that.
    Certainly things changed on the 1st of February, and that's 
what we need to assess and go back and continue to re-look this 
relative to the Board's findings and the approach that we 
intend to take.
    Senator Hutchison. So, if I could summarize, you think that 
you have set the priorities and you have the resources 
necessary to accomplish those top priorities and leave the ones 
at the bottom by the wayside.
    Mr. O'Keefe. In the scientific objectives, the answer is 
yes. Again, in terms of our performance of those activities, 
we're going to be guided by other additional views that the 
Board may have found here as we go through this to upgrade, 
update, and improve this approach toward it. But in terms of 
the science priorities, I think you're exactly right. That 
effort, a year ago, was the first time we'd ever had a 
prioritization set that began with the number one and moved 
progressively through two, three, four, and five. Prior to 
that, everything was the number-one priority, which, therefore, 
meant nothing was a priority.
    Senator Hutchison. I'd like to ask Admiral Gehman. It's 
clear from your report that there was insufficient resource and 
that NASA was stretched too thin to achieve its multiple goals. 
Do you believe that the agency is more budget-driven than 
mission-driven? In the past. Not going forward, obviously, 
because we're indicating that there is going to be a change. 
But do you think it was too budget-driven rather than mission-
driven?
    Admiral Gehman. We believe that the budgets had a lot to do 
with what happened, with how the management system morphed over 
the years. And we believe that budgets are one of the 
constraints on the program. Yes, ma'am.
    For example, I was just looking through the report. I was 
going to try and find it to quote the page to you--normally, 
I'm like a Bible preacher; I can quote the page that everything 
is--and I couldn't find it. There's a little sidebar in there 
which talks about the shuttle upgrade program. The shuttle 
upgrade program is essentially unfunded. There's a 
recommendation in here that if you're going to fly this shuttle 
beyond about 2010, you should completely requalify or recertify 
the shuttle. That would be a very expensive proposition. Not 
funded.
    We suggest that we need to reestablish the independent 
technical review authority or reestablish the position of 
engineers as being independent from the program so engineers 
can do engineering work independent from the program. And then 
when you ask for an engineering program--an engineering 
evaluation, or an engineering decision, you're getting an 
evaluation from people who don't care anything about the 
schedule, for example, or the need to make a launch. That 
requires a couple of hundred people or a couple of thousand 
people to be funded from someplace, which is currently not 
funded, because now everything is charged against one of the 
programs.
    So budgets are a big issue. Yes, ma'am.
    Senator Hutchison. Let me just ask Administrator O'Keefe, 
in my last couple of seconds. He's talked about the upgrading 
of the shuttles and the recertification of shuttles, which you 
have said you're committed to doing, and we also have the new 
space orbital vehicle that will replace the shuttle. And I 
would like to ask you if you think--you've said you have the 
resources to do your high priorities. Have you taken into 
account the upgrading of the shuttles? And do you have any 
intention of speeding up the process of the space orbital 
vehicle that would replace the shuttles?
    Mr. O'Keefe. Yes, ma'am. Two out of three of those. Again, 
our discussion a moment ago was on the science priorities. But, 
as it pertains to the three specific items he's mentioned, 
again, those now are findings, and, therefore, they're treated 
as fact. Out of the three issues, two of them there are 
resources set aside. Whether they're sufficient or not is 
something we've got to evaluate.
    For the upgrading of the shuttle, there is a Service Life 
Extension Program (SLEP) budget line item that's in the budget 
the President presented to the Congress on February 3. We have 
to assess exactly what those upgrades are that need to comply 
specifically with these findings. Whether that comports exactly 
or whether additional resources are necessary is something that 
time will tell.
    In the second area, in terms of the independent technical 
authority, Admiral Gehman is exactly right. Whether that takes 
200 or 2,000 additional engineers--don't know yet; we're going 
to have to assess all those options. Indeed, he's right. That's 
not something we anticipated. That's not something that's 
contained in this budget, but we intend to do it and will 
assess what those resource requirements are as we work our way 
through this.
    So the approach would--and as far as the orbital space 
plane is concerned, there is an additional amount in--there is 
amounts in the budget before Congress now that was proposed for 
2004. The initial funding was----
    Senator Hutchison. Five hundred----
    Mr. O'Keefe.--agreed to by the Congress as part of the 
President's amendment, in November of last year, to last year's 
budget.
    Senator Hutchison. It's not enough to increase the----
    Mr. O'Keefe. That's exactly right. And I was just about to 
say that. You're exactly right. The issue of accelerating its 
delivery is something we need to look at; and the issue is not 
so much of how much more it will cost, but how much more 
resources you need earlier in order to achieve that. And that's 
something we've really got to assess now and make a 
determination of whether that is in the best interest overall, 
to pursue that particular approach. But we're working that 
diligently and have got some answers on what it would take to 
accelerate this for an earlier delivery of whatever ultimate 
design would come out of this competitive effort that we're 
pursuing right now.
    Senator Hutchison. Thank you, Mr. Chairman.
    Mr. O'Keefe. Thank you, Senator.
    The Chairman. Senator Wyden?
    Mr. O'Keefe. Appreciate it very much.
    Senator Wyden. Thank you, Mr. Chairman.
    Let me begin, Administrator O'Keefe, with this question of 
my sense that you really can't define NASA's mission now 
without getting on top of the question of manned spaceflight. 
And I think we're about to start a whole array of commissions 
and studies and the like. And I would like to ask you whether 
you could furnish us, within 90 days, or, at most, 6 months, a 
solid cost-benefit analysis with respect to manned spaceflight. 
Because I think that's what the Congress really needs. And I 
know that what I get asked all the time--and certainly there 
are a lot of critics that say, ``Look, they give the bulk of 
the money to manned programs, but most of the research seems to 
come from areas that aren't manned.'' What's your reaction to 
the proposal I made this morning that you give this Committee a 
solid cost-benefit analysis on manned spaceflight within 90 
days, or, at most, 6 months?
    Mr. O'Keefe. It's a very intriguing idea. I'll give it my 
best shot. I think that's a very thoughtful way to go about 
approaching it, and I'll do my very best to provide such a 
document and an analysis that would demonstrate that. That's a 
step forward, I think, in proving this.
    Two things, though, to observe, as well, though, that--just 
to be clear on the facts. A third of the budget is really 
dedicated toward spaceflight activities, of which 25 percent is 
shuttle, additional amounts are for International Space 
Station. And then the other two thirds is toward earth science, 
space science, all the things that are not specifically related 
to spaceflight activities. So it already is skewed heavily 
toward activities by a factor of roughly two to one, the kinds 
of functions that are performed by robotic and distant means. 
So that's an approach.
    The other thing we've got to really assess here--and, 
again, in pursuit, I think, earnestly to answer the question, 
the very thoughtful proposal you've put forward, on how to 
conduct such an analysis--we've got to find some way to factor 
in what is the cognitive skills that human beings bring to the 
occasion in these cases. There are some things you simply can't 
do without a human intervention. And we've got to be selective 
in the cases in which we expose humans to those risks. And 
that's essentially what I think you're posing, and it's a very 
interesting way to go about doing it, and I'll give it my best 
shot, Senator.
    Senator Wyden. Mr. Chairman, I would just like to follow up 
with you and Senator Hollings. I've made the proposal, but 
obviously I'd very much like to do it within the bipartisan 
approach you've followed in this Committee.
    But, to me, that is the bottom line. We have got to get a 
cost-benefit analysis with respect to what is done in the 
manned versus unmanned area. And I'll be following that up and 
look forward to talking to my colleagues about it.
    The second question, Admiral Gehman, if I might, involves 
the compliance issue. I think Senator Hollings touched on this. 
I mean, the whole history here is tragedy and recommendations 
made, and then somehow they don't get followed. I'd like your 
recommendations with respect to how it could be different this 
time, and to bring about compliance. I mean, for example, I 
mean, just on a kind of basic level, I mean, we could ask 
Administrator O'Keefe to come on in here every 90 days and 
basically say, ``Look, this is what we've done in the last, you 
know, 90 days.'' I want to give you a crack at how you'd 
approach it.
    But what I think you want to do, and the dedicated people 
who staffed this effort want to do, is make sure we're not 
sitting here in the face of another tragedy. And your thoughts 
with respect on how to make sure that there's compliance this 
time, I think, would be another area I'm interested in.
    Admiral Gehman. Thank you, Senator.
    As I indicated in my opening remarks, I agree with your 
concern, and, as I said in our opening remarks, I think we owe 
it to the memory of the seven heroes who died to make sure that 
we do everything we can to prevent this accident from happening 
again.
    In the history of NASA, which we studied very carefully and 
documented in our report, indicates that NASA, like any other 
big bureaucracy, responds to the forces that are acting on it. 
And, unfortunately, over a period of a long period of time, 
budget, schedule, and cost forces became very important to NASA 
and they started to affect the program.
    The question about how to prevent this from happening again 
is a very intriguing one. The Board has spent some time 
scratching their heads about it. We have a couple of examples 
that have worked well in the past. In the case of the 
Challenger accident, you may recall that the Rogers Commission 
required that NASA redesign the solid rocket booster joints and 
O-rings. It wasn't just the O-rings. It was the whole joint. 
And they also recommended that an oversight committee be 
established to supervise that, a non-NASA oversight committee. 
And that oversight committee was in existence for almost 3 
years. And they disapproved the first couple of NASA redesign 
efforts.
    You could appoint some kind of a panel or a committee to 
advise the Congress as to whether or not these management steps 
have been taken and whether or not they're really working and 
all that sort of stuff. There is a precedent for that.
    I think the Members of this Committee are very much aware 
that there is a congressionally appointed or congressionally 
created oversight panel already in existence, called the 
Aerospace Safety Advisory Panel (ASAP). You might want to 
assign them with some duties and responsibilities, maybe 
reformat them, the membership to get at the issues that you're 
concerned about.
    Senator Wyden. Admiral, if I might--because I know I'm just 
about to run out of time, and I want your opinion in one other 
area--the technical engineering authority that you have talked 
about strikes me as a way to bring about some of the 
independence and oversight that's important. I would like to 
hear your thoughts on, sort of, the nuts and bolts of how that 
would work, and also yours, Administrator O'Keefe, whether you 
accept the recommendation, and, in effect, how something like 
this would work.
    I mean, the first thing that strikes me is, if NASA puts up 
the money for it, then you say to yourself, how does that 
facilitate the kind of independence that you're talking about? 
But given the fact that you put great weight on this technical 
engineering authority, tell us how you think it would work. And 
I'd like both of your reactions. I know my light is on, but I'd 
like the reaction of both you gentlemen on that.
    Admiral Gehman. Senator, thank you for that question. That 
question probably gets to the most important recommendation, 
and probably the core of our report, and that is that we have 
found that--over the years, that a legitimate system of checks 
and balances has been lost in NASA in which there are 
independent and resourced and robust agencies that kind of 
check up on each other, within NASA. The Board does not feel 
that we need to create another entity or an anti-NASA or 
something like that. But what has happened is, is this 
independent and robust system of checks and balances has been 
lost. And it's been lost in the name of efficiency and 
effectiveness.
    And the manifestations of that are really what our report 
is all about. All the e-mails that didn't get acted on and the 
inability of engineers to affect things and the overwhelming 
power of informal chains of command by people in the program 
and things like, all those things are fixed if you create an 
engineering world in which engineers can have a robust and 
honest difference of opinion and you don't do management by 
view graphs. You use technical papers instead of view graphs 
and overheads and all those bad things we talked about.
    What this organization would do, what we think the key 
ingredient to the success of this scheme is that this 
organization must, in fact, own a function. By that, I mean, 
simply creating an organization that sits on the sideline and 
kibitzes or second-guesses other people is not good enough. Our 
suggestion is that this organization actually has to own part 
of the process. And the part of the process we suggest is that 
they have to own the technical requirements and specifications 
and all waivers to them. Now, that implies that they have to 
understand those technical requirements and specifications. 
They have to understand why they're there. If anybody wants a 
waiver to them, they have to understand the rationale for the 
waiver. And if they don't want to grant the waiver, they have 
to understand why they're not granting it. So that suggests an 
engineering enterprise of some size.
    It used to be that way a long, long time ago, and that 
really gets to the core--that really gets to the core of our 
recommendation, because many--half, 60 percent--of all the ills 
that we list in our report are immediately fixed because of 
this enterprise that we recommend. It could be within NASA. We 
don't necessarily suggest that it has to be outside of NASA.
    Mr. O'Keefe. Sir----
    The Chairman. Senator Brownback?
    Mr. O'Keefe. Oh, I'm sorry.
    The Chairman. Go ahead.
    Mr. O'Keefe. The request was that I respond, as well.
    The short answer is, it's a finding, and, therefore it's a 
fact. It's a recommendation, so, therefore, we're going to 
comply with it. No further debate on that issue. And what 
Admiral Gehman and his colleagues on the Board have pointed to 
is a organizational characteristic that I recognize from my 
Defense Department experience years ago, particularly the Navy 
Department experience, which is to have a severability between 
that institutional force which owns and kind of takes control 
of specifications and engineering requirements and those that 
are faced with the program operational considerations of cost 
and schedule and all the other factors that go into the day-in 
and day-out kinds of work, and make a very clear severability 
of those functions. Got the message. That's a clear 
recommendation. We're going to sort through the options of what 
is the best approach to do it. And, again, the oversight 
function that we have put in motion is the Stafford-Covey team 
of Tom Stafford and Dick Covey, and their 29 or 30 colleagues 
in all these different disciplines of management, engineering, 
technical change, organization change, and culture change. All 
those different experts will then be the judge of whether we 
have picked the appropriate option to do that. And we will not 
proceed until such time as we're satisfied that we have 
selected an option that is not only compliant, but really does 
follow through on the point that's being raised here.
    A final observation is, I concur wholeheartedly on Admiral 
Gehman's view that there is a statutory board in place right 
now that the Congress enacted 30 years ago after the Apollo 
fire, the ASAP, the panel that is focused on these, you know, 
safety objectives. I think the charge that I'm hearing here and 
as well as the approach that we need to take is, take that 
statutory oversight function and reinvigorate it. And we'll 
have to kind of cogitate on what the right ways are to do that, 
and certainly would appreciate your support and help in that 
pursuit, as well.
    The Chairman. Senator Brownback?
    Senator Brownback. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being here today.
    Admiral Gehman, in the report it's replete about there's a 
need for a change of culture. And I think there was one news 
account that put it accurately, that ``Technology is easy. 
People are difficult.'' How do you change a culture at an 
institution without changing the people involved? This seems to 
me that if you're talking about a cultural issue here, you're 
not talking about moving boxes or organizational charts around; 
you're talking about changing whole mentalities and whole 
attitudes. And that seems to me that you are talking about 
major wholesale changes in personnel within the NASA system. Is 
that accurate?
    Admiral Gehman. Senator, we anguished over this issue for a 
considerable amount of time, and we also did not--we did not 
start our investigation with this position. We kind of came to 
it. And I think that in order to answer your question directly, 
I have to make it clear that the Board made a clear distinction 
between management problems and management fixes, and culture. 
We, in our minds, in our framework, we view these two things as 
two separate things.
    Management can easily be fixed by wiring diagrams and 
changing rules and regulations and moving people around and 
changing functions and all that kind of stuff. But the cultural 
issues are more difficult to get at, much more difficult. We 
had a little saying that you can fix a management problem by 
reorganizing, but you can't fix a cultural problem by 
reorganizing.
    Cultural problems are going to have to be driven--bad 
culture--there's good culture, too, by the way. There's the 
culture of safety and a culture of honesty and a culture of 
openness and all those kinds of things, which needs to be 
reinforced. But bad cultural traits, which we tried to list 
specifically in our report so we weren't just waving our arms 
and beating our breasts here, need to be driven out of the 
system by active--proactive leadership, and not just leadership 
from the administrator. He can't do it alone. It's going to 
take--he can affect probably two levels below him, and then the 
people below him can affect two levels below them. But it's 
going to have to take active leadership on behalf of several 
layers of management in order to get at this problem, and it 
can't be done in a few days or a few months. And, therefore, we 
did not make it a return-to-flight thing. It's----
    Senator Brownback. Let me--because my time's going to be 
limited on this--isn't what you're describing, though, that 
you're going to have to make major personnel changes to change 
those attitudes, the culture----
    Admiral Gehman. You can----
    Senator Brownback.--up and down through the organization?
    Admiral Gehman. My experience has been that you can change 
the behavior of people. You can't change the attitude of 
people, but you can change their behaviors. I would suggest to 
Mr. O'Keefe that after trying as hard as he can and repeating 
the message over and over again, if there's somebody out there 
who doesn't get it, he has to be replaced.
    Senator Brownback. And quickly.
    Mr. O'Keefe, in looking at the comprehensive list of 
recommendations there in chapter 11, it takes me back a little 
bit. You know, the return-to-flight requirements are extensive. 
How long do you think those would take to get implemented, and 
at what cost?
    Mr. O'Keefe. Well, there are 15 very specific 
recommendations that must be implemented--you're exactly 
right--prior to any return-to-flight activity. And the answer 
is, it will occur when we've determined we are fit to fly. 
Because not just those 15, but anything else we determine that 
falls into the category of issues which would otherwise 
compromise successful mission accomplishment is going to have 
to be accomplished. That bar has to be that much higher. It 
can't be just those 15.
    Senator Brownback. No time-frame then? You can't establish 
any timeframe? I think you've said that in other interviews. 
What about the cost?
    Mr. O'Keefe. Again, we have to assess that. Because it 
really turns on which options we select to implement each of 
those, particularly those 15, and then all the other 
recommendations, as well, and the other things we've included 
in the raise-the-bar, kind of, inputs area. So as we work 
through, with the Stafford-Covey team, exactly what options 
we're going to choose, that will then yield a price tag, which 
will give us a better judgment of exactly what that's going to 
take.
    Senator Brownback. Let me build on that, if I could. And 
this is, I think, along the line with what Senator Wyden was 
saying. As you appraise that, there's going to be a cost 
associated with that. I hope you also look at it and question 
whether it would be just a better thing to invest in a 
different technology, if, at some point, we look at--that 
sooner rather than later, maybe even much sooner, we ground the 
shuttle and go to a different system, if the cost of 
implementing this is so high, relative to going to a new 
technology or a new system. And I would hope that, as you 
appraise this, that you look at--this is the amount of time it 
would take us to get the shuttle back to flight. This is how 
much it would cost. Are we throwing good money after bad? 
There's a fair feeling that this is an older technology. It's a 
complex technology that we may just be at a point--it's time to 
say shuttle the scuttle--shuttle the scuttle--scuttle the 
shuttle, and we move on to the next technology. And I hope you 
will be making that appraisal, rather than just saying, ``Well, 
we're on this line and we're going to go that track.''
    Mr. O'Keefe. Yes, sir. As you review the implementation 
plan, which, again, will be released late this week, early 
next, and you--that's going to continue to inform the debate of 
what the scope and magnitude of return to flight's going to 
require. I'm certain we're going to have a spirited debate, in 
terms of what exactly that will entail, what it'll cost, what 
the tradeoffs are. And, again, we intend to be under multiple 
levels of oversight review in that process.
    Senator Brownback. And I can assure you Congress is going 
to be looking at that question.
    Mr. O'Keefe. Sure.
    Senator Brownback. How much time?
    Mr. O'Keefe. Absolutely.
    Senator Brownback. What's its cost? Is it just time to go 
to a new technology? Which, I have to tell you, my leaning is 
just clearly that that's the way we should be going at this 
time. There are two major disasters. It's a complex system. 
It's an older design. This is a 30-year-old design that we're 
into now. I just can't help but to think that we would do much 
better--and it may also be a cultural issue when you go at a 
new technology. We can bring a new team in to design where 
we're going to next. And that new team will have a different 
cultural--are you going to be able to shape the attitude of 
that culture?
    I think cultures are critically important. I think it is to 
the country, and I think it is to institutions. I know it is in 
my office. And this may be the answer to both the cultural and 
the technology.
    Mr. O'Keefe. Well, Senator, you've asked me to keep an open 
mind. I'd just ask that you do the same. As we work our way 
through this implementation plan, my plea would be let's all 
keep an open mind in terms of where the options need to go.
    Senator Brownback. That's fair enough.
    Mr. O'Keefe. I'd appreciate very much.
    Senator Brownback. I hope you also will think about 
creating this Presidential commission on the future of space 
exploration. Congress can do that, but that's really an 
Executive Branch function. And the report noted that we lack a 
comprehensive and engaging vision. The way I've been looking 
and seeing is we're stuck mentally in low-space orbit, our 
thinking is. And I just think you need to get--and I think the 
country wants to engage in a discussion on what's our vision 
for space. It's not just NASA. It also involves--I mean, it's 
discovery and exploration, but it's also commercial and 
military--to engage that broader discussion of where are we 
going as a country here. Because I think the country wants to 
go, but they need that vision that really unites and says, 
``This risk is worth it. This cost is worth it.''
    So I hope you'll consider that, a Presidential-level 
commission to work with establishing that. I know there are 
difficulties with it, and there's not a simple answer, but a 
vision really is a critical thing to unite a country.
    Senator Brownback [presiding]. Now, I'll be chairing the 
hearing the rest of the way out, and who's--Senator Nelson is 
next up. Sorry about that.
    Senator Nelson. Thank you, Mr. Chairman.
    Gentlemen, everybody up here wants this program to be 
successful. And so I'm going to ask some very specific 
questions.
    We have heard the Admiral say--in his excellent report, he 
has stated ``buying power has been reduced 40 percent over the 
last 10 years.'' The Admiral has said here today that ``money 
has been squeezed out of the shuttle program.'' And I'm doing 
exact quotes from what you said, Admiral. You talked about how 
the program manager had made trades on the cost; how, looking 
ahead, that you should separate engineering and safety from the 
cost and schedule part of the evaluation. And you talked 
about--all leaders are responsible for the results--the 
Administrator, the White House, and Congress. You specifically 
stated that.
    So realizing that that has been part of the problem in the 
past, now I want to ask some very specific questions, Mr. 
Administrator, as we go forward. This is not partisan. The 
space program is not partisan. A lot of these questions have 
been addressed by Senator Hutchison, as well.
    I would like to know if you have had discussions--you or 
any of your immediate people--with the White House--OMB is part 
of the White House--about the increased expenditures that 
you're going to come to Congress to ask for.
    Mr. O'Keefe. We are pursuing an interagency discussion on 
the larger U.S. space exploration objectives. The result of 
that will yield a very specific answer to your question that 
will manifest in a request from the President in whatever 
period of time that takes.
    Senator Nelson. It's a request for supplemental that you're 
talking about.
    Mr. O'Keefe. No, sir. I'm not specifying exactly what form 
it will take, whether it's an amendment or a supplemental or 
part of a regular budget request. All that's being vetted now.
    Senator Nelson. Well, as the Admiral said, the leadership 
problems involved everybody in the past. So if we're going to 
fix this problem, the Congress is going to have to help you and 
the White House fix the problem. So we're going to need to know 
how much we're going to have to help you to fix the problem. So 
can you give us any kind of idea what we're talking about? 
Because right now decisions are being made in the 
Appropriations Subcommittee on the 2004 budget.
    Mr. O'Keefe. Indeed. And that process is underway. And as 
soon as we can get an answer, that's precisely what I have an 
obligation to come back to you and your colleagues to deliver. 
Yes, sir.
    Senator Nelson. OK. You said you had ongoing discussions. 
Have you had ongoing discussions in the range of a billion-and-
a-half dollars of return-to-flight additional monies?
    Mr. O'Keefe. We have had ongoing discussions. I really 
don't want to get into what the current state of play is or 
what the numbers might be, because they really run the gamut. I 
think, again, as I mentioned in response to Senator Brownback's 
commentary, the cost of this is going to depend on which 
options we choose. There are 29 recommendations, and a whole 
range of raise-the-bar objectives we're going to have to do. So 
each of those options is going to have a price tag. The answer 
to that very specific question will come from the total of how 
much it takes on the options you select for all 29 of those and 
every other issue contained in the raise-the-bar inputs that 
are equally important, in our judgment. So I can't give you an 
answer to that until we can do that math.
    Senator Nelson. Mr. Administrator, you have heard me be 
very critical of past administrations, both parties, on the way 
that they use budgetary sleight of hand over the years to get 
us into the fiscal condition that we are finding, where NASA 
has not given the specific money directed at safety. You've 
heard me talk about how the space shuttle budget and the Space 
Station budget were lumped together back in the 1990s, and then 
money was transferred around.
    Now, it is very much the responsibility of the Congress, as 
we look at your budgets, to know specifically what has 
happened. Now, for example, maybe you can share this with us. 
Of course, as Admiral Gehman said, not only have the budgets 
been flat with regard to the space shuttle, the budgets have 
actually--in real buying power, has been a 40 percent drop over 
10 years. And, indeed, where I see the difference in what the 
Administration has requested in 2003 for the space shuttle, 
roughly $3.2 billion, you would think it was an increase going 
to the 2004 request of three-point-nine. But, in fact, the 
institutional account, which includes a lot of the 
infrastructure that was $1.2 billion in the past is zeroed out. 
So a number of those institutional costs, including things like 
infrastructure, are part of that additional funding increase. 
So where is the increase in your 2004 request that specifically 
gets at the problem of safety and safety upgrades?
    Mr. O'Keefe. There is a budget line item within the shuttle 
program for Service Life Extension Program. Of that, we have to 
identify the prioritization that's underway, that was started 
before the accident, to begin to work through exactly what is 
the prioritization of selection of those upgrades and their 
timely implementation. So the answer to the question is, that's 
the funding stream that's there. It's not one year. It's in 
2004 and each successive year thereafter. There's a continuing 
funding stream that follows thereafter. As a consequence, this 
is an enduring program that we intend to put specificity to 
which upgrade implemented at which time based on which 
prioritization's set--and, again, informed by a lot of what we 
will learn as we implement these findings and recommendations.
    Senator Nelson. OK.
    Senator Brownback. Senator----
    Senator Nelson. I see my time is up.
    Senator Brownback. Senator Breaux?
    Senator Breaux. Thank you very much, Mr. Chairman. And, 
once again, thank you, Admiral, for a very fine report. And 
also thank you, Mr. O'Keefe, for the cooperative effort that 
you've shown in producing this report.
    I'd just ask you, with regard to the Lockheed Martin 
facility in Michoud, down in New Orleans, what kind of 
cooperation did you get, Admiral, in working with them and 
finding out what they did and everything else?
    Admiral Gehman. Senator, we got outstanding cooperation at 
Michoud. And, in particular, we did a lot of work down there, 
because we and the workforce at Michoud wanted to understand 
the properties of foam better than had been understood in the 
past. And, therefore, we asked them how to go about that, and 
they worked right alongside us in conducting--devising and 
conducting various experiments.
    And certainly the best commentary I can get--I can give you 
is the very--is the dissection of the already-built bipod ramps 
that we did. This showed some problems inside those bipod ramps 
that were unknown beforehand, and it took a considerable amount 
of courage on those people to help us do that.
    Senator Breaux. Did the separating of the foam from the 
external fuel tanks become an ``acceptable risk'' to NASA?
    Admiral Gehman. The categorization of ``separation of 
foam'' changed over the years. It migrated from a very, very 
serious category to a category that was not so serious, until 
it absolutely disappeared off the radar scope altogether. And 
yet it was the same physical event. And that is a--that's a 
mistake.
    Senator Breaux. It seems to me that we've had this 
separation of the foam from the very beginning, that we've had 
separation of foam--the first known incident was back in 1983. 
The most recent incident, other than this tragic accident, was 
only 3 months before this final accident. And your report 
points out that photos exist of foam separating for 65 of the 
79 missions, for which we had imaging that was available. And 
then the regulations of NASA on external tank debris limits 
said very clearly that ``no debris shall emanate from the 
critical zone of the external tank on the launch pad or during 
a set, except for such material which may result from normal 
thermal protection systems reception due to a set heating.''
    So we've had foam separation from the very beginning, 
throughout numerous launches, 65 of 75 that we saw pictures of, 
and as recent as 3 months before this incident, plus a 
regulation of NASA itself that says no debris separation is 
acceptable or should be allowed. And yet we were still 
launching shuttle missions knowing that this was continuing and 
knowing that we had a regulation that said, ``Don't allow this 
to happen.'' To me, that seems like a monumental breakdown. Can 
you comment on that?
    Admiral Gehman. Yes, sir. And it gets to the core of our 
recommendation to have an independent technical authority. The 
adjudication of whether or not the foam anomaly should be 
treated as a showstopper or not is made by a board, a board of 
engineers and managers, at the space shuttle program office. 
And the chairman of that board is the space shuttle program 
manager. So what we have is a case where the program manager, 
who has pressures on him for cost and schedule and manifests 
and lots of other things, having to determine whether or not 
this anomaly, which is now before the board for adjudication, 
whether or not he should make a big administrative deal out of 
this or make a small deal out of it. He knows that if he makes 
a big deal out of it, it might jeopardize or slow down future 
launches. He also knows that if he doesn't understand why this 
is happening, it'll cost a couple of million dollars to do some 
research and development, a couple of million dollars that he 
doesn't have, to find out why foam is doing this and what are 
the properties of it and how to fix it. And so this one person, 
who's got all these pressures on him, is making these 
decisions, and we found to be not a good system.
    Senator Breaux. I'm not sure how an outside board is going 
to help you on this particular degree of investigation or 
supervision, because we already knew it was happening. We have 
a rule that says ``no debris shall separate or shed,'' and we 
have numerous instances of launches where this was occurring. 
It was despite a rule that said, ``Don't let it happen.'' It 
was happening, and we were continuing to launch vehicles 
knowing it was happening. An outside board's going to tell us 
the same thing we already know.
    Mr. O'Keefe, was it a matter of cost? I mean, we have a 
regulation that says it should not happen. It was happening, 
and we were still launching knowing that it was happening as 
much as 3 months before this launch. Is the reason that it was 
allowed to continue a cost reason or was it simply people 
ignoring the regulations and ignoring what was happening?
    Mr. O'Keefe. I don't discount anything that Admiral Gehman 
has offered here. Again, I think those are all contributing 
factors. But I think there are two overriding reasons why this 
happened.
    The first rule, which you cite properly, exactly, very 
precisely, that was set is viewed in the agency and within the 
shuttle program as a ``goal.''
    Senator Breaux. As what?
    Mr. O'Keefe. A goal. Not a requirement, not a hard, fast 
specification. That's a fool's errand, heading down the road 
toward saying, ``Well, we'd like to achieve this,'' because 
that means we regularly rationalize why we would waive 
something we view as a goal, not as a requirement, as a 
specification. And that's a big mistake. So we've really got to 
look back. So that's the first issue, we really have to make 
that rule as firm as you just described it to have folks 
understand what is it that's inviolate that you simply cannot 
transcend, and where are those cases in which there's a desired 
objective that we have to continue to achieve, and find a way 
to get there, or else simply define this as a goal that's not 
achievable.
    And the second case is, what we're dealing with here is 
human nature. It is--like everything else in life, when you see 
something repetitively, it begins to fuel a rationalization of 
why that's not a problem.
    Senator Breaux. That's the cultural problem.
    Mr. O'Keefe. Yes, sir. They go hand in hand, but I think 
they have to be viewed compatibly. That human tendency we 
shouldn't be surprised to see in engineers when we see it in 
everyday life.
    We all know anytime you walk down a metropolitan street, 
anytime there is a homeless person sitting inside of a doorway, 
there is some number of people who are stunned by the fact that 
people walk by with absolutely no cognizance of the fact that's 
going on and have ignored it. If anybody came from a South 
Pacific paradise island and walked down that same street, 
they'd be aghast at seeing at humanity is being treated and 
would be amazed by how it is we, as a people, could tolerate 
that.
    And so it's that first occasion in which you see it that 
raises that interest level. We shouldn't be surprised when 
engineers act just like the rest of people do. When they see 
something repetitively, they begin to rationalize and begin to 
look at things and assume what it is they think they know about 
it. And in every other instance--and here's the big mistake, 
and Admiral Gehman and the Board pointed to this very, very 
clearly--this human nature said, ``If nothing happened 
previously, it probably won't happen again in the future.'' 
That's the wrong direction. It ought to go in the opposite 
approach, which they have said repetitively in this report, 
which is, ``We've got to prove that it's safe, not prove that 
it's not.'' And that's a point that really has to be driven 
home. As a consequence, we really have to take that same 
mindset and understand that while this is a human nature, human 
characteristic, that when we see things repetitively, that we 
take it for granted or begin to make assumptions or whatever 
else. It simply can't be tolerated here, because the stakes are 
too high.
    Senator Breaux. Well, we all know what happens when we 
assume.
    Mr. O'Keefe. Yes, sir. We do it in every discipline. Every 
single discipline in every walk of life. There are assumptions 
that are considered to be inviolate, and we've got to go back 
and question what those assumptions are. That's a real tough 
order, and it's one that's going to take us a lot of time and 
discipline.
    Senator Brownback. Senator Dorgan?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Admiral Gehman and Administrator O'Keefe, 
thank you for your testimony this morning.
    I was thinking, as I was sitting here, having read recently 
about the December 17, 1903, 59 second flight by the Wright 
brothers at Kitty Hawk, and in the 100 years since, we have had 
all manners of tragedy and exhilaration and success. And 
especially the space program, it seems to me, is the one aspect 
of going from leaving the ground to walking on the moon, the 
one aspect of walking on the edge of the envelope of technology 
and science, and one would expect that there will always be 
those who suffer the consequences of tragedy in those 
circumstances.
    But these tragedies that have occurred, this one 
especially, and the investigation you have completed tell us 
that there are certain things that can and should and must be 
done to prevent this from happening again. I mean, the fact 
that we're dealing on the edge of the envelope in science and 
technology does not in any way excuse tragedies that could have 
been prevented. And those heroes, as you've described them and 
as our country understands them to be, and that space--in the 
space shuttle should expect--should have expected then and 
certainly the future astronauts should expect everything 
possible is being done to provide for their safety.
    I want to ask you just about two issues quickly. And let me 
say, first of all, Admiral Gehman, I'm not a scientist or--I 
don't have the technical ability, perhaps, to have fully 
digested everything that your report includes, but it seems to 
me you have done a massively thorough job.
    Administrative O'Keefe, you have, I think, been a very 
stand-up Administrator here in these circumstances. I raised 
questions immediately about the proposition of whether NASA 
could create its own investigative board reporting to NASA. 
Others raised the same questions. You responded immediately by 
changing the Board's charter, removing references to the 
requirement that NASA oversee and review the Board's 
investigation and so on. I think the result of that, 
Administrator O'Keefe, gives us a report that does have true 
independence. And I think your working with it the way you have 
has been admirable, and I appreciate that leadership.
    I want to ask you----
    Mr. O'Keefe. Thank you, sir.
    Senator Dorgan.--a few things.
    Mr. O'Keefe. Thank you.
    Senator Dorgan. One, the requirement of the mission 
management team meetings every day during a shuttle flight, 
those--NASA regulations required such meetings every day, and 
my understanding is, from your report, it occurred--those 
meetings occurred only five times during the 16-day mission, 
and that discussions regarding the risks of the foam strike and 
the need for additional imagery, the request for imagery did 
not surface at all at these meetings that were held. So, 15 of 
these, or 16 of these meetings should have been held, I guess, 
and five of them were held; and at the five that were held, no 
discussions were developed in those meetings with respect to 
the request for imagery, despite the fact that beneath all of 
that these discussions were occurring. Can you describe that,--
perhaps both of you describe that for me. Is that part of the 
culture issue or part of the assumption issue that never came 
to the attention of those who should have been attending to it?
    Admiral Gehman. I'll start off by saying that the 
characterization is correct that you made. They held five MMT 
meetings in the 16-day flight. They're required to meet every 
day. We went back to the three previous missions and counted up 
the number of times the MMT met. And guess what? They don't 
meet every day. They've been meeting every third day for as 
long back as we can find records. And this is an example of 
culture at work.
    What happens is, you've got regulations, ``You've got to do 
it this way.'' Over a period of years and years and years, you 
kind of atrophy to where you do it this way. You're violating 
your own rules and regulations, and now you're sending all 
kinds of informal messages through the system, that it's OK to 
violate your rules and regulations. And then the top-level 
managers are doing it, ``We don't need to meet every day. We 
can meet every third day. It's good enough. E-mails are good 
enough.'' And we're not sure what e-mails count for. I mean, 
are e-mails official communications, or not?
    And so this is a classic case. So I wouldn't blame the fact 
that there were only five meetings on this mission as being 
causative. In other words, that's the way they've been doing it 
for years, so there's nothing different about it.
    Now, we made the point in our report that these meetings 
are very short, that some of them were 30 minutes long. The 
longest one was about 50 minutes long. And if they really had 
met every day, maybe they would have inquired into some of the 
more minute details of what was going on, and the subject of 
imagery might have come up. Pure speculation.
    Senator Dorgan. Mr. O'Keefe?
    Mr. O'Keefe. This report very clearly indicates that the 
rules and regulations that we have promulgated over the years 
are treated much the same way as stop lights in Naples; they're 
advisory. That's not tolerable. We cannot have that. We've got 
to go back and really look at what those operational procedures 
call for, and put in motion that which we believe. And that's 
part of the recommendations. That's part of our raise-the-bar 
input standards that we really have to implement and have a 
very clear understanding of how those operational rules will be 
promulgated and followed as we go through this.
    Because the intent behind the MMT, I think it's a good one, 
which is to coordinate views and positions, inputs, and then 
serve it up for decisionmaking. Well, there was an awful lot of 
stray voltage, is what this report indicates, of lots of 
communication going on, but to no particular point, in some 
cases, or to no particular decisionmaking alternative. That's a 
failure, really, to understand the purpose of the rules. And 
over time, I think, as the chairman of the Board observed, as 
well as all of his members, that, over time, if these things 
are viewed as advisory, what's the point? Why are they there? 
And that's something we've really got to take back as a strong 
indictment of the culture, and we've got to correct it.
    Senator Dorgan. And, Administrator O'Keefe, the reason I 
asked this specific question is the mission management team 
meetings--I don't know much about this at all, except that my 
assumption would be that ``mission management'' means just what 
it sounds like, managing the entire mission. And the fact that 
it didn't meet, not only in this shuttle flight, per 
regulation, every day, but in other shuttle flights, as well, 
but, more than that, the fact that when it did meet, it did not 
have the information flowing up to it of questions being raised 
in the organization about the question of whether they should 
have additional imagery to determine whether this foam had 
caused some damage to the wing. I mean, that's an 
organizational issue, it seems to me, and a structural issue of 
very significant----
    Mr. O'Keefe. Yes, sir.
    Senator Dorgan.--importance to the future of operations of 
NASA.
    Mr. O'Keefe. It's an important process question that must 
be resolved. No question.
    Senator Dorgan. And I wanted to ask, just briefly, a 
question about the next-generation launch vehicle. The return-
to-flight for the shuttle, one hopes, will occur at some point 
when we have satisfied all of these issues, and there's much 
work to be done. But my understanding is that the next-
generation launch vehicle is meant to complement rather than 
replace the shuttle. And as I read the investigative report, 
what you are saying, Admiral Gehman, is that this shuttle 
vehicle is yesterday's technology, it needs to be replaced 
rather than to have some other vehicle complement it at some 
point. And this gets back, I think, to the question that my 
colleague, Senator Nelson, was asking, as well. I mean, all of 
that costs an enormous amount of money. Replacing this launch 
vehicle completely will be a significant capital requirement, 
will it not?
    When we go back to return-to-flight with the space shuttle, 
will you, by that time, have made a decision about what your 
next-generation launch vehicle will be and whether it's going 
to fully replace it in a certain time period, or whether you're 
going to continue to try to complement it as your current plans 
would indicate?
    Mr. O'Keefe. Yes, sir. No, the short answer is yes, indeed. 
By the time we return to flight, we really have to have an 
answer to those questions, and we're in the process right now, 
very hard, of trying to resolve precisely what the composition 
of this will be, using as the baseline the integrated space 
transportation plan that we have presented to the Congress as 
part of this year's budget and was endorsed last year as part 
of the President's amendment in November.
    I'd ask Admiral Gehman to comment, though, on the 
characterization of this particular finding, because I read it 
a little differently. And rather than have us go through mutual 
interpretations here, let's ask the oracle to render exactly 
what was the intent behind the words that are used here, in 
terms of chapter 9 and where we should be going.
    Admiral Gehman. After we had studied this system in such 
great detail, the Board felt that we owed it to the public and 
to the United States and to the Nation to editorialize a little 
bit on the safety and the longevity and the life span of the 
shuttle, as we know it.
    In chapter 9, we opined that the Board was surprised and 
disappointed to find ourselves at--here we are at 2003, and we 
don't even have a replacement vehicle on the drawing boards. I 
mean, we're still debating. We're having a debate about the 
replacement vehicle. The Board found that the shuttle is not 
inherently unsafe. It can be operated for another number of 
years if the recommendations of this Board are followed through 
on. But the Board finds that operating it for another 20 years, 
or something, is beyond our--beyond the scope of our 
imaginations, and that sometime in the period of something like 
10 years from now, if you're going to operate it more than 
about 10 years, you're going to have to fully recertify and 
fully requalify the vehicle, which would be extraordinarily 
expensive.
    Senator Dorgan. From what I understand your answer to be, 
if you were an astronaut and if the recommendations of the 
Board were followed, you would not have difficulty joining the 
crew and flying the shuttle----
    Admiral Gehman. That's absolutely correct.
    Senator Dorgan. You would fly it yourself.
    Admiral Gehman. That's correct.
    Senator Dorgan. All right. I expect you won't get the 
opportunity, unless it's a----
    Admiral Gehman. I asked.
    [Laughter.]
    Mr. O'Keefe. Fortunately, that was not a finding and 
recommendation which we intend to accept and comply with. So, 
as a consequence, this is a debatable point, and I think he 
wants to head back to his sailboat.
    Senator Dorgan [presiding]. Well, this is obviously deadly 
serious business, and the work you have done has been long and 
labored, but I think you've accomplished much with it. And I 
think that the Chairman has done a real service for this 
Committee and for the Senate in calling this hearing today at 
this time. And you've done some significant benefit, I think, 
for this country and its space program in your testimony and in 
the work you've done prior to it.
    Let me just make one final comment and say that I come from 
North Dakota. I mean, I don't have a space launch pad in the 
middle of my state, as do Florida and Texas. But I really 
believe a society that stops exploring stops progressing. I 
think space exploration has been very important for this 
country. I want it to succeed. I want it to continue. I think 
the benefits are very substantial. But it will only succeed and 
continue if we understand that these tragedies require an 
enormous amount of work to understand what has happened and 
prevent it from happening again. Again, we're operating on the 
edge of the envelope of knowledge here, and some wonderful men 
and women--heroes, in my judgment--one of whom served with us 
here in the Senate, Senator Glenn, have been the pioneers in 
space travel. But I really think we're just at the beginning 
phase of understanding what the rest of our universe is and how 
to explore it and the benefits it can provide for us.
    So let me, again, thank the Chairman, who had to depart. 
And Senator Nelson has a final question, and then he will close 
out the hearing.
    Senator Nelson?
    Mr. O'Keefe. Senator, if I could just quickly observe----
    Senator Dorgan. Yes.
    Mr. O'Keefe.--on your point, I think you've got it spot-on. 
I mean, we are really in the equivalency here in space 
exploration of the age of sail. We have really just gotten 
started. As humankind has pursued this approach, it is very 
early in this process. And we've got a long way to go. And the 
expanse to what we could conquer by this really is just 
unimaginable in its expanse. And so, as a consequence, I think 
exactly the way you've characterized this is precisely the way 
I look at it. This is a daunting challenge, and we're at the 
very beginning of it. It's a tremendous responsibility, and 
it's one we take very seriously.
    Senator Dorgan. Thank you very much.
    Senator Nelson?
    Mr. O'Keefe. Thank you, sir.
    Senator Nelson [presiding]. Senator Dorgan, I want to pick 
up on your question about the next-generation vehicle.
    Mr. O'Keefe, you and I have talked many times, both 
privately and publicly, about how you could get some more money 
with regard to this next-generation vehicle. And one of the 
things we have discussed is that other agencies of the Federal 
Government could share in the expense of developing the 
technologies, that NASA would oversee the research and 
development, because those technologies would be of value to 
other agencies. Would you share with the Committee what is 
happening there, from a financial perspective in the future?
    Mr. O'Keefe. Well, the current ongoing effort we have 
underway--for example, on the X-37 technology demonstrator--is 
a good example of the kind of arrangement in which there are 
advantages that may be derived for multiple purposes. And so, 
as a consequence, NASA and the Defense Department--Air Force, 
particularly--are really examining exactly where that approach 
is going. We are financing with them the overall expense 
related to the launch and test phase of that particular 
technology demonstrator.
    The orbital space plane, which is, again, the follow-on 
effort that Senator Dorgan referred to--we are right now in the 
process of inviting the industry to respond to the 
requirements, which, again, can be summarized in one page. This 
is what we want it to do, and here are the capabilities we 
need. And there are a number of different technologies that are 
accented, if you will, that may have great application, or the 
Defense Department may go in on that, and we are engaging in 
discussions with them.
    But at this present time, on the orbital space plane, the 
objective is that we get about the process of finding a 
complementary asset that is crew-transfer vehicle in its 
orientation, that the Board observed in chapter 9, is the kind 
of thing we need to do, as expeditiously as possible. And we're 
now in the process of trying to figure out, How do you define 
``expeditious''? How quickly can it be done? What's it going to 
look like? And the industry is actively playing in that and 
working through that particular contractual effort that's being 
engaged right now. So we should have an answer to that in very 
short order.
    Senator Nelson. Do you expect that, in a net outflow of 
dollars from NASA, that that will require additional money to 
be budgeted in NASA?
    Mr. O'Keefe. It heavily depends on how soon we want to see 
delivery of the asset. As I mentioned in response to Senator 
Hutchison's comment, the amount that we have included in the 
NASA budget now before Congress in the 5-year stream, certainly 
is a resource allocation for an orbital space plane. It will 
not be sufficient to cover any delivery date that we may 
desire. To the extent we want to accelerate that, it isn't 
going to require more in aggregate. It may require more up 
front. And that's part of what we've got to sort through now. 
But, again, very thoughtful questions, commentary, and 
direction that you've given us at previous hearings, and along 
with other of your colleagues, prompted us to go back and look 
at that trade study, figure out what it's going to take in 
order to accelerate this. What are the approaches we would use 
in that regard? And in no instance have we made the 
requirements negotiable. We've made those the fixed constant, 
and everything else around it the variables that we may want to 
consider, in terms of accelerating its delivery or what other 
approach you'd use for crew transfer versus crew rescue and the 
like.
    Senator Nelson. And what timeframe, so that we can be 
expecting it, would you expect to come to the Congress for that 
kind of request?
    Mr. O'Keefe. To the extent that a request is required, it 
will be at the point in which the President determines that 
that's necessary, and that's exactly when it will be delivered.
    Senator Nelson. And is your answer the same, then, with 
regard to the additional expenses that will be required for the 
return to flight?
    Mr. O'Keefe. Again, those are more dependent. I've got to 
serve up to, I think, all--within our administration, a clear 
understanding of the options we choose for the 29 
recommendations and the raise-the-bar inputs, that are going to 
be equally important, and make a determination of how much we 
need in order to implement the options we've chosen. And that 
is going to--again, be a fulsome debate within the 
administration, and we're in the midst of that now.
    Senator Nelson. All right. I will just merely close out my 
comments and the considerable fine hearing that we've had and 
thank you both by saying you've read the Gehman report. The 
Gehman report said that the cost-cutting in the past has been 
part of the problem. That's what I said I was pleasantly 
surprised in seeing in the report, because I didn't anticipate 
that Admiral Gehman's Board was going to address cost. It is 
part of the problem, and they have identified it. And the long 
and short of it is, over four administrations--and this is 
bipartisan, both parties--that NASA has been, to use my word, 
``starved'' of funds. And it has always been that Office of 
Management and the Budget that has said ``nyet'' to NASA.
    I think everybody, including the Members of this Committee, 
that want, as Senator Dorgan so eloquently said, to see our 
space program continue to be robust and fulfill that desire of 
this Nation to explore, needs to know that you're going to be 
in there fighting in the internal fights in the administration, 
with OMB, and the White House, to make sure that the monies are 
there for NASA.
    Mr. O'Keefe. Yes, sir.
    Senator Nelson. That answer is good enough for me.
    [Laughter.]
    Mr. O'Keefe. Thank you, sir.
    Senator Nelson. Admiral Gehman, again, you've done a great 
service to the country, an enormous service. We thank you from 
the bottom of our hearts.
    No other questions from the Committee. The Committee is 
adjourned.
    [Whereupon, at 11:52 a.m., the hearing was adjourned.]
                            A P P E N D I X

                 Congressional Budget Office--U.S. Congress
                                      Washington, DC, July 29, 2003
Hon. Ted Stevens,
Chairman,
Committee on Appropriations,
United States Senate,
Washington, DC.

Dear Mr. Chairman:

    In response to your request, the Congressional Budget Office (CBO) 
has reviewed the past and current use of contractors by the National 
Aeronautics and Space Administration (NASA) to operate and maintain the 
Space Shuttle. CBO has also examined other cases in which the United 
States government uses contractors to perform technologically complex 
activities. CBO's examination focuses on selected activities that it 
judges to be of interest based on their content. While informative, 
these examples do not constitute a comprehensive review of 
technologically complex activities conducted by the government. Nor has 
CBO audited the performance of the government sponsors or contractors 
involved in these activities.
    The activities CBO examines span a broad range and include 
maintaining and upgrading weapons systems, designing and producing 
weapon systems, operating and maintaining government nuclear 
facilities, and designing nuclear weapons. The nature of the work 
contractors perform varies among these activities. In some cases 
contractors are designing and producing complete multi-element systems; 
in other cases the contractors maintain or install upgrades to specific 
government-owned hardware or operate facilities for the government. How 
the government defines the work that the contractors perform also 
varies--in some cases the government provides a set of detailed, 
comprehensive specifications; in others the government uses top-level 
performance measures, leaving some or many details to be defined by the 
contractors. The cost of the work varies from annual expenditures of 
tens of millions of dollars to billions of dollars. The contracts used 
are in some cases sole-source and in others competitively awarded; some 
contracts are cost plus fee, and some are firm-fixed price. The size of 
the government workforce performing oversight of the contractors varies 
from less than one hundred to more than a thousand people, and how that 
oversight is conducted also varies. Thus, many of the elements of the 
examples CBO has examined differ from the ways NASA uses contractors to 
operate the Shuttle. Nonetheless, all of the examples considered by CBO 
involve the government's use of contractors to perform demanding, 
technologically complex tasks, a situation that is not unique to NASA.
    The attachment to this letter describes CBO's review, which was 
prepared by Adebayo Adedeji, David Arthur, Eric Labs, Fran Lussier, and 
Robie Samanta-Roy of CBO's National Security Division. CBO's staff 
point of contact for this effort is J. Michael Gilmore.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
Attachment

cc: Honorable Robert Byrd
Ranking Member
                                 ______
                                 
                               Attachment

   NASA's Space Flight Operations Contract and Other Technologically 
         Complex Government Activities Conducted by Contractors

 Congress of the United States--Congressional Budget Office--July 29, 
                                  2003

Contents
Summary and Introduction

History of NASA's Use of Contractors to Operate the Shuttle

The Space Flight Operations Contract
        United Space Alliance
        SFOC Implementation
        SFOC Fees
        NASA's Oversight of the SFOC

Other Technologically Complex Government Activities
        The Coast Guard's Deepwater Project
        The Evolved Expendable Launch Vehicle
        The Future Combat System
        Lawrence Livermore National Laboratory
        Logistics Support for the B-2 Bomber
        National Missile Defense--National Team
        Refueling/Overhauls for Aircraft Carriers
        The Savannah River Site
        Trident Ballistic Missile Submarine Conversions to Perform 
        Conventional Missions

TABLES
1. Examples of Selected Technologically Complex Government Activities 
Conducted by Contractors

2. The Space Shuttle's Workforce, 1992 to 2002

FIGURE

1. Annual Budgets for the Space Shuttle
                                 ______
                                 
Summary and Introduction
    The space shuttle, formally known as the Space Transportation 
System (STS), was developed during the 1970s. The first operational 
shuttle, Columbia, was delivered to the National Aeronautics and Space 
Administration (NASA) in 1979 and first flew in 1981. The shuttle 
consists of a reusable orbiter manned vehicle, two reusable solid 
rocket boosters (SRBs), and an expendable external tank that holds the 
propellants used by the orbiter's three space shuttle main engines 
(SSMEs) during launch. The shuttle fleet initially consisted of four 
orbiter vehicles, and NASA initially planned for the STS to fly up to 
60 missions per year; however, at most, it has flown only eight 
missions annually. In 1986, the Challenger exploded on its ascent to 
orbit, and subsequently, the Congress authorized funds for a 
replacement vehicle. On February 1, 2003, the Columbia disintegrated as 
it reentered Earth's atmosphere. Currently, there are three remaining 
orbiters in the fleet--Atlantis, Discovery, and Endeavour--which have 
about 75 percent of their design life remaining, based on a goal of 100 
missions per orbiter.
    The space shuttle program continues to be one of the most 
significant individual portions of NASA's budget. In the President's 
budget for 2004, the space shuttle accounted for about 26 percent of 
NASA's total proposed funding.
    In 1995, NASA began planning to consolidate the numerous individual 
contracts it was using to operate the shuttle into a single contract 
let to a single contractor. In 1997, NASA initiated the first phase of 
that consolidation by contracting with United Space Alliance (USA), a 
limited liability company owned jointly by Boeing and Lockheed 
Martin.\1\ Under the Space Flight Operations Contract (SFOC), USA was 
to perform some--but not all--of the tasks associated with shuttle 
operations. Not all of the originally planned consolidation has 
occurred, although additional activities were subsequently incorporated 
under the SFOC in Phase II, which began in 1998. In particular, the 
propulsion elements, such as the external tank, SSMEs, and propellant 
portions of the SRBs, have not been incorporated under the contract. 
NASA still uses multiple contractors, albeit a lesser number than it 
used originally, to operate and maintain the shuttle.
---------------------------------------------------------------------------
    \1\ Limited liability companies (LLCs) have characteristics of both 
regular corporations and partnerships. Like the stockholders of regular 
corporations, the owners of LLCs are not personally liable for the 
debts and liabilities of the organization. However, an LLC can be taxed 
as a pass-through entity, like a partnership, so there is no corporate 
tax on its net income. The profits of the LLC are automatically 
included in the owners' income for tax purposes.
---------------------------------------------------------------------------
    At the request of the Chairman of the Senate Appropriations 
Committee, the Congressional Budget Office (CBO) has reviewed NASA's 
past and current use of contractors to operate the shuttle. CBO's 
review also describes other cases in which the U.S. Government uses 
contractors to undertake technologically complex endeavors like the 
shuttle's operation and maintenance (see Table 1). CBO's examination 
focuses on selected illustrative activities that it judges to be of 
interest on the basis of their content. Although selected to be 
informative, the examples do not constitute a comprehensive review of 
the government's technologically complex activities. Nor has CBO 
audited the performance of the associated contractors or government 
agencies.
    The activities that CBO examined span a broad range and include 
maintaining, upgrading, designing, and producing weapon systems; 
operating and maintaining the government's nuclear facilities; and 
designing nuclear weapons. The type of work that contractors perform 
varies among those activities. For example, in some cases, the 
contractors may design and produce complete multielement systems; in 
other cases, they may maintain or install upgrades to specific 
government-owned hardware or operate government facilities.
    How the government defines the work that the contractors perform 
also varies--in some instances, the government may provide a set of 
detailed, comprehensive specifications; in others, it may use less 
specific performance measures, leaving some or many of the details to 
be defined by the contractors. The cost of the work ranges from annual 
expenditures of tens of millions of dollars to billions. The contracts 
used are sometimes sole-source contracts and sometimes competitively 
awarded; some are of the cost-plus-fee type, and others feature firm 
fixed prices.

    Table 1.--Examples of Selected Technologically Complex Government
                   Activities Conducted by Contractors
------------------------------------------------------------------------
              Activity                      Government Department
------------------------------------------------------------------------
Coast Guard Deepwater Project        Department of Homeland Security
Evolved Expendable Launch Vehicle    Department of the Air Force
 Program
Future Combat System                 Department of the Army
Lawrence Livermore National          Department of Energy
 Laboratory
Logistics Support for the B-2        Department of the Air Force
 Bomber
National Missile Defense--National   Department of Defense
 Team
Refueling/Overhauls for Aircraft     Department of the Navy
 Carriers
Savannah River Site Program          Department of Energy
Trident Ballistic Missile Submarine  Department of the Navy
 Conversions to Perform
 Conventional Missions
------------------------------------------------------------------------
Source: Congressional Budget Office.

    The size of the government workforce that oversees the contractors 
for a given activity varies from less than 100 personnel to more than a 
thousand, and how that oversight is conducted may differ from activity 
to activity. For example, in some cases, the government may require 
contractors to prepare and submit reports according to government 
specifications; in other cases, it may use internal contractor-
generated reports.
    In sum, many of the features of the activities that CBO has 
examined differ from the elements that characterize NASA's use of 
contractors to operate the space shuttle. As is the case with the 
shuttle's operation, however, all of the examples involve the 
government's use of contractors to perform demanding, technologically 
complex tasks, a situation that is not unique to NASA.
History of NASA's Use of Contractors to Operate the Shuttle
    As noted earlier, from the early 1980s through 1996, NASA used 
numerous contracts with individual contractors to operate and maintain 
the space shuttle. In late 1994, NASA Administrator Daniel Goldin 
formed an independent team to propose approaches to improve the 
shuttle's management. The team was led by Christopher Kraft, the flight 
director during the early Mercury and Gemini missions; its membership 
was drawn from the aerospace industry and former NASA leaders. NASA 
stated that the panel's objective, set within the context of flat NASA 
budgets and initiatives to reduce the civil service workforce, was to 
maintain safety while significantly decreasing total operating costs.
    The Report of the Space Shuttle Management Independent Review, also 
known as the Kraft report, was released in February 1995, and its key 
recommendation was to place the shuttle's operations under a single 
prime contractor. In addition, the review team recommended that NASA 
reduce its involvement in and oversight of the operation of the space 
shuttle, transferring responsibility for daily operations to the 
contractor; and that various elements of the shuttle program, such as 
its processing before flight and its flight operations, be consolidated 
and reduced, along with the minimizing of NASA-contractor interaction. 
The Kraft report stated (p. 8): ``Many inefficiencies and difficulties 
in the current Shuttle Program can be attributed to the diffuse and 
fragmented NASA and contractor structure. Numerous contractors exist 
supporting various program elements, resulting in ambiguous lines of 
communication and diffused responsibility. This type of fragmented 
structure and contract management provides little promise for 
significant cost reductions.''
    In September 1995, NASA held a competitive bidder's conference for 
the Space Flight Operations Contract, which was attended by Boeing, 
McDonnell Douglas, Rockwell/Lockheed Martin/United Space Alliance, and 
a small business (BAMSI International). USA was to be a limited 
liability company, with ownership split equally between Rockwell and 
Lockheed Martin--which at the time together accounted for approximately 
69 percent of the dollar value of all shuttle-related prime contracts. 
In November 1995, the NASA administrator submitted a so-called 
Determination and Findings to the Congress, which concluded that it was 
in the public interest to award a sole-source contract for shuttle 
operations to USA. NASA awarded the SFOC effective October 1, 1996, and 
a total of 9,400 employees of Rockwell, Lockheed Martin, Unisys, and 
Allied Signal became employees of USA. In December 1996, Boeing 
acquired Rockwell and hence joined Lockheed Martin as an owner of USA.
    Prior to initiation of the SFOC, NASA had taken steps to make the 
shuttle program more efficient. Over a period of five years starting in 
1990, operational maintenance requirements and specifications decreased 
from 11,000 to 8,000, while the number of hours of labor devoted to 
processing each vehicle for a mission was cut from about 1 million to 
750,000. Operating costs were reduced by about 25 percent. The majority 
of the reductions in NASA's overall shuttle workforce and budgets since 
1992 occurred before the SFOC was initiated (see Figure 1 and Table 2).
    SFOC costs have varied over time because of changes in its content 
(for example, the incorporation of additional activities under Phase 
II) and variations in annual launch rates. The reductions in the space 
shuttle's budget and workforce that occurred from 1990 to 1995 are due 
in part to changes that NASA made in its requirements for inspecting 
the shuttle during processing. Before 1989, preparing the shuttle for a 
launch required contractor and government personnel to execute about 
44,000 government mandatory inspection points (GMIPs) and 325,000 
designated inspection points (DIPs). GMIPs are required by NASA in 
order for it to accept the work performed by its contractors on the 
shuttle. DIPs are inspections performed on work that if not 
accomplished correctly could result in the loss of life, a vehicle, or 
a mission or in a major schedule delay. Between 1993 and 1995, NASA 
introduced a ``structured surveillance'' program in which technicians 
were allowed to ensure the quality of their own work, primarily for 
non-single-point failure systems. That approach reduced GMIPs to around 
22,000 and DIPs to around 140,000 per launch. During the 1997-1998 
period, NASA made a concerted effort to further reduce nonessential 
inspections, which resulted in a drop in GMIPs to around 8,500.\2\ The 
DIP count, however, remained at 140,000.\3\
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    \2\ After wiring problems were found on Columbia in 1999, a few 
more GMIPs were added.
    \3\ As an example, before 1997, both NASA and contractor personnel 
performed postflight inspections of the thermal protection system, 
although NASA determined which tiles to repair and replace and 
performed the final preflight inspection. After the reduction in 
inspections, USA conducted the postflight inspection and determined 
which tiles to repair and replace. NASA then performed the final 
preflight inspection. In this case, the contractor performed the same 
number of inspections, but NASA was able to eliminate one set of 
inspections.
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Figure 1. Annual Budgets for the Space Shuttle

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Source: Congressional Budget Office based on data from the National 
Aeronautics and Space Administration.

    Notes: SFOC = Space Flight Operations Contract. About 10 percent of 
total SFOC costs are for work related to the International Space 
Station.

    This figure does not include salaries for NASA's civil servants or 
overhead.
The Space Flight Operations Contract
    The SFOC (formally known as NAS 9-20000) between NASA and the 
United Space Alliance, is a cost-plus-fee contract. According to NASA, 
the SFOC is a``completion form'' contract under which the contractor is 
responsible for performing a specific set of tasks defined in a 
statement of work that is part of the contract.
    The value of the original contract was $6.94 billion and the period 
of performance was from October 1, 1996, through September 30, 2002, 
with two two-year options. The first of the two options has been 
exercised, for a cost of $2.9 billion, and will expire in September 
2004. The second option would extend the contract through September 
2006. NASA also has two other shorter-term options under consideration 
that would extend the contract through December 2004 or March 2005. The 
total value of the contract to date, including shuttle upgrades and 
other annual authorizations, is $12.8 billion.

                              Table 2. The Space Shuttle's Workforce, 1992 to 2002
----------------------------------------------------------------------------------------------------------------
                     1992    1993    1994    1995    1996     1997     1998     1999     2000     2001     2002
----------------------------------------------------------------------------------------------------------------
NASA Employees       4,000   3,800   3,300   3,066   2,650    2,196    1,954    1,777    1,786    1,759    1,724
 Associated with
 the shuttle
 program
Associated with       n.a.    n.a.    n.a.    n.a.    n.a.    1,604    1,252    1,260    1,251    1,219    1,191
 the SFOC a
SFOC Contractor       n.a.    n.a.    n.a.    n.a.    n.a.   12,207   11,989   11,820   12,859   13,478   12,958
 Personnel a
----------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office based on data provided by the National Aeronautics and Space Administration.
 
Notes: Not all personnel who work on the shuttle program do so full-time. The numbers of government personnel in
  the table denote full-time equivalents assigned to the program.
 
SFOC = Space Flight Operations Contract; n.a. = not available.
 
a The SFOC was initiated in 1997. CBO was unable to obtain comprehensive data on the numbers of NASA civil
  servants and of contractor personnel associated with overseeing and executing the individual contracts that
  NASA used to operate the space shuttle before the SFOC's initiation.

United Space Alliance
    Under the SFOC, USA has overall responsibility for processing 
selected shuttle hardware, which includes:

   Performing inspections and modifications of the orbiter,

   Recovering the expended solid rocket boosters,

   Assembling the sections that compose the SRBs,\4\
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    \4\ USA does not manufacture the SRB propellant sections (or the 
external tank or SSMEs). Rather, the contractor receives the SRB 
sections at the Kennedy Space Center, assembles them to form two 
boosters, and attaches the boosters to the shuttle's external tank.

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   Attaching the external tank to the orbiter, and

   Installing the space shuttle main engines within the 
        orbiter.

    In addition to processing shuttle hardware, USA is responsible for 
mission design and planning, astronaut and flight controller training, 
design and integration of flight software, payload integration, flight 
operations, launch and recovery operations, vehicle-sustaining 
engineering, flight crew equipment processing, and operation and 
maintenance of shuttle-specific facilities such as the Vertical 
Assembly Building, the Orbiter Processing Facility, and the launch 
pads. USA also provides spare parts for the orbiters, maintains shuttle 
flight simulators, and provides tools and supplies, including food, for 
shuttle missions. About 10 percent of the value of the SFOC pays for 
shuttle-related activities that support the International Space 
Station, including training, mission planning, mission operations, and 
flight equipment and supplies.
SFOC Implementation
    In 1995, prior to the SFOC's initiation, NASA had 85 separately 
managed contracts with 56 contractors. Those contracts were either 
fully or partially funded by the shuttle program and were used to 
operate and maintain the shuttle fleet. In 1996, spending on those 
separate contracts totaled about $3.14 billion. Phase I of the SFOC, 
begun in 1997, consolidated 12 of the contracts (plus two smaller 
subcontracts), which had a total cost of about $1.36 billion in 1996. 
In July 1998, Phase II of the SFOC was initiated to incorporate the 
activities associated with 15 additional contracts and subcontracts. 
Those activities included processing of the SRB and maintenance of 
flight software and equipment used by the flight crew. As a result of 
Phase II, 1,375 employees of United Space Boosters Inc., Lockheed 
Martin, and Boeing became employees of USA.
    Originally, Phase II was planned to incorporate contracts for 
maintaining and upgrading the shuttle's main engines, the external 
tank, and the propellant sections of the SRBs. However, responsibility 
for those activities has not been added to the SFOC. According to NASA, 
part of the rationale for excluding those activities was the agency's 
philosophy that it should continue to separately manage contracts that 
involved significant development activities. To support the separate-
management approach, some NASA officials also cite the results of a 
study of military space-launch programs, called the Broad Area Review 
(BAR), which was conducted by the Air Force in 1999. The Air Force 
commissioned the BAR after a number of launch vehicle failures and near 
failures. The review's key finding was that the Air Force had been 
exercising insufficient management and engineering oversight of its 
contracts for space launch vehicles.
SFOC Fees
    The overall fee that USA has earned to date amounts to about 9 
percent of the contract's cost measured on an annual basis. The 
contract establishes several categories of fees that USA can earn, 
which are based on a variety of criteria, both objective and 
subjective. The criteria include meeting specific schedules for 
performing key activities associated with preparing the shuttle for 
launch; executing a safe, successful mission; and reducing the costs of 
operating the shuttle.
    NASA states that the fee system is structured to meet the program's 
goals, which are, in order of priority, (1) flying safely; (2) meeting 
the launch manifest--that is, launching the shuttle and its payloads on 
schedule; (3) ensuring that the shuttle can be operated and supported 
throughout its expected design life; and (4) improving the overall 
shuttle system. Under the contract, USA can earn no fee for cost 
reduction unless it exceeds expectations for safety. And if NASA 
determines that USA is responsible, through its acts or omissions, for 
the loss of an orbiter or for loss of life during the period from the 
beginning of final launch preparations through the return of the 
orbiter, USA will lose all fees for the six-month performance period in 
which the loss occurs.
NASA's Oversight of the SFOC
    Under the SFOC, NASA has the following responsibilities and roles:

   Maintaining ownership of the shuttles and all other assets 
        of the shuttle program;

   Managing the overall process for ensuring the shuttle's 
        safety;

   Developing requirements for major upgrades to all assets;

   Participating in planning shuttle missions and in directing 
        launches and executing flights;

   Performing surveillance and audits and obtaining technical 
        insight into contractor activities;

   Deciding whether to ``commit to flight'' for each mission; 
        and

   Managing government-to-government relations, including 
        international interactions.

    NASA divides management and oversight of the shuttle program among 
three major centers:

   The Johnson Space Center (JSC) houses the Shuttle Program 
        Office and is the primary site for the astronauts' activities, 
        including the selection of flight crews, training and support 
        (under the SFOC), and extravehicular activity. In addition, JSC 
        has primary responsibility for such SFOC-related activities as 
        shuttle flight operations, software, and equipment processing; 
        shuttle integration; and the orbiter.

   The Kennedy Space Center has primary responsibility for 
        processing, launch, and landing operations, all of which are 
        conducted under the SFOC.

   The Marshall Space Flight Center is primarily responsible 
        for all of the shuttle's propulsion elements, including the 
        external tank, the shuttle's main engines, and the SRBs. The 
        boosters actually have two components: the propellant portions 
        (the reusable solid rocket motor) and the nonpropellant 
        portions, which are also referred to as the SRB. Of those 
        elements, only the nonpropellant portion is currently under the 
        SFOC.

    Within NASA and located at the three centers described above are 
technical management representatives (TMRs), also referred to as 
subsystem managers, who are responsible for executing the tasks 
associated with NASA's roles and responsibilities. Within USA, there 
are associate program managers, each of whom has a counterpart TMR 
within NASA.
    As a result of the SFOC, some of NASA's tasks and positions 
associated with shuttle oversight and management were moved to USA. 
They include 425 tasks and 25 positions associated with flight 
operations; 305 tasks (no positions) associated with ground operations; 
and 38 tasks (no positions) associated with integrated logistics.
    Before the SFOC, NASA's subsystem managers were the primary focal 
point for all technical issues relating to a shuttle subsystem. Those 
managers were aware of and took part in day-to-day decisionmaking 
regarding any technical problems that arose with the shuttle subsystems 
for which they were responsible. Under the SFOC, the NASA TMRs 
participate less in daily decisionmaking. They are responsible 
primarily for overseeing changes in the design of shuttle subsystems 
and processing, and for resolving anomalies that occur during shuttle 
flights.
Other Technologically Complex Government Activities
    The remainder of this paper examines examples of other activities 
that the government undertakes by using contractors. The activities 
span a broad range of effort, and they vary in their annual costs, the 
types of contracts used, the incentives the contracts contain, how work 
to be done under the contracts is defined, and how the government 
oversees the contractors' work. Thus, many of these activities have 
features that differ from those characterizing NASA's use of 
contractors to operate the space shuttle. However, all of the 
subsequent examples involve the government's use of contractors to 
perform technologically complex tasks.
The Coast Guard's Deepwater Project
    The Coast Guard is undertaking a project, which it calls Deepwater, 
to redesign the way it performs its missions in deepwater regions--that 
is, regions that are 50 or more nautical miles from the U.S. coastline. 
That effort involves determining the numbers and types of ships, fixed-
wing aircraft, helicopters, and surveillance sensors that the service 
will need for such missions for the next 30 years.
    The first phase of the Deepwater project was a competition 
conducted in 1997 in which three contractor teams were each awarded a 
$21 million contract to design a Deepwater ``system'' for the Coast 
Guard. After judging the results, the Coast Guard selected Integrated 
Coast Guard Systems--a joint-venture limited liability company formed 
by Northrup Grumman and Lockheed Martin--to build the Deepwater system. 
That single contractor is to provide the Coast Guard with all of the 
elements that compose the Deepwater system--ships, aircraft, 
helicopters, and sensors--over a 30-year period. The contractor will 
also provide whatever other systems are needed to ensure that the 
system is integrated--that is, that all Deepwater elements can 
communicate with each other and exchange needed information.
    According to the Coast Guard, no other government agency has ever 
attempted to replace its entire set of core mission systems by using a 
single contractor instead of a piecemeal approach. Moreover, in 
contrast to past projects in which detailed specifications were 
provided to a contractor that then supplied equipment that matched 
them, the Coast Guard conducted the Deepwater design competition by 
employing a set of less detailed measures of performance.
    After Integrated Coast Guard Systems delivers the ships, aircraft, 
and other assets that compose the Deepwater system and following a 
period of transition, the Coast Guard will use its personnel to operate 
the equipment and perform minor maintenance. Currently, the service 
employs contractors to perform major maintenance on selected equipment, 
and it plans to continue that practice. In general, the Coast Guard has 
not yet determined the role that Integrated Coast Guard Systems will 
play in maintaining the Deepwater elements. However, it has decided not 
to purchase the high-altitude unmanned aerial vehicle that is part of 
the Deepwater system and that will be used to perform surveillance 
missions but rather to lease it from, and have it maintained by, the 
contractor.
    The Coast Guard has divided the remainder of the Deepwater project 
into six five-year contracts characterized as indefinite-delivery, 
indefinite-quantity contracts.\5\ Their total potential value is $14 
billion to $15 billion. The first five-year contract period has a 
potential value of $3 billion to $5 billion.
---------------------------------------------------------------------------
    \5\ The contracts do not specify the exact numbers and types of 
items that the contractor must provide to the Coast Guard during each 
five-year period. Those details will be decided yearly and will depend 
on a number of factors, including available budgetary resources.
---------------------------------------------------------------------------
    Under the terms of those contracts, the Coast Guard will develop a 
set of task and delivery orders each year that describe the work that 
Integrated Coast Guard Systems should accomplish and the equipment that 
it should deliver. Those task and delivery orders can be structured as 
either cost-plus-fee or firm-fixed-price arrangements. The contractor 
may also receive an additional annual award fee if the work performed 
on all task and delivery orders is deemed satisfactory by the Coast 
Guard.
    At the end of the five-year period of each contract, the Coast 
Guard will evaluate the contractor's performance. The most important 
determinants of the service's overall satisfaction with the 
contractor's efforts will be whether operational effectiveness has been 
increased and total ownership costs have been reduced. Although the 
Coast Guard has a once-a-year opportunity to ``walk away'' from the 
contract, the contractor is bound to fulfill its contract 
responsibilities for the full five-year term so long as the Coast Guard 
wants it to continue doing the work. If, at the end of the five years, 
either side no longer wants to work with the other, either party can 
terminate the relationship.
The Evolved Expendable Launch Vehicle
    According to the Air Force, the Evolved Expendable Launch Vehicle 
(EELV) program is a new approach to obtaining the capability to launch 
satellites into orbit. With the EELV contract, the Air Force states 
that it is purchasing, for a firm fixed price, not actual launch 
vehicles but commercial launch services supplied by a contractor that 
is responsible for ensuring that the services are provided 
successfully. In a further departure from traditional practices, the 
Air Force will not pay all of the contractors' costs to design and test 
the new EELVs. Instead, the service has required the contractor to 
share in those development costs because of the potential commercial 
market for the launch vehicles developed under the EELV program. 
(However, the originally anticipated market has not as yet 
materialized.)
    To initiate the EELV program, the Air Force executed two ``other 
transaction'' authority agreements with Boeing and Lockheed Martin in 
October 1998.\6\ Underthose agreements, the government provided $500 
million to each contractor to develop a family of EELVs. According to 
the Air Force, each contractor has also spent from $1.5 billion to $2 
billion of its own funds on EELV development.
---------------------------------------------------------------------------
    \6\ ``Other transaction'' agreements are financial assistance or 
acquisition arrangements other than procurement contracts, grants, or 
cooperative agreements. The ``other transaction'' authority contained 
in title 10, section 2371, of the U.S. Code permits the military to 
enter into such arrangements to carry out basic, applied, and advance 
research projects without regard to statutes or regulations that 
constrain the use of contracts, grants, or cooperative agreements.
---------------------------------------------------------------------------
    Currently, the EELV program comprises two families of launch 
vehicles, the Delta IV and the Atlas V; there are multiple versions of 
each vehicle to meet the demand for medium-, intermediate-, and heavy-
weight payloads. The first Lockheed Martin vehicle, the Atlas V, flew 
on August 21, 2002, and the first Boeing vehicle, the Delta IV, flew on 
November 20, 2002. Both flights were successful but carried commercial 
payloads. The first Air Force payload was successfully launched by a 
Delta IV on March 10, 2003.
    Rather than eventually selecting a single contractor, the Air Force 
expects to engage continually in competitions between Boeing and 
Lockheed Martin to procure launch services using EELVs. The Air Force 
states that this continual competition is needed to ensure that the 
United States always has the means available to launch spacecraft.
    In 1998, the Air Force awarded initial launch services contracts 
for 26 EELV launches: 19 Boeing Delta IV launches, for a total of $1.5 
billion, and seven Lockheed Martin Atlas V launches, for a total of 
$506 million. The Air Force anticipates awarding a second set of 
contracts in the summer of 2003 for up to four launches and a third set 
of contracts in the fall of 2003 for up to 18 launches. Recently, as a 
penalty for Boeing's unlawful possession of a competitor's proprietary 
information, the Air Force reduced the initial Boeing contract to 12 
launches and increased the initial Lockheed Martin contract to 14 
launches. In addition, the Air Force also disqualified Boeing from 
competing for three additional launches and awarded them to Lockheed 
Martin.
    The Air Force's EELV program office is located in Los Angeles, with 
additional personnel located at both the eastern (Cape Canaveral) and 
western (Vandenberg Air Force Base) launch ranges. The program office 
currently employs 76 Air Force personnel to manage the EELV program. 
Lockheed Martin and Boeing together have approximately 3,600 employees 
to manufacture and launch their respective versions of the EELV.
    Four key performance parameters have been established for the EELV 
program: mass-to-orbit specifications, reliability, standard payload 
interface, and a standard launch interface.\7\ Under the launch 
services contracts, a launch service is deemed complete and accepted 
with the intentional ignition of the first-stage engine and the first 
intentional detonation of the first-stage tie-down of the launch 
vehicle. In other words, the contractors are responsible for ensuring 
that an EELV successfully ignites and begins to lift off the launch 
pad--but not for ensuring that the Air Force spacecraft it carries 
successfully reaches orbit.
---------------------------------------------------------------------------
    \7\ There are seven mass-to-orbit standards that specify given 
masses to given orbits--for example, the launch vehicle must get 17,000 
pounds of payload into a low Earth orbit with a certain inclination. 
The vehicle's design reliability must be at least 98 percent. The Air 
Force has specified a standard interface for accommodating payloads 
that each vehicle must be capable of providing. The launch interface 
requirement states that medium, intermediate, and heavy versions of a 
launch vehicle must be able to be launched from the same pad.
---------------------------------------------------------------------------
    There are no incentive or award fees in any EELV program contract. 
According to the Air Force, the contractors are expected to launch 
successfully in order to increase their competitiveness in the 
marketplace. Consequently, the government does not have penalty clauses 
associated with the EELV contract in the event of the loss of a 
vehicle. (Rather, the penalty to the contractor would be the potential 
loss of future business from government sources and commercial firms as 
a result of the failure.) Both contractors, in what is known as the 
``best-customer clause,'' guarantee that they will not sell a 
commercial launch service using an EELV for less than the cost that the 
government has negotiated for a similar launch service.
    The Air Force states that it has relied heavily on ``insight'' 
rather than ``oversight'' in conducting the EELV program. For example, 
the service notes that it has not required the contractors to provide 
the government with special or unique documentation or data. Instead, 
the government has relied on the same documentation that the 
contractors use to manage their respective programs.
The Future Combat System
    Traditionally, in developing battlefield weapon systems, the Army 
has established separate programs for each system--such as the Abrams 
tank or Comanche helicopter--relying on a prime contractor to develop 
each one. But in the case of the Future Combat System (FCS), the Army's 
next generation of weapons, the service is using a nontraditional 
approach that assigns substantial authority to a single contractor. 
That contractor, referred to as the lead system integrator (LSI), will 
develop and integrate 18 different systems--new families of manned and 
unmanned ground vehicles and unmanned aerial vehicles--to replace the 
service's current fleet of tanks, armored vehicles, self-propelled 
howitzers, and various other systems.\8\ The Army has contracted with 
Boeing--which has teamed with Science Applications International 
Corporation--to act as the LSI and to coordinate the development, 
testing, and production of all 18 systems, their associated sensors, 
and the communications networks to connect them all.
---------------------------------------------------------------------------
    \8\ The total cost for equipping all of the Army's maneuver 
brigades with FCS could be as high as $300 billion.
---------------------------------------------------------------------------
    According to the Army, the LSI will ``develop, manage, and execute 
all aspects'' of the program, acting as the government's industry 
partner.\9\ In that role, the LSI will undertake many of the activities 
that the Army would have performed under a more traditional approach. 
Those activities include issuing requests for proposals (RFPs); 
developing performance requirements for FCS as a whole as well as for 
individual systems and subsystems; evaluating responses to the RFPs; 
and, with the Army's concurrence, awarding the contracts to develop the 
individual systems. The LSI will also design tests, analyze system 
performance trade-offs, and manage production. The Army has used 
``other transaction'' authority agreements in executing contracts for 
FCS and states that it believes that ``FCS is larger and more complex 
than traditional developments, and thus requires an alternative 
procurement approach.'' As a consequence, the Army chose to rely on an 
LSI ``after studying lessons learned by the National Aeronautics and 
Space Administration's (NASA) space station and the Missile Defense 
Agency's (MDA) Ballistic Missile Defense Systems approaches to 
designing and developing extremely large and complex systems of systems 
projects.'' \10\
---------------------------------------------------------------------------
    \9\ Department of the Army, ``The Lead System Integrator (LSI) 
Agreement for the Future Combat System (FCS) Program,'' Army 
Information Paper (June 18, 2003), provided to the Congressional Budget 
Office.
    \10\ Ibid.
---------------------------------------------------------------------------
    During the concept and technology development stage from March 2002 
through June 2003, Boeing was responsible for developing, delivering, 
updating, and maintaining an overarching architecture for all of the 
systems included in FCS; supporting the Army's Training and Doctrine 
Command in refining operational concepts and requirements; identifying 
and evaluating potential concepts and technologies; conducting 
demonstrations; and developing performance specifications and the 
documentation to support a successful transition to the system 
development and demonstration (SDD) phase of the project. As part of 
that effort, Boeing issued 23 RFPs for development tasks to be 
performed during SDD and evaluated the responses in preparation for 
awarding the contracts in the fall of 2003. For work performed during 
the concept and technology development stage, the government agreed to 
pay Boeing a total of $154 million.
    The government recently exercised its option under the concept and 
technology development contract to extend its agreement with Boeing to 
include the system development and demonstration phase. Activities to 
be performed by the LSI during that phase include managing the design, 
manufacture, and testing of prototypes; evaluating whether the systems 
are ready for production; identifying and performing the tests and 
producing the documentation needed to enter the next phase of the 
acquisition process; providing detailed cost estimates and cost 
reports; and supporting Army personnel who will use the equipment once 
it is fielded. Boeing, in conjunction with government representatives, 
is also responsible for awarding contracts for the 23 systems and 
subsystems that were defined in the concept and technology development 
phase. The SDD phase of the FCS program is estimated to extend through 
December 2011, with the total value of the contract currently set at 
$14.9 billion and annual funding levels ranging from $1.3 billion to 
$4.3 billion.
    Although the Army signed a contract with the LSI on May 30, 2003, 
to perform the work described above, the final details have yet to be 
settled. In fact, one of the tasks to be completed during the first 
seven months of the contract is to establish the fee structure and 
criteria that will apply to the remainder of the contract (that is, 
from early 2004 until December 2011) and to reconcile Boeing's 
projected expenditures with the government's projected funding and the 
program's scope of work.\11\ Other tasks that Boeing must perform 
include updating the technical specifications; demonstrating command-
and-control software; evaluating or negotiating all 23 subcontracts for 
which RFPs were let and fully defining at least 85 percent of them; and 
reaching agreement on the staffing of integrated product teams (IPTs), 
which include both contractor and government personnel.
---------------------------------------------------------------------------
    \11\ Department of the Army, Agreement Between the Boeing Company 
and U.S. Army Tank-Automotive and Armaments Command Concerning Future 
Combat System (FCS) System Development and Demonstration (SDD) Phase, 
DAAE07-03-09-F001 (May 30, 2003).
---------------------------------------------------------------------------
    A total of $130 million has been allocated to this effort for 2003, 
with an additional $60 million planned for 2004. Of that total $190 
million, a base fee of $10 million has been set aside for Boeing with 
an additional $15 million available in incentive fees. The incentive is 
structured to motivate Boeing to complete the tasks described above--
and in particular to establish the final details of the contract--
before the end of December 2003.\12\
---------------------------------------------------------------------------
    \12\ Starting on December 30, 2003, and every 30 days thereafter, 
the $5 million incentive fee for working out the final details of the 
contract will be reduced by $800,000. If the contract is not fully 
defined by the end of May 2004, Boeing will not receive any of the $5 
million incentive fee.
---------------------------------------------------------------------------
    Although the government will retain ultimate control of the FCS 
effort, the program's management structure--in which the LSI and the 
Army form integrated product teams--gives the contractor extraordinary 
responsibility and authority. The agreement signed in May 2003 
envisions IPTs at several levels. The highest would be the program 
management team cochaired by the LSI program manager and the Army's FCS 
program manager. Below that would be 14 second-tier IPTs, each of which 
would also be cochaired by representatives of both the LSI and the 
government.
    Decisions by IPTs are expected to be reached by consensus between 
the cochairs, but the contract also includes a mechanism for settling 
disputes. In cases in which consensus cannot be reached, the decision 
of the LSI cochair will prevail. Government cochairs can initiate a 
request for review of decisions with which they do not concur but must 
do so in writing to the next-higher-level IPT and propose an 
alternative approach to the disputed decision as well. The same 
hierarchical rules apply to the higher-level IPTs--that is, the LSI 
cochair has the final say. The highest decisionmaking authority for an 
issue raised through this process is the LSI program manager. However, 
any appeal that the LSI program manager does not support must be 
reported to the Army's FCS program manager. Ultimately, it is the 
Army's FCS program manager who has not only the final word but also the 
authority to override the LSI program manager's decision and direct 
that changes be made to the program.
Lawrence Livermore National Laboratory
    Since 1952, the Department of Energy (DOE) and its predecessors 
have contracted with the University of California for management and 
operations (M&O) of the Lawrence Livermore National Laboratory (LLNL). 
Under the contract, the university is responsible for managing, 
operating, and staffing the lab; accomplishing the missions assigned to 
it; and administering the M&O contract with DOE.
    LLNL was established in 1952 as a facility dedicated to research on 
and development of nuclear weapons designs. The lab encompasses two 
sites covering a total of almost 8,000 acres; it has 600 buildings and 
employs about 5,400 personnel. Its current missions include ensuring 
that the Nation's nuclear weapons remain safe, secure, and reliable; 
acting as a steward of U.S. nuclear weapons through activities ranging 
from dismantling weapons to remanufacturing the enduring stockpile; 
ensuring the availability and safe disposition of plutonium, highly 
enriched uranium, and tritium; assisting in remediation and reduction 
of wastes from the nuclear weapons complex; and helping to deter, 
detect, and respond to the proliferation of unconventional weapons. 
DOE's total obligation to the university in 2002 for managing and 
operating LLNL was $1.6 billion.
    The ultimate responsibility for executing the contract lies with 
the regents of the University of California, who have delegated 
management and oversight authority to the university system's 
president. The president, in turn, appoints the director of the lab 
(subject to the regents' and DOE's approval). The university oversees 
the three national labs that it manages for DOE (the other two are Los 
Alamos National Lab and Lawrence Berkeley National Lab) through the 
office of the vice president for laboratory management as well as 
through a regents' committee, a president's council, and two additional 
senior-level councils and committees.
    DOE oversees operations at LLNL through its Oakland Field Office, 
which maintains about 140 personnel at the LLNL site. The assistant 
manager for National Nuclear Security Administration (NNSA) operations 
in the Oakland Field Office heads the LLNL site office and reports to 
the manager of the Oakland office. DOE's representatives at the LLNL 
site office are responsible for ensuring that nuclear activities at 
LLNL are carried out safely and in accordance with current laws and 
regulations. In particular, the NNSA staff at the site office oversee 
nuclear research, nuclear safety, and related matters, and the 
environmental management staff at the field office oversee 
environmental restoration and waste management activities, including 
the construction of a new waste treatment facility. Thus, the lab must 
gain approval from its DOE overseers before proceeding with new 
construction or operations.
    The existing contract between DOE and the University of California 
was signed in January 2001 and extends through September 2005. Because 
LLNL is a federally funded research and development center, the 
contract for its management and operation is exempt from competition 
and is merely an extension of the original 1952 contract between DOE 
and the university. However, the current version of the contract 
incorporates revisions that reflect DOE's updated acquisition 
requirements. The contract also includes performance objectives and 
measures that DOE began to include in its contracts in the mid-1990s in 
response to widespread calls for reform.
    The LLNL contract, as revised for 2003, includes nine performance 
objectives, each of which is supported by as many as eight performance 
measures.\13\ Performance objectives are negotiated annually, before 
the start of the fiscal year, with performance tracking and reporting 
carried out by the contractor throughout the year. Evaluations and 
assessments of the university's progress based on the performance 
objectives and measures are conducted annually by the university and by 
DOE, and part of the compensation that the university receives for 
managing LLNL is an adjustable fee based on those evaluations. In 2003, 
for example, an adjustable fee based on performance could account for 
$4.3 million of the $7.1 million that the university may receive in 
compensation unrelated to the direct costs of managing and operating 
LLNL. (The remaining $2.8 million is fixed and covers the university's 
indirect costs.)
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    \13\ Those standards are spelled out in Modification No. M456, 
Supplemental Agreement to DOE Contract No. W-7405-ENG (revised March 4, 
2003)--specifically, in Appendix F, Standards of Performance. One 
example is the performance objective to use the university's strengths 
to recruit, retain, and develop the workforce. The university's 
progress in meeting that objective is to be judged on the basis of two 
performance measures: first, providing the skills necessary to enhance 
the science base by implementing recruiting and retention strategies; 
and second, implementing leadership and management development programs 
aligned with workforce planning and diversity objectives. Another 
example of a performance objective is the one for maintaining a secure, 
safe, environmentally sound, effective and efficient basis for 
operations and infrastructure. That objective is supported by eight 
performance measures, of which developing a long-term plan with DOE to 
reduce inventories of surplus and excess special nuclear material and 
onsite waste is an example.
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Logistics Support for the B-2 Bomber
    Contractors are significantly involved in certain support 
activities for B-2 bombers, specifically aircraft maintenance, aircraft 
modifications, and training. In comparison, Air Force units perform 
mission planning and payload preparation. Contractors provide some 
assistance in those latter two activities (for example, by helping keep 
automated mission planning tools up to date and functioning), but the 
Air Force considers the planning of strikes and the loading of 
munitions on the bombers to be inherently military tasks that should be 
performed by Air Force support squadrons and by the Air Force personnel 
who compose the bomber squadrons.
    B-2 maintenance is performed both by contractors and by Air Force 
personnel. In general, the Air Force handles maintenance when the 
aircraft are with the 509th Bomb Wing; it uses a contractor to perform 
the bombers' periodic and much more extensive programmed depot 
maintenance (PDM). There is, however, some contractor support on the 
flight line. For example, a few contractors work at Whiteman Air Force 
Base, where the B-2s are based, to help with issues that might arise 
with the special low-observable surfaces on the aircraft or with its 
engines.
    Much of the PDM work that is done under contract involves replacing 
the bombers' exterior low-observable coatings, a very specialized task 
on the B-2. A study of PDM alternatives conducted by the Air Force in 
the mid-1990s determined that the facilities and skills needed for that 
special coating maintenance as well as for maintenance activities 
associated with other unique aspects of the B-2 could best be provided 
by Northrop Grumman, the B-2's original manufacturer. As a result, the 
overhauls are conducted at Northrop Grumman's Plant 42 facility in 
Palmdale, California.
    Much of the contract work for the B-2 is consolidated under an 
umbrella flexible acquisition sustainment team (FAST) contract with 
Northrop Grumman. The FAST contract does not itself define the work to 
be performed. Rather, it serves as a vehicle by which individual work 
orders tailored to the specific maintenance needs of individual 
aircraft can be executed.
    Since the B-2 program is relatively young and the PDM cycle is 
seven years, the PDM arrangement has been in place only since 2000. A 
so-called delivery order for PDM is executed annually under the FAST 
contract, whose yearly value is about $60 million and typically 
includes work on two aircraft. According to the Air Force, the initial 
annual contracts were set up as cost-plus-award-fee arrangements 
because the specific nature and extent of the maintenance that would be 
required was not well understood. With the experience gained under the 
work conducted over the period from 2000 to 2002, the Air Force has 
begun to execute PDM contracts as firm-fixed-price agreements.
    The PDM contracts also have incentive aspects (notwithstanding the 
firm-fixed-price feature), which include a program for reduction in 
total ownership costs (RTOC). The goal of the program is to reduce the 
Air Force's overall costs for maintaining the B-2 without impairing 
essential system functions or performance characteristics. Savings from 
RTOC initiatives are shared with the contractor.
    As with maintenance, B-2 training is split between Air Force and 
contractor personnel--who are provided by the Link Simulation and 
Training Division of L3 Communications, Inc. (formerly Raytheon and 
before that, Hughes). Contractor personnel are involved in operating, 
maintaining, and modifying the B-2 training systems. Link operates and 
maintains the aircrew and maintenance training devices and also 
develops and modifies maintenance training courses. Course development 
and academic instruction for the B-2's aircrews are provided by 
Northrop-Grumman under a subcontract to Link, with Air Force 
instructors supplementing that instruction. In addition, Link operates 
and maintains the Weapons Loading Trainer.
    Those contractor-performed training activities are covered under 
the Training System Contractor Logistics Support Contract, for which 
Link is the prime contractor. The period of performance on the $325 
million contract is eight years.
National Missile Defense--National Team
    In order to define the elements of its ``layered'' missile defense 
concept and the manner in which those elements will interact, the 
Missile Defense Agency within the Department of Defense turned to a 
largely contractor-staffed organizational structure called the National 
Team. In addition to contractors, the National Team consists of 
employees from the Department of Defense and federally funded research 
and development centers (such as the Aerospace Corporation); it is 
divided functionally into two major components: one for systems 
engineering and integration (SE&I) and the other for integrating battle 
management, command, control, and communications (BMC2&C). Those two 
teams, as they are known, interact with MDA personnel in designing and 
developing an overall missile defense system.
    According to MDA, a key feature of the National Team is that the 
two teams are behind a ``firewall,'' which separates them from other 
contractor personnel who are developing missile defense hardware. That 
arrangement was necessary because the prime contractors leading the 
national teams are also engaged in weapon system development and 
production. National Team contractors must thus sign conflict-of-
interest and associate contractor agreements to ensure that 
information--including proprietary data that team members employed by 
individual contractors would otherwise not be free to share--flows 
between the SE&I and BMC2&C teams.
    The SE&I team is led by Boeing, with participation from Lockheed 
Martin, and the BMC2&C team is led by Lockheed Martin, with 
participation from Boeing. General Dynamics, Northrup Grumman/TRW, and 
Raytheon are also represented on both teams. The role of the SE&I team 
is to define a ``toolbox''--consisting of weapons, sensors, and 
communications components--and integrate those systems to forge a 
single, layered ballistic missile defense system (BMDS). The SE&I 
team's responsibilities also include characterizing the threat 
environment. The role of the BMC2&C team is to develop the components 
for planning, control, monitoring, and execution of the BMDS.
    MDA used ``other transaction'' authority agreements with Boeing and 
Lockheed Martin to form the National Team. The period of performance 
for both the SE&I's and the BMC2&C's agreements is divided into two 
parts. Part I lasts for four months; its tasks include definition of 
the BMDS processes and an initial assessment of the system's elements. 
Part II, which lasts for 10 years, covers the design, modeling and 
simulation, and virtual prototyping of the BMDS. Part II is structured 
as a two-year base contract, followed by four two-year options. 
Together, both Part I contracts (SE&I and BMC2&C) total about $28 
million. MDA estimates that funding for Part II of the SE&I contract 
and Part II of the BMC2&C effort will total $953 million and about $1.7 
billion, respectively.
    The National Team contracts are structured as cost-plus-award-fee 
arrangements, with the fee amount based on a mix of subjective and 
objective criteria. The total award fee available through December 2003 
for the SE&I contract is $34.5 million; $30.8 million is available for 
the BMC2&C contract.
Refueling/Overhauls for Aircraft Carriers
    The Navy's nuclear-powered aircraft carriers must be refueled and 
overhauled periodically throughout their 40- to 50-year lifetimes. Only 
one shipyard in the United States--Newport News, owned by Northrup 
Grumman--is capable of undertaking the required work. The Navy provides 
Newport News with nuclear fuel and detailed specifications for 
refueling the carrier's reactor and overhauling the other ship's 
systems. The work performed by Newport News includes removing the 
expended nuclear fuel, installing new fuel, and delivering the expended 
fuel to the Navy for storage and disposal. Newport News also assists in 
conducting sea trials of the refueled and overhauled carrier prior to 
its return to operations.
    The Navy uses sole-source contracts to perform the refueling 
overhauls and structures them as cost-plus-award-fee arrangements. 
Newport News and the Navy negotiate a target cost for the work and a 
target fee. In the most recently awarded contract, which was for 
refueling and overhauling the USS Carl Vinson, the fee component of a 
total $1.52 billion contract was $144 million, or about 10 percent. 
Under the terms of the contracts, Newport News can earn an additional 
fee amount (up to a preset maximum) for underrunning the cost target 
but will lose part of the fee (down to a preset minimum) if costs 
exceed the target.
    Every carrier undergoing maintenance has a detailed list of 
specifications developed by the Navy as to how the work is to be done. 
Any work that cannot meet the specifications must receive a waiver from 
Naval Sea Systems Command (NAVSEA), which oversees work performed by 
Newport News.
    Newport News is responsible for developing and following a quality 
control process and for performing quality assurance. NAVSEA personnel 
monitor and audit the shipyard work and perform random sampling to 
ensure that Newport News is following its quality control and assurance 
processes. That oversight is carried out by the Navy's supervisor of 
shipbuilding, conversion, and repair (SUPSHIP) located at Newport News. 
The Naval Nuclear Propulsion Program (commonly known as Naval Reactors) 
also has an office at the shipyard to monitor the process of refueling 
the carrier. All work done by the contractor must pass a final 
inspection by NAVSEA to ensure that the work has been done to all 
specifications before being accepted.
    Once the ship is delivered and accepted, it goes through a series 
of sea trials, which the Navy performs over a three-to four-month 
shakedown period. Every system on the ship is tested, and the carrier 
is pushed to its limits to ensure that it can perform properly upon its 
return to operations. The ship must receive a series of certifications 
from the Navy to show that it passed all the tests. After that, there 
is an eight-month postshipyard availability during which the contractor 
must fix all items discovered during the trials that did not meet the 
specifications or pass the at-sea tests. The Navy covers the cost of 
resolving problems identified during the sea trials.
The Savannah River Site
    The Department of Energy's Savannah River Site (SRS) was 
constructed during the early 1950s to produce and separate plutonium 
and tritium for nuclear weapons. In 1989, the Westinghouse Savannah 
River Company (WSRC) took over the contract with the Department of 
Energy to manage and operate the facility, which had been held since 
1950 by the E.I. duPont de Nemours Company.
    Since the mid-1990s, the bulk of the activities at Savannah River 
have involved managing the storage and treatment of radioactive waste 
from production activities, the storage of special nuclear materials 
such as components from dismantled weapons and spent nuclear fuel, and 
the recycling of tritium from surplus nuclear weapons. The site covers 
a total of 198,000 acres (or 310 square miles) and employs about 13,000 
personnel. Under the current contract, WSRC is responsible for 
providing the personnel, equipment, materials, supplies, and services 
necessary to manage and operate the site.
    Oversight of the contract is provided by about 400 DOE staff at the 
Savannah River Operations Office (SRO), which is located on the 
Savannah River site. The manager of the SRO is responsible for contract 
management and oversight of the site's environmental restoration and 
waste management activities, which represent about 80 percent of all 
work that DOE has contracted for there. (An assistant manager of the 
SRO is responsible for overseeing stewardship of the Nation's stockpile 
of nuclear weapons and materials; those stewardship duties constitute 
the remainder of the activities at SRS and fall under the purview of 
the National Nuclear Security Administration.) WSRC is responsible for 
managing the work of a team of contractors and subcontractors at SRS. 
The team includes Bechtel Savannah River and BNFL, Inc., which together 
manage engineering, design, and construction activities; and BWXT, 
which handles shut-down, decontamination, and decommissioning of excess 
facilities. BNFL, Inc., also manages solid waste activities.
    The existing contract between DOE and WSRC is an extension of the 
contract that was awarded competitively to WSRC in 1997; it was signed 
in early 2001 and extends through the end of September 2006. DOE's 
total obligation to WSRC from October 1, 2000, through September 30, 
2006, is $8.4 billion, yielding average annual allotments of $1.4 
billion. Under the contract, WSRC is responsible for five major groups 
of activities:

   Performing environmental restoration tasks such as 
        identifying, characterizing, and assessing waste units and 
        affected groundwater; preparing plans for closing selected 
        facilities; managing remediation of waste sites; monitoring 
        inactive waste-and groundwater units; and accelerating early 
        remediation activities;

   Decontaminating and decommissioning excess facilities, 
        including several produc tion reactors and chemical processing 
        facilities;

   Developing new areas of research and development;

   Managing the site's nuclear programs, which include the 
        processing of tritium, and supporting long-term planning to 
        maintain the tritium supply and stabilize and store existing 
        inventories of nuclear material; and processing high-level 
        waste for eventual long-term storage or disposal; and

   Providing site support by protecting human health and safety 
        and the environment in all activities; managing the design and 
        construction of new facilities; providing operational support 
        such as utilities, transportation, and maintenance and repairs; 
        and supporting long-range and strategic planning for the site.

    The contract between WSRC and DOE includes a multiyear fee ``pool'' 
of $345 million to fund performance-based incentive awards over the 
contract's six-year term. Performance incentives and measures are 
negotiated before the beginning of each Fiscal Year and are used to 
determine annual awards. In March 2001, the Defense Nuclear Facilities 
Safety Board raised concerns that the incentives could encourage waste 
processing at the expense of safety.\14\ However, an internal DOE 
review conducted in response to those concerns concluded that the 
incentive structure in place did not compromise safety and that it 
correctly emphasized waste processing.\15\ Moreover, it concluded that 
the onsite DOE representatives responsible for monitoring the contract, 
in order to stress DOE's safety concerns, had appropriately reduced the 
contractor's award fee to reflect less-than-acceptable performance.
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    \14\ Defense Nuclear Facilities Safety Board, High-Level Waste 
Management at the Savannah River Site, Recommendation 2001-1 (March 23, 
2001), p. 5.
    \15\ Department of Energy, Independent Review Team, Independent 
Assessment of the Savannah River Site High-Level Waste Performance 
Based Initiatives, EM-INTEC-02-008 (December 2001).
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    In July 2002, the assistant secretary for environmental management 
at DOE initiated an internal review of the incentive structure at SRS 
as part of an effort to ensure that incentives in DOE's major site 
contracts were properly linked to its overall strategic plan for 
environmental management and the strategic plans of the individual 
sites.\16\ In the case of SRS, DOE's review team concluded that the 
site's contract incentives were not designed to accelerate risk 
reduction and closure (two goals of DOE's environmental management 
efforts) but rather to motivate cost savings.\17\ In response to that 
finding, WSRC and the SRO, at the direction of the assistant secretary, 
revised the performance objectives and incentives in the SRS contract 
for 2003 to better align them with DOE's environmental management 
goals.
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    \16\  Memorandum from Jessie Hill Roberson, Assistant Secretary of 
Energy for Environmental Management, to various DOE field offices, 
``FY2003 Contract and Performance Objectives and Incentives for 
Environmental Management,'' July 2, 2002.
    \17\ Department of Energy, Savannah River Site Trip Report (July 9, 
2002).
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Trident Ballistic Missile Submarine Conversions to Perform Conventional 
        Missions
    The Trident submarine conversion program will convert four existing 
Ohio classTrident submarines, which formerly performed strategic 
nuclear missions, to a conventional configuration that will provide 
special operations and conventional strike capabilities. The program 
comprises activities to manufacture the ``kits'' required to convert 
the four submarines, conduct engineering refueling overhaul (ERO) of 
the four ships' nuclear reactors, and install the conversion kits. The 
conversion kits consist of lock-out chambers and associated equipment 
for use by special operations personnel, launch tubes (multiple all-up-
round canisters) for conventional Tomahawk missiles, Tomahawk missile 
fire-control systems, and information management and communications 
equipment.
    The initial work on the program (such as concept and initial design 
studies) began in 2000, and detailed design efforts commenced in 2002. 
Refueling overhauls and conversion kit manufacturing and installation 
will take place between 2003 and 2007. The first ship in the line (USS 
Ohio) is expected to be operational in its new configuration in 2007. 
The four conversions are expected to cost $4 billion over the period 
from 2000 through 2009.
    The Navy plans to carry out the conversion program by using a 
public/private partnership approach. The conversions begin with the 
installation of a new reactor core (the ERO) in each submarine. Public 
shipyards--the Puget Sound Naval Shipyard on the West Coast and the 
Norfolk Naval Shipyard on the East Coast--will each perform two 
refueling overhauls as part of the overall program. Those shipyards 
will also provide a portion of the technical labor and other services 
and support required to install the conversion kits in the four 
submarines, work that will be managed by a contractor but performed at 
the public shipyards. The Electric Boat (EB) division of General 
Dynamics Corporation will design and manufacture the conversion kits 
and manage their installation, including providing most of the labor 
needed for that task.\18\ EB is designated as the conversion execution 
manager--the single entity responsible for the conversion kit's design, 
manufacture, installation, and testing.
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    \18\ Other contractors (Northrop Grumman Marine Systems and General 
Dynamics Advanced Information Systems) are also involved in the design 
and manufacture of the systems that go into the conversion kits. 
However, EB is responsible for the overall integration of the systems 
with those of the ship.
---------------------------------------------------------------------------
    EB's installation of the kits and its testing activities will use 
the Navy's labor resources at the public shipyards. The shipyards will, 
in effect, operate as a subcontractor to EB under the conversion 
installation contract. That is, EB will receive money under the cost-
plus-fee contract for the ``touch labor'' provided by the public 
shipyards and will then reimburse them for the cost of the labor that 
they have supplied.\19\
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    \19\ The authority for the shipyards to undertake this type of 
arrangement derives from the Center of Industrial and Technical 
Excellence (CITE), which allows a government entity with exceptional 
technical capabilities to provide services to a private party if doing 
so benefits the government. According to the Navy's cost accounting and 
funding rules for its shipyards, EB will be charged the variable costs 
of using the labor, while the fleet, as ``owners,'' will foot the bill 
for the shipyard's facility and administrative overhead.
---------------------------------------------------------------------------
    EB's work on the design and manufacture of the conversion kits is 
being done under a sole-source cost-plus-fixed-fee contract that 
includes performance incentives.\20\ The contract has two main parts. 
The first, which is worth about $400 million, covers the detailed 
design of the conversion kits and ship modifications. The second part, 
totaling about $116 million, covers the procurement of materials needed 
for the conversion. Each portion of the contract has a total available 
fee of 10 percent, including incentives for timeliness and cost 
control.
---------------------------------------------------------------------------
    \20\ The noncompetitive procurement stems from two factors: EB was 
the original designer and manufacturer of these Ohio class submarines, 
and the Navy has determined that the project's time schedule does not 
permit a competitive procurement.
---------------------------------------------------------------------------
    The other major contracts in the conversion program are for the 
multiple all-up-round canister (MAC), designed and manufactured by 
Northrop Grumman Marine Systems, and the attack weapon control system 
(AWCS), designed and manufactured by General Dynamics Advanced 
Information Systems. The contracts for the MAC (totaling $155 million) 
and AWCS (totaling $117 million) are both of the cost-plus-incentive-
fee type. For the MAC, the maximum fee is 16 percent; the maximum fee 
for the AWCS is 15 percent.
    A Trident submarine conversion program office established within 
Naval Sea Systems Command is responsible for the overall management and 
technical oversight of the conversion program and retains approval 
authority for critical design elements.\21\
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    \21\ In 2002, NASA and NAVSEA initiated the NASA/Navy Benchmarking 
Exchange to examine the Navy's submarine safety assurance program and 
compare its features with NASA's safety program for the space shuttle. 
The goal was to identify a set of lessons learned that could benefit 
NASA. The two organizations published an interim report in December 
2002 outlining similarities in and differences between the design, 
test, operation, and maintenance of submarines and the shuttle. In the 
report, NASA identifies potential opportunities for change that it 
should consider, including the implementation of the NAVSEA 
organizational model for submarine safety compliance verification, 
which would establish within NASA an office independent of the shuttle 
program to verify compliance with safety procedures and measures; and 
the development of a comprehensive set of detailed and specific NASA 
safety requirements that its future human-operated space systems must 
meet.
---------------------------------------------------------------------------
    The Navy's supervisor of shipbuilding--EB Groton Office--is the 
supervising authority and administrative contracting officer for all EB 
work (specifically, the de sign, manufacture, installation, and testing 
of the conversion kits). SUPSHIP Groton oversees and certifies the 
conversion work on behalf of NAVSEA. The public shipyards perform the 
refueling overhauls under NAVSEA's oversight.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John McCain to 
                           Hon. Sean O'Keefe
    Question 1. After reviewing the Board's report, do you believe that 
the proposed March 2004 date for return to flight is still valid?
    Answer. The March-April 2004 launch window was set for planning 
purposes only. This target date allowed the program to establish 
milestones for the return to flight process, and the Space Shuttle 
program will not return to flight until those milestones have been 
fully met. The CAIB made 15 Recommendations that must be resolved 
before return to flight. Assessing those recommended actions and our 
technical progress to date; we have revised our launch-planning window 
to September-October of 2004. We will not commit to launch again until 
we, in concurrence with the Stafford-Covey Task Group, have assessed 
our completion of the Return-to-Flight actions and advised the NASA 
Administrator that we are ``fit to fly.''

    Question 2. NASA has established a task group headed by veteran 
astronauts, retired U.S. Air Force Lieutenant General Thomas Stafford 
and Space Shuttle commander Richard Covey, to perform an independent 
assessment of NASA's actions to implement the Board's recommendations. 
How will you ensure that this task group is fully independent, and will 
make sure that the Board's recommendation will be implemented?
    Answer. The Return to Flight Task Group is chartered under the 
Federal Advisory Committee Act. As such, the Task Group operates under 
statutory procedures that help insure its independence. For instance, 
all documents considered by the Task Group are made available to the 
public and all meetings where the Task Group deliberates to make its 
consensus decisions in advance must be open for public scrutiny. To 
further insure its independence from scheduling or any other 
programmatic pressures the Stafford-Covey Task Group reports directly 
to the NASA Administrator, not to the Office of Space Flight or Space 
Shuttle Program. The 28 members have been chosen for their knowledge in 
a wide range of issues, from space flight to management of complex 
organizations, and have indicated their willingness to undertake public 
service. Of the 28 members of the Stafford-Covey Task Group, only ex-
officio member Mr. James D. Lloyd is a current NASA employee. The 
members of the Stafford-Covey Task Group have already demonstrated 
their independence of opinion in their interactions with Admiral 
Gehman.

    Question 3. The Board report has stated that NASA's culture played 
a role in the Columbia accident, and viewed the agency's ``cultural 
resistance as a fundamental impediment to NASA's effective 
organizational performance.'' In the weeks before the report was 
released, senior NASA officials were quoted as downplaying the role of 
culture in the accident. What specific actions do you intend to take to 
shake up NASA's culture and break down its resistance to outside 
recommendations?
    Answer. NASA accepts the CAIB Recommendations calling for a more 
independent Safety and Mission Assurance organization, a reorganized 
Space Shuttle Integration Office that is responsible for the flight 
performance of all Space Shuttle elements, and an independent Technical 
Engineering Authority that will exercise ownership of Space Shuttle 
failure mode, effects analysis, and hazard reporting systems. The new 
NASA Engineering and Safety Center will be one part of this 
reorganization strategy, and will serve as the basis for opening up new 
avenues of communication and promoting a culture of safety through 
engineering excellence. Additional organizational changes are under 
review.
    Fourteen of the senior managers on the Space Shuttle program are 
new to their positions. They and the NASA Administrator are responsible 
for emphasizing that all elements of the Agency understand the role of 
free and open communication. Through them, NASA will actively encourage 
people to express dissenting views, even if they do not have the 
supporting data on hand, and create alternative organizational avenues 
for expressing those views.
    NASA will continue to seek the participation of independent experts 
from outside the Agency, including the Stafford-Covey Task Group, 
Aerospace Safety Advisory Panel, the NASA Advisory Council, the NASA 
Office of the Inspector General, and others.
    NASA will take aggressive action to identify areas where we can 
improve our culture and take action to do so. NASA will take the 
following steps as stated in NASA's Implementation Plan for Return to 
Flight and beyond.

   Create a culture that values effective communication and 
        empower and encourage employees to take ownership over their 
        work processes.

   Assess the existing safety organization and culture to 
        correct practices detrimental to safety.

   Increase our focus on the human element of change management 
        and organizational development.

   Remove barriers to effective communication and the 
        expression of dissenting views.

   Identify and reinforce elements of the NASA culture that 
        support safety and mission success.

   Ensure that existing procedures are complete, accurate, 
        fully understood, and followed.

   Create a robust system that institutionalizes checks and 
        balances to ensure the maintenance of our technical and safety 
        standards.

   Work within the Agency to ensure that all facets of cultural 
        and organizational change are continually communicated within 
        the NASA team

    NASA has proactively focused on cultural change starting in July 
2002 when the Administrator formed the One NASA team. The team's 
objectives included defining the actions needed to create a more 
unified NASA organization and formulating a set of specific 
recommendations for organizational and cultural change that can elevate 
NASA to a new level of effectiveness and performance. The One NASA team 
has identified a set of recommendations and actions to senior 
management, which are being implemented. Since the release of the CAIB 
report, the Agency is evaluating how the cultural issues raised by the 
Board can be addressed by this ongoing activity and other culture 
change activities in the near future.
    One specific area of concern from the Board's report was the 
operation of the Shuttle's Mission Management Team (MMT) at Johnson 
Space Center (JSC). NASA has quickly moved out to address that concern 
and has made some major changes. In perhaps the most convincing way yet 
that NASA ``gets it,'' the new chairman of the MMT outlined some major 
changes to improve communications among engineers and managers, to 
ensure dissenting views are heard and to correct the cultural 
shortcomings blamed in part for the Columbia disaster. New members will 
be added to the MMT and outside experts will be brought in to coach the 
managers on decision-making skills and regular mission simulations will 
be held to test those skills in make-believe emergencies.
    The new chairman stated that his basic model of management would be 
consensus. Consensus style of management will open lines of 
communication to make sure people get their dissenting and minority 
opinions on the table. In the near to long term, outside safety and 
management experts will be brought in on a regular basis as part of a 
continuing education program.
    The above is one of many changes and activities that are already 
ongoing at NASA to bring about the desired cultural change the Board 
recommended.

    Question 4. The Board analyzed two possible scenarios that might 
have been used for rescuing the Columbia crew: repairing the damage on 
orbit or rescuing the crew with the Atlantis. The Board found that the 
option using Atlantis ``had a considerably higher chance for bringing 
Columbia's crew back alive.'' Had NASA done any training or simulations 
prior to the Columbia accident for what to do in case of a major tile 
loss or Reinforced-Carbon--Carbon breach on an orbiter? What are NASA's 
plans for dealing with a potential similar crisis in the future, and is 
NASA currently training astronauts to do an orbiter-to-orbiter transfer 
as is discussed in the report?
    Answer. NASA had conducted a number of engineering studies as to 
the efficacy of on-orbit repair of Space Shuttle tiles between 1979 and 
1981. Before the first launch of the Space Shuttle in April 1981, 
Shuttle program managers were most concerned with a ``zipper'' effect 
during flight, whereby the loss of a single whole tile would initiate 
the loss of large areas of tile. Engineering data showed that some 
surface damage to tiles in flight, short of the loss of a whole tile, 
did not jeopardize the thermal design requirements for the vehicle. 
When later analysis and flight tests showed that the Space Shuttle tile 
system was not as vulnerable to zippering due to the loss of single 
tiles, the in-orbit tile repair research was cancelled. No similar work 
was done for on-orbit Reinforced-Carbon-Carbon (RCC) repairs.
    Instead of an orbiter-to-orbiter crew rescue procedure in the case 
of future, irrecoverable damage to a Space Shuttle on-orbit, NASA is 
evaluating the feasibility of providing a lower-risk Contingency 
Shuttle Crew Support (CSCS) capability. CSCS is a contingency 
capability that will provide another response to known, but remote, 
risks and circumstances. In the event of an on-orbit emergency 
precluding reentry and landing, the Shuttle orbiter would transfer its 
crew to the ISS. The crew would remain on the ISS until they could be 
returned to Earth.

    Question 5. Last week, the Washington Post reported that the 
President plans no immediate upgrade of NASA's budget or mission. The 
article went on to state that the Administration intends to issue by 
early next year a blueprint for interplanetary human flight over the 
next 20 to 30 years. Can you comment on whether or not the Fiscal Year 
2004 budget request should be revised given the grounding of the 
Shuttle fleet? Should the Shuttle be funded at the same level? NASA 
plans to release its Return-To-Flight Implementation Plan next week. I 
assume it will lay out what needs to be done prior to the next launch. 
Will NASA's plan also identify the required resources to implement that 
plan?
    Answer. Until we can do a full analysis of the CAIB Requirements 
for Return to Flight, including an accounting of some of the design and 
production work that can be covered under existing continuing 
engineering contracts, the President's FY 2004 budget request for the 
Space Shuttle Program represents the most prudent funding level for the 
program. The Implementation Plan for Space Shuttle Return to Flight and 
Beyond identifies the engineering resources, but not costs, that will 
be required to respond to the CAIB Recommendations and to carry out 
those initiatives that we have identified that raise the bar above the 
CAIB Recommendations. As noted in the Implementation Plan, it will be 
updated, as our plans are refined. NASA will identify financial 
resources required as the specific implementation tasks are finalized.

    Question 6. The General Accounting Office is expected to release 
its report on impacts of the Columbia accident to the Space Station 
later this month. Does NASA have any idea of what the costs of the 
delay would mean to the Station's budget?
    Answer. NASA has been assessing the impacts of the Columbia 
accident on the ISS program since the accident occurred, and is now 
assessing the impacts of the NASA response to the CAIB recommendations 
on the ISS. To date, the Station program has estimated impacts in 
excess of $130 million starting in FY 2003. NASA expects the majority 
of the costs to be realized in FY 2004 and FY 2005. The estimates are 
based on a roughly one year slip in Station assembly and do not account 
for any additional logistics and assembly missions or the 
implementation of those CAIB recommendations that may affect the ISS. 
The estimates account for: delays in planned contractor de-staffing; 
contract equitable adjustments; the re-certification of flight 
hardware; replacement of the extended duration orbiter capability lost 
on Columbia; logistics carrier re-manifesting; spares and EVA tool 
replacement; and U.S. operations in Russia in support of crew rotation 
and Station resupply. A delay beyond one year, additional assembly and 
logistics missions, and CAIB implementation could drive ISS costs close 
to $200 million. But as stated above, all of the required assessments 
are still in work and a total cost impact cannot be provided now.

    Question 7. Selection of NASA safety and quality personnel should 
be based upon meeting specific qualifications and possessing the right 
attitudes and disciplines for these critical positions. Certainly, the 
practice of assigning personnel to safety and quality as a part of an 
adverse personnel action must be stopped. Do you believe that those who 
have been re-assigned as a result of the Columbia accident do in fact 
meet such employment criteria?
    Answer. No personnel have been assigned to safety and quality 
positions as a result of adverse personnel actions. The reassignment of 
any NASA employee is predicated on an analysis of the duties and 
performance requirements of the new position and a determination that 
the individual being reassigned has the ability and the experience 
necessary to perform the new duties and meet the new performance 
expectations. Performance expectations at the SES level include 
leadership and communications skills. As I have stated before, I have 
full confidence in the NASA team. Mobility across the Agency is a high 
priority to ensure that a variety of expertise and perspectives are 
applied to all areas of NASA activities, including safety. Recent 
reassignments to various positions at several NASA Centers reflect the 
selection of the best person for the job.

    Question 8. Are any additional personnel changes forthcoming?
    Answer. At this time, no additional personnel changes are planned 
that are related to the Columbia accident.

    Question 9. Given the recent losses of vehicles over the past few 
years with other NASA programs, including the break-up of the CONTOUR 
spacecraft in August 2002 and the crash of the Helios solar electric 
airplane in June of this year, have you identified any similarities 
between these accidents?
    Answer. Although specific details of these accidents and the NASA 
and contractor elements involved vary considerably, NASA has identified 
that some of the underlying causes are similar. These similarities 
include weaknesses in independent engineering oversight, inadequate 
analytical tools, and weak identification and follow-through on 
potential technical problems. As a result, NASA is also considering 
these other weaknesses and the associated lessons learned in evaluating 
how to apply the recommendations, findings, and observations of the 
Columbia Accident Investigation Board's report to project management 
and engineering work throughout NASA.

    Question 10. The Board has stated that NASA has not 
``institutionalized'' its ``lessons learned'' approaches to ensure that 
knowledge gained from both good and bad experience is maintained in 
corporate memory. The Naval Reactors program and the Navy's Submarine 
Flooding Prevention and Recovery program have demonstrated the merits 
of an ``institutionalized'' program. While NASA has a lessons learned 
system, it is voluntary. Do you have any plans to more formally 
``institutionalize'' NASA's ``lessons learned'' program?
    Answer. Yes. NASA is conducting a major overhaul and consolidation 
of its various lessons learned systems to ensure they are timely, 
candid, relevant, trended, well promulgated, and properly incorporated 
in both training and design requirements. This overhaul had been 
initiated by NASA about two months before the Columbia accident, and is 
being further augmented to include the observations of the CAIB's 
report. The lessons learned systems upgrades are being based in large 
part on the Navy/NASA Benchmarking Study that has also focused on the 
high-quality systems of the Naval Reactors and SUBSAFE programs.

    Question 11. Do you plan to apply any lessons learned from the 
Columbia accident to other areas of NASA? If so, where?
    Answer. We will apply the lessons learned from the Columbia 
accident throughout NASA. In addition to the specific technical 
lessons, the organizational and cultural lessons are applicable to much 
of the other aspects of NASA work. Recognizing that one size does not 
fit all within NASA, we have formed a task group headed by the Goddard 
Space Flight Center Director to evaluate how best to apply all of the 
findings, observations, and recommendations of the Board's report to 
other NASA elements.

    Question 12. The Board has recommended that NASA develop practical 
capabilities to inspect and effect emergency repairs to take advantage 
of the International Space Station, and to be used independently of the 
station. What are the technical requirements for implementing the CAIB 
recommendations and how soon can they be implemented?
    Answer. NASA's near-term plan for risk mitigation calls for Space 
Shuttle vehicle modifications to eliminate the liberation of critical 
debris, and improved ground and Shuttle vehicle cameras for debris 
detection and damage assessment. On-orbit surveys of the vehicle's 
thermal protection system will be conducted using the Shuttle Remote 
Manipulator System and the Space Station Remote Manipulator System 
cameras, and ISS crew observations during Shuttle approach and docking. 
Techniques for repairing tile and Reinforced Carbon-Carbon by 
extravehicular activity are under development. The combination of these 
capabilities will help to ensure a low probability that critical damage 
will be sustained, while increasing the probability any damage that 
does occur can be detected and the consequences mitigated in flight.
    NASA's long-term risk mitigation steps will refine and improve all 
elements of the near-term plan, ensuring an effective inspection and 
repair capability, not reliant upon the Space Station, is in place in 
time to support the next Hubble Space Telescope servicing mission.

    Question 13. How will grounding of the Space Shuttle and NASA's 
``return to flight'' efforts affect NASA's budget for Fiscal Year 2004? 
NASA has identified approximately $108 million in FY 2004 associated 
with implementation of an initial set of actions tied to the CAIB 
recommendations and other corrective actions, which are summarized in 
Enclosure #1.
    Answer. Where applicable, hardware-related rough-order-of-magnitude 
(ROM) costs are primarily engineering estimates based on previous 
development and integration activities. Items also include nonrecurring 
ROM cost for studies, implementation and retrofit if appropriate, and 
include recurring ROM cost if required. In addition, ROM costs are 
included for engineering resources for certification and verification. 
We will be refining our estimates over the next few months, and we will 
keep the Committee informed as decisions are made.

    Question 14. What effects will these efforts have on NASA's plans 
regarding the International Space Station?
    Answer. NASA's post-Columbia strategy for the ISS will continue as 
planned. The ISS program will complete all ground development 
activities in accordance with its original schedules. Launch package 
testing and integration will be completed as planned so that the flight 
hardware is ready for Shuttle integration when launch dates are 
determined. Operations-related products will be developed to the degree 
practicable, then placed ``on the shelf'' until launch dates are 
defined. The Station workforce will remain intact except for the 
contractor personnel no longer required for development activities or 
essential to assembly activities.
    The ISS Continuing Flight Team (CFT) was chartered to review all 
CAIB results for applicability to the ISS Program. This team will 
ensure that all necessary steps are taken to apply the lessons learned 
from the Columbia accident to the ongoing operation of the ISS. 
Representatives from all NASA field centers supporting human space 
flight, as well the Astronaut and Safety and Mission Assurance offices, 
are members of the team. NASA will continue to work closely with its 
International Partners and keep the lines of communication open as NASA 
implements process improvements and enhancements as a result of lessons 
learned from Columbia. The first edition of NASA's Implementation Plan 
for International Space Station (ISS) Continuing Flight has been 
provided to Congress.
    NASA is also assessing the financial and workforce impacts of the 
implementation of the CAIB recommendations on the ISS program, and will 
adjust workforce allocations and budget to accommodate all required 
changes to the program. NASA intends to re-baseline the ISS program 
during next year's budget formulation cycle.

    Question 15. One of the issues of greatest concern to me is the 
fact that there were three requests for on-orbit imaging of Columbia, 
and that Shuttle management turned down these requests. What steps do 
you intend to take to ensure that similar requests are not ignored in 
the future?
    Answer. NASA has concluded a Memorandum of Agreement with the 
National Imagery and Mapping Agency that provides for on-orbit 
assessment of the condition of each Orbiter vehicle as a standard 
requirement on every flight. In addition, NASA is putting in place 
standard operating procedures to implement this, and any other relevant 
agreements. Also, in order to improve the technical and cultural 
capabilities for the Mission Management Teams (MMT) responsible for 
Space Shuttle flight operations, NASA will conduct regular MMT 
simulations with realistic in-flight crises, engage independent 
internal and external consultants that will address the management, 
cultural, and communications issues raised in the CAIB report, and 
continue benchmarking best practices from other high-risk 
organizations.

    Question 16. What recommendations can you offer Congress to help 
formulate the future of the human space flight program?
    Answer. The Administration is currently working through an 
interagency process to formulate future space exploration objectives, 
including those for the human space flight program. Following the 
conclusion of the process, the Administration plans to work closely 
with Congress on the development and implementation of plans for the 
future of the human space flight program.
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                                 ______
                                 
 Responses to Written Questions Submitted by Hon. Olympia J. Snowe to 
                           Hon. Sean O'Keefe
    From the report, I understand that after the first accident, 
investigators found that at the Marshall Space Flight Center, for 
example, managers tended toward ``management isolation.'' I also note 
from the report--and this is not new, but in now looking at these 
issues in their totality--that separate responsibilities for different 
shuttle systems and production are located at different geographical 
``centers'' around the country.
    Finally, I note in the report that Daniel Goldin implemented at 
NASA the management notion that a corporate headquarters should not 
exert bureaucratic control over a complex organization, but rather set 
strategic directions and provide operating units with the authority and 
resources needed to pursue these directions. Another principle was that 
checks and balances were unnecessary and some times counterproductive, 
and those carrying out the work should bear primary responsibility for 
its quality.

    Question 1. Mr. O'Keefe, do you believe, that even after the first 
accident, the destruction of the Challenger, and the subsequent changes 
at NASA that there was ``management isolation'' at the various centers? 
And do you agree with the management philosophies I just outlined from 
Dan Goldin?
    Answer. During my tenure at NASA, I have not seen evidence of 
``management isolation'' as described in the report by the Rogers 
Commission. Also, I cannot speak to Dan Goldin's management principles 
or the direction his team pursued during his ten-year tenure. His team 
was working under a different Administration with different guidelines. 
Under today's circumstances and my management philosophy, there will be 
checks and balances throughout the Agency, and NASA Headquarters will 
be more involved in all Programs.

    Question 2. Do you believe that there should be a different 
management standard for NASA, given its unique role in general, and 
within the government specifically, and given the inherently risky 
nature of its mission for human life? In other words, should NASA reach 
for a different standard than, say, the management structure of an 
International Widget corporation, or is good management practice just 
good management practice?
    Answer. Good management is good management. Implementation of 
various management practices should be tailored for various industries. 
The U.S. Government as a whole has a special responsibility as the 
steward of the public trust, to maintain the highest standards of 
management excellence. To that end, NASA is currently working with 
other high-risk entities, such as the Navy submarine safety programs, 
to benchmark their best practices and incorporate these experiences 
into NASA's programs.

    Question 3. According to the report, after two close calls in July 
1999 with STS-93, former Administrator Dan Goldin chaired a Shuttle 
Independent Assessment Team (SIAT). Among the findings of the team was 
that, ``The SIAT was concerned with ``success-engendered safety 
optimism. The Space Shuttle Program (SSP) must rigorously guard against 
the tendency to accept risk solely because of prior success.''
    Mr. O'Keefe, can you tell me in the wake of that assessment, to 
your knowledge, specifically what steps or mechanisms, if any, were in 
place to answer that criticism? And, if there were mechanisms that were 
put in place, how did they hold up with regard to what happened with 
Columbia, and particularly with the numerous requests for satellite 
imaging, as well as the assessments of the foam strikes?
    Answer. Based on the SIAT final report, NASA concluded that most of 
SIAT's recommendations were aimed at bringing best practices from other 
high-risk organizations into the Space Shuttle program (SSP). Prior to 
my arrival at NASA, the Space Shuttle program had begun a series of 
regular senior management meetings that specifically addressed the 
issue of complacency and the inherent risk to the SSP relative to 
process and procedure change. After I became NASA Administrator in 
2002, this review process was expanded to include of best practices 
from the Navy submarine safety programs and working to incorporate this 
experience into all of NASA's programs, including the Space Shuttle 
program.
    NASA, and especially the Space Shuttle program have had mechanisms 
in place that allow employees to submit safety concerns to safety and 
program management. Since the Columbia Accident and the subsequent 
Columbia Accident Investigation Board recommendations, additional 
measures are being taken to improve and streamline this reporting 
process. Initial management changes have been put into place, such as 
the establishment of a new independent NASA Engineering and Safety 
Center, initiation of Mission Management Team training and simulations, 
and a reorganization of the Space Shuttle program to include stronger 
systems integration.

    Question 4. That same SIAT report also found that communication 
problems and concerns upward to the Space Shuttle Program from the 
``floor'' also appeared to ``leave room for improvement.'' Mr. O'Keefe, 
was this warning heeded within NASA--if so, what kind of priority was 
the concern given and then looking forward, how do you ensure that, if 
changes are made, the impact of those changes are being assessed, and 
that the changes don't fall by the wayside? Because I believe that will 
largely dictate how NASA functions in the future, and the future safety 
of the Shuttle Program.
    Answer. As stated in the response to the above question, a number 
of different actions have been taken to further enable communication 
from both the ``top-down and bottom-up'' within NASA. The Agency will 
take additional actions in the future as we work with representatives 
from industry, academia, and other government organizations to 
determine how best to institutionalize ``best practices'' into the NASA 
culture, with clear communications being a high priority area for 
improvement.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                           Hon. Sean O'Keefe
    Question 1. Admiral Gehman, in your view, what role did NASA's 
relationship with contractors have in the breakdown in communication 
that led to the organizational failures you discuss in the Board's 
report? If NASA was performing all of the contracted work rather than 
its contractors, would these communication breakdowns have been as 
likely?
    Answer. Since the earliest days of its human spaceflight program, 
NASA has relied upon the expertise of the Nation's aerospace 
contractors to carry out its programs. The CAIB noted that there were 
communications problems within the Space Shuttle program as a whole, 
both within the government and, to a lesser extent, between the 
government and its contractors. In response to these findings, NASA is 
taking steps to improve its own internal communications and to enhance 
the ability of the Space Shuttle program to provide insight into 
contractor operations.

    Question 2. ``Mr. O'Keefe, the Kraft report of March 1995 found 
that `` many inefficiencies and difficulties in the current Shuttle 
Program can be attributed to the diffuse and fragmented NASA and 
contractor structure. Numerous contractors exist supporting various 
program elements, resulting in ambiguous lines of communication and 
diffused responsibilities.'' What actions did NASA take to address this 
concern in the Kraft report?''
    Answer. The Kraft report was the product of a team of government, 
aerospace industry, and former NASA leaders, formed by NASA 
Administrator in November 1994, to review Shuttle operation management 
and ``propose innovative approaches to decrease total operating costs 
while maintaining systems safety.'' The report stated the Shuttle 
program should:

   Establish a clear set of program goals with greater emphasis 
        on cost-efficiency and ``user-friendly'' payload integration.

   Redefine management structure, separating development and 
        operations and disengaging NASA from daily operation of the 
        Shuttle.

   Change environment in the Program to pursue these goals.

    The report concluded the best approach was to consolidate 
operations under a single-business entity. A NASA-Prime Contractor 
program structure was proposed to separate development vs. operational 
activities, minimize NASA-contractor interfaces, eliminate overlapping 
tasks, and strengthen responsibility for operations and motivation to 
reduce costs. NASA would define clear Shuttle operations requirements 
with limited oversight. This change allows the contractor to perform 
day-to-day operations, increasing the content and scope of work being 
performed by the private sector. The government would still retain all 
Shuttle mission execution responsibilities. Regular and independent 
review of program restructuring process is done to ensure safety.
    On November 30, 1995, the NASA Administrator established a single 
contract, the Space Flight Operations Contract (SFOC), ``to consolidate 
all mature operational areas of the Shuttle program.'' NASA recommended 
awarding the SFOC to the United Space Alliance (USA), a joint venture 
of Rockwell International (now the Boeing Company) and Lockheed Martin 
Corporation. This decision was based on NASA's commitment to launch the 
International Space Station on schedule, and to maintain safety. The 
SFOC contract was initiated in October 1996. To date, twenty-one 
separate Space Shuttle contracts of the have been consolidated into 
SFOC.
    Since the Columbia accident and at the recommendation of the 
Columbia Accident Investigation Board, the Space Shuttle Integration 
Office has been reorganized. The integration function has been 
strengthened and elevated to a higher level in the Space Shuttle 
program organization to make it capable of integrating all of the 
Shuttle program elements including those performed by the contractor 
community. It also has been given the authority and accountability for 
the integration function.

    Question 3. I believe that there is an inherent conflict of 
interest between profit and the level of funding spent on safety. The 
Space Flight Operations Contract rewards cost reductions to the 
contractor, United Space Alliance. But doesn't this create a culture of 
creating ``minimum safety requirements'' or ``safety on the cheap''? 
Outside of costly government oversight, which could obviate any 
savings, is this type of an economic performance-based contract ideal 
in for safety-critical programs like the space shuttle?
    Answer. To be a good steward of the Government's funds, NASA must 
manage each of our contracts efficiently and effectively. Like other 
NASA contracts, safety is a critical factor in the rating of 
performance under the Shuttle Flight Operations Contract (SFOC). Safety 
is used as a key factor in the award fee earnings determination for 
SFOC and is the only individual factor for which the contractor 
receives a separate specific score every six months. It carries a 
significant weight and serves as a ``gate'' for the contractor's 
ability to reap their share of any cost savings. In order to pass this 
``gate'', the contractor must achieve a safety evaluation factor 
rating, which, at a minimum, reflects effective performance; 
accomplishment of requirements in a timely and efficient manner; and 
work which substantially exceeds minimum contract requirements. This 
``gate'' feature is used under the contract to deter any motivation by 
the contractor for taking a ``minimal'' approach to safety in order to 
increase cost reduction. It serves to emphasize the importance of 
safety and the need to achieve much more than the ``minimum'' safety 
requirements. Regarding the use of a performance-based contract for the 
SFOC, we feel it has been and can continue to be effective for 
management of Shuttle operations. Notwithstanding that, we had 
commenced a review of the contract terms and alternate approaches to 
the current contract structure prior to the Columbia accident in order 
to effect improvements. We are currently assessing any additional 
changes that may be necessary as a result of the CAIB Report, and plan 
to renegotiate the contract terms in the near future to reflect the 
current NASA priorities and CAIB recommendations.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John McCain to 
                         Harold W. Gehman, Jr.
    Question 1. The report indicates that three different requests were 
made for on-orbit imaging of the Columbia, and makes it clear that the 
Debris Assessment Team felt that it needed these images to analyze the 
effect of the foam strike. Why did the Shuttle management reject these 
requests?
    Answer. Shuttle managers firmly believed that foam could not damage 
the RCC panels. They therefore characterized the request for pictures 
as a superfluous request to prove that the shuttle condition was safe. 
Since managers ``knew'' the shuttle was safe, they wanted engineers to 
``prove'' it was unsafe before they went to the effort to request 
national level imagery. Since the engineers needed images to determine 
the extent of damage, they were unable to ``prove'' the condition of 
the shuttle was unsafe. Second, NASA managers assumed they knew the 
capabilities of national level imagery and that national level imagery 
could not detect damage on the shuttle, despite the fact few of them 
were familiar with imagery capabilities or even had the security 
clearances to know what capabilities were available. Third, there was 
confusion about the source of the imagery request. An informal request 
for imagery originated on Flight Day Two at Kennedy Space Center 
outside of normal request channels. KSC members, realizing they had not 
followed proper protocols, terminated actions taken to that point 
requesting imagery. A subsequent formal request for imagery from the 
Debris Assessment Team was mistakenly interpreted by the MMT as the 
same informal request from KSC. The MMT claimed to never have been 
aware of a formal request for imagery from the Debris Assessment Team. 
Their belief that foam could not damage RCC, the engineers' lack of 
proof that the shuttle condition was unsafe, confusion as to the source 
of the request, and their erroneous assumptions regarding national 
level imagery capabilities, led Linda Ham to cancel the requests for 
imagery.

    Question 1a. What recommendations did the Board make to ensure that 
similar requests are not ignored in the future?
    Answer. First, the CAIB eliminated the issue by requiring an on-
orbit inspection of the orbiter on each flight soon after orbit 
insertion. The Board made significant recommendations regarding the 
need to change the safety culture. Second, the Board directed NASA to 
update its process for requesting photos of the orbiter while on orbit. 
Third, the Board directed NASA to place additional cameras on each 
orbiter to better determine when damage exists. Fourth, the Board 
directed NASA to improve the quality of orbiter imagery during launch 
and ascent. All of these will directly contribute to ensuring that 
engineers have the best imagery data available during any similar 
future situations.

    Question 2. Question 2 should be answered by NASA.

    Question 3. Your report states that based on NASA's history of 
ignoring external recommendations, or making improvements that atrophy 
with time, the Board has no confidence that the Space Shuttle can be 
safely operated for more than few years based solely on renewed post-
accident vigilance.
    (a) Do you expect that all of the CAIB's recommendations, not only 
the ``return to flight'' ones, will be implemented by NASA? Do you 
believe that the NASA task force created to assess NASA's 
implementation of the CAIB recommendations is the correct approach?
    Answer. The Board believes that Congress, the Administration and 
NASA will determine what recommendations, and to what extent those 
recommendations, will be implemented. The Board did not prioritize and 
believes all the recommendations should be implemented and all the 
significant issues addressed in Chapter 10 should be addressed by NASA 
because they fall into the category of ``weak signals'' that could be 
indications of future problems.

    (b) What are the limiting factors affecting the safe operation of 
the Shuttle beyond more than a few years?
    Answer. As the Shuttle System ages, new and sometimes unpredictable 
reliability issues will arise. Since these issues are unpredictable, 
they must be dealt with as they come up. The present management system 
does not do that well. To quote from the report:

        ``Based on NASA's history of ignoring external recommendations 
        and making improvements that atrophy over time, the Board has 
        no confidence that the Space Shuttle can be safely operated for 
        more than a few years based solely on renewed post accident 
        vigilance. The Board felt the Management system is inherently 
        unsafe beyond the short-term. Complex systems almost always 
        fail in complex ways and the Board is convinced that NASA can 
        fly again in the near-term if the RTF recommendations are 
        followed. However, NASA needs to look into the organizational 
        and cultural aspects to lessen the chance another accident will 
        occur beyond more than a few years. Additionally, the Shuttle 
        is an aging spacecraft in a research and development era 
        requiring special attention to orbiter corrosion, orbiter 
        maintenance down periods/major modification, test equipment, 
        etc. The Board has serious concerns how NASA can manage an 
        aging shuttle life cycle with a lack of an integrated hazard 
        analysis system.''

    NASA needs to be resourced to effect change recommended by the CAIB 
report . . . many of the organizational recommendations retract 
previous management efficiencies in favor of a new, more balanced 
system of checks and balances which will increase budget and manpower 
demands. These organizational changes are necessary to improve the 
safety culture and create an atmosphere of high reliability.

    Question 4. The report speaks of a ``broken safety culture'' at 
NASA. Can you elaborate on this for the Committee?
    Answer. Safety culture refers to an organization's characteristics 
and attitudes--promoted by its leaders and internalized by its 
members--that serve to make safety the top priority.) In this context, 
the Board believes the mistakes that were made on STS-107 are not 
isolated failures, but are indicative of systemic flaws that existed 
prior to the accident.
    The investigation revealed that in most cases, the Human Space 
Flight Program is extremely aggressive in reducing threats to safety. 
But we also know--in hindsight--that detection of the dangers posed by 
foam was impeded by ``blind spots'' in NASA's safety culture. The 
investigation uncovered a troubling pattern in which Shuttle Program 
management made erroneous assumptions about the robustness of a system 
based on prior success rather than on dependable engineering data and 
rigorous testing.
    Further, the Shuttle Program's complex structure erected barriers 
to effective communication and its safety culture no longer asks enough 
hard questions about risk. (Had the Shuttle Program observed insight 
from High Reliability, Normal Accident and Organizational Theory, 
reviewed Best Safety Practices and learned from its own history, the 
threat that foam posed to the Orbiter, particularly after the STS-112 
and STS-107 foam strikes, might have been more fully appreciated by 
Shuttle Program management. Evidence of the broken safety culture is 
seen in the ``prove it's unsafe'' approach to the foam strike. This 
attitude by management kept them from seeing the need to conduct 
serious contingency planning on whether or not the Shuttle was in 
trouble and how to save it either by on-orbit repair or rescue. Every 
problem was simplified and reduced to the least threatening posture 
that truncated management's entire thought and decision processes.

    Question 5. The Board recommends preparing a detailed plan for 
creating an independent Technical Engineering Authority, independent 
safety program, and reorganized Space Shuttle Integration Office. Why 
is it necessary to complete the plan for these operations, as opposed 
to implementing the operations themselves, before the shuttle returns 
to flight?
    Answer. The recommendations to create a technical engineering 
authority, a truly independent safety organization and an effective SSP 
program integration office are designed to prevent the gradual return 
to bad habits that normally occurs at all large organizations as the 
memory of a tragic accident fades. As noted in the Report, the Board is 
confident the next half dozen flights will receive all the vigilance 
and oversight possible. Several Board members have extensive experience 
managing large organizations and know with some personal knowledge that 
the kinds of changes represented by these recommendations are 
fundamental, complex and challenging to implement. These three 
recommendations are changes in FUNCTIONS, not just wiring diagram 
changes and they will take considerable time to implement. Therefore, 
getting the plan written and submitted in a timely manner is important 
and the actual implementation should be done thoughtfully and 
carefully.

    Question 6. The Board recommends establishing an independent 
Technical Engineering Authority that is responsible for technical 
requirements, and all waivers to them, that will build a disciplined 
approach to identifying, analyzing, and controlling hazards throughout 
the life cycle of the Shuttle System. How should this new authority be 
designed and staffed to prevent some of NASA's bad habits, such as the 
reliance on past successes as a substitute for sound engineering 
practices, from leaching into this new organization?
    Answer. The Board intentionally declined to tell NASA how to 
specifically structure this new organization.

    Question 7. The Board recommends that NASA Headquarters Office of 
Safety and Mission Assurance should have direct line authority over the 
entire Space Shuttle Program safety organization and should be 
independently resourced. The Rogers Commission made a similar 
recommendation.
    (a) Why is it important that the Office of Safety and Mission 
Assurance has direct line authority over the Space Shuttle program and 
be independently resourced?
    Answer. The question should state ``Why is it important that the 
Office of Safety and Mission Assurance have direct line authority over 
the Space Shuttle safety program and be independently resourced?'' The 
Board did not recommend that the Safety office have direct line 
authority over the entire SSP.
    In order for a safety system to be effective and for people within 
the organization to feel comfortable using it, it must operate outside, 
but in parallel with the normal management chain of command; it must be 
equal in stature to the organization it monitors; it must have 
visibility into all levels of the organization; it must report directly 
to the senior leader in charge of the overall organization; and, it 
must have its own line item budget. Each of these is explained below.
    Safety must operate outside the normal management chain of command. 
If we expect people to report problems, they must feel secure within 
the organization to do that. If they feel threatened, a safety program 
operated outside the normal chain of command, allows them an avenue to 
raise a safety concern without feeling like they are jeopardizing their 
livelihood. In the case of the shuttle program, the safety organization 
was controlled by the SSP, so the program dealt with safety concerns 
about the program. This structure allowed the shuttle program manager 
to unilaterally waive technical requirements (such as the debris 
prevention requirement). An independent technical authority or safety 
function would ensure technical requirements are met or resolved before 
subsequent launches. Engineers stopped viewing the safety office as a 
reporting option since their complaints basically went right back to 
the program, leaving them vulnerable to retribution from management.
    Safety must be equal in stature to the organization it monitors. 
Safety programs must have a status that can stand up to the program it 
monitors. It does this by having a sufficient budget, high-quality 
safety professionals who are respected by their peers and a link to 
senior leadership to give them relevance. If safety is not of equal 
stature, the safety program will be ignored.
    Safety must have visibility into all levels of the organization. No 
area of any program within an organization can be exempt from review 
and monitoring by the safety office. Without visibility and authority 
to challenge at all levels of the organization, the safety program will 
not be effective.
    Safety must report directly to the senior leader in charge of the 
overall organization. Safety gives the senior leadership of an 
organization a different perspective on problems and solutions. If it 
is not directly reporting to the senior leadership, then the programs 
view it as a less important function within the organization. Safety 
must also have the authority to stop an operation for safety reasons 
and that authority can only come from senior leadership. Finally, to 
have relevance at all levels of an organization, safety must be 
directly reporting to the senior leadership.
    Safety must have its own line item budget. Safety programs need 
great people and they need sound budgets. If they must rely on the 
program or other parts of the organization to fund their activities, 
they will never be relevant and will always be limited in 
effectiveness. Owning their own budget empowers all the other concepts 
discussed above and gives the safety office the autonomy it needs to be 
highly effective. The safety budget should not compete with space 
shuttle program funds.

    (b) Why has NASA been so resistant to this recommendation?
    Answer. Good safety programs cost good money and require good 
people in order to be effective. Shuttle program managers believed they 
were always being safe so a robust safety program didn't add value to 
what they were doing. If it didn't add value, then why fund it? Since 
the SSP owned its own safety budget, they could decide how much safety 
they wanted to buy. As budgets became constrained, the safety budget 
was continuously cut to make up funds. In fact, most of safety was 
matrixed from other areas of NASA or contracted out.

    Question 8. Since October 1996, Space Shuttle operations have been 
managed by the United Space Alliance.
    (a) Could you please explain how contracting out Space Shuttle 
operations have affected NASA's in-house engineering capabilities?
    Answer. Over the years, NASA, in efforts to reduce government head 
count and operate more efficiently, assigned more work and 
responsibility to contractors and relied more heavily on contract 
financial incentives, as opposed to direct Government oversight. The 
result is that NASA technical expertise has winnowed down to the point 
that NASA no longer always has the sophisticated and elegant system of 
oversight by very knowledgeable people that such a complex enterprise 
requires. The Board is also concerned that functions have been shifted 
to contractors that should be performed by Government personnel, 
resulting in the shift of technical expertise from the Government to 
the private sector.

    (b) The report states that the Space Shuttle should be considered a 
developmental vehicle, not an operational one. How would this change of 
status effect NASA's requirements for the United Space Alliance 
contract?
    Answer. The differences between how a developmental vehicle is 
managed vs. how an operational vehicle is managed are profound. NASA 
management repeatedly stated that the Shuttle is officially considered 
a developmental vehicle, however the Board found ample evidence to 
conclude the Shuttle was being employed in an operational manner. The 
Board found no evidence to suggest that the contract had anything to do 
with this accident, but did find procedures that should be carefully 
reviewed prior to the next contract solicitation.
    The most significant issue that concerned the Board was the 
extensive management functions that are included in the contract. While 
there is nothing wrong with this as a policy, the practical result is a 
migration of technical expertise from the government sector to the 
private sector. It is our opinion that NASA is best suited to answer 
any questions regarding changes in requirements of the USA contract. 
However, anytime a government owned developmental vehicle is being 
flown a requirement exists for significant government oversight. 
Whether the shuttle is developmental or operational affects the overall 
management approach to flying the shuttle. It would call for a more 
distinct line of separation between government and contractor and 
require retention of a greater level of technical expertise by the 
government in order to be more deeply involved at the subsystem level. 
It is also the Board's opinion that were the Columbia viewed as 
developmental, procedures may have been in place to more exhaustively 
seek out the extent of damage to the left wing leading edge instead of 
continuing the ``operational'' 16-day science timeline.

    (c) Could you please discuss the Board's findings regarding 
relations between NASA and United Space Alliance as they worked to 
determine the damage done to Columbia by the foam debris strike? OK
    Answer. The report describes this relationship on page 142. After 
United Space Alliance became contractually responsible for most aspects 
of Shuttle operations, NASA developed procedures to ensure that its own 
engineering expertise was coordinated with that of contractors for any 
``out-of-family'' issue. In the case of the foam strike on STS-107, 
which was classified as out-of-family, clearly defined written guidance 
led United Space Alliance technical managers to liaise with their NASA 
counterparts. Once NASA managers were officially notified of the foam 
strike classification, and NASA engineers joined their contractor peers 
in an early analysis, the resultant group should, according to standing 
procedures, become a Mission Evaluation Room Tiger Team. Tiger Teams 
have clearly defined roles and responsibilities. Instead, the group of 
analysts came to be called a Debris Assessment Team. While they were 
the right group of engineers working the problem at the right time, by 
not being classified as a Tiger Team, they did not fall under the 
Shuttle Program procedures described in Tiger Team checklists, and as a 
result were not ``owned'' or led by Shuttle Program managers. This left 
the Debris Assessment Team in a kind of organizational limbo, with no 
guidance except the date by which Program managers expected to hear 
their results: January 24. Had this Tiger Team authority issue been 
clarified, the Debris Assessment Team would not have taken ``no'' for 
an answer in response to their request for imagery. They would have 
demanded imagery as a necessary requirement to be able to do their 
damage assessment and used the shuttle program as their authority.

    Question 9. NASA is currently developing an Orbital Space Plane to 
transport astronauts to the International Space Station. Based on your 
analysis of the development of the Space Shuttle and the lessons 
learned, what actions should be taken in developing the new Orbital 
Space Plane?
    Answer. The most important step we can take in designing the next 
orbital vehicle is to agree on a national vision on what we want the 
manned space program to accomplish. This would lead to the development 
of a concept of operations followed by a set of requirements for the 
vehicle to meet the objectives of a vision. The concept of operations 
and the requirements would then drive the design of the new orbital 
vehicle. Without an agreed national vision, the next orbital vehicle 
will fall victim to the same set of design compromises that plague the 
current orbiter fleet and the previous failed attempts to implement a 
replacement for the Space Shuttle.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                         Harold W. Gehman, Jr.
    Thank you for your continued dedication and support of the Columbia 
Investigation, and for your thoughtful questions for the record. I hope 
that you will find the following responses to be satisfactory.

    Question 1. Role played by ``NASA's relationship with contractors'' 
in the ``breakdown in communication that led to the organizational 
failures.''
    Answer. Over the years, NASA, in efforts to reduce government head 
count and operate more efficiently, assigned more work and 
responsibility to contractors and relied more heavily on contract 
financial incentives, as opposed to direct Government oversight. The 
result is that NASA technical expertise has winnowed down to the point 
that NASA no longer always has the sophisticated and elegant system of 
oversight by very knowledgeable people that such a complex enterprise 
requires. The Board is also concerned that functions have been shifted 
to contractors that should be performed by Government personnel, 
resulting in the shift of technical expertise from the Government to 
the private sector.

    Question 2. If NASA was performing all functions, would these 
communications breakdown have been as likely?
    Answer. Yes, the communications problems occurred where they always 
occurr, at the interfaces between offices and functions. Those 
interfaces exist in purely governmental organizations as well as 
contractor organizations. Once again, the only issue the Board was 
concerned about was the migration of technical expertise that went with 
the migration of oversight positions to the private sector.

    Question 3. Is there an inherent conflict of interest between 
profit and safety?
    Answer. Not in the sense that one can infer the level of safety by 
the level of profits. However, in this business, careful attention to 
technical detail, not profit levels, should be the principal focus for 
managers and workers, both government and contractors alike.
    The Board found no evidence that profit considerations contributed 
to the accident or compromised safety. However, the elaborate, multiple 
profit incentives NASA has adopted in efforts to promote contractor 
efficiency and performance, risks making technical considerations 
secondary to profit considerations among managers and workers. Where 
emphasis should be on determining what is the right thing to do 
technically, knowing that company profits are directly at risk, can 
encourage ``good news reporting'' and make it more difficult for 
management and workers to surface problems that could delay schedules 
or otherwise adversely affect profit.