[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
IMPLEMENTING THE VISION FOR SPACE
EXPLORATION: DEVELOPMENT OF THE
CREW EXPLORATION VEHICLE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 28, 2006
__________
Serial No. 109-65
__________
Printed for the use of the Committee on Science
Available via the World Wide Web: http://www.house.gov/science
______
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COMMITTEE ON SCIENCE
HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas BART GORDON, Tennessee
LAMAR S. SMITH, Texas JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California LYNN C. WOOLSEY, California
KEN CALVERT, California DARLENE HOOLEY, Oregon
ROSCOE G. BARTLETT, Maryland MARK UDALL, Colorado
VERNON J. EHLERS, Michigan DAVID WU, Oregon
GIL GUTKNECHT, Minnesota MICHAEL M. HONDA, California
FRANK D. LUCAS, Oklahoma BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois LINCOLN DAVIS, Tennessee
WAYNE T. GILCHREST, Maryland DANIEL LIPINSKI, Illinois
W. TODD AKIN, Missouri SHEILA JACKSON LEE, Texas
TIMOTHY V. JOHNSON, Illinois BRAD SHERMAN, California
J. RANDY FORBES, Virginia BRIAN BAIRD, Washington
JO BONNER, Alabama JIM MATHESON, Utah
TOM FEENEY, Florida JIM COSTA, California
RANDY NEUGEBAUER, Texas AL GREEN, Texas
BOB INGLIS, South Carolina CHARLIE MELANCON, Louisiana
DAVE G. REICHERT, Washington DENNIS MOORE, Kansas
MICHAEL E. SODREL, Indiana DORIS MATSUI, California
JOHN J.H. ``JOE'' SCHWARZ, Michigan
MICHAEL T. MCCAUL, Texas
MARIO DIAZ-BALART, Florida
0 C O N T E N T S
September 28, 2006
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Sherwood L. Boehlert, Chairman,
Committee on Science, U.S. House of Representatives............ 39
Written Statement............................................ 40
Statement by Representative Bart Gordon, Minority Ranking Member,
Committee on Science, U.S. House of Representatives............ 40
Written Statement............................................ 42
Statement by Representative Ken Calvert, Chairman, Subcommittee
on Space and Aeronautics, Committee on Science, U.S. House of
Representatives................................................ 43
Written Statement............................................ 44
Statement by Representative Mark Udall, Minority Ranking Member,
Subcommittee on Space and Aeronautics, Committee on Science,
U.S. House of Representatives.................................. 45
Written Statement............................................ 45
Statement by Representative Dana Rohrabacher, Member, Committee
on Science, U.S. House of Representatives...................... 46
Prepared Statement by Representative Jerry F. Costello, Member,
Committee on Science, U.S. House of Representatives............ 47
Prepared Statement by Representative Eddie Bernice Johnson,
Member, Committee on Science, U.S. House of Representatives.... 47
Witnesses:
Dr. Scott J. Horowitz, Associate Administrator, Exploration
Systems Mission Directorate, National Aeronautics and Space
Administration (NASA)
Oral Statement............................................... 48
Written Statement............................................ 50
Biography.................................................... 53
Mr. Allen Li, Director, Acquisition and Sourcing Management,
Government Accountability Office
Oral Statement............................................... 54
Written Statement............................................ 56
Biography.................................................... 62
Discussion
Congressional Oversight........................................ 62
GAO's Response to NASA Changes................................. 63
Budget Concerns................................................ 64
Transition Challenges.......................................... 67
International Competition...................................... 68
More Transition Challenges..................................... 68
Integration Challenges......................................... 70
More Budget Concerns........................................... 71
More Transition Challenges..................................... 75
CEV Safety..................................................... 76
Performance Margin............................................. 77
Ares Rocket Development........................................ 79
Payload Capacity............................................... 80
More on GAO's Response to NASA Changes......................... 82
More on Integration Challenges................................. 84
More on International Competition.............................. 85
More CEV Budget Concerns....................................... 86
More Integration Challenges.................................... 87
More Budget Concerns........................................... 88
Appendix 1: Answers to Post-Hearing Questions
Dr. Scott J. Horowitz, Associate Administrator, Exploration
Systems Mission Directorate, National Aeronautics and Space
Administration (NASA).......................................... 90
Mr. Allen Li, Director, Acquisition and Sourcing Management,
Government Accountability Office............................... 99
Appendix 2: Additional Material for the Record
Letter addressed to Hon. Sherwood Boehlert, Chairman, and Hon.
Bart Gordon, Ranking Member, House Science Committee from
Gregory J. Junemann, President, International Federation of
Professional & Technical Engineers (IFPTE), dated September 18,
2006........................................................... 108
IMPLEMENTING THE VISION FOR SPACE EXPLORATION: DEVELOPMENT OF THE CREW
EXPLORATION VEHICLE
----------
THURSDAY, SEPTEMBER 28, 2006
House of Representatives,
Committee on Science,
Washington, DC.
The Committee met, pursuant to call, at 2:06 p.m., in Room
2318 of the Rayburn House Office Building, Hon. Sherwood L.
Boehlert [Chairman of the Committee] presiding.
hearing charter
COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
Implementing the Vision for Space
Exploration: Development of the
Crew Exploration Vehicle
thursday, september 28, 2006
2:00 p.m.-4:00 p.m.
2318 rayburn house office building
Purpose
On Thursday, September 28th at 2:00 p.m. the House Committee on
Science will hold a hearing to review the National Aeronautics and
Space Administration's efforts to develop the Crew Exploration Vehicle
(CEV), which NASA has recently announced will be called Orion. As laid
out in the President's Vision for Space Exploration, Orion will carry
humans to the International Space Station (ISS), the Moon, and beyond
following the retirement of the Space Shuttle in 2010. On August 31st,
2006, NASA selected Lockheed Martin as its industry partner for the
development and production of Orion, signing a development and
production contract worth, including all options, approximately $8.1
billion through 2019.
On Wednesday the 26th of July, the Government Accountability Office
(GAO) released a report critical of NASA's contracting approach for the
acquisition of Orion. The report, entitled ``NASA: Long-Term Commitment
to and Investment in Space Exploration Program Requires More
Knowledge,'' faults the Agency for committing to a long-term contract
for Orion before reaching an appropriate level of understanding of the
design and risks of the program. The GAO report says, ``NASA's current
acquisition strategy for the CEV places the project at risk of
significant cost overruns, schedule delays and performance shortfalls
because it commits the government to a long-term product development
effort before establishing a sound business case.''
Following discussions with the GAO and the Science Committee, NASA
revised its then pending contract with Lockheed Martin to address some
of the GAO's concerns.
NASA and Lockheed Martin have now started work under the Orion
contract and expect to complete development by 2014 with a first
demonstration flight occurring in 2013. Overall, NASA will be depending
in part on the skills and knowledge in the contractor community to
reach a final design for Orion. GAO argues that this design activity
should be separated from longer-term production, allowing the
government to have greater leverage to seek beneficial production
terms. NASA, however, has chosen to include the entire design and
production of Orion into one contract with the hopes that this will
help control total life cycle costs. This hearing will explore NASA's
development schedule and costs and provide a basis for ongoing
oversight of this program.
Witnesses
Dr. Scott J. (Doc) Horowitz, Associate Administrator, Exploration
Systems Mission Directorate, NASA
Mr. Allen Li, Director, Acquisition and Sourcing Management, Government
Accountability Office
Overarching Questions
1) What is NASA's strategy for developing Orion?
2) Does NASA have the knowledge required to enter into a long-
term development contract?
3) What steps can NASA take to ensure timely and cost-
effective development of Orion?
Background
Following President Bush's January 14th, 2004 announcement of the
Vision for Space Exploration, NASA began a number of studies to
determine how the Agency could implement the new direction laid out in
the President's speech. The agency announced the results of its
Exploration Systems Architecture Study (ESAS) in September, 2005 and
has continued to refine this approach to date.
NASA has presented a plan designed to enable a crew of four to land
anywhere on the Moon, stay for up to seven days initially, and abort
and return to Earth at anytime. To enable this mission concept, NASA
has chosen to separate crew and cargo using two new launch vehicles.
Crew will travel aboard the Crew Exploration Vehicle, now called Orion,
a capsule capable of supporting a crew of four to six. Orion will
initially transport crew to the International Space Station and will
eventually ferry astronauts to the Moon and back. This design will
include a launch escape system that should allow the crew to safely
abort in the event of a launch failure. NASA argues that this design
has a safety factor many times higher than that of the current Space
Shuttle. The capsule will launch on top of a new launch vehicle,
previously described as the Crew Launch Vehicle (CLV), and which has
recently been named the Ares I. This launch vehicle will use the Space
Shuttle's Solid Rocket Booster (SRB) as an initial stage and an upper
stage utilizing an Apollo derived engine, the J-2X. After Orion and
Ares I have been developed, NASA plans to begin work on a new heavy-
lift launch vehicle of a capacity slightly greater than that of the
Saturn V. This vehicle, the Ares V, would launch the equipment needed
to land on the Moon--equipment the CEV would link up with in low-Earth
orbit. Ares V will utilize two Space Shuttle SRBs and five engines from
the Boeing Delta IV, on an external tank similar to Shuttle's. NASA is
calling the overall program for the development of Orion, Ares I and V,
and future lunar activities the Constellation Systems program.
Issues
What has NASA committed to in the Orion development contract with
Lockheed Martin?
Lockheed Martin was selected for the Orion contract on August 31,
winning out over a partnership between Northrup Grumman and Boeing. The
Lockheed contract is expected to cost about $3.9 billion for
development and testing of two test flight capsules; it is a cost-plus
contract so the exact figure cannot yet be known. The signed contract
also includes two additional options, named Schedules B and C, under
which NASA would contract with Lockheed to produce the operational
vehicles. Schedules B and C include price ceilings for the vehicles and
associated support services. The contract value of the options totals
approximately $4.25 billion through 2019 assuming a schedule of five
flights per year.
Initially, the contract did not make clear that Schedules B and C
were options and that therefore the government could end the contract
prior to production of operational vehicles without penalty. As a
result of the GAO study, the contract language was changed so that it
is now clear that Schedules B and C are options.
Why was Lockheed Martin chosen?
Selection documents show that NASA judged Lockheed Martin's bid
superior based on cost, technical approach, and past performance.
Does NASA have the knowledge needed to sign a long-term contract?
GAO's first concern is the Agency's approach of committing to a
long-term contract for Orion before completing design work and
developing a firmer cost estimate. GAO fears that committing now to a
long-term development contract could raise costs as design changes are
worked out.
Responding to the GAO report, NASA argues that it has a good sense
of how the project will proceed because it is largely based on existing
technology developed for the Apollo or Shuttle programs. Also, NASA
points out that two teams of NASA employees conducted design studies
independent of the contractor (and of the NASA teams was independent of
the Constellation program). NASA also believes that making clear that
Schedules B and C are merely options has also reduced the risk of cost
overruns.
NASA also has included explicit milestones for the contractor to
meet and given the government the ability to terminate the contract if
the project is not meeting NASA's requirements.
GAO, in turn, points out that space projects in general, and NASA's
in particular do not have a good record of coming in within expected
costs. GAO also points out that NASA still does not have a final design
or cost estimate for Orion or Ares I. NASA has just begun the detailed
design work necessary before production of the first test units. NASA
expects to have preliminary designs completed by summer 2008 and final
designs by spring 2010.
Why has NASA chosen a long-term contract?
NASA says it requires industry expertise to complete the design and
development of Orion. While NASA is engaging all of its centers in the
development projects within Constellation, the Agency says it does not
have sufficient personnel in critical areas to complete the designs in-
house.
GAO recommended that NASA could mitigate its contract risk without
delaying the project by moving forward with a contract to carry the
program only through its design phase to the Preliminary Design Review
(PDR) milestone, scheduled for summer 2008. During the PDR, NASA will
verify that the designs for Orion meet all of the requirements for the
system. At PDR, NASA (and industry) will have a much better
understanding of the program and be in a stronger position to make firm
commitments to cost and schedule for the development. NASA, however,
has chosen to include the entire design and development of Orion into
one contract with the expectation that this will help control total
life cycle costs because, among other reasons, it removes the incentive
to push off expenses to later stages of the contract.
What are the technical challenges that face the Constellation Program?
NASA believes that there are no areas in the Orion concept where
the technology is immature and poses significant development risks.
When pressed, NASA officials have said the hardest aspect of the
project will be ``systems integration''--enabling elements that were
originally designed for other vehicles to work together. In addition,
NASA has begun focused efforts on technology areas that are currently
perceived to hold the most risk, including efforts to address early
risks in the thermal protection and landing systems. However, given the
early stage of development of the project, the risks for the overall
program are not clear. For the next year, NASA and Lockheed Martin will
work to complete a set of well-defined requirements, a preliminary
design, and firm cost estimates.
What is the likelihood of further technical changes to Orion?
As GAO notes in its report, NASA has made a number of significant
changes to the Exploration Systems architecture since its announcement
in September 2005. These include decreasing the diameter of Orion from
5.5 meters to five meters, moving from use of the Space Shuttle Main
Engine (SSME) to an Apollo-derived engine, the J-2X, on the Ares I, and
moving to the Delta IV engine on the Ares V. Further changes are
expected, particularly as engine testing determines exactly how much
weight the engines are capable of lifting.
What is the development timeframe for Orion and Ares I?
The NASA Authorization Act of 2005 directs NASA to launch Orion as
close to 2010 as possible to minimize the time between the last Shuttle
launch and the first launch of Orion. NASA had hoped to have Orion
launch by 2012--two years earlier than initially planned--but has not
concluded that it will not have the funding to accomplish that.
Orion and Ares I are currently in the early stages of development.
Significant design and development activities remain for both projects,
including finalizing top-level requirements and drafting detailed
engineering designs. This fall, both vehicles will begin System
Requirement Reviews that will finalize the basic parameters of the
system. Preliminary design work will be reviewed during the summer of
2008, with final reviews before commencing production occurring during
the spring of 2010. NASA expects to complete a preliminary test of the
first stage of Ares I in late 2009. Operational tests of the full
system will not occur until fall of 2013.
What are the projected costs for Constellation development?
Due to the uncertainty inherent in estimating costs for development
of new products, NASA develops a cost range based on past performance
and cost models. Traditionally NASA has budgeted for new developments
at a confidence of 50 percent, meaning that the project stood an equal
chance of having an actual cost above or below the estimate. A higher
confidence levels reflects a greater chance of the actual cost of a
project coming in under the estimate. There is an ongoing debate within
the space community about the appropriate confidence level for space
acquisitions, with many critics suggesting the need for higher
confidence levels. The Air Force has recently switched to a policy of
requiring estimates at the 80 percent level.
NASA predicts the Orion development effort will cost $18.3 billion
from 2006 to 2020 at 65 percent confidence including both contractor
and government costs. In the near-term, NASA predicts that the cost of
the Constellation program through 2011, when NASA would begin testing
Orion and Ares I, is $32.1 billion with 80 percent confidence. Finally,
NASA believes that the cost of returning to the Moon by 2018 may be
around $104 billion, but NASA has not yet performed a detailed analysis
of this cost. GAO estimates the total Constellation costs through 2018
total $122 billion. For Constellation, most of the development risk
lies beyond the 2012 timeframe, when NASA begins work on the various
craft needed to support a lunar mission.
GAO notes that the FY 2007 budget does not fully support the costs
laid out in the original Exploration Systems Architecture Study (ESAS),
completed last summer. GAO estimates that NASA does not have sufficient
funding budgeted to support the architecture during FY 2008, 2009, and
2010. However, NASA's approach to implementing the exploration
architecture has evolved significantly since the ESAS report making it
difficult to determine what shortfall may occur. NASA has continued to
refine its cost estimates internally, but has embargoed that
information pending the release of the FY 2008 budget.
What implications would cost growth in Constellation have for other
programs at NASA?
As noted by GAO, it is unclear if NASA has the budget to support
the Vision as laid out in ESAS. NASA has announced its intention to
carry over funds in the Exploration Systems Mission Directorate from
fiscal years 2006, 2007, and 2008 to cover the expected large costs in
2009 and 2010. NASA expects to shift resources away from the Shuttle
program after its retirement to Constellation. Despite these resources,
the Agency remains challenged to support development of Orion by 2014.
NASA has stated that it will pursue a lunar return program under a
philosophy of ``go-as-you-can-afford-to-pay.'' Specifically:
NASA's plan is to contain [CEV] costs within the human space
flight budget, thereby, impacting the content of other projects
and programs within that budget. Thus, a higher than expected
CEV cost would simply delay CEV development or production or
impact other programs and projects within that human space
flight budget category. NASA continues its `go-as-you-can-
afford-to-pay' strategy toward all of our missions of space
exploration, scientific discovery, and aeronautics research.
The Authorization Act requires NASA to balance its human space
flight, space science, Earth science, and aeronautics programs.
Witness Questions
The witnesses were asked to address the following questions in
their testimony:
Dr. Scott Horowitz
1. What is NASA's strategy for reducing the total cost for
production and operation of the CEV?
2. What actions has NASA taken to address the concerns raised
in the GAO report entitled ``NASA: Long-Term Commitment to and
Investment in Space Exploration Program Requires More
Knowledge''?
Mr. Allen Li
1. To what degree does NASA's approach deviate from ``best
practices'' for large system acquisitions?
2. NASA has claimed that implementing the GAO's
recommendations would delay the delivery of the CEV and
increase costs. Please explain why you agree or disagree with
NASA's claim.
3. Does NASA have the financial resources necessary to
complete the adopted acquisition strategy? What particular
areas have the potential for significant cost growth?
4. What indicators would the GAO identify in order to gauge
the progress of CEV development?
Appendix A
Excerpts of NASA Authorization Act of 2005 on CEV
TITLE I--GENERAL PRINCIPLES AND REPORTS
SEC. 101. RESPONSIBILITIES, POLICIES, AND PLANS.
(b) Vision for Space Exploration--
(1) IN GENERAL--The Administrator shall establish a
program to develop a sustained human presence on the
Moon, including a robust precursor program, to promote
exploration, science, commerce, and United States
preeminence in space, and as a stepping-stone to future
exploration of Mars and other destinations. The
Administrator is further authorized to develop and
conduct appropriate international collaborations in
pursuit of these goals.
(2) MILESTONES--The Administrator shall manage human
space flight programs to strive to achieve the
following milestones (in conformity with section 503)--
(A) Returning Americans to the Moon no later
than 2020.
(B) Launching the Crew Exploration Vehicle as
close to 2010 as possible.
(C) Increasing knowledge of the impacts of
long duration stays in space on the human body
using the most appropriate facilities
available, including the ISS.
(D) Enabling humans to land on and return from
Mars and other destinations on a timetable that
is technically and fiscally possible.
SEC. 102. REPORTS.
(b) Budget Information--Not later than April 30, 2006, the
Administrator shall transmit to the Committee on Science of the
House of Representatives and the Committee on Commerce,
Science, and Transportation of the Senate a report describing--
(1) the expected cost of the Crew Exploration Vehicle
through fiscal year 2020, based on the public
specifications for that development contract; and
(2) the expected budgets for each fiscal year through
2020 for human space flight, aeronautics, space
science, and Earth science--
(A) first assuming inflationary growth for the
budget of NASA as a whole and including costs
for the Crew Exploration Vehicle as projected
under paragraph (1); and
(B) then assuming inflationary growth for the
budget of NASA as a whole and including at
least two cost estimates for the Crew
Exploration Vehicle that are higher than those
projected under paragraph (1), based on NASA's
past experience with cost increases for similar
programs, along with a description of the
reasons for selecting the cost estimates used
for the calculations under this subparagraph
and the confidence level for each of the cost
estimates used in this section.
SEC. 103. BASELINES AND COST CONTROLS.
(a) Conditions for Development--
(1) IN GENERAL--NASA shall not enter into a contract
for the development of a major program unless the
Administrator determines that--
(A) the technical, cost, and schedule risks of
the program are clearly identified and the
program has developed a plan to manage those
risks;
(B) the technologies required for the program
have been demonstrated in a relevant laboratory
or test environment; and
(C) the program complies with all relevant
policies, regulations, and directives of NASA.
(2) REPORT--The Administrator shall transmit a report
describing the basis for the determination required
under paragraph (1) to the Committee on Science of the
House of Representatives and the Committee on Commerce,
Science, and Transportation of the Senate at least 30
days before entering into a contract for development
under a major program.
(3) NONDELEGATION--The Administrator may not delegate
the determination requirement under this subsection,
except in cases in which the Administrator has a
conflict of interest.
TITLE V--HUMAN SPACE FLIGHT
SEC. 501. SPACE SHUTTLE FOLLOW-ON.
(a) Policy Statement--It is the policy of the United States to
possess the capability for human access to space on a
continuous basis.
(b) Progress Report--Not later than 180 days after the date of
enactment of this Act and annually thereafter, the
Administrator shall transmit a report to the Committee on
Science of the House of Representatives and the Committee on
Commerce, Science, and Transportation of the Senate describing
the progress being made toward developing the Crew Exploration
Vehicle and the Crew Launch Vehicle and the estimated time
before they will demonstrate crewed, orbital space flight.
(c) Compliance Report--If, one year before the final planned
flight of the Space Shuttle orbiter, the United States has not
demonstrated a replacement human space flight system, and the
United States cannot uphold the policy described in subsection
(a), the Administrator shall transmit a report to the Committee
on Science of the House of Representatives and the Committee on
Commerce, Science, and Transportation of the Senate
describing--
(1) strategic risks to the United States associated
with the failure to uphold the policy described in
subsection (a);
(2) the estimated length of time during which the
United States will not have its own human access to
space;
(3) what steps will be taken to shorten that length of
time; and
(4) what other means will be used to allow human
access to space during that time.
SEC. 502. TRANSITION.
(a) In General--The Administrator shall, to the fullest extent
possible consistent with a successful development program, use
the personnel, capabilities, assets, and infrastructure of the
Space Shuttle program in developing the Crew Exploration
Vehicle, Crew Launch Vehicle, and a heavy-lift launch vehicle.
(b) Plan--Not later than 180 days after the date of enactment
of this Act, the Administrator shall transmit to the Committee
on Science of the House of Representatives and the Committee on
Commerce, Science, and Transportation of the Senate a plan
describing how NASA will proceed with its human space flight
programs, which, at a minimum, shall describe--
(1) how NASA will deploy personnel from, and use the
facilities of, the Space Shuttle program to ensure that
the Space Shuttle operates as safely as possible
through its final flight and to ensure that personnel
and facilities from the Space Shuttle program are used
in NASA's exploration programs in accordance with
subsection (a);
(2) the planned number of flights the Space Shuttle
will make before its retirement;
(3) the means, other than the Space Shuttle and the
Crew Exploration Vehicle, including commercial
vehicles, that may be used to ferry crew and cargo to
and from the ISS;
(4) the intended purpose of lunar missions and the
architecture for those missions; and
(5) the extent to which the Crew Exploration Vehicle
will allow for the escape of the crew in an emergency.
SEC. 504. GROUND-BASED ANALOG CAPABILITIES.
(a) Policy--It is the policy of the United States to achieve
diverse and growing utilization of, and benefits from, the ISS.
(b) Elements, Capabilities, and Configuration Criteria--The
Administrator shall ensure that the ISS will--
(1) be assembled and operated in a manner that
fulfills international partner agreements, as long as
the Administrator determines that the Shuttle can
safely enable the United States to do so;
(2) be used for a diverse range of microgravity
research, including fundamental, applied, and
commercial research, consistent with section 305;
(3) have an ability to support a crew size of at least
six persons, unless the Administrator transmits to the
Committee on Science of the House of Representatives
and the Committee on Commerce, Science, and
Transportation of the Senate not later than 60 days
after the date of enactment of this Act, a report
explaining why such a requirement should not be met,
the impact of not meeting the requirement on the ISS
research agenda and operations and international
partner agreements, and what additional funding or
other steps would be required to have an ability to
support crew size of at least six persons;
(4) support Crew Exploration Vehicle docking and
automated docking of cargo vehicles or modules launched
by either heavy-lift or commercially-developed launch
vehicles;
(5) support any diagnostic human research, on-orbit
characterization of molecular crystal growth, cellular
research, and other research that NASA believes is
necessary to conduct, but for which NASA lacks the
capacity to return the materials that need to be
analyzed to Earth; and
(6) be operated at an appropriate risk level.
Appendix B:
NASA Report on Cost Estimates for the
Crew Exploration Vehicle (CEV) and Other
Agency Program Budgets through 2020
June 2006
This report responds to the requirements of Section 102 of the NASA
Authorization Act of 2005 (P.L. 109-155) to provide cost and budget
information for the Crew Exploration Vehicle (CEV), as well as other
Agency programs through 2020.
The current estimate of total nonrecurring cost for the Crew
Exploration Vehicle from fiscal year 2006 through 2020 is $18.3
billion. There are many assumptions behind this estimate, which require
a fill explanation. First, this assumes that the first CEV test flights
would begin no later than 2012, and the first operational demonstration
flight of the CEV to the International Space Station (ISS) would be no
later than 2014. This estimated total cost includes design,
development, test, and evaluation (DDT&E) and production costs for the
CEV through 2020; but does not include the recurring cost of
operations. This total nonrecurring cost includes not only expected
contract costs, but also all Government costs associated with the CEV.
This preliminary estimate is based on the exploration architecture NASA
developed during last year's Exploration System Architecture Study and
forms the basis for NASA's FY 2007 budget. Given that the requirements
and acquisition processes are still under way, NASA performed cost risk
analyses to develop the cost estimate with a 65 percent cost confidence
level to arrive at the total budget. This confidence level is
appropriate for this phase of the CEV project.
NASA considers the confidence level of 65 percent to be appropriate
for two reasons. First, the CEV definition is not complete, and the
distribution on CEV cost is still fairly wide, reflective of the
uncertainty in definition. A wide cost distribution requires more cost
reserve to achieve 65 percent confidence than will be the case once the
CEV definition has matured and some cost risk has been retired, leading
to a narrower cost distribution. Once NASA retires risk and the CEV
cost distribution narrows, the Agency could find that the CEV cost
estimate of $18.3 billion is greater than 65 percent confidence. But to
be prudent at this point, NASA is carrying enough reserve to achieve a
65 percent confidence level even on the wide cost distribution that now
exists on CEV. Secondly, carrying 65 percent confidence level cost
estimates on individual projects such as CEV results in about an 80
percent cost confidence for the total Constellation Program. In
investing, this is called the ``portfolio effect.'' In the case of the
Constellation portfolio, since the CEV Program is at the 65 percent
confidence level on each individual project, the probability is that
only a few of the individual projects will overrun. At 65 percent
confidence, more projects will underrun than overrun, and the total
reserve at the Constellation level should be more than sufficient.
The NASA Authorization Act also asks NASA to report at least two
cost estimates for the CEV that are higher than those NASA had
projected, but based on NASA's past experience. To arrive at two higher
CEV cost estimates, NASA would add additional program cost reserves to
its estimates for the work to be done. Thus, while our current estimate
of total costs for the CEV is $18.3 billion at 65 percent confidence
for fiscal years 2006-2020, NASA's cost estimates at higher confidence
levels are $20.3 billion for 70 percent cost confidence and $23.8
billion for 80 percent cost confidence. The higher cost estimates
provide additional reserve to address technical and schedule
uncertainties. However, for the level of maturity in the designs and
plans NASA has at this time, NASA firmly believes that a 65 percent
confidence level is the appropriate level of confidence for our cost
estimates at this early phase (Phase A) of the CEV project. NASA will
also be employing a rigorous Continuous Cost-Risk Management (CCRM)
approach to retire risks as we progress from Phase A through Phase B
(Preliminary Design). By effectively managing our risks in this
fashion, the cost confidence for the $18.3 billion estimate is expected
to increase as NASA proceeds with Final Design and Fabrication (Phases
C and D, respectively) of the CEV.
The NASA Authorization Act further asks NASA for the expected
budgets for each fiscal year through 2020 for human space flight,
aeronautics, space science, and Earth science. NASA's five-year budget
run-out assumptions for fiscal years 2006-2011 are presented as part of
NASA's FY 2007 budget request. The budget figures for the years after
2011 must be considered notional at best.
See the enclosed charts for this information, which requires
further explanation. The Act asks NASA to assume inflationary growth
for its' top-line budget, so in the attached charts we show notional
growth at this level for NASA's programs, based on the 2011 budget.
NASA assumes an inflationary growth rate of 2.4 percent per year. For
the purpose of this report, the human space flight budget is treated as
NASA's budget categories of Space Operations, except for the Space and
Flight Support theme and Exploration Systems. The Act then asks NASA to
assume the higher cost estimates for the CEV provided above in its
report of expected budgets for each fiscal year. However, we should not
confuse costs with budget in this analysis. These are our cost
estimates for the CEV with different confidence levels to that expected
cost. If there is a change in the cost estimates, NASA will not
necessarily change the budget plans. Instead, NASA's plan is to contain
those costs within the human space flight budget, thereby, impacting
the content of other projects and programs within that budget. Thus, a
higher than expected CEV cost would simply delay CEV development or
production or impact other programs and projects within that human
space flight budget category. NASA continues its ``go-as-you-can-
afford-to-pay'' strategy toward all of our missions of space
exploration, scientific discovery, and aeronautics research.
Appendix C:
Notification Concerning the Award of the
Crew Exploration Vehicle Development Contract
Preface
The National Aeronautics and Space Administration intends to award
a design, development, production, and support contract for the Crew
Exploration Vehicle (CEV) not sooner than August 31, 2006. The
following report has been prepared pursuant to direction in Section
103(a) of the National Aeronautics and Space Administration
Authorization Act of 2005 (P.L. 109-155) to support the Administrator's
determination.
1.0 Introduction
The Vision for Space Exploration has specific goals and objectives
of retiring the Shuttle by no later than 2010, providing CEV
operational availability no later than 2014, and returning humans to
the Moon by 2020. During the summer of 2005, NASA conducted the
Exploration Systems Architecture Study (ESAS) to define the system
architecture and concepts for the CEV. The architecture recommended by
the ESAS defines the CEV as a crew module, service module, and launch
abort system arrangement similar to that of Apollo. This architecture
was determined to be the least costly, most rapid, and safest approach
for bringing the lunar missions to fruition in a timely manner.
2.0 Business Case, Acquisition Strategy, and Status
NASA requires the development of a sound business case prior to
committing the Government to a long-term product development effort. In
establishing the acquisition strategy for the CEV, NASA utilized a
knowledge-based and performance-based acquisition framework, as
outlined in this report, which defines how the Agency implemented these
provisions for the planned development, production, and fielding of
this new human space vehicle. Additionally, NASA is maximizing
competition by soliciting from industry their development, production,
and management approach with an emphasis on Life Cycle Cost (LCC) for
the CEV. The foundation of the CEV acquisition strategy is to seek
commitment from industry for a design solution and to control LCC
through competition and incentives. While in this competitive
environment, NASA will receive firm competitive prices from industry to
complete development of the CEV and demonstrate a crewed vehicle and an
uncrewed cargo vehicle. Under this competition, NASA will also
establish ``not-to-exceed'' prices for the production of the required
vehicles to support the current flight manifest through 2019.
The CEV acquisition utilizes a phased approach. Lockheed Martin and
Northrop Grumman were selected and awarded Phase 1 contracts in July of
2005. These two vendors will remain under contract until one is
selected for Phase 2 of the acquisition. To minimize the Government's
obligation during design and development, NASA's acquisition for Phase
2 divides the CEV contract into three different schedules:
Schedule A, for design, development, test, and
evaluation (DDT&E) and production of the first certified flight
units of the crewed and uncrewed vehicle. Schedule A also
includes the units necessary to perform the flight tests
required to certify the CEV.
Schedule B, for production of flight units beyond the
first certified flight units produced in Schedule A.
Schedule C, for sustaining activities during
production and operation.
Schedule A is authorized at contract award and runs through the
first flight demonstration of each design variant of the CEV. Schedule
A aids the formulation phase of the project by allowing NASA to utilize
the contractor's knowledge to develop a set of validated requirements
including component specifications by the project's Preliminary Design
Review (PDR). The CEV acquisition strategy will allow NASA and the
contractor to jointly attain knowledge about the project and required
resources that will enable the generation of firm cost, schedule, and
risk elements. Shortly after PDR, the Non-Advocacy Review (NAR) will be
held to establish the firm project baseline and provide assurances to
our stakeholders that NASA has the necessary knowledge to move the
project forward into development.
Schedule B is a contract option planned to be authorized post-PDR,
NAR, and after the Critical Design Review (CDR). Schedule B will be
used to produce all the flight units other than the first two units
produced under Schedule A. Schedule C is an additional contract option
and is planned to be authorized at approximately the same time as
Schedule B. The CEV strategy does not commit the Agency to production
until the NAR milestone is met. First production orders are planned for
the fall of 2009, nine months after the official acceptance by NASA of
the baseline of the CEV's design at CDR.
The acquisition strategy being utilized for CEV provides an
effective knowledge- and performance-based approach for NASA. This
strategy is designed to coincide with the GAO-defined Knowledge Points
and minimizes the Government's obligation accordingly. Use of Delivery
Orders provides NASA the ability to order only the units and sustaining
engineering necessary, with appropriate incentives, at a time when the
requirement and costs are better understood by NASA and industry.
Inherent in this strategy is the ability for the Government to
terminate these efforts if performance does not meet expectations.
3.0 CEV Policy, Regulation, and Directive Compliance
These acquisitions, as well as the project plan, have been built in
compliance with all NASA's defined policies, regulations, and
directives and, in particular, the following key documents:
A Renewed Spirit of Discovery: The President's Vision
for U.S. Space Exploration.
The National Aeronautics and Space Administration
Authorization Act of 2005 (Public Law 109-155).
NASA Policy Directive 7120AC--Program/Project
Management.
NASA Procedural Requirement 7120.5C--NASA Program and
Project Management Processes and Requirements.
NASA Procedural Requirement 7123.1--Systems
Engineering Procedural Requirements.
NASA Procedural Requirement 8000.4--Risk Management
Procedural Requirements.
NASA Policy Directive 8700.1 C--NASA Policy for
Safety and Mission Success.
48 CFR 1800-1899--Federal Acquisition Regulation
Supplement (NASA/FAR Supplement).
4.0 Technology Maturation
NASA has not identified any areas in the CEV concept where the
technology is immature. To further improve and characterize NASA's
knowledge, the Agency has in-house advanced development plans (ADP) to
mitigate cost and schedule risk for those areas that are deemed to have
the most risk for CEV development. The architecture design chosen by
NASA, informed by the ESAS study, and requirements maturation through
the Phase 1 trades and analysis, permits the use of mature technology
and high-pedigree heritage hardware with space flight experience.
The Phase 2 proposals have been evaluated for technology risks.
Specifically, the CEV Phase 1 contractors provided a priority list of
all risks with a narrative of their mitigations, mitigation costs and
schedules, and projected mitigation action result. In addition, the CEV
Phase 1 contractors' narratives included fall-back options for
technologies and their impact to cost and schedule, if used.
With these ADP efforts, Phase 2 proposals are being evaluated for
technical risk and risk-reduction testing. NASA has confidence that the
technologies have been effectively demonstrated to proceed with design
and development of the CEV.
5.0 Risk Management
The CEV project, in compliance with NPR 8000.4, Risk Management
Procedural Requirements, practices a Continuous Risk Management process
that provides structured. management of all risks facing the project
regardless whether they are based in safety, cost, schedule, or
technical risk areas. Each CEV team member is actively engaged in
identifying and logging all project risks in the risk database so that
they can be coordinated and pro-actively resolved. Subsystem managers
define the top risks associated with their subsystem and allocate
mitigation resources as required. Risk Mitigation Plans are developed
for each risk, and progress in carrying out those plans is reported,
monitored, and controlled on a continuous basis. The monthly CEV
Project-level Risk Board (comprised of the senior project leadership)
reviews, integrates, and controls the risks from each subsystem and
determines if these risks and mitigation strategies should be elevated
to the top CEV project risk list and coordinated with the Constellation
Program office. Named after the patterns that stars form in the night
sky, the Constellation Program is responsible for developing the CEV,
CLV, and related exploration architecture systems that will provide
humans the capabilities necessary to travel and explore the solar
system.
NASA has expended considerable time and resources in the
formulation phase of the CEV project to best define requirements and
risk factors to mission success. In May 2005, the ESAS was initiated,
with one task, among others, to provide an assessment of the top-level
CEV requirements. Further, the. ESAS laid the groundwork by defining
the baseline technical content, cost, schedule, and principal risk
factors. Since that time, a rigorous Constellation Program systems
engineering and integration process has been established to control
changes to missions, requirements, cost, schedule, and risk as these
occur normally through the project formulation and development
processes.
NASA has spent a year continuing to refine and mitigate concept
risks through the combination of trades and analysis performed by NASA
in-house teams and both CEV Phase 1 contractors. As a result of the
ESAS and the ensuing work, the architecture and the top-level
requirements for the CEV were chosen and made part of the Phase 2
competition. Additionally, NASA established an infra-agency CEV Smart
Buyer Team which performed trade studies and design analyses that were
used by the CEV Project Office to understand and verify the
appropriateness of the requirements incorporated into the CEV Phase 2
solicitation and evaluation of proposals. The evolution of the
Constellation systems, along with more clear definition of the CEV,
allows NASA to select a single contractor at this time. Detailed design
decisions are necessary to continue the development of the CEV,
including contractor-specific design solutions and definitions of
development risks.
Key aspects for managing contractual and schedule risks are
incentives and control devices such as the use of Earned Value
Management, which NASA has adopted into its contracting strategy.
During DDT&E, NASA will use an end-item award fee. This makes all award
fees subject to final determination that the product has been
demonstrated to meet all requirements. The contractor will have
incentives to identify risks early and to quickly and pro-actively
mitigate them. This is a powerful tool for NASA and provides incentives
to be successful on all elements of the project: cost (including life
cycle costs), schedule, technical, and quality. There will be inherent
motivation toward schedule performance by means of concluding each
project milestone with an award fee determination. Since no provisional
payments will be made, industry will not receive interim payments until
the completion of an established project milestone. A slip in schedule
will be reflected both in a delay in receipt of the interim payment and
a lower evaluation score in the associated NASA evaluation.
In summary, the CEV project utilizes a structured process for
managing all risks which encompasses safety, cost, schedule, or
technical risk areas. Risk Mitigation Plans are developed for each
risk, and progress of these risk mitigation plans is reported,
monitored, and controlled on a continuous basis by project management.
Risk integration is performed at all levels to ensure efficient,
effective risk mitigation within the CEV Project and across the
Constellation Program. Further, considerable work was done in the
formulation phase to understand and characterize the risk trade space
with various requirements and development options.
6.0 Summary
In accordance with Section 103 (a) of the NASA Authorization Act of
2005, NASA has clearly identified technical, cost, schedule, and safety
risks and has plans to manage them. NASA has baselined an architecture
that has mature technologies. Finally, the NASA CEV Project has
complied with all relevant policies, regulations, and directives of the
Agency.
The CEV design, development, and acquisition efforts are on track
for the identified Agency milestones. Selection of a CEV Prime
Contractor is a major step forward in the implementation of the Vision
for Space Exploration. NASA has demonstrated a sound acquisition
strategy that seeks commitment from industry for a design solution and
to control LCC through competition and incentives. NASA is ready to
execute its next step, ``down-select'' to a single Prime and award a
contract in order to:
Finalize NASA and contractor design solutions.
Allow open communications with the contractor that is
going to design and develop the CEV. Communication between
Government and the Phase 1 industry teams is currently limited
due to source selection constraints.
Proceed to the design review milestones with a single
contractor.
To date, NASA has received firm competitive prices from industry to
complete development of the CEV. NASA has identified no technology
issues. NASA has demonstrated its technical, cost, and schedule risk
management planning and has mitigations, budget, controls, and
assessments in place. Earned value and other cost controls and
reporting requirements are in place on all Government and contract
deliverables.
The combination of the knowledge gained from the ESAS, the Smart
Buyer team, the work in the CEV Phase 1 contracts and Phase 2 proposals
and processes for risk control and integration enables NASA to ``down
select'' a single Prime contractor. Hence, NASA will be able to
baseline an industry approach and commitment to meet the desired
outcomes of the CEV project.
Letter from GAO to Chairman Boehlert
July 17, 2006
The Honorable Sherwood Boehlert
Chairman
The Honorable Bart Gordon
Ranking Minority Member
Committee on Science
House of Representatives
Subject: NASA: Long-Term Commitment to and Investment in Space
Exploration Program Requires More Knowledge
The National Aeronautics and Space Administration (NASA) plans to
spend nearly $230 billion over the next two decades implementing the
Vision for Space Exploration. In January 2006, NASA publicly released
its Exploration Systems Architecture Study (ESAS), which is an effort
to identify the best architecture and strategy to implement the
President's 2004 Vision for Space Exploration (Vision).\1\ The cost
estimate for implementing the ESAS through fiscal year 2011 exceeds $31
billion. The estimate through fiscal year 2018 is over $122 billion,
and the estimate through fiscal year 2025 is nearly $230 billion.\2\
These estimates include the architecture, robotic precursor missions,
supporting technologies, and funding needed to service the
International Space Station (ISS).\3\ NASA plans to implement this
architecture through a ``go as you can afford to pay'' approach,
wherein lower-priority efforts would be deferred, descoped, or
discontinued to allow NASA to stay within its available budget profile.
This approach assumes NASA's budget will increase moderately to keep
pace with inflation. Given the long-term fiscal imbalances that will
challenge the entire Federal Government now and in the future, it would
be prudent for NASA to establish a program that reduces the risk that
significant additional funding, beyond moderate increases for
inflation, will be required to execute the program.\4\ Government
leaders will have to make difficult decisions to resolve such
challenges, and the debate over the potential cost and the Federal
Government's role in implementing the Vision are emblematic of the
challenges the Nation will need to resolve in the years ahead.
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\1\ The ESAS architecture supports the development of a new Crew
Exploration Vehicle (CEV), Crew Launch Vehicle (CLV), a Cargo Launch
Vehicle (CaLV), and other supporting systems. The architecture also
calls for various Research and Technology (R&T) and Robotic Lunar
Exploration Program (RLEP) projects.
\2\ All cost estimates related to the Vision are reported as
inflated (``real year'') dollars.
\3\ NASA's cost estimate through 2011--$31.2 billion--included the
costs of the R&T and RLEP projects needed to support the architecture.
Its estimate for the first lunar landing--$104 billion--did not include
$18 billion in funding for R&T and RLEP projects. To ensure
consistency, the estimates for 2018 and 2025 are presented with R&T and
RLEP funding included.
\4\ GAO, 21st Century Challenges: Re-examining the Base of the
Federal Government, GAO-05-325SP (Washington, D.C.: Feb. 2005); 21st
Century: Addressing Long-Term Fiscal Challenges Must Include a Re-
examination of Mandatory Spending, GAO-06-456T (Washington, D.C.: Feb.
15, 2006); and Highlights of a GAO Forum: The Long-Term Fiscal
Challenge, GAO-05-282SP (Washington, D.C.: Feb. 1, 2005).
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Because of the significance of this investment, competing demands
on the federal discretionary budget, and the importance of the success
of NASA's exploration program to the future of U.S. human space flight,
you requested that we assess (1) the extent to which NASA has
identified the architecture and costs necessary to implement the
Vision, (2) whether NASA's exploration architecture cost estimates fit
within the Agency's projected available budgets, and (3) the risks
associated with NASA's acquisition strategy for the CEV project.
We presented our preliminary findings to your staff in May 2006.
Because of your committee's interest in how NASA is implementing the
Vision for Space Exploration, we are enclosing the full briefing that
supported that May presentation with this report (see Encl. II), along
with a summary of our findings and conclusions. We are recommending
that the NASA Administrator modify the current CEV acquisition strategy
to ensure that the Agency does not commit itself, and in turn the
Federal Government, to a long-term contractual obligation prior to
establishing a sound business case at the project's preliminary design
review. In written comments, NASA non-concurred with our recommendation
and stated that it has the appropriate level of knowledge to proceed
with its current acquisition strategy. As a result of its
nonconcurrence, we are including as a matter for congressional
consideration that the Congress should consider restricting NASA's
appropriations and obligations for the CEV project to only the amount
of funding necessary to successfully complete the project's preliminary
design review.
Background
The Vision includes plans to explore the Moon, Mars, and beyond.\5\
The first step in implementing the Vision is to retire the Space
Shuttle after completing assembly of the ISS by the end of the decade.
NASA currently plans to retire the Space Shuttle in 2010, creating a
potential gap in U.S. human space flight of up to four years before
development of the CEV and the CLV is complete. Congress has voiced
concern over the United States not having continuous access to space,
and NASA has made it a priority to minimize the gap by accelerating the
CEV project to have it in service as close to 2010 as possible. NASA's
Exploration Systems Mission Directorate's (ESMD) Constellation program
is responsible for the development of both the CEV and the CLV. NASA
awarded concept development contracts for the CEV project to both
Lockheed Martin and Northrop Grumman in July 2005 and plans to award a
contract for design, development, production and sustainment in
September 2006. That contract could extend through 2019. For the CLV,
NASA plans to award a sole-source contract for the first stage of the
CLV to ATK-Thiokol, the manufacturer of the Shuttle's Reusable Solid
Rocket Motor, in October 2006. Also, the Agency plans to award Pratt &
Whitney Rocketdyne, the developer of the Space Shuttle Main Engine
(SSME) and J-2 engines, a sole-source contract for development of the
J-2X engine in November 2006. These contractors are currently planning
their respective efforts under interim contract arrangements. NASA has
started in-house preliminary design work on the CLV upper stage
structures and avionics and plans to begin awarding competitive
contracts for production of these items in May 2007.
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\5\ The Vision includes a return to the Moon that is intended
ultimately to enable future exploration of Mars and other destinations.
To accomplish this, NASA initially plans to (1) complete its work on
the International Space Station by 2010, fulfilling its commitment to
15 international partner countries; (2) begin developing a new manned
exploration vehicle to replace the Space Shuttle; and (3) return to the
Moon no later than 2020 in preparation for future, more ambitious
missions.
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Despite many successes in the exploration of space, such as landing
the Pathfinder and Exploration Rovers on Mars, the loss of life,
unsuccessful missions, and unforeseen cost overruns have recently
increased the level of concern over the benefits of such exploration,
particularly with regard to human space flight activities. NASA has had
difficulty bringing a number of projects to completion, including
several efforts to build a second generation of reusable human space
flight vehicle to replace the Space Shuttle. NASA has attempted several
expensive endeavors such as the National Aero-Space Plane, the X-33 and
X-34, and the Space Launch Initiative, among others. While these
endeavors have helped to advance scientific and technical knowledge,
none have completed their objective of fielding a new reusable space
vehicle. We estimate that these unsuccessful development efforts have
cost approximately $4.8 billion since the 1980s. The high cost of these
unsuccessful efforts and the potential costs of implementing the Vision
make it important that NASA achieve success in its new exploration
program.
Our past work has shown that developing a sound business case,
based on matching requirements to available and reasonably expected
resources before committing to a new product development effort,
reduces risk and increases the likelihood of successful outcomes.\6\ At
the heart of a business case is a knowledge-based approach to product
development that is a best practice among leading commercial firms and
successful government system developers. For a program to increase its
chances of delivering a successful product, high levels of knowledge
should be demonstrated before managers make significant program
commitments. In essence, knowledge supplants risk over time. This
building of knowledge can be described as three levels that should be
attained over the course of the program:
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\6\ Examples of our best practices reports include GAO, Best
Practices: Using a Knowledge-Based Approach to Improve Weapon
Acquisition, GAO-04-386SP (Washington, DC.: Jan. 2004); Space
Acquisitions: Committing Prematurely to the Transformational Satellite
Program Elevates Risks for Poor Cost, Schedule, and Performance
Outcomes, GAO-04-71R (Washington, D.C.: Dec. 4, 2003); Best Practices:
Capturing Design and Manufacturing Knowledge Early Improves Acquisition
Outcomes, GAO-02-701 (Washington, D.C.: Jul. 15, 2002); and Best
Practices: Better Matching of Needs and Resources Will Lead to Better
Weapon System Outcomes, GAO-01-288 (Washington, DC.: Mar. 8, 2001).
(1) At program start, the customer's needs should match the
developer's available resources in terms of availability of
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mature technologies, time, human capital, and funding.
(2) Midway through development, the product's design should be
stable and demonstrate that it is capable of meeting
performance requirements.
(3) By the time of the production decision, the product must
be shown to be producible within cost, schedule, and quality
targets, and have demonstrated its reliability.
Our work has shown that programs that have not attained the level
of knowledge needed to support a sound business case have been plagued
by cost overruns, schedule delays, decreased capability, and overall
poor performance. With regard to NASA, we have reported that in some
cases the Agency's failure to define requirements adequately and
develop realistic cost estimates--two key elements of a business case--
resulted in projects costing more, taking longer, and achieving less
than originally planned.
Summary
Although NASA is continuing to refine its exploration architecture
cost estimates, the Agency cannot at this time provide a firm estimate
of what it will take to implement the architecture. The absence of firm
cost estimates is mainly due to the fact that the program is in the
early stages of its life cycle. According to NASA cost-estimating
guidance, early life cycle phase estimates are generally based upon
parametric models, which use data from projects with similar attributes
to predict cost because there are usually many unknowns and actual cost
or performance data are not available. NASA preliminarily identified
the resources needed to implement the architecture as outlined in the
architecture study primarily through the use of such models. NASA
conducted a cost risk analysis of its preliminary estimates through
fiscal year 2011. On the basis of this analysis and through the
addition of programmatic reserves (20 percent on all development and 10
percent on all production costs), NASA is 65 percent confident that the
actual cost of the program will either meet or be less than its
estimate of $31.2 billion through fiscal year 2011. For the cost
estimates for beyond 2011, when most of the cost risk for implementing
the architecture will be realized, NASA has not applied a confidence
level distinction. Since NASA released its preliminary estimates, the
Agency has continued to make architecture changes. For example,
following the issuance of the architecture study, NASA conducted
several analysis cycles during which various aspects of the
architecture have evolved, such as the diameter of the CEV, the engine
used to support the upper stage of the CLV, and the size of the
Reusable Solid Rocket Booster on the CLV. While these changes, and
others, are appropriate for this phase of the program, when concepts
are still being developed, they leave the Agency in the position of
being unable to firmly identify program requirements and needed
resources, which can also be expected at this phase of the program.
According to NASA officials, once they receive more detailed contractor
inputs, the Agency will be able to produce higher-fidelity estimates of
program cost. NASA plans to commit to a firm cost estimate at the
preliminary design review (PDR) in 2008, when the program's
requirements, design, and schedule will all be baselined.
NASA will be challenged to implement the architecture recommended
in the study within its projected budget. Whether using the
architecture study estimates of funds available or NASA's Fiscal Year
2007 Budget Submission for ESMD that was based on the architecture
study cost estimates, there are years when NASA does not have
sufficient funding to implement the architecture. Some yearly
shortfalls exceed $1 billion, while in other years the funding
available exceeds needed resources. NASA maintains that the
architecture could be implemented within the projected available
budgets through fiscal year 2011 when funding is considered
cumulatively. In addition, NASA preliminarily projects multibillion-
dollar shortfalls for ESMD in all fiscal years from 2014 to 2020, with
an overall deficit through 2025 of over $18 billion. In the short-term,
NASA is attempting to address this problem within the Constellation
program by redirecting funds to that program from other ESMD activities
to provide a significant surplus for fiscal years 2006 and 2007 to
cover projected shortfalls beginning in fiscal year 2009. In addition,
the Constellation program has requested more funds than required for
its projects in several early years to cover shortfalls in later years.
For example, the Exploration Communication and Navigation Systems
project within the Constellation program plans to roll over $56.2
million from the fiscal year 2007 budget to make up for budget
shortfalls in fiscal years 2008, 2009, and 2010. NASA officials stated
the identified budget phasing problem could worsen given that changes
made to the exploration architecture following issuance of the study
will likely add to the near-term development costs, where the funding
is already constrained. In addition, NASA's estimates beyond 2010 are
based upon a surplus of well over $1 billion in fiscal year 2011 due to
the retirement of the Space Shuttle fleet in 2010. However, NASA
officials said the costs for retiring the Space Shuttle and
transitioning to the new program are not fully understood, and thus the
expected surplus could be less than anticipated.
NASA's current acquisition strategy for the CEV places the project
at risk of significant cost overruns, schedule delays, and performance
shortfalls because it commits the government to a long-term product
development effort before establishing a sound business case. NASA
plans to award a contract for the design, development, production, and
sustainment of the CEV in September 2006--before it has developed key
elements of a sound business case, including well-defined requirements,
a preliminary design, mature technology, and firm cost estimates. The
period of performance for the contract scheduled for award in September
2006 will extend through at least 2014, with the possibility of
extending through 2019. This contract will comprise all design,
development, and test and evaluation activities, including production
of ground and flight test articles and at least four operational CEVs.
Although NASA is committing to a long-term contract, it will not have
the elements of a sound business case in place until the project level
PDR in fiscal year 2008. Awarding a contract for design, development,
production, and sustainment of the project as NASA has planned places
the CEV project at increased risk of cost growth, schedule delays, and
performance shortfalls. At PDR, NASA will likely (a) have the increased
knowledge necessary to develop a sound business case that includes
high-fidelity, engineering-based estimates of life cycle cost for the
CEV project, (b) be in a better position to commit the government to a
long-term effort, and (c) have more certainty in advising Congress on
required resources.
Implementing the Vision over the coming decades will require
hundreds of billions of dollars and a sustained commitment from
multiple Administrations and Congresses over the length of the program.
The realistic identification of the resources needed to achieve the
Agency's short-term goals would provide support for such a sustained
commitment over the long-term. With a range of federal commitments
binding the fiscal future of the United States, competition for
resources within the Federal Government will only increase over the
next several decades. Consequently, it is incumbent upon NASA to ensure
that it is wisely investing its existing resources. As NASA begins to
implement the Vision with several key acquisition decisions planned to
occur this fall, it will be essential that the Agency ensure that the
investment decisions it is making are sound and are based upon high
levels of knowledge. NASA should make the prudent decision now to
ensure that it has attained the appropriate level of knowledge to
support a sound business case before it commits to the project.
However, under the current acquisition strategy for CEV, key
knowledge--including well-defined requirements, a preliminary design,
mature technology, and firm cost estimates--will not be known until
over a year after the expected contract award date. Nevertheless, NASA
plans to commit the government to a long-term contract. This approach
increases the risk that the project will encounter significant cost
overruns, schedule delays, and decreased capability. Given the Nation's
fiscal challenges and those that exist within NASA, the availability of
significant additional resources to address such issues, should they
occur, is unlikely. With the impending decisions pertaining to the CEV,
NASA has the opportunity to establish a firm foundation for the entire
Constellation program by ensuring that the appropriate level of
knowledge is available before proceeding with its acquisition strategy
and committing the government to a long-term design, development, and
production effort.
Recommendation for Executive Action
Because of the importance of the CEV project to NASA's overall
implementation of the Vision, NASA should focus on ensuring that its
acquisition approach for the CEV project does not place the government
at risk by committing to a long-term design and development effort
without the knowledge needed to make wise investment decisions. We
therefore recommend that the NASA Administrator modify the current CEV
acquisition strategy to ensure that the Agency does not commit itself,
and in turn the Federal Government, to a long-term contractual
obligation prior to demonstrating, through the establishment of a sound
business case at the project's preliminary design review, that the
project is affordable and executable.
Matter for Congressional Consideration
Based on its response to our report, it appears that NASA plans to
proceed with its acquisition strategy for the CEV and award a long-term
contract for the project, although it continues to lack sufficient
knowledge and a sound business case for doing so. Congress is currently
being asked to approve NASA's fiscal year 2007 funding request and will
be asked to approve fiscal year 2008 and perhaps the fiscal year 2009
funding requests for the CEV project before NASA has demonstrated such
knowledge and has provided evidence, based on that knowledge, that the
project will be executable within existing and expected resources. In
light of the fact that NASA plans to award the contract for the CEV in
September 2006, Congress should consider restricting annual
appropriations and limiting NASA's obligations for the CEV project to
only the amount of funding necessary to support activities needed to
successfully complete the project's preliminary design review.
Agency Comments and Our Evaluation
In written comments on a draft of this report (see Encl. I), NASA
non-concurred with our recommendation that it modify the current CEV
acquisition strategy to ensure that the Agency does not commit itself,
and in turn the Federal Government, to a long-term contractual
commitment prior to establishing a sound business case at the project's
preliminary design review. NASA stated that it has the appropriate
level of knowledge to proceed with its acquisition plan to ``down
select'' to a single Crew Exploration Vehicle prime contractor in
September 2006. NASA added that it is maximizing competition by
soliciting from industry a development, production, and management
approach with an emphasis on life cycle cost. In the area of technology
maturity, NASA stated that it has a plan and process in place to
address the Thermal Protection and Landing subsystems technology risks
through in-house development work and collaboration with the prime
contractor. NASA also noted that during its design, development, and
test and evaluation effort, the Agency will be using an end-item award
fee, which would make all award fees subject to a final evaluation to
determine how well the product met requirements, including cost and
schedule.
The CEV acquisition strategy is not knowledge-based in that it
calls for maturing technologies, designing systems, and preparing for
initial production concurrently--an approach that our work has shown
carries the increased risk of cost and schedule overruns and decreased
technical capability. Therefore, we disagree with NASA's statement that
it has the appropriate level of knowledge to proceed with its current
acquisition strategy and award a long-term contract for the project
prior to obtaining sufficient knowledge. Specifically:
In its response, NASA suggests that there would be no
benefit in retaining two prime contractors for the CEV project
through the preliminary design review and that the best return
on its investment would be gained by down-selecting to one
contractor and awarding the contract in September 2006.
Contrary to NASA's response, addressing our recommendation
would not preclude the Agency from down-selecting to one
contractor. The thrust of our recommendation is that NASA
should lessen the government's obligation to the project at
such an early stage when realistic cost estimates have yet to
be established and requirements are not fully defined, and
therefore limit the scope of the contract to activities needed
to successfully complete the preliminary design review. At that
point the project should have in place a sound business case
for proceeding and hence be in a better position to justify
continued investment. Implementation of the recommendation
could be accomplished through various means, including by
retaining two contractors through the preliminary design review
and awarding a contract at that time or by down-selecting as
planned in September 2006 and limiting the scope of the
contract as described above.
NASA's suggestion that it is maximizing competition
by soliciting from industry its development, production, and
management approach and that it will receive firm competitive
prices from industry for completion of development and
demonstration of two vehicles has little basis. First, while
the current structure will allow for competition in the short-
term, the benefits of such competition will be short-lived.
Without well-defined requirements, mature technologies, an
approved preliminary design, and realistic cost estimates, NASA
has insufficient information to ensure that it is obtaining
firm competitive prices for the work conducted for the entirety
of Schedule A--especially for activities beyond the project's
preliminary design review.
Because NASA continues to refine the project's requirements,
as demonstrated by the numerous changes to the exploration
architecture as discussed in our report, it cannot provide a
firm estimate of project cost. Without such information, it
will likely be difficult for NASA to establish realistic ``not-
to-exceed'' prices for Schedule B activities. Under the current
strategy, NASA will not have high-fidelity, engineering-based
estimates of life cycle costs for the CEV until the preliminary
design review. As outlined in this report, projects with cost
estimates based on early, evolving designs and top-level
requirements are at increased risk of cost growth relative to
estimates based on mature designs and detailed requirements--
which could be achieved at the preliminary design review.
According to NASA, it plans to obtain this and further
knowledge about program cost, schedule, and risk elements
following the contract award and in conjunction with the
contractor. In the absence of such information, it is not clear
how NASA can substantiate its statement that it has the
knowledge necessary to commit to activities beyond the
project's preliminary design review. Further, it cannot provide
Congress with assurance of the appropriateness of requested
funding for the project.
NASA stated that its current acquisition strategy for
the CEV minimizes the government's obligation during
development by dividing the CEV contract into three separate
schedules. All three schedules, however, will be awarded in
September 2006 as part of one contract. Although NASA plans to
include language in the negotiated CEV contract to state that
the minimum quantity under Schedule B will not be applicable
until that schedule's period of performance begins in 2009--a
step that would lessen the government's obligation during
production--it will continue to be responsible for all Schedule
A activities at the time of contract award. These activities
include all design, development, and test and evaluation
activities, as well as the production of two operational
vehicles. Contractually obligating the government to even these
Schedule A activities, before it has established a sound
business case to support such a commitment, is not in line with
our knowledge-based approach and is ultimately not in the best
interest of the government.
NASA's investment in identifying and maturing the
Thermal Protection and Landing Subsystems is a step in the
right direction to ensure that these technologies are mature
and available when needed. NASA has no guarantee, however, that
these critical technologies will be mature by the time of the
project's preliminary design review--the point at which our
work has shown that technologies should be mature in order to
decrease the risk of cost and schedule growth. NASA's proposed
commitment to the project for activities beyond the preliminary
design review before retiring these technology risks increases
the likelihood that the project will experience schedule delays
and cost overruns.
NASA maintains that program risks have been
marginalized and that the Agency will utilize incentives,
including end-item award fees, to ensure contractor
performance. NASA suggests that the incentives it plans to use
in the form of end-item award fees will be a powerful tool for
meeting cost schedule, technical, and quality goals. The use of
these tools, however, does not compensate for proceeding with a
risky acquisition, nor do they lessen NASA's responsibility to
implement an executable program from the start. For them to
function as intended, NASA needs to address the more
fundamental issues related to its acquisition strategy,
including its lack of a sound business case for the CEV
project.
Finally, the use of cost-reimbursable contracting,
while appropriate for early development and design efforts,
places most of the cost risk for the project on the government.
Given the nature of this effort, it is likely that the project
will change significantly as it moves forward. Therefore, any
scope changes or schedule slips could translate into additional
contract cost for NASA. Such cost impacts could be minimized if
NASA limited its contractual obligation to those activities
needed to achieve a successful preliminary design review, as we
recommended. In addition, limiting the scope of the CEV
contract would allow both NASA and Congress to assess the
project's progress at the preliminary design review and to
decide if continued investment in the project is prudent and in
the best interest of the government.
It is important to note that Congress will continue to be asked to
make funding commitments in advance of CEV project events that would
demonstrate that the project has the knowledge necessary to support a
sound business case. Specifically, NASA's funding request for fiscal
years 2007 and 2008 are scheduled to be approved before the CEV holds
its preliminary design review. Since the preliminary design review is
currently scheduled for March 2008, this may also be the case for
fiscal year 2009. Congress should safeguard against a situation in
which contractual and budget decisions could hinder its ability to tie
further investments in the CEV project to demonstrated progress at the
preliminary design review. As such, we have included a matter for
congressional consideration.
We also received technical comments from NASA, which have been
addressed in the report, as appropriate.
Scope and Methodology
To assess the extent to which NASA has identified the architecture
and costs necessary to implement the Vision and whether NASA's
exploration architecture cost estimates fit within the Agency's
projected available budgets, we reviewed and analyzed NASA's
Exploration Systems Architecture Study, fiscal year 2007 budget
request, ground rules and assumptions provided from the Constellation
program to project level management estimators to perform the bottom up
review, guidance for use in preparing the fiscal year 2008 budget
request, NASA cost-estimating guidance in the NASA Cost Estimating
Handbook, and congressional hearings and testimonies pertaining to NASA
and the Vision. We also conducted interviews with NASA headquarters
officials from the Cost Analysis Division, the Exploration Systems
Mission Directorate, and Constellation program officials, Constellation
program and CEV project officials at Johnson Space Center; CLV project
officials at Marshall Space Flight Center; and cost analysts from the
Kennedy Space Center. During these interviews, we discussed the
methodologies used in preparing the ESAS and subsequent cost estimates,
architecture changes after the ESAS and the trades being considered,
budgeting issues, and procurement strategies and activities.
To assess the risks associated with NASA's acquisition strategy for
the CEV project, we reviewed and analyzed CEV project documentation,
including draft project plans, draft requirements documents, technology
development plans, documentation included in the contract request for
proposals, and past NASA human space flight acquisition programs. We
compared NASA's plans for the CEV with criteria contained in GAO best
practices work on systems acquisition. We also conducted interviews
with NASA headquarters officials from the Exploration Systems Mission
Directorate and Constellation Systems officials, Constellation program
and CEV project officials at Johnson Space Center, and CLV project
officials at Marshall Space Flight Center.
We conducted our work from January 2006 to May 2006 in accordance
with generally accepted government auditing standards.
As agreed with your offices, unless you announce its contents
earlier, we will not distribute this report further until 10 days from
its date. At that time, we will send copies of the report to NASA's
Administrator and interested congressional committees. We will also
make copies available to others upon request. In addition, the report
will be available at no charge on GAO's web site at http://www.gao.gov.
Should you or your staff have any questions on matters discussed in
this report, please contact me at (202) 512-4841 or [email protected].
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Principal
contributors to this report were James L. Morrison, Assistant Director;
Rick Cederholm; Shelby S. Oakley; Guisseli Reyes; Sylvia Schatz; and
John S. Warren, Jr.
Allen Li
Director
Acquisition and Sourcing Management
Enclosures
Enclosure I
Chairman Boehlert. The hearing will come to order. I want
to welcome everyone to today's important hearing: the
Committee's first public discussion of the Crew Exploration
Vehicle, or Orion, project since we had the Administrator
before us in March, and the first review in Congress since
Lockheed Martin was awarded the contract for Orion at the end
of August.
Let me start by reiterating my support for the President's
Vision for Space Exploration, which I think is an important
national undertaking. Let me also reiterate my determination
that NASA not become a single-mission agency. Human space
flight can't succeed at the expense of Earth science, space
science, and aeronautics.
So NASA has to move ahead with Orion deliberately, but also
cautiously, and Congress has to keep a keen and constant eye on
the project. Neither the Agency nor the Nation can afford
another space station, a project that for all its technical
magnificence has seen its costs balloon while its capabilities
shrank to near the vanishing point.
This may very well be the last hearing on NASA. Some people
will breathe a sigh of relief. But I hope we will have set a
pattern of friendly, but rigorous vigilance that will be
continued as the Nation moves ahead with work on returning to
the Moon.
I am pleased to say that NASA itself also seems to be
operating at a high level of vigilance. The agency is trying to
base Orion on technologies that have already been used
successfully in other programs; and I am also very glad to see
that NASA modified the Lockheed Martin contract for Orion as a
result of the General Accountability Office study this
committee requested. That is a great example of how sensible
oversight can work to the advantage of the Agency being
reviewed, and frankly, it is a credit to this committee, to
GAO, and to NASA that the contract was modified.
But that hardly closes the issue before us. GAO correctly
points out that NASA does not yet have a final design or cost
estimate for Orion. That is not a criticism of NASA, that is
just where we are in the process, and Congress has to recognize
how fluid the situation is, although far less fluid than it was
at this time last year.
GAO believes that NASA should not have let as an extensive
contract as it did, given the uncertainties, and they make a
plausible case. NASA has made reasonable arguments in response,
and the contract has been let so we don't have to rehash that
issue here. What we do have to do is learn what should Congress
be doing, and what information should it be seeking to exercise
strict oversight as the project moves forward. And what
additional steps should NASA take to make sure that project
costs do not escalate?
I look forward to getting answers to those questions. We
have the right folks before us to get those answers, and I want
to welcome Dr. Scott Horowitz from NASA for his first public
appearance before the Committee. I think you will see, after
you hear and are exposed more to Dr. Horowitz, he is a
congenial, knowledgeable guy, and it is a pleasure to work with
him. He meets with staff all the time, and that is a productive
time use, and hopefully, we won't be as hard on him today as
they are.
With that, let me turn to my co-partner here, Mr. Gordon of
Tennessee.
[The prepared statement of Chairman Boehlert follows:]
Prepared Statement of Chairman Sherwood L. Boehlert
I want to welcome everyone to today's important hearing, this
committee's first public discussion of the Crew Exploration Vehicle, or
Orion, project since we had the Administrator before us in March, and
the first review in Congress since Lockheed Martin was awarded the
contract for Orion at the end of August.
Let me start by reiterating my support for the President's Vision
for Space Exploration, which I think is an important national
undertaking. And let me also reiterate my determination that NASA not
become a single-mission agency; human space flight can't succeed at the
expense of Earth science, space science and aeronautics.
So NASA has to move ahead with Orion deliberately, but also
cautiously, and Congress has to keep a keen and constant eye on the
project. Neither the Agency nor the Nation can afford another Space
Station--a project that, for all its technical magnificence, has seen
its costs balloon while its capabilities shrank to near the vanishing
point.
This may very well be my last hearing on NASA, but I hope we will
have set a pattern of friendly, but rigorous vigilance that will be
continued as the Nation moves ahead with work on returning to the Moon.
I am pleased to say that NASA itself also seems to be operating at
a high level of vigilance. The agency is trying to base Orion on
technologies that have already been used successfully in other
programs. And I am very glad to see that NASA modified the Lockheed
Martin contract for Orion as a result of the Government Accountability
Office (GAO) study this committee requested.
That is a great example of how sensible oversight can work to the
advantage of the Agency being reviewed, and frankly it's a credit to
this committee, to GAO and to NASA that the contract was modified.
But that hardly closes the issues before us. GAO correctly points
out that NASA does not yet have a final design or cost estimate for
Orion. That's not a criticism of NASA; that's just where we are in the
process, and Congress has to recognize how fluid the situation is--
although far less fluid than at this time last year.
GAO believes that NASA should not have let as extensive a contract
as it did, given the uncertainties, and they make a plausible case.
NASA has made reasonable arguments in response, and the contract has
been let, so we don't have to rehash that issue here.
What we do have to learn at this hearing is: what should Congress
be doing and what information we should be seeking to exercise strict
oversight as this project moves forward? And, what additional steps
should NASA be taking to make sure that project costs do not escalate?
I look forward to getting answers to those key questions. We have
the right folks before us to get those answers, and I want to welcome
Dr. Scott (Doc) Horowitz from NASA for his first public appearance
before the Committee. He meets with the staff all the time, and
hopefully we won't be as hard on him today as they are.
Mr. Gordon.
Mr. Gordon. Thank you, Mr. Chairman.
I once tried out for my church choir, and I was quickly
told that I had such a bad voice that I was not even able to
make a joyful Lord--noise to the Lord, so my birthday present
to you today is not to sing. Unfortunately, I can't say that
for Dana Rohrabacher. I am not sure what he will do, but we do
wish you a happy birthday, and we welcome our witnesses today.
First, let me make clear what this hearing is not. It is
not a hearing about whether or not the Nation should build a
Crew Exploration Vehicle. It is not a hearing about whether or
not the right contractor team won the CEV contract. And it is
not a hearing about whether or not the U.S. should return to
the Moon. Instead, this hearing is an examination of whether or
not NASA is pursuing the right acquisition strategy for the
CEV, whether it has adequately planned for the challenges
inherent in the program, and whether it has budgeted sufficient
funds to complete the CEV. The last question is particularly
important because if there is cost growth in the CEV program,
it has the potential to do serious damage to NASA's other
programs, as well as other parts of the exploration initiative.
I don't want to see that happen. I want to see the CEV
program succeed, and that is why I was very concerned when the
GAO reported to Chairman Boehlert and I in late July that, and
I quote ``NASA's current acquisition strategy for the CEV
places the project at risk of significant cost overruns,
schedule delays, and performance shortfalls.''
Equally troubling were GAO's findings on the issues of
whether NASA's overall exploration architectural costs
estimates fit within the Agency's projected available budget.
Once again, to quote GAO, ``There are years when NASA does not
have sufficient funding to--funds to implement the
architecture. Some yearly shortfalls exceed $1 billion, while
in other years the funding available exceeds needed
resources.'' And ``NASA's preliminary projections--projects
multi-billion dollar shortfalls for the Exploration System
Mission Directorate in all fiscal years 2014 through 2020.'' In
other words, we may be seeing another example of lofty goals
being set without those proposals--without those proposing them
identifying where resources needed to achieve these goals will
be coming from in future years.
I want to note, of course, that NASA non-concurred with
GAO's findings and believes that it has a good plan for both
the CEV acquisition and the overall exploration program. I
would caution, however, that those are words we have heard
before. I would remind my colleagues that some 18 months ago,
NASA testified before this committee about its plans for
acquiring a CEV, indicating that it had a well thought out
approach to the CEV program.
Let me offer a quote from NASA's February 16, 2005,
testimony. ``The CEV will be developed in a spiral approach
wherein early demonstrations and prototypes are used to
demonstrate capabilities, validate technologies, and mitigate
risk, all along an evolutionary path toward a mature design.
The first spiral development plan will provide the capacity to
deliver humans to orbit in a CEV by the year 2014.''
Now, as you recall, last year's approach was going to
maintain a competition between two contractor teams until 2008
when there would a competitive ``fly-off'' prior to the award
of the CEV development contract. NASA also assured Congress
last year that CEV and the CLV acquisition plan would be within
budget that would meet the 2014 timeframe.
It is now 2006. NASA has eliminated the spiral development
approach, has decided not to maintain the competitive fly-off,
and has added almost $7 billion to the CEV and CLV program
relative to what last year's five-year funding plan said would
be needed. And after all of that, NASA is indicating that CEV
still will not enter operational service until 2014, due to
budgetary constraints.
My intent in reciting this history is not to embarrass
NASA; it is simply to make the point that we have received
assurances from this agency in the past that everything is
under control, and we have had other painful reminders in
recent months of large-scale acquisition programs in other
agencies under our jurisdiction going off course. We cannot
afford to have that happen again.
Today's hearing will provide an opportunity for the
Committee to hear from both GAO and NASA on these issues. And
once again, as my friend Chairman Boehlert has pointed out, our
concern here is that if things get out of kilter even with the
best intentions, it is going to result in potentially
cannibalizing other programs within NASA, which makes us lose
support within Congress for NASA, which then can lead to
appropriations battles where they could take some of this out
of our hands. That is not where we want to be. We want to work
with you as good partners to try to alleviate that, because we
are all going to suffer if that is not the case.
And again, I welcome you here.
[The prepared statement of Mr. Gordon follows:]
Prepared Statement of Representative Bart Gordon
Good afternoon. I'd like to join the Chairman in welcoming the
witnesses to today's hearing.
First, let me be clear about what this hearing is not. It is not a
hearing about whether or not the Nation should build a Crew Exploration
Vehicle. It is not a hearing about whether or not the right contractor
team won the CEV contract. And it is not a hearing about whether or not
the U.S. should return to the Moon.
Instead, this hearing is to examine whether or not NASA is pursuing
the right acquisition strategy for the CEV, whether it has adequately
planned for the challenges inherent in the program, and whether it has
budgeted sufficient funds to complete the CEV.
The last question is particularly important, because if there is
cost growth in the CEV program, it has the potential to do serious
damage to NASA's other programs as well as to other parts of the
exploration initiative.
I don't want to see that happen. I want to see the CEV program
succeed. That is why I was very concerned when the GAO reported to
Chairman Boehlert and me in late July that: ``NASA's current
acquisition strategy for the CEV places the project at risk of
significant cost overruns, schedule delays, and performance shortfalls.
. .''
Equally troubling were GAO's findings on the issue of whether
NASA's overall exploration architecture cost estimates fit within the
Agency's projected available budgets. To again quote GAO: ``. . .there
are years when NASA does not have sufficient funding to implement the
architecture. Some yearly shortfalls exceed $1 billion, while in other
years the funding available exceeds needed resources. . .''
And, ``NASA preliminarily projects multi-billion-dollar shortfalls
for [NASA's] Exploration System Mission Directorate in all fiscal years
from 2014 to 2020.''
In other words, we may be seeing another example of lofty goals
being set without those proposing them identifying where the resources
needed to achieve those goals will be coming from in future years.
I want to note, of course, that NASA ``non-concurred'' with the
GAO's findings and believes that it has a good plan for both the CEV
acquisition and the overall exploration program. I would caution,
however, that those are words we have heard before.
I would remind my colleagues that some 18 months ago, NASA
testified before this committee about its plans for acquiring the CEV,
indicating that it had a well-thought-out approach to the CEV program.
Let me offer a quote from NASA's February 16, 2005 testimony:
``[The CEV] will be developed in a `spiral' approach, wherein early
demonstrations and prototypes are used to demonstrate capabilities,
validate technologies, and mitigate risk, all along an evolutionary
path toward a mature design. The first spiral development planned will
provide the capability to deliver humans to orbit in a CEV by 2014.''
As you will recall, last year's approach was going to maintain a
competition between two contractor teams until 2008 when there would be
a competitive ``fly-off'' prior to award of the CEV development
contract.
NASA also assured the Congress last year that its CEV and CLV
acquisition plan came with a budget that would meet its 2014 timetable.
It's now 2006. NASA has eliminated the spiral development approach,
has decided not to maintain the competitive fly-off, and has added
almost $7 billion to the CEV and CLV program relative to what last
year's five-year funding plan said would be needed. And after all of
that, NASA is indicating that the CEV still will not enter operational
service until 2014 due to budgetary constraints.
My intent in reciting this history is not to embarrass NASA--it is
simply to make the point that we have received assurances from this
agency in the past that ``everything is under control'' and we have had
other painful reminders in recent months of large-scale acquisition
programs in other agencies under our jurisdiction going off course. We
cannot afford to have that happen again.
Today's hearing will provide an opportunity for the Committee to
hear from both GAO and NASA on these issues. I look forward to their
testimony
Chairman Boehlert. Thank you very much, Mr. Gordon.
Now, for the distinguished Chairman of the Subcommittee,
Mr. Calvert.
Mr. Calvert. I thank the gentleman, and I, too, want to
share with my colleague on the other side, bid you birthday
wishes. Happy birthday. Happy 70th birthday. My goodness, that
is great. I want to say from the bottom of my heart, surely----
Chairman Boehlert. I should note parenthetically that Mr.
Gordon, on the side, said, ``I wasn't going to mention that.''
Mr. Calvert. Hey, we all want to make it. I don't know if I
will ever make it. But it has been a great six years with you
here as Chairman. This institution will be less of a place when
you retire. I think that you have done a fantastic job here. It
has really been a pleasure serving with you, and I want you to
know that.
NASA, as you know, has undertaken the first steps of an
exploration program that will continue over the next several
decades. It will inspire the next generation of scientists and
engineers, just as Apollo inspired an earlier generation in the
1960s. Two major contracts recently awarded are moving us, I
think, in the right direction. The Space Shuttle has completed
its third flight since the Columbia disaster, and we are now on
a path to complete the International Space Station. The
Commercial Orbital Transportation Services Award recently had
been awarded to Space X and Rocketplane Kistler. Both of these
entrepreneurial companies are developing logistics systems to
service the International Space Station, while on a parallel
plane, the Lockheed Martin company will be developing a Crew
Exploration Vehicle, or Orion, to explore the Moon, Mars, and
beyond.
I want to applaud NASA for their timely schedule of
procurement for this major undertaking. The two procurement
announcement, or the first of several major procurement award
announcements, were made in order to achieve the Vision for
Space Exploration. I am certainly pleased that the Committee
was the first to endorse the Vision when we unanimously passed
the NASA Authorization of 2005 last July. The Congress
overwhelmingly passed the Authorization last year, and now NASA
is carrying out the will of the Congress. Many of the overall
decisions for the Vision have been made: a capsule approach for
the Crew Vehicle to minimize a technical risk and maximize crew
safety; a launch vehicle that builds on the Space Shuttle
technology of upper stage engine derive that was used on Saturn
V, and a main engine currently used on Delta IV.
It seems that all of these programs contribute to the
knowledge-based approach that is laid out by the GAO. I believe
NASA has a more advanced state of knowledge than the Agency has
had for many of their earlier procurements. In addition, the
NASA acquisition strategy for the Vision is more flexible and
has built in incentives, options, and provisions for
termination if necessary. The aim is to improve contractor
performance.
I know how tight the development budgets will be for this
program. I am concerned that some of these recommendations
could impose delays, resulting in substantial cost increases.
Congress will continue to exercise its oversight responsibility
on this program, just as we are today. However, we cannot
analyze the program to death. We must move forward, stabilize
requirements, maintain a tight design and development schedule
to minimize the gap between the Shuttle retirement and the
operational Crew Exploration Vehicle, and bring Orion online
within the allowed or allocated budget.
I know that NASA and these contractors have brought in the
best minds to work on this program. We now have an exciting
program for NASA to carry out, and for the next generation to
aspire to to be a part. The decision has been made to move
forward, and we need to let NASA and the United States lead the
world in our exploration of space.
Thank you, Mr. Chairman.
[The prepared statement of Chairman Calvert follows:]
Prepared Statement of Chairman Ken Calvert
NASA is undertaking the first steps of an exploration program that
will continue over several decades. It will inspire the next generation
of scientists and engineers just as Apollo inspired an earlier
generation in the '60s. Two major contracts recently awarded are moving
us in the right direction. The Space Shuttle has completed its third
flight since the Columbia disaster and we are now on the path to
complete the International Space Station.
The Commercial Orbital Transportation Services awards recently have
been awarded to SpaceX and to Rocketplane/Kistler. Both entrepreneurial
companies are developing a logistics system to service the
International Space Station, while on a parallel plane, the Lockheed
Martin Company will be developing the Crew Exploration Vehicle, or
Orion, to explore the Moon, Mars and beyond.
I applaud NASA for their timely schedule of procurement for this
major undertaking. The two procurement announcements are the first of
several major procurement award announcements that will be made in
order to achieve the Vision for Space Exploration. I am pleased the
Committee was the first to endorse the Vision when we unanimously
passed the NASA Authorization of 2005 last July. The Congress
overwhelmingly passed the Authorization late last year and now NASA is
carrying out the will of the Congress.
Many of the overall decisions for the Vision have been made--a
capsule approach for the crew vehicle to minimize technical risk and to
maximize crew safety; a launch vehicle that builds on the Space Shuttle
technology; an upper stage engine derived from that used on the Saturn
V; and a main engine currently used on the Delta IV. It seems that all
of these programs contribute to a ``knowledge-based'' approach, as laid
out by the GAO. I believe NASA has a more advanced state of knowledge
than the Agency has had for many of their earlier procurements. In
addition, the NASA acquisition strategy for the Vision is more flexible
and has built in incentives, options, and provisions for termination if
necessary. The aim is to improve contractor performance.
I know how tight the development budgets will be for this program
and am concerned that some of these recommendations could impose delays
resulting in substantial cost increases. Congress will continue to
exercise its oversight responsibilities on this program, just as we are
today. However, we cannot analyze the program to death. We must move
forward and stabilize the requirements; maintain a tight design and
development schedule to minimize the gap between the Shuttle retirement
and an operational Crew Exploration Vehicle; and bring Orion online
within the allocated budget.
I know that NASA and its contractors have brought in their best
minds to work on this program. We now have an exciting program for NASA
to carry out and for our next generation to aspire to be a part of. The
decision has been made to move forward and we need to let NASA and the
United States lead the world in our exploration of space.
Chairman Boehlert. Thank you very much, Chairman Calvert.
Mr. Udall.
Mr. Udall. Thank you, Mr. Chairman. In the spirit of Mr.
Gordon and Mr. Calvert's remarks, I would also like to make a
brief comment about your tenure and your friendship and your
leadership. It has been said that a statesman is a dead
politician, and somebody said that, yeah, we need more
statesmen. I think you are in a quasi-statesman category today,
and soon after you leave the House, you will be known as a full
statesman for the way you conducted yourself, the leadership
particularly on this committee. I am particularly indebted to
you for your hard work on behalf of energy independence, doing
something about climate change, I think looms as one of the
biggest challenges facing not only our country, but the world,
and you will be sorely missed.
I, too, want to welcome all--the two witnesses today here.
We have got a lot to cover so I will be very brief.
I want to mention that I am encouraged that the recent CEV
contract was by all accounts the result of a hard-fought
competition between the two high-quality contractor teams, and
I did want to congratulate Lockheed Martin, which
coincidentally is based in my home State of Colorado, on
winning that competition.
I would also like to echo the comments made by Ranking
Member Gordon, and I am, of course, troubled by the issues
raised by the GAO in their July 17 report. I look forward to
hearing both from the GAO and NASA today.
Given the importance of the CEV program to the future of
the Nation's human space flight activities, I think it is
imperative that this committee engage in sustained, serious
oversight of it, as well as the other parts of NASA's
exploration initiative to ensure that they are carried out in
an efficient and responsible manner. I say this not because I
have any concerns about the dedication and commitment of NASA
and the contractor team to the success of the program; rather,
it is because from my vantage point on the Armed Services
Committee, I have seen that dedication and commitment are by
themselves are not sufficient to keep major systems
acquisitions from sometimes running into trouble. We all know
examples of important programs that have gotten off track and
suffered significant cost growth and schedule delays.
As the GAO has pointed out other occasions ``Good
intentions aren't enough.'' There also needs to be a clear
understanding of requirements, credible costs, and scheduled
estimates and a disciplined approach to program management. All
of us want NASA's CEV program to succeed, and in that spirit, I
believe that today's hearing can provide a forum for a
constructive review of NASA's plans.
And again, I look forward to hearing from our two esteemed
witnesses. Thank you, Mr. Chairman.
[The prepared statement of Mr. Udall follows:]
Prepared Statement of Representative Mark Udall
Good afternoon. I'd like to join my colleagues in welcoming our
witnesses to today's hearing. We have a lot of issues to cover today,
so I will just make a few observations.
First, I am encouraged that the recent CEV contract award was by
all accounts the result of a hard-fought competition between two high-
quality contractor teams.
And I want to take this opportunity to congratulate the Lockheed
Martin team--which coincidentally is based in my home State of
Colorado--on winning that competition.
Second, I want to echo the comments made by Ranking Member Gordon.
I am, of course, troubled by the issues raised by the GAO in their July
17th report, and I look forward to hearing from both GAO and NASA today
about what has been done to address those issues.
Given the importance of the CEV program to the future of the
Nation's human space flight activities, I think it's imperative that
this committee engage in sustained, serious oversight of it, as well as
the other parts of NASA's exploration initiative, to ensure that they
are carried out in an efficient and responsible manner.
I say this not because I have any concerns about the dedication and
commitment of NASA and the contractor team to the success of the
exploration program.
Rather, it's because from my vantage point on the Armed Services
Committee, I have seen that dedication and commitment are by themselves
not sufficient to keep major systems acquisitions from sometimes
running into trouble.
We all know of examples of important programs that have gotten off
track and suffered significant cost growth and schedule delays.
As the GAO has pointed out on other occasions, ``good intentions''
aren't enough. . .
There also needs to be a clear understanding of requirements,
credible cost and schedule estimates, and a disciplined approach to
program management.
We all want NASA's CEV program to succeed. I hope that today's
hearing can provide a forum for a constructive review of NASA's plans,
and I look forward to hearing from our witnesses.
Chairman Boehlert. Thank you very much.
The Chair, as a point of personal request, recognizes Mr.
Rohrabacher.
Mr. Rohrabacher. Before you get away, I want to thank you
for all the great times we have had here and the intellectual,
I might say, stimulation that we have had on so many--exploring
so many areas that they themselves are interesting, but it is
also interesting how different approaches can be an exciting
way to actually look at our potential. So happy birthday to the
Chairman. Also, I want to note that in the future, and as you
move on and you are not here, every time I start talking about
global warming I will look in front of me and I will see your
skeptical face there on that painting and it will remind me of
some of these great discussions that we have had.
Finally, on our issue for today, let me just say that we
have behind us--your face is in front of us, but behind us we
still have this slogan that says ``Where there is no vision,
the people will perish.'' There is an actual--that is not the
end of the quote, interestingly enough. The other part of the
quote goes ``Where there is no prioritization, there is only
failure.'' I would hope people know that you can fail by not
trying to do enough, but most of the time we fail--and my
experience is that we have failed because we have tried to do
everything for everybody. And the President laid down a plan, a
game plan, a priority of this--of a lunar approach first, a
lunar goal, and I think we--that we now have in front of us the
first manifestation of that prioritization of goals, and I am
very pleased that the Administration is doing this in a cost
effective way by trying to use older technology, meaning
technology that is already proven, and putting it together in
new sources of rockets, et cetera.
And with that said, thank you, Mr. Chairman, for all of
your leadership. We will miss you and I will miss some of our
back and forths.
Chairman Boehlert. Can I tell them about the secret gift
you gave me? He gave me a birthday card and said, ``You know, I
think maybe we ought to look at global warming.'' It is for
real, but thank you very much. I thank all my colleagues. You
have been very kind and it is a pleasure to work with all of
you.
I would remind one and all we have another hearing
tomorrow, so polish up your rhetoric. We will have another
opportunity.
[The prepared statement of Mr. Costello follows:]
Prepared Statement of Representative Jerry F. Costello
Good afternoon. I want to thank the witnesses for appearing before
the Committee to examine National Aeronautics and Space
Administration's (NASA) development strategy for the Crew Exploration
Vehicle (CEV) in light of the recent report issued by the Government
Accountability Office (GAO) expressing concerns over NASA's ability to
budget for the CEV program.
In January 2004, President Bush announced his Vision for Space
Exploration (VSE) which include key human space flight milestones, such
as retirement of the Space Shuttle in 2010, completion of the
International Space Station (ISS), and development of a new CEV, known
as Orion. According to NASA, Orion will help further our understanding
of Earth, the solar system, the universe, and the origins of life
itself.
On July 17, 2006 GAO issued a report expressing their serious
concerns over NASA's acquisition of Orion. The report examines whether
NASA's exploration initiative estimated costs fit within the Agency's
projected available budgets and determined that NASA will be
significantly challenged to meet their intended goal. The
recommendations submitted by GAO suggest Congress should consider
restricting annual appropriations and limit NASA's obligations for
Orion to only the amount of funding necessary to support activities
needed to successfully complete the project's preliminary design
review. I look forward to hearing from Dr. Horowitz from NASA and Mr.
Allen from GAO on the exploration program.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Representative Eddie Bernice Johnson
Thank you, Mr. Chairman and Ranking Member.
NASA is especially important to Texas. Space travel has sparked the
minds of generations of Americans. In Texas, it has meant jobs and
strong local economies.
I recently hosted an astronaut, Ms. Stephanie D. Wilson, at an
event in Washington. Just watching footage from Ms. Wilson's time in a
zero gravity environment was incredible and inspiring.
We understand that NASA has had a challenging task to plan out the
short- and long-term details for the Orion project. It is in our
interest as policy-makers and the interest of our constituents to stay
engaged in the process.
As the Agency prepares to embark on a new journey with the Orion
Crew Exploration Vehicle, this committee wants to do all it can to
provide support so that the initiative succeeds.
Since this is the first time the Full Committee on Science has
interacted officially with NASA since the last successful space launch,
I extend warmest congratulations on its success.
It is my hope that this strong record of achievement speak for the
public's confidence in future endeavors such as Orion.
Thank you, Mr. Chairman. I yield back the balance of my time.
Chairman Boehlert. Let us go to our two witnesses, and very
distinguished witnesses they are.
Dr. Scott Horowitz, Associate Administrator, Exploration
Systems Mission Directorate, National Aeronautics and Space
Administration. Doctor, it is good to have you here. And Mr.
Allen Li, Director, Acquisition and Sourcing Management for the
highly regarded and respected General Accountability Office.
Not only is the office highly regarded and respected, so too
are you, sir. Thank you.
Dr. Horowitz, you are up.
STATEMENT OF DR. SCOTT J. HOROWITZ, ASSOCIATE ADMINISTRATOR,
EXPLORATION SYSTEMS MISSION DIRECTORATE, NATIONAL AERONAUTICS
AND SPACE ADMINISTRATION (NASA)
Dr. Horowitz. Thank you, sir.
Good afternoon, Chairman Boehlert, Ranking Member Gordon,
and Members of the Committee. Thank you for inviting me here
today to testify how we at NASA are taking the first step in
turning the Vision for Space Exploration into reality with the
Crew Exploration Vehicle called Orion.
First of all, sir, I would like to thank this committee,
especially you, sir, for--and Member Gordon as well as
Congressmen Calvert and Udall for your vision and your
leadership that brought us the NASA Authorization Act of 2005.
Chairman, I couldn't help but notice your new picture here on
the wall, and I know it is a great honor, only second to if it
was hanging in the Hall of Fame. I know that this Act is going
to be an important part of your legacy.
For years, NASA struggled with a lack of clear guidance.
Through your efforts, we now have a clear set goals and
objectives to focus the great talents of our NASA team. This
law provides clear guidance for Aeronautics, Science, Space
Ops, and Exploration. For human space flight, we now have
clear, concise direction: finish the International Space
Station, retire the Space Shuttle, develop a Shuttle-derived
transportation system that will be operational by 2014, and
give us the capability to go back to the Moon by 2020. These
are the first steps to creating a sustained human presence on
the Moon in preparations for journeys to Mars and beyond.
Mr. Chairman, NASA engineers have done too much view graph
engineering in the all too recent past. As a rocket scientist,
astronaut, test pilot, and experimental aircraft builder, I can
tell you there's nothing better than hands-on experience. Sir,
it is time for NASA to put down the view graphs and get our
hands dirty. It is time to start designing, building, and
testing real flight hardware, and we are.
Let me share with you some of the accomplishments so far
this year. We have successfully accomplished two Space Shuttle
missions to the ISS and are finishing its assembly. We said at
the beginning of the year that we would complete the
competition for the Crew Exploration Vehicle, and also enter
into funded Space Act Agreements to demonstrate commercial crew
and cargo services for the ISS. On August 18, we signed two
Space Act Agreements with Space X and Rocketplane Kistler to
demonstrate the commercially operated transportation services.
On August 31, we awarded a major contract to Lockheed Martin
for the design and development of Orion. We are well on our way
to developing the Ares I launch vehicle, with development of
the first stage underway, and the J-2X second stage engine
program off and running. We have constructed and conducted
Orion body mass drop tests at Langley, thermal protection
systems arc jet tests at Ames, wind tunnel tests and engine
tests at Marshall. This week at Kennedy Space Center, we
completed industry and global assessments on launch and
operations to reduce future infrastructure and ops costs.
Some major milestones for you to keep your eyes open for in
the future are in 2008. We will launch the lunar robotic
orbiter being developed at Goddard, and it will have its
secondary payload, Lunar CRater Observation and Sensing
Satellite (LCROSS), being developed at Ames. We are 30 months
away from the first launch of a full-scale test article of the
Ares I, scheduled for early 2009.
Mr. Chairman, in your invitation letter, you asked me to
specifically address two questions. One, how will NASA strategy
reduce the total cost for production and operations of the
Orion Crew Exploration Vehicle, and two, what actions have we
taken to address concerns raised by the GAO?
First, the most important factor that will reduce the total
cost for production in operations of Orion is its simplicity.
The Ares I launch vehicle and Orion spacecraft are far simpler
designs than the Space Shuttle, and thus will need few
engineers and technicians to design, develop, test, and
operate. There are no exotic technologies or evolutionary
designs required to accomplish our mission.
We take the GAO concerns quite seriously, and have had our
team meet with GAO, and Mr. Li and I have personally met. We
are implementing our management approach dictated by NASA
program guidance 7120.5, which incorporates the GAO
recommendations on implementing a knowledge-based acquisition
framework. Also, based on our discussions, we have made some
modifications to our contract with Lockheed Martin, the most
notable being the use of options which preserve NASA's
flexibility in case of any unforeseen trouble. We have the
knowledge and technical framework to move forward. The
consolation program, our NASA Smart Buyer team, Lockheed
Martin, and Northrop Grumman Boeing teams all completed initial
designs based on our requirements. If you were to place a model
of each of these designs on the table, except for the shape of
the solar rays, you couldn't tell the difference. The largest
change in a year we have made to the vehicle is we shrunk it
from five and a half meters to five meters, about this much.
That is the largest change we have made.
We know what we need to do; it is time to execute.
In closing, Mr. Chairman, I would like to share with you
how important this challenge is to me personally, because it
reflects how many of us at NASA feel. February 1, 2003, was the
darkest day of my NASA career. When the Space Shuttle Columbia
didn't come home, I lost seven friends. I spent the next
several months in Eastern Texas helping with the recovery
efforts, and in the back room of our control center, myself and
several of my fellow astronauts wondered if the United States
might stop exploring space altogether, and what would that mean
to our nation's future.
It was there that the initial design concepts were born
that would allow us to send astronauts to space with more
reliability and safety. The risks are worth the rewards. Every
person that has ever strapped themselves to the top of a rocket
understands this. We need to learn from our past and not become
complacent about the costs and risks involved in human space
flight. Fortunately, our nation's leaders recognize this as
well and understand the importance of worthy goals for our
space program. Mr. Chairman, we have a lot of work ahead of us,
and we have the team in place who remembers the lessons from
that dark day and have dedicated themselves to this most noble
of causes.
Again, thank you for your leadership and support of our
nation's space program, and I look forward to your questions.
[The prepared statement of Dr. Horowitz follows:]
Prepared Statement of Scott J. Horowitz
Mr. Chairman and Members of the Committee, thank you for the
opportunity to appear before you today to outline NASA's progress in
developing Orion, the Nation's next-generation piloted spacecraft.
In the NASA Authorization Act of 2005 (P.L. 109-155), the Congress
provided a national framework that supports and expands upon the
Administration's Vision for Space Exploration. These policy pillars are
helping to shape, align, and focus NASA's human exploration and robotic
activities. With this foundation, NASA now has a broad, future-focused
context for its low-Earth orbit activities. These include flying the
Space Shuttle safely until its 2010 retirement and completing the
International Space Station (ISS) in order to advance science,
exploration, and international collaboration. NASA is also now taking
the initial steps to extend humanity's presence across the solar system
by moving beyond our beachhead in space on the ISS. We will return to
the Moon by the end of the next decade to live and work on a sustained
basis to meet a range of objectives, including the preparation for
journeys to Mars and beyond.
A sustained presence on the Moon will advance U.S. preeminence,
commerce and science, and prepare us for future expeditions outside
Earth's immediate neighborhood. I am honored and humbled to represent
such a noble, important, and far-reaching effort. It taps into a
natural curiosity about space, stirs our imagination, and stimulates
creativity and productivity. It is a program that will make a
difference in our lives, on our planet, and to our children's
children's future.
Time to Put the Viewgraphs Down and Get Going
In August of this year, NASA took a major step to maintain the
Nation's leadership position in space when it awarded to Lockheed
Martin Corporation a contract to design and develop the Crew
Exploration Vehicle, now dubbed Orion. The contract took effect on
September eighth. Named for one of the brightest and most recognizable
star formations in the sky, Orion is the central member of a family of
spacecraft and launchers that NASA's Constellation Program is
developing for the next generation of explorers. Two industry teams,
Lockheed Martin and a consortium of Northrop Grumman and Boeing, spent
13 months refining concepts, analyzing requirements, and refining the
design for Orion.
Orion represents the culmination of literally decades of hardware
heritage, design, and trades. We now have the opportunity to develop a
system with greater safety, reliability, capability, and affordability
than the Space Shuttle. The Columbia tragedy and the earlier Challenger
tragedy clarified the need to address these issues and form a national
context where our human space flight capabilities can be openly
addressed. Thank you for providing a national framework in which to
begin to implement our dreams and build upon the sacrifice of our
colleagues. We already are working hard on this transition from our
current capabilities into the capabilities of the future.
Astronauts will have a less risky ride to and from space aboard
Orion. While all space flight involves risk, if we are to explore, we
must reduce the risk of launching below the current level. This new
crew module is inherently safer than the Shuttle because it will be
placed on top of its booster. This will protect it from potentially
deadly launch system debris during ascent, and allows the addition of
an abort system that can separate capsule and crew from the booster in
an emergency.
Orion is the next-generation piloted spacecraft. For missions to
the Moon, Orion will carry up to four astronauts to low-Earth orbit
and, once there, link up with a lunar surface access module for the
trip to lunar orbit. The access module will descend to the Moon's
surface for up to a week for sortie missions and up to six months for
outpost missions, while Orion orbits, awaiting its return. The two
vehicles will link up again at the end of the surface mission, and the
astronauts will ride back to Earth in Orion. The capsule will re-enter
the atmosphere and descend on parachutes back to Earth. Orion also has
the capability to service the ISS as a backup to commercial crew and
cargo delivery services now in development for the ISS. Orion will be
capable of transporting crew to and from the ISS and staying for six
months as a rescue vehicle.
Knowledge-Based Acquisition for a Path from the Past to the Future
Unlike NASA's past space vehicle efforts, such as the National
Aero-Space Plane, X-33, and Orbital Space Plane, which focused on
pushing technology and relied on numerous advances and breakthroughs,
Orion is designed and focused on achieving clear national goals based
on known technology and using an integrated management approach.
Our approach to Orion mirrors NASA's overall focus on technical
competence and excellence in our workforce and in project development
and oversight. NASA is placing greater emphasis on reliability in its
systems and increasing the amount of up-front analysis that goes into
concept definition to ensure that top-level requirements are known and
achievable. We recognize that our systems like Orion will operate over
decades and in different flight regimes. Therefore, we have decided to
insert low-risk and mature technologies into the process but also allow
for the introduction of new technology that can mature quickly. Orion
resembles Apollo for good reason. Relying on proven technology for our
lunar return increases the likelihood of success. Although Orion
borrows its shape and aerodynamic performance from Apollo, the new
capsule's updated computers, electronics, life support, propulsion, and
heat protection systems represent a marked improvement over legacy
systems. Our technology program is tightly coupled with the
Constellation Program and it is essential to keeping our long-term risk
and life cycle costs within bounds. Because of its importance to
overall exploration program risk and our ability to meet national
goals, we ask that you support full funding for our technology
program's budget. We are working on a range of technologies, such as
cryogenic storage and hydrogen fuel cells, that will make a big impact
on our programs and may have valuable applications outside of the space
program.
NASA is working to ensure that initial investments lead to an Orion
system that supports multiple applications with low recurring
operations and life cycle costs. Since recurring infrastructure costs
have a substantial effect on life cycle costs, selection of the Orion
launch vehicle, the Ares I, was influenced greatly by the contractor's
ability to minimize infrastructure and associated manpower
requirements.
Technology maturation activities by our research and technology
development programs will further improve reliability, reduce life
cycle costs, and increase the anticipated effectiveness of future
exploration systems. Also critical to cost control will be the
development of a versatile human-rated launch system. The Orion/Ares
design will serve as an anchor for NASA's transportation architecture,
which itself is intended to enable exploration involving multiple
destinations and diverse objectives. The architecture will be able to
grow so that it can perform multiple functions. The overall crew
transportation system that will evolve from the basic design will
enable ascent and entry in Earth's atmosphere, transit in Earth orbit
and through deep space, and operations at multiple locations including
the Moon and Mars.
Orion embodies a new generation of systems but it will be built
upon the tried-and-true engineering of the past. We evaluated literally
thousands of configurations and transportation options before settling
on Orion's design. The Orion contract is a continuation of these
analyses, requirements, architecture, and conceptual design work. Orion
will enable space operations by U.S. astronauts on the Moon and
elsewhere in the solar system. As the NASA Authorization Act of 2005
also directed, we now have a very capable transportation architecture
that infuses Shuttle-derived hardware and capabilities where
appropriate. As a four-time space flyer, personal aircraft builder and
flyer, and holder of a Ph.D. in aerospace engineering from the Georgia
Institute of Technology, I am confident in the design we have chosen.
This is not a technology dependent program. This is still rocket
science--but rocket science we know and understand.
Orion Contract Approach and Strategy
The acquisition strategy for Orion and other projects within
Exploration Systems need to match the bold and forward-thinking Vision
for Space Exploration. Within Exploration Systems we have laid out
acquisition strategy tenets that were followed for the Orion contract.
One of these tenets is to maximize competition. From our recent down-
select we received innovative and credible approaches with financial
commitments from the Lockheed Martin team that will reap benefits for
NASA through the entire life cycle of the Orion project. Another tenet
that we are using for Orion and other elements of the Constellation
Program is to utilize current, proven technologies that will lead to a
safer, more reliable and affordable solution. Because NASA defined the
design concepts for development by both Phase One contractors, both
Prime Contractor teams were able to construct credible proposal
estimates. Lockheed Martin will take these concepts to the next stage
of development. For the Schedule A contract for the Design,
Development, and Test and Evaluation phase for Orion, NASA chose a
cost-type contract, in which it accepts all of the cost risks. We chose
this type of contract in order for the contractor team to fully refine
the design and test the vehicle so that NASA can receive a reliable and
affordable space vehicle. What makes this cost risk acceptable is the
fact that the NASA's two independent efforts--one performed by the
Constellation Program Office and the other by the Smart Buyer team--
included detailed preparatory work in its strategy for establishing
firm requirements at the beginning of the contract. The ``not to
exceed'' prices for the Schedule B option establishes the upper level
of the contract value for the Agency for the production of the Orion
vehicles to meet the current planned manifest. I would like to
acknowledge Allen Li and his team at the Government Accountability
Office for pointing out the potential long-term commitment in our
solicitation which resulted in NASA making options of both Schedule B
and C in the final contract.
NASA's acquisition strategy and plan for selecting a Project Orion
prime contractor was based on a thorough business case and the efforts
of our two NASA teams that developed independent designs. We were
intimately familiar with both proposal teams, having worked side-by-
side with each of them for over a year under Phase 1 contracts. The
Orion Project will establish a firm foundation for the Constellation
Program. The Orion acquisition strategy and plan focuses on gaining
industry's commitment for a design solution and controlling life cycle
cost through competition and incentives. NASA invested more than $140
million in the formulation phase and we had an appropriate level of
knowledge to down-select a single Project Orion prime contractor.
From a contract oversight perspective, we will employ a number of
measures to further guard against cost overruns. NASA based 25 percent
of the award fee evaluation pool on project cost management. The
project will employ earned value management, with cost and schedule
performance measured against tasks. Progress will be measured through
milestones and tests on a schedule determined by the program. We will
demonstrate hardware and progress on Orion through an exacting test and
demonstration schedule. Additionally, the Orion contract has an ``end
item'' award fee feature that will be milestone based and focused on
successful completion of all elements of the design and initial
production of the Orion vehicle. We believe this award fee feature
presents an opportunity to maximize the return on investment for both
NASA and the Lockheed Martin team.
NASA's contract with Lockheed Martin maintains the longstanding
development schedule for Orion. The initial flight test of an Orion
prototype is targeted for 2008. The first unpiloted flight of an actual
capsule will follow in 2011, and the first flight with humans aboard is
to occur no later than 2014. Orion's first Moon mission with a crew
will take place between 2015 and 2020.
The Orion Project organization was approved June 1, 2006, as a
multi-center ``virtual'' organization that leverages the Agency's
technical strengths. Staffing of key positions is complete. A
Constellation tasks ``roll out'' to nine NASA Centers and the Jet
Propulsion Laboratory occurred on June 6, 2006. The NASA centers
included Ames, Glenn, Goddard, Langley, Kennedy, Marshall, Stennis,
Johnson and Dryden. Management processes are maturing, with integrated
reporting and scheduling processes instituted and maturing; boards,
panels, and working groups identified; and configuration and risk
management processes operating.
NASA Has Addressed the Findings of the GAO Report
NASA has reviewed the findings in the GAO Report entitled ``NASA:
Long-Term Commitment to and Investment in Space Exploration Program
Requires More Knowledge.'' We have non-concurred with a key finding in
the report since we feel we are meeting the concerns stipulated through
our management framework, acquisition approach, and our incentives to
Lockheed Martin to meet performance, schedule, and life cycle cost
requirements. Also, as stated earlier, we are not seeking technological
miracles. We are not trying to violate the laws of physics--we are
ready to build a spaceship that can meet our current national needs and
evolve to meet our future needs. However, although we non-concurred
with the overall report, we have implemented a number of the GAO's
recommendations.
NASA has learned and applied the best lessons from its past
efforts. More importantly, we have adopted an implementation approach
that is technically solid and well-managed. On the contract side, we
have, after discussions with GAO, made the Schedule B and Schedule C
portions of the contract into options. Phase Two preserves NASA's
flexibility to terminate the contract at Orion's preliminary design
review if cost projections are determined to be unaffordable and non-
executable.
Progress Report--Meeting Commitments and Transitioning Access to Low-
Earth Orbit
NASA is making good progress on the national objectives Congress
has laid out for the Agency. Space Shuttle missions STS-121 in July and
STS-115 this month brought us two steps closer to finishing assembly of
the International Space Station and meeting our partner commitments. We
also are two steps closer to retiring the Shuttle in 2010. The
Exploration Systems Mission Directorate is working to create greater
service-based access to low-Earth orbit, to utilize the ISS for
exploration research and development, and to foster the capabilities
necessary to sustain human presence on the lunar surface. In August, we
entered into two unprecedented agreements with Space X and Rocketplane
Kistler to demonstrate, based on milestone performance, cargo and crew
services to support the ISS. We are very hopeful that these and other
nascent commercial space efforts will succeed so that NASA can
increasingly shift its focus and resources beyond low-Earth orbit. Once
the commercial sector demonstrates this capability, then we will enter
into Phase Two of the Commercial Crew and Cargo program and procure
these services from the commercial sector via the competitive
procurement process.
Meanwhile, much work on Orion already has been accomplished. In
May, six vertical drop tests of a body mass simulator, in support of
landing systems development, took place at Langley Research Center, and
all Phase One arc jet testing for thermal projection systems was
completed at Ames Research Center. In June, Ames and the Jet Propulsion
Laboratory completed the first phase of a real-time operating trade
study evaluation and delivered an interim report, and Orion thermal
protection system material was arc jet tested at Johnson Space Center.
In July, the Orion cockpit team conducted crew evaluations of proposed
window designs and the flight test article System Requirements Review
(SRR) was completed. This month we kicked off the Orion SRR and made
the Phase Two contract award for the Thermal Protection System Advanced
Development Project. In October, NASA will hold a Preliminary Design
Review for the Orion flight test article. We are moving forward. On the
Ares front, we now have models being tested in wind tunnels. We are
firing engine components and will be conducting a launch abort test in
2008 and a full-scale Ares I-1 test launch in April 2009. The Lunar
Reconnaissance Orbiter (LRO)/Lunar Crater Observation and Sensing
Satellite (LCROSS) mission is on track for launch in 2008.
Conclusion
The Space Shuttle is the world's most versatile spacecraft to date.
The Constellation program's Orion and Ares will be even more so. They
are designed to fly to the Moon, but they also may be used to service
the International Space Station. We are looking at ways that
Constellation will support expeditions to other bodies in the solar
system after we are finished exploring Mars. The possibilities seem
limitless. Most importantly, the Constellation Program and our
Commercial Orbital Transportation Services (COTS) efforts will assure
America's access to space after the Space Shuttle is retired in 2010.
Orion is the focus of America's 21st century crewed space transport
strategy, designed to continue the evolution of exploration experience
and cutting-edge technology that began with the Apollo Program. Orion
will help further our understanding of Earth, the solar system, the
universe, and the origins of life itself. It will support our
exploration missions by providing crew ascent and entry into Earth's
atmosphere, orbital and deep-space transit, transfer capabilities, and
operations at the Moon, Mars, and elsewhere.
Mr. Chairman, thank you for the opportunity to testify before you
today. I look forward to working closely with the Congress to ensure
American leadership on the frontier of the future. I would be pleased
to respond to any questions you or the other Members of the Committee
may have.
Biography for Scott J. Horowitz
Scott J. Horowitz is the Associate Administrator for the
Exploration Systems Mission Directorate. A former NASA astronaut and a
retired U.S. Air Force Colonel, he will lead the Agency in the
development of the Nation's new spacecraft that will return astronauts
to the Moon and travel to Mars and other destinations in the solar
system.
After retiring from NASA and the Air Force in 2004, Horowitz joined
ATK Thiokol, Inc., as Director of Space Transportation and Exploration.
At ATK, he was responsible for developing the company's strategy to
support NASA's Vision for Space Exploration.
Horowitz joined the Air Force after graduating with a Master's and
doctorate in aerospace engineering from the Georgia Institute of
Technology. He received his undergraduate degree in engineering from
California State University at Northridge.
During his military career, he was an instructor pilot, F-15
fighter pilot and, after attending the Air Force Test Pilot School,
served an assignment as a test pilot. He has logged more than 5,000
hours in more than 50 different aircraft. Horowitz also served as an
adjunct professor at Embry Riddle University and later as a Professor
at California State University at Fresno.
NASA selected him as an astronaut pilot in 1992. A veteran of four
Space Shuttle missions, Horowitz made his first flight in 1996 on a
microgravity science mission. His other missions included servicing the
Hubble Space Telescope and two flights to the International Space
Station. He has logged more than 1,138 hours in space.
His decorations include the Distinguished Flying Cross, Defense
Meritorious Service Medal, Defense Superior Service Medal, two Air
Force Commendation Medals, two NASA Exceptional Service Medals and four
NASA Space Flight Medals.
Chairman Boehlert. Thank you, Dr. Horowitz.
Mr. Li.
STATEMENT OF MR. ALLEN LI, DIRECTOR, ACQUISITION AND SOURCING
MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Li. Before I begin, allow me to congratulate NASA, its
employees, and contractors on its latest two achievements:
Atlantis' successful mission, marking the long-awaited return
to space station assembly, and Opportunity's breathtaking look
at Victoria Crater. They are reminders of the excitement and
challenges associated with space exploration, and the
importance dedication and teamwork play in achieving mission
success.
Chairman Boehlert, Ranking Member Gordon, and Members of
the Committee, thank you for inviting me here today to discuss
our work on NASA's efforts to implement its space exploration
plans and the Crew Exploration Vehicle specifically. As
requested, I will highlight my statement.
At the request of this committee, GAO initiated several
reviews over the past year that have implications for
implementation of the President's Vision for Space Exploration.
In our December 2005 report regarding NASA's acquisition
policies, we made several recommendations to help ensure NASA
uses a knowledge-based acquisition approach to make informed
investment decisions. More recently, in July of 2006, we issued
a report that questioned the affordability of NASA's
exploration program, and in particular, NASA's acquisition
approach for the CEV, now known as Orion. Based on those
reports, I will raise four issues.
Issue number one. NASA cannot develop a firm cost estimate
for the exploration program at this time because the program is
in its early stages. The current estimate is $230 billion over
the next two decades. Changes that have occurred to the program
over the past year illustrate its evolving nature. True,
changes are appropriate and understandable at this early stage,
but changes do not allow the Agency to firmly identify program
requirements and needed resources, a key element of knowledge-
based acquisition approach. Thus, we concluded that NASA was
not in a position to make a long-term commitment to the
program.
Issue number two. NASA will likely be challenged to
implement the program as laid out in its exploration systems
architecture study because of the high costs associated with
the program in some years. Despite initial surpluses, the
sustainability of the program is questionable, given its long-
term funding outlook. NASA's preliminary projections show
multi-billion dollar shortfalls for its Exploration Directorate
in all fiscal years from 2014 to 2020, with an overall deficit
through 2025 exceeding $18 billion. Furthermore, funds NASA is
planning to have after 2010 made possible by the retirement of
the Shuttle may not be available to the extent projected. This
is because Shuttle transition needs are still being quantified.
Issue number three. NASA's acquisition strategy for the CEV
was not based on obtaining an adequate level of knowledge to
make an informed investment decision. NASA planned to commit
the government to a long-term product development effort
without a sound business case. This entails having well-defined
requirements, mature technology, a preliminary design, and firm
cost estimates that realistic budget projections can handle.
Without such knowledge, it is difficult to predict with any
confidence how much the program will cost, what technologies
will or will not be available to meet performance expectations,
and when the vehicle will be ready for use.
As you know, we recommended in our July 2006 report that
NASA alter its strategy to reduce these risks by securing
additional knowledge. NASA disagreed. However, as Dr.
Horowitz's statement indicates, NASA subsequently adjusted its
acquisition approach and now production and sustainment
portions of the contract are options, a move that is consistent
with our recommendation, since it lessens the government's
financial obligation at this early stage. However, risks
persist with NASA's approach. NASA still has no assurance that
the project will have a sound business case in place at
preliminary design review. Therefore, commitment to efforts
beyond that point, even when limited to design and development
activities, is a risky approach.
My final issue. NASA's current acquisition policies and
project guidance do not include major decision reviews beyond
the initial project approval gate, nor a standard set of
criteria with which to measure projects at crucial phases. As
we pointed out in our December 2000 report--2005 report, these
decision reviews and development measures are key markers
needed to ensure that project progress and decisions are based
on the appropriate levels of knowledge. These markers can help
lessen project risks.
In response to our recommendations, NASA stated that it
would make several changes to bring its policies more in line
with a knowledge-based approach. For example, NASA plans to add
requirements for success at key junctures and require
additional project decision reviews. While these changes are
not yet implemented, recent briefings and discussion with NASA
officials indicate that the Agency plans to do so in revised
project program management policies.
NASA would be well-served by fully implementing our
recommendations, thereby placing itself in a better position to
lessen risks, obtain good program outcomes, and achieve mission
success.
So where do we go from here? Orion is only one piece of the
pie. Implementing the Vision over the coming decades will
require hundreds of billions of dollars and a sustained
commitment from multiple Administrations and Congresses. With a
range of federal commitments binging the fiscal future of the
United States, competition for resources within the Federal
Government will be fierce. Consequently, as it proceeds with
its acquisition strategy for Orion and other key projects, it
will be important for NASA to ensure that its investment
decisions are sound and based on high levels of knowledge. This
will allow decision-makers to make informed decisions about
where continued investments are justified.
From the perspective of the Congress, tools have recently
been instilled for more effective oversight. Indeed, cost
growth in excess of stated thresholds as well as information on
technology and schedule risks must now be reported as required
by the NASA Authorization Act of 2005. GAO stands ready to
assist this committee in its oversight responsibilities.
Mr. Chairman, this concludes my oral statement. I will be
pleased to answer any questions you or other Members may have.
[The prepared statement of Mr. Li follows:]
Prepared Statement of Allen Li
Mr. Chairman and Members of the Committee:
I am pleased to be here today to discuss the National Aeronautics
and Space Administration's (NASA) plans for implementing the
President's Vision for Space Exploration (Vision).\1\ NASA plans to
spend nearly $230 billion over the next two decades--more than $31
billion of which will be spent in the next five years--to bring the
Vision to reality.\2\ In July 2006, we issued a report that questioned
the program's affordability, and in particular, NASA's acquisition
approach for one of the program's major projects--the Crew Exploration
Vehicle (CEV).\3\ My statement today, which is based upon that report
and another report evaluating NASA's acquisition policies,\4\
highlights our continuing concerns with the affordability of the
exploration program and the acquisition approach for the CEV project,
as well as the absence of firm requirements in NASA's acquisition
policies for projects to proceed with development with the appropriate
level of knowledge. Given the competing demands facing the Federal
Government and an already troubling funding profile for the program, it
is imperative that NASA implement the various aspects of the Vision in
a fiscally prudent and competent manner. Our work was performed in
accordance with generally accepted government auditing standards.
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\1\ The Vision includes a return to the Moon that is intended
ultimately to enable exploration of Mars and other destinations. To
accomplish this, NASA initially plans to (1) complete its work on the
International Space Station by 2010, fulfilling its commitment to 15
international partner countries; (2) begin developing a new manned
exploration vehicle to replace the Space Shuttle; and (3) return to the
Moon no later than 2020 in preparation for future, more ambitious
missions.
\2\ All cost estimates related to the Vision are reported as
inflated (``real year'') dollars.
\3\ GAO, NASA: Long-Term Commitment to and Investment in Space
Exploration Program Requires More Knowledge, GAO-06-817R (Washington,
D.C.: July 17, 2006).
\4\ GAO, NASA: Implementing a Knowledge-Based Acquisition Framework
Could Lead to Better Investment Decisions and Project Outcomes, GAO-06-
218 (Washington, D.C.: Dec. 21, 2005).
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Summary
In summary, we found that because NASA's exploration program is in
its early stages, the Agency cannot develop a firm cost estimate for
the program at this time. The changes that have occurred to the program
over the past year and the resulting refinement of its associated cost
estimates are indicative of the evolving nature of the program.
Furthermore, we found that it will likely be a challenge for NASA to
implement the program, as laid out in its Exploration Systems
Architecture study (ESAS)\5\ due to the high costs associated with the
program in some years and the long-term sustainability of the program
relative to anticipated funding. Finally, we found that NASA's
acquisition strategy for the CEV was not based upon obtaining an
adequate level of knowledge when making key resources decisions,
placing the program at risk for cost overruns, schedule delays, and
performance shortfalls. These risks were evident in NASA's plan to
commit to a long-term product development effort before establishing a
sound business case for the project that includes well-defined
requirements, mature technology, a preliminary design, and firm cost
estimates. Furthermore, in our 2005 report on NASA's acquisition
policies, we found that NASA's policies lacked major decision reviews
beyond the initial project approval gate and lacked a standard set of
criteria with which to measure projects at crucial phases in the
development life cycle. These decision reviews and development measures
are key markers needed to ensure that projects are proceeding with and
decisions are being based upon the appropriate level of knowledge and
can help to lessen project risks.
---------------------------------------------------------------------------
\5\ The ESAS was an effort to identify the best architecture and
strategy to implement the Vision. The architecture supports the
development of a new CEV, Crew Launch Vehicle (CLV), a Cargo Launch
Vehicle (CaLV), and other supporting systems. The architecture also
calls for various Research and Technology (R&T) and Robotic Lunar
Exploration Program (RLEP) projects. NASA's Exploration Systems Mission
Directorate's Constellation program is responsible for the development
of the CEV, CLV, and CaLV.
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In our July 2006 report, we recommended that NASA adjust its
acquisition strategy to ensure that sufficient program knowledge--to
include well-defined requirements, mature technologies, a stable
design, and realistic cost estimates--be attained prior to committing
the government to a long-term contract. NASA did not concur with our
recommendation and in late August awarded a contract for the design,
development, production, and sustainment of the CEV to Lockheed Martin.
However, prior to awarding the contract, NASA adjusted its acquisition
approach and the Agency included the production and sustainment
portions of the contract as options--a move that is consistent with the
recommendation in our report because it lessens the government's
financial obligation at this early stage. While these changes are
positive steps, the Agency's acquisition strategy needs further
refinement to conform to acquisition best practices. Given the approach
that NASA has chosen, continued congressional oversight will be
critical for ensuring that the program stays within cost and schedule
goals. This is especially true given NASA's ``go as you can afford to
pay'' approach, wherein lower priority efforts will be deferred,
descoped, or discontinued to allow NASA stay within its budget profile.
Competing demands within the Agency, coupled with a declining supply of
federal discretionary funding requires due diligence on the part the
Agency and Congress to ensure successful program outcomes. As our work
has found, all too often, programs are allowed to proceed without
adequate knowledge being attained at key phases of development. Without
such knowledge, it is difficult to predict with any confidence how much
the program will cost, what technologies will or will not be available
to meet performance expectations, and when the vehicle will be ready
for use.
Background
Despite many successes in the exploration of space, such as landing
the Pathfinder and Exploration Rovers on Mars, NASA has had difficulty
bringing a number of projects to completion, including several efforts
to build a second generation reusable human space flight vehicle to
replace the Space Shuttle. NASA has attempted several costly endeavors,
such as the National Aero-Space Plane, the X-33 and X-34, and the Space
Launch Initiative. While these endeavors have helped to advance
scientific and technical knowledge, none have completed their objective
of fielding a new reusable space vehicle. We estimate that these
unsuccessful development efforts have cost approximately $4.8 billion
since the 1980s. The high cost of these unsuccessful efforts and the
potential costs of implementing the Vision make it important that NASA
achieve success in its new exploration program beginning with the CEV
project.
Our past work has shown that developing a sound business case,
based on matching requirements to available and reasonably expected
resources before committing to a new product development effort,
reduces risk and increases the likelihood of success. High levels of
knowledge should be demonstrated before managers make significant
program commitments, specifically: (1) At program start, the customer's
needs should match the developer's available resources in terms of
availability of mature technologies, time, human capital, and funding;
(2) Midway through development, the product's design should be stable
and demonstrate that it is capable of meeting performance requirements;
(3) By the time of the production decision, the product must be shown
to be producible within cost, schedule, and quality targets, and have
demonstrated its reliability. Our work has shown that programs that
have not attained the level of knowledge needed to support a sound
business case have been plagued by cost overruns, schedule delays,
decreased capability, and overall poor performance. With regard to
NASA, we have reported that in some cases the Agency's failure to
define requirements adequately and develop realistic cost estimates-two
key elements of a business case-resulted in projects costing more,
taking longer, and achieving less than originally planned.\6\
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\6\ GAO, NASA: Lack of Disciplined Cost-Estimating Processes
Hinders Effective Program Management, GAO-04-642 (Washington, D.C.: May
28, 2004).
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Firm Cost Estimates Cannot Be Developed at This Time
Although NASA is continuing to refine its exploration architecture
cost estimates, the Agency cannot at this time provide a firm estimate
of what it will take to implement the architecture. The absence of firm
cost estimates is mainly due to the fact that the program is in the
early stages of its life cycle. NASA conducted a cost risk analysis of
its preliminary estimates through fiscal year 2011. On the basis of
this analysis and through the addition of programmatic reserves (20
percent on all development and 10 percent on all production costs),
NASA is 65 percent confident that the actual cost of the program will
either meet or be less than its estimate of $31.2 billion through
fiscal year 2011. For cost estimates beyond 2011, when most of the cost
risk for implementing the architecture will be realized, NASA has not
applied a confidence level distinction. Since NASA released its
preliminary estimates, the Agency has continued to make architecture
changes and refine its estimates in an effort to establish a program
that will be sustainable within projected resources. While changes to
the program are appropriate at this stage when concepts are still being
developed, they leave the Agency in the position of being unable to
firmly identify program requirements and needed resources. NASA plans
to commit to a firm cost estimate for the Constellation program at the
preliminary design review in 2008, when requirements, design, and
schedule will all be base-lined. It is at this point where we advocate
program commitments should be made on the basis of the knowledge
secured.
Expected Budget and Competing Demands Will Challenge Architecture
Implementation
NASA will be challenged to implement the ESAS recommended
architecture within its projected budget, particularly in the longer-
term. As we reported in July 2006, there are years when NASA has
projected insufficient funding to implement the architecture with some
yearly shortfalls exceeding $1 billion; while in other years the
funding available exceeds needed resources. Per NASA's approach, it
plans to use almost $1 billion in appropriated funds from fiscal years
2006 and 2007 in order to address the short-term funding shortfalls.
NASA, using a ``go as you can afford to pay'' approach, maintains that
in the short-term the architecture could be implemented within the
projected available budgets through fiscal year 2011 when funding is
considered cumulatively. However, despite initial surpluses, the long-
term sustainability of the program is questionable given the long-term
funding outlook for the program. NASA's preliminary projections show
multi-billion-dollar shortfalls for its Exploration Systems Mission
Directorate in all fiscal years from 2014 to 2020, with an overall
deficit through 2025 in excess of $18 billion. According to NASA
officials, the Agency will have to keep the program compelling for both
Congress and potential international partners, in terms of the
activities that will be conducted as part of the lunar program, in
order for the program to be sustainable over the long run.
NASA is attempting to address funding shortfalls within the
Constellation program by redirecting funds to that program from other
Exploration Systems Mission Directorate activities to provide a
significant surplus in fiscal years 2006 and 2007 to cover projected
shortfalls beginning in fiscal year 2009. Several Research and
Technology programs and missions were discontinued, descoped, or
deferred and that funding was shifted to the Constellation Program to
accelerate development of the CEV and CLV. In addition, the
Constellation program has requested more funds than required for its
projects in several early years to cover shortfalls in later years.
NASA officials stated the identified budget phasing problem could
worsen given the changes that were made to the exploration architecture
following issuance of the study. For example, while life cycle costs
may be lower in the long run, acceleration of development for the five
segment Reusable Solid Rocket Booster and J-2X engine will likely add
to the near-term development costs, where the funding is already
constrained. NASA has yet to provide cost estimates associated with
program changes.
NASA must also contend with competing budgetary demands within the
Agency as implementation of the exploration program continues. NASA's
estimates beyond 2010 are based upon a surplus of well over $1 billion
in fiscal year 2011 due to the retirement of the Space Shuttle fleet in
2010. However, NASA officials said the costs for retiring the Space
Shuttle and transitioning to the new program are not fully understood;
thus, the expected surplus could be less than anticipated. This year,
NASA plans to spend over 39 percent of its annual budget for Space
Shuttle and International Space Station (ISS) operations--dollars that
will continue to be obligated each year as NASA completes construction
of the ISS by the end of fiscal year 2010. This does not include the
resources necessary to develop ISS crew rotation or logistics servicing
support capabilities for the ISS during the period between when the
Space Shuttle program retires and the CEV makes its first mission to
the ISS. While, generally, the budget for the Space Shuttle is
scheduled to decrease as the program moves closer to retirement, a
question mark remains concerning the dollars required to retire the
Space Shuttle fleet as well as transition portions of the
infrastructure and workforce to support implementation of the
exploration architecture. In addition, there is support within Congress
and the scientific community to restore money to the Science Mission
Directorate that was transferred to the Space Shuttle program to ensure
its viability through its planned retirement in 2010. Such a change
could have an impact on future exploration funding.
Lack of Sound Business Case Puts CEV Acquisition at Risk
In July 2006, we reported that NASA's acquisition strategy for the
CEV placed the project at risk of significant cost overruns, schedule
delays, and performance shortfalls because it committed the government
to a long-term contract before establishing a sound business case. We
found that the CEV contract, as structured, committed the government to
pay for design, development, production and sustainment upon contract
award--with a period of performance through at least 2014 with the
possibility of extending through 2019.
Our report highlighted that NASA had yet to develop key elements of
a sound business case, including well-defined requirements, mature
technology, a preliminary design, and firm cost estimates that would
support such a long-term commitment. Without such knowledge, NASA
cannot predict with any confidence how much the program will cost, what
technologies will or will not be available to meet performance
expectations, and when the vehicle will be ready for use. NASA has
acknowledged that it will not have these elements in place until the
project's preliminary design review scheduled for fiscal year 2008. As
a result, we recommended that the NASA Administrator modify the current
CEV acquisition strategy to ensure that the Agency does not commit
itself, and in turn the Federal Government, to a long-term contractual
obligation prior to establishing a sound business case at the project's
preliminary design review. In response to our recommendation, NASA
disagreed and stated that it had the appropriate level of knowledge to
proceed with its current acquisition strategy. NASA also indicated that
knowledge from the contractor is required in order to develop a
validated set of requirements and, therefore, it was important to get
the contractor on to the project as soon as possible. In addition,
according to NASA officials, selection of a contractor for the CEV
would enable the Agency to work with the contractor to attain knowledge
about the project's required resources and, therefore, be better able
to produce firm estimates of project cost. In our report, we
highlighted that this is the type of information that should be
obtained prior to committing to a long-term contract. To our knowledge,
NASA did not explore the possibility of utilizing the contractor,
through a shorter-term contract, to conduct work needed to develop
valid requirements and establish higher-fidelity cost estimates--a far
less risky and costly strategy.
Subsequent to our report, NASA did, however, take steps to address
some of the concerns we raised. Specifically, NASA modified its
acquisition strategy for the CEV and made the production and
sustainment schedules of the contract--known as Schedules B and C--
contract options that the Agency will decide whether to exercise after
project's critical design review in 2009. Therefore, NASA will only be
liable for the minimum quantities under Schedules B and C when and if
it chooses to exercise those options. These changes to the acquisition
strategy lessen the government's financial obligation at this early
stage. Table 1 outlines the information related to the CEV acquisition
strategy found in the request for proposal and changes that were made
to that strategy prior to contract award. While we view these changes
as in line with our recommendation and as a positive step to address
some of the risks we raised in our report, NASA still has no assurance
that the project will have the elements of a sound business case in
place at the preliminary design review. Therefore, NASA's commitment to
efforts beyond the project's preliminary design review--even when this
commitment is limited to design, development, test and evaluation
activities (DDT&E)--is a risky approach. It is at this point that NASA
should (a) have the increased knowledge necessary to develop a sound
business case that includes high-fidelity, engineering-based estimates
of life cycle cost for the CEV project, (b) be in a better position to
commit the government to a long-term effort, and (c) have more
certainty in advising Congress on required resources.
Sound Management and Oversight Key to Addressing CEV Project Risks
Sound project management and oversight will be key to addressing
risks that remain for the CEV project as it proceeds with its
acquisition approach. To help mitigate these risks, NASA should have in
place the markers necessary to help decision-makers monitor the CEV
project and ensure that is following a knowledge based approach to its
development. However, in our 2005 report that assessed NASA's
acquisition policies, we found that NASA's policies lacked major
decision reviews beyond the initial project approval gate and a
standard set of criteria with which to measure projects at crucial
phases in the development life cycle--key markers for monitoring such
progress. In our review of the individual center policies, we found
that the Johnson Space Center project management policy, which is the
policy that the CEV project will be required to follow, also lacked
such key criteria. We concluded that without such requirements in
place, decision-makers have little knowledge about the progress of the
Agency's projects and, therefore, cannot be assured that they are
making informed decisions about whether continued investment in a
program or project is warranted.
We recommended that NASA incorporate requirements in its new
systems engineering policy to capture specific product knowledge at key
junctures in project development. The demonstration of such knowledge
could then be used as exit criteria for decision-making at the
following key junctures:
Before projects are approved to transition in to
implementation, we suggested that projects be required to
demonstrate that key technologies have reached a high maturity
level.
Before projects are approved to transition from final
design to fabrication, assembly, and test, we suggested that
projects be required to demonstrate that the design is stable.
Before projects are approved to transition to
production, we suggested that projects be required to
demonstrate that the design can be manufactured within cost,
schedule, and quality targets.
In addition, we recommended that NASA institute additional major
decision reviews that are tied to these key junctures to allow
decision-makers to reassess the project based upon demonstrated
knowledge.
While NASA concurred with our recommendations, the Agency has yet
to take significant actions to implement them. With regard to our first
recommendation, NASA stated that the Agency would establish
requirements for success at the key junctures mentioned above. NASA
planned to include these requirements in the systems engineering policy
it issued in March 2006. Unfortunately, NASA did not include these
criteria as requirements in the new policy, but included them in an
appendix to the policy as recommended best practices criteria. In
response to our second recommendation, NASA stated it would revise its
program and project management policy for flight systems and ground
support projects, due to be completed in fall 2006. In the revised
policy, NASA indicated that it would require the results of the
critical design review and, for projects that enter a large-scale
production phase, the results of the production readiness review to be
reported to the appropriate decision authority in a timely manner so
that a decision about whether to proceed with the project can be made.
NASA has yet to issue its revised policy; therefore, it remains to be
seen as to whether the CEV project decision authorities will have the
opportunity to reassess and make decisions about the project using the
markers recommended above after the project has initially been
approved. Briefings that we have recently received indicate that NASA
plans to implement our recommendation in the revised policy.
The risks that NASA has accepted by moving ahead with awarding the
contract for DDT&E for CEV could be mitigated by implementing our
recommendations as it earlier agreed. Doing so would provide both NASA
and Congress with markers of the project's progress at key points. For
example, at the preliminary design review, decision-makers would be
able to assess the status of the project by using the marker of
technology maturity. In addition, at the critical design review, the
Agency could assess the status of the project using design stability
(i.e., a high percentage of engineering drawings completed). If NASA
has not demonstrated technology maturity at the preliminary design
review or design stability at the critical design review, decision-
makers would have an indication that the project will likely be headed
for trouble. Without such knowledge, NASA cannot be confident that its
decisions about continued investments in projects are based upon the
appropriate knowledge. Furthermore, NASA's oversight committees could
also use the information when debating the Agency's yearly budget and
authorizing funds not only for the CEV project, but also for making
choices among NASA's many competing programs. If provided this type of
information from NASA about its key projects, Congress will be in a
better position to make informed decisions about how to invest the
Nation's limited discretionary funds.
NASA's ability to address a number of long-standing financial
management challenges could also impact management of NASA's key
projects. The lack of reliable, day-to-day information continues to
threaten NASA's ability to manage its programs, oversee its
contractors, and effectively allocate its budget across numerous
projects and programs. To its credit, NASA has recognized the need to
enhance the capabilities and improve the functioning of its core
financial management system, however, progress has been slow. NASA
contract management has been on GAO's high-risk list since 1990 because
of such concerns.
Conclusions
In conclusion, implementing the Vision over the coming decades will
require hundreds of billions of dollars and a sustained commitment from
multiple administrations and Congresses. The realistic identification
of the resources needed to achieve the Agency's short-term goals would
provide support for such a sustained commitment over the long-term.
With a range of federal commitments binding the fiscal future of the
United States, competition for resources within the Federal Government
will only increase over the next several decades. Consequently, it is
incumbent upon NASA to ensure that it is wisely investing its existing
resources. As NASA proceeds with its acquisition strategy for the CEV
project and other key projects, it will be essential that the Agency
ensure that the investment decisions it is making are sound and based
upon high levels of knowledge. NASA should require that the progress of
its projects are evaluated and reevaluated using knowledge based
criteria, thereby improving the quality of decisions that will be made
about which program warrant further investment. Furthermore, it will be
critical that NASA's financial management organization delivers the
kind of analysis and forward-looking information needed to effectively
manage its programs and projects. Clear, strong executive leadership
will be needed to ensure that these actions are carried out. Given the
Nation's fiscal challenges and those that exist within NASA, the
availability of significant additional resources is unlikely. NASA has
the opportunity to establish a firm foundation for its entire
exploration program by ensuring that the level of knowledge necessary
to allow decision-makers to make informed decisions about where
continued investment is justified. Doing so will enhance confidence in
the Agency's ability to finally deliver a replacement vehicle for
future human space flight.
Mr. Chairman, this concludes my prepared statement. I would be
pleased to respond to any questions that you or other Members of the
Committee may have.
Biography for Allen Li
As Director of the Acquisition and Sourcing Management Team, Mr. Li
is responsible for leading GAO's work at the National Aeronautics and
Space Administration (NASA) and for reviewing defense acquisition
programs. He also serves as the Team's Director for Operations,
managing day-to-day activities of a geographically dispersed group.
Examples of recent work include NASA's efforts to develop and build the
International Space Station (ISS), Crew Exploration Vehicle (CEV), the
James Webb Telescope, and Shuttle alternatives for supplying the ISS;
the Agency's management of its Deep Space Network (DSN); and NASA's
implementation of its Integrated Enterprise Management Program. Defense
work recently completed include identification of the risks associated
with the development of the Navy's EA-18G electronic attack aircraft.
Prior to assuming his current duties, Mr. Li was an Associate
Director in GAO's Energy, Resources, and Science Issue Area where he
directed work on research and development, nuclear safety, and
Department of Energy management issues. Over the past twenty-seven
years at GAO, he has worked in several other units, including GAO's
Transportation Issue Area where he specialized in aviation safety and
air traffic control modernization. Mr. Li has frequently testified
before Senate and House Committee and Subcommittees on civil and
military issues. He also testified before the Columbia Accident
Investigation Board following the tragic loss of the Shuttle Columbia
and its crew.
Mr. Li has received several awards at GAO: the Comptroller
General's Distinguished Service Award, two Comptroller General's
Meritorious Service Awards, and Director and Outstanding Achievement
Awards from several GAO units. He was selected for GAO's Senior
Executive Service in February 1993 and designated Associate Director of
Transportation Issues. Mr. Li has a B.S. degree in Aerospace
Engineering from the University of Maryland. Mr. Li is married to the
former Ellen Dziuszko and lives in Oak Hill, VA. They have two adult
children, Christopher and Allison.
Discussion
Congressional Oversight
Chairman Boehlert. Thank you very much, Mr. Li.
Let me start by asking you some of the questions I
addressed in my opening statement, and when you respond, I
would like Dr. Horowitz to respond to your response.
The questions were what specifically should Congress be
doing and what documentation should we be seeking to keep a
watchful eye on Orion development?
Secondly, and now that the contract has been awarded, what
other steps should NASA be taking to avoid cost escalation?
Mr. Li. Your first question has to do with exactly the
point that I just ended with, which is the tools are there. The
NASA Authorization Act will require NASA to report to this
committee on the progress and all the technical risks
associated with its program. Those are some things that this
committee did not have before. I believe that your use of those
particular tools will be very important, and I think that for
them to provide you with honest answers in terms of where the
status is, is going to be extremely important.
The second question is one that I think we all have to be
worried about. There are a lot of things that NASA can be
doing. They have identified that they have reduced the risks.
Obviously, in this particular case, I have indicated that I
don't agree with them. I think that they have gone further than
they should. Be that as it may, the contract is signed. Let us
move on. I believe that at this point in time, what NASA needs
to do is to abide and conform with the policies and management
guidance that is going to be finalized, hopefully in the coming
weeks, and that will provide for more knowledge-based decisions
in the future.
Chairman Boehlert. Thank you very much, and Dr. Horowitz,
just before you respond to that, let me point out--and I think
Chairman Calvert and Mr. Rohrabacher before him, and Mr. Udall
will agree--that essentially we have got the Nunn-McCurdy
language in the authorizing legislation, and that is a tribute
to the Subcommittee and to the foresight of one of our most
valuable members who is no longer a member of the professional
staff, Mr. Adkins, Bill Adkins.
Mr. Horowitz.
Dr. Horowitz. Thank you, sir.
The first question, what should we do, and we do have
mandatory reports which we will provide to you on a timely
basis. I believe we have been very good recently at providing
all reports to this committee as requested, and we will
continue to do so.
But I think we are going to go above and beyond that, and
the way we are going to do that is with open communications. We
are going to come and visit you and let you know. You won't
have to wait for a report to let you know what is going on. I
have charged my staff to make sure that when things are
happening, we keep you informed. It is our job to keep those
lines of communication so you know what is going on. You have
every right to know how your program is going, and we are very
proud to share it with you.
What should we do to avoid the cost of overruns? A day
doesn't go by that I don't say this to my staff. This is all
about performance, cost, and scheduling. Every day you need to
ask yourself, whether you are working on a contract, whether
you are working on a design idea, whether you are working on an
integration issue, you always have to think about performance,
cost, and schedule. Having that in the forefront of your mind
will allow us to do things like implement some of the
recommendations that GAO gave us on making our contracts more
responsible and to give the government better value for its
dollar.
So that is basically the mantra and those are the ways that
we are going to avoid the cost overruns.
GAO's Response to NASA Changes
Chairman Boehlert. Let me commend you for the open
dialogue--continuing openness and continuing dialogue with the
Committee and the Members and the staff. That is essential.
Mr. Li, if you had to give a mark, how would you grade
NASA's response to the GAO report?
Mr. Li. Well, I have to be honest with you. When I first
got the written response to the draft report, I was
disappointed since they non-concurred. But I do believe that
the events that have occurred subsequent to that--and I believe
that both Houses, both this particular Committee and the
Senate, forced a better understanding and caused NASA and my
team to get together, and we discussed our differences. And I
believe that that was--as a result of that, as you indicated in
your opening statement, I think that is what oversight is. That
is what good government is. We were able to have them have a
better understanding of what our concern was, and as a result,
they modified the contract to have options. I think that was a
step in the right direction.
Chairman Boehlert. Thank you, sir, very much. This
Committee believes very strongly in oversight.
So often in the Congress we do good deeds with the best of
intentions and pat ourselves on the back and say ``Boy, wasn't
that great?'' Let us go on to the next thing, and don't pause
to go back and see if what we did originally was the right
thing and people are responding in the appropriate manner. So
you have given us some good direction, and I want to thank you
on behalf of the entire Committee.
With that, Mr. Gordon.
Budget Concerns
Mr. Gordon. Thank you, Mr. Chairman.
I am afraid that there is not going to be much done about
our spiraling budget deficits over the next two years, but I
think in the election of 2008, both on the Presidential and
Congressional, it is going to be a major issue. And with that,
there is going to be needed budget pressure. I am concerned
about NASA being able to survive and get the increases that we
are talking about. And so we may have to deal with not only not
getting those increases, but it could get worse.
Now, let me--I want to--that is the context. I want to
congratulate NASA in terms of the approach you took with the
CEV in terms of not overreaching in terms of technology and
trying to, you know, trying to do the job with reachable
technology. I think that was a smart approach and I think it
follows Mr. Griffin's overall approach to things. I compliment
you for that.
Now, in your non-concurrence letters, you were very
confident about being able to complete on time and on budget,
and in your testimony you have here today. And so since you
have such confidence, would NASA be willing to accept a formal
cost cap on the CEV program?
Dr. Horowitz. Well, I believe, sir, to answer your
question, we actually are operating under a cost cap. The--I
have been given a budget. I have to make this program fit
inside that budget or we cannot do any of the other things that
we want to do. If I allow the CEV development to run over cost
and schedule, we are not going to be able to do the goals of
going on to the Moon and beyond because what you see here----
Mr. Gordon. So then what are you going to do, then, if--
that is your job, so you are going to keep it within cost, you
say.
Dr. Horowitz. Right.
Mr. Gordon. So will you take money from the rest of the
exploration program or from other agency activities?
Dr. Horowitz. Everything has to----
Mr. Gordon. What will you do?
Dr. Horowitz. Everything has to come out of my exploration
budget due to the exploration. We are going to make our
programs fit inside of exploration. You only have the three
things I talked about before. You have performance, costs, and
schedule, and you need a certain minimum performance, for
example, getting the CEV to orbit and accomplishing that
mission. You need more performance to get to the Moon----
Mr. Gordon. So if you take it out of exploration, then what
if you just wind up with a CEV and nothing else?
Dr. Horowitz. Well, the other thing you have left is
schedule. If you can't get the job done with minimum
performance and you have only a certain number of resources----
Mr. Gordon. But if you are going to have to get into
resources and you are doing away with--so are you just saying
you will just keep stretching the bounds?
Dr. Horowitz. You have no choice. With a set number of
resources to achieve a minimum performance, if you are falling
behind, the only out you have to stay within your resources----
Mr. Gordon. So then if you are--again, you are saying very
competently you are going to do this, so why would it not be
appropriate to have a formal cost cap?
Dr. Horowitz. I can take that for the record. I don't know
any reason why you wouldn't, but I can go back and discuss that
with my staff.
[The information follows:]
Historically, cost caps have not proven effective in managing major
NASA research and development (R&D) programs. Constraining the
International Space Station (ISS) to $2.1 billion annually did little
to control overall program costs. And while life cycle cost caps are
regularly imposed on small, discrete projects (e.g., Explorer,
Discovery) as part of the selection process, they are not easily
adapted to major R&D efforts that extend far beyond the current budget
horizon. In the case of large development programs such as
Constellation, cost caps can be problematic as they depend on
assumptions regarding outyear funding. The future priorities of the
country are not known and can change over the life of the Constellation
program.
At its early formulation stage, the Constellation Program is
certain to face ``unknown unknowns'' as we continue to refine
requirements, develop advanced technologies, and begin to integrate the
various systems into an operational infrastructure to enable long-term
exploration of the Moon and Mars. When Constellation moves into the
implementation phase, after Preliminary Design Review (PDR) in the
spring of 2008, design, cost, and schedule baselines will be
established, and Program performance will be measured against metrics
established at the various key decision points throughout the life of
the program. At this juncture, NASA will submit Constellation project
life cycle cost commitments to Congress. Under Section 103 of the NASA
Authorization Act of 2005 (P.L. 109-155), NASA is required to submit
Major Program Annual Reports, the first of which shall include a
Baseline Report that is to include an estimate of the life cycle cost
for those programs. Under Section 103, NASA is required to report
changes to the Baseline Report--including life cycle cost estimates--as
part of the annual budget request. NASA will notify the Committee at
other junctures, as necessary, if there are any adjustments to life
cycle cost estimates. As such, NASA would advise against imposition of
a formal statutory ``cost cap'' on CEV development.
Mr. Gordon. Okay. It looks like somebody may have already
discussed it for you there. Do they have anything you want to
add to it?
Dr. Horowitz. Well, the only other part is--which comes to
my initial statement is one of the things that I will guarantee
will drive the costs higher over time is if we have unstable
funding for the program, and I can't provide stability to the
project. Also----
Mr. Gordon. You can guarantee it will get more expensive if
you have to stretch it out a long time, too.
Dr. Horowitz. Right, and the thing that usually happens is
if you short fund a program in the near-term, you can guarantee
that you will stretch it out and you will increase its costs in
the long-term.
Mr. Gordon. Which again goes back to the original problem.
Mr. Li, GAO's July 17 report to us made the following
recommendation. In light of the fact that--and I am quoting
you--or the report, which is probably you. ``In light of the
fact that NASA plans to award the contract for CEV in September
of 2006, Congress should consider restricting annual
appropriations and limiting NASA's obligations for CEV project
to only the amount of funding necessary to support activities
needed to successfully complete the project's preliminary
design review.'' Do you still stand behind that recommendation,
and if not, why not?
Mr. Li. I do. I mean, the application of a knowledge-based
acquisition strategy is one which within the body of work that
we have conducted at GAO has proven and has shown that when you
don't abide by those particular principles, which is not going
beyond what your knowledge tells you, that you do run into
trouble. I mean, the Committee has a great list of DOD programs
and this particular committee is aware of one of them, being
the NPOESS, that have great exceeded their costs and projected
costs because of such things as faulty assumptions, and I will
have to say, there are some programs that we have reviewed that
have faulty assumptions associated with the use of heritage
technology. That has happened. So I am cautious when I hear
NASA indicate that this is low-risk technology.
My recollection is that people that were telling me about
the space station not being very high technology. They are just
modules up in space, and yet, I seem to recall a $5 billion
increase somewhere along the line.
Mr. Gordon. Mr. Li, I want to give Dr. Horowitz a chance to
respond. I guess what we are seeing here is this cloud of
skepticism because of NPOESS and other things. We only want--we
think--at least, I think that we have the best vets available
at NASA now and they are doing the best job available, but
there is this skepticism and the concern that you can't put
1,000 pounds of canaries in a 500-pound box.
And so what would be your response to Mr. Li's--or to that
recommendation?
Dr. Horowitz. Well, sir, the thing that I wanted to bring
out in this program is we talk about the knowledge and
technology. This is much different than, for example, NPOESS,
in that we know exactly what we want here.
One of the things--and to give the space station as an
example, is the requirements kept changing, and guaranteed, if
you keep changing your requirements: how big is it going to be,
how many people are going to be on it, all that----
Mr. Gordon. What about the recommendation that Congress
should consider restricting annual appropriations and limiting
NASA's obligations for CEV project to only the amount of
funding necessary to support activities needed to successfully
complete the project's preliminary design review?
Dr. Horowitz. Well, this comes back to the point of the
stable funding. We have a budget profile laid out to
successfully execute this project, and if we short fund the
project in the near-term when we are working our way to the
preliminary design review, now with our contractor on board, we
will guarantee to delay the execution of this project and not
meet the milestones, and therefore actually the program will
get more expensive, not less expensive.
Mr. Gordon. Well, Mr.----
Mr. Li. I disagree because there should not be a connection
between funding and the different phases of an acquisition. You
can still ensure that you have that funding in the future
without breaking it at PDR, for example.
Mr. Gordon. I need to stop, but I guess the premise that we
are concerned about here is this. I don't think it is a
foregone conclusion that we are going to do this no matter
what, and to some extent, you are saying okay, it can always be
stretched out but it will cost more. Well that means ultimately
there has to be some money coming in.
I don't know--you know, there is a point at which we might
very well say this is too expensive, this is not working, let
us stop, you know, cut our losses. And you seem to be working
under the premise we are going to do it no matter what, and I
am not sure that is what Congress is going to do. And so that
is what we are trying to do is reach a point where if we can do
it in a responsible way.
Chairman Boehlert. Mr. Calvert.
Mr. Calvert. Well, I guess I got a little more positive
attitude, but I would like to point out, too, by the way, the
deficit isn't spiraling out of control. It has actually come
down $109 billion, based on the CBO estimate, but that is
another subject. I just thought----
Mr. Gordon. Are you satisfied?
Transition Challenges
Mr. Calvert. We are making progress. We are happy to say--
like I said, I just have a different attitude.
But I want to point out that there are some things that we
do in this country that are extremely important, and I think
this is one of them. One point that I want to make is that if
we don't have this operational within the time constraints that
you have set out, 2014--and this is, I guess, a question for
Dr. Horowitz--what is going to happen to that labor force in
Houston and in Florida?
Dr. Horowitz. Sir, this is one of the biggest concerns and
something we work on every day is the transition. One of the
reasons the designs look the way they do before you is one of
the key elements of design was how do we make the most value of
all the investment we have, not just in our hardware and our
technology, but in our workforce, because the workforce is the
key. It is the people. People say what does it take to make a
rocket fly, and they say you talk to engines and propulsion. It
is not that; it is the thousands of people that we have
working----
Mr. Calvert. Okay----
Dr. Horowitz. If we lose that support----
Mr. Calvert. I remember, you know--we are about the same
age, maybe you are a little bit younger, but the Apollo Gemini
program, when we had that gap between the Apollo Gemini and the
Shuttle program, what happened to the labor force then?
Dr. Horowitz. Sir, that was a disastrous time for NASA. We
lived through that----
Mr. Calvert. Okay. So we can't allow----
Dr. Horowitz. We lost all that capability----
International Competition
Mr. Calvert. We cannot allow that to happen, and not only
that, if we are not in outer space between that so-called gap
period between 2010 and whenever we successfully launch these
vehicles, does that mean nobody will be in outer space?
Dr. Horowitz. Absolutely not, sir. We have had demonstrated
to us that there are a lot of other countries very interested
in going to space.
Mr. Calvert. There is competition out there today, isn't
there?
Dr. Horowitz. Yes, sir. Anybody who understands what this
is all about is out there going to space. There are many other
people.
Mr. Calvert. You know, I was looking at the--you know, I
was commenting with my seatmate here about the Ares V and the
lift capability of that, and of course, we go back and think of
the old Saturn, but that has a lift capability of what,
approximately 100 tons?
Dr. Horowitz. This one can lift a little more than a Saturn
V, about 125 metric tons.
Mr. Calvert. One hundred twenty-five metric tons. What is
the heaviest lift capability we have now?
Dr. Horowitz. It is less than the small rocket you see to
its left, which is on the order of 20 to 25 metric tons.
Mr. Calvert. Now, is there potentially other revenue
streams that could be utilized for Ares V in other parts of the
government?
Dr. Horowitz. Yes, sir, I am sure there are other people
that might be interested.
Mr. Calvert. You mean, there is no country in the world at
this point that can launch 125 metric tons?
Dr. Horowitz. Sir, there is nobody else who has this
capability.
More Transition Challenges
Mr. Calvert. Okay. Now, you put together a pretty good
contractor team, and the people who put this together, like you
are saying, we are kind of going back to the future, as I have
heard the slogan before. That the technology that you are using
is--you are not going to use risky technology that has not
proven itself. Is that a correct statement?
Dr. Horowitz. That is correct.
Mr. Calvert. So you feel pretty comfortable that the budget
you have set forth and the time constraints that you are under,
you can meet?
Dr. Horowitz. Yes, sir, absolutely.
Mr. Calvert. How confident would you say are you at
controlling overall cost development of the Orion Crew Vehicle
and also the Ares V?
Dr. Horowitz. Sir, we are very confident. We have all the
technologies above what we call TRL [Technology Readiness
Level] 6, so we don't see any issues there.
Mr. Calvert. Okay.
Mr. Li, I do believe--I am a former business guy, you know,
and I--when I was in the restaurant business we worked on a
three percent margin. So I woke up every morning and tried to
figure out what I was going to sell and what the profit margin
was going to be, and just try to come out alive at the end of
the day.
So obviously, we are dealing with larger numbers here, but
when we are going through this process--and I think we are--I
think Congress is committed to see this through. I think the
country is committed to see this through. You know, from my
perspective, I want to be on the Moon to greet the Chinese, not
the other way around. That is just maybe a nationalistic
statement on my part, but that is just the way I am.
But what should we do as a Committee as we move forward on
this--what points would you think are most important to make
sure that we have oversight to make sure that we keep this
moving in the right direction and we maintain reasonable cost
control as we move forward? And recognizing when you are
dealing with new technology--I am on the Armed Services
Committee, you know, the F-22 we didn't do too good.
Mr. Li. No.
Mr. Calvert. And so--as a matter of fact, any--as you--and
I know you work on DOD. We do a lousy job in the Department of
Defense. I am hoping that NASA does a much better job than we
do in the DOD on new weapons system procurement. As you know,
on the new Joint Strike Fighter, I think that thing is out of
control again, and my friends over here, I mean, we are going
to have to get that brought in or we are not going to be
developing that program.
So what can we do to stay on this to make sure that we keep
control on this process?
Mr. Li. Thank you for your question. I think the issue
here--and we touched on some of the points. You were raising
the issue of the industrial base, I think is the way that I
would characterize that in terms of with the Shuttle winding
down, what happens to all those people. I am also worried, not
only on those--of the people that they are using, but also
their suppliers and also the various tiers of suppliers that go
by. So I think that transition is extremely important.
I think the big challenge, sir, is going to be integration.
I think the issue here is not just talking about the CEV,
talking about the CLV, talking about the CaLV, it is the whole
ball of wax. And I am encouraged because in talking with Dr.
Horowitz, I understand that he is trying to build people within
his team that will do that integration, but I think that is
going to be a big challenge.
Chairman Boehlert. Thank you. The gentleman's time has
expired.
Mr. Udall.
Integration Challenges
Mr. Udall. Thank you, Mr. Chairman.
Mr. Li, Dr. Horowitz, as I mentioned in my opening
statement, I also serve on the Armed Services Committee, as
does my good friend from California, Mr. Calvert. And from that
vantage point, I have seen some of the problems that have
arisen when we have tried to acquire space systems. And I
wonder whether the DoD experiences for some reason for caution
as we assess NASA's plans.
I wanted to read a couple of quotes this document, the
Acquisition of National Security Space Programs Influential
2003 Joint Task Force. First, ``Unrealistic estimates lead to
unrealistic budgets and unexecutable programs. The space
acquisition process is strongly biased to produce
unrealistically low cost estimates throughout the process.''
And to another quote, ``The government acquisition environment
has encouraged excessive optimism and a can-do spirit. Program
managers have accepted programs with inadequate resources and
excessive levels of risk.''
The Task Force then goes on to recommend that when
estimating cost of space acquisition programs, ``National
security space programs should be budgeted at the 80/20 level,
which the Task Force believes to be the most probable cost.''
As you know, NASA currently is using a lower competence level
to estimate the cost of its CEV program, and the difference
between NASA's cost estimate and the estimate we get when we
follow the Task Force recommendation is $5.5 billion, not
insignificant, which is also a significant increase in the
estimated cost.
Mr. Li, GAO has done a lot of oversight on national
security space programs, and you have looked at NASA's
Exploration program now. Are there any parallels that from your
point of view that we need to be concerned about as we
evaluate----
Mr. Li. Thank you for your question, and I have had the
opportunity to work on many of those programs. Mr. Calvert,
actually for several years I monitored the F-22 program, well
aware of the problems associated with Joint Strike Fighter
(JSF).
But on the space acquisition, the space program
specifically has been a real thorn in DOD's side. To DOD's
credit, they are making some changes right now, recognizing
that the things that they have done in the past, which is
buying something all at once doesn't work. They are going to be
a lot more careful in making sure that those things that they
have to discover are going to be in science and technology.
Once they have those technologies mature, they will bring that
forward to--in the systems development process.
The things that NASA can learn from that is that there are
some issues, as I indicated initially. They made some
assumptions on programs like NPOESS and programs such as SBIRS
High, programs that have identified the fact that technology,
low-risk technology, that they were bringing from heritage type
programs, actually did not pan out, and that is why I am
cautioned--and I would like to think that some of these things
that NASA are doing is going to be low-risk, but I think that
from the standpoint of integration, when you are bringing--I
recall when I had my old 1976 Dodge, I had the components for a
car. The ones that I have right now on my 2000 Durango are
quite different. They are the same components, but when they
put them together, when I open that hood, I can't even figure
out what hose is going to where. That is the issue. The
components are probably basically the same, but once you
integrate them, it is a completely different story.
Mr. Udall. I think Chairman owns a '76 Dodge as well. But
Dr. Horowitz, would you care to comment?
Dr. Horowitz. Oh, sorry. I have a '70 TR-6 I put a Corvette
engine in, so that was quite an integration challenge. You can
come to my shop any time.
No, absolutely. We have the same concerns. We worry about
integration. This is a large integration task. We worry about
doing it a piece at a time. These are the first two pieces. Our
two pieces just happen to be a lot bigger. If you look at all
of the things it is going to take for exploration, we are
taking off bite-sized chunks at a time. They are just big bites
because of the size of our vehicles that we fly.
Technology, again, I shall come back to. We are using as
much known technology, and we do have technology lines. We have
identified the top 40 technologies and when they are urged to
support future programs. In fact, one of the things we can use
your help and support in is making sure we can protect our
technology investments because we do realize that if we don't
invest in those early that later they will come to bite us, so
we are prioritizing every single one of our technologies, tying
to every place we need it to make sure that we get the
development on time and on schedule, and we are using and the
new guidance, which was from the recommendations from the GAO
on the decision points and the key decision points are all
being identified, and we are putting proper oversight and
insight at each of those points.
Mr. Udall. Thank you.
Chairman Boehlert. The gentleman's time has expired. Mr.
Rohrabacher?
More Budget Concerns
Mr. Rohrabacher. Well, let me admit that I don't know a
darn thing about engines of cars, and I don't even know how to
change the oil in my car, plus put parts in from other cars, et
cetera, but one thing I do know about is getting the bill at
the end of the month and trying to figure out how I am going to
pay it. And what I am looking at here is I am trying to figure
out what the bill is going to be at the end and how we are
going to pay it.
Let me see if I can get this straight. Dr. Horowitz, to
develop the Orion, the Ares I is the first of the two rocket
parts of the Orion project. So how much will it cost us to get
one of those rockets so that they are ready to go and do into
space?
Dr. Horowitz. Okay, sir, the----
Mr. Rohrabacher. The rocket? Now, you say you are going to
use a lot of things that are coming from other rockets, so----
Dr. Horowitz. Okay, sir. Thank you for that question.
It is interesting in the development. We are developing a
launch system, so what you will see is, you will see increase
cost in the development of the Ares I and the reason that we
are increasing the development is we have made some changes to
make the parts more common between the Ares I and Ares V. We
added the J-2. We had originally based it on a Space Shuttle
Main Engine, and so in order to drive down the lifecycle cost
of the program, it was worth investing and developing that
engine earlier, which will then not be needed to be
redeveloped.
Mr. Rohrabacher. Well, how much is the price tag at when
you put the thing up? The first one?
Dr. Horowitz. Well, the whole development, I will have to
take that for the record as the exact cost of the entire
integrated development. The recurring cost that came of the
estimates, including flying the capsule, was in the order of
$200 million a flight.
Mr. Rohrabacher. Okay, but how much is it going to cost us
to get to the point to get to the recurring time period?
Dr. Horowitz. Well, I have the breakdown by the whole
Constellation Systems. I can get you the breakdown by
components if you like. I can take that for the record.
[The information follows:]
Launch vehicle costs for the Ares I Crew Launch Vehicle through the
first human launch, currently projected late in FY 2014, are
approximately $10.8 billion. This number excludes the Orion Crew
Exploration Vehicle, mission and ground operations and facility
modifications, and program integration and other program-level costs.
Orion Crew Exploration Vehicle project costs through first human flight
are about $10.3 billion. Therefore, combined Ares I and Orion project
costs through first human launch are about $21.1 billion. If related
required programmatic and non-flight hardware costs are included in the
estimate, it will cost about $33.5 billion to get to the point of first
human launch projected in 2014.
All of these numbers include reserves, but exclude Corporate G&A.
These numbers include estimates for FYs 2012, 2013, and 2014, which lie
beyond the budget horizon.
Mr. Rohrabacher. Okay, so in other words, we are moving
forward with both of these now----
Dr. Horowitz. Right.
Mr. Rohrabacher.--and that is part of the same budget
figure----
Dr. Horowitz. Yes.
Mr. Rohrabacher.--so it is hard for you to break out what
that first one is going to be?
Dr. Horowitz. Yes, sir. And I can go get you actual
breakdown.
Mr. Rohrabacher. Okay, but you are telling me that it is
going to be $200 million a flight, starting what year?
Dr. Horowitz. The first human flights are scheduled--the
operational flights will be in test in 2012.
Mr. Rohrabacher. Right.
Dr. Horowitz. We will have the first fight test in 2009,
but the full-up operation are scheduled for 2014.
Mr. Rohrabacher. Yes, and that is $200 million a flight
from that point on?
Dr. Horowitz. Right, and that is a functional flight rate,
also.
Mr. Rohrabacher. And you are guessing how much? Is it 30?
Do I see the figure $31 billion here somewhere?
Dr. Horowitz. The overall program is about $30 billion for
the horizon forecast out into the 2011 timeframe if you add up
all of the cost for the entire Constellation program, which
includes the launch vehicles, the Orion spacecraft, the ground
systems, the technology program, the human-research program,
and the robotics precursor programs, which will fly a mission
to the Moon in 2008, and impactor, and a lander.
Mr. Rohrabacher. And that is how much, all together, then?
Dr. Horowitz. All of that, integrated, to the 2011
timeframe is approximately $30 billion, total.
Mr. Rohrabacher. Thirty billion, and then somewhere along
the line, when we are actually going to get back to the Moon,
it is going to cost us about $110 billion or something?
Dr. Horowitz. Sir, I don't know. I will take that for the
record what the total is, but I just have the run out for the
current budget out in front of me.
Mr. Rohrabacher. Okay, so we are going to spend over $30
billion before we see that rocket go up. Is that right?
Dr. Horowitz. No, sir. You will see the first test flight
of the Ares I----
Mr. Rohrabacher. One----
Dr. Horowitz.--in 2009, which is several years before----
Mr. Rohrabacher. Right.
Dr. Horowitz.--five years before years get to the end of
that timeline.
Mr. Rohrabacher. No, when I say go up, I mean actually be--
--
Dr. Horowitz. On an operational mission.
Mr. Rohrabacher. Operational basis.
Dr. Horowitz. With people?
Mr. Rohrabacher. Right.
Dr. Horowitz. Ready to go? Full-up? That would be about the
total cost of the program to that point.
Mr. Rohrabacher. Thirty-one billion dollars up until that
point?
Dr. Horowitz. That is the number I have for the total run-
out of the current budget.
Mr. Rohrabacher. Mr. Li, do you think that is a realistic
figure?
Mr. Li. Well, since I don't believe that the requirements
have been fully established, I don't think that there is any
confidence in what that number is, and we won't have a better
idea of what that is until 2008.
Mr. Rohrabacher. Okay. Until, 2008, all right. So let me
ask you this: where is the money coming from in NASA for that
money? Are we reducing spending elsewhere to make that money or
is that coming out of a new type of potion that we have that
creates wealth out of nothing?
Dr. Horowitz. Sir, thanks for that question.
The money needed to do this program is all of the money
that has been allocated to the exploration line. And everything
that we have laid out fits inside of the budget that we have
been given. So we have put together a program that fits inside
of the resources that have been allocated to us.
Mr. Rohrabacher. You know, I would hope that some day
someone who testifies somewhere before I leave would come and
say, you know, we have just decided that a couple of these
other projects have less value than the one we are talking
about today, and we are going to get rid of two centers, two
NASA centers. We have ten NASA centers. We are going to get rid
of two of them in order to have a project to the Moon; and I
have not heard that. I have been here 18 years, and I have
never heard anybody talk that way.
Chairman Boehlert. Mr. Rohrabacher, you know my affection
for you, so I am going to make you feel better. They are
getting rid of the Shuttle. That is a good example.
Mr. Rohrabacher. Well, that is a----
Chairman Boehlert. So do you feel a little bit better?
Mr. Rohrabacher. I do feel better.
Chairman Boehlert. All right. That is good. And the
gentleman's time has expired.
Mr. Rohrabacher. Well, thank you very much.
Chairman Boehlert. Mr. Green?
Mr. Green. Thank you, Mr. Chairman and Ranking Member. As
we go back to the future, my fear is that we may come back to
the past. We are talking about, as I understand it, $122
billion through 2018, and let me just start by asking if that
is a correct number for Constellation costs. Is that correct,
$122 billion through 2018?
Mr. Li. Yes.
Mr. Green. Given that as correct, and understanding that
sometimes we have persons who see very large coffers and they
spend rather lavishly, what do we have contained within this to
ensure us that we won't buy $500 hammers that we can go out to
the hardware store and purchase for, shall we say, considerably
less, or that we won't buy toilets seats for hundreds of
dollars that we can purchase for considerably less. And I say
this only because it has happened. This is not something that
would be unique if it occurred as we go back to the future. So
would one of you fine men care to elaborate, please?
Mr. Li. Well, you know, I don't think that based upon the
fact that, as I indicated, the requirement have been
sufficiently identified. I cannot with confidence tell you that
there won't be any cost grown. I think that a lot of the
technologies that they have identified are things that do make
sense. I have to hand them that much, but the fact of the
matter is there are a lot of things that we don't know yet, and
some of those things will happen during testing, during
integration. And at that point in time, as we know more, then,
we will be able to make some better projections. But I think
NASA is the one that needs to answer you question.
Dr. Horowitz. Yes, sir. And thank you for that.
The idea of runaway costs on individual items, the way you
control costs in a program is you design analysis cycles, we
are in our second iteration of design analysis cycles. We have
already designed this vehicle four times, so we are actually
gaining knowledge and getting a higher confidence in our
estimates.
When you start the program and you just say I want to go
the Moon, you have some initial concepts, and you make some
estimate using the estimating tools. As you get further into
the design, you get better a better cost estimates until
eventually, when you finally build it, of course, you know you
are at 100 percent. So we are improving our cost estimating
every single design cycle, and in fact, we are in a cycle right
now which will provide us an even higher confidence in our
estimate. We actually have a signed contract for a vehicle----
Mr. Green. If you would, Doctor, allow me to interrupt for
just a moment. Give your guesstimate as to how sure you are of
this. Let us assume you could be 100 percent or you could be
something less than 100 percent. How sure are you that we could
avoid the concerns that I have called to your attention?
Dr. Horowitz. Well, sir, I am extremely certain that we can
avoid these because we are going to implement a lot of the
tools----
Mr. Green. Is that 100 percent?
Dr. Horowitz. I am 100 percent certain that we can avoid
these problems with proper program management and proper
oversight.
More Transition Challenges
Mr. Green. Okay. Now, another question, quickly, and this
one has to do with the integration of people as opposed to
equipment. If we integrate as we assume we will, what
percentage of person will be lost from the project, will
actually lose their jobs?
Dr. Horowitz. Sir, thank you for that question. It really
comes to one of the hearts of why this transition is so
important to all of us. Basically, the NASA budget is fairly
flat. We know what it is; we know what percent we spend on the
workforce inside of NASA and how much we spend on our
contractor workforce. That number is not going to change;
therefore, the number of jobs and the number of people aren't
going to change. What we need to do is transition the workforce
to do different things. We need the same number of people doing
different things. Will there be some people displaced in the
transition? Absolutely. Our goal is to keep as much and all of
the talent we need to accomplish----
Mr. Green. Reclaiming my time for just a moment. Will most
of those people be at the upper level, lower level or mid-level
that we will lose?
Dr. Horowitz. Sir, I don't have an estimate at which level
which people will be lost. There will be a transition at every
level at every program.
Mr. Green. My assumption is that you will need the
engineers, so we won't lose a lot of engineers. Is that a fair
statement?
Dr. Horowitz. Well, we are going to need engineers,
technicians, operators, production people, managers, program
managers, project leaders at all levels.
Mr. Green. But at this level, you have no ideas where you
will suffer your losses in terms of personnel.
Dr. Horowitz. I don't have any hard numbers to tell you
exactly which positions at which level that are going to be
lost. We are working on the transition plans at this time.
Mr. Green. And when do you anticipate having that type of
intelligence?
Dr. Horowitz. Well, the estimates will get better all the
time. I can take that for the record and get back to you with
our current, rough estimate, and then as they improve, we can
provide you as the transition plan progresses, more accurate
estimates.
Mr. Green. I would be honored if you would.
Dr. Horowitz. It would be my pleasure, sir.
[The information follows:]
Civil servants currently supporting the Shuttle Program are
generally either part of the operations infrastructure at Kennedy Space
Center, or perform core human space flight functions (training,
equipping humans to fly in space) at Johnson Space Center (JSC) and
Marshall Space Flight Center (MSFC).
Since the Constellation Program relies upon certain Shuttle-derived
technologies, we expect to find some commonality in hardware and
operations requirements as we transition from Shuttle to Orion. At the
same time, we are aggressively pursuing systems and processes that will
allow us to operate more efficiently and effectively as we develop the
Nation's new space capabilities. This effort includes commercial and
international partnerships that could lower operations costs and better
position us to achieve the Vision for Space Exploration's goals.
During FY 2006, the Exploration Directorate embarked on a joint
workforce review with Space Operations and NASA's Program Analysis and
Evaluation group to study these very issues. The team completed the
first of its planned center assessments at JSC in July, and will be
visiting MSFC in November. The results of this study will feed into the
FY 2009 Budget process, which will focus on the Shuttle-Orion
transition.
Mr. Green. And I thank you. I yield back the balance of my
time.
Mr. Calvert. [Presiding] I thank the gentleman. Mr. Hall,
you are recognized.
CEV Safety
Mr. Hall. I thank you, and I thank the chairman for having
this, another good meeting. And I am thankful, also, for Dr.
Horowitz, his history, his present, and what he going to be
doing for us in the future. Both of our witnesses have alluded
in their testimony the next few years are critical for NASA and
the vision for space exploration.
The Committee in particular is going to need to really
exercise its oversight power to make sure that the vision stays
on track and that we meet our stated milestones, and you have
indicated 100 percent sure if you do that, and there is always
an allowance for when they don't do it exactly right; then that
percentage would be affected, plus or minus, but getting a CEV
going now is very critical to us if we are going to shorten the
gap between the retirement of the Space Shuttle--we know we are
going to do that--and the Orion mission.
I just have a couple of questions relating to the design of
the CEV and the overall contract. As the Committee knows, I am
not the only strong proponent of astronaut safety. We are all
up here, every one us have that deep down in our crawl, and
that has affected us back through the years of setting budgets
and knowing that we have had to set them with safety in mind
and knowing the effect that had on the budget and the increased
increment of the budge for that, but we couldn't take a chance
on that. I got funding in this for a study of crew escape
mechanism for the Shuttle a couple of years ago. I can't
remember exactly what it was. It seems like it was $15 million,
somewhere along there.
And somewhere along the way we, during one of the
discussion of the budgets here, we found out they had third-
based some of that money to send John Glenn--and I am for
sending old people up into space; I am all for that--but we got
that finally place back and the money spent, and NASA explained
to us that a mechanism just wasn't feasible for the Shuttle,
and that is disturbing to know, but understanding the nature of
the thing and the context and the weight of it, but they
assured us that it is going to be part of the design of the
next space vehicle, so Dr. Horowitz, give us some
encouragement, and explain how the Orion is going to
incorporate this crew-escape system, its effect, and its
estimate of cost, if you can.
Dr. Horowitz. Yes, sir. Thank you very much.
As I stated in my testimony, the drivers to the design you
see before you were based on the most important point you bring
up, which is the crew getting to and from orbit. That
requirement drove the entire design, so from the outset, the
design allows for safety. The Shuttle, as a magnificent vehicle
as it is, its complexity, and the fact of its basic layout,
doesn't allow for an effective escape system. This vehicle, the
escape system is depicted here by the small tower on the top,
and it is very similar to what you may remember in the Apollo
era which was tested on a Little Joe rocket. In fact, we just
had meeting today to go over the design of the system that will
test that escape system, which will be the first major test.
That system is called the launch abort system, and it is
designed in the vehicle so that if you--first you design a very
reliable vehicle you hope never has a bad day. That gets your
chances up. Then if you have a bad day, you have a plan B. And
we had some of the world's best safety and reliably experts
looking at all of the design trades. We went through 20,000 to
40,000 of those, and the prediction is that this vehicle will
enjoy, at least, an order of magnitude improvement in crew
safety compare to our current Shuttle system.
And it is built into the cost estimate of the CEV. Part of
what you get with the CEV contract is the capsule and its
service module, its adapter, and the launch abort system; it is
all part of that entire contract, so you get all of that with
this contract.
Mr. Hall. And the estimate of the cost of the safety
equipment?
Dr. Horowitz. Sir, I will have to take that for the record.
I do not know the exact breakdown of the launch escape system,
but I can get those numbers for you.
[The information follows:]
NASA does not currently track Orion CEV costs in a way that allows
the determination of the cost of the Launch Abort System and other
components. NASA is currently working with the Orion Prime Contractor
on a contract modification that will, among other things, modify the
Work Breakdown Structure (WBS) to allow collection of costs by Service
Module, Crew Module and Launch Abort System. This work will be complete
in the early spring 2007 to support the activities for the FY 2009
budget cycle.
Mr. Hall. Now, you are going to hear a lot from us about
safety from this point forward, and I think you expect that,
and I think you encourage it. And I do, once again, feel good
with you where you are, and thank you for you service to this
committee, to this Congress, and to this country. And I yield
back.
Dr. Horowitz. Thank you, sir.
Mr. Calvert. Mr. Ehlers.
Performance Margin
Mr. Ehlers. Thank you, Mr. Chairman. First of all in
response to the question asked by Mr. Rohrabacher asked a bit
earlier, I have a different perspective, but for the same
question, basically.
And I think a basic problem, Mr. Rohrabacher, is it is
usual story of Congress wanting more than it is willing to pay
for. And I think we have given NASA--put them in a horrible
vise, saying yes, we want to finish the Space Station. Yes, we
want to keep the Shuttle flying. Yes, we want the CEV. And we
don't want you to cut anything else. But in fact, they can't do
that. So we see Aeronautics being cut at a very crucial time
when our air traffic control system, badly, over the next
decade, is going to need huge revamping. The FAA simply cannot
do it themselves; they were depending on NASA.
And so that leaves us an unresolved issue. In addition, the
lack of funding for the many science experiments we can do, the
various robotic devices, which as you know, cost much less than
human space exploration, this is not a criticism of you, Dr.
Horowitz. It is a criticism of Congress for having a bigger
wish list than their pocketbook. But I think that is left you
in a bit of a conundrum. But I am concerned; I still remember
the X-33.
I made a trip to California on behalf of the Committee.
Several of the Members here were along. I came home from that
trip convinced it would never work. I talked to people about
it. The project went on. Finally it was killed. I think your
final net investment and loss was between $2 and $3 billion. I
am very worried about making these great predictions on the
basis of something that you are not very far along. And I
realize that you are using a tried and true method, but there
are still problems when you put it together, when you add an
extra stage to the Ares I rocket, et cetera.
One concern I have is it is my understanding--and I may be
wrong. If so, I would be delighted to be corrected. My
understanding is that you want a performance margin between the
weight of the rocket and its thrust, about an excess thrust of
20 percent for normal rockets and 30 percent for Human-Rated
Rocket. Is that correct, or is there a different performance
margin that you are current planning to achieve with the Orion
plus the Ares rocket?
Dr. Horowitz. Sir, thank you for that question. I also went
out to California and visited the X-33 and had the very same
feelings. It was trying to violate the laws of physics, and
that is expensive.
Mr. Ehlers. Well, that was interesting, and I got into an
argument with the engineers there, and they just kept insisting
I just didn't understand.
Dr. Horowitz. I got the same response.
Mr. Ehlers. And I asked them for a response in writing so
they could take time to clarify it for a poor, ignorant
physicist, and the letter made no sense either.
Dr. Horowitz. And I was a poor, ignorant aerospace
engineer, and they treated me the same way.
Mr. Rohrabacher. Mr. Ehlers, just for the record, there was
an alternative to that project in the DC-X, which was supposed
to be manufactured in my district, and the last administration
chose the riskier proposition instead, let me note.
Mr. Ehlers. At any rate, back to the performance margin.
Dr. Horowitz. Yes, sir. Let me discuss a little bit about
performance margin. And I appreciate that question.
The way we treat performance margin is several ways. The
launch vehicle itself has margins, so we will ask the vehicle
to lift, say, 50,000 to a certain orbit. The project manager
for the launch vehicle is keeping performance margin for his
launch vehicle, so the vehicle may be able to lift 50,000
pounds, and his margin is on the order of about 15 percent or
so for the launch vehicle. We also have margin that the CEV
project manager has to hold on his side in case his vehicle
gets large, also.
The integrated margin, right now, is for the total Moon
mission, not just the low Earth orbit. We have huge margins to
get to low Earth orbit. But to be able to carry up to the lunar
mission, approaching 20/20 at this point, we have about 25
percent performance margin on the amount of lift this vehicle
can provide. And the very first test we did of the first engine
component showed that it is exceeding its performance spec, but
we are still going to keep the margin because you don't know
where else you are going to need that margin.
Margin is very important in a program like this, and that
is why you don't want to over promise and say you only have one
percent of weight margin or something. That is not realistic in
this program. We do have sufficient margins for working on the
program.
Mr. Ehlers. Let me just tell you my concern on this because
I have seen this with project after project including
experiments I have worked on.
Dr. Horowitz. Right.
Mr. Ehlers. You are going to want to do more things: you
are going to want to have more in the launch vehicle. If you
can increase the margin on your propulsion system, then you
start losing margin as you lose more goodies, perhaps an escape
mechanism, to the capsule. I just feel very nervous about the
margin you are using because I feel that is what might
disappear as you go thorough the project and get lessened.
Dr. Horowitz. Well, sir, thank you. As I said, again, we
guard the margins very closely.
One of the nice things, for example, on the first stage, we
have already fired that engine. We know what it can do; so
therefore, you have margin on a piece of equipment you
already--so there is no much risk you are not--that you are not
going got meet your performance spec even though you have the
extra margin. One of the things that will eat your margin is if
you change your requirements. It comes back to the overall----
Mr. Ehlers. That is what I am talking about. You are going
to want more payload because you are going to think of extra
things you are going to have to have for safety or other
reasons.
Dr. Horowitz. Yes, sir. And since we have already included
the escape system, the key thing that I have to do is maintain
stability for the program by not letting excess requirements
creep in from the top to ask the program to do more than the
have the margin to protect. It is absolutely critical.
Mr. Ehlers. Actually, I think they will probably creep in
the bottom as well.
Dr. Horowitz. I shall work on that, too, sir.
Ares Rocket Development
Mr. Ehlers. Just one last question: do you think that
adding a fifth stage to the Ares rocket is a straightforward
type of thing or do you anticipate some potential problems
there?
Dr. Horowitz. Sir, thanks, I appreciate that question. I
believe you are referring to the fifth segment on the first
stage.
Mr. Ehlers. Yes, right.
Dr. Horowitz. The five-segment rocket booster was
originally designed for the Shuttle program years ago. It
actually was developed, and a five-segment version of the motor
was tested in October of 2003. So it is already been fired and
tested, and even using components that were still the old four-
segment components that weren't upgraded, they still had plenty
of margin to fire the motor and run it safely. So we believe
that the risk to developing the five-segment is very low
because we have already fired a full-scale motor.
Mr. Ehlers. And what propellants are you talking about
using? I understand you are not----
Dr. Horowitz. We looked at that HT-type propellants and the
P-ban, and for safety and manufacturability and cost, we stayed
with the P-ban. If for some reason, you wanted to go to a
higher performance motor, you could go to a higher performance
propellant, but in the overall trade for the cost-effectiveness
and the performance requirement and the manufacturability and
the safety, we stayed with the P-ban, which is what we
currently have in the Shuttle solid rocket motor.
Mr. Ehlers. Okay, I have a multitude of other questions,
but I have had more than enough time.
Mr. Calvert. Okay. I thank the gentleman. Mr. Akin, you are
recognized.
Payload Capacity
Mr. Akin. Thank you. I apologize for coming in a little bit
late, so I don't know if I may be asking something that has
already been asked. You are talking about going with the
smaller model than you have there, and that is 100 percent
solid fuel type approach, right?
Dr. Horowitz. Sir, the model that you see in front of you,
the first stage is solid rocket propellant.
Mr. Akin. Okay.
Dr. Horowitz. The second stage is LOX hydrogen.
Mr. Akin. Okay. But you are not using your hydrogen and
oxygen until you get further up?
Dr. Horowitz. That is correct, sir.
Mr. Akin. And you are using, what was it? Ammonium
perchlorate? Or aluminum or something?
Dr. Horowitz. That is the basic constituent of the solid
rocket propellant.
Mr. Akin. Right. Yes.
Dr. Horowitz. It is the same one we use in the Shuttle
today.
Mr. Akin. Right.
Dr. Horowitz. It is referred to as a P-ban propellant.
Mr. Akin. Now, does that mean that you are taking less
payload on that first than what you are taking currently, or
how does the actual size of these, scale-wise----
Dr. Horowitz. Sir, to relate it, I can relate it to the
Space Shuttle, if that is what you would like.
Mr. Akin. Yes.
Dr. Horowitz. The payload being the Space Shuttle will
bring up about 30 to 40,000, but it also brings up 200,000-
pound Space Shuttle.
Mr. Akin. Yes.
Dr. Horowitz. This launch vehicle, which is a solid rocket
booster, at its second stage, can lift about 50,000 pounds to
orbit, which is more than the payload being the Space Shuttle.
To be able to go to the Moon, the large vehicle that you see to
your left, my right, that vehicle could lift about 260-,
270,000 to orbit, about 125 metric tons, which is more than the
Saturn 5 could lift to orbit.
Mr. Akin. I am not that fast with the numbers. Compared to
what we are lifting when we put a Shuttle up right now, the
smaller model that you have, will that lift that amount or not?
Dr. Horowitz. Sir, that will lift more payload than the
Space Shuttle can lift in its payload bay today.
Mr. Akin. Right today? Then the bigger one is going to be
quite a number of times more?
Dr. Horowitz. It is going to be approximately five times
that much payload capacity.
Mr. Akin. Five times more, okay. And the cost estimates and
all, you have got that reasonably within projecting/including
inflation and all in numbers, and you still think you are----
Dr. Horowitz. Yes, sir. We do. We do the standard. We
include the stationary, and we include all costs, full costs
accounting for all of the NASA workforce and all of the
infrastructure and all of the development costs and all of the
operations costs.
Mr. Akin. I guess one last thing. I think I have still got
another nickel in the meter here time-wise. What is going to be
the purpose of these vehicles? Is it mostly just getting
payload up into orbit or are you staring to push more forward
than that and does that change the design of what you are
doing? Or mostly are we just trying to put mass up to where we
can start using it?
Dr. Horowitz. Sir, thanks for that question. That is the
basic job of the launch vehicle, to get you to orbit. These
vehicles were designed to get us to the Moon and then on to
Mars, so the first vehicle is optimized to get the crew to
lower Earth orbit. The large vehicle brings up all of the parts
and pieces you need to, for example, bring a lander and extra
fuel to get you to the Moon or to bring up the major parts you
need when you eventually go to Mars some day.
Mr. Akin. We use a jet-type technology to move the vehicle
through space. Are we still using that? Would that be a
hydrogen/oxygen type thing?
Dr. Horowitz. Sir, we have several different types of
engines. The propulsion system that will propel you to the
Moon, the engine we will use is the same engine we will use on
the second stage, so we will use the same engine on the large
vehicle, which is an oxygen and hydrogen rocket engine that
will propel the whole stack to the Moon. We also have some
other fuels that we use for storability for long-term storage
on the Moon or on the way to Mars.
Mr. Akin. I see, and basically the oxygen/hydrogen, weight-
wise, gives you more performance than the solid does?
Dr. Horowitz. Yes, sir. The most efficient chemical
propellant is oxygen and hydrogen. The reason we don't use it
on the lower stages as much is it is not as much thrust even
though it is more fuel efficient. As you get further from the
earth, you want a more efficient fuel.
Mr. Akin. I got it. So there are benefits of both,
depending where you are using it.
Dr. Horowitz. Absolutely.
Mr. Akin. Thank you very much. Thank you, Mr. Chairman.
Mr. Calvert. I thank the gentleman. Mr. Udall.
More on GAO's Response to NASA Changes
Mr. Udall. Thank you, Mr. Chairman. Mr. Li, NASA--and Dr.
Horowitz, I tell you, I want to give you a chance to reply as
well. NASA asserts that implementing GAO's acquisition approach
would delay the delivery of the CEV and increase costs. Do you
agree or disagree and why?
Mr. Li. I think this goes back to our initial point. I
think NASA chose to interpret our recommendation as necessarily
taking two vendors and continuing with two. That is one way in
which you can meet our recommendation. Now, obviously, if you
have two vendors, it is going to cost more. But I, again, going
back to my analogy of what my youth is with automobiles. The
logo was pay me now or pay me later, and I think in this
particular case, having more knowledge would have reduced those
costs in the future years.
Now, there are other options that NASA could have taken.
They took one which they decided to make options Schedule B and
Schedule C. But I still believe that they went further than we
would have liked; they would have been better served to only go
through what we call preliminary design review. So from that
perspective, it is very difficult to say whether or not those
costs would be greater.
In terms of schedule, again, it goes back to that issue of
are you going to have problems. I think that past history has
shown, and with our experience looking at many DOD programs,
the fact of the matter is if you don't have that knowledge,
that is going to come back to bite you later on.
Mr. Udall. Thank you. I am not sure Dr. Horowitz used Fram
on this car. You remodeled it and you reengineered it. You are
free to respond to the questions, but I also want to throw
another one at you, which is can you provide your best
quantitative estimates of the size of the delay and cost
estimates if, in fact, the assertion you make is--were to hold
fast?
Dr. Horowitz. Well, sir, thanks for allowing me to respond
to that question. The first issue that Mr. Li brings up was
actually, in my opinion, was just a failure to communicate. You
can see there was some misunderstanding of our interpretation
of his report, and that is why it was important for us to sit
down and get together and we did make some modifications, like
he pointed out. We added the options B and C.
The important thing for us is as we went through the design
analysis cycles, a couple of things were happening. We had two
contractor teams on board in a competitive environment, and
that is always good to have competition to keep costs down.
What we ran into was the designs had converged to the point
that there was no new knowledge in the designs. We had got to
the point that we weren't learning very much more about the
designs, and in fact, because of the competitive enviroment, we
couldn't even discuss things with our contractor team.
There are only so many rocket scientists in this country,
and they exist in a couple of big companies and NASA, so we
wanted to get the team formed as soon as possible to help us
work through all of the final design to get us to the
preliminary design review which doesn't occur until 2008. So we
wanted to get the contractor team on board in order to do that.
Now, if we kept one contractor on and didn't award them the
contract to go past the preliminary design review, then I would
have been negotiating a contract in a noncompetitive
environment, which I don't believe would have been in the best
interest of the government. So those are the factors in our
strategy of whom we approached this problem.
Mr. Udall. Are you in a position to answer further, perhaps
for the record, my questions about a quantitative estimate of
the size and the delay and the cost estimates that might be a
part of it?
Dr. Horowitz. Sir, I don't have the exact--I can take that
for the record and get back to you----
[The information follows:]
In May 2005, the Exploration Systems Architecture Study (ESAS) was
initiated with one of its tasks to provide a complete assessment of the
top-level Orion CEV requirements. As a result of ESAS, the architecture
and the top level requirements for the Orion CEV were chosen, and made
part of the Phase 2 competition. At that point, NASA saw no benefit of
keeping two prime contractors through Preliminary Design Review (PDR)
at an estimated cost of $1 billion each (as in a spiral approach).
Rather, NASA saw a better return of its investment in competitively
issuing two Phase 1 Orion CEV Prime Contracts for conceptual design and
trade studies against the ESAS architecture for an estimated cost of
$46 million each.
Mr. Udall. You will take that for the record.
Mr. Li. Mr. Udall, when we, specifically, asked NASA to be
able to quantify that, they told us that they did not do that
analysis; so therefore, I do not feel confident that they could
have made that particular assertion.
Mr. Udall. Do you think we ought to ask them to make that
assertion?
Mr. Li. Well, I think it is water over the dam at this
point in time, but my point is that in order to make an
assertion of delays and of extra costs, those should come from
analysis, and I don't believe that that analysis was done.
Mr. Udall. Perhaps the Committee ought to take that under
review ourselves, and we may want to ask that NASA actually
complete those analyses for us, but that is another day,
another story at some point.
Dr. Horowitz. Yes, sir.
Mr. Udall. If I could, just for the record--I see my time
is about to expire, and I could get another from Mr. Akin,
perhaps--but I am curious why you decided to fundamentally
change your acquisition approach, that is, for the CEV after
doing a spiral development approach for the first year-and-a-
half. And what was wrong with the original acquisition
approach?
[The information follows:]
NASA changed its acquisition approach from the previous ``spiral
development'' approach to reduce technical, cost, and schedule risk.
Spiral development is a process to achieve a desired capability where
the end-state requirements are not known at program initiation. Spiral
development was based on an undefined transportation architecture.
Subsequent comprehensive requirements definition and independent
assessments defined an architecture and showed that a continued spiral
approach would no longer fit, as it would increase cost, schedule, and
technical risk. NASA made a decision to spend its resources in
developing its exploration transportation end-state requirements and
architecture for Exploration through a number of parallel efforts for
the formulation phase of the Orion Crew Exploration Vehicle (CEV)
project. The NASA Authorization Act of 2005 (P.L. 109-155) also
directed NASA to pursue a Shuttle-derived transportation system to
support a sustained human presence on the Moon and ability to support
future destinations. This approach was also the one chosen through
doing trade studies.
In May 2005, the Exploration Systems Architecture Study (ESAS) was
initiated with one of its tasks to provide a complete assessment of the
top-level Orion CEV requirements. As a result of ESAS, the architecture
and the top level requirements for the Orion CEV were chosen, and made
part of the Phase 2 competition. At that point, NASA saw no benefit of
keeping two prime contractors through Preliminary Design Review (PDR)
at an estimated cost of $1 billion each (as in a spiral approach).
Rather, NASA saw a better return of its investment in competitively
issuing two Phase 1 Orion CEV Prime Contracts for conceptual design and
trade studies against the ESAS architecture for an estimated cost of
$46 million each.
Additionally, NASA established an intra-agency Orion CEV Smart
Buyer team which performed trade studies and design analysis that was
used by the Orion CEV Project Office to understand and verify the
appropriateness of the requirements incorporated into the Orion CEV
Phase 2 solicitation and evaluation of proposals. With knowledge gained
from ESAS, the Smart Buyer team, and Orion CEV Phase 1 contracts, NASA
was in a position to ``down select'' to a single Prime contractor and
initiate the Design, Development, and Test and Evaluation (DDT&E)
contract for the Orion CEV in order to baseline an industry approach
and commitment to meet the desired outcomes of the Orion CEV project.
This new acquisition approach provides NASA with the capability to
shorten the gap in human space flight capability with the retirement of
the Space Shuttle in 2010. The original ``spiral development''
acquisition approach contained significant risk that this nation would
not have a human space flight capability by 2014 with a higher
development cost of close to $1 billion.
And maybe, Mr. Li, you could comment later for the record
as well. Do you have any view regarding the relative merits of
those two approaches? And when I say for the record, I don't
know if maybe the Chairman wants to cut me off and you could do
it writing later or whether he is willing to have you do it
here, now.
Dr. Horowitz. Certainly.
More on Integration Challenges
Mr. Calvert. I thank the gentleman. Also, just for the
record, Dr. Horowitz, the capsule, itself, would that capsule
be capable to have interaction with the Space Station if
necessary?
Dr. Horowitz. Yes, sir, absolutely. The capsule can dock
with vehicle that has a compatible docking station, so it can
go to the Space Station.
Mr. Calvert. Let us talk about what the long pole on the
tent is in this whole program. You know, moving this thing
along, even though we are using existing technology, obviously,
it is a complex engineering problem. If you had to take one
element to this that you consider the long pole in the ten,
what would it be?
Dr. Horowitz. Sir, right now, the long pole the critical
path, would be the J-2X engine on the second stage; it is
leading the pack.
Mr. Calvert. And why is that the case?
Dr. Horowitz. The J-2X engine, while the engine is a
derivate of the J-2 that flew in the Apollo mission, we have to
redo the tooling and the manufacturing and bring the engine up
to today's standards. The lead time for components, for
example, valves, if you want to order just abilitative metal to
make these cryogenic valves, there is at least a three-year
lead time on some of those components, so the development and
the amount of testing to get it to our standards make that
engine unavailable until 2012.
Mr. Calvert. Is there any way that that can work out any
quicker than the 2012 timeline or is that a conservative
estimate?
Dr. Horowitz. Well, sir, we will have engines in the test
stand before 2012, but just because of the amount of testing
and the lead time on articles, you could put a lot of money in
and accelerate the program a few months, but there is no way to
accelerate that engine, say, one or two years earlier just
because of the lead time required and the testing required to
get it up to the standards we want.
Mr. Calvert. Mr. Li, what would you identify from your
perspective?
Mr. Li. From my perspective, obviously, Dr. Horowitz has a
lot more of the technical knowledge of the design. You know,
NASA is designing them. From my perspective, from a management
perspective, I am the most worried about them succumbing to,
perhaps, of both money and time, and maybe bypassing and
shortchanging what I would consider to be some basic, sound
systems engineering practicing, and that is making sure that
you do the testing, making sure that there are certain reviews
that are done.
In preparation for this hearing, I was going through some
of my old papers of some of the things that have occurred at
NASA, and I recollect things such as the unfortunate occurrence
with Mars Polar Lander where, in that particular case, where
because of the desire to cut costs, they did not do a full-up
test, and as a result, there are some issues associated with
spurious signals that made the spacecraft think that it was
closer than what it was and it crashed. I think that that is,
to me, the thing that I worry about the most, is allowing those
pressures to make one to make some decision from a systems-
engineering perspective and short-change them.
More on International Competition
Mr. Calvert. And we hope that that would not occur, but on
one hand, if I look back on history, back when John F. Kennedy
first made his speech that we will go to the Moon, and from the
time that we had that speech to the time that we went to the
Moon, it was probably less time than we are talking about
between now and the launch in 2014, and this was something that
was done a long time ago. Many people in the audience weren't
even alive at the time. And in this country, some comments I
hear when I go around the country, been there, done that. Why
are we doing it again? And it is interesting that we forgot
how. We cannot do that today. We do not have the technology
today to do that kind of endeavor, and now we are striving to
move back forward again. And unlike 1969, we are looking in the
rearview mirror, and we have other people right on our
tailpipe, using the car analogy again. Mr. Rohrabacher?
Mr. Rohrabacher. Well, I think that in 1969, if you
remember, we did have a race with the Russians at that time,
and we were looking in the rearview mirror. And luckily for the
Chinese, we have----
Mr. Calvert. They weren't going to the Moon, though.
Mr. Rohrabacher. And luckily for the Chinese, we have
diverted enough technology to them over the last ten years in
order to provide them excellent missile and rocket and
technology so they are in our rearview mirror. Let us make
sure, I would hope, as our NASA director visits the Chinese--as
he is, I believe, right now, as I speak--I hope that he
remember the last time we tried to cooperate with the Chinese.
It wasn't to our benefit. In terms--I reminded Mr. Ehlers that
the X-33 program that he was talking about that Mr. Horowitz
and I talked about in my office the other day, that program
spent, I think, $1 billion-and-a-half dollars, and that was,
interestingly enough, being built by the same company that has
been given the contract for this project. Let us hope that that
is not repeated, and we are going to watch that very closely.
More CEV Budget Concerns
I agree with Mr. Ehlers that, certainly, robotics is a
cheaper method than building things that are capable of human
space flight. But I understand, Mr. Horowitz, and you may
correct me if I am wrong, that this overall project will
include the use of robotics, and is designed to actually use
robotics to facilitate some of the missions that we are going
to then end up putting men, or should I say human beings, after
the robots have led the way. That, itself, is, I am sure, cost-
saving a certain amount of money because of the expense of
taking care of contingencies.
I want to compliment NASA and Mike Griffin for the concept
of using technology that is already tested and proven for
significant parts of this new project, because as you say, that
in it self has saved an enormous amount of money and time
because you know there are large numbers of parts of these
projects that work because they have already worked.
Integrating them has not been tested yet, and that is part of
it.
So I think Mr. Chairman, we should be recognizing this
strenuous effort to try to us that as a means of keeping down
costs. But still, with all of that said, the cost does seem to
be rather high, so I do not understand why it costs so much,
especially if you have so many parts that have been already
used and tested, why it costs $31 billion to get to the point
where we are going to have one of those rockets. Thirty-one
billion dollars is a lot of money, and here, just to get to
that point, to get that rocket launched, it is $31 billion, is
it not? That is as of today. That is if all of Mr. Li's fears
don't come true, and the costs don't go up after that.
Dr. Horowitz. Sir, if you like, I will take that question,
and the $31 billion number that you mentioned in the integrated
cost for all of exploration through our budget run-out. That
includes all of the robotics----
Mr. Rohrabacher. Okay, but that is not just that----
Dr. Horowitz. That is not just this, sir----
Mr. Rohrabacher. I am glad I asked that question.
Dr. Horowitz. I am sorry.
Mr. Rohrabacher. How much is it just for that rocket?
Dr. Horowitz. Well, I can, like I said, I will take that
for the record. I can get you a breakdown of every component
that we have and the cost estimation of every single component
and where the money is being spent.
Mr. Rohrabacher. No, I just want to know basically. I don't
need every component.
Dr. Horowitz. Right.
[The information follows:]
Launch vehicle costs for the Ares I Crew Launch Vehicle through the
first human launch, currently projected late in FY 2014, are
approximately $10.8 billion. This number excludes the Orion Crew
Exploration Vehicle, mission and ground operations and facility
modifications, and program integration and other program-level costs.
Orion Crew Exploration Vehicle project costs through first human flight
are about $10.3 billion. Therefore, combined Ares I and Orion project
costs through first human launch are about $21.1 billion. If related
required programmatic and non-flight hardware costs are included in the
estimate, it will cost about $33.5 billion to get to the point of first
human launch projected in 2014.
All of these numbers include reserves, but exclude Corporate G&A.
These numbers include estimates for FYs 2012, 2013, and 2014, which lie
beyond the budget horizon.
Mr. Rohrabacher. When that rocket is launched, I want to
know how much it is going to cost to get us from here to there.
Is it $5 billion? Is it $10? I am glad you just straightened
out the $31 billion number for me. That is what these hearings
are all about.
Dr. Horowitz. Yes, sir. And we will break it down any way
you like. If you would like just the integrated stack, I can
get you that cost or the launch cost to launch it or the total
infrastructure.
Mr. Rohrabacher. When we launch that first rocket, how much
does it cost? That is what we want to know, how are we going to
get from here to there. That will be very helpful.
Dr. Horowitz. I will be more than happy to bring those
numbers to you.
More Integration Challenges
Mr. Rohrabacher. Well, thank you very much, and I want to
thank Chairman Boehlert, and of course, Chairman Calvert for
their leadership, and I am looking forward to working with you
and following this project to make sure--Remember this: we are
facing $3 billion right down the toilet because they based it
on that system and taking, building, spending the money before
they had a piece of technology that worked, and then it never
did work. And you are telling us that that is not going to
happen in this program because everything works. Is that right?
Dr. Horowitz. Yes, sir.
Mr. Rohrabacher. Okay, is that your reading, Mr. Li?
Mr. Li. I still think I disagree somewhat, and I still
think there are some technologies that are being developed. The
landing system, it is my understanding, is still something that
has not reached the technology readiness level that they would
like at this point in time, so I still think there is some
issue there.
Mr. Rohrabacher. So you have got some worries. We are going
to follow this. Thank you very much, Mr. Chairman.
Mr. Calvert. I thank the gentleman. Mr. Udall, do you have
any additional questions?
More Budget Concerns
Mr. Udall. I don't know if you want to give me a third
chance here, Mr. Chairman.
One question, for the record, Mr. Li. I know we have talked
quite a bit about whether you are being too conservative and
not adequately accounting for the CEV and the CLV program's use
of existing technology in their designs, which NASA says
considerably reduces the risk. But what you know now of NASA's
approach, do you accept NASA's assessment of these risks, and
if now, why not. And I know you have talked of this quite a bit
during the hearing, but if I could get it on the record.
Mr. Li. Well, again, I understand that there are a lot of
components that have been used before. But as NASA will say
themselves, we are talking about new processes. It is new
technology. It would be foolish to take technology that was
used on the Apollo and put it in this particular vehicle. We
are talking about smaller things that probably do the same
things; but however, when you shrink things into a smaller
size, that is when you run the risk of having some problems. So
yes, I understand functionally that there are some things that
we have proven when you bring it down to form, fit and
function, that is when I worry.
Mr. Udall. Thank you. If you have other thoughts as the
weeks unfold, we would appreciate any additional comments in
the record. Again, thanks to the witnesses.
Mr. Calvert. Well, if we have no further questions, we
are----
Mr. Rohrabacher. Could I add one thing for the record, Mr.
Chairman? And that is Mr. Li, over the years, has been a
tremendous source of information and guidance for this, and we
thank you very much, Mr. Li, for that.
Mr. Calvert. We thank you for your service. Thank you very
much. We are adjourned.
[Whereupon, at 3:53 p.m., the Committee was adjourned.]
Appendix 1:
----------
Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by Scott J. Horowitz, Associate Administrator, Exploration
Systems Mission Directorate, National Aeronautics and Space
Administration (NASA)
Questions submitted by Chairman Sherwood L. Boehlert
Q1. During your testimony, you identified ``systems integration'' as a
difficult part of Orion and Ares development. Are there particular
areas that you can already identify as potentially problematic? Where
might problems arise and when might those become apparent?
A1. NASA recognizes that systems integration will be critical to the
success of Orion and Ares development. To help deal with the challenge,
the Orion and Ares projects are structured based upon the formal NASA
Procedural Requirements (NPR) of NPR 7120.5 (Program and Project
Management Processes and Requirements) and NPR 7123.1 (Systems
Engineering Procedural Requirements). These Agency technical procedures
provide best practice guidance, including systems engineering, for all
programs and projects to adhere to. NPR 7123 requires each program to
maintain an approved System Engineering Management Plan (SEMP) to
control the life cycle technical management process. The Constellation
Program SEMP establishes the approaches for integrating and organizing
People, Products/Orion/Ares, and Processes for successfully achieving
the requirements.
There are no known problematic systems engineering areas at this
time. The Constellation Program has established and is executing a
rigorous Risk Management process to identify, control, and mitigate
risks at the earliest time possible. This Risk Management process is
being used effectively by the Program on Orion and Ares development and
integration efforts in the areas such as design, analysis,
requirements, test & verification (T&V), and manufacturing. This Risk
Management process identified two early development risks: performance
of the integrated Launch Abort System and Command Module, and
performance of the integrated CEV and CLV during ascent. These risk
concerns are expected to decrease over time because they were
identified early, and risk mitigation plans will be implemented to
reduce these risks.
Systems integration for a program of this caliber is challenging.
To counter and manage any unexpected integration related challenges,
the program is using the formal processes and procedures required by
NPR 7120.5 and NPR 7123. As such, a challenge could become apparent
during vigorous T&V, which is being designed by the Program to capture
and resolve any unexpected development or integration related
challenges at the earliest. For example, the Flight Test Strategy calls
for early T&V of progressively mature test article configurations
leading to the first planned flight test in 2009. Any challenges that
arise during the T&V will be resolved before they become apparent risks
to the overall success of Orion, Ares and the Constellation program.
Q2. What are the most likely additional design changes that could be
made to Orion in the future, and could they be absorbed in current
budget estimates?
A2. Orion is currently in the formulation stage of the project. The
specific details of the design will continue to mature until the design
is finalized at the Critical Design Review (CDR). However, a number of
major design areas have already been established, and, therefore,
budget risk of future changes is low. Consequently, notwithstanding the
maturity of the design, NASA currently believes that it has the budget
to develop Orion.
Q3. How many technology and cost threats are currently being carried
by Orion? The Ares I upper-stage? The Ares I first stage? NASA's
notification to Congress on its intent to begin development of Orion
states that NASA has identified no ``areas in the CEV [Crew Exploration
Vehicle] concept where the technology is immature.'' Would you assess
the Ares vehicle similarly? Does this assessment suggest that the
current technology and cost risks are very unlikely to occur?
A3. The Ares I has minimal technology development activities due to the
extensive use of heritage hardware. However, there are certain
components of the Upper Stage that may require advanced development,
such as the Reaction Control System (RCS) thrusters, Thrust Vector
Control (TVC) systems, and various main propulsion system (MPS)
components. All are within acceptable technology readiness levels to be
inserted into the project without risk.
Cost threats associated with Ares I exist due to the transition
between the Shuttle Program close-out and Constellation Program ramp-
up. Although synergy between the Shuttle program and Ares I helps the
transition, it also presents a challenge. Budgets and schedules tend to
be contingent on each other. The challenge comes as Orion ramps up and
Shuttle is still operating at full strength in support of missions to
ISS. Even with the best of transition planning, there may be issues
related to Shuttle program close-out activities that may impact Ares I
development activities.
The Orion vehicle relies on proven technologies for its design
implementation. However, there are two areas where NASA felt that it
was appropriate to begin early advanced development work prior to the
award of the Prime contract. These areas are the Thermal Protection
System and the Landing System. As a part of this development work, NASA
has performed analysis and testing on materials and subsystem
components for these two systems.
Orion is subject to the cost risks associated with the normal
unknowns of any development project. However, NASA has put management
tools in place to identify and address those risks.
Q4. How many ``end item'' milestone awards are included in each
schedule of the Orion contract and what is the approximate value of
those awards?
A4. The base contract contains nine milestone periods where the
contractor may receive award fee payments. The maximum fee available
varies, depending on the milestone, and generally the later milestones
have larger fee amounts. The first evaluation period ends at the
Systems Design Review (SDR), and the maximum fee amount for this period
is $19,438,745. The largest maximum fee amount is $149,515,277 for the
period ending with the delivery of the first flight vehicle. [It should
be noted that all fee's considered a provisional payment. The final
award fee amount will be made based on the contractor's performance
over the entire period of performance.]
An ``End Item'' award fee contract is being used in the Orion
contract in order to measure the true quality of contractor performance
at the end of the contract. Therefore, the total contract award fee
pool is available and the contractor's total performance is evaluated
against the award fee plan to determine total earned award fee. In
addition to the final evaluation, interim evaluations are done to
monitor performance prior to contract completion in order to provide
feedback to the contractor on the Government's assessment of the
quality of the contractor's performance, and to establish the basis for
making interim award fee payments. These interim award fee assessments
are done at key milestone periods in the contract. Therefore all fee
paid during the contract are considered interim payments. A final award
fee determination will be made, based on the contractor's performance
over the entire contract, which will determine the award fee amount
earned by the contractor for the contract.
Q5. Given that the Ares I is also in the very early stages of
development, how can NASA be confident that the rocket will perform
well enough to support the current design of Orion? In your testimony,
you said that the program carried roughly 25 percent margin, combining
the vehicle performance and payload mass margins for a lunar mission.
Specifically, you said:
The launch vehicle itself has margins, so we will ask the
vehicle to lift, say 50,000 pounds to a certain orbit. The
project manager for the launch vehicle is keeping performance
margin for his launch vehicle, so the vehicle may be able to
lift 55,000 pounds, and his margin is on the order of about 15
percent or so for the launch vehicle. We also have margin that
the CEV project manager has to hold on his side in case his
vehicle gets larger, also. The integrated margin, right now,
for the total moon mission, not just the low-Earth orbit. We
have huge margins to get to low-Earth orbit. But to be able to
carry up to the lunar mission, approaching 2020 at this point,
we have about 25 percent performance margin on the amount of
lift this vehicle can provide.
What is the individual margin for Ares performance and Orion mass
for a lunar mission? Furthermore, what is the current level of
performance margin for Ares I to deliver Orion to an orbit equivalent
to that of the International Space Station? What mass margin is
currently held by Orion for an ISS rendezvous mission? How do these
margins compare to margins held by previous launch vehicle designs?
A5. Performance margin is the usable performance capability reserved to
protect mission injection conditions. The Ares I design team is using
validated engineering tools that are used to set the allocations to the
elements for initial planning. These tools are anchored in historical
`as flown' capabilities and tend to envelope loads and weights. The
Ares I Project currently has 15 percent margin reserved for
uncertainties in nominal vehicle parameters or their dispersions and
this margin is used to protect vehicle capability requirements for
modifications or a new design. This margin will be maintained to
minimize the risk of failure to deliver Orion to its required orbit,
either ISS or for a lunar mission.
The Orion project uses a historically based ``schedule'' to
determine weight growth allowances for each subsystem. The weight
growth allowance will vary depending on the historical risk of weight
growth for each type of subsystem. The allowable weight growth will
also reduce over time as the design matures. For the lunar mission
Orion is carrying approximately 15 percent weight growth allowance. In
addition, Orion has allocated another 10 percent margin that is carried
as reserve. For Orion the lunar case is the most challenging from a
weight growth perspective. Therefore, the margins for a potential
mission to the Space Station are lower than those listed above for the
lunar mission.
Q6. In a letter responding to 102 of the NASA Authorization Act of
2005, NASA stated that ``a higher than expected CEV cost would simply
delay CEV development or production. . .'' Given that Orion and Ares I
currently consume the bulk of Exploration funding and the current
schedule supports operations no earlier than 2014, can NASA implement
its go-as-you-can-afford-to-pay philosophy for the program while
meeting the President's deadline of a 2014 launch?
A6. At its early formulation stage, the Constellation Program is
certain to face ``unknown unknowns'' as we continue to refine
requirements, develop advanced technologies, and begin to integrate the
various systems into an operational infrastructure to enable long-term
exploration of the Moon and Mars. When Constellation moves into the
implementation phase, after Preliminary Design Review, currently
scheduled for the spring of 2008, design, cost, and schedule baselines
will be established, and Program performance will be measured against
metrics established at the various key decision points throughout the
life of the mission. It is at this juncture that NASA will provide
Constellation project Life Cycle Cost commitments to Congress.
Yet even before these baselines are established, the Constellation
Program is operating under a ``go-as-you-can-afford-to-pay''
constraint; we are living within a set budget profile, and any growth
beyond our capacity to perform trades, de-scope, or apply reserve will
result in a slip to the baseline schedule. We are making every effort
to avoid this through aggressive use of management tools at all phases
of the Program: defining and controlling requirements, generating
realistic cost estimates early on (ESAS), employing a ``smart buyer''
approach to major acquisitions, and monitoring performance by means of
a rigorous earned value system. Thus far, we have been successful in
achieving critical milestones within our budget profile.
Q7. When would a decision to exercise Options B and C need to be made
to support operations in 2014 and beyond? At the time NASA decides to
exercise these options, will the Ares I launch vehicle have completed
Preliminary Design Review? Will the Ares I have completed Critical
Design Review?
A7. The Orion CEV flight units necessary for the first human launch and
the first cargo launch are developed under Schedule A. The current
contract states that Options B & C need to be exercised no later than
July 2009. The Orion PDR is currently scheduled for March 2008 and the
CDR is currently scheduled for April 2009. The Ares I PDR is currently
scheduled for April 2008 with CDR currently scheduled for September
2009.
Q8. Has the Agency or its contractors identified the activities needed
to support PDR? What post-PDR activities are currently being pursued by
NASA or its contractors? What is the cost of these activities?
A8. The Orion PDR is currently scheduled for April 2008. The costs of
PDR will include all expenses prior to this date--approximately $5.5
billion. In a major development program, approximately 15 percent of
programmatic dollars would be consumed by PDR. A successful PDR will
require completed design specifications, the identification and
acquisition of long-lead items, manufacturing plans, and firm life
cycle cost estimates, a methodical process that effectively brings the
design to 30 percent completion. The PDR will provide the basis for
determining whether the baseline design is acceptable and if the
process leading to Critical Design Review may proceed.
Questions submitted by Representative Bart Gordon
Q1. In the letter from Deputy Administrator Dale that non-concurred
with GAO's report, she stated that as part of the CEV contract
competition that was just completed: ``NASA will receive firm
competitive prices from industry to complete development of the CEV. .
.NASA will also establish not-to-exceed prices for production of
required CEVs to support the current flight manifest through 2019.''
Q1a. Given NASA's stated confidence in having firm pricing data, is
NASA willing to accept a formal cost cap on the CEV program? If so, at
what level would NASA propose the cost cap be set?
Q1b. If not now, at what point in the CEV development program would
NASA be willing to accept a formal cost cap?
A1a, 1b. Historically, cost caps have not proven effective in managing
major NASA research and development (R&D) programs. Constraining the
International Space Station (ISS) to $2.1 billion annually did little
to control overall program costs. And while life cycle cost caps are
regularly imposed on small, discrete projects (e.g., Explorer,
Discovery) as part of the selection process, they are not easily
adapted to major R&D efforts that extend far beyond the current budget
horizon. In the case of large development programs such as
Constellation, cost caps can be problematic as they depend on
assumptions regarding outyear funding. The future priorities of the
country are not known and can change over the life of the Constellation
program.
At its early formulation stage, the Constellation Program is
certain to face ``unknown unknowns'' as we continue to refine
requirements, develop advanced technologies, and begin to integrate the
various systems into an operational infrastructure to enable long-term
exploration of the Moon and Mars. When Constellation moves into the
implementation phase, after Preliminary Design Review (PDR) in the
spring of 2008, design, cost, and schedule baselines will be
established, and Program performance will be measured against metrics
established at the various key decision points throughout the life of
the program. At this juncture, NASA will submit Constellation project
life cycle cost commitments to Congress. Under Section 103 of the NASA
Authorization Act of 2005 (P.L. 109-155), NASA is required to submit
Major Program Annual Reports, the first of which shall include a
Baseline Report that is to include an estimate of the life cycle cost
for those programs. Under Section 103, NASA is required to report
changes to the Baseline Report--including life cycle cost estimates--as
part of the annual budget request. NASA will notify the Committee at
other junctures, as necessary, if there are any adjustments to life
cycle cost estimates. As such, NASA would advise against imposition of
a formal statutory ``cost cap'' on CEV development.
Q2a. In your testimony, you stated that you have only three things you
can vary in the CEV program: cost, schedule, and performance. If there
is cost growth in the CEV program, what specifically will be your
approach to dealing with it?
What changes in performance or program content would be feasible
to make in order to contain cost growth?
A2a. NASA is committed to the ``go-as-you-can-afford-to-pay'' approach.
In this approach, the implementation of capabilities can be delayed
until the budget is available. For example, the Orion CEV is being
designed as a vehicle for the lunar mission, and development of some
capabilities for that mission can be delayed until needed. For example,
the Guidance, Navigation, and Control GN&C software required to get to
lunar orbit and return is not necessary for the CEV's early flights.
Q2b. Is there a date beyond which you would not slip the CEV schedule?
If so, what is it?
A2b. The NASA Authorization Act of 2005 (P.L. 109-155) endorses the
President's Vision for Space Exploration, which charged NASA to conduct
the first manned mission no later than 2014.
Q2c. Is it possible to slip CEV schedule without increasing the life
cycle cost of the CEV program? If so, how?
A2c. Experience has shown that, if the completion of elements of major
development programs is delayed significantly, the overall cost of a
major development program will go up.
Q3a. The GAO has pointed out that with respect to your budget plan,
``. . .there are years when NASA does not have sufficient funding to
implement the architecture. Some yearly shortfalls exceed $1 billion,
while in other years the funding available exceeds needed resources.''
In fact, NASA is proposing to ``bank'' funds in its CEV and CLV account
in FY 2006 and FY 2007 in excess of what it could spend in those years,
with the intent of trying to make those funds available in later years
when its planned funding is insufficient to meet the program's needs.
Why, only two years into the President's multi-decade Vision for
Space Exploration (VSE), is NASA having to resort to such budgetary
maneuvers to fund its implementation of the Exploration initiative?
A3a. The President called for an affordable and sustainable program of
exploration. Reflecting that direction, our budget profile is
relatively level, though the natural funding curve for a major
development program, such as Constellation, is not flat. When NASA
retires the Space Shuttle, additional funds will become available for
Constellation, but that will not occur until 2010. Long-lead
procurements and early design effort will ramp up prior to 2010.
Therefore, as NASA has outlined for the Committee in correspondence and
testimony, funding carryover for Constellation will allow us to meet
those requirements in FY 2008 and FY 2009.
Q3b. Why shouldn't Congress insist that NASA only submit requests for
funding that are consistent with the actual Exploration program funding
needs in a given fiscal year--especially given the competing demands
for funds in other parts of NASA? Wouldn't such an approach be more
aligned to the way development programs historically have been funded?
A3b. One of the ways the ups and downs of development funding curves
can be accommodated is by optimizing the use of two-year R&D funding,
and phasing the program schedule to align with available funding.
Q4. Why was it necessary to shift almost $7 billion into the
Constellation program [which includes the CEV and CLV] for the years FY
2006 to FY 2010 compared to what NASA had said would be needed over
that period in last year's budget request?
Q4a. Did NASA underestimate the cost of the CEV and CLV programs?
Q4b. NASA has indicated that it will not be possible to launch an
operational CEV until 2014--which was the original goal--despite the
additional funds that have been transferred into the program to
``accelerate'' it. Why is that?
A4a, 4b. NASA did not underestimate the life cycle costs. Funding for
Constellation Systems has been increased from the FY 2006 President's
Budget within overall Exploration Systems Mission Directorate funding.
This budget increase reflects the Agency's position, based on the
results of the ESAS, the President's continuing commitment to the
priorities identified in the Vision for Space Exploration, and the NASA
Authorization Act of 2005 (P.L. 109-155). Increased funds are
specifically identified for the Orion CEV and Ares I CLV in order to
ensure their ability to launch humans no later than 2014, but as close
to 2010 as possible.
Increased funding for the CEV supported a better defined, lower-
risk program with an earlier down-select to a single contractor for CEV
design; a Preliminary Design Review in FY 2008; Critical Design Review
in FY 2009; potential design verification tests in 2007 (to be
determined after selection of a prime contractor); and initial tests of
a Launch Abort System starting in FY 2009 (or sooner, depending on
available funding).
Increased funding for the Ares I CLV supports early design work
with Space Shuttle contractors to prepare the solid rocket boosters for
use as the first stage of the Ares I CLV; development of a propulsion
system for the upper stage of the Ares I CLV; and early design work to
modify the Space Shuttle main engine (SSME) for use as an expendable
engine on the future Ares V Cargo Launch Vehicle (CaLV).
A plan was put in place early in 2006 to effectively accelerate
development activities by refocusing on developing Ares I hardware with
greater extensibility to the Ares V system. Consistent with this new
strategy, NASA made several launch vehicle architectural design
adjustments such as changing the four-segment RSRM first stage to a
five-segment RSRM first stage, and replacing the SSME upper stage
engine with the J-2S-derived J-2X engine. These architectural changes
reduced the number of distinct development cycles by capitalizing on
design synergies between the Ares I and the Ares V: single upper stage
development (J-2X) and increased first stage commonality between Ares I
and Ares V. This will, in turn, reduce life cycle costs and major
risks.
Funding is also necessary to support initial design efforts to
modify, or in some cases start from new, necessary ground systems to
support the operational requirements of the Ares I and Ares V. This
includes potential changes to the launch infrastructure at Kennedy
Space Center, as well as NASA's ground-based and in-space
communications infrastructure for space exploration missions.
Question submitted by Representative Ralph M. Hall
Q1. What is the cost estimate for the major components of Orion: the
Launch Abort System, Crew Module, Service Module, and inter-stage?
A1. NASA does not currently track Orion CEV costs in a way that allows
the determination of the cost of the Launch Abort System and other
components. NASA is currently working with the Orion Prime Contractor
on a contract modification that will, among other things, modify the
Work Breakdown Structure (WBS) to allow collection of costs by Service
Module, Crew Module and Launch Abort System. This work will be complete
in the early spring 2007 to support the activities for the FY 2009
budget cycle.
Question submitted by Representative Dana Rohrabacher
Q1. Please provide NASA's estimate for the total cost of the Orion and
Ares I development programs through the test flights of Orion.
A1. Launch vehicle costs for the Ares I Crew Launch Vehicle through the
first human launch, currently projected late in FY 2014, are
approximately $10.8 billion. This number excludes the Orion Crew
Exploration Vehicle, mission and ground operations and facility
modifications, and program integration and other program-level costs.
Orion Crew Exploration Vehicle project costs through first human flight
are about $10.3 billion. Therefore, combined Ares I and Orion project
costs through first human launch are about $21.1 billion. If related
required programmatic and non-flight hardware costs are included in the
estimate, it will cost about $33.5 billion to get to the point of first
human launch projected in 2014.
All of these numbers include reserves, but exclude Corporate G&A.
These numbers include estimates for FYs 2012, 2013, and 2014, which lie
beyond the budget horizon.
Questions submitted by Representative Jo Bonner
Q1. Recent Shuttle missions have shown the importance of having a
robotic arm and cameras to properly inspect the Shuttle. Do you feel a
robotic arm might be beneficial when inspecting the CEV, either when
it's not attached to the International Space Station, in a another
orbit, or on a separate mission? Do you believe a robotic arm would be
beneficial for future space missions?
A1. The Orion vehicle is designed to be inherently safer than the
Shuttle in that the heat shield used to protect the capsule during re-
entry is protected from launch and on-orbit debris by Service Module
for most of the mission. Just prior to the Crew Module return to Earth,
the Service Module is jettisoned and this exposes the heat shield. The
heat shield is designed to be replaced after each mission. Based on
this improved overall technical concept of operation, the Orion does
not include a robotic arm.
Q2. Is there a robotic arm currently being considered on the CEV, and
if so, is it included in the draft drawings of the CEV?
A2. The current Orion design concept does not include a robotic arm.
Questions submitted by Representative Mark Udall
Q1. Why did NASA decide to fundamentally change its acquisition
approach for the CEV after pursuing a ``spiral development'' approach
for the first one and a half years of the Exploration initiative? What
was wrong with the original acquisition approach?
A1. NASA changed its acquisition approach from the previous ``spiral
development'' approach to reduce technical, cost, and schedule risk.
Spiral development is a process to achieve a desired capability where
the end-state requirements are not known at program initiation. Spiral
development was based on an undefined transportation architecture.
Subsequent comprehensive requirements definition and independent
assessments defined an architecture and showed that a continued spiral
approach would no longer fit, as it would increase cost, schedule, and
technical risk. NASA made a decision to spend its resources in
developing its exploration transportation end-state requirements and
architecture for Exploration through a number of parallel efforts for
the formulation phase of the Orion Crew Exploration Vehicle (CEV)
project. The NASA Authorization Act of 2005 (P.L. 109-155) also
directed NASA to pursue a Shuttle-derived transportation system to
support a sustained human presence on the Moon and ability to support
future destinations. This approach was also the one chosen through
doing trade studies.
In May 2005, the Exploration Systems Architecture Study (ESAS) was
initiated with one of its tasks to provide a complete assessment of the
top-level Orion CEV requirements. As a result of ESAS, the architecture
and the top level requirements for the Orion CEV were chosen, and made
part of the Phase 2 competition. At that point, NASA saw no benefit of
keeping two prime contractors through Preliminary Design Review (PDR)
at an estimated cost of $1 billion each (as in a spiral approach).
Rather, NASA saw a better return of its investment in competitively
issuing two Phase 1 Orion CEV Prime Contracts for conceptual design and
trade studies against the ESAS architecture for an estimated cost of
$46 million each.
Additionally, NASA established an intra-agency Orion CEV Smart
Buyer team which performed trade studies and design analysis that was
used by the Orion CEV Project Office to understand and verify the
appropriateness of the requirements incorporated into the Orion CEV
Phase 2 solicitation and evaluation of proposals. With knowledge gained
from ESAS, the Smart Buyer team, and Orion CEV Phase 1 contracts, NASA
was in a position to ``down select'' to a single Prime contractor and
initiate the Design, Development, and Test and Evaluation (DDT&E)
contract for the Orion CEV in order to baseline an industry approach
and commitment to meet the desired outcomes of the Orion CEV project.
This new acquisition approach provides NASA with the capability to
shorten the gap in human space flight capability with the retirement of
the Space Shuttle in 2010. The original ``spiral development''
acquisition approach contained significant risk that this nation would
not have a human space flight capability by 2014 with a higher
development cost of close to $1 billion.
Q2. In order to make your proposed CEV and CLV acquisition approaches
work, NASA has had to shift significant amounts of funding from the
exploration technology R&D and Space Station research accounts. Do you
intend to restore all of the funding that was cut from those accounts?
If so, when will that occur?
A2. Last year, the content of the ESMD Research and Technology
Development program was prioritized, (Human Systems Research and
Technology (HSRT) and Exploration Systems Research and Technology
(ESRT) ), as part of the Exploration Systems Architecture Study (ESAS)
review, to ensure that the R&T portfolio directly supports requirements
of the Constellation Systems program. The Exploration Technology
Development content was substantially reduced through this
prioritization activity and retains only the high priority research and
technology development projects that support exploration needs. Future
research and technology development will be phased so that technologies
are ready when they are needed to meet the Constellation program
development schedules.
Additionally, NASA is conducting research and developing new
technologies for lunar and Mars exploration that will reduce mission
risk, reduce logistics requirements, and reduce mission life cycle
cost. In-situ resource utilization and non-toxic power and propulsion
systems are examples of these kinds of technologies. These investments
also have important connections to U.S. scientific, economic, and
national security interests.
Q3. If Congress followed GAO's recommendation to restrict annual
appropriations and limit obligations for the CEV project ``to only the
amount of funding necessary to support activities needed to
successfully complete the project's preliminary design review,''
Q3a. What impact would that have on NASA's schedule for developing and
deploying the CEV, including the impact on procurement of long-lead
items? What is your estimate based on?
Q3b. What impact would that have on NASA's cost to develop and deploy
the CEV? What is your estimate based on?
A3a, 3b. The impact of restricting appropriations for CEV to only
support PDR, currently scheduled for April 2008, would be very
negative. The Orion CEV benefits from a competitive down select process
in which NASA received an innovative cost, technical, and management
approach from Lockheed Martin. This effort relies upon continuity
within the Development and Test phase of the Orion CEV contract. The
PDR is a part of the engineering development process and not an end
item for the development of the Orion CEV.
The line between preliminary design and detailed design is a blurry
one. PDR is a somewhat arbitrary construct that permits the customer to
make a detailed assessment of progress to date, set at the time when
most of the preliminary design is complete. Some will have been
completed long ago, and, typically, some items will not be complete at
PDR. DDT&E for differing phases of development is not set forth in a
serial, end-to-beginning fashion. Rather, an efficient plan has
different phases beginning and ending at different times for different
components and subsystems. Using the PDR as a hard break in the
activities of the prime contractor would prevent Orion CEV from being
developed as efficiently as possible, and would affect cost and
schedule accordingly.
The delay in execution of a comprehensive development plan by
industry would also cause a delay in the completion of that plan. This
would add time to the schedule, and experience shows that extending the
development schedule is one of the primary causes of increased costs to
a development program. The ideal situation is to allow a contractor to
make an efficient and effective plan through completion of development,
and to reduce perturbations to that plan to an absolute minimum.
In addition, division of DDT&E into two contracts, with the second
contract awarded after PDR, would mandate that the second contract be a
sole-source negotiation. The alternative to this is to change prime
contractors, resulting in significant delay and rework. Under this
scenario, negotiations regarding the largest expense of the development
effort, the final hardware design and fabrication, would occur without
the benefit of competition. Based on long, historical experience with
large multi-year contracts, NASA is convinced that this approach would
create great cost and/or schedule risk.
Given the knowledge NASA has with regard to its end-state
requirements, the most effective end-item to procure at this point is a
fully funded DDT&E effort. There is no benefit for the Government to
limit the funding and the contract to PDR of the development phase of
the Orion CEV project.
Q4. What are the major challenges facing NASA as it moves to implement
its Constellation program [which includes both the CEV and its Crew
Launch Vehicle (CLV) ]?
A4. From a technical perspective, the Ares I CLV has three top
technical risks: launch vehicle operability; ability to meet Ares I
performance requirements; and, the J-2X development schedule. The
Constellation Program is carrying two risks for Orion, the risk of mass
growth and the Launch Abort System development. NASA does have risk
mitigation activities and plans in place.
Q5. When NASA announced its Exploration architecture last fall, the
Crew Launch Vehicle (CLV) was supposed to make use of flight-proven
Space Shuttle components. To what extent is that still the case, and
for those cases where Shuttle hardware will no longer be used or will
be significantly modified, how will CLV costs and programmatic risk be
affected? On what is your assessment based?
A5. Ares incorporates Space Shuttle components in addition to utilizing
the infrastructure and workforce associated with the Space Shuttle. The
human-rated Ares I that will deliver the CEV to low-Earth orbit (LEO)
early next decade is an in-line configuration with a five-segment first
stage Reusable Solid Rocket Booster (RSRB) based on the Space Shuttle
Solid Rocket Booster (SRB).
The heavy-lift Cargo Launch Vehicle (CaLV) also builds on heritage
hardware from the Apollo and Space Shuttle vehicles, with a propulsion
core consisting of a 33-foot diameter core tank with five expendable
RS-68 engines and two modified Ares I First Stage RSRBs.
Hardware commonality between the Ares I CLV and Ares V CaLV, such
as the RSRB and the J-2X engine, will reduce the logistics footprint,
as well as non-recurring and fixed operations costs, which will help
sustain long-term space exploration, expanding humanity's reach to the
Moon, Mars, and beyond. Where we are not using Shuttle hardware, we are
using heritage J-2 engines used by the Apollo Saturn vehicles and for
X-33 testing. We believe by using heritage hardware and having an
active risk mitigation plan and approach will reduce life cycle costs
and risks.
NASA has spent the past year continuing to refine and mitigate
concept risks through the combination of trades and analysis performed
by NASA in-house teams. As a result of ESAS and the ensuing work, the
architecture and the top-level requirements for the Ares I were
established. The Constellation Program systems engineering and
integration process has been established to control changes to
missions, requirements, cost, schedule and risk as these occur normally
through the project formulation and development processes. Monthly Ares
I reviews of technical content, cost, schedule, and principle risk
factors are performed to integrate and control the risks from each
element and determine if these risks and mitigation strategies should
be elevated to the top Ares I project risk list and coordinated with
the Constellation Program office.
Questions submitted by Representative Eddie Bernice Johnson
Q1. Does NASA have the financial resources necessary to complete the
acquisition strategy that it has adopted for the CEV?
A1. At this time based on what we know--yes. In its early formulation
stage, the Constellation Program is certain to face ``unknown
unknowns'' as we continue to refine requirements, develop advanced
technologies, and begin to integrate the various systems into an
operational infrastructure to enable long-term exploration of the Moon
and Mars. When Constellation moves into the implementation phase, after
Preliminary Design Review in the spring of 2008, design, cost, and
schedule baselines will be established, and program performance will be
measured against metrics established at the various key decision points
throughout the life of the mission. At this point NASA will declare
Constellation project Life Cycle Cost commitments to Congress.
We are making every effort to avoid cost growth and schedule slip,
through aggressive use of management tools at all phases of the
Program: defining and controlling requirements, generating realistic
cost estimates early on (ESAS), employing a ``smart buyer'' approach to
major acquisitions, and monitoring performance by means of a rigorous
earned value management system. Thus far, we have been successful in
achieving critical milestones within our budget profile.
Q1a. What particular aspects of the acquisition activity have the
potential for significant cost growth?
A1a. The Constellation Program is carrying two risks for the CEV. The
first is a risk common to most development programs and that is the
risk that the mass of the system will outgrow its control mass. The
other risk carried for CEV is the challenging schedule to develop and
test the Launch Abort System. As with any complex system, risks are
present and trades option analysis/studies are performed to determine
the best approach to mitigate these risks. The study results will
provide the best mitigation strategy to buy down each risk.
Answers to Post-Hearing Questions
Responses by Allen Li, Director, Acquisition and Sourcing Management,
Government Accountability Office
Questions submitted by Chairman Sherwood L. Boehlert
Q1. NASA's notification to Congress on its intent to begin development
of Orion states that NASA has identified no ``areas in the CEV concept
where the technology is immature.'' What is your view on NASA's
assertions that risks on the Orion project are minimal due to the use
of heritage hardware and low technology risk? What specific risks are
you concerned about?
A1. While the assumption that the risks on the Orion project are
minimal due to the use of heritage hardware and low risk technology
seems logical on the surface, in practice, this has not always shown to
be the case. GAO's work has shown that other space programs that have
made similar optimistic assumptions about savings from the use of
heritage hardware and the availability of mature technology, for
example, have suffered unexpected cost increases and schedule delays.
For instance, the Geostationary Operation Environmental Satellite I-M
(GOES I-M) has experienced severe technical challenges, massive cost
overruns, and risky schedule delays, despite optimistic assumptions
including savings from heritage systems and readiness of technology
maturity. GAO reported that these problems were caused by a number of
factors including insufficient technical readiness of the satellite
design prior to contract award and unrealistic cost and schedule
estimates. In addition, we also found in reviewing the Advanced
Extremely High Frequency Satellite System that optimistic or aggressive
schedules, resulting from the pressure to minimize a gap between the
existing and new program and unanticipated technical complexities, not
only increased the schedule gap, but also led to cost increases.
Q2. The GAO has recommended that NASA refrain from any development
activities beyond the Preliminary Design Review. To what extent has the
Agency started such work?
A2. GAO does not have information on development activities beyond
those necessary to complete a successful preliminary design review that
NASA may have begun at this point. NASA is in a better position to
provide information to respond to this question. However, regardless of
whether such activities have begun, GAO's concern is that the contract
as it is structured gives NASA and the contractor the ability to begin
such work prior to the preliminary design review. Undertaking this
work, prior to demonstrating the appropriate levels of knowledge at the
preliminary design review can result in extensive redesign because of
the high number of unknowns on the project--technologies that have yet
to be matured, requirements that have yet to be fully defined, a
preliminary design that has yet to be approved, and a firm estimate of
cost that has yet to be established.
Q3. Does the Exploration Systems Mission Directorate have the
financial resources necessary to complete the adopted acquisition
strategy for Orion and Ares I by 2014?
A3. According to NASA, the fiscal year 2007 budget contained no serious
unresolved budget issues for the CEV or the Constellation program. In
addition, NASA has indicated that the fiscal year 2008 budget request
will also contain no serious unresolved budget issues. However, NASA
made several changes to the exploration architecture since the release
of the fiscal year 2007 budget that will be accounted for in the fiscal
year 2008 budget. As we reported, according to NASA officials some of
these changes would increase near-term costs, but benefit overall life
cycle costs of the program. NASA would not provide GAO with the cost
data to support its claim about the impact of the changes to the
architecture; therefore, based upon available information, we cannot
verify that the Exploration Systems Mission Directorate has the
financial resources necessary to complete the adopted acquisition
strategy for Orion and Ares I by 2014.
Q4. How does the Orion Acquisition strategy compare with that of the
Ares I? Given that the Ares I is also in the very early stages of
development, can NASA be confident that the rocket will perform well
enough to support the current design of Orion?
A4. GAO is currently reviewing the acquisition strategy of the Ares I
project. Our preliminary work indicates similar tendencies as found
with the CEV in that NASA plans to execute at least two long-term
contracts before the development of a sound business case for the
project. In 2006, NASA initiated contract actions that will lead to a
sole-source contract later this year (tentatively planned for December
2006) for development of the first stage of the CLV. This first stage
will use heritage hardware from the Shuttle program, namely an evolved
five-segment Reusable Solid Rocket Booster. The acquisition strategy
for the Upper Stage is a bit more involved. The agency plans to award a
sole source contract for development of a derivative of the Saturn era
J-2 engine toward the end of 2006. While this engine is based on legacy
hardware, the development effort appears to be similar to a ``clean
sheet'' design of the engine using modern manufacturing processes and
redesigned internal components. The agency also plans to release draft
requests for proposals in December 2006 leading to a competitively
awarded contract for development of the main elements for the Upper
Stage in August 2007. Preliminary briefings presented to GAO on Ares I
acquisition strategy hold promise that the project will be following a
knowledge-base acquisition approach. According to information provided
by NASA, the Ares I acquisition strategy calls for the inclusion of key
decision points (KDPs) to be held at each phase in the project life
cycle. These KDPs appear to roughly correspond to GAO's knowledge
points, but we have not been provided enough information to perform a
comprehensive analysis. Our concern focuses on the effectiveness of
these proposed key decision points for the Ares I project since they
will occur well after the awarding of long-term developmental
contracts, similar to what we reported with the CEV acquisition. GAO
will provide updates to the Committee as this work progresses. NASA is
in a better position to respond to the question of whether it is
confident that the Ares I will perform well enough to support the
current Orion design.
Ouestions submitted by Representative Bart Gordon
Q1. How does NASA's current acquisition strategy for the CEV compare
with its initial approach? Was the budget plan for the initial approach
realistic or did it have similar mismatch between available funding and
resource needs in given years?
A1. NASA's former acquisition strategy involved selecting two
contractors to develop concepts for the CEV. Once these concepts were
sufficiently designed, NASA planned to down select to one contractor
for the remainder of the program. The timeframe for this down select
was after the preliminary design review. In addition, NASA planned to
use spiral development--a type of evolutionary development--for the
program. Evolutionary development is an approach that enables
organizations to achieve a match between needs and resources. Under
this approach, basic requirements are achieved first, with additional
capabilities planned for future generations of the product. Because
product development is incremental, achieving knowledge is more
manageable. This type of approach is especially worthwhile if the goal
is to reduce development cycle times and get the system operational as
quickly as possible. Our work has shown that evolutionary development
is a best practice for system development that can help reduce risks at
critical junctures and help ensure that decision makers get the most
out of their investments. In 2005, NASA changed course and chose a
different approach for the program. This approach entailed selecting
and awarding a contract to one contractor over a year and a half before
the preliminary design review. The result of NASA's chosen approach is
that the Agency is committed to one concept, thereby removing their
ability to leverage the most beneficial aspects of each design. NASA's
administrator has testified that the earlier plans for the CEV, which
called for operational deployment of the CEV not later than 2014, were
abandoned in an effort to accelerate the development of the CEV and
have it operational as soon as possible. NASA's planning for its
exploration architecture was based on a 2011 operational capability of
the CEV. However, NASA's approach has not resulted in a significant
decrease in development time and current program documents continue to
show an operational date for the CEV of 2014. GAO is unaware of NASA
developing a similar cost estimate for its initial approach to the CEV
project. However, given that that project was so early in the concept
development stage when it was abandoned, it is unlikely that NASA had
sufficient information to develop such an estimate. Therefore, we
cannot project whether the budget plan for the initial approach was
realistic or faced a similar mismatch between available funding and
resource needs in given years.
Q2. To what degree, if at all, does NASA's current approach deviate
from ``best practices'' for large systems acquisitions?
A2. NASA approach deviates from best practices because it commits the
government to a long-term effort prior to obtaining the knowledge
necessary to support such a commitment. At the time of our July 2006
report, the contract was intended to cover all design, development,
test and evaluation, production, and sustaining engineering activities.
As I mentioned in my statement, NASA modified its approach and made the
production and sustainment activities contract options. This step
brings NASA's approach more in line with best practices, but the Agency
is still taking a risky approach with the project by committing to
activities beyond PDR without a sound business case. Without such
knowledge it is difficult for NASA to predict with any confidence how
much the project will cost, what technologies will or will not be
available to meet performance expectations, and when the vehicle will
be ready for use. In addition, NASA's current acquisition policies do
not support the attainment of such knowledge at key junctures in the
development process. If NASA had in place controls to ensure that the
progress of the CEV project would be measured against standardized
knowledge base criteria, the risks associated with their current
approach would be lessened. Briefings that we have seen on changes to
NASA's program and project management policies look promising, but NASA
has yet to issue its revised policy and consequently, we have yet to
review the actual document.
Q3. Has GAO recommended a similar type of approach on other
acquisition programs to what it is recommending for NASA's CEV program?
Has the government approached any past acquisitions with a similar
long-term, life cycle cost strategy? What were the results?
A3. Most major acquisition programs within the Department of Defense
are encouraged not to commit the government to production and
sustainment activities prior to demonstrating that the system works as
intended. Our prior recommendations have focused on the need to acquire
knowledge at critical points in the development process, not
specifically on the contract. However, we have recommended that
programs delay the award of a contract due to a lack of adequate
knowledge. The Joint Strike Fighter (JSF) is one notable example. The
JSF program did not concur with our recommendation and awarded its
contract without first gaining sufficient knowledge. Subsequently, the
program has experienced over a 30 percent cost growth and almost a year
delay in schedule. At issue with the CEV project is that NASA has no
certainty what the status of the project will be at the PDR, in terms
of cost estimates or technology maturity for example, but will be
committed to proceed regardless or will be forced to terminate the
contract and incur additional costs.
Q4. What types of indicators should Congress ask NASA to provide in
order to gauge the process of CEV development and ensure adequate
oversight at key junctures during its development, including at the
preliminary design review, the critical design review, and at the
production review?
A4. Successful product developers ensure a high level of knowledge was
achieved at key junctures in development, including the preliminary
design review, the critical design review, and the production review.
These junctures and associated indicators are defined as follows:
Preliminary Design Review: Resources and needs match. This
level of knowledge occurs when a sound business case is made
for the product--that is, a match is made between the
customer's requirements and the product developer's available
resources in terms of knowledge, time, money, and capacity.
Achieving a high level of technology maturity at the start of
system development is an important indicator of whether this
match has been made. This means that the technologies needed to
meet essential product requirements have been demonstrated to
work in their intended environment. The Congress could ask NASA
to provide information on the following indicators to verify
that:
all technologies are demonstrated to a high
level of technology maturity--(Technology Readiness
Level 6 or 7);
project requirements are informed by the
systems engineering process;
cost and schedule estimates established for
the project are based on knowledge from the preliminary
design using systems engineering tools;
additional resources are in place including
needed workforce; and
a decision review is conducted following
completion of the preliminary design review.
Critical Design Review: Product design is stable. This level
of knowledge occurs when a program determines that a product's
design is stable--that is, it will meet customer requirements
and cost and schedule targets. A best practice is to achieve
design stability at the system-level critical design review,
usually held midway through development. Completion of at least
90 percent of engineering drawings at the system design review
provides tangible evidence that the design is stable. The
Congress could ask NASA to provide information on the following
indicators at the critical design review to verify that:
at least 90 percent of engineering drawings
are complete;
all subsystem and system design reviews are
completed;
the design meets requirements demonstrated
through modeling, simulation, or prototypes;
stakeholders concurrence that drawings are
complete and producible is obtained;
failure modes and effects analysis are
completed;
key system characteristics are identified;
critical manufacturing processes are
identified;
reliability targets are established and a
growth plan based on demonstrated reliability rates of
components and subsystems is developed; and
a decision review is conducted following the
completion of the Critical Design Review.
Production Review: Production processes are mature. This level
of knowledge is achieved when it has been demonstrated that the
product can be manufactured within cost, schedule, and quality
targets. A best practice is to ensure that all key
manufacturing processes are in statistical control--that is,
they are repeatable, sustainable, and capable of consistently
producing parts within the product's quality tolerances and
standards--at the start of production. The Congress could ask
NASA to provide information on the following indicators at the
production review to verify that:
manufacturing processes have been
demonstrated;
production representative prototypes have
been built;
production representative prototypes have
been tested and have achieved reliability goals;
production representative prototypes have
been demonstrated product in operational environment
through testing;
statistical process control data has been
collected;
critical processes have been demonstrated to
be capable and that they are in statistical control;
and a decision review is conducted following
completion of the production readiness review.
Q5. Do you agree or disagree with NASA's view that risks on the CEV
project are minimal due to the use of heritage hardware and a low
technology risk approach?
A5. While the assumption that the risks on the Orion project are
minimal due to the use of heritage hardware and low risk technology
seems logical on the surface, in practice, this has not always shown to
be the case. GAO's work has shown that other space programs that have
made similar optimistic assumptions about savings from the use of
heritage hardware and the availability of mature technology, for
example, have suffered unexpected cost increases and schedule delays.
For instance, the Geostationary Operation Environmental Satellite I-M
(GOES I-M) has experiences severe technical challenges, massive cost
overruns, and risky schedule delays, despite optimistic assumptions
including savings from heritage systems and readiness of technology
maturity. GAO reported that these problems were cause by a number of
factors including insufficient technical readiness of the satellite
design prior to contract award and unrealistic cost and schedule
estimates. In addition, we also found in reviewing the Advanced
Extremely High Frequency Satellite System that optimistic schedules,
resulting from the pressure to minimize a gap between the existing and
new program and unanticipated technical complexities, not only
increased the schedule gap, but also led to cost increases and possible
quality issues.
Q6. Should Congress impose a formal cost cap on the CEV program? If
so, at what point in the development program should the cap be imposed?
If not, why not?
A6. While instituting a cost cap on the CEV project could help to
encourage fiscal responsibility for the project, other factors need to
be considered before using such an approach. As we reported, NASA lacks
a firm estimate of project cost at this point and will not be able to
produce such an estimate until the preliminary design review scheduled
for 2008. Therefore, if Congress chooses to institute a cost cap for
the project, it would be best to wait until at least the preliminary
design review when NASA has a better understanding of project cost. In
the interim, sound project management as discussed in GAO's written
statement can help to ensure that the project is being managed in a
fiscally responsible manner. Another consideration is the fact that
instituting a cost cap on the project assumes a stable design. For
example, as you know, Congress imposed a cost cap on the International
Space Station program. In our 2001 report examining NASA's compliance
with the cost cap, we found that while NASA projections for the
International Space Station through 2004 fell within the cost cap, the
projections were achieved mainly by reductions in space station
content, not by prudent fiscal and project management.
Q7. Why was it necessary to shift almost $7 billion into the
Constellation program [which includes the CEV and CLV] for the years FY
2006 to FY 2010 compared to what NASA had said would be needed over
that period in last year's budget request?
Q7a. Did NASA underestimate the cost of the CEV and CLV programs?
Q7b. NASA has indicated that it will not be possible to launch an
operational CEV until 2014--which was the original goal--despite the
additional funds that have been transferred into the program to
``accelerate'' it. What is that?
A7a, 7b. The following table presents changes to the Constellation
Systems budget elements included in the President's FY 2007 budget
request. The table shows how the changes in funding resulted in a net
increase of nearly $7 billion for FY 2006 through 2010 when compared
with the totals for FY 2006 to FY 2010 from the President's FY 2006
budget request.
According to the narrative in NASA's FY 2007 budget justification
for CEV, ``Acceleration of the program has resulted in higher budget
numbers then in the FY 2006 submittal.'' However, the budget numbers
only show an $86 million dollar increase in FY 2006, with annual
reductions ranging from $196 million to $410 million in FY 2007 to FY
2010 funding. In total, funding requested for the CEV project decreased
by about $1 billion for the FY 2006 to FY 2010 period when compared to
the FY 2006 budget. Funding also decreased for ISS Cargo Crew Services
by $364 million. These reductions in the Constellation Systems budget
were more than offset by a $2.8 billion increase for the CLV project,
an addition of $2.4 billion for the new Launch and Mission Systems
project, an addition of $448 million for the new Exploration
Communications and Navigation Systems project, and an additional $2.6
billion in funding not tied to specific Constellation projects. NASA's
FY 2007 budget justification did not break the funding out for specific
projects but noted that the Constellation budget includes funding for
initial planning for systems and vehicles necessary for lunar and Mars
missions. The President's FY 2007 budget request for Constellation
Systems in FY 2011 is $7.7 billion, which includes about $5.8 billion
for the five specific projects in the table and about $1.9 billion for
funding not directly tied with specific projects.
Questions submitted by Representative Mark Udall
Q1. GAO has pointed out that with respect to NASA's budget plan ``. .
.there are years when NASA does not have sufficient funding to
implement the architecture. Some yearly shortfalls exceed $1 billion,
while in other years the funding available exceeds needed reserves.''
Q1a. Are you aware of any other major system acquisition programs in
the government that have been funded using the approach being taken by
NASA in the Constellation program?
Q1b. If so, which ones, and how well has that funding approach worked?
Q1c. Does GAO support such a funding approach?
A1a, 1b, 1c. As we noted in our July report and September testimony,
there is a substantial mismatch between estimated costs and the amount
and timing of the Exploration Systems Mission Directorate's five-year
budget in NASA fiscal year 2007 request. GAO's past work has shown that
matching requirements to available and reasonably expected resources
reduces risk and increases the likelihood of success for major
acquisitions. In what could be an effort to offset the years of
projected funding shortfalls, NASA has been consistently accumulating a
bow wave of unobligated balances that are carried over at the end of
each year. We briefed the Committee that NASA's actual balance of FY
2005 unobligated funds continued a trend of increasing both in terms of
the dollar amount and the percentage increase of budget authority. For
example, NASA's unobligated balance more than tripled from $616 million
at the end of FY 2000 to $2.1 billion at the end of FY 2005--an
increase from five percent of the budget to about 13 percent. While we
have not looked at other agencies with major system acquisition
programs that utilize a similar approach, it would appear that the
ability to carryover large amounts of unobligated funds affords NASA a
great deal of flexibility in attempting to address projected funding
shortfalls in selected programs. However, it can reduce the
transparency of the budget request and create difficulties for Congress
in determining the amount and timing of budget authority it should
provide to NASA.
Q2. How confident are you that NASA will be able to restore the
technology R&D and Space Station research funding that was shifted to
the Constellation program? What will be the impact if those funds are
not restored?
A2. None of GAO's current work provides it with the information
necessary to comment on whether NASA will be able to restore these
funds, nor on the impact to Exploration Systems Research and Technology
(ESRT) or Human Systems Research and Technology (HSRT) if the funds are
not restored. According to NASA, funding was shifted from ESRT and HSRT
based on the results of the Exploration Systems Architecture Study
(ESAS). NASA's budget indicates that ESAS provided NASA with
information that has allowed the Agency to better align the programs'
research and technology development with the Vision for Space
Exploration while maintaining fundamental ISS efforts on ISS and to
focus on technology priorities for lunar exploration. Furthermore, the
overall funding for the ISS program per the FY 2007 budget submission
totaled about $10.2 billion, a $200 million increase over the total for
the same period in the FY 2006 budget submission.
Q3. Are there any other areas of concern that GAO has about NASA's
implementation of the President's exploration initiative that Congress
should be aware of?
A3. NASA will undoubtedly be operating in a constrained fiscal
environment, and it is imperative that NASA successfully manage its
limited resources in order to achieve successful outcomes. Adhering to
the principles of knowledge-based acquisition is a key step in this
effort, but as their efforts move forward, the Agency must not let
itself succumb to the pressures of meeting self-imposed schedules. The
gap between retiring the Shuttle in 2010 and bringing the CEV on-line
is a reality. Attempting to close that gap by pushing forward
development of the CEV without first obtaining the requisite knowledge
at key points could very well result in the production of a system that
not only doesn't meet expectations but ends up costing more and
actually increasing the gap. Competing demands within the Agency could
also instill schedule pressure on CEV development efforts. For example,
NASA plans to rely on commercial providers to make up the gap in ISS
logistics left by the Shuttle retirement. We currently have work
underway to assess whether ISS operations can be effectively supported
in the interim. NASA must also effectively manage the transition of
both its supplier base and workforce from the Shuttle program to
planned exploration activities. The need to maintain and safely process
the Shuttle through its final planned flight in 2010 and designing,
developing and testing a CEV in 2014 presents a difficult challenge for
NASA.
Q4. If Congress followed GAO's recommendation to restrict annual
appropriations and limit obligations for the CEV project ``to only the
amount of funding necessary to support activities needed to
successfully complete the project's preliminary design review,''
Q4a. What impact would that have on NASA's schedule for developing and
deploying the CEV, including the impact on procurement of long-lead
items? What is your estimate based on?
Q4b. What impact would that have on NASA's cost to develop and deploy
the CEV? What is your estimate based on?
A4a, 4b. If NASA is approaching the development of the CEV using a
knowledge-based approach, it would not be undertaking development
activities at this point unless they are needed to successfully
complete a preliminary design review. NASA's own program and project
management policies call for a major decision review following the
preliminary design review to ensure that the project is ready to move
beyond preliminary design activities. A knowledge-based acquisition
approach requires decision makers to ask themselves, at each decision
point, whether they have gained the knowledge needed to progress into
the next acquisition phase. For example, at the preliminary design
review, all technologies needed to meet essential product requirements
should have been demonstrated to work in their intended environment. If
not, the program should not go forward. GAO has recommended that the
procurement of long-lead items not be approved until the project can
clearly demonstrate that technologies are mature and the design is
stable. Our past work has shown that increased costs and schedule
slippage may accrue to programs that are still maturing technologies
well into system development when they should be focused on stabilizing
system design and preparing for production.
Q5. What are the major challenges facing NASA as it moves to implement
its Constellation program [which includes both the CEV and its Crew
Launch Vehicle (CLV) ]?
A5. NASA has embarked on an ambitious schedule to have two separate and
distinct major acquisition programs in development concurrently. The
coordination and timing of development efforts between the CEV and the
CLV cannot be overstated, and the integration of these programs will be
challenging for NASA. The functionality of the CEV is wholly dependent
on the CLV. NASA plans to use heritage hardware for the CEV and CLV in
hopes that it will simplify and shorten the development process. But,
given NASA's planned upgrades to some components, technology and
performance risks could increase. GAO has already identified an
instance within the Constellation Program where the Agency has entered
into a long-term commitment without having all the elements of a sound
business case, including mature technologies and well defined
requirements. Ensuring that both of these major acquisition programs
are carried out in a prudent and cost-effective manner will not only be
key to maintaining our country's human access to space but vital to
instilling confidence that NASA can achieve mission success.
Q6. When NASA announced its Exploration architecture last fall, the
Crew Launch Vehicle (CLV) was supposed to make use of flight-proven
Space Shuttle components. To what extent is that still the case, and
for those cases where Shuttle hardware will no longer be used or will
be significantly modified, how will CLV costs and programmatic risk be
affected? On what is your assessment based?
A6. GAO is studying the CLV architecture as part of on-going work
requested by this committee concerning the acquisition strategy of the
project. We have not completed our analysis with regard the affect of
CLV changes on costs and programmatic risk. The architecture has
changed since the completion of the Exploration Systems Architecture
Study last fall. In January 2006, NASA announced that the two
components with direct ties to the Shuttle program--the four-segment
Reusable Solid Rocket Booster (RSRB) and the Space Shuttle Main Engine
(SSME)--would no longer be part of the CLV architecture. Instead, NASA
now plans to utilize a newly developed five-segment RSRB for the CLV's
first stage and a remanufactured Saturn era J-2X engine to power the
Upper Stage.
Questions submitted by Representative Eddie Bernice Johnson
Q1. Does NASA have the financial resources necessary to complete the
acquisition strategy that it has adopted for the CEV?
Q1a. What particular aspects of the acquisition activity have the
potential for significant cost growth?
A1, 1a. Given the fact that NASA would not provide us with cost
information beyond what was contained in the fiscal year 2007 budget
request, we are not in a position to answer your question. NASA should
provide you with an answer as whether it can afford the chosen
acquisition approach for the CEV and the basis for its response. From
our perspective, however, NASA has embarked on a long-term design and
development effort without the requisite knowledge. By making a long-
term commitment prior to establishing a sound business case, NASA has
accepted the risk for potential cost and schedule growth. It is unknown
at this point whether NASA will have the financial resources necessary
to complete the adopted acquisition strategy since realistic cost
estimates are not currently available.
Appendix 2:
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Additional Material for the Record