[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                    NASA COST AND SCHEDULE OVERRUNS:
                        ACQUISITION AND PROGRAM
                         MANAGEMENT CHALLENGES

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON SPACE

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 14, 2018

                               __________

                           Serial No. 115-64

                               __________

 Printed for the use of the Committee on Science, Space, and Technology
 
 
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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         ZOE LOFGREN, California
MO BROOKS, Alabama                   DANIEL LIPINSKI, Illinois
RANDY HULTGREN, Illinois             SUZANNE BONAMICI, Oregon
BILL POSEY, Florida                  AMI BERA, California
THOMAS MASSIE, Kentucky              ELIZABETH H. ESTY, Connecticut
RANDY K. WEBER, Texas                MARC A. VEASEY, Texas
STEPHEN KNIGHT, California           DONALD S. BEYER, JR., Virginia
BRIAN BABIN, Texas                   JACKY ROSEN, Nevada
BARBARA COMSTOCK, Virginia           CONOR LAMB, Pennsylvania
BARRY LOUDERMILK, Georgia            JERRY McNERNEY, California
RALPH LEE ABRAHAM, Louisiana         ED PERLMUTTER, Colorado
GARY PALMER, Alabama                 PAUL TONKO, New York
DANIEL WEBSTER, Florida              BILL FOSTER, Illinois
JIM BANKS, Indiana                   MARK TAKANO, California
ANDY BIGGS, Arizona                  COLLEEN HANABUSA, Hawaii
ROGER W. MARSHALL, Kansas            CHARLIE CRIST, Florida
NEAL P. DUNN, Florida
CLAY HIGGINS, Louisiana
RALPH NORMAN, South Carolina
DEBBIE LESKO, Arizona
                                 ------                                

                         Subcommittee on Space

                     HON. BRIAN BABIN, Texas, Chair
DANA ROHRABACHER, California         AMI BERA, California, Ranking 
FRANK D. LUCAS, Oklahoma                 Member
MO BROOKS, Alabama                   ZOE LOFGREN, California
RANDY HULTGREN, Illinois             DONALD S. BEYER, JR., Virginia
BILL POSEY, Florida                  MARC A. VEASEY, Texas
STEPHEN KNIGHT, California           DANIEL LIPINSKI, Illinois
BARBARA COMSTOCK, Virginia           ED PERLMUTTER, Colorado
RALPH LEE ABRAHAM, Louisiana         CHARLIE CRIST, Florida
DANIEL WEBSTER, Florida              BILL FOSTER, Illinois
ANDY BIGGS, Arizona                  EDDIE BERNICE JOHNSON, Texas
NEAL P. DUNN, Florida
CLAY HIGGINS, Louisiana
LAMAR S. SMITH, Texas
                            C O N T E N T S

                             June 14, 2018

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Brian Babin, Chairman, Subcommittee 
  on Space, Committee on Science, Space, and Technology, U.S. 
  House of Representatives.......................................     4
    Written Statement............................................     6

Statement by Representative Ami Bera, Minority Ranking Member, 
  Subcommittee on Space, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................     8
    Written Statement............................................    10
Statement by Representative Lamar Smith, Chairman, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    12
    Written Statement............................................    14

Statement by Representative Eddie Bernice Johnson, Ranking 
  Member, Committee on Science, Space, and Technology, U.S. House 
  of Representatives.............................................    16
    Written Statement............................................    17

                               Witnesses:

Ms. Cristina Chaplain, Director, GAO: Contracting and National 
  Security Acquisitions
    Oral Statement...............................................    19
    Written Statement............................................    22

Mr. Steve Jurczyk, Associate Administrator, NASA
    Oral Statement...............................................    58
    Written Statement............................................    60

Mr. Paul Martin, Inspector General, NASA
    Oral Statement...............................................    68
    Written Statement............................................    70

Mr. Daniel L. Dumbacher, Executive Director, American Institute 
  of Aeronautics and Astronautics (AIAA)
    Oral Statement...............................................    79
    Written Statement............................................    81

Discussion.......................................................    89


             Appendix I: Answers to Post-Hearing Questions

Ms. Cristina Chaplain, Director, GAO: Contracting and National 
  Security Acquisitions..........................................   112

Mr. Steve Jurczyk, Associate Administrator, NASA.................   122

Mr. Paul Martin, Inspector General, NASA.........................   136

Mr. Daniel L. Dumbacher, Executive Director, American Institute 
  of Aeronautics and Astronautics (AIAA).........................   139

            Appendix II: Additional Material for the Record

Documents submitted by NASA......................................   144

 
                    NASA COST AND SCHEDULE OVERRUNS:
                        ACQUISITION AND PROGRAM
                         MANAGEMENT CHALLENGES

                              ----------                              


                        THURSDAY, JUNE 14, 2018

                  House of Representatives,
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:04 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Brian 
Babin [Chairman of the Subcommittee] presiding.
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    Chairman Babin. Good morning. The Subcommittee on Space 
will come to order.
    Without objection, the Chair is authorized to declare 
recesses of the Subcommittee at any time.
    Welcome to today's hearing titled, ``NASA Cost and Schedule 
Overruns: Acquisition and Program Management Challenges.''
    I will now recognize myself for five minutes for an opening 
statement.
    NASA is at a critical juncture as it lays out the details 
of its roadmap for human exploration missions while determining 
the best business approach to success. However, human 
exploration doesn't encompass the breadth of NASA's total work. 
They are also launching interplanetary spacecraft systems, 
advancing science and aeronautics research, and developing 
critical technologies to enable U.S. leadership in space. 
Strategic acquisition planning, utilization of new contracting 
mechanisms, and improving management and oversight will be a 
crucial part of effective, affordable, and sustainable mission 
success for NASA.
    As Chairman of the Space Subcommittee and a proud 
representative of Johnson Space Center in Houston, I am a 
tireless advocate for NASA. However, as Members of this 
Committee, we have a responsibility to every taxpayer to ensure 
that NASA is being a good steward, managing the resources with 
which we have been entrusted. Today's hearing will touch upon a 
number of important oversight topics, including acquisition 
mechanisms, cost-estimation methodologies, and NASA program 
management.
    Procurements represent over 90 percent of NASA's annual 
budget. In fiscal year 2016, NASA procured over $18.6 billion 
through nearly 41,000 active procurements. That's a tremendous 
amount of work. Unfortunately, NASA has been plagued for years 
with contract management issues, which have resulted in 
substantial cost overruns and schedule slips. Generally, it's 
the high-profile, major programs which get the most scrutiny 
because of the funding and time associated with these 
procurements. However, there are other well-documented issues, 
many of which could constitute and possibly warrant a dedicated 
hearing.
    In May of this year, the Government Accountability Office 
released its annual Assessment of Major NASA Projects, those 
exceeding $250 million in appropriations. This assessment 
covered 26 major projects. I'd like to note the Subcommittee 
will have a dedicated hearing about the James Webb Space 
Telescope next month, but this project's long history of cost 
and schedule overruns is relevant to today's discussion as 
well.
    GAO reported an overall deterioration in the major program 
portfolio, primarily due to the fact that 9 out of 17 projects 
in development are experiencing cost and schedule performance 
growth as a result of risky program management decisions, 
significant technical challenges, and issues beyond the control 
of the projects.
    Last year, GAO assessed that NASA projects were 
``continuing a generally positive trend of limiting cost and 
schedule growth, maturing technologies, and stabilizing 
designs.'' However, GAO also noted that many of the more 
expensive projects were ``approaching the phase of their life--
their lifecycles when cost and schedule growth is most 
likely.''
    The Subcommittee will also investigate specific NASA cost-
estimating methodologies such as the Joint Cost and Schedule 
Confidence Level, the JCL process, and NASA management 
techniques related to project schedule determination and the 
use of headquarters reserve funding. We are particularly 
interested in the NASA Inspector General's recommendations on 
improvements with NASA's cost estimating methodologies, 
especially if there is a need to continue using the JCL process 
or adopt another cost-estimating technique.
    Furthermore, the Subcommittee will investigate these and 
other questions: What acquisition mechanisms--cost plus, fixed 
price, award fee, Space Act Agreements, et cetera--are most 
appropriate for various types of procurements?
    Next, how do these acquisition tools incentivize the 
provider to perform safely and efficiently? What are the pros 
and cons?
    And then, are existing appropriation funding authorities 
sufficient for Congressional oversight of major NASA projects?
    And lastly, do current agency approaches hold both the 
agency and provider accountable for overall performance?
    And this is a very timely hearing today. In their report 
last month, GAO noted that NASA is planning to invest about $61 
billion over the lifecycle of its current portfolio of 26 major 
programs, and that doesn't even account for thousands of other 
procurements and a significant portion of NASA's spending 
authority. Whether large or small, all of NASA's business 
decisions matter. Decisions made now have long-lasting 
implications on NASA's mission success and leadership.
    I want to thank the witnesses for being here. I'm sorry I 
was a little bit late, didn't get a chance to shake each of 
your hands, but we're looking forward to your testimony on the 
challenges that NASA is facing in controlling program cost and 
schedule.
    [The prepared statement of Chairman Babin follows:]
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    Chairman Babin. So now, I'd like to recognize the Ranking 
Member of the Subcommittee from California, Mr. Bera.
    Mr. Bera. Thank you, Mr. Chairman. Thank you for having 
this timely hearing, and welcome to the witnesses. I do look 
forward to your testimony.
    When you think about NASA, NASA is a unique agency. It's a 
source of national pride for us, but it also is a cutting-edge 
agency that serves to inspire. Those of us who grew up during 
the space race certainly understood that inspiration and it 
motivated many of us to go into the sciences.
    I want to also acknowledge it's not that often we walk into 
a hearing room and we see a line of folks waiting to get in 
here, and I think we're joined by NASA's interns and that next 
generation that hopefully is going to inspire, discover, and 
move us forward. So, thank you to the interns that are here. 
You are the future.
    In terms of thinking about Congress' role here, we clearly 
have a role, a fiscal responsibility and oversight, and those 
at NASA don't have an easy job. I mean, you are trying to think 
about what that future looks like. You are trying to put those 
projects together and I appreciate that check and balance. As 
you're doing things that we've never done before, you often 
encounter the unexpected. And I think that's why this is an 
important hearing.
    Resolving cost and scheduling issues are hard, and there 
really is no simple fix for these types of situations. That 
said I have no doubt that NASA's talented workforce is looking 
to find those improvements of how it conducts project 
management, oversees its contractors, collaborates with 
international partners, provides greater funding certainty, and 
applies cost estimation tools and techniques.
    But today's discussion of schedule delays and cost 
increases and the search for corrective actions cannot take 
away from the accomplishments and discoveries made by programs 
like Hubble, the International Space Station, and Mars 
Curiosity. These accomplishments and discoveries would not have 
happened had the nation not made the hard decisions that enable 
these projects to carry through in spite of scheduling delays 
and cost growth.
    And we've been well-rewarded with countless innovations 
thanks to the dedicated and inspired work by NASA, its 
supporting contractors, and the nation's colleges and 
universities. One area for improvement is a better agreement on 
the baseline from which cost growth and schedule delay are 
determined.
    The inconsistent measurement of cost growth across programs 
was noted in the National Academies' review of NASA Earth 
Science and Space Missions in 2010. For example, some people 
characterize the cost growth of the Webb Space Telescope using 
an initial baseline project cost of $1 billion to $3.5 billion. 
While this was the initial range cost estimated in 1996, that 
estimate was not based on a detailed analysis. A detailed 
analysis is needed to establish a baseline from which NASA 
makes a commitment to Congress that it can design, develop, and 
build a project at the cost specified. The initial baseline was 
established in the fiscal year of 2009, and according to that 
baseline, JWST was estimated to have a lifecycle cost of about 
$5 billion. That is a pretty different number than $1 billion.
    So, in closing, Mr. Chairman, this topic is timely. NASA's 
need to effectively manage its programs will gain even more 
importance as the agency seeks to manage its wide-ranging 
portfolio in an increasingly constrained fiscal environment 
while pursuing ambitious goals such as exploring Europa and 
sending humans far away from Earth.
    I look forward to a robust discussion at today's hearing, 
and with that, I'll yield back.
    [The prepared statement of Mr. Bera follows:]
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    Chairman Babin. Thank you very much.
    And now I'd like to--in fact, before I recognize our next 
speaker, I also want to reiterate--thank you for saying this, 
Congressman Bera. I met some of you outside in the hall when I 
walked up, and I wanted to tell you that we're elated that 
we've have got all of these NASA interns in here, and we really 
appreciate the good work you're doing and just want to pat you 
all on the back. You're our future in the space program. Thank 
you for being here.
    Now, I'd like to introduce our--the Chairman of the full 
Committee, the gentleman from Texas, Chairman Lamar Smith.
    Chairman Smith. Thank you, Mr. Chairman.
    This Committee has demonstrated time and again that U.S. 
leadership in space is a bipartisan priority. Our vote on the 
2018 NASA Authorization Act in April was a clear demonstration 
of that.
    Congress and the Administration support a consistent, 
focused space program, and the current NASA budget demonstrates 
that resolve. NASA once again received one of the most 
favorable authorizations and appropriations of any agency.
    Healthy budgets are a good start, but they must be followed 
up with solid management and oversight to make certain 
taxpayers' funds are spent well. However, excessive costs and 
missed deadlines may undermine the very NASA projects Congress 
and the American people support.
    We recently held hearings discussing four of NASA's highest 
profile programs: SLS, Orion, Commercial Crew, and the James 
Webb Space Telescope. The Subcommittee will have a hearing next 
month about the JWST program breach, and Northrop Grumman's CEO 
has agreed to testify.
    The GAO's report identified significant cost and deadline 
problems with all four of these high-interest programs. SLS and 
JWST are identified as having deteriorating cost and schedule 
performance due to risky decisions involving technology. GAO 
found that the commercial crew contractors continue to have 
significant delays in the test flight schedules. And NASA 
expects the Orion program to exceed its cost baseline.
    GAO assessed other NASA major projects this year as well. 
For example, the Wide Field Infrared Survey Telescope remains a 
serious concern for Congress. This Committee has requested but 
not received the WFIRST lifecycle cost estimate that was 
required by the fiscal year 2018 omnibus.
    Congress has a responsibility to authorize and appropriate 
funding necessary to accomplish the tasks it directs NASA to 
carry out. But Congress also has a responsibility to not let 
cost overruns detract from other NASA priorities, such as 
research and small- and medium-class missions.
    It is time for NASA's contractors to deliver. The 2018 NASA 
Authorization Act takes important steps to impose a contractor 
responsibility watchlist. This watchlist would penalize poor 
performing contractors by restricting them from competing for 
further NASA work.
    Beyond contractor watchlists, NASA should continue to 
explore additional options to reduce the costs of these large 
programs, such as leveraging program surpluses, early-stage 
cost caps, firm fixed-price contracts, and public-private 
partnerships that benefit taxpayers. Anything short of that 
will undermine Congressional confidence in the contractors' 
ability to deliver on their promises at a reasonable cost.
    If space exploration is going to continue to earn the 
public's trust, then contractors will have to deliver on time 
and on budget. If they cannot, then they should face sanctions.
    Mr. Chairman, again, I look forward to our witnesses' 
testimony today and yield back the balance of my time.
    [The prepared statement of Chairman Smith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman Babin. Thank you very much.
    Now, I'd like to introduce the gentlewoman from Texas, the 
Ranking Member of the full Committee, Ms. Johnson.
    Ms. Johnson. Thank you very much, Mr. Chairman, and thank 
you for holding this hearing and thanks to our witnesses for 
being here.
    This morning, we hope we're going to get a status update on 
NASA's management and its programs, particularly cost and 
schedule status on its large missions. To that end, I hope the 
hearing will provide answers to some of our key questions. Is 
NASA's ability to manage cost and schedule on its programs 
improving or is it getting worse, as the Government 
Accountability Office seems to indicate in its recent report on 
NASA's major projects?
    If it is getting worse, what should be done, particularly 
by this Committee? Cost and schedule can be expected to be 
difficult on projects that push the state-of-the-art in science 
and engineering. Challenging missions and transformational 
science are what we expect of space programs worthy of this 
great nation.
    That said, Mr. Chairman, we can do better. In particular, 
we need to improve our ability to identify early on when we can 
still make design decisions whether a project runs the risk of 
exceeding budget constraints and, if so, what options we have 
at our disposal to make sure the program meets those budget 
constraints.
    The Wide Field Infrared Survey Telescope is a good example. 
After stakeholders, including the National Academies, expressed 
concerns that the WFIRST could run into potential cost and 
schedule growth, NASA established expert groups to rigorously 
review the cost, engineering, and science objectives for the 
mission. I commend NASA for taking this action. These steps are 
being taken before a final WFIRST mission design is established 
and while there is still time to reconsider the scope and 
approach of the mission to preclude the possibility of 
exceeding costs, schedule expectations as it starts its 
development.
    Mr. Chairman, I look forward to discussing learning 
opportunities such as this one in determining whether future 
NASA missions would benefit from incorporating similar 
processes to minimize the possibility of future schedule delay 
and/or cost increases.
    One thing I learned early on while serving on this 
Committee is that NASA is a unique engine of innovation, a 
force for pushing new advances in space technology and 
operations. That is why I'm anxious to hear from our witnesses 
on whether the costs and schedule models that are based on the 
past, traditional approaches to national project development 
are being updated to reflect the changes in today's 
manufacturing, operations, and technology environment. Is R&D 
on cost and schedule models needed? Are there other tools that 
could help NASA improve the management of cost and schedule in 
its acquisition of space systems?
    We do have a lot to discuss this morning, and I look 
forward to hearing from our witnesses. Thank you, and I yield 
back.
    [The prepared statement of Ms. Johnson follows:]
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    Chairman Babin. Thank you very much.
    Now, I'd like to introduce our witnesses. Our first witness 
today is Ms. Cristina Chaplain, Director of Contracting and 
National Security Acquisitions at the U.S. Government 
Accountability Office. Among other topics, Ms. Chaplain has led 
reviews on the ISS, the SLS, and Orion crew capsule, as well as 
commercial cargo and crew projects at NASA.
    Ms. Chaplain received her bachelor's degree in 
international relations from Boston University and a master's 
degree in journalism from Columbia University. We welcome you.
    Our second witness today is Mr. Stephen Jurczyk, serving as 
the Associate Administrator of NASA, the agency's highest-
ranking career civil service position. Prior to this 
appointment, Mr. Jurczyk served as Associate Administrator of 
the Space Technology Mission Directorate where he formulated 
and executed the agency's space technology programs.
    Mr. Jurczyk is a graduate of the University of Virginia 
where he received a Bachelor of Science and a Master of Science 
in electrical engineering. Thank you for being here.
    Our third witness today is Hon. Paul Martin, Inspector 
General of NASA. Prior to this appointment, Mr. Martin served 
as the Deputy Inspector General of the U.S. Department of 
Justice in the Office of Inspector General. Mr. Martin holds a 
Bachelor of Arts in journalism from Pennsylvania State 
University and a Juris Doctor from Georgetown University Law 
Center. Thank you for being here.
    Our final witness today is Mr. Daniel Dumbacher, the 
Executive Director of the American Institute of Aeronautics and 
Astronautics, or AIAA. Mr. Dumbacher--is it Bacher or Bacher?
    Mr. Dumbacher. Bacher.
    Chairman Babin. Bacher, I thought so. I served three years 
in Germany, so I thought so. Mr. Dumbacher has previously 
served as the Deputy Associate Administrator of the Exploration 
Systems Development Division of NASA's Human Exploration and 
Operations Mission Directorate.
    Mr. Dumbacher earned his bachelor's degree in mechanical 
engineering from Purdue University and a master's degree in 
business administration from the University of Alabama in 
Huntsville. He has also completed the Senior Managers in 
Government program at Harvard University.
    So I'd like to recognize Ms. Chaplain for five minutes to 
present her testimony.

         TESTIMONY OF MS. CRISTINA CHAPLAIN, DIRECTOR,

                      GAO: CONTRACTING AND

                 NATIONAL SECURITY ACQUISITIONS

    Ms. Chaplain. Chairman Babin and Ranking Member Bera, 
Chairman Smith and Ranking Member Johnson, thank you for 
inviting me today to discuss the cost and schedule performance 
of NASA's largest projects.
    Since we began our assessments of major projects ten years 
ago, we have seen NASA make progress in reducing acquisition 
risk, but our most recent review found that performance has 
worsened after several years of following a general positive 
trend.
    [Slide.]
    Ms. Chaplain. Specifically, as shown in this graph, the 
average launch delay, which is the yellow line with dots, 
increased from 7 months in our 2017 report to 12 months in this 
year's report. This was the first year we could not determine 
the extent of cost growth because NASA does not have a current 
estimate for the Orion program. Orion accounts for 22 percent 
of about $30 billion of development costs for major projects.
    Even without including Orion, however, the overall 
development cost growth increased to 18.8 percent, up from 15.6 
percent in 2017. We expect this number to increase further once 
Orion is factored in and probably even more as large projects, 
including James Webb, Space Launch System, and Exploration 
Ground Systems are in their riskiest phases of development.
    In regard to this graph, I'd also like to point out that 
when we started our assessments in 2009, cost and schedule 
growth was more problematic than depicted. Many baselines had 
been set just a couple years prior in response to a statutory 
requirement aimed at enabling more consistent reporting from 
NASA. So, as you can see, it's been a struggle for Congress to 
hold them accountable for years. Also in 2012, you can see the 
impact that James Webb had on the overall cost growth when its 
estimate increased from 4.9 billion to $8.8 billion.
    [Slide.]
    Ms. Chaplain. This next graph depicts some of the reasons 
why projects experience cost and schedule growth. They're not 
so different than what we've seen in the past at NASA and 
across government space programs. Cost and schedule growth is 
sometimes due to issues beyond a project's control--the light 
blue circles--which might include a delivery--a late delivery 
and a delay of the launch vehicle.
    In other times the dark blue circles, it was due to risky 
management decisions. For instance, human spaceflight programs 
have been operating with very low cost and schedule reserves, 
which has limited their ability to address unforeseen technical 
challenges. In other cases, projects encounter technical 
problems that can sometimes be avoided and sometimes not. The 
James Webb program is reporting delays, for example, due to 
workmanship errors that delayed the delivery of the spacecraft 
propulsion system and also because of unanticipated 
complexities involved with unfurling the sunshield, which is 
unique to the telescope. We're looking at whether more could 
have been done to avoid the workmanship issues.
    Since the mid-2000s, NASA has made strides in developing 
tools and approaches to reduce costs and schedule growth.
    [Slide.]
    Ms. Chaplain. As shown in this graph, for example, projects 
are increasingly building more knowledge about critical 
technologies early so that they do not discover problems when 
they're more expensive and time-consuming to fix. Similarly, 
they're building more knowledge about design before proceeding 
into integration. NASA has also improved cost and schedule 
estimating processes and its oversight processes.
    While we recognize NASA's progress, we believe more can be 
done to put programs on a sounder footing. For example, as 
mentioned earlier, the human spaceflight projects should not be 
operating with low cost and schedule reserves. Projects should 
also regularly update cost and schedule estimates, but they are 
more often reluctant to do so. For James Webb, an updated 
estimate may have forecasted the current schedule delays if it 
were done a few years ago.
    We also still find that some projects do not manage 
contractors well and react only after problems become 
overwhelming. This year, we saw that workmanship errors on even 
the smallest of components can sometimes have dramatic impacts.
    Lastly, NASA should take steps needed to ensure cost growth 
from a large project does not overwhelm a portfolio. NASA did 
this recently for its astrophysics portfolio when it undertook 
an independent review of the WFIRST telescope before the more 
costly phases of the acquisition process began. This type of 
assessment should continue.
    In conclusion, we recognize NASA projects are complex, they 
face inherent technical challenges. Some cost and schedule 
growth is inevitable when you push the state of technology, but 
more can be done to limit management risks that often 
exasperates problems.
    Chairman Babin, Ranking Member Bera, this concludes my 
statement, and I'm happy to answer any questions you have.
    [The prepared statement of Ms. Chaplain follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    Chairman Babin. Thank you, ma'am.
    I now recognize Mr. Jurczyk for five minutes to present his 
testimony.

                TESTIMONY OF MR. STEVE JURCZYK,

                 ASSOCIATE ADMINISTRATOR, NASA

    Mr. Jurczyk. Mr. Chairman and Members of the Committee, I 
am pleased to have the opportunity to discuss NASA's program 
management accomplishments and challenges.
    NASA is focused on its mission of science and exploration. 
In support of this mission, the agency has developed a rigorous 
process for program formulation, approval, implementation, and 
evaluation. NASA's challenge is to develop and improve our 
program project management capabilities to ensure both 
efficiency and accountability. We must execute and deliver 
missions on cost and on schedule. We have to execute in an 
environment that includes some significant risk, and we are 
focused on identifying and characterizing risks as quickly as 
possible. We must take corrective actions promptly, whether 
mitigating, accepting, evaluating, or monitoring an identified 
risk.
    NASA implements a rigorous process for project formulation, 
development, and execution. Projects proceed through a series 
of key decision gates. At Key Decision Point C, which we refer 
to as KDP-C, the agency commits to deliver a project within an 
established baseline cost and schedule. This agency baseline 
commitment is the baseline against we which we evaluate 
performance.
    Beginning in 2009, NASA adopted a joint confidence level--
or JCL--approach to producing estimates, and this approach has 
resulted in improved performance. The JCL employs probabilistic 
risk assessment to establish a confidence level for an 
estimate. Typical NASA--typically, NASA establishes baselines 
for major projects around a 70 percent confidence level. Since 
the agency established its JCL policy, programmatic performance 
has significantly improved as NASA has launched more projects 
at or near their original cost and schedule baselines.
    NASA is committed to applying a robust set of available 
authorities to accomplish our mission efficiently and 
effectively. NASA's strategic acquisition process utilizes 
multiple authorities to meet agency objectives, including, 
though not limited to, federal acquisition regulation or FAR-
based contracts, grants, cooperative agreements, international 
agreements, and Space Act Agreements. NASA has expanded its use 
of fixed-price contracts where appropriate with the percentage 
of funds NASA spends on firm fixed-price contracts increasing 
from 26 percent in 2013 to 35 percent in 2016.
    The JCL approach has certainly improved our performance, 
and we look forward to building on this success to address our 
ongoing challenges with major projects. NASA is working to 
strengthen program planning and control through a series of 
initiatives, including the application of industry-standard 
earned value management processes. NASA began the process of 
applying an in-house EVM capability in 2013 and has broadened 
its use in a stepwise fashion over time. NASA is leading an 
effort through the scheduling initiative to strengthen schedule 
management by building a community to identify and reinforce 
schedule management best practices.
    Our decision to conduct independent reviews of both WFIRST 
and JWST missions, along with our continued support for regular 
GAO reviews and audits, illustrate our commitment to 
transparency and our determination to identify risks as early 
as possible and immediately take action to mitigate them.
    Finally, Mr. Chairman, NASA will continue to accept the big 
challenges that the Committee and the nation place before us. 
Our missions will continue to incorporate cutting-edge 
technologies and to pursue the challenging goals that can only 
be accomplished in the hostile environment of space. NASA 
missions do things that have never been done before. The Parker 
Solar Probe will dive into the sun's corona. The James Webb 
Space Telescope will unfold itself almost a million miles from 
Earth and operate at minus 380 degrees Fahrenheit. The Space 
Launch System or SLS will enable humans to travel deeper into 
space than ever before. These missions will employ technologies 
that must be developed and tested on Earth but can only be 
demonstrated in space.
    All this is to say that NASA must accept the risk, but we 
are committed to managing that risk and executing within our 
cost and schedule commitments.
    Thank you for the invitation to testify before you today, 
and I look forward to answering any questions you may have.
    [The prepared statement of Mr. Jurczyk follows:]
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    Chairman Babin. Thank you, Mr. Jurczyk.
    I would like to now recognize Mr. Martin for five minutes 
to present his testimony.

                 TESTIMONY OF MR. PAUL MARTIN,

                    INSPECTOR GENERAL, NASA

    Mr. Martin. Thank you, sir.
    Chairman Babin. Yes, sir.
    Mr. Martin. Members of the Subcommittee, over its 60-year 
history, NASA has been responsible for numerous scientific 
discoveries and technological innovations. However, many of 
NASA's largest projects cost significantly more to complete and 
take much longer to launch than originally planned.
    Our office has examined NASA's successes and failures in 
project management by examining the long-standing challenges 
the agency has faced in meeting cost, schedule, and performance 
objectives, as well as the tools it has developed to address 
these shortcomings. We identified four factors that present the 
greatest challenges to successful project outcomes: one, NASA's 
culture of optimism; two, underestimating technical complexity; 
three, funding instability; and four, development of new 
project managers. My remarks this morning address the first two 
of these challenges, optimism.
    Optimism exemplified by the agency's greatest achievement, 
landing humans on the Moon and safely returning them to Earth, 
NASA's ability to overcome obstacles has become part of its 
can-do culture. However, our work has shown that this attitude 
contributes to development of unrealistic plans and performance 
baselines, particularly with respect to its largest projects.
    And technological success, often at a significantly greater 
cost than originally estimated, tends to reaffirm a mindset 
that project cost and adherence to schedule are secondary 
concerns. In fact, several people offered a name for this 
phenomenon, calling it the ``Hubble psychology'' or an 
expectation that projects that fail to meet initial cost and 
schedule goals will receive additional funding and that 
subsequent scientific success will overshadow budget and 
schedule problems.
    The Hubble Space Telescope was two years late and about $1 
billion more than initial estimates, but most people don't 
remember that. Instead, they rightfully remember its stupendous 
images of the universe. While a few projects in NASA's recent 
past have been canceled because of poor cost and schedule 
performance, a too-big-to-fail mentality pervades agency 
thinking when it comes to NASA's larger and most important 
missions. While understandable given the investment of agency 
resources, cost overruns in these projects can result in delays 
to other missions as funding is reprioritized.
    Technical complexity: The technical complexity inherent in 
NASA projects remains a major challenge to achieving cost and 
schedule goals, with project managers attempting to predict the 
amount of time and the amount of money needed to develop one-
of-a-kind and first-of-their-kind technologies. We found that 
NASA historically has underestimated the level of effort needed 
to develop, mature, and integrate such technologies.
    To help project managers avoid cost and schedule overruns, 
NASA has implemented a number of initiatives. I highlight two 
this morning. JCL: Required since 2009 for all NASA projects 
with lifecycle costs exceeding $250 million, a JCL analysis 
calculates the likelihood a project will achieve its objectives 
within budget and on time. The process uses software models 
that combine cost, schedule, risk, and uncertainty to evaluate 
how expected threats and unexpected events may affect a 
project's cost and schedule. Our examination of NASA's use of 
JCL found mixed success with the tool unevenly applied across 
agency projects.
    Contracting: NASA makes use of multiple procurement 
vehicles for its projects, including fixed-price and cost-
reimbursement contracts, as well as funded Space Act Agreements 
used to spur development of commercial cargo and crew 
capabilities. As NASA looks increasingly to the private sector 
to leverage its resources, it must ensure that the contracting 
mechanisms it chooses are best suited to maximize the agency's 
significant investments.
    In sum, to meet cost and schedule goals, agency leaders 
must temper NASA's historic culture of optimism by demanding 
more realistic cost and schedule estimates, well-defined and 
stable requirements, and mature technologies early in project 
development. In addition, Congress and NASA managers must 
ensure that funding is adequate and properly phased.
    Finally, the agency must be willing to take remedial action 
up to and including termination when these critical project 
elements are not present. In our judgment, meeting these 
project-related challenges can only be accomplished through 
leadership that articulates a clear, unified, and sustaining 
vision for NASA and provides the necessary resources to execute 
that vision. Thank you, sir.
    [The prepared statement of Mr. Martin follows:]
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    Chairman Babin. Thank you very much, Mr. Martin.
    Now, I'd like to recognize Mr. Dumbacher for five minutes 
to present his testimony.

             TESTIMONY OF MR. DANIEL L. DUMBACHER,

                      EXECUTIVE DIRECTOR,

               AMERICAN INSTITUTE OF AERONAUTICS

                    AND ASTRONAUTICS (AIAA)

    Mr. Dumbacher. Chairman Babin, Ranking Member Bera, and 
distinguished Members of the Committee and Subcommittee----
    Chairman Babin. You may want to push your button there. I'm 
sorry. Yes.
    Mr. Dumbacher. Chairman Babin, Ranking Member Bera, and 
distinguished Members of the Subcommittee, thank you for this 
opportunity to address you today. Your support for the nation's 
space program is to be commended.
    I sit before you as a former NASA Program Manager, former 
educator, and as the current Executive Director of the world's 
largest aerospace professional society.
    Let me first say that the work NASA employees and its 
industry partners do is purposely challenging. The NASA 
industry teams should be commended for their accomplishments 
under such tight constraints. Programs are complex, and a great 
deal of planning and commitment is necessary to execute a 
successful mission.
    Every program has its unique challenges. The NASA industry 
team works hard to address these issues, develop solutions, and 
incrementally make progress towards the respective missions. No 
matter how much planning takes place or how well-thought-out 
the plan, it's difficult to estimate the cost and schedules of 
these complex one-of-a-kind projects.
    All federal government departments and agencies are 
operating in a time of heightened fiscal responsibility and 
accountability. Accordingly, NASA has updated policies and 
guidance to focus on formulation and implementation with robust 
cost-estimating; well-defined baselines, designs, and risk 
postures at key decision points; and formal requirements and 
guidance.
    Especially during the implementation phases of its 
projects, NASA has processes to ensure that rigorous cost 
assessment is performed. Program progress is tracked through 
the periodic performance review process. Since NASA instituted 
its joint confidence level policy nearly a decade ago, NASA's 
cost and schedule performance has improved.
    From my perspective, the issues experienced in the NASA 
projects can be assessed in two categories: one, the need for 
stable, predictable, and consistent funding; and workforce 
development. Simply stated, project management has three basic 
knobs: content, schedule, and cost. A change in any one of 
these three variables directly affects the other two.
    Cost and schedule issues do arise when there are 
unanticipated changes to a program or when development 
challenges arise, particularly during first-time production and 
when technical capability is being pushed. Disruptions to the 
budget process and funding stream, along with major policy and 
priority shifts, affect schedules and contracts and ultimately 
lead to additional cost. It is also quite difficult for NASA to 
plan and implement programs without sufficient resources or 
reserves.
    A key issue is projects developed under a flatline budget. 
A flatline budget requires project managers to realign the work 
as they go to stay under the budget cap, resulting in hard 
priority decisions and inefficiencies that explicitly break the 
program linkages across schedule and budget. These 
circumstances can and do add to program cost to move schedules 
to the right. We learned this lesson with the International 
Space Station and yet now we're repeating it with SLS and 
Orion.
    The current budgeting process, including the regular use of 
continuing resolutions, late-year appropriations, and threats 
of government shutdowns result in endless multiple planning 
scenarios. As stated in October 2015 testimony before this 
Subcommittee, the need to constantly have backup plans for 
various potential appropriations outcomes, different budget 
planning levels, along with flexible workforce blueprints 
invites confusion and miscommunication.
    A related issue is the inability of NASA to include 
appropriate budget and schedule margin in its program planning 
due to externally imposed constraints. Planned margin is 
difficult to include because it becomes the first target for 
budget reduction in the budget and appropriations process.
    A separate but related issue that must be addressed is the 
workforce challenge impacting the aerospace community as a 
whole. There remains a nationwide shortage of workers for jobs 
requiring science, technology, engineering, arts, and 
mathematics. According to Aviation Week's 2017 workforce study, 
nearly 30 percent of the nation's aerospace and defense 
workforce are over the age of 55, and 22 percent are younger 
than 35.
    More concerning is the lack of development program 
experience. The vast majority of the NASA human spaceflight 
workforce has been hired and trained after space shuttle 
development. Space station development has provided on-orbit 
expertise. However, launch system development experience is 
minimal. NASA expertise that developed the space shuttle has 
mostly retired or passed away.
    For the United States to continue its long-held space 
exploration leadership, significant investments must be made in 
addressing the workforce development via hands-on real-world 
hardware programs and research. Key technical challenges for 
the future of space exploration such as new propulsion, on-
orbit assembly, and human survival in microgravity should be 
addressed. Such investments would meet key research and 
engineering needs, while providing valuable experience. A well-
developed leadership bench is also necessary for a program's 
mission success. This ensures the appropriate expertise to 
assess and balance risk and priorities.
    In conclusion, I thank this Committee for the opportunity 
to talk today and look forward to your questions.
    [The prepared statement of Mr. Dumbacher follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Babin. Thank you, Mr. Dumbacher. We appreciate it.
    Now, I would like to recognize myself for five minutes for 
questioning. And I have a bunch of questions, and I'm sure 
everybody else does, too, so if you could just get right to the 
point, answer these things, we want to cover as much of this 
part of ground as we possibly can.
    NASA has a storied history with overrunning costs and 
schedules for space systems development. Some of these programs 
have even suffered cancelation as a result, and this has simply 
got to stop. We need performance, not excuses from the agency, 
as well as providers. And with that in mind, of NASA's options, 
what acquisition mechanisms such as cost-plus, fixed-price, or 
Space Act Agreements are most useful in promoting performance 
and holding the provider as well as the agency management 
accountable for meeting the acquisition requirements? And I'd 
ask you first, Mr. Dumbacher.
    Mr. Dumbacher. Congressman, I think the appropriate 
acquisition tool depends on the objectives of the program and 
the scientific engineering issues and risks associated with 
that.
    Typically, we have a lot of experience with cost-plus 
contracts in this country. NASA uses that a lot for its major 
programs. There is the discussion of public-private 
partnerships, which can also be valuable and have been tried in 
the past, some successful, some not. When we consider all of 
this, we need to consider the objectives that are for the 
program, what are the incentives and the motives that are 
necessary for success both in terms of how it would apply in a 
public-private partnership, as well as a cost-plus arena? And 
we need to sort through those and make valid, conscious, 
objective decisions.
    Chairman Babin. Thank you. And now that same question, Ms. 
Chaplain, if you would answer that. I don't need to repeat it, 
right?
    Ms. Chaplain. Right.
    Chairman Babin. Okay.
    Chairman Babin. So with fixed-price contracts, the 
contractor bears the most risk for meeting cost and schedule 
goals, so that's your main aim. That's a contract, but it's not 
really appropriate when you're facing a lot of unknowns at the 
beginning. If you're really stretching technology, don't know 
how long it's going to take, how much it's going to cost, in 
that case the government does need to bear the risk of the 
contract, and that's where cost-plus comes in.
    Chairman Babin. Okay. Thank you. And then we're talking 
about cost-plus, so I'm just going to--the second part of my 
question to you two, do cost-plus contracts provide any 
incentive for the provider to complete the project on time and 
on schedule?
    Ms. Chaplain. There are typically incentives built into the 
contract, and they come through the award fees. So some may be 
tied to performance and quality and things like that, but 
others could definitely be tied to cost and schedule.
    Chairman Babin. Okay. All right. Thank you. And, Mr. 
Dumbacher?
    Mr. Dumbacher. Just to add a little bit to that, when we 
have done award fee, cost-plus award fee, and incentive fee in 
the past, we do and can make schedule performance and cost 
performance part of the evaluation criteria, and that is 
typically included.
    Chairman Babin. Okay. Thank you. And then to Mr. Martin and 
Ms. Chaplain as well, acquisition encompasses a great deal, 
including strategic planning, procurement processes, and the 
development of clear requirements. For many years, the DOD has 
employed a robust training and certification program for 
defense acquisition professionals. What institutional 
improvements such as training, certification, and career 
progression are necessary or perhaps missing from NASA's 
acquisition processes?
    Ms. Chaplain. I know NASA has invested pretty heavily in 
training cost estimators and project management. They have 
conferences every year, for example. But I still think maybe 
more could be done in that area in certain techniques and 
especially more program management issues related to managing 
contracts.
    Chairman Babin. Okay. And then Mr. Martin?
    Mr. Martin. Attracting and retaining the project managers 
is a real challenge for the agency. As Mr. Dumbacher suggested, 
within NASA, 50 percent of the workforce is over 50 years old, 
and with a diminishing number of small projects for these 
project managers to really get the experience and cut their 
teeth on, it's a real concern.
    Chairman Babin. Okay. And then do you think NASA can gain 
from DOD's experiences?
    Mr. Martin. I'm not as familiar with DOD's experiences.
    Chairman Babin. Okay. Ms. Chaplain?
    Ms. Chaplain. I think that Defense Acquisition University 
is a very good model for training programs and all kinds of 
issues. It's something NASA could look toward.
    Chairman Babin. Okay. Thank you.
    Mr. Jurczyk, NASA recently took steps to control the costs 
of the Europa Clipper and WFIRST missions while in formulation. 
Have these steps proven helpful, and can similar measures be 
implemented on other major projects to control the cost?
    Mr. Jurczyk. Yes. On WFIRST we did an independent--had an 
independent review board come in and look at the project early 
in phase A, in formulation, and they confirmed that the project 
scope had grown and they were not going to be able to execute 
the mission within the $3.2 billion budget that we had for 
their--for them for the management agreement. They made some 
recommendations. The project took those recommendations and 
adjusted the scope and re-planned the cost and schedule 
estimates and they came in and presented their baseline to the 
agency program management council, which I chair. And we have 
confidence, based on their estimate given the re-plan, that 
they have a solid estimate going into phase B. I think that--
and similarly for Europa Clipper. So I think that is a way to 
try to minimize cost and schedule risk early in the program.
    Chairman Babin. Okay. I'm out of time. I had several more 
questions, but thank you very much.
    I'd like to recognize the gentleman from California, the 
Ranking Member, Mr. Bera.
    Mr. Bera. Thank you, Mr. Chairman. Each of you in your 
opening statements obviously touch on the complexity of 
budgeting and scheduling when you're trying to do something 
that you may never have done before. And I have to imagine when 
we started on the Apollo missions, lots of cost overruns, lots 
of scheduling delays, but as you got further down the road, 
understood what we had to do, that started to reduce and there 
was more predictability.
    As we think about future missions, let's put it in the 
context of something we talk a lot about, Mars by 2033. We 
don't know how we're going to do that. We don't know the 
technology and the science and everything else. As we go into 
deeper space, we are encountering more complicated projects. As 
we look at the balance of the commercial sector, the 
entrepreneurial sector, more reliance on external entities. 
When we did Apollo, NASA was the launch vehicle, the landing 
vehicle, the science mission, maybe a little bit more control 
as you think about working with outside contractors and new 
startup companies that may be--a little bit more 
unpredictability, I think that adds another variable. As the 
international community becomes much more engaged, as you see 
countries like India, Japan, the European Space Agency start to 
do some of the science, another complicated variable.
    So, as opposed to budgeting and scheduling getting easier, 
my sense is budgeting and scheduling is going to get more 
difficult. Is that a reasonable--reasonably accurate thought? I 
guess, Ms. Chaplain.
    Ms. Chaplain. Well, I would like to note in the Apollo era, 
a lot of things had never been done before, so they were very 
difficult to estimate. I think now we have the benefit of time 
and history that there are a lot of things we can estimate even 
if we haven't done that particular mission.
    And I also know that in the past decade the three space 
agencies, DOD, NRO, and NASA have been working very closely 
together to kind of gain that historical perspective in costs 
and build databases so there is more knowledge there that gives 
you an advantage. But yes, those other complexities do make it 
hard.
    Mr. Bera. Right. And as we think about that, learning from 
what we've done in the past, trying to create more predictable 
models of budgeting and scheduling, I think to Chairman Babin's 
question, you know, I'll put it in the context of my profession 
as a doctor. We'll often--and--as we're caring for populations 
of patients, we'll have a shared risk pool that says, okay for 
a certain fee, we're going to take care of this population of 
patients. If we do really well, we improve health, et cetera, 
there's a reward on that end. If, on the other hand, we do a 
bad job taking care of these patients, we share some of that 
risk.
    And I don't know if in contracting--I think you touched on 
the shared risk award fees, et cetera. Have you noticed in that 
type of contracting that you actually get better predictability 
when not doing something that we know how to do and is pretty 
predictable but something where there is some risk involved? 
And Ms. Chaplain, if you want to answer that or, Mr. Martin, if 
you want to take that.
    Mr. Martin. Let me just toss in that over the last ten 
years, NASA has moved to a new procurement mechanism, the 
funded Space Act Agreements, particularly to spur development 
of transportation capabilities for cargo and crew services to 
the International Space Station. Now, NASA contributes 
significant--billions of dollars--to the funded Space Act 
Agreements, but the commercial companies also have a 
significant financial stake in the game. So having them have 
their skin in the game as well to develop these private 
capabilities of which NASA will be procuring as a service, I 
think is interesting and has been relatively successful.
    Has it increased cost schedule and timing? Not 
particularly.
    Mr. Bera. Mr. Jurczyk?
    Mr. Jurczyk. Yes, as I said before, we choose kind of--
either a FAR-based, you know, contract, either cost 
reimbursement or fixed price or a public-private partnership 
where it makes sense. Particularly public-private partnerships 
where there's shared strategic common interests between 
ourselves and an industry partner or partners, that makes a lot 
of sense, and therefore, there--we also share the risk there in 
that partnership.
    We did do a reimbursable Space Act Agreement, a funded 
Space Act Agreement for cargo. We've kind of moved away from 
that approach because of our ability to have insight and 
manage. And our latest public-private partnerships have 
actually been through fixed-price contracts with cost-sharing 
where we use the FAR rules to manage the relationship and allow 
the contractor to contribute resources and share the risk.
    Mr. Bera. All right I'm out of time, so----
    Chairman Babin. Thank you very much.
    And now, I'd like to recognize the Chairman of the full 
committee, Mr. Smith from Texas.
    Chairman Smith. Thank you, Mr. Chairman.
    Ms. Chaplain and Mr. Martin, a lot of NASA contractors seem 
to not be able to stay on schedule, they fall behind, and they 
end up with cost overruns and fail to perform as we expect them 
to do. In the 2018 NASA Authorization Act, we have a watchlist 
for contractors who don't perform well.
    And let me--before I get to my specific question, let me 
just say that I think the American people are rightfully 
sometimes frustrated by the Federal Government when things go 
wrong, when projects end up not being performed as they should, 
when there are cost overruns, when the deadlines are missed. 
And somehow no one is held accountable; no one is responsible. 
It just happened. And I think that is frustrating to the 
American people when they see projects that cost millions if 
not billions of dollars more than expected.
    So I'd like to ask you all who you think would be good 
candidates for that watchlist. The watchlist is just that, 
these are contractors who need to be watched more closely, who 
need to be reminded of their contractual obligations and 
perhaps sanctioned if they don't improve their performance. 
But, given your investigations, who are some of the contractors 
that we might consider putting on such a watchlist? And, Ms. 
Chaplain, start with you if we could.
    Ms. Chaplain. It's a difficult question because in some 
cases there's a shared responsibility between NASA and the 
contractor, so it's hard to parse out who's really responsible 
for that overrun. Even when it comes to like a workmanship 
issue, there could be some shared responsibility there.
    If you look at the provision you were talking about, there 
are a couple projects in our list where performance has been 
bad consistently over time, and NASA has actually canceled or 
proposed canceling a project or is looking at whether to do 
that because--
    Chairman Smith. Okay.
    Ms. Chaplain. --contractor performance. In those cases--
    Chairman Smith. And who were those contractors?
    Ms. Chaplain. One is--for the SGSS project, that would be 
General Dynamics, so that project is being looked at. 
Performance has been a long-standing issue on that.
    Chairman Smith. Okay.
    Ms. Chaplain. The other one was the RBI Instrument, which 
is a weather satellite sensor. That one was proposed for 
termination. That was Harris Corporation and formerly Exelis. 
That--those are the more extreme cases--
    Chairman Smith. Okay.
    Ms. Chaplain. --that could possibly--but it's ultimately 
like NASA's decision, and they have to--
    Chairman Smith. I understand.
    Ms. Chaplain. --really investigate the situation.
    Chairman Smith. Okay. Thank you. Mr. Martin, in your 
testimony, you made a couple of really good suggestions I 
thought to try to avoid the to-big-to-fail syndrome. What are 
some other ways we can hold contractors accountable? We have 
the watchlist. What are some other things that we can do to 
keep projects on time and on budget?
    Mr. Martin. I think one of them is what you are doing here 
today is an oversight hearing and the proposed hearing several 
weeks from now to focus on the issues specific to JWST.
    Chairman Smith. Right.
    Mr. Martin. I think aggressive oversight by GAO and the 
IG's Office is important, and I think just a general sense that 
folks need to be held accountable for--you know, there's human 
failure, we all fail, but there are avoidable human mistakes on 
some of these projects. For instance, the improper use of a 
solvent on the JWST by Northrop Grumman, inadequate welding on 
the SLS core stage by Boeing, as the prime contractor. So we 
have individual avoidable mistakes.
    We have issues with our international partnerships, which 
are key to the future of NASA. But when the European Service 
Module is 14 months behind schedule, that impacts Orion.
    Chairman Smith. Right. Final question for you and also I 
think for Ms. Chaplain, and it is this, that it is very 
unlikely that NASA's budget is going to see a significant 
increase, say 25 percent, anytime soon. It's just not the 
nature of our spending, and various constraints are going to 
prohibit I think any agency from getting a significant 
increase. We're fortunate, I believe, to have--NASA had sort of 
a flatline budget. So many agencies--other agencies have been 
cut. Yet there are a lot of people and pundits who expect us to 
keep the International Space Station as-is, go back to the 
moon, and then on to Mars, and seem to be able to think we're 
going to do everything all the time.
    I think that in my opinion is not being willing to make 
some difficult decisions. Realistically, I don't think it's 
possible. I think it's very naive to think we can do everything 
all the time. Do you agree with that assessment or is--am I 
missing--is there some magic solution that will enable us to do 
everything all the time? Or are we going to have to take a hard 
look at some of these big missions like--either ones that we 
already have like the space station or others to come like the 
Moon and Mars?
    Mr. Martin. No, you're not missing anything. I think it's 
all about choices. There's a finite amount of resources, and 
you're right, NASA has been very fortunate in the budgets it's 
received over the years. But that's why cost and schedule 
estimation is so important, to come up with realistic cost and 
schedule so you can put it before the decision-makers at NASA 
and in Congress.
    Had NASA been able to say that the James Webb Space 
Telescope was going to cost $8 billion ten years ago when it 
was proposed, then it's a decision. You do James Webb--and I'm 
not suggesting it should or shouldn't have been done. It's 
going to do amazing things when it's up there--but you make a 
decision based on that. But if you say yes to James Webb, 
you're saying no to a lot of other things.
    Chairman Smith. Right. And that's what we have to 
appreciate and recognize and understand.
    My time is up but, Ms. Chaplain, can you give us a really 
brief response to that as well?
    Ms. Chaplain. I think NASA is at risk of having too many 
programs to pay for at one time. Even if you look at what we've 
been looking at over the years, we started out with 15 to 16 
projects. That helped them reduce cost overall.
    Chairman Smith. Okay.
    Ms. Chaplain. Now, we're looking at 26.
    Chairman Smith. Okay. Thank you. Thank you, Mr. Chairman.
    Chairman Babin. Great questions. Thank you.
    I now recognize the gentlelady from Texas, Ms. Johnson.
    Ms. Johnson. Thank you very much.
    Ms. Chaplain, in your 2017 assessment of NASA's major 
projects, you indicated that in October 2015, NASA decided to 
decentralize its independent assessment function and deploy the 
staff to the agency centers in part to better use its workforce 
to meet program needs in areas such as program management and 
cost estimating.
    GAO had previously reported on the potential risk that this 
change could pose for project oversight but stated that it was 
too early in the transition to assess its effect on areas such 
as independence, the robustness of the reviews, and 
information-sharing. So now one year later, are you able to 
tell us whether that decentralization was successful?
    Ms. Chaplain. We haven't seen a real visible impact either 
way yet. We're still very concerned about that move. I think 
it's beneficial to the agency to have centralized expertise in 
those areas. They really can leverage each other a lot.
    Ms. Johnson. Mr. Jurczyk, do you have any comment?
    Mr. Jurczyk. Yes, I think we've moved to a model where 
we're putting the responsibility and accountability of the 
mission directorate to manage the programs to do that 
independent assessment, and so far, they've stepped up to the 
job, and I think they're doing an effective job in implementing 
our spaceflight project management processes, including 
reviews.
    We do still have a cadre of experts in the Office of the 
Chief Financial Officer that have schedule and cost assessment 
expertise that the review boards can draw on. And we've also 
given stewardship of project planning and control to the Office 
of the Chief Financial Officer, and that's been very 
beneficial, and not only this cadre of people for schedule and 
cost estimating but improving our skills and processes and 
capabilities in cost and schedule estimating and management.
    Ms. Johnson. Okay. Let me ask you this. What are the most 
important things that NASA can do to minimize cost and schedule 
growth? And when NASA is faced with an unexpected cost growth 
and schedule delay, what are the tradeoffs that NASA can make? 
And give me some examples of successful tradeoffs.
    Mr. Jurczyk. Yes, so, you know, I think we continue to 
mature and effectively apply the joint confidence level process 
is going to be really important. And I've seen--since 2009, 
I've seen the value of that in budgeting projects at the agency 
based on coming in at the 70 percent confidence level, and I 
think we can do even better there in maturing that process. And 
I've seen success, and I think we need to continue to have 
success there.
    I think we can--we need to continue to focus on development 
of the project management workforce and the program planning 
and control workforce has been noted, including, you know, 
hiring and developing the talent through hands-on project 
management and project experience and training.
    About 15 years ago, we identified a shortage of skills in 
project planning and control, and we've really taken on an 
effort to hire and train people in that area, cost estimating 
and schedule estimating and management, and I think that's paid 
off. We need to continue to do that.
    We talked about independent assessments, and we can 
continue to strengthen independent assessments.
    And then we have capturing and communicating lessons 
learned and looking for systemic issues and challenges across 
programs and putting corrective action plans in place to deal 
with those like the shortage of program planning and control 
staff. We need to continue to do that. And I think all those 
things can lead to improved program project--continued improved 
program project performance.
    Ms. Johnson. Thank you very much. My time is about out, but 
would any other witness like to comment on any of the 
questions?
    Ms. Chaplain. I would just add a couple more things to his 
list. One would be to update cost estimates and schedule 
estimates as risks change over time. We see programs reluctant 
to do that. And then focusing more on quality management 
because these workmanship issues come up all the time. There 
has been efforts to focus on that, but I think more can be 
done.
    Mr. Dumbacher. Congressman, I would like to add also 
there's also--there is a need to recognize that you need 
appropriate skills for the portion of the program lifecycle you 
are in. So development skills are needed upfront in a 
development program, operational skills at the end, and we need 
to make sure that we're working for the right skills at the 
right time.
    Ms. Johnson. Thank you very much. Thank you, Mr. Chairman.
    Chairman Babin. Yes, ma'am. Thank you.
    I'd like to recognize the gentleman from Oklahoma now, Mr. 
Lucas.
    Mr. Lucas. Thank you, Mr. Chairman.
    And thinking about the questions that my colleagues have 
had, Mr. Jurczyk, let's discuss for a moment in January of 2018 
GAO found that the commercial crew program contractors Boeing 
and SpaceX experienced additional schedule delays for their 
demonstration missions and their certification of the vehicles 
for human spaceflight, and these delays could jeopardize the 
ability of NASA to maintain access to the International Space 
Station. Will there be a gap in U.S. access to the 
International Space Station?
    Mr. Jurczyk. No, there will not be a gap in access. We've 
taken actions and we have other actions we can take to minimize 
the risk of a gap, so the first action we have taken is to buy 
three more seats on Soyuz, and that extends the ability to 
access station by that capability and minimizes the risk of any 
gap between our Soyuz contracted seats ending and commercial 
crew coming online.
    There's a couple other things that we're looking at. One is 
adding a third crewmember to the first Boeing crewed flight. 
That will be important. The other is extending missions from 
approximately 140 days to 190 days and being able to space the 
launches--the Soyuz launches out, and these are other actions 
we can take to further mitigate any risk of a gap.
    Mr. Lucas. But you're confident that the direction the 
contractors are going, that we won't have to use those 
measures?
    Mr. Jurczyk. We--this summer, we're engaging in an 
assessment of the schedules for both SpaceX and Boeing, and 
we'll have a better handle on whether we need to take those 
initial measures at the end of the summer. We'd be glad to 
report back to you on that.
    Mr. Lucas. Fair enough. Mr. Chairman, that answers my 
question. I yield back.
    Chairman Babin. Yes, sir. Thank you.
    And now, I'd like to recognize the gentleman from Virginia, 
Mr. Beyer.
    Mr. Beyer. Mr. Chairman, thank you very much, and thank you 
all for being here.
    Ms. Chaplain, you mentioned that it would be helpful to 
have much more frequent updates of cost and timelines, that 
these come very sporadically. I know in the family business we 
update the projections at least once a month. Here in the 
Federal Government we're getting all kinds of monthly reports 
on new-home sales and unemployment claims and new jobs created. 
Why are NASA and the contractors reluctant to update on a 
regular basis when it would be probably a lot easier to 
tolerate?
    Ms. Chaplain. Yes, it would be easier if they continually 
did it because then it wouldn't be such a chore to do it after 
a couple years. But right now, they set the baselines when they 
really start their program, and they don't revisit. And in some 
cases I think they don't want to revisit. They don't want to 
really show to the world like what the cost truly is at that 
point. But you'd really have to ask the programs. I think it's 
a healthy thing to do when you see conditions change.
    In the James Webb program there were a lot of things that 
had changed in a few years. The cryocooler, for example, took 
way longer to manufacture than anticipated. That would have 
been a good time to reassess where the project stood, but they 
didn't do it.
    Mr. Beyer. This may be one of the things as we move forward 
is looking at requiring much more frequent updates on both cost 
and timeline.
    Mr. Dumbacher, this may be more of a rhetorical editorial 
comment, but you write, ``The current budgeting process, 
including the regular use of continuing resolutions, late-year 
appropriations, threats of government shutdowns, result in 
endless, multiple planning scenarios.'' Resolving complex 
technical issues, hold schedules, and predicting accurate 
flight dates is difficult when the budget is constantly in 
flux. Is it then credible to say that Congress plays a role in 
the problems that NASA has with budget and timeline?
    Mr. Dumbacher. Yes, sir, I would say that.
    Mr. Beyer. You don't need to say anymore. But thank you for 
making that so clear.
    Mr. Jurczyk, why not under-promise and overperform? I know 
that's what my children do with me.
    Mr. Jurczyk. Yes. So, you know, our job on--in any given 
program area is to optimize the portfolio and deliver the most 
science or exploration missions that we can for the budget 
given. So we have, you know, taken an approach of having a 
portfolio of small, medium, and large missions and an approach 
where we budget these missions at the 70 percent confidence 
level. We think that balances the risk of projects in 
formulation and implementation against the opportunity cost of 
budgeting more than at the 70 percent confidence level and 
delaying starting new missions. So it's a matter of optimizing 
the portfolios and delivering the most science and exploration 
content we can for the budget that we have been given.
    Mr. Beyer. I would suggest to you that part of optimizing 
that is managing the expectations of the people whose 
expectations you have to----
    Mr. Jurczyk. Yes, we can definitely do a better job at 
managing expectations.
    Mr. Beyer. Mr. Martin?
    Mr. Martin. I think one of the other realistic things is if 
you under-promise, you're in greater danger of not getting your 
project started in the first place, of attracting enough 
excitement and attention to get the project funded. So I think 
what NASA's problem is often is they overpromise, obviously 
overpromise the maturity of the technology.
    I was struck in the--like a lawyer going over the footnote 
on page 3 of our written statement, there's a quote from former 
Administrator Griffin. I think he was current Administrator at 
that time talking about projects, proponents of individual 
missions, downplay the technical difficulty and risk, grossly 
at times, in order to gain new start funds. I think that has 
been a historic problem for NASA.
    Mr. Beyer. You raised two interesting pieces in your 
testimony, Mr. Martin. One was that there's this culture of 
optimism that was too optimistic, and, number two, that we 
needed far more accountability. But at the same time, the 
dilemma with the accountability is we also have a shortage of 
the talent that we need, you know, more than half are over 50 
years old, the challenge with getting the STEM kids. How do you 
ratchet up accountability and not depress, you know, the 
enthusiasm, the sense of worth? And also how do you dampen out 
the optimism in an agency that has to be so optimistic?
    Mr. Martin. It's an incredibly difficult--you're dancing on 
the edge of a knife when you do that because, as you point out, 
you have to have that optimism, that freethinking to really 
think of things that have never been built before, to 
conceptualize them and then actually put--to start bending 
metal on them. So it's an incredibly difficult balance.
    If it was easy, NASA would be doing it. I mean, it is 
rocket science after all, and so it is very difficult. And I 
just think--and, like I said, NASA has brought in a lot of its 
cost-estimating techniques and its JCLs and other processes--
they just need to force adherence to it, to those requirements.
    Mr. Beyer. Great. Thank you. Mr. Chair, I'll yield back.
    Chairman Babin. Yes, sir. Thank you.
    Now, I'd like to recognize the gentleman from Alabama, Mr. 
Brooks.
    Mr. Brooks. Thank you, Mr. Chairman.
    I am concerned by the perceived transition process away 
from the current operational format of the International Space 
Station. There have not been, in my judgment, enough 
substantive public debate on what this transition involves.
    And with that as a backdrop, I have a question directed at 
Ms. Chaplain, Director, Contracting and National Security 
Acquisitions, GAO; and NASA Associate Administrator Stephen 
Jurczyk. First, has NASA come up with a definition of what 
commercialization of the International Space Station means?
    Ms. Chaplain. We have not been doing work in that area, and 
I don't believe they have yet, but I'll let Steve----
    Mr. Jurczyk. Yes, so let me tell you where we are with I 
would say the more detailed planning of the station transition. 
So we released a solicitation not too long ago for studies, 
industry studies on transitioning space station to some sort of 
collaborative or commercial enterprise. We're getting the 
proposals back in this week, and we'll evaluate those.
    And what we asked for in those studies is the capabilities 
that commercial thinks they can provide us as compared to what 
we need and what we have and we need in the future. The second 
is their technical approach to achieving those capabilities. 
And then third is their business plan. You know, what is their 
business plan? Because, although we don't have a rigorous 
definition, NASA should be a maybe 20, 30 percent user of the 
capability and other government entities and commercial 
entities should also use that capability. We should not be the 
80 or 90 percent, you know, kind of anchor tenant of a 
capability. To me--personally to me, it's not--I would not 
define it as commercial.
    So we're going to get those studies back in December, and 
that will inform a more detailed transition plan. And I think 
we'd be ready to come to you all and present that plan and get 
your feedback and input on it.
    Mr. Brooks. When do you anticipate having that more 
detailed plan that you can present to us that we have a better 
understanding of what this commercialization means?
    Mr. Jurczyk. Yes, we'll get the results from the studies in 
December of this year, so we'll probably need some number of 
months, so probably, you know, first half of next calendar year 
we'll definitely be able to come back to you and lay that out 
informed by that--those industry studies and industry input of 
what looks feasible in the mid-'20s time frame.
    Mr. Brooks. So you would be in a position to answer the 
question in the first 6 months of 2019? Is that correct?
    Mr. Jurczyk. Yes. And I can take a question to get back to 
you on a more exact date if you'd like.
    Mr. Brooks. All right. Thank you.
    Mr. Martin, your audit of commercial resupply services to 
the International Space Station report dated April 26, 2018, 
notes that, quote, ``SpaceX's average pricing per kilogram will 
increase approximately 50 percent under CRS-2 while Orbital 
ATK's average per-kilogram pricing will decrease by roughly 15 
percent.'' The major difference between those contracts is 
SpaceX's introduction of reusability. SpaceX has noted multiple 
times that customer should not expect substantial discounts on 
reused hardware.
    My question is this: Are you concerned about whether 
taxpayers will save money with reusable rockets? And second 
follow-up question is, is it possible reuse may end up costing 
NASA and the United States taxpayer more overall?
    Mr. Martin. Steve could probably answer this more 
specifically, but I believe there is a slight reduction in the 
area of 3 to 7 percent for use of a reused SpaceX rocket. I 
think it's happened once if not twice so far for commercial 
cargo, so there is a slight reduction.
    And am I concerned? I mean, it's a safety issue, and so the 
launch services people need to assess the specific rocket, and 
they have access to the rocket, before they authorize them for 
launch.
    Mr. Brooks. Well, Mr. Jurczyk, since Mr. Martin pointed the 
finger at you----
    Mr. Jurczyk. Yes.
    Mr. Brooks. --with your insight, can you----
    Mr. Jurczyk. Yes, I think----
    Mr. Brooks. --share what insights you may have on that 
question?
    Mr. Jurczyk. Yes, I think Mr. Martin is right with respect 
to the marginal cost reduction, with the introduction of the 
reusability of the first stage of the Falcon 9, and they're 
also working towards reusing the fairing and they recently 
are--announced that they're looking at approach to reuse the 
upper stage also.
    I think as we--as they gain experience and as anybody gains 
experience operationally with the system and they gain 
experience with reuse, I think there is opportunity to further 
reduce the risk and reduce the cost, my understanding what the 
condition of the hardware is when it comes back and how much 
effort it takes to recondition it, to re-fly it, so there's 
opportunity there. I'm not able to predict what additional 
savings they might achieve through reuse at this point.
    Mr. Brooks. Is there any chance you could expound on 
increased risk factor of using a novel approach, i.e., reusable 
rockets?
    Mr. Jurczyk. Yes, we're--like Mr. Martin said, we're--the 
Launch Services Program is in the process of assessing that 
risk for all missions, and I can take a question for the record 
on that to get back with you when that assessment will be done.
    Mr. Brooks. Please. Thank you, Mr. Chairman.
    Chairman Babin. Thank you. I now recognize the gentleman 
from Pennsylvania, Mr. Lamb.
    Mr. Lamb. Thank you, Mr. Chairman.
    Everyone, I appreciate you highlighting the difficult 
position that you're in when it comes to unpredictable funding 
streams, threats to shut down the government, funding by CRs, 
that kind of thing. I'm trying to learn a little bit more about 
how that actually affects you on the ground day-to-day. This is 
a question for anyone. Can you share some more specific 
examples of how that might have affected a particular project?
    Mr. Dumbacher. Well, I'll be happy to take that because I 
lived it for a while. And what happens, Congressman, is when 
you're working on a program and you're trying to put the plan 
together for the future and what's my workplan for this year, 
what's my workplan over a five-year budget horizon? And as I'm 
working through the appropriations budgeting process, every 
time I'm--I have to plan to a different number, that means I've 
got to go back through that planning iteration process.
    So at a time when the President's budget request was 
significantly different from what was typically coming from the 
appropriations process, it was necessary to--A, to do the plan 
that was supportive and was inclusive in the President's budget 
request, and I had to be ready as a program manager that if 
additional appropriations did come in, I at least had an 
ability to plan and be able to react to that.
    Mr. Lamb. And what type of program were you managing that 
you're talking about right now?
    Mr. Dumbacher. At the time I was doing this, this was the 
beginning of the SLS and Orion programs.
    Mr. Lamb. Okay. And so that was a program that was supposed 
to take how long kind of from start to finish?
    Mr. Dumbacher. At the time I was there, we were looking at 
first launch in the 2017, 2018 time frame, and in the--while 
I--during my tenure as the Program Director for SLS and Orion, 
we had to deal with a government shutdown, continual 
negotiations on both ends of Pennsylvania Avenue, and then in 
addition to that, while I'm doing all that planning, my--the 
team's focus is pulled away from the day-to-day management of 
these technically complex jobs. So we were working through all 
of that and actually had to deal with a government shutdown and 
work through that and then all the multiple planning cycles.
    Mr. Lamb. Thank you. And, Ms. Chaplain, it seemed like you 
had something to add.
    Ms. Chaplain. I think I've heard very similar things from 
other agencies that I oversee like Missile Defense, that kind 
of constant re-planning and the chaos and time that it 
consumes. But another real example of like the impact of a 
shutdown can have is a cryocooler--or cryo test at the end of a 
program like James Webb, it might take a couple weeks to get 
the facility ready for this test and then two weeks to cool 
down, and the shutdown--I think there was a shutdown threat 
while there were doing that test this time, and they were 
really worried, like if we had to shut down, we're going to 
lose a whole month of time.
    Mr. Lamb. Okay. Thank you very much.
    And, again, a question for really anyone because I think 
it's pressing, but some of you have highlighted the workforce 
development issues that you have within NASA, and I think it 
was Mr. Dumbacher that talked about young people especially 
leaving NASA for higher-paying jobs in the private sector, 
which is a challenge obviously across the government. It 
happens in the military, too. But if there was one reform you 
could suggest or one thing that we can improve or strengthen to 
retain some of this talent and to attract new talent, what 
would it be?
    Mr. Dumbacher. Well, as I stated in my testimony, the one 
thing I would recommend is good real hardware programs that--to 
go address those technical needs that we need for space 
exploration and for the NASA mission but to go give these 
students, give these young professionals real hands-on hardware 
experience because that informs their capability and informs 
their experience throughout their career.
    Mr. Jurczyk. Yes, I would just like to second that. The 
first project I worked on after I got out of college was a 
spaceflight instrument development project in-house at NASA 
Langley Research Center, so I was able to design, build, 
integrate, test all the way through environmental test flight 
hardware, and that experience was critical throughout my entire 
career as I moved to a Subsystem Manager and Systems Engineer 
and Project Manager and then Line Manager. So I would just 
second that. I--it--without that experience, I don't know how I 
would have been able to be as effective as I was as I moved 
through my career at NASA.
    Mr. Dumbacher. And if I may just give you a little bit of a 
story, too, if you stand back and look at--there are a group of 
people of which I was one, Robert Lightfoot was one, where we 
had the ability and we were asked and required by our mentors 
to actually test shuttle main engines in-house, and we tested 
the new technology that ultimately became the final flight 
configuration for shuttle. And that hands-on experience--they--
our mentors, our leaders forced us into that because they knew 
that it fit into the long-term career.
    Mr. Martin. Just echoing the same thing, we've heard from a 
number of Project Managers that we've spoke with, their 
frustrations about their spending--agency engineers are 
spending most of their time overseeing contractors' effort, and 
that's frustrating.
    Mr. Lamb. Thank you. Thank you, Mr. Chairman.
    Chairman Babin. Yes, sir. Thank you.
    I'd like to recognize the gentleman from Louisiana, Mr. 
Higgins.
    Mr. Higgins. Thank you, Mr. Chairman. Mr. Chairman, it's 
uplifting to see these young Americans here today, these NASA 
interns, and I hope you young men and women are paying 
attention to these budget discussions. We are a nation that's 
$20 trillion in debt. And should this body ever manage to 
produce a surplus, say, $1 billion, it would require 20,000 
years of $1 billion surplus to address a $20 trillion debt.
    So I'm prayerful that NASA has a spirit of doing more with 
less because not only are individual projects at risk, but 
certainly anyone can recognize that a $20 trillion debt puts 
the entire stability of all programs at risk in every 
government agency. I'm very hopeful that you young Americans 
are paying close attention to this conversation.
    Mr. Martin, I'm concerned about the culture of optimism 
that you referred to and the too-big-to-fail attitude amongst 
Project Managers. But I understand their perception that their 
projects are too big to fail because in every case a tremendous 
amount of American treasure has been invested in that project, 
and therefore, it's quite logical for these Project Managers to 
have this cavalier attitude of too big to fail. What can this 
Committee do, what can Congress do to ensure projects are 
developed and managed within their budget constraints, 
including--I'd like your thoughts, sir, regarding 
accountability for our contractors within these projects.
    Mr. Martin. Again, I think more frequent conversations with 
Members of Congress about the status of individual projects is 
important, more fidelity to the cost estimating that NASA does 
right now, and then the occasional example that projects large 
or small are going to be terminated if they go too far over 
cost and schedule. And in preparation for this hearing, I think 
the last project that I remember being canceled was something 
called GEMS. It was a telescope that was supposed to look for 
evidence of black holes, and it was a smaller program from 
NASA. It was capped at $105 million. And then partway through 
formulation, they realized in an independent cost assessment 
that it was going to be 20 or 30 percent over that $105 million 
cap, and NASA canceled it. And it got people's attention.
    Mr. Higgins. Generally speaking, the contractors that are 
involved in cost overruns for NASA projects, large projects, 
these are for-profit companies, are they not?
    Mr. Martin. They are, sir.
    Mr. Higgins. And has that ever been addressed within the 
leadership at NASA, that, you know, most Americans, if we 
receive a bid from a professional contractor to perform a 
particular service, then we expect that service performed for 
the price that was bid. And they're held accountable legally by 
civil law, and there's a certain expectation of performance 
when you're giving a bid. And yet within the Federal Government 
and certainly within NASA's large projects there seems to be an 
attitude of well, we're not really accountable for the actual 
bid that we presented, and we won't be forced to perform.
    Mr. Martin. He's NASA leadership.
    Mr. Jurczyk. Okay. So, yes, the--most--a lot of the time 
we're doing things--building--designing and building systems 
for the first time that no one else has ever built before, and 
so in those cases we use a cost reimbursement contractor. And 
the incentives--and we use incentives to hold the contract 
accountable through a performance evaluation plan. And those 
incentives are tied to fee, usually award fee, and that is 
their profit. So if they do not perform and--they should get a 
low score against their performance evaluation plan and either 
receive much less profit or no profit depending on how we 
weight the incentives in the plan and how they're scored.
    So given the high-risk nature and--the nature of what we 
do, very complex systems, very high-risk with new technology, 
we take that approach, and then we hold them accountable. And 
the ultimate price to pay for them if they don't perform is 
loss of--complete loss of profit.
    Mr. Higgins. Gentlemen, thank you for your response.
    Mr. Chairman, my time has expired. If there's a second 
round, I have a question for Ms. Chaplain.
    Chairman Babin. Yes, sir. Thank you very much.
    Now, the--Mr. Foster.
    Mr. Foster. Yes. Thank you. And I guess I'd like to start 
just by making an observation about the--you know, the amount 
of funding that you can think about having in the next decades. 
Last week, the Federal Reserve made the historic announcement 
that household net worth in the United States, the wealth of 
Americans, just went over $100 trillion. This is up $45 
trillion since President Obama signed the stimulus, reversed 
the economic collapse, and triggers the economic growth that's 
going on today. So when people tell you there is not enough 
money to do this or that, the scale for that is what fraction 
of $100 trillion might we think about, you know, using to 
travel to Mars or wherever--whatever your dream is.
    I also want to say that I resonated--as a former Project 
Manager and someone doing technical components for large 
federal projects, I very much resonated with your desire to 
retain in-house expertise. It is very, very difficult to manage 
a project if you've never done it yourself. And so when I 
decided that I had to manage a group doing a large number of 
integrated circuits, I learned all the integrated circuit 
design control tools and made integrated circuits myself before 
I decided that now I could sit at the top and emit 
specifications for other engineers.
    And this is crucial, and we have to look very carefully 
when we--this rush to privatization runs the risk of losing the 
in-house expertise that will ultimately cost more money because 
you'll have projects that are not managed as well as they could 
be. So I just--we ought to be very cognizant of that as we 
contemplate this transition.
    Now, you know, when I think about cost overruns, you know 
they're sort of two big general classes. The first ones are in 
enthusiast cost estimates, you know, in the initial scoping of 
a project, the initial scoping is always done by people who are 
advocates for the project, and then you have to get adults in 
the room with experience to actually pull back and say, okay, 
how does this compare to actual cost?
    The other one is legitimate technical risk. And I would 
just like to say that I would hope that my colleagues in 
Congress would be much more tolerant of technical risk. You 
know, it is okay to take significant technical risk. And if you 
assemble a group of experts that say success is not assured but 
this looks like a good bet and then it turns out you lose the 
bet, then Congress should be, you know, very understanding and 
tolerant but much less tolerant when projects are approved when 
everyone in the room knows the--you know, I don't want to point 
fingers, but I'm sure in your minds you know several projects 
that have been approved where a large number of the people knew 
that you weren't really going to get the project done for that 
cost. And it's not just NASA. This happens everywhere in the 
government.
    And so I just was wondering, are there ways that you can 
identify retrospectively the times when you've had enthusiast 
cost estimates? Are there any sociological red flags that would 
allow you to say, okay, I'm suspicious that this is not a real 
cost estimate? Yes.
    Ms. Chaplain. I always--I can tell like when I'm 
suspicious. It's usually when there are very grand statements 
made about the program and the achievements that it's going to 
get seem overly exaggerated. And that's when you start 
wondering, are these estimates real?
    What I would say in the case of NASA, I kind of trust the 
process that they have because they do review those estimates 
pretty carefully. They have standing review boards that look at 
them before they make their decisions. They could have more 
independent estimating to kind of compare. That's one thing. 
But I do believe that their processes now, as opposed to a few 
years ago, are pretty rigorous in ensuring those estimates are 
complete.
    I would just add, one thing you said about taking risks, 
you know, that's--you need to still do that. I think there is a 
concern within NASA and other places in the government that 
we're not taking enough technical risk, that we're too afraid 
to do that.
    Mr. Foster. Yes, I concur.
    Mr. Martin. With respect to science missions, NASA relies 
extensively on the findings of the National Research Council 
and their decadal surveys that identify specific projects, so I 
think that's another check as opposed to----
    Mr. Foster. No, they don't do cost estimates. They're sort 
of given external estimates is my understanding.
    Mr. Martin. I think they do cost--they don't do very good 
cost estimates, but they do cost estimates.
    Mr. Foster. Yes. That's where you need the expertise and 
judgment, at that stage. Yes.
    Mr. Dumbacher. And if I may, Congressman, is when I think 
back on my career and some of the places where I've seen this 
problem occur the most, one key thing stands out, and that is 
have the people doing the cost estimate be the ones that will 
be held accountable for the program execution. I have seen a 
couple of instances where the people making the initial 
estimate putting the plan together knew that they were going to 
be moving on to something else and then they brought the new 
person and the new person was what's this?
    I think if you--if there is an air of accountability and 
they know that they're ultimately accountable for that cost--
for executing to their cost estimate, that starts to get the 
behavior where I think you want it sociologically.
    Mr. Foster. Thank you. And it's--well, there's a whole set 
of questions when you go to an external contractor model, who 
does the cost estimate and who takes the responsibility in that 
model?
    I guess I'm out of time here.
    Mr. Brooks. [Presiding] Thank you. The Chair recognizes 
Congressman Dunn from Florida.
    Mr. Dunn. Thank you very much, Mr. Chairman. Jump right in 
here.
    Mr. Jurczyk, the Canadian Space Agency last month canceled 
its participation in WFIRST project for budgetary reasons. In 
your assessment what will the impact be to the technology 
development and the cost which results from CSA's decision to 
pull out of the WFIRST?
    Mr. Jurczyk. Yes, so that decision was factored into the 
projects re-planning after the independent review of WFIRST and 
was factored into the plan they brought forward to move from 
phase A to phase B. So they've been able to adjust scope and 
adjust their cost and schedule estimates to stay within the 
$3.2 billion and still without the Canadian contribution, so 
that----
    Mr. Dunn. How does that affect the technology development?
    Mr. Jurczyk. I don't think it significantly affects the 
technology development. I think that the project has a really 
good plan to early on develop prototype hardware----
    Mr. Dunn. All right.
    Mr. Jurczyk. --to reduce the risk of that element, as well 
as other elements of high risk----
    Mr. Dunn. How about the mission itself? Does the 
capability--the mission goals, do they change because----
    Mr. Jurczyk. No. No, the level-one science goals do not 
change, and they will meet the requirements of the mission as 
defined in the NRC decadal survey for astrophysics.
    Mr. Dunn. That's great news. So the '18 omnibus bill 
required a lifecycle cost estimate by May 22. That's behind us. 
When will that be submitted to Congress?
    Mr. Jurczyk. We will get you that within the next couple of 
weeks. It's been done, and they're just wrapping up the 
documentation, and it will be here hopefully within the next 2 
or so weeks. That's our plan.
    Mr. Dunn. Great. So many people here on the panel have 
called the assessment--many assessments, that you need stable, 
predictable funding to plan. So let's close our eyes just for a 
minute and imagine that Congress might provide multiyear 
funding authority. It's a pleasant fiction, I know, but let's 
imagine that. In that scenario, how would that--how would this 
authority change your planning for your programs?
    Mr. Jurczyk. Well, I think it would allow us to only plan 
once and execute to that plan and deal with the challenges that 
Mr. Dumbacher had articulated before.
    The one example that we have of getting multiyear funding 
was OV-105, which is the replacement orbiter after the 
Challenger accident where Congress appropriated multiyear 
funding for that project. And they were very successful in 
executing on schedule and on budget with the profile that 
ramped up, peaked, and ramped down like any project--rational 
project plan should, and having the money--the adequate money 
when they needed it, so that's just an example of what you're 
talking about.
    Mr. Dunn. So that might actually be good for a lot of 
different agencies in the government?
    Mr. Jurczyk. For any large complex program that's going to 
take multiple years to execute, I would think so.
    Mr. Dunn. I'm thinking Ms. Chaplain would love that, right?
    So let me--in our limited time, so again for--well, 
actually, Mr. Jurczyk, you may be under constraints, unable to 
answer this. I think we're all disappointed that the James Webb 
Space Telescope cost overruns missed--and missed deadlines. 
What programmatic changes would you make to that program to 
prevent that in light of that failure? Can you answer that?
    Mr. Jurczyk. I can tell you what we have done----
    Mr. Dunn. Okay, good.
    Mr. Jurczyk. --to date, and so the first is a series of 
actions that we worked on with Northrup Grumman. So, first of 
all, we completely restructured the I&T organization in 
Northrup to flatten it and be able to more clearly hold people 
accountable for getting through the integration and test 
program. That also has allowed them to identify and resolve 
issues in a more timely manner to minimize the impact of those 
issues.
    We've also added staffing to the I&T team out at Northrup, 
and we've really strengthened the mission assurance function 
and personnel out there to deal with some of the workmanship 
and quality issues that were mentioned by Ms. Chaplain and 
others to try to avoid these human errors that have caused 
schedule delays. Like was mentioned, a small error or problem 
has a very large effect on a program like JWST.
    Mr. Dunn. I can well imagine. In the 30 seconds remaining, 
Mr. Martin, do you have anything to add to Mr. Jurczyk's 
comments on that?
    Mr. Martin. Yes, we have not done significant oversight of 
JWST. Congress directed----
    Mr. Dunn. How about you, Ms. Chaplain?
    Ms. Chaplain. Yes, I believe the actions they've taken have 
been reasonable. I would note they were--already had some 
onsite presence over at NGAS, but we'll be looking to see how 
effective those actions are as we do our next review.
    Mr. Dunn. Well, here's wishing you multiyear funding 
authority. And with that, Mr. Chairman, I yield back.
    Mr. Brooks. The gentleman yields back.
    The Chair recognizes Representative Lofgren from 
California.
    Ms. Lofgren. Thank you, Mr. Chairman. I think this is an 
important hearing, and most of the questions have been asked, 
but I would like to think about what further Congress could do 
in addition to avoiding the kind of situations Mr. Lamb 
addressed, the shutdowns issue, the inconsistency between the 
President's requested budget and what's appropriated that lends 
uncertainty to the planning process. What could Congress do to 
limit the uncertainty in funding other than those two issues? 
The idea of a multiyear funding program for large projects is 
valuable, but can you give us further guidance to stem losses 
through our own actions?
    Ms. Chaplain. I'd--I'll start. I would say avoid over-
specifying what your expectations are, avoid setting dates for 
a program, avoid choosing, you know, how they're going to do it 
because that limits their choices even more in what they can 
do.
    Mr. Jurczyk. Yes, I would just echo that. We seem to be 
getting more and more direction through the appropriations 
process, particularly through the report, and we're--the 
expectation is we will follow that direction. And that 
constrains the solution space and our ability to manage 
effectively sometimes, so I'd say just to echo what Ms. 
Chaplain said. I think that's one additional thing I could 
think of.
    Mr. Martin. With respect to the funding issues, not only 
the actual dollar amount, it's when that dollar amount comes, 
the proper phasing----
    Ms. Lofgren. Right.
    Mr. Martin. --of the appropriation has impacted NASA 
programs.
    Mr. Dumbacher. I would add work to make sure that the 
environment in which we have these discussions is less punitive 
and more objective and more willing to hear the risks and 
understand the issues. I think we have to be careful that a lot 
of the--that we can be--you've inadvertently set up a vicious 
cycle of oversight leads to conservativism leads to more 
oversight, and it just keeps going around in a circle. And I 
think what Congress can do and this Subcommittee can do because 
of its oversight activities is to help establish an environment 
that allows more open communication on these kinds of issues.
    Ms. Lofgren. Well, I think the point that Mr. Foster made 
all scientists know, which is failure is a learning experience. 
I mean, science is testing and not knowing the answer before 
you start. And we need to foster that sense of discovery and 
willingness to take risks if we're going to be successful.
    Let me just close with sort of a parochial question. I 
represent part of Santa Clara County. NASA Ames is located in 
Santa Clara County. And thinking about the demographic issues 
we face in NASA with so much of the workforce being over 50 
years of age, the NASA Ames facility is located in a key part 
of the country. It's in Silicon Valley, and there's a lot of 
synergy between what's going on in the tech community and NASA 
Ames. And although it's very expensive to live in Santa Clara 
County, actually, they just built some housing for NASA 
employees so that it's possible to maintain their--that 
synergy.
    I'm just wondering in terms of that facility as well as 
others that are co-located with technology centers, what 
further we can do to move top scientists away from really 
better-paying jobs into the agency to make young people who are 
smart and who are good scientists want to work in NASA? If 
anybody has an answer to that.
    Mr. Dumbacher. I'll take a try at it. I think what the 
young people want now is similar to what the young people 
wanted when I got out of school. They want exciting work, they 
want to know that they have an opportunity to make a 
difference, and they want to help solve today and future 
problems. And I think providing those and then in addition to 
the infrastructure kind of options that you have described 
would be extremely beneficial.
    I think they want to--from my experience teaching at Purdue 
for a few years is if you hit those first three bullet, then 
the students will come. That's why they go to SpaceX and Blue 
Origin. They see exciting work. That's why they still want to 
come to NASA because NASA still has that cachet that it's 
always had. So exciting work, help make a difference, and do 
something quick, and I think you'll be a long way down the 
road.
    Ms. Lofgren. Thank you very much. I see my time is expired, 
Mr. Chairman, so I yield back.
    Mr. Brooks. Thank you for your questions and participation.
    The Chair next recognizes Representative Rohrabacher of 
California.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman. I 
apologize for being late to the hearing. Obviously, two 
important hearings have to happen at exactly the same time, 
which perhaps leads me to the first point, which is we need to 
make sure we hold NASA accountable, but I have to assume that 
the Congress isn't doing its job all that well either. And when 
we're talking about continuing resolutions and omnibus bills, I 
mean, that's a reflection on the fact that we aren't doing our 
job here as well. So please don't think if there's any 
criticism here coming from this end that we don't realize--or 
at least some of us don't realize that there is justified 
criticism of the way Congress is doing its job.
    Let me ask a couple of questions here about these cost 
overruns and--that seem to be around. They've been around as 
long as I've been around. And let me ask you this. Is a lot of 
this intentional low bidding on the part of companies in order 
to achieve a contract? Is this part of that? And to whoever can 
answer that question.
    Mr. Jurczyk. You know, we have a pretty rigorous request 
for proposal and proposal evaluation process, including 
independent cost and schedule estimates by the government to 
ensure that what's being proposed is actually executable. 
What's being proposed in that contract is executable.
    Mr. Rohrabacher. So it's not to say you don't see this as a 
scheme by some big corporation to intentionally bid low, get 
the contract, and then realize we're going to have to pay for 
it later on?
    Mr. Jurczyk. I do not.
    Mr. Rohrabacher. Okay. Anybody believe that at all? Good. 
Thank you. That helps our understanding of this.
    And a lot of these companies that do have the cost overruns 
are companies that are worth billions and billions of dollars 
themselves. If--what penalty does a company have that goes 
through a major cost overrun and doesn't meet its commitments 
through a contract? What's the punishment?
    Ms. Chaplain. So, as we discussed earlier, you can take 
actions to punish companies just through award and incentive 
fees, but often, they're tied to multiple objectives so you're 
limited in terms of what you can do. So the ultimate thing is 
just to cancel a program if you really feel like----
    Mr. Rohrabacher. Well, what about the next program? Can a 
company that did not meet its contract be denied the next 
contract or a contract down the road because they have not met 
their obligation?
    Ms. Chaplain. Yes, I think that's possible. And the 
proposal that's in your bill about a contractor watchlist, they 
could go on that list if they're not performing well and that 
NASA will not deal with them in the future for a period of 
time. That is one option. I didn't know if you want to comment.
    Mr. Rohrabacher. Yes, maybe you could expand on that for 
me.
    Mr. Jurczyk. Yes, so what we do now--first of all, we have 
a very robust acquisition integrity program within the agency 
that's run by our Office of Procurement and our Office of the 
General Counsel and so, you know, they, along with the 
programs, look at contract performance and we'll use the FAR 
process for suspension and debarment for lack of performance or 
for waste and abuse, you know, so we use the existing process.
    The other thing we do is we have the contractor performance 
assessment reporting system, so when we evaluate a contractor 
on a regular basis, that assessment goes into that system, as 
well as the assessments of all of the departments and agencies 
within the Federal Government, and then not only NASA but other 
departments and agencies can draw on that to use in assessing 
past performance of the contract to determine whether to award 
them anything in the future.
    Mr. Rohrabacher. Well, it seems to me that we have to be 
much more diligent on--in that area and--if--unless we have 
accountability and responsibility for these things, we can 
expect to have more problems. And I have to assume that we did 
not have the amount of discipline in our system and the 
accountability that will deter companies--perhaps maybe 
companies that make bids should be held responsibility for that 
bid, meaning that the money that's lost perhaps should be 
absorbed by the company. As I say, these are multibillion-
dollar companies, and if they're going to be taking the 
taxpayer money and failing in what they're claiming to do, why 
should the taxpayer pick it up?
    We have--we just mentioned a--we have $20 trillion debt, 
and the gentleman mentioned how that is--if there's anything 
that's going to keep us from going into space, it's going to be 
the total disintegration of our economic system so that we 
can't afford any of this stuff.
    I would--also, let me just note that we're also going to 
have to--we have a $20 billion budget for NASA, $20 billion. We 
should be able to do a lot with $20 billion. And let me just 
note that when I first got involved that I realized that the 
budget wasn't enough to accomplish the missions, and that's why 
I dramatically--I tried to focus totally on international 
cooperation and private sector investment. So let's hope that 
we--that's one avenue of making more revenue come in, but we 
also have to make sure we pay attention to what this hearing is 
all about is making sure that we're managing the actual 
projects themselves in a way to minimize the loss of very 
scarce dollars.
    So thank you very much, Mr. Chairman.
    Mr. Brooks. Certainly. The Chair thanks the gentleman for 
his participation.
    We're nearing the noon hour and we're going to finish by 
noon, but from what I understand, there may be a member who 
wishes to ask a second set of questions, and as long as we are 
able to do so within that time frame, the Chair is most 
comfortable in doing so.
    Mr. Higgins, did you want to do follow-up?
    Mr. Higgins. Thank you, Mr. Chairman. I have one question.
    Mr. Brooks. Well, one second. The Chair recognizes 
Representative Higgins of Louisiana for that follow-up.
    Mr. Higgins. Thank you, Mr. Chairman, for recognizing me 
and allowing me to ask one question to Ms. Chaplain.
    Ms. Chaplain, NASA has received multiple recommendations on 
ways to better develop cost and schedule estimates, as well as 
perform joint cost and schedule confidence level analysis 
during the beginning stages of the implementation phase of 
large projects. In December 2012, it was recommended that the 
JWST project update its JCL. According to the report, NASA 
concurred with this recommendation, and yet no steps were taken 
to implement it. Further analysis indicates that, if 
implemented, an updated JCL may have prevented schedule delays.
    Among the many known and unknown challenges that NASA 
encounters regarding cost and schedule continuity, can you 
elaborate on why this recommendation was purposefully 
overlooked?
    Ms. Chaplain. At the time they did concur, as you said, so 
I didn't ever have an official reason why it was overlooked. I 
think they just were reluctant to relook at their costs. A 
couple years later, we recommended that they at least do 
something similar to do a cost schedule risk analysis and 
really take a deep look at their risks, and we even were going 
to do that ourselves, working with the contractor, but that was 
rejected by the contractor. And then it wasn't until they were 
getting ready to work with the launch agency on setting the 
date that they actually did a schedule risk analysis themselves 
and realized how far behind they really were.
    Mr. Higgins. Ms. Chaplain, thank you for your candid 
answer.
    Mr. Chairman, thank you for allowing me to ask a second 
question.
    Mr. Brooks. Certainly.
    Any other member wish to ask any other follow-up questions?
    Seeing none, I thank the witnesses for their valuable 
testimony and the Members for their questions. The record will 
remain open for two weeks for additional comments and written 
questions from Members.
    This hearing is adjourned.
    [Whereupon, at 11:57 a.m., the Subcommittee was adjourned.]

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