NASA: Shuttle Fleet's Safe Return to Flight Is Key to Space	 
Station Progress (29-OCT-03, GAO-04-201T).			 
                                                                 
Since its inception, the International Space Station has	 
experienced numerous problems that have resulted in significant  
cost growth and assembly schedule slippages. Following the	 
Columbia accident and the subsequent grounding of the shuttle	 
fleet in February 2003, concerns about the future of the space	 
station escalated, as the fleet has been key to the station's	 
assembly and operations. In August 2003, the Columbia Accident	 
Investigation Board drew a causal link between aggressive space  
station goals--supported by the National Aeronautics and Space	 
Administration's (NASA) current culture--and the accident.	 
Specifically, the Board reported that, in addition to technical  
failures, Columbia's safety was compromised in part by internal  
pressures to meet an ambitious launch schedule to achieve certain
space station milestones. This testimony discusses the		 
implications of the shuttle fleet's grounding on the space	 
station's schedule and cost, and on the program's partner funding
and agreements--findings we reported on in September 2003. The	 
testimony also proposes a framework for providing NASA and the	 
Congress with a means to bring about and assess needed cultural  
changes across the agency.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-201T					        
    ACCNO:   A08781						        
  TITLE:     NASA: Shuttle Fleet's Safe Return to Flight Is Key to    
Space Station Progress						 
     DATE:   10/29/2003 
  SUBJECT:   Agency missions					 
	     Internal controls					 
	     Investigations by federal agencies 		 
	     Performance measures				 
	     Safety regulation					 
	     Safety standards					 
	     Space exploration					 
	     Cost estimates					 
	     NASA International Space Station Program		 

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GAO-04-201T

United States General Accounting Office

GAO Testimony

Before the Subcommittee on Science, Technology, and Space, Committee on
Commerce, Science, and Transportation, United States Senate

For Release on Delivery
Expected at 2:00 p.m., EST
Wednesday, October 29, 2003 NASA

     Shuttle Fleet's Safe Return to Flight Is Key to Space Station Progress

Statement of Allen Li, Director Acquisition and Sourcing Management

GAO-04-201T

Highlights of GAO-04-201T,
a testimony before the Subcommittee on
Science, Technology, and Space,
Committee on Commerce, Science, and
Transportation, U.S. Senate

Since its inception, the International Space Station has experienced
numerous problems that have resulted in significant cost growth and
assembly schedule slippages. Following the Columbia accident and the
subsequent grounding of the shuttle fleet in February 2003, concerns about
the future of the space station escalated, as the fleet has been key to
the station's assembly and operations.

In August 2003, the Columbia Accident Investigation Board drew a causal
link between aggressive space station goals-supported by the National
Aeronautics and Space Administration's (NASA) current culture-and the
accident. Specifically, the Board reported that, in addition to technical
failures, Columbia's safety was compromised in part by internal pressures
to meet an ambitious launch schedule to achieve certain space station
milestones.

This testimony discusses the implications of the shuttle fleet's grounding
on the space station's schedule and cost, and on the program's partner
funding and agreements-findings we reported on in September 2003. The
testimony also proposes a framework for providing NASA and the Congress
with a means to bring about and assess needed cultural changes across the
agency.

www.gao.gov/cgi-bin/getrpt?GAO-04-201T.

To view the full product, click on the link above. For more information,
contact Allen Li at (202) 512-4841 or [email protected].

October 29, 2003

NASA

Shuttle Fleet's Safe Return to Flight Is Key to Space Station Progress

Since the grounding of the shuttle fleet last February, the space station
has been in a survival mode. Due to the limited payload capacity of the
Russian launch vehicles-which the program must now rely on to transport
crew and supplies to and from the station-on-orbit assembly is at a
standstill and on-board research has been limited. Moreover, certain
safety concerns on board the station cannot be corrected until the shuttle
fleet returns to flight. For example, NASA has had to delay plans to fly
additional shielding to protect the on-orbit Russian Service Module from
space debris-a risk that increases each year the shielding is not
installed.

To date, NASA has not fully estimated the increased costs and future
budget impact incurred due to the grounding of the space shuttle fleet.
However, it projects that additional costs of maintaining the space
station while the shuttle fleet is grounded will reach almost $100 million
for fiscal years 2003 and 2004. It has also identified a number of factors
that will affect costs- including the need to extend contracts to complete
development and assembly of the station. Delays in completing the assembly
of the station- which will be at least 2 years-are likely to incur
significant additional program costs. At the same time, partner funding is
uncertain, which may result in NASA paying a larger share of certain
program costs.

Although the full impact of the shuttle fleet's grounding on the space
station is still unknown, it is clear that the station's future is
dependent on the shuttle fleet's return to flight. NASA must carefully
weigh this future against the risks inherent in its current culture. As we
reported early this year, NASA's organization and culture has repeatedly
undermined the agency's ability to achieve its mission. The Columbia
Accident Investigation Board similarly found that NASA's history and
culture have been detrimental to the shuttle fleet's safety and that
needed improvements at NASA go beyond technical enhancements and
procedural modifications. The cultural change required for NASA to
consider the numerous technical and administrative recommendations made by
the Board could be the agency's greatest challenge to date.

.

In an effort to help NASA as it undergoes this change-and the Congress as
it assesses NASA's future corrective actions-we have provided a framework
for establishing appropriate operating principles and values and program
direction, securing and maintaining a sufficient and skilled workforce,
establishing proper performance targets, and ensuring adequate monitoring.

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss the challenges facing the
International Space Station in the wake of the Columbia accident. The
grounding of the shuttle fleet this past February escalated concerns about
the future of the space station-which, since its inception, has
experienced numerous problems that have resulted in significant cost
growth and assembly schedule slippages. The shuttle fleet has been key to
the station's assembly and operations, and without it, the program must
rely on Russian launch vehicles to transport crew and supplies to and from
the station. As requested, my testimony today will discuss the
implications of the shuttle fleet's grounding on the space station's
schedule and cost and on the program's partner funding and
agreements-findings we reported on to the full Committee in September
2003.1

You asked how the Congress can assess the cultural changes that the
National Aeronautics and Space Administration (NASA) is considering as the
agency proceeds with its efforts to safely return the shuttle fleet to
flight. As you know, the Columbia Accident Investigation Board reported in
August 2003 that in addition to technical failures, Columbia's safety was
compromised in part by the shuttle program's fluctuating priorities and
arbitrary schedule pressures to achieve certain space station milestones.2
The Board characterized NASA's emphasis on maintaining the launch schedule
to support construction of the station as a "line in the sand" and found
evidence that structural inspection requirements for the shuttle were
reduced and other requirements were deferred in order to meet an ambitious
schedule. NASA's recent revision to its return to flight plan recognizes
that to ensure safety in all its programs, a cultural change is needed
across the agency. Today, I am proposing a framework intended to provide
NASA and the Congress with a means to assess cultural change in the
context of NASA's overall mission.

In summary, the grounding of the shuttle fleet last February has basically
put the space station in a survival mode. Due to the limited payload
capacity of the Russian launch vehicles, on-orbit assembly is at a
standstill and on-board research has been limited. Moreover, certain
safety concerns on board the station cannot be corrected until the shuttle
fleet returns to

1 U.S. General Accounting Office, Space Station: Impact of the Grounding
of the Shuttle Fleet, GAO-03-1107 (Washington, D.C.: Sept.12, 2003).

2 Columbia Accident Investigation Board, Report Volume 1 (Washington,
D.C.: Aug. 2003).

flight. NASA estimates that additional costs of maintaining the space
station while the shuttle fleet is grounded will reach almost $100 million
for fiscal years 2003 and 2004. However, significant additional program
costs are likely to be incurred because completing assembly of the station
will be delayed by at least 2 years. At the same time, partner funding is
uncertain-which may result in NASA paying a larger share of certain
program costs-and partner agreement on the final station configuration has
been delayed by approximately one year.

While the space station's future is clearly dependent on the shuttle
fleet's return to flight, NASA must carefully weigh this future against
the risks inherent in its current culture. As we reported in January 2003,
NASA's management challenges and risks reflect a deeper need for broad
cultural change to eliminate organizational stovepipes and hierarchy,
which have repeatedly undermined the agency's ability to achieve its
mission.3 The Columbia Accident Investigation Board similarly found in its
August 2003 report that NASA's history and culture resulted in
organizational practices that have been detrimental to the shuttle fleet's
safety. The cultural sea change required for NASA to consider the numerous
technical and administrative recommendations made by the Board could be
the agency's greatest challenge to date. In an effort to help NASA as it
undergoes a cultural change-and the Congress as it assesses NASA's future
corrective actions-we have provided a framework for establishing
appropriate operating principles and values and program direction,
securing and maintaining a sufficient and skilled workforce, establishing
proper performance targets, and ensuring adequate monitoring.

Background 	In 1998, NASA and its international partners-Canada, Europe,
Japan, and Russia-began on-orbit assembly of the International Space
Station, envisioned as a permanently orbiting laboratory for conducting
materials and life sciences research and earth observations under nearly
weightless conditions. The International Space Station program has three
key goals: (1) maintain a permanent human presence in space, (2) conduct
world-class research in space, and (3) enhance international cooperation
and U.S. leadership through international development and operations of
the

3 U.S. General Accounting Office, Major Management Challenges and Program
Risks: National Aeronautics and Space Administration, GAO-03-114
(Washington, D.C.: Jan. 2003).

space station. Each of the partners is to provide hardware and crew, and
each is expected to share operating costs and use of the station.4

Since October 2000, the space station has been permanently occupied by two
or three crewmembers, who maintain and operate the station and conduct
hands-on scientific research. The space station is composed of numerous
modules, including solar arrays for generating electricity, remote
manipulator systems, and research facilities. The station is being
designed as a laboratory in space for conducting experiments in near-zero
gravity. Life sciences research on how humans adapt to long durations in
space, biomedical research, and materials-processing research on new
materials or processes are under way or planned. In addition, the station
will be used for various earth science and observation activities. Figure
1 shows the International Space Station on orbit.

4 In 1996, NASA and the Russian Aviation and Space Agency signed a
"balance protocol" listing the services that each side would provide to
the other during assembly and operations.

Figure 1: International Space Station On Orbit

Since fiscal year 1985, the Congress has appropriated a total of about $32
billion for the program. When the station's current design was approved in
1993, NASA estimated that its cost would be $17.4 billion.5 By 1998, that
estimate had increased to $26.4 billion. In January 2001, NASA announced
that an additional $4 billion in funding over a 5-year period would be
required to complete the station's assembly and sustain its operations. By
May 2001, that estimated cost growth increased to $4.8 billion. In an
effort to control space station costs, the administration announced in its
February 2001 Budget Blueprint that it would cancel or defer some hardware
and limit construction of the space station at a stage the administration
calls "core complete."

In November 2001, the International Space Station Management and Cost
Evaluation Task Force-appointed by the NASA Administrator-made a number of
recommendations to get costs under control. NASA implemented most of the
recommendations, and the task force reported in December 2002 that
significant progress had been made in nearly all

5 All amounts are stated in current-year dollars.

  Grounding of the Shuttle Fleet Will Result in Additional Schedule Delays and
  Cost

aspects of the program, including establishing a new management structure
and strategy, program planning and performance monitoring processes, and
metrics. NASA was postured to see results of this progress and to verify
the sufficiency of its fiscal year 2003 budget to provide for the core
complete version of the station when the Columbia accident occurred.

With the shuttle fleet grounded, NASA is heavily dependent on its
international partners-especially Russia-for operations and logistics
support for the space station. However, due to the limited payload
capacity of the Russian space vehicles, on-orbit assembly has been halted.
The program's priority has shifted from station construction and research
to maintenance and safety, but these areas have also presented significant
challenges and could further delay assembly of the core complete
configuration. While NASA maintains that its fiscal year 2004 budget will
remain unchanged, the schedule delays that have resulted from the
grounding of the shuttle fleet will come at a cost.

Program's Priority Has Shifted From Station Construction and Research to
Maintenance and Safety

The space shuttle fleet has been the primary means to launch key hardware
to the station because of its larger payload capacity. With the shuttle
fleet grounded, current space station operations are solely dependent on
the Russian Soyuz and Progress vehicles. Because the payload capacity of
the Soyuz and Progress vehicles are significantly less than that of the
U.S. shuttle fleet,6 operations are generally limited to rotating crew and
transporting food, potable water,7 and other items to the station. The
Russian vehicles are also used for logistics support.

On-orbit assembly of the station has effectively ceased. Prior to the
Columbia accident, NASA had planned to assemble the core complete
configuration of the station by February 2004. NASA officials estimate
that assembly delays will be at least a "month for month" slip from the
previous schedule, depending on the frequency of flights when the shuttles
resume operations. Assuming a return to flight around fall 2004, the core
complete configuration would not be assembled before early 2006.

6 At about 36,000 pounds, the shuttle's payload capacity is roughly 7
times that of Russia's Progress vehicle and almost 35 times the payload
capacity of its Soyuz vehicle.

7 Potable water is a constraint to sustaining station operations. For
example, crewmembers currently have a limit of two liters of water per day
per crewmember.

While the space station crew's primary responsibility is to perform
routine maintenance, the two crewmembers on board will conduct some
research, according to an interim space station research plan developed by
NASA. However, due to the grounding of the shuttle fleet and the station's
reliance on the Russian vehicles, this research will be curtailed. For
example:

o  	Outfitting of U.S. research facilities halted: Currently, 7 of the 20
planned research facilities are on orbit. With the fleet grounded, three
major research facilities-which, according to NASA, complete the
outfitting of the U.S. laboratory-could not be launched in March of this
year, as planned.8 At this time, it remains unknown when the full
configuration of the 20 research facilities will be on board the station.

o  	Existing hardware failures: Because new and additional hardware cannot
be transported, NASA has to rely more heavily on existing on-orbit science
facilities-facilities that have already experienced some failures. For
example, the refrigerator-freezers on board the station, which serve as
the main cold storage units, have failed several times, according to NASA
officials. A larger cold temperature facility was one of three facilities
that had been planned for launch in March 2003.

o  	Limited science material: Currently, there are very limited
allocations for science materials to be transported to or from the space
station by the Russian Soyuz and Progress vehicles.9 According to NASA
officials, they plan to send about 93 kilograms (just over 200 pounds) of
science material to the station on the next Progress vehicle scheduled for
launch in January 2004. However, returning samples from investigations
will be delayed until the shuttle fleet returns to flight because of the
Soyuz's limited storage capacity.

NASA also cannot resolve known safety concerns on board the station while
the shuttle fleet is grounded. For example, NASA has had to delay plans to
fly additional shielding to protect the on-orbit Russian Service Module
from space debris-a risk that increases each year the shielding is not
installed. NASA is studying alternatives for launching and installing the
debris protection panels earlier than currently planned. In addition, a
failed on-orbit gyro-one of four that maintains the station's orbital

8 The research facilities that were packed in a logistics module awaiting
launch had to be removed from the flight module and serviced.

9 Currently, science material is flown on a space and weight available
basis. For example, if food or other life support items were not depleted
between flights, science material might be transported.

stability and control-remains on board because the shuttle flight that was
to carry a replacement gyro to the station and return the failed unit for
detailed analysis was planned for March of this year-1 month after the
grounding of the shuttle fleet.

Cost Implications Have Yet to Be Determined, but Increases Are Likely

  Uncertainty of the Shuttle's Return-to-Flight Date Delays Partner Agreements

To date, NASA has not fully estimated the potential increased costs and
future budget impact incurred due to the grounding of the space shuttle
fleet. However, it has identified a number of factors that will likely
result in increased costs-including the need to extend contracts to
complete development and assembly of the station.

NASA has requested $1.71 billion for fiscal year 2004 for the space
station. The request is based, in part, on near completion of the hardware
development for the U.S. core configuration and the transition to on-orbit
operations. Soon after the Columbia accident, NASA stated that it would
maintain budget requests at current levels until the shuttle returns to
flight. NASA estimates the impact to the station program from the Columbia
accident to be $22 million in fiscal year 2003 and up to $72 million in
fiscal year 2004. NASA maintains that an assessment of total impact cannot
be accomplished prior to the fiscal year 2006 budget submission in
February 2005.

However, the considerable uncertainty about when the shuttle will return
to flight, what the payload capability will be, and how many flights can
be achieved each year greatly impact the total cost to the station
program. NASA anticipates that by keeping a crew on board the station
while the shuttle fleet is grounded and the continued development of space
station hardware will incur additional costs. For example, NASA officials
told us there are approximately 80,000 pounds of hardware at Kennedy Space
Station ready for integration to the space station and another 106,000
pounds there being processed.

While long-term plans are not well defined at this time, alternative
funding may be needed to sustain the station-let alone achieve the
station's intended goals. International agreements governing the space
station partnership specify that the space agencies of the United States,
Canada, Europe, and Japan are responsible for funding the operations and
maintenance of the elements that each contributes, the research activities
each conducts, and a share of common operating costs. Under current
planning, NASA will fund the entire cost of common supplies and ground
operations, then be reimbursed by the other partners for their shares.

  Proposed Framework for Guiding and Assessing Cultural Change

Depending on contributions made by the partners while the shuttle fleet is
grounded, the share that each partner contributes to the common operations
costs may have to be adjusted and could result in NASA's paying a larger
share of those costs. For example, the European Automated Transfer Vehicle
is scheduled to begin flying in September 2004. If that vehicle takes on a
larger role in supporting the station than currently planned, the European
share of common operations costs could be reduced with the other partners
paying more.

At the same time, NASA and its partners must develop a plan for assembling
the partners' modules and reaching agreement on the final station
configuration. Prior to the Columbia accident, options for the final
on-orbit configuration were being studied, and a decision was planned for
December 2003. NASA officials told us the process has been delayed, and
NASA and its partners agreed on a program action plan in October 2003 that
will ultimately lead to an agreement on the final on-orbit configuration
in December 2004.

Clearly, the space station's future is dependent on the shuttle fleet's
safe return to flight. In the past, we have reported on challenges facing
NASA's shuttle program-especially in maintaining an adequate shuttle
workforce.10 In January 2003, we reported that NASA needed to shift its
overall orientation from processes to results, organizational stovepipes
to matrixes, management hierarchy and control to flatter structures and
employee empowerment, and reactive behavior to proactive approaches. The
Columbia Accident Investigation Board's report and recommendations
similarly indicate that needed improvements to the shuttle program go
beyond technical enhancements and procedural modifications. Specifically,
the Board found that despite several schedule slippages and rapidly
diminishing schedule margins, NASA remained committed to 10 shuttle
launches in less than 16 months to achieve the space station's core
complete status by February 2004-a target date set in mid 2001. According
to the Board, this schedule-driven environment influenced managers'
decisions about the potential risks to the shuttle if a piece of foam
struck the orbiter-an event that had occurred during an October 2002
shuttle flight and one that was ultimately identified as the technical
cause behind Columbia's breakup. The Board concluded that

10 U.S. General Accounting Office, Space Shuttle: Human Capital and Safety
Upgrade Challenges Require Continued Attention, GAO/NSIAD/GGD-00-186
(Washington, D.C.: Aug. 15, 2000).

cultural issues-including lapses in leadership and communication, a dogged
"can do" attitude, and reliance on past successes-were critical factors
that contributed to the accident.

In its September 8, 2003, response to the Board's findings,11 NASA stated
that it would pursue an in-depth assessment to identify and define areas
where the agency's culture can be improved and take aggressive action."
NASA indicated that it would take actions to achieve several goals:

o  	Create a culture that values effective communication and remove
barriers to the expression of dissenting views.

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

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

o  	Create a robust system that institutionalizes checks and balances to
ensure the maintenance of the agency's technical and safety standards.

Most recently, on October 15, 2003, NASA indicated that the agency is also
assessing if cultural change is needed agency-wide. However, the agency
offered no further details beyond its previous commitments.

As NASA works to change its culture, and as the Congress assesses the
adequacy of NASA's corrective actions, applying a framework could prove
beneficial. Such a framework should recognize NASA's operating principles
and values, describe the direction of NASA's programs, focus attention on
securing and maintaining skills for its employees, provide safety targets,
show key results, and acknowledge the importance of internal and external
review. The following framework-similar in concept to GAO's framework for
ensuring the quality of its work-is anchored in four main areas:
leadership, human capital, program performance, and monitoring and review.

11 See NASA, NASA's Implementation Plan for Space Station Return to Flight
and Beyond (Oct., 2003).

Figure 2: Framework for Quality

o  	Leadership: The leadership anchor encompasses the agency's core
values, including safety as NASA's highest priority; and the expectations
that top management sets, such as stressing the importance of character,
integrity, and support of safety assurance measures. This anchor also
stresses the need to encourage staff to raise safety concerns, regardless
of the staff member's formal organizational relationships or job
responsibilities. Strategic planning and stakeholder consultation have
importance only if championed by NASA's leadership. The leadership anchor
helps address the question "What do we do?"

o  	Human Capital: Securing and assigning skilled staff, understanding
short-and long-term skill deficiencies, establishing and maintaining
skills, as well as assessing individual employee performance are major
components of a comprehensive human capital anchor. NASA's efforts at
developing a strategic human capital plan and legislative proposals
related to human capital would be included in this anchor. The human
capital anchor helps address the question "Who will do it?"

o  	Program Performance: While the primary focus of program performance is
often related to mission-related activities, such as flight processing and
major modifications, effective program performance also measures results
achieved, oversight of contractors, infrastructure maintenance, and sound
financial management to provide decision makers with accurate information
with which to make resource tradeoffs and long-term investments. The
program performance anchor helps address the question "How do we translate
what we do into processes and procedures-that is, how do we operationalize
our work?"

o  	Monitoring and Review: The oversight and enforcement of safety is a
shared responsibility between program officials, Associate Administrators,
the NASA Administrator, and independent groups such as non-advocate
reviews and the Aerospace Safety Advisory Panel. The monitoring and review
anchor helps address the question "How is this reinforced?"

We believe this framework can serve to identify the priorities agency
leadership must communicate, the human capital activities needed to ensure
that expected employee performance is achieved, the safety processes and
procedures that need to be operationalized as part of program performance,
and the scope of enforcement responsibilities. As such, use of this
framework can help the Congress monitor the corrective actions NASA will
undertake to strengthen the agency's culture.

Mr. Chairman, this concludes my prepared statement. I will be happy to
answer any questions you or other members of the subcommittee may have.

Contact and Acknowledgments

For future information, please contact Allen Li at (202) 512-4841 or
[email protected]. Individuals making key contributions to this testimony
include Jerry Herley, James Beard, Rick Cederholm, and Karen Sloan.

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