NASA: Agency Has Taken Steps Toward Making Sound Investment	 
Decisions for Ares I but Still Faces Challenging Knowledge Gaps  
(31-OCT-07, GAO-08-51). 					 
                                                                 
One of the first steps in the National Aeronautics and Space	 
Administration's (NASA) efforts to implement the President's plan
to return humans to the moon and prepare for eventual human space
flight to Mars is the development of the Ares I Crew Launch	 
Vehicle. In 2005, NASA outlined a framework for implementing the 
President's plan and has awarded contracts for Ares I and the	 
Orion Crew Exploration Vehicle it is designed to send into space.
It plans to conduct the first human space flight in 2015.	 
However, the agency is seeking to speed development efforts in	 
order to reduce the gap in our nation's ability to provide human 
access to space caused by the Space Shuttle's retirement in 2010.
GAO was asked to assess NASA's progress in developing the	 
knowledge needed to make sound investment decisions for the Ares 
I project. GAO's work included analyzing Ares I plans, contracts,
schedules, and risk assessments.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-51						        
    ACCNO:   A77800						        
  TITLE:     NASA: Agency Has Taken Steps Toward Making Sound	      
Investment Decisions for Ares I but Still Faces Challenging	 
Knowledge Gaps							 
     DATE:   10/31/2007 
  SUBJECT:   Aerospace industry 				 
	     Cost analysis					 
	     Cost control					 
	     Cost overruns					 
	     Product evaluation 				 
	     Research and development				 
	     Research and development contracts 		 
	     Research and development costs			 
	     Risk assessment					 
	     Risk management					 
	     Schedule slippages 				 
	     Space exploration					 
	     Technology assessment				 
	     Technology research				 
	     Space shuttles					 
	     Crew Exploration Vehicle				 
	     Crew Launch Vehicle				 

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GAO-08-51

   

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Report to the Chairman, Committee on Science and Technology, House of 
Representatives: 

United States Government Accountability Office: 
GAO: 

October 2007: 

NASA:
Agency Has Taken Steps Toward Making Sound Investment Decisions for 
Ares I but Still Faces Challenging Knowledge Gaps: 

GAO-08-51: 

GAO Highlights: 

Highlights of GAO-08-51, a report to the Chairman, Committee on Science and Technology, House of Representatives. 

Why GAO Did This Study: 

One of the first steps in the National Aeronautics and Space Administrationâs (NASA) efforts to implement the Presidentâs plan to return humans to the moon and prepare for eventual human space flight to Mars is the development of the Ares I Crew Launch Vehicle. In 2005, NASA outlined a framework for implementing the Presidentâs plan and has awarded contracts for Ares I and the Orion Crew Exploration Vehicle it is designed to send into space. It plans to conduct the first human space flight in 2015. However, the agency is seeking to speed development efforts in order to reduce the gap in our nationâs ability to provide human access to space caused by the Space Shuttleâs retirement in 2010. GAO was asked to assess NASAâs progress in developing the knowledge needed to make sound investment decisions for the Ares I project. GAOâs work included analyzing Ares I plans, contracts, schedules, and risk assessments. 

What GAO Found: 

NASA has been taking steps to build a business caseâdemonstrating the project is achievable within the constraints of time and money and other resources NASA has availableâfor Ares I. This has included relying on established technology and adopting an acquisition strategy that emphasizes attaining knowledge on cost, schedule, and technical and development feasibility before commitments are made to long-terms investments. The project also acknowledges that many risks are present and is undertaking an array of activities to track and mitigate those risks. However, NASA has not yet developed the knowledge needed to make sound investment decisions for the Ares I project. Principally, there are gaps in knowledge about requirements, costs, schedule, technology, design, and production feasibility. Our work shows that successful program execution is dependent on having these elements in place at the time long-term investment commitments are made. While NASA still has 10 months under its own schedule to close gaps in knowledge about requirements, technologies, costs, and time and other elements needed to develop the Ares I system, the gaps we identified are fairly significant and challenging given the complexity and interdependencies in the program. For example, continued instability in the design of the Orion Crew Exploration Vehicle is hampering the Ares I projectâs efforts to establish firm requirements, the aggressive J-2X upper stage engine development schedule is not synchronized with the rest of the project, and it is unclear if NASA has allocated sufficient funding to the project. 

Figure: Artistâs rendition of Ares I: 

[See PDF for image] 

[End of figure] 

What GAO Recommends: 

GAO recommends NASA establish a sound business case for Ares I before proceeding beyond preliminary design review (now set for July 2008), and if necessary, delay the preliminary design review until the projectâs readiness to move forward is demonstrated. 

To view the full product, including the scope and methodology, click on [hyperlink, http://www.GAO-08-51. For more information, contact Cristina Chaplain at (202) 512-4841 or [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

NASA Has Taken Steps Toward Making Sound Investment Decisions for Ares 
I but Still Faces Knowledge Gaps: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the National Aeronautics and Space 
Administration: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Figures: 

Figure 1: Constellation Program Schedule, by Fiscal Year: 

Figure 2: Space Shuttle, Ares I, and Ares V Comparison: 

Figure 3: Comparison of NASA's Life Cycle with a Knowledge-Based 
Acquisition Life Cycle: 

Figure 4: Ares I Risks as Tracked by IRMA: 

Figure 5: Illustration of Ares I Common Bulkhead and Frustrum: 

Figure 6: Ares I Project Schedule Timelines, by Fiscal Year: 

Abbreviations: 

DDT&E: design, development, test, and evaluation: 
ESAS: Exploration Systems Architecture Study: 
IRMA: Integrated Risk Management Application: 

[End of section] 

United States Government Accountability Office: 

Washington, DC 20548: 

October 31, 2007: 

The Honorable Bart Gordon: 
Chairman: 
Committee on Science and Technology: 
House of Representatives: 

Dear Mr. Chairman: 

The National Aeronautics and Space Administration (NASA) plans to spend 
nearly $230 billion over the next 2 decades to implement the 
President's Vision for Space Exploration (Vision), which calls for a 
return of humans to the moon and eventual human spaceflight to Mars. 
NASA is implementing the Vision under the Constellation program. [Footnote 1] Among the first major efforts of this program are 
the development of new space flight systems--including the Ares I Crew 
Launch Vehicle and the Orion Crew Exploration Vehicle--to tackle the 
mission. NASA has awarded contracts related to each effort and plans to 
conduct the first human spaceflight launch in 2015. However, the agency 
is seeking to speed development efforts in order to reduce the gap in 
our nation's ability to provide human access to space caused by the 
Space Shuttle retirement in 2010. 

In September 2005, NASA outlined an initial framework for implementing 
the Vision in its Exploration Systems Architecture Study (ESAS). NASA 
indicated it would maximize the use of heritage hardware and established technology in order to reduce cost and minimize risk. It 
proposed using the same engines and reusable solid rocket boosters that 
now launch the Space Shuttle as the basis for the Ares I Crew Launch 
Vehicle. Since then, however, NASA has undertaken a number of 
additional reviews to further refine the project requirements which 
resulted in changes to the Ares I design. 

You asked us to assess NASA's progress in developing the knowledge 
needed to make sound investment decisions for the Ares I project. To 
address this objective, we obtained and reviewed Ares I plans, 
contracts, schedules, risk assessments, budget documentation, and 
technology maturity assessments. We conducted further qualitative and 
quantitative analyses of these documents and compared them to criteria 
established in NASA directives governing development projects and in 
GAO's best practices body of work. Our work was conducted between March 
2007 and September 2007 in accordance with generally accepted 
government auditing standards. 

Results in Brief: 

NASA has been taking steps to build a business case for Ares I, 
including relying on established technology and adopting an acquisition 
strategy that emphasizes attaining knowledge on cost, schedule, and 
technical and development feasibility before commitments are made to 
long-term investments. The program also acknowledges that many risks 
are present and is undertaking an array of activities to track and 
mitigate those risks. However, NASA has not yet developed the knowledge 
needed to make sound investment decisions for the Ares I project. 
Principally, there are gaps in knowledge about requirements, costs, 
schedule, technology, design, and production feasibility. Our work 
shows that successful program execution is dependent on having these 
elements in place at the time long-term investment commitments are 
made. While NASA still has 10 months under its own schedule to close 
gaps in knowledge about requirements, technologies, costs, and time and 
other elements needed to develop the Ares I system, the gaps we 
identified are significant and challenging given the complexity and 
interdependencies in the program. More specifically, the challenges 
NASA faces are the following: 

* Requirements knowledge gaps: Ares I requirements are not yet stable, 
namely because requirements are not yet stable for the Orion Crew 
Exploration Vehicle--which Ares I will be launching. NASA recognizes 
the need to synchronize Ares I and Orion requirements as the top risk 
facing the Ares I project. According to NASA, at least 14 of the 57 
risks in the Ares project--as tracked by the Constellation program's 
integrated risk management system--are explicitly tied to requirements 
instability. When requirements are in flux and development efforts are 
contingent upon the flow-down of stable requirements, it can create a 
ripple effect of unknowns and be extremely difficult to establish firm 
cost and schedule baselines. In fact, NASA was not able to definitize, 
that is, reach agreement on the terms and conditions of its development 
contracts for the first stage and upper stage engine until very 
recently because requirements were in flux. 

* Technology and hardware development knowledge gaps: Three major 
elements of the Ares I system--first stage, upper stage, and the upper 
stage engine--pose significant development challenges. Although the 
first stage draws heavily from existing Space Shuttle systems, 
incorporating a fifth segment is likely to affect the flight 
characteristics of the existing reusable solid rocket booster. These 
flight characteristics would need to be demonstrated and understood 
prior to the production effort. Also, the upper stage is including a 
shared or "common" bulkhead between its two fuel tanks. Experience from 
the Apollo program indicates that common bulkheads are complex, 
difficult to manufacture, and should be avoided. Further, the J-2X 
upper stage engine represents a new engine development effort that is 
likely to encounter problems during development. NASA estimates that J-
2X will require 29 rework cycles to address problems. 

* Aggressive schedule: The J-2X upper stage engine, the critical path 
for the Ares I development, is on an aggressive development schedule 
wherein the J-2X engine design cycle is ahead of the Ares I vehicle 
design cycle. Delays in the J-2X schedule for design, development, 
test, and evaluation would have a ripple effect throughout the entire 
Ares I project. In addition, the critical design review for the first 
stage is currently scheduled after the Ares I project-level critical 
design review. This places the project at risk of prematurely beginning 
full-scale test and integration activities. 

* Projected funding shortfalls: NASA's funding strategy for the 
Constellation program relies on accumulating funds in fiscal years 2006 
and 2007 for work planned in fiscal years 2008, 2009, and 2010. NASA 
estimates its total budget will be insufficient to fund all 
Constellation activities during these years. These funding shortfalls 
could result in planned work not being completed to support schedules 
and milestones. 

NASA acknowledges these risks and has mitigation plans in place for 
most of them. For example, NASA is mitigating J-2X schedule risk by 
acquiring additional test resources in order to relieve pressure on the 
test schedule. We are making recommendations to the NASA Administrator 
to direct the Ares I project to develop a sound business case before 
beginning product development. 

Background: 

Ares I and Orion are currently targeted for operation no later than 
2015 (see fig. 1). However, NASA is seeking to accelerate this schedule 
to minimize the gap in the nation's ability to launch humans into 
space.[Footnote 2] Following the initial phase, Constellation will 
develop crew and cargo capabilities for missions to the lunar surface, 
no later than 2020. As currently planned, this system will include the 
Ares V Cargo Launch Vehicle, Earth Departure Stage, Lunar Surface 
Access Module, and associated support capabilities. Further development 
will provide crew, cargo, and infrastructure to support human 
exploration of Mars and beyond. 

Figure 1: Constellation Program Schedule, by Fiscal Year: 

[See PDF for image] 

This figure is a timeline , depicting the following data: 

Ares I crew launch vehicle: 
System requirements review: December, 2007; 
Preliminary design review: July, 2008; 
Critical design review: March, 2010; 
Initial operating capability for both projects: March, 2015. 

Orion crew exploration vehicle: 
System requirements review: March, 2007; 
Preliminary design review: August, 2008; 
Critical design review: September 2009; 
Initial operating capability for both projects: March, 2015. 

Source: GAO analysis of NASA data. 

[End of figure] 

In September 2005, NASA authorized the Ares I project to proceed with 
the development of a new human-rated crew launch vehicle with a 
24.5-metric ton lift capability and a total budget of $14.4 billion for 
design, development, test, and evaluation (DDT&E), and 
production.[Footnote 3] In April 2006, NASA awarded a $1.8 billion 
contract for DDT&E of the first stage to Alliant Techsystems followed 
by a $1.2 billion contract for DDT&E of the J-2X upper stage engine to 
Pratt and Whitney Rocketdyne in June 2006. NASA is developing the upper 
stage and the upper stage instrument unit, which contains the control 
systems and avionics for the Ares I, in-house. 

Recent Changes to Ares I Architecture: 

As initially conceived in the ESAS--NASA's effort to identify the best 
architecture and strategy to implement the President's 2004 Vision for 
Space Exploration--the Ares I design was predicated on using existing 
Shuttle components including the four-segment reusable solid rocket 
booster as the first stage and the Space Shuttle main engine as the 
upper stage engine. According to agency officials, after standing up 
the Ares I project office, NASA began to examine the ESAS architecture 
from a more programmatic perspective. At this point NASA began to 
consider alternatives that would streamline the development path for 
the Ares family of launch vehicles and save development and operations 
costs in the long run. 

Implementing the ESAS architecture for the Ares launch vehicle family 
would have entailed five new efforts to develop and/or modify 
propulsion hardware including: 

* modifying and certifying the Space Shuttle's four-segment reusable 
solid rocket booster for the Ares I first stage; 

* modifying and certifying, a five-segment reusable solid rocket 
booster for the Ares V, based on the Space Shuttle's four-segment 
reusable solid rocket booster; 

* modifying and certifying an expendable Space Shuttle main engine for 
the Ares I upper stage; 

* modifying and certifying a different expendable Space Shuttle main 
engine for the Ares V; and; 

* developing and certifying, based on the Apollo era J-2 engine, an 
engine for the Ares V. 

This approach would have also required NASA to manage multiple booster 
configurations and multiple Space Shuttle main engine versions during 
the lunar mission time frame. 

After completing additional systems engineering and analysis of life-
cycle costs, in January 2006 NASA made changes to the Ares I design to 
reduce the total number of development efforts required to enable the 
Ares launch vehicle family.[Footnote 4] The Ares I design (see fig. 2) 
now includes the five-segment reusable solid rocket booster for its 
first stage and the J-2X--an engine based on the J-2 and J-2S engines 
used on the 1960s era Saturn V--as the upper stage engine. The current 
design increases commonality between the Ares I and Ares V, and 
eliminates the need to develop, modify, and certify both a four-segment 
reusable solid rocket booster and an expendable Space Shuttle main 
engine for the Ares I. NASA also expects the J-2X to be less expensive 
and easier to manufacture than the Space Shuttle main engine. According 
to NASA, by developing the J-2X and resolving risks associated with 
incorporating a fifth segment into the reusable solid rocket booster 
earlier, the new Ares I design now represents a significant and direct 
down payment on the Ares V. Furthermore, NASA believes this approach 
can enable an earlier Ares V availability date, since the risks 
associated with incorporating the fifth segment into the reusable solid 
rocket booster will have been resolved. 

Figure 2: Space Shuttle, Ares I, and Ares V Comparison: 

[See PDF for image] 

This figure is an illustration of the overall height, in feet, of the Space Shuttle, Ares I, and Ares V. 

Space Shuttle (four-segment reusable solid rocket booster): 
Overall vehicle height in feet: approximately 180. 

Ares I (five-segment reusable solid rocket booster and J-2X: 
Overall vehicle height in feet: approximately 330. 

Ares V (five-segment reusable solid rocket booster and J-2X: 
Overall vehicle height in feet: approximately 360. 

Source: NASA and GAO presentation. 

[End of figure] 

NASA estimates that incorporating the J-2X and five-segment reusable 
solid rocket booster in the Ares I design will result in long-term cost 
savings. According to NASA officials, the savings can be realized by 
minimizing the number of development efforts--eliminating the cost of 
modifying and certifying the Space Shuttle main engine and four-segment 
reusable solid rocket booster for use on the Ares I--and increasing 
commonality between the Ares I and the Ares V. While achieving these 
savings involves increasing the Constellation budget by $730 million 
through 2010, NASA estimates that these changes will result in net long 
term savings of $1.2 billion. Our past work on total ownership costs 
indicates that making design trades early in development is a best 
practice among leading commercial developers that can reduce long-term 
operating and support costs.[Footnote 5] 

NASA Has Taken Steps Toward Making Sound Investment Decisions for Ares 
I but Still Faces Knowledge Gaps: 

NASA has taken steps toward making sound investment decisions for Ares 
I. For instance, it is relying on established technology to support the 
program, and it is adopting an acquisition strategy that emphasizes 
attaining knowledge on cost, schedule, and technical and development 
feasibility before commitments are made to long-terms investments. NASA 
also recognizes that the program is still facing many technical, 
programmatic, and funding risks and has undertaken measures to track 
and mitigate those risks. However, NASA still must develop the 
knowledge needed to make sound investment decisions for the Ares I 
project. Principally, there are gaps in knowledge about requirements, 
costs, schedule, technology, design, and production feasibility. 

Knowledge about Requirements and Resources Is Critical to Making Sound 
Investment Decisions: 

GAO's work on best practices over the past decade has shown that 
success in large-scale, expensive development efforts like Ares I 
depends on establishing an executable business case before committing 
resources to a new product development effort. The business case in its 
simplest form is demonstrated evidence that (1) the customer's needs 
are valid and can best be met with the chosen concept, and (2) the 
chosen concept can be developed and produced within existing resources-
-that is, proven technologies, design knowledge, existing funding, and 
adequate time to deliver the product when it is needed. A program 
should not go forward into product development unless a sound business 
case can be made. For a program to deliver a successful product within 
available resources, managers should demonstrate high levels of 
knowledge before significant commitments are made. In essence, 
knowledge supplants risk over time. 

Having adequate knowledge about requirements and resources is 
particularly important for a project like Ares I. Human spaceflight 
development programs are complex and difficult by nature, and the Ares 
I project faces daunting challenges in terms of design, testing, and 
manufacturing regardless of the systems and technologies underpinning 
the system's design. There are also considerable external pressures 
being placed on the program. For example, the program is being asked to 
deliver capability by 2015 in order to minimize the gap between the 
Space Shuttle's retirement and deployment of new transportation 
vehicles. In addition, there are funding constraints due to the need to 
fund other programs in NASA's portfolio. Moreover, over the past 
decade, there have been a number of instances where NASA pursued costly 
efforts to build a second generation of reusable human spaceflight 
vehicles without attaining critical knowledge about requirements and 
resources and, in turn, experienced significant problems--including 
cost and schedule delays. These include the National Aero-Space Plane, 
the X-33 and X-34, and the Space Launch Initiative, which were 
eventually canceled. While these endeavors have helped to advance 
scientific and technical knowledge, none of these projects accomplished 
NASA's objective of fielding a new reusable space vehicle. We estimate 
that these unsuccessful development efforts have cost approximately 
$4.8 billion since the 1980s. 

NASA Is Attempting to Follow a Knowledge-Based Approach to Building a 
Business Case for the Ares I Project: 

The current Ares I acquisition strategy does include some knowledge-
based concepts. The Ares I first stage design draws heavily from 
existing Space Shuttle systems. Our work has shown that design 
solutions based on modifying and/or improving existing technologies and 
systems are less risky than design solutions based on new technologies 
and new inventions. Furthermore, NASA's decision to include the J-2X 
engine and five-segment booster in the Ares I design in order to reduce 
long-term operations and support cost is in line with the practices of 
leading commercial developers that give long-term savings priority over 
short-term gains. 

The Ares I project was also proactive in ensuring that the ongoing 
project was in compliance with NASA's new directives, which include 
elements of a knowledge-based approach. NASA's new acquisition 
directives require a series of key reviews and decision points between 
each life-cycle phase of the Ares I project that serve as gates through 
which the project must pass before moving forward.[Footnote 6] The 
directives also recommend, but do not require, specific entrance and 
success criteria for each technical review. We found that the Ares I 
project had implemented the use of key decision points and adopted the 
recommended entrance and exit criteria for the December 2006 Systems 
Requirements Review and the upcoming October 2007 Systems Definition 
Review. According to NASA officials, the Constellation program made a 
conscious decision to require all of its projects to use the criteria 
recommended in the new directives for all reviews. We also found that 
the Ares I project has established specific knowledge-based goals--such 
as demonstrating maturity of key technologies by the preliminary design 
review and requiring a threshold 90 percent of engineering drawings be 
complete by the critical design review. 

Figure 3 illustrates how NASA's current acquisition directives for 
spaceflight programs and projects have incorporated some knowledge-
based concepts into NASA's approach to acquisitions. For example, NASA 
Procedural Requirements 7120.5D, NASA Space Flight Program and Project 
Management Requirements, requires decision reviews between each major 
phase of the acquisition life cycle. Further, NASA Procedural 
Requirements 7123.1A, NASA Systems Engineering Processes and 
Requirements, recommends general entrance and success criteria for the 
decision reviews. While the directives include multiple decision points 
at which progress in development can be measured, they also allow the 
centers and individual projects to establish the specific criteria used 
to define success for these reviews. NASA Procedural Requirements 
7120.5D, NASA Space Flight Program and Project Management Requirements, 
also requires that at the end of the formulation phase, projects 
demonstrate some elements of a sound business case, to include firm 
requirements, mature technologies, a preliminary design, and realistic 
cost and schedule estimates before proceeding into 
implementation.[Footnote 7] 

Figure 3: Comparison of NASA's Life Cycle with a Knowledge-Based 
Acquisition Life Cycle: 

[See PDF for image] 

This figure is a comparison of NASA's Life Cycle with a Knowledge-Based 
Acquisition Life Cycle. 

NASAâs life cycle for flight systems and ground support projects: 

Formulation: 
* Pre-phase A: Concept studies (Key Decision Point A at end of phase); 
* Phase A: Concept development (System definition review during the phase; Preliminanry non-advocate review at end of phase; Key Decision Point B at end of phase). 
* Phase B: Preliminary design and technology completion (Preliminary design review during phase; Non-advocate review at end of phase; Key Decision Point C at end of phase). 

Implementation: 
* Phase C: Final Design and fabrication (Critical design review during the phase; Key Decision Point D at end of phase). 
* Phase D: System assembly, integration and test, launch (Key Decision Point D at end of phase). 
* Phase E: Operations and sustainment (Key Decision Point D at end of phase). 
* Phase F: Closeout. 

Knowledge-based approach: 
* Concept and technology development (Knowledge point 1 (KP1) at end of phase: Technologies, time, funding, and other resources match customer needs); This is the program start point, and coincides with Key Decision Point C of the NASA life cycle.
* Product development: Integration; Demonstration. (Knowledge point 2 (KP2) between integration and demonstration: Design performs as expected. This coincides with Key Decision Point D of the NASA life cycle); Knowledge point 3 (KP2) at end of cycle: Production meets cost, schedule, and quality targets. This coincides with the middle of Phase D of the NASA life cycle). 
* Production. 

Management decision reviews include:
* Preliminary non-advocate review; 
* Non-advocate review; 
* Key decision points. 

Technical reviews include: 
* System definition review; 
* Preliminary design review; 
* Critical design review. 

Source: NASA data and GAO analysis. 

[End of figure] 

NASA Is also Taking Measures to Mitigate Risks: 

In accordance with a knowledge-based approach, NASA's acquisition 
directives also require all space flight programs and projects, 
including the Ares I project, to maintain a continuous risk management 
system.[Footnote 8] NASA Procedural Requirements 7120.5D, NASA Space 
Flight Program and Project Management Requirements, defines risk 
management as an organized, systematic decision-making process that 
efficiently identifies, analyzes, and plans for the handling of risks, 
and tracks, controls, communicates, and documents risk in order to 
increase the likelihood of achieving project goals. 

NASA is currently using the Web-based Integrated Risk Management 
Application (IRMA) as a tool for implementing continuous risk 
management within the Ares I project. IRMA identifies and documents 
risks, categorizes risks--as high, medium, and low based on both the 
likelihood of an undesirable event as well as the consequences of that 
event to the project--and tracks performance against mitigation plans. 
In the case of the Ares I project, as illustrated by figure 4, IRMA is 
tracking 57 Ares I risks including 31 high-risk areas.[Footnote 9] 

Figure 4: Ares I Risks as Tracked by IRMA: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Level of Risk: High; 
Number of risks: 31; 

Level of risk: Medium; 
Number of risks: 23; 

Level of risk: Low; 
Number of risks: 2. 

Source: NASA data and GAO analysis. 

Note: Risks in this figure total only 56 because 1 of the risks has not been categorized as high, medium, or low. 

[End of figure] 

Critical Knowledge Needed for Investment Decision Making for Ares I Has 
Not Yet Been Attained: 

NASA has not yet established firm requirements or developed mature 
technologies, a preliminary design, or realistic cost estimates, or 
determined the ultimate time and money needed to complete the program 
and so is not in a position to make informed investment decisions. Our 
work and NASA's own directives have shown that a successful knowledge-
based acquisition strategy is dependent on having these elements in 
place at the time long-term investment commitments are made. For NASA, 
this milestone is currently scheduled for July 2008. While NASA still 
has 10 months to close gaps in knowledge, it will be challenged to do 
so. 

Gaps in Knowledge about Ares I Requirements: 

In following a knowledge-based approach to development, successful 
organizations extensively research and define requirements before 
program start to ensure that they are achievable, given available 
resources. In successful programs, negotiations and trade-offs occur 
before product development is started to ensure that a match exists 
between customer expectations and developer resources. By contrast, 
previous NASA programs have continued to define requirements after 
product development was started--which in turn created unknowns about 
costs and schedule as well as the need for rework late in development 
to address changes in performance parameters. 

For the Ares I program, 14 of the project's self-identified risk 
factors are tied to unstable requirements--many of which are 
interrelated between Ares I and Orion projects. Because the Orion 
vehicle is the payload that the Ares I must deliver to orbit, changes 
in the Orion design, especially those that affect weight, directly 
affect Ares lift requirements. Both the Orion and Ares I vehicles have 
a history of weight and mass growth, and NASA is still defining the 
mass, loads, and weight requirements for both vehicles. For example, a 
design analysis cycle completed in May 2007 revealed an unexpected 
increase in ascent loads (the physical strain on the spacecraft during 
launch) that could result in increases to the weight of the Orion 
vehicle and both stages of the Ares I. While our work shows that the 
preliminary design phase is an appropriate place to conduct systems 
engineering to support requirement trade-off decisions, when 
requirements are in flux and development efforts are contingent upon 
the flow-down of stable requirements, it can create a ripple effect of 
unknowns and make it extremely difficult to establish firm cost 
estimates and schedule baselines. NASA recognizes that the need to 
synchronize Ares I and Orion requirements is the top risk facing the 
Ares I project and that continued instability in the Orion design is 
increasing risk to the Ares I project. The Ares I and Orion projects 
are working on this issue but don't expect to finalize new mass, loads, 
and weight allocations until after the October 2007 Systems Definition 
Review. Until these top-level requirements are finalized, lower-level 
requirements will also remain in flux. 

Requirements instability is also increasing risk for the individual 
elements of the Ares I. The J-2X engine design cycle is ahead of the 
Ares I vehicle design cycle. Consequently, there is a possibility that 
new and/or late developing requirements for the Ares I could lead to 
costly changes being required for the engine design. In addition, until 
the Ares I requirements are finalized, NASA will not know whether the 
existing hardware--such as the first stage reusable solid rocket 
boosters--will need modifications to satisfy requirements. 
Furthermore, NASA has not yet matured guidance, navigation, and control 
requirements for the upper stage subsystems. According to an agency 
official, these requirements cannot be finalized until mass, loads and 
weight requirements are finalized. Since these requirements are not 
expected to be provided until just 2 Â½ months prior to the upper stage 
preliminary design review process start, there is a possibility that 
the system requirements review design concepts will be highly affected 
once requirements are received. 

Requirements instability also contributed to NASA's inability to 
definitize design, development, and test and evaluation contracts for 
both the first stage and upper stage engine until August and July 2007 
respectively--more than a year after the contracts were awarded. The 
NASA Federal Acquisitions Regulation Supplement establishes a goal of 
definitizing undefinitized contracts[Footnote 10] within 6 months of 
issuance.[Footnote 11] NASA awarded sole-source, cost-reimbursable 
contracts for all of design, development, and test and evaluation of 
the first stage and upper stage engine in April 2006 and June 2006 
respectively. Our past work indicates that while it is appropriate for 
developmental contracts for government specific items to be cost-
reimbursable in nature, it is a poor practice to allow these types of 
contracts to remain undefinitized for extended periods. In fact, both 
GAO and NASA inspector general reports have identified risks in NASA 
programs in the past, including the International Space Station and the 
Space Shuttle due to heavy reliance on undefinitized contract actions. 
According to agency officials, these contracts remained undefinitized 
over 1 year because of the difficulty associated with establishing 
requirements for the complex Ares I development effort. According to 
agency officials, however, NASA mitigated the risk of the contracts 
remaining undefinitized by capping the value of the undefinitized work 
and by closely monitoring the contractor's progress. 

Gaps in Knowledge about Resources: 

In following a knowledge-based approach, successful organizations also 
ensure that resources--primarily funding, time, and other resources--
can be matched to requirements before program start. For example, they 
ensure that technologies can work as intended, funding will be 
available, costs are accurately estimated, and that the project 
schedule provides the time required to complete critical technology 
development, design, and production activities. Although NASA is 
relying on the use of existing systems and low-risk technology, there 
are still gaps in knowledge about resources--including money, time, and 
availability of technologies and hardware. 

Ares I First Stage: 

NASA is incorporating a fifth segment into the existing four-segment 
Space Shuttle reusable solid rocket booster by adding a third center 
segment--the two center segments of the four-segment reusable solid 
rocket booster are identical. NASA is also adding a frustum--an 
inverted cone-shaped connecter--to mate the reusable solid rocket 
booster to the larger-diameter upper stage (see fig. 5). Adding the 
fifth segment and the frustum has increased the length and flexibility 
of the reusable solid rocket booster. It is currently unclear how the 
modification will affect the flight characteristics of the reusable 
solid rocket booster. Failure to completely understand the flight 
characteristic of the modified booster could create a risk of hardware 
failure and loss of vehicle control. In addition, there is also a 
possibility that the reusable solid rocket booster heritage hardware 
may not meet qualification requirements given the new ascent and re-
entry loads and vibration and acoustic environments associated with the 
Ares I. This could result in cost and schedule impacts due to redesign 
and requalification efforts. NASA is currently working to define this 
risk. Furthermore, the added weight of the fifth segment to the 
boosters is forcing the contractor to push the state of the art in 
developing a parachute recovery system. 

In January 2007, an independent review of the first stage development 
questioned the cost-effectiveness of continuing with a reusable booster 
design. According to NASA and contractor officials, the primary benefit 
of recovering the reusable solid rocket boosters is not financial in 
nature but is the knowledge gained through analysis of the recovered 
flight hardware. However, NASA may need to consider expendable first 
stage options given the weight issues associated with both the Ares I 
and Orion vehicles. If NASA opts to pursue an expendable solution for 
the first stage, the overall Ares I design and requirements could 
change dramatically. 

Figure 5: Illustration of Ares I Common Bulkhead and Frustrum: 

[See PDF for image] 

This illustration depicts the Ares I Common Bulkhead and Frustrum, with the following componenets labeled:
* First stage: 
- Center segments; 
- Frustrum. 

* Upper Stage: 
- Nozzle; 
- Upper stage J-2X engine; 
- Common bulkhead; 
- Instrunment unit. 

* Orion. 

Source: NASA. 

[End of figure] 

Ares I Upper Stage: 

NASA's development effort for the Ares I upper stage has resulted in 
the redesign of its propellant tanks from two completely separate tanks 
to two tanks with one shared, or common, bulkhead. While the prior two-
tank configuration was a simpler design with a lower manufacturing 
cost, it did not meet mass requirements. The current common bulkhead 
design involves a complex and problematic manufacturing process that 
plagued earlier development efforts on the Apollo program. In fact, 
IRMA indicates that one of the lessons learned from the Apollo program 
was to not use common bulkheads because they are complex and difficult 
to manufacture. In addition, there is a possibility that upper stage 
subsystems will not meet the Constellation program's requirements for 
human rating unless the Constellation program grants waivers to failure 
tolerance requirements. NASA's human rating directive generally 
requires that human spaceflight hardware be "two-failure tolerant," 
that is, the system should be designed to tolerate two component 
failures or inadvertent actions without resulting in permanent 
disability or loss of life.[Footnote 12] According to Ares I project 
officials, NASA's directive allows the use of ascent abort in response 
to a second failure during launch; however, Constellation program 
requirements do not allow abort and require Ares I to reach orbit even 
if there are two failures. 

In August 2007, NASA awarded a cost-plus-award-fee contract for 
production of the upper stage. The basic contract calls for 
developmental hardware and test articles, the production of at least 
six operational flight units, and engineering support to the NASA in-
house upper stage design team. The contract also included indefinite 
delivery/indefinite quantity tasks for additional support and quantity 
options for additional operational flight units. According to NASA 
officials, they needed to select the production contractor early to 
obtain the engineering support to ensure that the NASA design team 
develops a producible and cost-effective design and to enable the 
production contractor to maximize its ability to meet the production 
schedule. 

J-2X Upper Stage Engine: 

Although the J-2X is based on the J-2 and J-2S engines used on the 
Saturn V, and leverages knowledge from the X-33 and RS-68, the extent 
of planned changes is such that both the ESAS and Ares I standing 
review boards reported that the effort essentially represents a new 
engine development. The scope of required changes is so broad, the 
contractor estimates that it will need nearly 5 million hours to 
complete design, development, test, and evaluation activities for the 
J-2X upper stage engine. In comparison, adding a fifth segment to the 
reusable solid rocket boosters requires less than one-third the amount 
of hours. According to Pratt and Whitney Rocketdyne representatives, 
these design changes will result in the replacement and/or modification 
of virtually every part derived from the J-2 or J-2S designs. NASA and 
Pratt and Whitney Rocketdyne recognize that some level of development 
anomaly and/or test failures are inherent in all new engine development 
programs, and the project has predicted that the J-2X development will 
require 29 rework cycles. In addition, the J-2X element faces extensive 
redesign in order to incorporate modern controls, achieve the increased 
performance requirements, and meet human rating standards. Pratt and 
Whitney Rocketdyne plans to replace the obsolete electromechanical 
controls used in the J-2 design with software-driven digital controls 
based on the controls used on the Delta IV's RS-68 engine. Pratt and 
Whitney Rocketdyne is also redesigning turbo-pumps from the X-33 
program that feed fuel and oxidizer into a newly configured main 
combustion chamber, to increase engine thrust to 294,000 pounds--the J-
2S had 265,000 pounds of thrust. The element also faces significant 
schedule risks in developing and manufacturing a carbon composite 
nozzle extension in order to satisfy these thrust requirements. 
According to contractor officials, the extension is more than 2 feet--
i.e., about one-third--wider in diameter than existing nozzles. 

Unknowns in Overall Project Schedule: 

As noted earlier, the Ares project cannot reliably estimate time needed 
to complete technology development, design, and production until 
requirements are fully understood. In addition, NASA is working under a 
self-imposed deadline to deliver the new launch vehicles no later than 
2015 in order to minimize the gap between the Space Shuttle's 
retirement in 2010 and new transportation vehicles. NASA has 
compensated for this schedule pressure by adding funds for testing and 
other critical activities. But it is not certain that added resources 
will enable NASA to deliver when expected. 

More specifically, the J-2X development effort is accorded less than 7 
years from development start to first flight. In comparison, the Space 
Shuttle main engine, the only other human-rated liquid-fuel engine NASA 
has successfully flown since the Apollo program, development required 9 
years. Due to the tight schedule and long-lead nature of engine 
development, the J-2X project was required to start out earlier in its 
development than the other elements on the vehicle. This has caused the 
engine development to be out of sync with the first stage and upper 
stage in the flow-down and decomposition of requirements. Although the 
only true mitigation to the technical and schedule risks for the 
element is a slowdown of the engine development to allow the 
requirements to catch up, this is unacceptable to the project because 
of the need to minimize the gap between the Space Shuttle's retirement 
in 2010 and the planned availability of the Ares I no later than 2015. 
NASA acknowledges that the engine development is proceeding with an 
accepted risk that future requirements changes may affect the engine 
design and that the engine may not complete development as scheduled in 
December 2012. If the engine does not complete development as 
scheduled, subsequent flight testing might be delayed. The J-2X 
development effort represents a critical path for the Ares I project. 
Subsequently, delays in the J-2X schedule for design, development, 
test, and evaluation would have a ripple effect throughout the entire 
Ares I project. 

NASA has taken steps to mitigate J-2X risks by increasing the amount of 
component-level testing, procuring additional development hardware, 
and working to make a third test stand available to the contractor 
earlier than originally planned. The project has secured funding to 
build a new $180 million altitude test facility needed to test the 
engine in a relevant environment. However the project is still seeking 
early access to a third test stand to perform J-2X engine testing in 
early 2010. According to the contractor, the project is currently 
working with the Space Shuttle program to free up a third test stand, 
but the Space Shuttle program needs the stand to be available for Space 
Shuttle testing until 2010. According to NASA, earlier access to a 
third stand could provide mitigation of the nozzle extension 
development effort, relieve test rate anxieties, and enable test 
schedule confidence. Without the ability to perform this testing, the 
J-2X critical path test schedule could be affected. 

In addition, as shown in figure 6, the first stage critical design 
review is out of sync with the Ares I project-level critical design 
review. NASA has scheduled two critical design reviews for the first 
stage. The first critical design review is scheduled for November 2009, 
5 months before the Ares I project critical design review. At this 
point, however, the project will not have fully tested the first stage 
development motors. The second critical design review, in December 
2010, occurs after static testing of additional developmental motors is 
conducted. According to the NASA Procedural Requirements 7120.5D, NASA 
Space Flight Program and Project Management Requirements, at the 
critical design review the Ares I project should demonstrate that the 
maturity of the project's design is appropriate to support proceeding 
into full-scale fabrication, assembly, integration, and test. It should 
also demonstrate that the technical effort is on track to complete the 
flight and ground system development and mission operations in order to 
meet overall performance requirements within the identified cost and 
schedule constraints. By conducting the Ares I critical design review 
before the first stage critical design review, the project could 
prematurely begin full-scale test and integration activities a full 9 
months before the first stage design has demonstrated maturity. 

Figure 6: Ares I Project Schedule Timelines, by Fiscal Year: 

[See PDF for image] 

This figure is an illustration of the Ares I Project Schedule Timelines, by Fiscal Year, depicting the following data: 

Name: Ares I Project: 
FY06: [Empty]; 
FY07: December, System Requirements Review; 
FY08: July, Preliminary Design Review; 
FY09: [Empty]; 
FY10: March, Critical Design Review; 
FY11: [Empty];
FY12: [Empty];
FY13: [Empty];
FY14: [Empty];
FY15: March, Initial Operational Capability. 

Name: Upper Stage J-2X Engine; 
FY06: [Empty]; 
FY07: November, System Requirements Review; August, Preliminary Design Review; 
FY08: August, Critical Design Review; 
FY09: [Empty];
FY10: [Empty];
FY11: [Empty];
FY12: [Empty];
FY13: [Empty];
FY14: [Empty];
FY15: [Empty]. 

Name: Upper Stage; 
FY06: [Empty];
FY07: April, System Requirements Review; 
FY08: May, Preliminary Design Review; 
FY09: [Empty];
FY10: November, Critical Design Review;
FY11: [Empty];
FY12: [Empty];
FY13: [Empty];
FY14: [Empty];
FY15: [Empty]. 

Name: Final Stage; 
FY06: [Empty];
FY07: December, System Requirements Review; 
FY08: April, Preliminary Design Review; 
FY09: [Empty];
FY10: [Empty];
FY11: December, Critical Design Review;
FY12: [Empty];
FY13: [Empty];
FY14: [Empty];
FY15: [Empty]. 

Source: NASA and GAO analysis. 

[End of figure] 

Constellation Funding Uncertain: 

NASA's approach to funding is risky, and the current approved budget 
profile is insufficient to meet Constellation's estimated needs. The 
Constellation program's integrated risk management system indicates 
there is a high risk that funding shortfalls could occur in fiscal 
years 2009 through 2012, resulting in planned work not being completed 
to support schedules and milestones. As we reported in 2006, NASA's 
basic approach for funding all of the Constellation program, including 
Ares I, depends on a "go as you can afford to pay" concept, wherein 
lower-priority efforts will be deferred, descoped, or discontinued to 
allow NASA to stay within its available budget profile.[Footnote 13] 
This approach relies on the accumulation of a large rolling budget 
reserve in fiscal years 2006 and 2007 to fund Constellation activities 
in fiscal years 2008, 2009, and 2010, when NASA estimates its total 
budget authority will be insufficient to fund all necessary 
Constellation activities. 

Risk Mitigation Activities Are Behind Schedule: 

Many of the risks NASA is tracking in IRMA correlate with the elements 
of a sound business case. For example, IRMA is tracking risks related 
to stabilizing requirements, finalizing a preliminary design, 
establishing realistic project schedules, and acquiring adequate 
funding. NASA has risk mitigation plans in place for most of these 
risks, and in most instances NASA is completing mitigation tasks on 
schedule. As of September 17, 2007, the project is behind schedule in 
completing mitigation tasks on four risks. While some of these tasks 
are just a few weeks late, there is one instance where the project has 
not completed mitigation tasks that were scheduled for completion in 
January and April 2007. In this instance, the Ares I project office is 
late completing mitigation tasks aimed at maturing Ares I requirements 
for the first stage. If mitigation does not proceed as planned on Ares 
I risks, NASA may be unable to establish a sound business case at the 
July 2008 preliminary design review. 

Conclusions: 

NASA has been in a discovery and exploration phase for its Ares I 
project for nearly 2 years, and it expects to remain in this phase 
until July 2008. During this period, it is critical for programs to 
work toward closing knowledge gaps about requirements, technologies, 
funding, time, and other resources so that they can be positioned to 
succeed when decisions are made to commit to making significant, long-
term investments. This is especially important for NASA given the cost 
of the program and past experiences with efforts to move beyond the 
current space transportation architecture. 

NASA is taking positive steps toward this end, particularly by adopting 
some knowledge-based acquisition concepts, relying on established 
technologies and hardware, and proactively identifying and mitigating 
risk. Nevertheless, there are still considerable unknowns--
principally, in terms of what requirements the program will be seeking 
to achieve, how much it will cost to do so, how long it will take, and 
whether certain development and production challenges inherent in the 
design and architecture can even be overcome. At a minimum, critical 
unknowns need to be addressed in the near future so that decision 
makers have a sound basis for moving forward. If they are not, NASA 
should delay making a long-term commitment to the program and reexamine 
external constraints, including time and money. 

Recommendations for Executive Action: 

We recommend that the NASA Administrator direct the Ares I project 
manager to develop a sound business case--supported by firm 
requirements, mature technologies, a preliminary design, a realistic 
cost estimate, and sufficient funding and time--before proceeding 
beyond preliminary design review (currently planned for July 2008) and, 
if necessary, delay the preliminary design review until a sound 
business case demonstrating the project's readiness to move forward 
into product development is in hand. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report (see app. II), NASA 
concurred with our recommendation. NASA acknowledged that the Ares I 
project faces knowledge gaps concerning requirements, technologies, 
funding, time and other resources and that the agency must close these 
gaps to be positioned for success when the project enters the 
implementation phase. NASA stated that the Ares I project manager will 
be required to demonstrate that the project meets all system 
requirements with acceptable risk and within the cost and schedule 
constraints, and that it has established a sound business case before 
the project is allowed to proceed into the implementation phase. NASA 
also stated that the NASA Agency Program Management Council and NASA 
Associate Administrator will review the Ares I project at the 
preliminary design review and determine the projects' readiness to 
proceed into the implementation phase and begin detailed design. 
Separately, NASA provided technical comments, which have been addressed 
in the report, as appropriate. 

We will send copies of the report to NASA's Administrator and 
interested congressional committees. We will also make copies available 
to others upon request. In addition, the report will be available at no 
charge on GAO's Web site at [hyperlink, http://www.gao.gov]. 

Should you or your staff have any questions on matters discussed in 
this report, please contact me at (202) 512-4841 or [email protected]. 
Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix III. 

Sincerely yours, 

Signed by: 

Cristina Chaplain, Director: 
Acquisition and Sourcing Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To assess NASA's progress in developing the knowledge needed to make 
sound investment decisions for the Ares I project, we reviewed and 
analyzed NASA's acquisition strategy for the Ares I project including 
program and project plans, contracts, schedules, risk assessments, 
technology maturity assessments, budget documentation, and the results 
of independent assessments of the program. We interviewed and received 
briefings from officials within the Ares I project office at Marshall 
Space Flight Center in Huntsville, Alabama, regarding the project's 
risk areas, the status of requirements and the project's process in 
definitizing contracts and developing life-cycle cost estimates. We 
also interviewed contractor officials on location at Pratt and Whitney 
Rocketdyne in Canoga Park, California, and Alliant Techsystems in 
Brigham City, Utah, regarding the J-2X engine and first stage heritage 
hardware and design changes. We analyzed risk documented through the 
Constellation Program's Integrated Risk Management Application and 
followed up with project officials for clarification and updates to 
these risks. In addition, we interviewed Constellation program 
officials from Johnson Space Center regarding program risks, 
requirements, and the impact of budget reductions. We also spoke with 
NASA Headquarters officials from the Exploration Systems Mission 
Directorate's Resources Management Office in Washington, D.C., to gain 
insight into the basis for fiscal year 2006 through fiscal year 2010 
budget requests as well as the funding strategy employed by the 
Constellation Program. Furthermore, we reviewed NASA, Marshall Space 
Flight Center, and Johnson Space Center program and project management 
directives and systems engineering directives. Our review and analysis 
of these documents focused on requirements and goals set for 
spaceflight systems. We compared examples of the centers' 
implementation of the directives and specific criteria included in 
these directives with our best practices work on system acquisition. 

Our work was conducted between March 2007 and September 2007 in 
accordance with generally accepted government auditing standards. 

[End of section] 

Appendix II: Comments from the National Aeronautics and Space 
Administration: 

National Aeronautics and Space Administration: 
Office of the Administrator: 
Washington, DC 20546-0001: 

October 19, 2007: 

Ms. Cristina T. Chaplain: 
Director, Acquisition and Sourcing Management: 
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Ms. Chaplain: 

NASA appreciates the opportunity to comment on your draft Government Accountability Office (GAO) report, GAO-08-51, entitled "NASA: Agency Has Taken Steps Toward Making Sound Investment Decisions for Ares I but Still Faces Challenging Knowledge Gaps" which pertains to the Ares project within the Constellation Systems program. 

In the draft report, GAO recommends that NASA develop the knowledge needed to make sound investment decisions for the acquisition of Ares I. 

Recommendation: We recommend that the NASA Administrator direct the Ares I project manager to develop a sound business caseâsupported by firm requirements, mature technologies, a preliminary design, a realistic cost estimate, and sufficient funding and timeâbefore proceeding beyond preliminary design review (currently planned for July 2008) and, if necessary, delay the preliminary design review until a sound business case demonstrating the project's readiness to move forward into product development is in hand. 

Response: NASA concurs with this recommendation. The Agency is working toward closing knowledge gaps about requirements, technologies, funding, time, and other resources so that it can be positioned to succeed when decisions are made to commit to significant, long-term investments in the Ares I project. Substantial work defining the Ares I requirements, cost, and schedule estimates has been completed, and this work will continue to mature through the formulation phase of the project. The Ares I project manager will be required to demonstrate that the project meets all system requirements with acceptable risk and within the cost and schedule constraints, and that it has established a sound business case to proceed with the detailed design. The NASA
Agency Program Management Council and NASA Associate Administrator will review the Ares I project at this key juncture and determine readiness for the project to proceed into the implementation phase and detailed design. 

Thank you for the opportunity to review this draft report. 

Sincerely, 

Signed by: 

Shana Dale: 
Deputy Administrator: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Cristina Chaplain (202) 512-4841 or [email protected]: 

Acknowledgments: 

In addition to the contact named above, Jim Morrison, Assistant 
Director; Meredith M. Allen; Greg Campbell; Sylvia Schatz; and John S. 
Warren made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Within NASA, a program is defined as a strategic direction that the 
agency has identified as needed to implement agency goals and 
objectives. A project is a specific investment within a program having 
defined requirements, a life-cycle cost, a beginning, and an end that 
yields new or revised products that directly address NASA's strategic 
needs. Ares I is a project within the Constellation program. 

[2] The Constellation program is maintaining a 2015 date for first 
human spaceflight launch at a 65 percent confidence level based on 
current funding. The program is also working internally toward 
achieving a first human spaceflight by 2013 at a confidence level of 
less than 40 percent based on current funding. 

[3] Human rated space systems incorporate those design features, 
operational procedures, and requirements necessary to accommodate human 
passengers and crew. 

[4] As a result of this analysis, NASA also modified the Ares V design 
to replace the Space Shuttle main engine with an improved version of 
the RS-68 engine used on the Air Force's Delta IV heavy launch vehicle. 
NASA estimates that using the RS-68 will save approximately $4.25 
billion in life-cycle costs through 2020. 

[5] GAO, Best Practices: Setting Requirements Differently Could Reduce 
Weapon Systems' Total Ownership Costs, GAO-03-57 (Washington, D.C.: 
Feb. 11, 2003). 

[6] NASA Procedural Requirements 7120.5D, NASA Space Flight Program and 
Project Management Requirements, March 6, 2007. NASA Procedural 
Requirements 7123.1A, NASA Systems Engineering Processes and 
Requirements, March 26, 2007. 

[7] The purpose of the formulation phase is to establish a cost-
effective program that is demonstrably capable of meeting agency 
objectives. 

[8] NASA Procedural Requirements 7120.5D, NASA Space Flight Program and 
Project Management Requirements, March 6, 2007. NASA Procedural 
Requirements 8000.4, Risk Management Procedural Requirements, February 
1, 2007. 

[9] This is the total number of open risks as of September 17, 2007. It 
does not include risks that have been closed or risks that NASA 
considers sensitive. 

[10] NFS 1843.7001 defines an undefinitized contract action as a 
unilateral or bilateral modification or delivery/task order in which 
the final price or estimated cost and fee have not been negotiated and 
mutually agreed to by NASA and the contractor. 

[11] NASA FAR Supplement 1843.7005(a). 

[12] NASA Procedural Requirements 8705.2A, Human-Rating Requirements 
for Space Systems, February 7, 2005. 

[13] GAO, NASA: Long-Term Commitment to and Investment in Space 
Exploration Program Requires More Knowledge, GAO-06-817R (Washington, 
D.C.: July 17, 2006). 

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