Cassini Mission: Estimated Launch Costs for NASA's Mission to Saturn
(Briefing Report, 05/08/95, GAO/NSIAD-95-141BR).

In April 1994, NASA estimated that it would cost about $475 million for
a Titan IV-Centaur launch of its Cassini spacecraft. NASA plans to
launch its Cassini spacecraft to Saturn in October 1997.  Following a
voyage of more than six years, the spacecraft will orbit Saturn for four
years, observing the planet's atmosphere, rings, and moons.  In response
to congressional concerns about cost, this briefing report provides
information on the current estimated cost for the Cassini launch and
determines the extent of cost-saving opportunities.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-141BR
     TITLE:  Cassini Mission: Estimated Launch Costs for NASA's Mission 
             to Saturn
      DATE:  05/08/95
   SUBJECT:  Space exploration
             Aerospace contracts
             Agency missions
             Cost control
             Contract costs
             Air Force supplies
             Air Force facilities
             Federal funds
             Aerospace research
IDENTIFIER:  Titan IV Rocket
             NASA Cassini Saturn Probe Program
             NASA Comet Rendezvous Asteroid Flyby Program
             NASA Advanced Solid Rocket Motor Program
             
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Cover
================================================================ COVER


Briefing Report to the Ranking Minority Member, Subcommittee on Space
and Aeronautics, Committee on Science, House of Representatives

May 1995

CASSINI MISSION - ESTIMATED LAUNCH
COSTS FOR NASA'S MISSION TO SATURN

GAO/NSIAD-95-141BR

Cassini Mission

(709091)


Abbreviations
=============================================================== ABBREV

  CRAF - Comet Rendezvous Asteriod Flyby
  MOA - Memorandum of Agreement
  NASA - National Aeronautics and Space Administration
  SRM - solid rocket motor
  SRMU - solid rocket motor upgrade

Letter
=============================================================== LETTER


B-260888

May 8, 1995

The Honorable Ralph M.  Hall
Ranking Minority Member
Subcommittee on Space and Aeronautics
Committee on Science
House of Representatives

Dear Mr.  Hall: 

In April 1994, the National Aeronautics and Space Administration
(NASA) estimated that it would cost about $475 million for a Titan
IV-Centaur launch of its Cassini spacecraft.  Concerned about the
cost, as the Chairman of the former Subcommittee on Space, House
Committee on Science, Space, and Technology, you requested that we
provide information about the current estimated cost for the Cassini
launch and determine the extent to which cost saving opportunities
exist.  On April 11, 1995, we briefed your staff on the results of
our work.  This report contains the information presented at that
briefing. 


   BACKGROUND
------------------------------------------------------------ Letter :1

NASA plans to launch its Cassini spacecraft to Saturn in October
1997.  Following a voyage of more than 6 years, the spacecraft will
orbit Saturn for 4 years.  Cassini will provide intensive, long-term
observations of Saturn's atmosphere, rings, magnetic fields, and
moons.  Cassini's probe will be used to analyze the atmosphere of
Saturn's largest moon, Titan. 

Cassini, a joint U.S.-European mission, was originally paired with a
project to explore comets and asteroids, the Comet Rendezvous
Asteroid Flyby (CRAF).  Cassini was first funded by Congress in
fiscal year 1990.  Since then, CRAF was canceled, and Cassini's
original scientific capabilities have been reduced and its launch
schedule extended.\1

NASA is responsible for the overall success of the Cassini mission,
including integrating the spacecraft with the launch vehicle and
approving the final launch.  Under an agreement with NASA,\2 the Air
Force will provide a
Titan IV expendable launch vehicle\3 with a Centaur upper stage\4 and
launch service from Cape Canaveral Air Force Station in Florida. 


--------------------
\1 Changes to CRAF/Cassini projects are described in Space Science: 
Causes and Impacts of Cutbacks to NASA's Outer Solar System
Exploration Missions (GAO/NSIAD-94-24, Dec.  29, 1993). 

\2 "Memorandum of Agreement between the National Aeronautics and
Space Administration and United States Air Force on Titan IV-Centaur
Launch Support for the Cassini Mission," Aug.  11, 1994. 

\3 An expendable launch vehicle is a disposable, unpiloted launcher. 

\4 An upper stage provides propulsion to carry a payload from a lower
to a higher orbit around earth. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

NASA's most recent estimate for the Titan IV-Centaur launch of its
Cassini spacecraft is about $452 million, approximately $23 million
less than its $475-million estimate in April 1994.  The decrease
occurred principally because NASA reduced its earlier estimate of
mission integration costs.  The $452-million estimate includes about
$253 million paid to the Air Force for a Titan IV-Centaur launch
vehicle and launch services.  The remaining Cassini launch costs are
NASA funding to pay for potential future cost increases, mission
integration, prior-year studies, support by two NASA field centers,
and miscellaneous costs.  The Air Force estimates that its cost for
launch vehicle and services is about $98 million more than the $253
million NASA will pay.  Air Force officials believe there are
benefits to providing a launch vehicle for Cassini.  For example, the
Air Force will avoid an estimated $11.5 million to $13.8 million in
storage charges and will reduce mission reliability risk due to the
aging of components. 

Reductions in the cost of the Cassini launch may be possible because
NASA recently completed its negotiation of the mission integration
contract for $15 million less than estimated.  However, cost savings
in other areas of the Cassini launch are unlikely, and some of NASA's
costs could increase.  Also, NASA missed a potential cost-saving
opportunity because its agreement with the Air Force does not require
the Air Force to refund NASA payments in excess of cost. 
Consequently, the Air Force is not required to refund to NASA fees
that the Air Force does not pay to the Titan IV contractor.  These
fees include $2 million in award fees and a $9-million incentive fee. 
In addition, NASA's mission integration contract does not fully
comply with the agency's revised policy for cost-plus-award-fee
contracts, which was implemented to encourage contractors to deliver
quality products at reasonable costs. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

We obtained and analyzed NASA and Air Force documents, including
memoranda of agreement, estimated and negotiated costs, funding and
budget data, the mission integration contract, and launch and
production schedules.  We interviewed personnel in NASA's Office of
Space Science and in the Office of the Assistant Secretary of the Air
Force (Acquisition) in Washington, D.C.  We also obtained information
from officials at the
Titan IV Systems Program Office, Space Systems Division, Air Force
Systems Command, Los Angeles, California, and the Launch Vehicles
Project Office, Lewis Research Center, Cleveland, Ohio. 

We performed our work from August 1994 to March 1995 in accordance
with generally accepted government auditing standards.  As agreed
with your office, we did not obtain written agency comments on this
report.  However, we discussed the information in a draft of this
report with officials from NASA and the Air Force and incorporated
their comments where appropriate. 


---------------------------------------------------------- Letter :3.1

Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 10 days from its issue date.  At
that time, we will send copies of this report to the NASA
Administrator, the Secretaries of Defense and the Air Force, the
Director of the Office of Management and Budget, appropriate
congressional committees, and other interested parties upon request. 

If you or your staff have any questions concerning this report,
please contact me on (202) 512-8412.  The major contributors to this
report were Frank Degnan, Raymond H.  Denmark, and Sandra D.  Gove. 

Sincerely yours,

David R.  Warren, Director
Defense Management and NASA Issues


Briefing Section I CASSINI LAUNCH
COSTS
============================================================== Letter 


   ESTIMATED CASSINI LAUNCH COSTS
------------------------------------------------------------ Letter :4



   (See figure in printed
   edition.)

   Source:  NASA's fiscal year
   1996 budget and data provided
   by NASA.

   (See figure in printed
   edition.)

The National Aeronautics and Space Administration (NASA) estimates
the Titan IV-Centaur launch of the Cassini spacecraft will cost
$451.7 million, or about 17 percent of NASA's total estimated cost of
$2.7 billion for the mission.  NASA's current estimate is about $23
million less than its $475-million estimate in April 1994.  The
decrease occurred principally because NASA reduced its earlier
estimate of mission integration costs. 

NASA will pay the Air Force $253.4 million for a Titan IV-Centaur
launch vehicle and launch services for Cassini.  Other estimated
launch costs in NASA's fiscal year 1996 budget include $38 million in
funding reserves to be held by NASA to pay for future modifications
to the launch vehicle and other unanticipated cost increases; $104.7
million for an integration contract; and $55.6 million for other
integration, prior-year studies, support provided at two NASA field
centers, and miscellaneous items. 


   CASSINI LAUNCH COSTS
------------------------------------------------------------ Letter :5



   (See figure in printed
   edition.)

   Source:  GAO analysis of data
   provided by NASA.

   (See figure in printed
   edition.)

About 56 percent of the total estimated launch cost is for the
vehicle and launch services provided by the Air Force.  The mission
integration contract and other integration costs account for about 24
percent of estimated launch costs; reserved funding, prior-year
studies, center support, and miscellaneous items account for the
remaining 20 percent. 


   COSTS FOR LAUNCH VEHICLE &
   LAUNCH SUPPORT SERVICES
------------------------------------------------------------ Letter :6



   (See figure in printed
   edition.)

   Source:  Memorandum of
   agreement between NASA and the
   Air Force, Aug.  11, 1994.

   (See figure in printed
   edition.)

According to an August 1994 memorandum of agreement (MOA), which was
established under the authority of the Economy Act (31 U.S.C.  1535),
NASA will pay the Air Force $253.4 million for a Titan IV-Centaur
vehicle and launch support services.  Under its agreement with the
Air Force, NASA was also to retain $45 million to pay for future cost
increases or unanticipated future changes to hardware.  This reserved
funding is discussed later. 

Over $205 million, or about 80 percent of the $253.4 million in
charges for launch service under the agreement, is for launch vehicle
hardware--the Titan IV core booster with a solid rocket motor
upgrade, Centaur upper stage, and mission-unique hardware.\5

Almost $37 million is for a variety of items, including range
support, miscellaneous costs (including storage), propellant,
technical support, and integration tasks that are not unique to the
Cassini mission, which are being performed under an Air Force
contract.  The remaining charges of about $11 million cover award
fees and a mission success incentive to be paid to the launch vehicle
contractor for a successful launch. 


--------------------
\5 About half of the cost of mission-unique hardware, or $12 million,
is for a Space Vehicle Destruct System.  This system is required
because the Cassini spacecraft will use plutonium-powered
Radioisotope Thermoelectric Generators. 


   NASA'S COST COMPARED WITH AIR
   FORCE ESTIMATE
------------------------------------------------------------ Letter :7



   (See figure in printed
   edition.)

\a A more recent Air Force estimate of propellant cost is discussed
later. 

   Source:  NASA cost based on
   memorandum of agreement, Aug. 
   11, 1994; Air Force estimate as
   of September 1994.

   (See figure in printed
   edition.)

The total charges to NASA under the agreement are $98 million less
than a September 1994 Air Force estimate for the Titan IV-Centaur
launch vehicle and launch services.  NASA costs, except for range
support and launch operations, reflect initial contract costs or
estimated costs at varying points during the period when NASA and the
Air Force were negotiating the agreement. 

Air Force officials stated there are a number of benefits associated
with the agreement.  For example, the Air Force has a backlog of
hardware because it has launched Titan IVs at much lower rates than
originally planned.  By providing a Titan IV unit to NASA, the Air
Force avoids an estimated $11.5 million to $13.8 million in storage
charges and reduces mission reliability risk due to the aging of
components.\6


--------------------
\6 However, NASA will pay an estimated $7 million in storage charges. 
These charges are included in the "miscellaneous" category in the
table. 


   LAUNCH VEHICLE COST DIFFERENCE
------------------------------------------------------------ Letter :8



   (See figure in printed
   edition.)

   Source:  GAO analysis of data
   provided by the Air Force.

   (See figure in printed
   edition.)

The $98-million difference between NASA charges under the agreement
and the later Air Force estimate is primarily due to two reasons. 
First, NASA is paying the initial contract cost for the specific unit
that it will use but not cost increases stemming from subsequent
slowdowns in launch vehicle production. 

Recent production slowdowns were necessary because the Air Force has
launched Titan IVs at much lower rates than originally planned.  The
launch vehicle that the Air Force is providing to NASA was acquired
under an existing $12.1-billion contract with Martin Marietta for 41
vehicles.  The Air Force negotiated a number of production slowdowns
with the Titan IV contractor during the period when NASA and the Air
Force were negotiating the launch costs for Cassini.  Each slowdown
resulted in an increase in Titan IV unit costs.  The Air Force
estimates that production slowdowns have added about $32 million in
costs to the Titan IV-Centaur vehicle it is providing to NASA. 
However, under the MOA, NASA is not paying the increased costs as the
Air Force's Titan IV classified customer is required to do. 


   RANGE SUPPORT & LAUNCH
   OPERATIONS COST DIFFERENCES
------------------------------------------------------------ Letter :9



   (See figure in printed
   edition.)

   Source:  GAO analysis of data
   provided by the Air Force.

   (See figure in printed
   edition.)

Second, under a reciprocal agreement,\7 the Air Force is not charging
NASA for the routine, recurring costs of operating and maintaining
launch facilities and ranges.  These are funded annually by the Air
Force at a set amount and prorated among scheduled launches for the
fiscal year.  NASA will not reimburse the Air Force for about $63
million in estimated costs for launch operations, including the
receipt, inspection, assembly, integration, servicing, and testing of
the Titan IV system.  NASA will pay $10.6 million, or almost $5
million less than the Air Force estimate, for range support.  NASA
range support charges are based only on those services that are
directly related to the Cassini mission, such as planning and range
documentation, safety, security, launch pad refurbishment, contractor
supplies, and utilities. 

The Air Force has a different arrangement with its other Titan IV
customer for launch services.  For example, the Air Force funds the
classified user's launch services at Cape Canaveral.  The classified
user funds all launch services for its West Coast launches. 


--------------------
\7 "Memorandum of Agreement between the National Aeronautics and
Space Administration and United States Air Force on Launch Services
and Range Support to Government Expendable Launch Vehicle Programs,"
Feb.  1, 1994. 


   PROPELLANT COST DIFFERENCE
----------------------------------------------------------- Letter :10



   (See figure in printed
   edition.)

   Source:  GAO analysis of data
   provided by the Air Force.

   (See figure in printed
   edition.)

NASA is paying $7 million for propellant--$1.3 million more than the
Air Force's September 1994 estimated cost for propellant because
NASA's cost is based on an earlier, higher price.  A NASA official
noted that the cost of propellants has fluctuated significantly in
recent years, and NASA and the Air Force established the cost early
in discussions about Air Force launch support for the Cassini
mission.  The NASA official also noted that propellant cost was not
an area of concern for NASA or the Air Force, because it represents a
small fraction of total launch costs.  Air Force officials noted that
the Air Force's current estimate for Titan IV propellant is $7.5
million, or about $500,000 more than NASA's cost under the agreement. 
The Air Force will absorb the projected higher cost. 


   RESERVED FUNDING
----------------------------------------------------------- Letter :11



   (See figure in printed
   edition.)

   Source:  GAO analysis of data
   provided by NASA.

   (See figure in printed
   edition.)

Under its agreement with the Air Force, NASA agreed to retain $45
million, or about 10 percent of the estimated cost of the Cassini
launch, to pay for future cost increases or unanticipated future
changes to hardware.  However, NASA's fiscal year 1996 budget
estimate includes $38 million in reserved funding.  NASA officials
said the reserved funding reduction was made when the agency was
directed by Congress to reduce its launch budget by $7 million. 

The $45-million funding reserve estimate established in the MOA was
developed by the Air Force based on experience, historical data, and
estimated hardware costs.  The current Air Force funding reserve
estimate is almost $67 million.  NASA will have to pay for any costs
for changes for the Cassini launch that exceed its current reserved
funding level of $38 million. 

Changes covered by reserved funding can stem from mission-driven,
safety, or mission assurance modifications or from other
unanticipated cost increases, including those for integration and
launch services.  Approximately $11.7-million worth of hardware
changes have already been proposed by or negotiated with the launch
vehicle contractor.  An Air Force official noted that the Air Force
was aware of the need for some of these changes when NASA and the Air
Force were negotiating the agreement, and the Air Force is in the
process of determining if it will charge NASA for these costs. 


   MISSION INTEGRATION COSTS
----------------------------------------------------------- Letter :12



   (See figure in printed
   edition.)

\a Base fee for special studies and analyses is $43,750. 

   Source:  NASA's mission
   integration contract.

   (See figure in printed
   edition.)

NASA's fiscal year 1996 budget includes $104.7 million for a Cassini
mission integration contract.  In December 1994, NASA finalized an
$89.5-million cost-plus-award-fee contract to integrate the Cassini
spacecraft with the Titan IV launch vehicle.  The contract is divided
into two main areas--$87.5 million for payload integration and $2
million for special studies and analyses.  Estimated fees in the
contract total $11.7 million, including $8.5 million in award fees,
$1.9 million in base fees, and a $1.2-million performance incentive
fee that will be paid to the contractor for successfully completing
integration tasks in a timely manner.\8

Although the Air Force has a separate contract providing for
integration services on Titan IV launches, it has agreed to allow
NASA to contract directly for these services for the Cassini mission. 
NASA officials believe the direct contract will enhance the agency's
ability to manage integration activities for Cassini and to control
costs.  NASA's Lewis Research Center will oversee mission
integration. 


--------------------
\8 The performance incentive may be increased by award fee not paid
to the contractor up to a total of $2 million, as discussed in more
detail later. 


   MISSION INTEGRATION CONTRACT
   COST ELEMENTS
----------------------------------------------------------- Letter :13



   (See figure in printed
   edition.)

Under NASA's contract, payload integration covers management and
support, including launch site services; interface design and
verification; mission-unique hardware and software design; and
independent verification and validation. 


   MISSION INTEGRATION CONTRACT
   COST ELEMENTS
----------------------------------------------------------- Letter :14



   (See figure in printed
   edition.)

NASA will issue task orders for special studies and analyses related
to the general scope of payload integration. 


   OTHER INTEGRATION, STUDIES,
   CENTERS' SUPPORT, AND
   MISCELLANEOUS COSTS
----------------------------------------------------------- Letter :15



   (See figure in printed
   edition.)

Other mission integration costs of approximately $5 million include
the cost of integration studies and about $1.7 million to pay the
contractor for preparing the proposal and negotiating the integration
contract.  NASA officials said the contractor, who was already under
contract with the Air Force to perform Cassini integration, was paid
because there was no reason for the contractor to prepare
documentation or to assemble a negotiation team, except to comply
with NASA's request for a separate integration contract.  NASA
believes that the advantages of having a separate integration
contract outweighed the added costs.  These advantages were discussed
previously. 

The $25.7 million for prior-year studies represents the cost of
studies funded through the Air Force over a period of 4 or 5 years,
when Cassini was paired with the Comet Rendezvous Asteroid Flyby
program, which was canceled in 1992.  Studies included reviews of
launch vehicle integration and performance analysis. 

The combined budget for Lewis Research and Kennedy Space Centers for
the Cassini mission is $21.1 million, including costs for launch
support activities by contractors and use of facilities.  Lewis'
responsibilities for the Cassini mission include overseeing the
technical areas of the integration contract, independently validating
critical analyses, and identifying and defining mission-unique
requirements.  Kennedy is responsible for a variety of activities,
including coordinating Cassini mission and Air Force range
activities. 

Miscellaneous costs estimated at $3.8 million cover a variety of
services, including government inspections, audits, and contract
services at contractors' facilities. 


   COST SAVINGS ARE POSSIBLE, BUT
   THERE IS ALSO COST GROWTH RISK
----------------------------------------------------------- Letter :16



   (See figure in printed
   edition.)

Reductions in the cost of the Cassini launch may be possible.  In
December 1994, NASA completed negotiations on a mission integration
contract with an estimated cost of $89.5 million--$15.2 million less
than the fiscal year 1996 budget estimate.  If other estimated launch
costs remain relatively stable, this reduction could lead to a
decrease in total estimated launch costs. 

However, cost savings are unlikely in other areas of the launch
budget, including NASA's $253.4-million agreement with the Air Force,
under which most of NASA's costs are firmly established.  In
addition, some costs could increase.  For example, NASA would have to
pay additional costs for range support and launch operations if it is
responsible for launch delays or changes that increase Air Force
costs.  Both NASA and Air Force officials believe such increases are
unlikely.  A NASA official noted that it is critical that Cassini be
launched on schedule, and the agency will make a concentrated effort
to do so.  He also said the agency has launched all other planetary
missions within their initial time frames.  An Air Force official
said that, due to the way the Air Force contracts for launch
operations (i.e., a level of support over a period of time rather
than by launch vehicle), a launch delay does not necessarily result
in increased costs. 

An unresolved issue that could significantly increase NASA's launch
costs is that of maintaining the solid rocket motor (SRM) as an
option for the Cassini launch.  NASA currently plans to use the solid
rocket motor upgrade (SRMU) for the Cassini launch.  The first use of
the SRMU is planned for October 1996, and two other launches using
the SRMU are scheduled before the Cassini mission.  NASA is currently
evaluating the feasibility and cost of maintaining the SRM as a risk
reduction option and expects the results in late April 1995. 
According to NASA officials, maintaining the SRM as an option could
add $50 million or more to the cost of the launch. 

One cost category in the Cassini launch budget with the potential for
future reduction is that of engineering change orders and risk. 
However, as previously noted, NASA's current budget reflects a
funding level of $38 million, or $7 million less than the amount
agreed to with the Air Force.  If the $45-million reserve estimate in
the MOA is accurate, NASA will overspend, rather than underspend, in
this cost category.  Also, there is already about $11.7 million in
proposed or negotiated hardware changes, accounting for more than 30
percent of the $38 million currently budgeted for unanticipated cost
increases. 


   MISSED SAVINGS OPPORTUNITIES
----------------------------------------------------------- Letter :17



   (See figure in printed
   edition.)

NASA's agreement with the Air Force does not provide for potential
cost savings for NASA for the Cassini launch.  Under this agreement,
there is no provision requiring the Air Force to refund any NASA
payment that exceeds actual costs.  For example, NASA's payments to
the Air Force would not decrease even if actual fees paid to the
contractor were lower than the maximum amounts scheduled.  This could
result in NASA's paying $9 million to the Air Force to cover the
contractor's incentive payment even if the launch is unsuccessful. 
In addition, NASA's payments to the Air Force for award fees are
based on the contractor's maximum potential award fee of $2 million
for the Titan IV vehicle.  However, for the last two Titan IV units
built, payments have averaged about 90 percent of the total available
award fee.  Based on this recent payment history, NASA could give the
Air Force about $200,000 more for award fee than the Air Force will
pay to the contractor. 

A NASA official acknowledged that NASA and the Air Force have not
discussed the possibility of the Air Force's refunding incentive or
award fees that are not paid to the contractor.  He noted that NASA
and the Air Force would discuss unpaid fees should a serious
performance problem arise, and NASA would probably request that some
of the money be refunded or be used for investigating the problem and
taking corrective action.  An Air Force official noted that excess
payments by NASA in incentive or award fees and other cost categories
in the agreement will be used to fund other program costs that exceed
the price negotiated with NASA. 


   NASA'S MISSION INTEGRATION
   CONTRACT
----------------------------------------------------------- Letter :18



   (See figure in printed
   edition.)

In October 1993, NASA revised its award fee policy to encourage
contractors to deliver quality products at reasonable costs.\9

However, NASA's integration contract does not fully comply with the
revised policy.  The policy states (1) the center procurement officer
must determine in writing that the use of base fee is in NASA's best
interest and (2) base fee, if used, will be paid only if the
contractor's performance is satisfactory or better.  The
determination that the use of base fee is in the agency's best
interest was not made for the mission integration contract, which
includes about $2 million in base fees, and these fees will be paid
to the contractor regardless of performance.  NASA officials noted
that the Air Force's
Titan IV integration contract has a base fee that is not tied to
satisfactory performance, and this fee provision was transferred to
the NASA contract.  Officials stated they attempted to convince the
contractor to agree to modify the base fee provision in order to
comply with the agency's revised award fee policy. 

In addition, a provision in the mission integration contract,
although not expressly prohibited by award fee policy, highlights the
need for management oversight of the agencywide implementation of
NASA's revised award fee policy.  While the policy eliminates the
"roll-over" of unearned award fee from one award fee period to a
later period, the integration contract allows the roll-over of up to
$800,000 in unearned award fee to a performance incentive.  NASA
officials at Lewis Research Center believe that, by allowing the
contractor to recoup a relatively small proportion of the total award
fee--less than 10 percent--as part of a performance incentive, they
are providing the contractor with an additional incentive to perform
well and to help meet the objective of launching the Cassini mission
successfully at the optimal time.  NASA headquarters' procurement
officials told us that other centers have also converted unearned
award fee to increase an incentive fee.  These officials indicated
that award fee guidance will be revised to ensure that this practice
is used appropriately and effectively. 


--------------------
\9 We reported on NASA's award fee policy revisions in NASA
Procurement:  Challenges Remain in Implementing Improvement Reforms
(GAO/NSIAD-94-179, Aug.  18, 1994). 

