NASA Infrastructure: Challenges to Achieving Reductions and Efficiencies
(Letter Report, 09/09/96, GAO/NSIAD-96-187).

Pursuant to a congressional request, GAO reviewed the status of the
National Aeronautics and Space Administration's (NASA) efforts to
achieve reductions and efficiencies in key areas of its infrastructure.

GAO found that: (1) NASA plans for a $2.8-billion reduction in the
current replacement value of its facilities will yield only about $250
million in cost reductions through fiscal year (FY) 2000; (2) NASA has
experienced problems in assessing cost-reduction opportunities because
it did not thoroughly evaluate cost-reduction options, excluded many
systems in its review of ways to cut supercomputer costs, performed
questionable initial studies for aircraft consolidation, made
inappropriate closure recommendations, and overstated cost-reduction
estimates; (3) although environmental cleanup costs could affect
facility disposition efforts, NASA lacks a policy for identifying other
responsible parties and sharing cleanup costs; (4) a joint effort
between NASA and the Department of Defense to study potential operation
cost reductions through increased cooperation and sharing yielded no
specific recommendations for closures, consolidations, or cost
reductions but did identify barriers to sharing and increasing
interagency reliance; and (5) NASA ability to reach its workforce
reduction goal by 2000 is subject to some major uncertainties, and NASA
may need to plan a reduction in force if enough employees do not retire
or resign voluntarily.

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

 REPORTNUM:  NSIAD-96-187
     TITLE:  NASA Infrastructure: Challenges to Achieving Reductions and 
             Efficiencies
      DATE:  09/09/96
   SUBJECT:  Federal agency reorganization
             Cost control
             Federal facility relocation
             Federal downsizing
             Interagency relations
             Cost effectiveness analysis
             Wide area networks
             Supercomputers
             Space exploration
IDENTIFIER:  NASA Tracking and Data Relay Satellite System
             NASA Zero Base Review
             NASA Project Reliance
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on National Security,
International Affairs, and Criminal Justice, Committee on Government
Reform and Oversight, House of Representatives

September 1996

NASA INFRASTRUCTURE - CHALLENGES
TO ACHIEVING REDUCTIONS AND
EFFICIENCIES

GAO/NSIAD-96-187

NASA Infrastructure

(709173), (709174), (709143)


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

  DOD - Department of Defense
  NASA - National Aeronautics and Space Administration

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


B-272591

September 9, 1996

The Honorable William H.  Zeliff, Jr.
Chairman, Subcommittee on National Security,
 International Affairs, and Criminal Justice
Committee on Government Reform and Oversight
House of Representatives

Dear Mr.  Chairman: 

The National Aeronautics and Space Administration (NASA) is facing
the difficult task of fulfilling its mission with significantly fewer
dollars.  NASA's present strategy for absorbing its most recent
funding reductions through fiscal year 2000 focuses on cutting
infrastructure.\1 If NASA fails to find and implement sufficient
infrastructure cost-reduction opportunities, meeting its budget
targets through fiscal year 2000 will require program
adjustments--stretching out, reducing the scope, or terminating
existing efforts and/or postponing new initiatives.  At your request,
we reviewed the status of NASA's efforts to achieve reductions and
efficiencies in key areas of its infrastructure, principally
facilities,\2 and the challenges it faces. 


--------------------
\1 NASA's infrastructure--the underlying foundation for agency
operations--includes people, facilities, equipment, business
processes, and information systems. 

\2 NASA defines facilities as land, buildings, structures,
permanently located trailers, and other real property improvements,
including utility systems and collateral equipment that is
essentially integrated into the facility. 


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

In the early 1990s, NASA was planning an infrastructure to support a
projected annual budget of more than $20 billion and a civil service
workforce of about 25,000 by the turn of the century.  However, over
the last several years, NASA has been directed by the Administration
to reduce its future years' budget levels.  In the fiscal year 1994
budget request, NASA's total funding for fiscal years 1994 through
2000 was reduced by 18 percent, or $22 billion.  In the fiscal year
1995 budget request, total funding was reduced again by almost $13
billion, or an additional 13 percent.  To absorb these major
reductions, NASA focused on adjusting programs.  For example, the
Space Station program was restructured and given an annual budget
ceiling of $2.1 billion.  Similarly, the scope of the Earth Observing
System program was reduced, and the program is being restructured
once again.  Also, funding was terminated for the Space Exploration
Initiative, the National Launch System, and the National Aerospace
Plane, and the Comet Rendezvous and Asteroid Flyby project was
canceled. 

As part of the executive branch's development of NASA's $14.2-billion
budget request for fiscal year 1996, NASA was directed once again to
lower its projected budget through fiscal year 2000, this time by an
additional
5 percent, or $4.6 billion.  Rather than terminating or delaying core
science, aeronautics, or exploration programs, NASA announced it
would absorb this funding decrease by reducing infrastructure,
including closing and consolidating facilities.  NASA also said it
would reduce its use of support contractors and decrease the size of
its workforce to about 17,500 by the turn of the century--the lowest
level since the early 1960s. 

While NASA's actual and planned budgets and staffing levels have
decreased sharply, the value of its facilities infrastructure has
actually increased.  From fiscal years 1990 through 1995, the current
replacement value\3 of NASA's facilities increased by about 14
percent, not including inflation.  At the end of fiscal year 1995,
the agency's facilities had an estimated current replacement value of
$17 billion.  The agency owned or leased about 3,000 buildings on
nearly 130,000 acres of land at 71 locations.  NASA's facilities
range in size from small buildings to large industrial plants. 
Appendix I provides information about facilities at NASA's 10 field
centers. 

As part of its infrastructure reduction efforts, NASA is also looking
at ways to cut the cost of its field center support activities.  Each
NASA field center operates a wide range of such activities, with some
support-unique missions at particular centers.  Common activities
include building maintenance, fire protection, security, printing,
and medical services.  NASA provides these services primarily through
a combination of civil service employees, contractor labor, and
arrangements with the Department of Defense (DOD) where facilities
are collocated. 


--------------------
\3 The current replacement value is the acquisition cost of
facilities, excluding land, plus the cost of collateral equipment and
incremental book value changes escalated to the current year using a
20-city average cost index for buildings. 


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

NASA's current facility closure and consolidation plans will not
fully achieve the agency's goal of decreasing the current replacement
value of its facilities by about 25 percent (about $4 billion in 1994
dollars) by the end of fiscal year 2000.  More importantly, these
plans will not result in substantial cost reductions by that date. 
Also, although NASA is about half way to its goal of lowering the
number of its full-time equivalent\4 employees to 17,500 by fiscal
year 2000, it faces major uncertainties in achieving additional
workforce reductions.  NASA has also had problems in evaluating some
cost-reduction opportunities; environmental cleanup costs could
affect future facility disposition efforts; and its efforts to share
facilities with DOD have progressed slowly. 

NASA faces barriers to accomplishing additional consolidations and
closures that, to date, it has not been able to overcome on its own. 
Closing facilities, relocating activities, and consolidating
operations in fewer locations with fewer employees have been slowed
by parochial concerns about the effects of such actions on missions,
personnel, and local communities.  These concerns have been
exacerbated by perceptions of the lack of fairness and impartiality
in the decision-making process.  In the face of these concerns, NASA
must still reduce its infrastructure further. 

Ultimately, if further progress in identifying and implementing
infrastructure reductions is limited, a process that uses an external
independent group similar to the Defense Base Closure and Realignment
Commission may be needed.  To help determine the need for an
independent group to facilitate closures and consolidations of NASA
facilities, Congress may wish to consider requiring NASA to submit a
plan outlining how it intends to meet its reduction goals. 


--------------------
\4 According to Office of Management and Budget guidance, full-time
equivalent generally includes
260 compensable days, or 2,080 hours, excluding overtime and holiday
hours. 


   PLANNED FACILITIES REDUCTIONS
   WILL NOT ACHIEVE LARGE COST
   REDUCTIONS
------------------------------------------------------------ Letter :3

NASA's current facility closure and consolidation plans will not
fully achieve the agency's goal of decreasing the current replacement
value of its facilities by about 25 percent (about $4 billion in 1994
dollars) by the end of fiscal year 2000.  More importantly, these
plans will not result in substantial cost reductions by that date. 

By the end of fiscal year 1997, NASA plans to have closed or
converted facilities to cost-reimbursable status that have a current
replacement value of $1.9 billion.  Also, as of March 1996, planned
reductions through fiscal year 2000 were $2.8 billion, or about 30
percent below NASA's goal of reducing the current replacement value
of its facilities by about $4 billion in 1994 dollars.\5 Agency
officials noted that the $4-billion reduction goal was a "stretch,"
or aggressive goal, which they were never certain could be achieved. 

Additional reductions are unlikely in research and development
facilities, but there may be opportunities for further reductions in
office space, according to NASA officials.  NASA classifies building
space based on its primary use, such as office space.  NASA was
providing general purpose office space for about 53,000 civil service
and contractor personnel at the end of fiscal year 1995.  Agencywide,
the average square feet of office space available per person,
including substandard space, exceeded NASA's standard\6 by nearly 43
percent and the ceiling by over 25 percent.  When substandard space
is not included, this average exceeded the standard by over 27
percent and the ceiling by 12 percent.\7 Future reductions in the
number of on-site contractor personnel and NASA employees (almost
4,000) by fiscal year 2000 will make even more office space
available. 

NASA estimates that the planned $2.8-billion reduction in the current
replacement value of facilities will yield only about $250 million in
cost reductions through fiscal year 2000.  Although some of these
cost reductions are from lowering facilities' operations and
maintenance costs, most result from four centers\8 bringing
contractor personnel from off-site leased space onto the centers to
fill space left vacant because of reductions in NASA personnel and
support contractors.  Moreover, some cost reductions may be offset by
increased costs in future years.  For example, according to a NASA
official, about three-quarters of NASA facilities are 30 or more
years old and keeping these facilities operational may lead to higher
operations and modernization costs. 


--------------------
\5 Assuming all planned reductions occur, at the end of fiscal year
2000, NASA's facilities will have a current replacement value of
$15.3 billion in fiscal year 2000 dollars. 

\6 NASA's allowance standard for office space is an average of 110
net square feet per person, and an average of 125 net square feet per
person is the ceiling, which NASA calls the "satisfactory liberal
limit."

\7 As of September 30, 1995, the agencywide average office density
was about 157 net square feet per person, including substandard
space, or 140 net square feet per person, excluding substandard
space.  A NASA official told us that these office space averages
include space that was not intended to be used as offices, such as
industrial plants and test sites. 

\8 Goddard Space Flight Center, Johnson Space Center, Kennedy Space
Center, and the Jet Propulsion Laboratory. 


   PROBLEMS IN EVALUATING COST-
   REDUCTION OPPORTUNITIES
------------------------------------------------------------ Letter :4

NASA has had problems in identifying, assessing, or implementing some
cost-reduction opportunities.  NASA personnel (1) did not thoroughly
evaluate potential larger cost-reduction options, (2) limited the
scope of consideration for consolidation, (3) performed questionable
initial cost-reduction studies, (4) made inappropriate closure
recommendations, and (5) substantially overstated cost-reduction
estimates.  Some of these problems resulted when NASA acted quickly
in an attempt to achieve near-term cost reductions.  NASA officials
said that some cost-reduction estimates were "interim" estimates
because NASA was pressured into prematurely providing what turned out
to be imprecise savings estimates to Congress.  Also, some NASA staff
lacked experience in developing estimates, according to NASA
officials. 

Although there were problems with some evaluations, which are
discussed below, others appear to have been done better.  For
example, the Office of Space Flight reviewed in detail a proposed
consolidation of automated data processing functions at a single
location before developing a plan that offered several options. 

Concerns about closing facilities, relocating activities, and
consolidating operations have sometimes been exacerbated by
perceptions of the lack of fairness and impartiality in the
decision-making process.  In the past, we have expressed concerns
about NASA's ability to accurately and independently develop cost
estimates to support its decisions on new and ongoing programs and
projects.\9 Just recently, the NASA Inspector General\10 and NASA
management have been discussing the structure required to meet NASA's
continuing need for independent, impartial, and technically credible
systems analysis and program evaluation. 


--------------------
\9 Space Programs:  NASA's Independent Cost Estimating Capability
Needs Improvement (GAO/NSIAD-93-73, Nov.  5, 1992). 

\10 Assessment of the Relocation of NASA Independent Program
Evaluation and Assessment Activities to Langley Research Center, NASA
Office of Inspector General, Inspections and Assessments (July 8,
1996). 


      COST-REDUCTION OPTIONS FOR
      TELECOMMUNICATIONS NETWORKS
      NOT THOROUGHLY EVALUATED
---------------------------------------------------------- Letter :4.1

NASA did not thoroughly evaluate potential larger cost-reduction
options for consolidating wide area telecommunications networks. 
NASA has five such networks operating or being developed, and they
provide a variety of communications services among headquarters,
field centers, major contractors, affiliated academic institutions,
and international partners.  Due to advances in technology, NASA no
longer needs to operate multiple telecommunications networks, and
consolidating network operations at a single site offers economies of
scale, as well as reduced administrative overhead. 

Last year, NASA's Zero Base Review\11 team recommended that the field
centers compete to determine which one could consolidate the five
wide area networks most cost-effectively.  Goddard Space Flight
Center, Ames Research Center, and Marshall Space Flight Center
prepared consolidation proposals.  NASA's Office of Space
Communications, which oversees the two largest networks, decided
against a competition and did not formally consider the proposals
offered by Goddard and Ames.  Instead, with the objective of
obtaining some budget cost reductions in 1997, it endorsed the
Marshall proposal without determining which of the three proposals
was the most cost-effective.  However, Marshall's proposal did not
project cost reductions in the near term as aggressively as the
others.  For example, Goddard's proposal estimated potential cost
reductions over the next 6 years totaling $94.5 million more than the
reductions in the Marshall proposal. 

Earlier this year, we recommended\12 that NASA conduct an objective
review of network consolidation to determine whether its chosen
approach should be modified to achieve greater cost reductions.  NASA
agreed with this recommendation and arranged for an independent group
to conduct the review.  It indicated the agency's telecommunications
experts were not participating in the review because they would have
a "biased" perspective.  The independent review is scheduled to be
completed this month. 

NASA's initial network consolidation efforts were hampered by the
lack of clear direction within NASA to include all five wide area
networks in the consolidation effort.  The Office of Space
Communications, which directed the consolidation effort at Marshall,
does not have authority over three of the five networks.  The
agencywide telecommunications network consolidation or streamlining
efforts did not have a strong central advocate.  NASA's Chief
Information Officer, who would be a logical choice to fill this role,
was not directly involved in this effort.\13


--------------------
\11 The Zero Base Review was an agencywide budgetary and management
study.  Its primary purpose was to identify ways for NASA to reduce
its infrastructure through fiscal year 2000 in order to meet the
budget target established in the agency's fiscal year 1996 budget
request.  (See app.  II for a brief description of the Zero Base
Review and other studies related to NASA facilities done since 1990.)

\12 Telecommunications Network:  NASA Could Better Manage Its Planned
Consolidation (GAO/AIMD-96-33, Apr.  9, 1996). 

\13 We reported on the effectiveness of NASA's initiatives to
implement a chief information officer position in NASA Chief
Information Officer:  Opportunities to Strengthen Information
Resources Management (GAO/AIMD-96-78, Aug.  15, 1996). 


      INITIAL LIMITATIONS IN SCOPE
      OF CONSIDERATION FOR
      SUPERCOMPUTER CONSOLIDATION
---------------------------------------------------------- Letter :4.2

NASA initially excluded almost 40 percent of its supercomputer
systems, which were used mostly for research and development, from
the scope of a supercomputer consolidation study.  The agency uses
supercomputers to support some space mission operations and a variety
of research projects, including developing new supercomputer
technologies. 

In March 1995, NASA began studying ways to cut its supercomputer
costs by consolidating their management and operation.  However, its
initial studies considered only some of the agency's supercomputers
and focused on nonresearch and development supercomputing systems. 
Although NASA's consolidation study team had identified 29
supercomputers, NASA management excluded 12 existing machines and
some planned for future procurement from consideration because (1)
some are being managed under existing contracts that could be
affected by a consolidation decision and (2) others were used in
research programs primarily to develop new supercomputer
technologies. 

We spoke with NASA program, field center, and supercomputer
consolidation study officials about the reasons for, and
appropriateness of, limiting the scope of NASA's consolidation study. 
During a series of discussions, NASA officials acknowledged our
concerns about the study's limitations and expanded its scope to a
phased approach that will eventually consider all of the agency's
supercomputers.  In commenting on a draft of this report, NASA said
the review will be based on a top-down plan for agencywide management
of supercomputing operations and will design an optimal supercomputer
architecture as a basis for determining future directions in this
area. 


      QUESTIONABLE INITIAL STUDIES
      OF AIRCRAFT CONSOLIDATION
      OPTIONS
---------------------------------------------------------- Letter :4.3

Questions about initial studies have delayed the decision-making
process in NASA's attempts to consolidate aircraft.  Last year, the
transfer of research and operational support aircraft from five NASA
centers to the Dryden Flight Research Center was proposed.  NASA
headquarters tasked Dryden, the center that would gain from the
consolidation, with planning and performing an aircraft consolidation
study.  In a recent report,\14 the NASA Inspector General noted the
Dryden study had estimated NASA could save $12.6 million annually by
consolidating aircraft at Dryden.  However, internal and external
questions about the scope and quality of this study have slowed the
decision-making process.  Subsequent reviews of the costs and
benefits of aircraft consolidation by both NASA management and the
NASA Inspector General staff have resulted in much lower annual
savings estimates. 

In light of the controversy that potentially accompanies any
significant decision to consolidate, relocate, or close facilities,
NASA would benefit from ensuring an adequate balance of expertise and
interests for study teams, developing initial analyses that are
objective and well-supported, and fairly and thoroughly considering
reasonable alternatives before making decisions.  In this way, NASA
can develop defensible decisions that will withstand external
scrutiny and can be implemented in a timely manner. 


--------------------
\14 Aircraft Consolidation at the Dryden Flight Research Center
(HA-96-007, Aug.  12, 1996). 


      INAPPROPRIATE
      RECOMMENDATIONS TO CLOSE
      PLUM BROOK STATION
---------------------------------------------------------- Letter :4.4

Plum Brook Station\15 was inappropriately recommended for possible
closure twice.  In February 1995, the NASA Federal Laboratory Review
recommended reviewing the station for possible closure because it was
being operated primarily for non-NASA users.\16 At about the same
time, NASA's White Paper, formally titled A Budget Reduction
Strategy, suggested that Plum Brook should be closed.  NASA officials
could not provide the rationale for the proposed action.  The
Laboratory Review report did acknowledge a problem concerning the
existence of an inactive nuclear reactor at the station, and the Zero
Base Review subsequently recommended retaining Plum Brook on a fully
reimbursable basis because of the reactor. 

Plum Brook operates on a cost-reimbursable basis, with most of its
operating cost covered by revenue from users of four test facilities
at the station.  Even if all four of the test facilities were closed,
the operating cost would still be about $2 million, primarily because
the Nuclear Regulatory Commission requires that the reactor be
maintained in its current state.  The only way to close the location
and dispose of the property would be to dismantle the reactor. 
However, the cost for doing this would be prohibitively
expensive--about $100 million in 1997 dollars, according to a 1990
estimate.  In addition, there are no disposal sites to accommodate
the radioactive waste that would be generated by the dismantling
process. 


--------------------
\15 Plum Brook is a field station of the Lewis Research Center, and
it is located about 50 miles west of Lewis, near Sandusky, Ohio.  It
encompasses 6,400 acres and employs 12 civil servants and 100
contractor personnel.  Its primary mission is to provide risk
reduction and system development testing on space-bound hardware for
a variety of customers. 

\16 Between fiscal years 1988 and 1995, the station's customers paid
$32.9 million.  NASA was the biggest customer, with 34 percent of the
business.  Other users included the National Aerospace Plane, 18
percent; Department of Energy, 15 percent; Air Force, 13 percent;
European Space Agency, 9 percent; Martin Marietta Aerospace, the
Defense Nuclear Agency, ILC Dover Company, and NASA's Jet Propulsion
Laboratory, 3 percent each; and General Dynamics, Space Systems
Division, 1 percent. 


      OVERSTATED COST REDUCTIONS
      FOR SOME OPTIONS
---------------------------------------------------------- Letter :4.5

In some cases, NASA's initial estimates of cost reductions were
overstated.  For example, the Zero Base Review estimated that $500
million or more could be saved through 2000 by commercializing the
Tracking and Data Relay Satellite System.  However, NASA later
determined this approach could not be implemented and that none of
the projected savings would materialize in the time frame targeted by
the Zero Base Review.  Also, the Zero Base Review claimed that
consolidation of telecommunications networks would save between $350
million and $375 million.  Subsequently, NASA officials acknowledged
these cost reductions would not only be significantly lower, but the
lower savings estimates had already been considered in the
preparation of the networks' future budget estimates. 

The estimated savings noted above were part of the total savings
estimate that provided the basis for NASA's claim that the fiscal
year 1996 out-year budget reductions could be covered by
infrastructure decreases.  To the extent the estimates were
overstated, additional pressure was placed on NASA program and field
center officials to find efficiencies to supplant the overstated
savings.  For example, after NASA determined that commercializing the
Tracking and Data Relay Satellite System would not reduce costs, it
began aggressively negotiating a fixed-price contract for the
purchase of three additional satellites needed for the system. 
However, NASA estimates that the fixed-price contract produced
considerably less savings than the commercializing of the system. 


   ENVIRONMENTAL CLEANUP COSTS
   COULD AFFECT FACILITY
   DISPOSITION EFFORTS
------------------------------------------------------------ Letter :5

NASA's future facility disposition decisions could be affected by
environmental cleanup costs.  Therefore, information about the extent
and type of contamination, the cost of its cleanup, and the party who
is financially responsible are relevant to such decisions.  However,
NASA officials do not yet fully know what the cleanup requirements
will be and lack a policy for identifying other responsible parties
and sharing cleanup costs. 

Currently, NASA officials are still working to identify all the
challenges they face as a result of environmental contamination. 
NASA's 1996 site inventory identified over 900 potentially
contaminated sites, about half of which may require cleanup.  At this
time, according to NASA records, only 72 sites are classified as
closed and, of these, only 15 required cleanup.  Most sites are still
in the early stages of the cleanup process, with almost 400 still
being studied to determine the type and extent of contamination.\17

NASA headquarters used selected portions of a DOD model to develop a
preliminary cost estimate of $1.5 billion for cleaning up potentially
contaminated sites over a 20-year period.  Subsequently, NASA's field
centers, in response to our request, developed cost estimates
totaling $636 million.\18 This estimate excludes some sites that have
not been studied and is a projection of cleanup cost for only the
next 8 years or less.  Although NASA field centers have not developed
cleanup cost estimates for disposing of property in the future,
officials at several centers believed the cost could be as much as
two to five times higher than if NASA were to retain the property. 
The higher cost would occur if NASA cleaned up facilities to meet
more stringent standards that might be required for disposal. 

Sharing cleanup costs with others could help NASA reduce its
environmental cleanup costs.  Environmental law holds owners,
operators, and other responsible parties liable for correcting past
environmental contamination.  However, NASA has no policy on pursuing
other responsible parties.  It currently pays the cleanup costs for
virtually all of its centers and other field locations, regardless of
who was responsible for causing or contributing to the contamination. 
Although NASA has identified other responsible federal agencies, it
has not generally tried to identify potentially responsible
contractors or previous owners and pursue cost-sharing agreements
with them. 

An ongoing facility reduction effort where cost sharing may be an
issue involves land at NASA's Industrial Plant in Downey, California. 
The city wants to acquire 166 acres of this property:  68 acres NASA
has identified as excess to its needs and 98 acres it has identified
as potentially excess.  The city plans to use the land for economic
development projects.  An assessment of environmental contamination
determined that 16 of the excess acres were free of contamination. 
Studies of the remaining excess acreage are underway.  The eventual
disposition of the remaining 98 acres of NASA-owned land is still
unclear, and studies of their contamination status are still in the
early stages. 

Before NASA took over the Downey facility, it was a DOD facility
operated by the predecessor organization of the contractor currently
operating the facility for NASA.  NASA will have to decide which
potentially responsible parties it will pursue in supporting any
corrective actions that may be needed to meet applicable cleanup
standards.  However, NASA's Johnson Space Center, which manages the
Downey facility, has not yet begun to deal with the potential
cost-sharing issue and, as noted above, there is no NASA-wide policy
providing guidance on this issue.  In commenting on a draft of this
report, NASA stated it intends to complete a policy statement by the
end of 1996 to address the issue of potential responsible parties at
NASA facilities requiring environmental remediation. 


--------------------
\17 NASA officials at some of the NASA field centers we reviewed said
they may not finish assessing the type and extent of contamination
until 1998 or 1999. 

\18 These estimates excluded NASA's potential share of the estimated
$1-billion cleanup costs at locations owned and operated by NASA
contractors. 


   EFFORTS TO LOWER SUPPORT COSTS
   UNDERWAY, BUT LITTLE PROGRESS
   MADE IN SHARING FACILITIES WITH
   DOD
------------------------------------------------------------ Letter :6

Among NASA's initiatives to reduce its infrastructure are efforts to
lower the field centers' operations support costs.  NASA spends over
$1 billion annually to support maintenance and operations at field
centers.  Among the actions NASA is taking to reduce this cost is
consolidating its payroll functions at one center to cut
payroll-related civil service and contractor staffing by about 50
percent.  It is also implementing a variety of initiatives to share
resources and standardize processes at its principal aeronautics
centers--Ames, Langley, Lewis, and Dryden.  NASA estimates that this
effort--known as Project Reliance--will reduce agency costs by about
$36 million by fiscal year 2000.\19

In June 1995, NASA expanded the scope of its cost-reduction search
outside the agency; it teamed with DOD to study how the two agencies
could significantly reduce their operations costs and increase
mission effectiveness and efficiency through increased cooperation
and sharing.  Study teams, referred to as integrated product
teams,\20 began work in September 1995 in seven areas.  We monitored
three teams:  major facilities, space launch activities, and
base/center support and services. 

The objectives of the major facilities and space launch activities
teams included assessing facilities' utilization and recommending
potential consolidations and closures.  The major facilities team was
responsible for (1) developing recommendations on test and evaluation
and research facilities with unnecessary overlap or redundancy and
(2) identifying and providing the rationale for consolidations,
realignments, and reductions for specific facilities.  The space
launch activities team focused on increasing cooperation in its area,
including range and launch facilities and infrastructure.  Neither
team recommended specific consolidations or closures or identified
cost reductions in their final briefings to the Aeronautics and
Astronautics Coordinating Board.\21 Both teams did, however, identify
barriers to increased cooperation and coordination between NASA and
DOD,\22 including differences in cost accounting systems, practices,
and standards. 

More importantly, NASA and DOD officials noted a more general
limitation:  the "old paradigm"--that is, each NASA and DOD program
protects its ability to maintain its own technical expertise and
competence.  The over-
capacity situation in large rocket test facilities helps to
illustrate this.  Several years ago, the National Facilities Study
concluded that there was excess large rocket test capacity and some
facilities could be closed, but DOD and NASA officials involved in
the study said no direction or funding was subsequently made
available to pursue this recommendation.  More recently, the major
facilities team found that NASA and DOD each have excess large rocket
test capacity based on both current and projected workloads. 
However, the team made no recommendation to consolidate facilities
because comparable facilities' cost data was not available.  The team
did recommend that a facility agreement in the area of rocket
propulsion testing be established to identify areas where capability
reductions and greater reliance between NASA and DOD would be
possible in the future. 

While the issue of large rocket test capacity remains unresolved,
some rocket test facilities are currently undergoing or being
considered for modification.  A rocket test complex at Edwards Air
Force Base is being upgraded by DOD at an estimated cost of $15
million to $17 million.  In addition, NASA plans to upgrade one of
its rocket engine test facilities at Stennis Space Center for about
$45 million.  DOD and NASA officials believe that their respective
upgrades are cost-effective, although they agreed that the agencies
need to improve coordination to prevent further excess capacity. 
NASA believes that the rocket test facilities at Stennis and Edwards
Air Force Base are not comparable.  However, the National Facilities
Study and the major facilities integrated product team raised the
overall excess capacity issue, and it has not yet been resolved. 
Independent actions by DOD and NASA to upgrade their individual
facilities potentially exacerbate the problem of overall excess
capacity. 

NASA and DOD officials acknowledged that recommending sharing and
increasing reliance on each other, including consolidating or closing
facilities, was difficult.  These officials pointed out that, in many
cases, such actions are "too politically sensitive" or could result
in near-term costs increases, rather than cost reductions.  They
noted that an external, independent process, similar to the one used
by the Defense Base Closure and Realignment Commission, may be needed
to overcome the sensitivity and cost issues. 

The base/center support and services team, which was responsible for
recommending ways to increase cooperation in base/center support and
services, examined existing and potential cooperative arrangements at
eight NASA centers and one test facility collocated with or
geographically near DOD installations.  The team reported finding
over 500 existing support arrangements and identified additional
cooperative opportunities.  The team identified changes to activities
at several NASA locations, including having NASA's Dryden Flight
Research Center and the Air Force Flight Test Center jointly use
space and combine certain operations; constructing one fuel facility
for joint use by NASA's Langley Research Center and Langley Air Force
Base; and sharing use of contracts and services. 

Although the team expects such changes to lower the agencies' costs
by millions of dollars, it cited specific barriers to accomplishing
more.  For example, different negotiated wage rates for support
service contractors could be a barrier, since consolidations would
likely require paying the higher rate, thereby substantially or
totally offsetting consolidation cost reductions.  In other cases,
merging certain activities could complicate existing procurements in
small and disadvantaged business set-aside programs.  However, the
team said that many more sharing arrangements are possible and should
be included in follow-on studies.  In developing the follow-on
process, this team recommended and then provided guidance on
designating lead offices, establishing and updating metrics and
milestones, and sharing information. 

NASA and DOD officials indicated that the work started by the
integrated product teams would continue.  A joint DOD-NASA report,
which could be released later this month, will recommend that six
alliances be established to continue the work initiated by the major
facilities team,\23 according to a NASA official.  Only two of the
alliances have been organized.  The official also stated that four
panels of the Aeronautics and Astronautics Coordinating Board are to
be established to oversee the follow-on activities.  However, three
of the panels have been delayed due to personnel reorganizations
affecting both DOD and NASA, and it is uncertain when they will be
initiated, according to the NASA official.  The only panel to be
established to date is the Aeronautics Panel, which met in July 1996. 

The details of the follow-on processes for continuing the work of the
integrated product teams have not yet been fully developed.  One
measure of the relevance and success of these processes will be how
they handle an issue such as overcapacity in large rocket test
facilities.  In commenting on a draft of this report, NASA said that
the NASA-DOD National Rocket Propulsion Test Alliance will strive for
joint management of facilities so they can be brought on or offline
and investments controlled for maximum benefit.  NASA also said this
alliance "will examine indepth the current and future projected
workloads to achieve proper asset management and utilization of
rocket test facilities."


--------------------
\19 We did not review the payroll consolidation or the Project
Reliance initiatives. 

\20 Studies and activities related to NASA's facilities
infrastructure, including NASA-DOD integrated product teams, are
discussed in appendix II. 

\21 The Board is a joint NASA-DOD organization for coordinating
aeronautics and space activities of mutual interest to the two
agencies, including potential duplication of facilities. 

\22 Even within DOD, past efforts to share support services have
produced limited results.  We recently reported that many studies
identifying potential cost reductions and efficiencies through
interservice cooperation were ignored because of parochial resistance
to implementing them.  See Military Bases:  Opportunities for Savings
in Installation Support Costs Are Being Missed (GAO/NSIAD-96-108,
Apr.  23, 1996). 

\23 The NASA-DOD alliance teams will have the authority to shape the
integration and investment strategies for six types of facilities: 
wind tunnels and air-breathing propulsion, rocket propulsion, space
environment, hypervelocity ballistic range/impact, and arc heated
facilities. 


   NASA FACES UNCERTAINTY IN
   ACHIEVING FURTHER WORKFORCE
   REDUCTIONS
------------------------------------------------------------ Letter :7

We recently reported\24 that NASA does not yet have fully developed
plans to reduce its personnel level by about 4,000 full-time
equivalent employees to meet its overall goal of decreasing the size
of its workforce to about 17,500 by fiscal year 2000.  Also, it may
not be able to do so without involuntarily separating employees. 
NASA projections show that voluntary attrition should meet the
downsizing goal through fiscal year 1998, but will not provide
sufficient losses by fiscal year 1999.  Thus, NASA intends to start
planning a reduction-in-force during fiscal year 1998, if enough NASA
employees do not retire or resign voluntarily. 

NASA's ability to reach its workforce reduction goal by the turn of
the century is subject to major uncertainties, including the shifting
of program management from headquarters to field centers and the
award of a single prime contract for managing the space shuttle at
Kennedy Space Center.  We proposed that, in view of these
uncertainties, Congress may wish to consider requiring NASA to submit
a workforce restructuring plan for achieving its fiscal year 2000
personnel reduction goal.  NASA estimates that civil service
personnel reductions will save about $880 million from fiscal year
1996 through fiscal year 2000. 


--------------------
\24 NASA Personnel:  Challenges to Achieving Workforce Reductions
(GAO/NSIAD-96-176, Aug.  2, 1996). 


   CONCLUSIONS AND MATTERS FOR
   CONGRESSIONAL CONSIDERATION
------------------------------------------------------------ Letter :8

NASA faces barriers to accomplishing additional consolidations and
closures that it may not be able to overcome on its own.  Closing
facilities, relocating activities, and consolidating operations in
fewer locations with fewer employees is not easy because of concerns
about the effects of such actions on missions, personnel, and local
communities.  NASA and DOD officials have suggested that a process
similar to the one used by the Defense Base Closure and Realignment
Commission may ultimately be needed to adequately deal with the
political sensitivity and cost issues that inevitably accompany
consolidation and closure decisions.  Given NASA's limited progress
to date, further opportunities to reduce infrastructure, and the
agency's lack of control over some barriers to further reductions,
Congress may wish to adopt the idea of having such a process if
NASA's efforts fail to show significant progress in the near future
in consolidating and closing facilities. 

To help determine the need for an independent process to facilitate
closures and consolidations of NASA facilities, Congress may wish to
consider requiring NASA to submit a plan outlining how it intends to
meet its goals for a reduced infrastructure through fiscal year 2000. 
Such a plan should include estimated cost reductions resulting from
specific facility closures and consolidations. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

In commenting on a draft of this report, NASA stated that it is
committed to streamlining its workforce and supporting infrastructure
and is continuing to make fundamental changes in the way it operates. 
NASA specifically noted that it intends to meet its fiscal and
programmatic challenges through efficiencies, restructuring,
privatization, commercialization, out-sourcing, and performance-based
contracting.  NASA commented on a number of areas discussed in the
report, and it provided us with some additional or updated
information and suggested changes to enhance the clarity and
technical accuracy of the draft.  We have incorporated the agency's
suggested changes in the final report where appropriate.  NASA's
comments are reprinted in their entirety in appendix III, along with
our final evaluation of them. 


---------------------------------------------------------- Letter :9.1

Our scope and methodology is discussed in appendix IV.  Unless you
publicly announce this report's contents, we plan no further
distribution until 30 days from its issue date.  At that time, we
will send copies to other interested congressional committees, the
Administrator of NASA, and the Director of the Office of Management
and Budget.  We will also provide copies to others upon request. 

Please contact me on (202) 512-4841, if you or your staff have any
questions concerning this report.  Major contributors are listed in
appendix V. 

Sincerely yours,

Thomas J.  Schulz
Associate Director
Defense Acquisitions Issues


SUMMARY OF THE NATIONAL
AERONAUTICS AND SPACE
ADMINISTRATION FIELD CENTER
FACILITIES
=========================================================== Appendix I

                              (Dollars in thousands)

                                                 Net
                                              usable
                                              square
                                                feet               Total current
                               Number of  (thousands   Number of     replacement
Center                 Acres   buildings           )    trailers           value
--------------------  ------  ----------  ----------  ----------  ==============
Kennedy Space Center  82,943         619       7,796         172      $3,585,612
Marshall Space         1,242         246       6,186          55       2,197,076
 Flight Center
Langley Research         788         233       2,748         131       2,113,208
 Center
Ames Research Center   3,411         355       2,169          88       2,065,116
Lewis Research         6,805         262       2,474           3       1,990,783
 Center
Johnson Space Center   3,570         332       5,320           3       1,559,158
Goddard Space Flight  10,105         402       3,112          24       1,316,201
 Center
Stennis Space Center  20,663         125       1,414          29       1,277,093
Jet Propulsion           156         279       1,678          71         760,198
 Laboratory
Dryden Flight             \a          80         654          44         168,049
 Research Center
================================================================================
Total                 129,68       2,933      33,551         620     $17,032,494
                           3
--------------------------------------------------------------------------------
Sources:  GAO compilation of National Aeronautics and Space
Administration (NASA) data as of September 30, 1995.  Excludes Yellow
Creek Facility, Iuka, Mississippi, which was transferred to the State
of Mississippi in February 1996. 

\a Dryden Flight Research Center is located on Edwards Air Force
Base, California. 


STUDIES AND ACTIONS RELATED TO
NASA FACILITIES INFRASTRUCTURE
========================================================== Appendix II


      THE ADVISORY COMMITTEE ON
      THE FUTURE OF THE U.S. 
      SPACE PROGRAM (KNOWN AS THE
      AUGUSTINE COMMITTEE)
------------------------------------------------------ Appendix II:0.1

The study's purpose was to advise the NASA Administrator on the
approaches the agency's management could use to implement the U.S. 
space program in the coming decades.  Of the 15 recommendations made,
2 related indirectly to facilities infrastructure.  The study was
completed in December 1990. 


      ROLES AND MISSIONS STUDY
------------------------------------------------------ Appendix II:0.2

At the direction of the NASA Administrator, the agency's Deputy
Administrator reviewed NASA's roles and missions and suggested ways
to implement the Augustine Committee's recommendations.  The
recommendations focused on NASA field centers' missions and project
management approaches.  Of the 33 recommendations, 9 were related
indirectly to facilities infrastructure.  The study was completed in
November 1991. 


      RESPONSE TO ROLES AND
      MISSIONS STUDY
------------------------------------------------------ Appendix II:0.3

With some modification, the NASA Administrator approved all
recommendations from the Roles and Missions Study and called for
implementation plans from the center directors and headquarters
program offices.  The recommendations were approved in December 1991. 


      NATIONAL PERFORMANCE REVIEW
------------------------------------------------------ Appendix II:0.4

This federal governmentwide review examined cabinet-level departments
and 10 agencies, including NASA.  One of the 19 recommendations that
focused on NASA was directly related to facilities.  The review was
completed in September 1993. 


      IMPLEMENTATION OF ROLES AND
      MISSIONS RECOMMENDATIONS
------------------------------------------------------ Appendix II:0.5

This document was issued in January 1994 by the Associate
Administrator for Space Flight in response to the Administrator's
December 1991 call for implementation plans and the current
Administrator's renewed emphasis on roles and missions.  It
identified a number of recommendations to implement the roles and
missions recommendations and assigned follow-up responsibilities.  Of
38 recommendations, 15 related to specific facilities. 


      NATIONAL FACILITIES STUDY
------------------------------------------------------ Appendix II:0.6

The study was initiated in 1992 by the NASA Administrator to develop
a comprehensive long-range plan to ensure that research, development,
and operational facilities were world-class and to avoid duplication
of facilities.  The study group was composed of representatives from
NASA; the Departments of Defense (DOD), Transportation, Energy, and
Commerce; and the National Science Foundation.  Almost 200
recommendations were made, including 68 specifically related to NASA
facilities.  The study was completed in April 1994. 


      NATIONAL RESEARCH COUNCIL
      REVIEW OF THE NATIONAL
      FACILITIES STUDY (SPACE
      FACILITIES)
------------------------------------------------------ Appendix II:0.7

Contracted by NASA and DOD, the National Research Council reviewed
the findings in the National Facilities Study to evaluate the
requirements presented in the national facilities plan for space and
research and development operations.  The Board made 11
recommendations, 4 of which related to facilities in general.  None
of the recommendations related to specific facilities.  The review
was completed in 1994. 


      NATIONAL RESEARCH COUNCIL
      REVIEW OF THE NATIONAL
      FACILITIES STUDY
      (AERONAUTICAL FACILITIES)
------------------------------------------------------ Appendix II:0.8

The Aeronautics and Space Engineering Board conducted this review at
NASA's request.  The study's purpose was to independently examine
projected requirements for, and approaches to, the provision of
needed aeronautical ground test facilities.  The Board made 13
recommendations; 2 related to specific NASA facilities.  The review
was completed in 1994. 


      FEDERAL LABORATORY REVIEW
------------------------------------------------------ Appendix II:0.9

Conducted under the auspices of the NASA Advisory Council, this study
was tasked to evaluate and develop recommendations for improving the
efficiency and effectiveness of the federal research and development
investment in the NASA laboratory system.  The review was also to
consider possibilities for restructuring, consolidating, closing, or
reassigning facilities.  The Laboratory Review made 74
recommendations and 3 suggestions related to specific facilities. 
The review was completed in February 1995. 


      NASA WHITE PAPER
----------------------------------------------------- Appendix II:0.10

The White Paper, formally titled A Budget Reduction Strategy, was
intended as a starting point for discussions on a proposed
realignment of center roles and missions and reinvention in a
constrained budget environment.  The paper made about 40
recommendations total; 15 were related to facilities.  The paper was
issued February 1995. 


      ZERO BASE REVIEW
----------------------------------------------------- Appendix II:0.11

This review was a NASA-wide effort to allocate reductions in the
fiscal year 1996 President's budget, set center role assignments,
provide suitable guidance for the fiscal year 1997 budget, and change
the way NASA conducted business.  About 50 recommendations were made,
of which 2 applied to specific facilities.  The review was completed
in June 1995. 


      NASA-DOD INTEGRATED PRODUCT
      TEAMS
----------------------------------------------------- Appendix II:0.12

NASA teamed with DOD to study how the two agencies could
significantly reduce their investment and operations costs and
increase mission effectiveness and efficiency through increased
cooperation at all organizational levels.  Study teams, referred to
as integrated product teams, began work in September 1995 in seven
areas.  Each team addressed facilities, as appropriate, in its
assigned functional area.  Teams reported their recommendation to the
Aeronautics and Astronautics Coordinating Board in April 1996. 
Additional information on this effort is presented in the body of
this report. 




(See figure in printed edition.)Appendix III
COMMENTS FROM THE NATIONAL
AERONAUTICS AND SPACE
ADMINISTRATION
========================================================== Appendix II



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


The following are GAO's comments on NASA's letter dated September 6,
1996. 

GAO COMMENTS

1.  The language of the report was modified where appropriate. 

2.  NASA provided information on activities and initiatives that
occurred after the issuance of our report on Telecommunications
Network:  NASA Could Better Manage Its Planned Consolidation
(GAO/AIMD-96-33, Apr.  9, 1996). 

3.  Our description of the current situation at Downey is in the
context of a potential, not a known, cost-sharing issue. 

4.  NASA provided information on two rocket propulsion test
facilities and stated that they are not comparable.  However, we made
no comparison of these facilities.  We merely pointed out that, while
the issue of potential excess in large rocket engine test capacity
remains unresolved, efforts are underway or planned to upgrade such
facilities.  As noted in the report, such independent actions
potentially worsen the problem.  The overcapacity issue could benefit
from a thorough, governmentwide assessment. 

5.  The report discusses the possible future need for a process
similar to the one used by the Defense Base Closure and Realignment
Commission.  Such a process could be applied to individual
facilities, groups of facilities, or entire agencies.  There is no
reason to believe that the process would be appropriate only for DOD
or for numerous locations. 


SCOPE AND METHODOLOGY
========================================================== Appendix IV

We reviewed the value of NASA's facilities and its budgets and
staffing; facility reduction plans; real property reports;
utilization data and reports; studies, including the National
Facilities Study and the NASA Federal Laboratory Review;
environmental law, policies, and procedures; and reports by the NASA
Inspector General. 

We interviewed officials at NASA field centers and in the Offices of
Management Systems and Facilities, Headquarters Operations, Space
Flight, Space Communications, Human Resources and Education,
Environmental Management Division, and Inspector General at NASA
headquarters.  To discuss NASA-DOD coordination efforts, we
interviewed NASA and DOD officials.  We also spoke with officials
from Rockwell International, Space Systems Division, about plans for
the NASA Industrial Plant, Downey, California.  We obtained
information from all NASA field centers, including information on the
value and utilization of facilities, plans for closing facilities and
estimated savings through fiscal year 2000, facilities project
budgets, and cleanup and cost-sharing activities.  We also spoke with
officials from other federal agencies, including the General Services
Administration and the Environmental Protection Agency. 

We obtained electronic versions of NASA's real property and major
facility inventory databases and NASA's potentially contaminated site
inventory database, but did not independently verify the reliability
of the data in the databases.  Because the National Facilities Study
included aircraft in its work, we included them in our review. 

We conducted our audit work at

  -- NASA headquarters, Washington, D.C.;

  -- Ames Research Center, Moffett Field, California;

  -- Goddard Space Flight Center, Greenbelt, Maryland;

  -- Wallops Flight Facility, Wallops Island, Virginia;

  -- Jet Propulsion Laboratory, Pasadena, California;

  -- Lyndon B.  Johnson Space Center, Houston, Texas;

  -- NASA Industrial Plant, Downey, California;

  -- White Sands Test Facility, Las Cruces, New Mexico;

  -- John F.  Kennedy Space Center, Florida;

  -- Langley Research Center, Hampton, Virginia;

  -- Lewis Research Center, Cleveland, Ohio;

  -- Plum Brook Station, Sandusky, Ohio;

  -- George C.  Marshall Space Flight Center, Huntsville, Alabama;

  -- Michoud Assembly Facility, New Orleans, Louisiana;

  -- Santa Susana Field Laboratory, California;

  -- John C.  Stennis Space Center, Mississippi;

  -- Phillips Laboratory, Edwards Air Force Base, California; and

  -- Vandenberg Air Force Base, California. 

We conducted our work from June 1995 through August 1996 in
accordance with generally accepted government auditing standards. 


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

Uldis Adamsons
Frank Degnan
Raymond H.  Denmark, Jr.
Sandra D.  Gove
William E.  Petrick, Jr. 

ATLANTA FIELD OFFICE

Lee Edwards
Dayna Foster
John T.  Gilchrist
Reginia S.  Grider

LOS ANGELES FIELD OFFICE

Jeffery N.  Webster
Dale M.  Yuge

NORFOLK FIELD OFFICE

Johnnie Phillips
Edwin J.  Soniat

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

John A.  de Ferrari
Galen L.  Goss
Elizabeth L.  Johnston

DENVER FIELD OFFICE

Jamelyn A.  Smith


*** End of document. ***