Space Shuttle: Human Capital and Safety Upgrade Challenges Require
Continued Attention (Letter Report, 08/15/2000, GAO/NSIAD/GGD-00-186).

Pursuant to a congressional request, GAO reviewed the workforce and
safety issues facing the National Aeronautics and Space Administration
(NASA) and its shuttle program, focusing on the: (1) impact of workforce
reductions on the shuttle program; (2) challenges NASA faces in
addressing workforce issues; and (3) status of planned shuttle safety
and supportability upgrades.

GAO noted that: (1) several internal NASA studies have shown that the
shuttle program's workforce has been affected negatively by downsizing,
much of which occurred after 1995; (2) since 1995, the shuttle workforce
has decreased by more than one-third to about 1,800 full-time equivalent
employees; (3) the shuttle program has identified many key areas that
are not sufficiently staffed by qualified workers, and the remaining
workforce shows signs of overwork and fatigue; (4) NASA has recognized
the need to revitalize its workforce; (5) NASA and the Office of
Management and Budget have begun an overall workforce review to examine
personnel needs, barriers to achieving proper staffing levels and skill
mixes, and potential reforms to help address the agency's long-term
requirements; (6) in addition, the Government Performance and Results
Act requires a performance plan that describes how an agency's goals and
objectives are to be achieved; (7) these plans are to include a
description of the: (a) operational processes, skills, and technology;
and (b) human, capital, information, and other resources required to
meet goals and objectives; (8) in reviewing NASA's fiscal year (FY) 2000
annual performance plan, GAO found that the plan does not adequately
describe how the agency's strategies and human capital resources will
help it achieve performance goals; (9) NASA's FY 2001 plan, however,
addresses at least some human capital issues in that it includes an
objective to improve workforce health monitoring; (10) in addition, in
June 2000, the President directed the heads of all executive agencies to
integrate human resource management into planning, budgeting, and
mission evaluation processes; (11) concerning safety issues, over the
next 5 years, NASA plans to develop and begin equipping the shuttle
fleet with a variety of safety and supportability, upgrades, at an
estimated cost of about $2.2 billion; (12) however, to implement the
program successfully, NASA will have to overcome a number of
programmatic and technical challenges, such as a demanding schedule and
undefined design and workforce requirements; (13) while the President's
June 2000 directive provides further emphasis on the need to integrate
human capital requirements with the strategic planning process,
continued management emphasis will be critical to the success of NASA's
human capital planning; and (14) in addition, NASA will need to take
steps to ensure it has the right people to manage the shuttle program.

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

 REPORTNUM:  NSIAD/GGD-00-186
     TITLE:  Space Shuttle: Human Capital and Safety Upgrade Challenges
	     Require Continued Attention
      DATE:  08/15/2000
   SUBJECT:  Space exploration
	     Human resources training
	     Personnel management
	     Personnel recruiting
	     Labor force
	     Strategic planning
	     Human resources utilization
	     Reductions in force
	     Performance measures
IDENTIFIER:  NASA International Space Station Alpha Program

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GAO/NSIAD/GGD-00-186

Appendix I: Space Shuttle Program Skill Shortfall Areas

18

Appendix II: Space Shuttle Upgrades

19

Appendix III: GAO Contact and Staff Acknowledgments

20

Table 1: Potential Space Shuttle Upgrades 19

Figure 1: Figure 1: High-Priority Safety Upgrades 13

NASA National Aeronautics and Space Administration

National Security and
International Affairs Division

B-285463

August 15, 2000

The Honorable John McCain
Chairman, Committee on Commerce, Science,
and Transportation
United States Senate

Dear Mr. Chairman:

The National Aeronautics and Space Administration's (NASA) space shuttle
program is at a critical juncture as three key factors converge: its
workforce has declined significantly since 1995, its flight rate will have
to double over that of recent years to support assembly of the International
Space Station, and costly safety upgrades are being planned to enhance the
space shuttle's safe operation until at least 2012.

As agreed with your office, we examined workforce and safety issues facing
NASA and its shuttle program. Specifically, we assessed the impact of
workforce reductions on the shuttle program, the challenges NASA faces in
addressing workforce issues, and the status of planned shuttle safety and
supportability upgrades.

Several internal NASA studies have shown that the shuttle program's
workforce has been affected negatively by the downsizing, much of which
occurred after 1995. Since 1995, the shuttle workforce has decreased by more
than one-third to about 1,800 full-time equivalent employees.1 The shuttle
program has identified many key areas that are not sufficiently staffed by
qualified workers, and the remaining workforce shows signs of overwork and
fatigue. For example, indicators on forfeited leave, absences from training
courses, and stress-related employee assistance visits are all on the rise.
Moreover, the program's demographic shape has changed. For example,
throughout the Office of Space Flight, which includes the shuttle program,
there are more than twice as many workers over 60 years old than under 30
years old. This jeopardizes the program's ability to hand off leadership
roles to the next generation and achieve a higher flight rate to support
assembly of the International Space Station. In addition, according to NASA,
it poses significant shuttle program flight safety risks.

NASA has recognized the need to revitalize its workforce. For example, in
December 1999, it terminated shuttle program downsizing plans and initiated
efforts to begin hiring new staff. In addition, NASA and the Office of
Management and Budget have begun an overall workforce review to examine
personnel needs, barriers to achieving proper staffing levels and skill
mixes, and potential reforms to help address the agency's long-term
requirements. NASA human resource officials told us that they are now using
a draft checklist we recently published as a guide2 in ongoing workforce
planning and in discussions with the Office of Management and Budget. The
checklist includes a five-part framework: strategic planning, organizational
alignment, leadership, talent, and performance culture. The guide should
help NASA to more clearly establish a linkage between human capital programs
and the agency's mission, goals, and strategies.

In addition, the Government Performance and Results Act requires a
performance plan that describes how an agency's goals and objectives are to
be achieved.3 These plans are to include a description of the
(1) operational processes, skills, and technology and (2) human, capital,
information, and other resources required to meet goals and objectives. In
reviewing NASA's fiscal year 2000 annual performance plan, we found that the
plan does not adequately describe how the agency's strategies and human
capital resources will help it achieve performance goals.4 NASA's fiscal
year 2001 plan, however, addresses at least some human capital issues in
that it includes an objective to improve workforce health monitoring. In
addition, in June 2000, the President directed the heads of all executive
branch federal agencies to integrate human resource management into
planning, budgeting, and mission evaluation processes. The directive
requires each agency to include specific human resource management goals and
objectives in its strategic and annual performance plans beginning October
1, 2000.

Concerning safety issues, over the next 5 years, NASA plans to develop and
begin equipping the shuttle fleet with a variety of safety and
supportability upgrades, at an estimated cost of about $2.2 billion. The
potential safety upgrades are estimated to cost $1.6 billion and are
expected to enhance shuttle system safety significantly.5 Improvements could
include an electric auxiliary power unit, improved orbiter avionics, and
main engine modifications. However, to implement the program successfully,
NASA will have to overcome a number of programmatic and technical
challenges, such as a demanding schedule and undefined design and workforce
requirements. During the summer of 2000, NASA plans to independently review
the shuttle program's safety upgrade strategy to assess how funding can be
used most effectively to improve space shuttle safety. NASA also has an
ongoing supportability upgrade program that is intended to address the
effects of aging components on the system. NASA estimates that it will spend
about $630 million through fiscal year 2005 to develop and incorporate the
supportability upgrades, which include the electronic assembly in the solid
rocket booster and insulation of the external tank.

While the President's June 2000 directive provides further emphasis on the
need to integrate human capital requirements with the strategic planning
process, continued management emphasis will be critical to the success of
NASA's human capital planning. In addition, NASA will need to take steps to
ensure it has the right people to manage the shuttle program.

Because the President has now directed NASA and all other executive branch
agencies to include human capital goals and objectives in their strategic
and annual performance plans, we are not making recommendations in this
report. We will monitor NASA's progress in establishing and achieving its
human capital goals as part of our annual performance plan assessments. NASA
reviewed a draft of this report but provided no comments.

The space shuttle is the world's first reusable space transportation system.
It consists of a reusable orbiter with three main engines, two partially
reusable solid rocket boosters, and an expendable external fuel tank. Since
it is the nation's only launch system capable of carrying people to and from
space, the shuttle's viability is important to other space programs, such as
the International Space Station. NASA operates four orbiters in the shuttle
fleet.

NASA budget data shows that from fiscal year 1995 through fiscal year 1999,
the space shuttle's workforce shrank from about 3,000 to about 1,800
full-time equivalent employees. A major element of this workforce reduction
was the transfer of shuttle launch preparation and maintenance
responsibilities from the government and multiple contractors to a single
private contractor. NASA believed that consolidating shuttle operations
under a single contract would allow it to reduce the number of engineers,
technicians, and inspectors directly involved in the day-to-day oversight of
shuttle processing, and it restructured its organization accordingly.
However, the agency now recognizes that it has shortages of required
personnel to perform in-house activities and maintain adequate oversight of
the contractor. In December 1999, NASA terminated its shuttle program
downsizing efforts and initiated efforts to begin hiring new staff.

Space systems are inherently risky because of the technology involved and
the complexity of their activities. For example, thousands of people perform
about 1.2 million separate procedures to prepare a shuttle for flight.
NASA's top priority for the shuttle program is safety. Since the shuttle's
first flight in 1981, the program has developed and incorporated many
modifications to improve performance and safety. These include a super
lightweight external tank, cockpit display enhancements, and main engine
safety and reliability improvements. In 1994, NASA stopped approving
additional upgrades pending the potential replacement of the shuttle with
another reusable launch vehicle. NASA now believes that it will have to
maintain the current shuttle fleet until at least 2012 and has established a
development office to identify and prioritize upgrades to maintain and
improve shuttle operational safety.

Attention

According to recently completed internal NASA studies, workforce reductions
are jeopardizing NASA's ability to safely support the shuttle's planned
flight rate. Various assessments, one completed as recently as March 2000,
provide evidence that the current shuttle civil service workforce is
stretched thin and overworked. In addition, studies of launch vehicle
failures6 cited workforce concerns similar to those experienced by the
shuttle program. Recognizing that in-house workforce reductions had gone too
far, NASA discontinued its downsizing and has begun addressing critical
staffing needs. However, it faces several human capital challenges,
including that of successfully attracting and retaining employees with
critical skills. NASA officials have begun using our draft human capital
self-assessment checklist, which provides a structured approach to
identifying and addressing human capital issues.

Problems

Over the past several years, NASA and its Aerospace Safety Advisory Panel
have studied the shuttle program civil service workforce.7 The studies
concluded that the workforce suffered significantly from the downsizing,
much of which occurred since 1995. The studies found that stress levels have
reached the point of creating an "unhealthy" workforce. According to NASA's
Associate Administrator for the Office of Space Flight, the agency faces
significant safety and mission success risks as a result of the downsizing.
The safety panel concluded that workforce problems could potentially impact
flight safety as the shuttle launch rate increases to meet its demands.

In addition, NASA has concluded that the shuttle program's workforce is
showing signs of overwork and fatigue as a result of the downsizing.8 For
example, indicators on forfeited leave, absences from training courses, and
stress-related employee assistance visits are all on the rise. Moreover, the
program's demographic shape and skill mix jeopardizes the program's ability
to hand off leadership roles to the next generation. For example, throughout
the Office of Space Flight, which includes the shuttle program, there are
more than twice as many workers over 60 years old than under
30 years old.

NASA has also identified areas in which it believes the shuttle program is
experiencing critical skill shortages (see app. I). In December 1999, NASA
completed an internal workforce assessment focusing on its Office of Space
Flight. That assessment identified work in which NASA is experiencing skill
shortfalls. These areas include avionics, mechanical engineering, computer
systems, and software assurance engineering. More recently, the Space
Shuttle Independent Assessment Team Report, completed in March 2000 and
chaired by NASA's Ames Research Center Director, concluded that the shuttle
program should determine the size of the workforce, skill levels, and
experience needed to maintain and operate the shuttle at the anticipated
higher flight rates. The shuttle program flew four flights each in fiscal
year 1998 and 1999. However, the number of flights is projected to increase
substantially over the next 5 years.

In response to the studies, NASA has begun taking actions to address its
shuttle workforce problems. It has terminated downsizing plans and expects
to add 95 full-time equivalent employees to the shuttle program in fiscal
year 2000 to address many critical skill shortages. In its fiscal year 2001
budget request, NASA is seeking authority to add another 278 full-time
equivalent employees to the shuttle's workforce. NASA believes the
stress-related indicators highlighted by the studies constitute critical
evidence supporting the need to increase its workforce.

In October 1999, NASA's Administrator directed the agency's highest-level
managers to consider ways to reduce workplace stress. NASA subsequently
included improved health monitoring as an objective in its fiscal year 2001
performance plan. The Government Performance and Results Act of 1993
requires agencies to prepare annual performance plans. The purpose is to
improve the efficiency of all federal agencies, with the goals of improving
management, effectiveness, and public accountability; improving
congressional decision-making on where to commit the nation's fiscal and
human resources; and improving citizens' confidence in the government's
performance.

According to its fiscal year 2001 performance plan, NASA intends to develop
and implement supervisor-specific and individual training to identify,
manage, and cope with stress in the workplace. Also, in May 2000, the
Administrator announced the creation of a new office to increase the
agency's emphasis on health and safety.

In addition, NASA has undertaken a joint review with the Office of
Management and Budget to identify its overall future workforce needs.
According to the NASA Administrator, this review will assess potential tools
for and approaches to overall agency personnel management. NASA expects this
effort to examine the process used to determine resource needs, the barriers
to achieving proper staffing levels, and potential reforms that may help the
agency address long-term human capital requirements. NASA and the Office of
Management and Budget plan to complete the study in time for consideration
during the fiscal year 2002 budget process.

Issues

NASA, the Department of Defense, and the private sector have carried out a
number of studies on the causes of expendable launch vehicle failures. The
studies can provide additional insights into how NASA's shuttle program can
address workforce issues.9 These studies, completed in late 1999, include
assessments by the Lockheed Martin and Boeing companies and a review by the
Department of Defense that encompass previous and ongoing studies and
included NASA's participation. In general, the studies address a range of
issues, including the effects of hardware problems and the need to improve
launch processes, establish accountability for mission success, and enhance
government and industry cooperation. The studies also emphasize the
importance of human resources by discussing the effects of employee burnout,
the need for a proper skill mix, the alignment of staff with program goals,
the potential effects of critical skill losses, and the need for long-term
human capital planning.

Shuttle officials believe that they can apply the lessons learned from the
expendable launch vehicle studies, particularly in the areas of establishing
accountability when transferring work to a private contractor and mitigating
the effects of downsizing. Over the next several years, NASA expects to seek
improvements in these areas by (1) responding to the study completed in
March 2000 by NASA's shuttle independent assessment team, (2) developing
cost and accountability criteria for completing the next phase of the
transfer of responsibilities to the shuttle processing contractor, and (3)
establishing resource levels during the current budget preparation cycle.

In dealing with its workforce issues, NASA shuttle program officials will
have to deal with a number of complicating challenges. These include
(1) meeting increased training needs deriving from higher workforce levels,
(2) ensuring adequate staffing levels for its safety upgrade program,
(3) attracting and retaining employees with critical skills, and (4)
achieving a higher projected flight rate compared with rates of recent
years. A structured approach can help NASA resolve its human capital
challenges.

NASA's shuttle independent assessment team report notes that although hiring
and training new personnel are logical steps in making up for the loss of
critical skills, these are slow processes and initially add to the workload
of existing personnel. For example, according to another NASA study,
training new engineers can take 2 or more years, but the shuttle's current
workload leaves little time for training.10

Also, the shuttle program is undertaking a 5-year safety upgrade initiative
involving modifications to increase the safety of all major vehicle
components. Although the workforce requirement for the upgrade program is
still undefined, Johnson Space Center officials believe the program could
require more than 200 engineers. Moreover, NASA Headquarters officials told
us that people with some critically needed skills, such as software
engineering, will be hard to attract and retain.

NASA's downsizing coincided with a decreased number of shuttle flights:
eight flights in fiscal year 1997, but only four each in fiscal years 1998
and 1999. However, the number of flights is projected to increase
substantially as the International Space Station assembly schedule
accelerates. For example, NASA plans nine flights in fiscal year 2001.

Our Comptroller General has made improved human capital management
throughout the federal government one of his top priorities. In testimony on
March 9, 2000, he stated that

"human capital management recognizes that employees are a critical asset for
success, and that an organization's human capital policies and practices
must be designed, implemented, and assessed by the standard of how well they
support the organization's mission and goals." 11

In September 1999, we published a draft human capital self-assessment
checklist that provides a systematic approach to identifying and addressing
human capital issues. This checklist allows agency managers to quickly
determine whether their approach to human capital supports their vision of
who they are and what they want to accomplish and to identify those policies
that are in particular need of attention. The checklist follows a five-part
framework that includes strategic planning, organizational alignment,
leadership, talent, and performance culture. The guide helps to establish a
linkage between human capital programs and an agency's mission, goals, and
strategies.

Our Standards for Internal Control in the Federal Government also address
human capital management issues and state that

"only when the right personnel for the job are on board and are provided the
right training, tools, structure, incentives, and responsibilities is
operational success possible."12

In addition, the Government Performance and Results Act requires a
performance plan that describes how an agency's goals and objectives are to
be achieved. These plans are to include a description of the (1) operational
processes, skills, and technology and (2) human, capital and information
resources required to meet those goals and objectives. In reviewing NASA's
fiscal year 2000 annual performance plan, we found that the plan does not
adequately describe how the agency's strategies and human capital resources
will help it achieve performance goals.13

The President recently underscored the importance of linking human capital
requirements with an agency's strategic planning processes. On June 9, 2000,
he directed the heads of all executive branch federal agencies to "fully
integrate human resources management into (each) agency's planning,
budgeting and mission evaluation processes, and clearly state specific human
resources management goals and objectives in (the) organization's strategic
and annual performance plans."

NASA human resource officials told us that the agency is using our checklist
as a guide in ongoing workforce planning and discussions with the Office of
Management and Budget. For example, they provided a draft of a Human
Resources and Education Functional Leadership Plan that addresses NASA's
approach to (1) recognizing employees as the agency's most important
resource by creating a safe, challenging, and satisfying work environment;
(2) attracting and retaining a skilled and diverse workforce; (3)
establishing a continuous learning environment; and
(4) ensuring that the agency's human resources professionals have the
knowledge, skills, abilities, and tools to carry out their
responsibilities.14 NASA plans to develop feedback surveys to measure its
success in achieving these goals.

Over the next 5 years, NASA plans to develop and begin equipping the shuttle
fleet with a variety of shuttle safety and supportability upgrades, at an
estimated cost of about $2.2 billion. While safety upgrades have been
identified, NASA plans to independently review the shuttle program's safety
upgrade strategy to assess how funding can most effectively be used to
improve space shuttle safety. To implement the safety program successfully,
a number of programmatic and technical challenges will have to be overcome.
NASA also plans to incorporate system supportability upgrades to mitigate
the effects of aging components and outdated technologies.

Between fiscal year 2000 and 2005, NASA plans to develop and begin equipping
the shuttle fleet with safety upgrades affecting every major aspect of the
system, at an estimated cost of $1.6 billion. For example, the plan includes
potential improvements to the orbiter, the external tank, the main engine,
and the solid rocket booster (see fig. 1). NASA's time frame for completing
these improvements is based on its current plans to operate the shuttle
fleet until at least 2012. A general description of each potential upgrade
is provided in appendix II.

Source: Space Shuttle Program Office.

NASA has undertaken two independent reviews of the safety upgrade program.
One review, begun in April 2000, will deal with specific cost and technical
issues related to each project; the other, begun in June 2000, will
concentrate on the overall program strategy. As individual projects are
approved for implementation, NASA's Independent Program Assessment Office
will evaluate the upgrades to determine whether (1) requirements are well
defined, (2) design and implementation risks are acceptable, and (3)
cost-effectiveness has been appropriately considered.

In addition, in February 2000 the Associate Administrator for Space Flight
asked NASA's Space Flight Advisory Committee to assess the agency's strategy
and priorities for the planned safety upgrades. The Committee is expected to
determine whether NASA has defined the right upgrade program and has adopted
a sound approach. It also expects to incorporate the results of the review
by the Independent Program Assessment Office into its work, currently
scheduled to be completed by late summer 2000.

Program

NASA and the shuttle program will have to overcome many programmatic and
technical challenges to implement the safety upgrade program successfully.
Specifically, the agency has not yet fully approved the set of upgrades it
will include in the program or the associated workforce requirements.
Assuming the shuttle will be replaced by 2012, the upgrade program must be
implemented on schedule to achieve maximum benefit. Addressing potential
development problems while meeting a demanding flight schedule will make
cost containment a major challenge. Programmatic and technical challenges
include the following:

ï¿½ Several major safety upgrade projects are not fully approved, creating
program uncertainty. For example, the avionics upgrade is to increase
hardware reliability and improve cockpit information for the crew. The
breadth of information to be provided and the means to do so have not yet
been fully determined. In addition, replacing the auxiliary power unit in
the solid rocket booster will require additional studies to determine the
best alternative. Also, NASA is still assessing potential safety upgrades
such as crew escape and thermal protection systems.

ï¿½ While NASA has begun to establish a dedicated shuttle safety upgrade
workforce, it has not fully determined its needs in this area. Johnson Space
Center officials estimate that the program could require more than 200
engineers dedicated specifically to the safety upgrades. NASA Headquarters
officials believe the planned workforce increase in fiscal year 2000 and
2001 will be sufficient to cover upgrade workforce needs. However, neither
organization was able to provide a firm estimate. Also, it is important to
note that the planned workforce increase as currently portrayed is supposed
to address all shuttle program workforce needs, not just those of the
upgrade program.

ï¿½ NASA currently plans to operate the shuttle until at least 2012. Thus, it
is important that the safety upgrades be developed by 2005 to ensure that
the program provides maximum benefit. The upgrade schedule coincides with
the peak assembly period of the International Space Station. During this
period, the shuttle will have to double its flight rate over those of recent
years. NASA officials acknowledge that it will be a challenge to accommodate
both schedules.

ï¿½ Historically, major hardware and software development efforts have
encountered unforeseen technical problems. The planned safety upgrade
program could require developing and integrating at least nine major
improvements in 5 years. As such, it may be the most aggressive modification
effort ever undertaken by the shuttle program. Because the technical
requirements for the program are not yet fully defined and the schedule for
implementation is very success oriented, it is likely that cost pressures
will develop.

In addition to the safety improvements, NASA plans to incorporate a number
of supportability upgrades over the next 5 years at an estimated cost of
$630 million. This effort is designed to combat the obsolescence of vehicle
and ground systems. Through this program, NASA hopes to mitigate the effects
of aging components and outdated technologies.

The most expensive supportability upgrade is the Checkout and Launch Control
System. This system is to replace the launch processing system that has been
used since the 1970s at the Kennedy Space Center. In 1997, the new system
was estimated to cost about $200 million, with a completion date in fiscal
year 2001. The estimate was later increased to about $230 million, with
completion in fiscal year 2003. According to a program official, additional
substantial cost and schedule increases are under review but will not be
fully determined until fiscal year 2001. Other supportability upgrades
involve improvements to the vehicle itself, including the solid rocket
booster and external tank.

Over the last several years, NASA's strategic human capital planning was
inadequate. While the agency was emphasizing workforce reductions, various
NASA studies were showing that the shuttle workforce was being negatively
impacted by the reductions. In the wake of analyses of workforce shortages
agencywide over the past couple of years, NASA recognized that it had
serious problems. The shuttle program was entering a critical phase in which
it had to prepare for a doubling of its current flight rate to assemble the
International Space Station while at the same time developing and
incorporating numerous safety upgrades. NASA is now taking a number of
important steps to address the effects of workforce reductions and to ensure
that a proper skill mix and staffing level for the shuttle program is
achieved and maintained. While the President's June 2000 directive provides
further emphasis on the need for integrating human capital requirements with
the strategic planning process, continued NASA management emphasis on human
capital planning will be critical to continued safe shuttle operations in an
environment of increasing flight rates.

NASA reviewed a draft of this report but provided no comments.

To assess the impact of workforce reductions on the shuttle program and the
challenges NASA faces in addressing workforce issues, we reviewed the
agency's workforce reduction goals, recent shuttle workforce studies, budget
documentation, internal indicators of workplace stress, recruitment and
hiring strategies, and workforce trends related to skill mix and age. In
addition, we reviewed internal briefings and recent launch vehicle studies
and interviewed program officials, study participants, members of NASA's
Aerospace Safety Advisory Panel, and officials in the Expendable Launch
Vehicle Office to gain further insights.

To assess the program's plans to incorporate safety upgrades, we reviewed
development plans, budget documentation, internal briefings, and risk
assessments. In addition, we compared cost estimates to budgetary
projections. We interviewed officials in the shuttle program development
office, NASA's Office of Safety and Mission Assurance, and the Aerospace
Safety Advisory Panel.

We conducted our review from September 1999 through June 2000 in accordance
with generally accepted government auditing standards.

Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 14 days from its issue date. At that time,
we will send copies to the Honorable Ernest Hollings, Ranking Minority
Member, Senate Committee on Commerce, Science, and Transportation; the
Honorable Daniel Goldin, NASA Administrator; the Honorable Jacob Lew,
Director, Office of Management and Budget; and other interested parties. We
will also make copies available to others on request.

Please contact me at (202) 512-4841 if you or your staff have any questions
about this report. Key contacts for and contributors to this report are
listed in appendix III.

Sincerely yours,
Allen Li
Associate Director
Defense Acquisitions Issues

Space Shuttle Program Skill Shortfall Areas

In December 1999, NASA completed an internal workforce assessment focusing
on its Office of Space Flight, which includes the shuttle program. That
assessment identified work areas in which NASA was experiencing skill
shortfalls. At our request, NASA provided a listing of shuttle program skill
shortages. The areas the agency identified follow:

ï¿½ Program/project management/project engineering

ï¿½ Aerospace vehicle design and mission analysis

ï¿½ Avionics

ï¿½ Guidance, navigation, and control systems

ï¿½ Materials analysis

ï¿½ Mechanical engineering

ï¿½ Thermal control

ï¿½ Structural dynamics

ï¿½ Vehicle dynamics

ï¿½ Aircraft ground systems

ï¿½ Human factors

ï¿½ Environmental controls

ï¿½ Robotic systems

ï¿½ Computer systems

ï¿½ Fluids (liquid propulsion systems)

ï¿½ Information technology security

ï¿½ Aerospace systems test engineering

ï¿½ Software (applications and systems)

ï¿½ Sensors and transducers

ï¿½ Electrical engineering

ï¿½ Software assurance engineering

ï¿½ Flight assurance

ï¿½ Quality engineering

ï¿½ Reliability engineering

ï¿½ Safety engineering

ï¿½ Flight controls

Space Shuttle Upgrades

NASA has identified a set of potential shuttle upgrades to be incorporated
by fiscal year 2005. The program includes potential improvements to every
major area of the shuttle system. A breakout of the planned modifications is
shown in table 1.

 Dollars in millions

 Upgrade area                 Purpose of upgrade               Estimated
                                                               cost
                              Eliminates use of hazardous
 Electric auxiliary power     fuel and high-speed equipment
 Unit                         to generate power for the        $224.0
                              orbiter's hydraulic system

 Space shuttle main engine    Provides real-time information
 advance health monitoring    to the crew on engine            108.1
                              performance
                              Reduces flight crew workload
 Orbiter avionics             and improves situational         380.0
                              awareness
                              Improves engine operating
 Space shuttle main engine    environment, thereby increasing  400.0
                              reliability
                              Eliminates the use of hazardous
 Solid rocket booster         fuel in the solid rocket
 auxiliary power unit         booster thrust vector control    208.0
                              auxiliary power unit
 Solid rocket booster         Reduces the potential for human
 attach/hold-down hardware    error and improves reliability   5.0
 Redesigned solid rocket      Improves the solid propellant
 motor propellant             and safety of ground personnel   10.0

 External tank friction stir  Improves reliability,
 welding                      supportability, and              20.0
                              manufacturing process control

 Implementation and           Vehicle installation, system
 additional studies           integration, studies, and        232.9
                              maintainability
 Subtotal                                                      $1,588.0
                              Checkout and Launch Control
 Supportability upgrades      System and mandatory             $630.0
                              supportability shuttle upgrades
 Total                                                         $2,218.0

GAO Contact and Staff Acknowledgments

Allen Li (202) 512-4841

In addition to the contact named above, Jerry Herley, Stephen Altman,
John Gilchrist, James Beard, Fred Felder, and Shirley Johnson made key
contributions to this report.

(707444)

Table 1: Potential Space Shuttle Upgrades 19

Figure 1: Figure 1: High-Priority Safety Upgrades 13
  

1. Full-time equivalent is a measure of staff hours equal to those of an
employee who works
40 hours per week in 1 year.

2. Human Capital: A Self-Assessment Checklist for Agency Leaders
(GAO/GGD-99-179 ,
Sept. 1999).

3. Section 4(b) of Public Law 103-62, Aug. 3, 1993, 31 U.S.C. 1115.

4. Observations on the National Aeronautics and Space Administration's
Fiscal Year 2000 Performance Plan (GAO/NSIAD-99-186R , July 20, 1999).

5. NASA has not yet fully approved the set of upgrades it will include in
the program.

6. Between August 1998 and May 1999, there were five government/commercial
expendable launch vehicle failures. NASA, the Department of Defense, and
private industry use expendable launch vehicles to place satellites in orbit
when human presence is not required.

7. Several workforce studies have been completed since 1996. The most recent
include Independent Assessment of the Shuttle Processing Directorate
Engineering and Management Processes, NASA Human Exploration and Development
of Space Independent Assessment Office (Nov. 4, 1999); Annual Report for
1999, Aerospace Safety Advisory Panel (Feb. 2000); and Report to Associate
Administrator, Office of Space Flight, Space Shuttle Independent Assessment
Team (Mar. 7, 2000).

8. Space Shuttle: Human Capital Challenges Require Management Attention
(GAO/T-NSIAD-00-133 , Mar. 22, 2000).

9. The studies prompted a number of investigations by the Department of
Defense, NASA, and the private sector to identify the root causes and
potential corrective actions.

10. Independent Assessment of the Shuttle Processing Directorate Engineering
and Management Processes, NASA's Human Exploration and Development of Space
Independent Assessment Office (Nov. 4, 1999).

11. Testimony was given before the Subcommittee on Oversight of Government
Management, Restructuring, and the District of Columbia, Senate Committee on
Governmental Affairs; Human Capital: Managing Human Capital in the 21st
Century (GAO/T-GGD-00-77 ). Also on March 9, 2000, we testified on similar
human capital concerns related to the Department of Defense. This testimony
was given at a joint hearing involving the Subcommittee on Military
Readiness, House Committee on Armed Services, and the Subcommittee on Civil
Service, House Committee on Government Reform; Human Capital: Strategic
Approach Should Guide DOD Civilian Workforce Management
(GAO/T-GGD/NSIAD-00-120 ).

12. Standards for Internal Control in the Federal Government
(GAO/AIMD-00-21.3.1 ,
Nov. 1999).

13. Observations on the National Aeronautics and Space Administration's
Fiscal Year 2000 Performance Plan (GAO/NSIAD-99-186R , July 20, 1999).

14. The Functional Leadership Plan establishes the human resource strategies
necessary to achieve the agency's missions and goals.
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