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GAO: NASA's Current Acquisition Strategy for the CEV Places the Project at Risk of Significant Cost Overruns, Schedule Delays, and Performance Shortfa

Press Release From: Committee on Science, Space, and Technology Democratic Caucus
Posted: Wednesday, July 26, 2006

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In a report released today, the Government Accountability Office (GAO) raises significant concerns about NASA's approach to acquiring key elements of the agency's human exploration initiative. In particular, the GAO questions NASA's plan to commit the government to a long-term contract for the Crew Exploration Vehicle (CEV) - the next generation space travel vehicle - prior to having well-defined requirements, a preliminary design, mature technology, and firm cost estimates.

The GAO study was requested by House Science Committee Ranking Member Bart Gordon (D-TN) and Chairman Sherwood Boehlert (R-NY) to ensure Congress has the information it needs to make informed decisions about the course and content of NASA's human exploration initiative - the "Vision for Space Exploration".

The GAO study concludes that "NASA's current acquisition strategy for the CEV places the project at risk of significant cost overruns, schedule delays, and performance shortfalls..."

In its response to GAO, NASA has said they "nonconcur" or disagree with GAO's recommendation they modify the current CEV acquisition strategy. NASA plans to award a long-term contract in September 2006 for the CEV that could extend through 2019 which will encompass everything from design and development of the CEV through its production and sustainment.

In its report, GAO questions the wisdom of entering into a long-term contract more than a year before key design, technology readiness, and cost information will be available. As a result, GAO is recommending that "Congress should consider restricting annual appropriations and limiting NASA's obligations for the CEV project to only the amount of funding necessary to support activities needed to successfully complete the project's preliminary design review."

Rep. Gordon reacted to the report saying, "GAO has provided an important early-warning signal that all may not be well with NASA's approach to implementing the exploration initiative. I think Congress needs to take a serious look at the issues GAO raises. We have seen too many examples in recent years of government programs that deviated significantly from their original cost, schedule, and performance goals to ignore GAO's concerns."

The GAO report also examines the issue of whether NASA's exploration architecture cost estimates fit within the agency's projected available budgets. GAO concludes that "NASA will be challenged to implement the architecture recommended in the study within its projected budget...there are years when NASA does not have sufficient funding to implement the architecture. Some yearly shortfalls exceed $1 billion, while in other years the funding available exceeds needed resources... the identified budget phasing problem could worsen given that changes made to the exploration architecture following issuance of the study will likely add to the near-term development costs, where the funding is already constrained." In addition, the GAO cautions that "NASA preliminarily projects multibillion-dollar shortfalls for [NASA's] Exploration Systems Mission Directorate in all fiscal years from 2014 to 2020..."

"The issues raised by the GAO are troubling," added Rep. Gordon. "We are already seeing important projects in science and aeronautics cancelled or delayed as a result of the Administration's decision to undertake an ambitious new Moon-Mars initiative without providing a budget for NASA equal to all the tasks it's been given. GAO's report indicates that if uncorrected, NASA's current approach to carrying out the initiative could lead to cost growth in the exploration program that will result in even further pressure on NASA's other core missions."

To obtain a copy of the full report, click here.

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