2. Executive Summary
The problems causing cost growth and schedule delays on the JWST Project are associated with budgeting and program management, not technical performance. The technical performance on the Project has been commendable and often excellent. However, the budget baseline accepted at the Confirmation Review did not reflect the most probable cost with adequate reserves in each year of project execution. This resulted in a project that was simply not executable within the budgeted resources.
The estimate to complete the JWST Project at Confirmation was understated for two reasons. First, the budget presented by the Project at Confirmation was flawed because it was not based upon a current bottoms-up estimate and did not include the known threats1. As a result of poor program and cost control practices, the Project failed to develop a reasonable cost and schedule baseline.
Second, the reserves provided were too low because they were established against a baseline budget that was too low, and in addition, because of budget constraints, were too low in the year of Confirmation and the year following (less than 20%) the two highest expenditure years. Leadership at Goddard Space Flight Center (GSFC) and NASA Headquarters failed to independently analyze the JWST Project's performance and recognize the flawed baseline. The reserve situation was recognized as a problem at the time, as was a degree of optimism in the integration and test (I&T) budget, which prompted NASA management to change the baseline launch date from June 2013 to June 2014 and to add extra reserves in the out years. Unaware of how badly understated the JWST Budget2 was, NASA management thought there was a 70% probability of launching in June 2014 at a total lifecycle cost of nearly $5 billion with the Confirmation budget profile. In fact, the Project had no chance of meeting either the schedule or the budget profile.
Another contributing factor was that in balancing the overall astrophysics program, the Astrophysics Division did not allocate the full funding amount needed to execute the Project. This might have required shifting resources from other programs within the Division. If this was not within its budgeting authority, the Division should have gone on record to the SMD and Agency management that its portfolio was not executable. Instead, the Division accepted the Project's continuing practice of deferring work and accepted the consequence of continued cost and schedule growth.
Still another contributory factor was the lack of effective oversight by GSFC of what the Project presented at Confirmation and at the subsequent program budget submissions. The direct cause for this was the interpretation of the NASA governance policy on roles, responsibilities, and accountabilities regarding the Center in project management and execution, due either to ambiguity in the NASA governance policy or to lack of effective communication between HQ and the Centers on this important issue. In either case, immediate corrective action is required.
The flaw in the Project Budget should have been revealed as part of the Confirmation process. The fact that it was not reflects the lack of an effective cost and programmatic analysis capability at HQ. This too requires immediate corrective action. It is critical to the successful completion of JWST to establish credible program and cost control capabilities at the GSFC Project office and to establish a robust independent analytical capability at both GSFC and HQ.
The Project reported a "red" assessment on cost in 7 of 9 quarterly reporting periods following Confirmation. The implication of these warnings--that the Project had no chance of meeting the planned budget and launch schedule--was interpreted by NASA leadership as a cost-control issue on the part of the contractor and not as a fundamentally broken estimate. Unaware of this, NASA worked with OMB and Congress to add funds piecemeal to the JWST Project on a yearto- year basis to help the Project, but these actions did not fix the Project in terms of providing the budget allocation to meet the agreed to life cycle cost and defined launch date. Again, the lack of an operational and effective cost and programmatic analysis capability at HQ was a contributing factor. Such a capability is required as a forcing function to define for senior NASA leadership what the current Project status is and what resources would be required to execute the Project.
The JWST Project Office at GSFC should be restructured to ensure that the Project is now managed with a focus appropriate to the Implementation Phase. Particular focus needs to be given to managing the project to the Life Cycle Cost (LCC) and Launch Readiness Date (LRD), and to developing robust I&T plans, consistent with delivering an Observatory that will meet its science requirements. The flawed practice by the Project of not adequately accounting for threats in the budgeting process needs immediate correction.
Essential to fixing these problems is moving the JWST management and accountability from the Astrophysics Division to a new organizational entity at HQ that would have responsibility only for the management and execution of JWST.
The earliest launch date possible--and hence the minimum cost to complete--is September 2015 and would require an additional ~$250 million above the current FY 2011 President's Budget profile in both 2011 and 2012. In addition, the critical management change noted above, along with the restructuring of the JWST Project office, supplemented by additional changes outlined in the report, must go "hand-in-hand" with additional funding.
In the time available, it was not possible to do an independent estimate of the cost-to-complete. As such, the Panel approached the question from several different points of view as described later in this report, leading to a judgment that the total LCC will be in the range of $6.2 billion to $6.8 billion. The Panel adopted an LCC of $6.5 billion on which to base its profile. Going forward, a bottoms-up estimate validated by an independent analysis and at least two independent cost estimates (ICEs) is required. Although not explicitly accounted for in the Panel numbers, there may be a number of low probability threats whose occurrence could cause an additional year delay in launch and a correspondingly higher cost.
In providing these assessments and recommendations, the Panel is fully aware of the problem in adjusting budgets at this late date--especially in the face of the nation's fiscal challenges. Nevertheless, despite management and budget shortcomings, the JWST Project has invested funds wisely in advancing the necessary technologies and reducing technical risk such that the funds invested to date have not been wasted. The management approach, however, needs to change to focus on overall life cycle cost and a well-defined launch date.