From: NASA Office of Inspector General
Posted: Wednesday, May 17, 2017
WHY WE PERFORMED THIS REVIEW
Test stands for large rocket propulsion systems are used to test system components under controlled conditions on the ground as part of the process to certify the systems for flight. Such stands cost tens or hundreds of millions of dollars to build or refurbish and may sit idle for many years after the programs for which they were built end. In August 2013, NASA entered into an agreement with the Army Corps of Engineers to plan and build two test stands at Marshall Space Flight Center to test the liquid hydrogen and liquid oxygen tanks that are part of the core stage of the Agency's new heavy-lift rocket, the Space Launch System (SLS). An essential component to achieving the Agency's goal of expanding human presence in the solar system, the SLS is designed to launch crews of up to four astronauts beyond low Earth orbit on the Orion Multi-Purpose Crew Vehicle (Orion), as well as cargo needed for NASA's future exploration missions. NASA spent approximately $76 million to build the two test stands.
We initiated this review to assess NASA's acquisition approach for the test stands; the cost, schedule, and performance of the construction project; the justification for placing the stands at Marshall; and plans for future use of the stands. We reviewed Federal and NASA policies, regulations, and plans; interviewed officials from NASA and Army Corps of Engineers; and reviewed contract documentation and various Agency studies concerning planning and construction of the test stands.
WHAT WE FOUND
In an attempt to meet a 2017 launch date for the SLS, NASA expedited construction of the test stands and paid the contractor a premium of approximately $7.6 million to complete construction on a compressed timetable. Moreover, because the stand designs were based on preliminary testing specifications, the requirements and testing capabilities that would be needed were not fully understood when the construction contract was awarded. As the testing requirements matured, NASA modified the contract to meet changing requirements, added additional features, and made other modifications that raised the contract price by $20.3 million. In addition, NASA did not establish adequate funding reserves to cover these changes and therefore had to secure $35.5 million in additional funding over the planned budget. Finally, because NASA did not adequately consider alternative locations before selecting Marshall as the site for the test stands, it cannot ensure it made the most cost-effective decision regarding where to build the stands.
WHAT WE RECOMMENDED
To improve the decision-making process for construction of test stands and facilities, we recommended NASA's Assistant Administrator for Strategic Infrastructure perform a comprehensive review of Program-funded construction projects to ensure adequate analysis, including all life cycle costs, is completed prior to project initiation, and develop additional construction project guidance for establishing unallocated construction reserves for program-direct construction facility projects to better account for significant expected risks. We also recommended NASA's Associate Administrator for Human Exploration and Operations ensure facility needs, such as construction of new facilities and/or modification of existing facilities, are appropriately included in program planning and scheduling and that testing requirements are adequately understood prior to committing the Agency to construction or modification of test facilities.
We provided a draft of this report to NASA management who concurred with each of the recommendations and described corrective actions the Agency plans to take. We consider management's comments to Recommendations 1 and 2 responsive; therefore, these recommendations are resolved and will be closed upon verification and completion of proposed actions.
Although NASA management concurred with Recommendation 3, the Agency's response did not adequately address the intent of the recommendation. NASA management agreed that modifying existing facilities or constructing new facilities to meet a specific program requirement should be included in program planning, and the driving requirements for those efforts should be clearly understood prior to committing Agency resources. However, the Agency considered this action to be complete since program planning and scheduling requirements are identified in "NASA Space Flight Program and Project Management Requirements," NASA Procedural Requirements (NPR) 7120.5E. We disagree. NPR 7120.5E, originally issued in 2012, was in place prior to the start of the test stand construction effort examined in this audit. As such, it was insufficient to prevent the concerns identified in this report and further action is needed to ensure the issues do not reoccur in future projects. Therefore, this recommendation remains unresolved pending further discussion with Agency officials.
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