The first version of the  SLS that NASA is developing is a 70-metric ton (mt) launch vehicle  known as Block I. SLS Has Resolved Some Technical Issues and Matured Its Design, but Pressure Remains on Reduced Cost and Schedule Reserves

The SLS program has made solid progress in resolving some technical  issues and maturing the SLS design, but the program’s management of  known risks as well as the program’s upcoming integration and test phase  puts pressure on the program’s reduced cost and schedule reserves. This  pressure threatens the program’s committed November 2018 launch  readiness goal. Such risks are not unusual for large-scale programs, especially  human exploration programs, but the program’s management of these  risks may increase pressure on reduced cost and schedule reserves. For  example, the SLS program has not positioned itself well to provide  accurate assessments of progress with the core stage—including  forecasting impending schedule delays, cost overruns, and estimates of  anticipated costs at completion—because, at the time of our review,  NASA did not have a performance measurement baseline necessary to  support full earned value management reporting on the core stage  contract. Finally, unforeseen technical challenges are likely to arise once  the program reaches its next phase, final integration for SLS and  integration of SLS with its related Orion and EGS human spaceflight  programs that will likely place further pressure on cost and schedule  reserves. Examples of this development progress— and the unexpected difficulties encountered achieving that progress— include the following:
Core stage. NASA’s Human Exploration and Operations Mission Directorate, which  oversees development of the SLS, EGS, and Orion programs, plans to  conduct a “build-to-synchronization” review in summer 2016 to  demonstrate that the integrated launch vehicle, crew vehicle, and ground  systems will perform as expected to meet EM-1 objectives. According to NASA program management requirements, a critical design  review for a NASA program would not only evaluate the integrated  design, but also evaluate whether it meets mission requirements with  appropriate margins and acceptable risk within cost and schedule  constraints. The EGS Program Is Making Progress Completing Modifications, but Technical Challenges Are Consuming Cost and Schedule Reserves

The EGS program is maturing selected systems, but the program is  encountering technical challenges that require both time and money to fix. This pressure threatens the  program’s committed November 2018 launch readiness goal. For example, based on the program’s February 2016 risk  assessment, the EGS program could see maximum cost increases of $10  million for the Mobile Launcher and $11 million for the Vehicle Assembly  Building, which is almost double the program’s fiscal year 2016 reserve. Recommendation for Executive Action

In order to ensure available cost and schedule margins are sufficient to  meet the synchronized goals for launch readiness and related activities,  we recommend the NASA administrator direct the Human Exploration and  Operations Mission Directorate as it finalizes its schedule and plans for  EM-1 during the planned build-to-synchronization review to re-evaluate  SLS and EGS cost and schedule reserves based on results of the  integrated design review in order take advantage of all available time  resources and maximize the benefit of available cost reserves, and to  verify that the November 2018 launch readiness date remains feasible. NASA stated  that the results of its build-to-synchronization review will be reported to  the NASA Program Management Council by November 30, 2016. GAO staff who made key  contributions to this report are listed in appendix V.

Appendix I: Exploration Ground Systems Components beyond the Space Launch System and Orion

According to Exploration Ground Systems (EGS) officials, the program  does not track how EGS investments could benefit users beyond the  Space Launch System (SLS) and Orion, but we found that the majority of  EGS funds are being used to develop major components that will be  exclusively used by SLS and Orion or require some modification to be  used by another user. Appendix II: Scope and Methodology

To assess the extent to which the Space Launch System (SLS) program  made progress in meeting cost and schedule commitments, we compared  current program status with National Aeronautics and Space  Administration’s (NASA) cost and schedule baselines for executing  Exploration Mission 1 (EM-1) in 2018.
Why GAO Did This Study

NASA is in the midst of developing systems needed to support deep-space exploration by humans. SLS will be NASA's first exploration-class launch vehicle in over 40 years to propel astronauts and cargo beyond low-Earth orbit. The EGS program is developing systems and infrastructure to support both SLS and the crew capsule, known as Orion. Together, the first planned SLS flight, the ground systems for that effort, and the first two Orion flights are estimated to cost almost $23 billion. In July 2015, GAO found that SLS's limited cost and schedule reserves were placing the program at increased risk of being unable to deliver the launch vehicle on time and within budget.
The House Committee on Appropriations report accompanying H.R. 2578 included a provision for GAO to assess the acquisition progress of the SLS, EGS, and Orion programs. This report assesses the extent to which (1) SLS has made progress meeting cost and schedule commitments, and (2) EGS has made progress in completing modifications to key facilities and equipment. To do this work, GAO examined the results of design reviews, contractor data, and other relevant program documentation, and interviewed relevant officials. GAO plans to report separately on the Orion program in July 2016.

What GAO Found

The National Aeronautics and Space Administration's (NASA) new launch vehicle, the Space Launch System (SLS), has resolved some technical issues and matured its design since GAO's July 2015 report, but pressure remains on the program's limited cost and schedule reserves. This pressure, in turn, threatens its committed November 2018 launch readiness goal. The program has made progress in resolving some technical issues—for example, a major alignment problem with the welding tool for the core stage (SLS's structural backbone and fuel tank) was corrected. Nonetheless, SLS development faces known risks moving forward. While such risks are not unusual for large-scale programs, the program's approach to managing them may increase pressure on the limited reserves. For example, the SLS program has not positioned itself well to provide accurate assessments of core stage progress—including forecasting impending schedule delays, cost overruns, and anticipated costs at completion—because at the time of our review it did not anticipate having the baseline to support full reporting on the core stage contract until summer 2016—some 4.5 years after NASA awarded the contract. Further, unforeseen technical challenges are likely to arise once the program reaches its next phase, final integration for SLS and integration of SLS with its related Orion and Exploration Ground Systems (EGS) human spaceflight programs. Any such unexpected challenges are likely to place further pressure on SLS cost and schedule reserves. The figure below shows key events in SLS and EGS launch readiness schedules.
The EGS program is making progress in modifying selected facilities and equipment to support SLS and Orion, but is encountering technical challenges that require time and money to address. Like SLS, the program has reduced cost and schedule reserves, which threatens its committed November 2018 launch readiness goal. Modifications to two main components—the Vehicle Assembly Building, where the SLS is assembled, and the Mobile Launcher, the vehicle used to bring SLS to the launch pad—have already cost more and taken longer than expected as has development of EGS software. In June 2016, after all the systems necessary to support the first flight test are expected to have a stable design, NASA plans to start an integrated design review to demonstrate that the integrated systems will perform as expected. NASA guidance indicates that this type of review should also evaluate whether mission requirements are being met with acceptable risk within cost and schedule constraints. NASA officials stated that this review will have limited discussion of cost and schedule. Proceeding ahead without reassessing resources, however, could result in the EGS or SLS program exhausting limited resources to maintain pace toward an optimistic November 2018 launch readiness date.

What GAO Recommends

GAO recommends that NASA should reevaluate cost and schedule reserves as part of its integrated design review for the first flight test in order to maximize all remaining cost and schedule reserves. NASA concurred with GAO's recommendation.