The consequence of proceeding with system development without  establishing and adhering to a sound business case is substantial. GAO and  others have reported that NASA has experienced cost and schedule growth  in several of its projects over the past decade, resulting from problems that  include failing to adequately identify requirements and underestimating  complexity and technology maturity. NASA Continues Efforts to Improve Its Acquisitions

In 2005, we reported that NASA’s acquisition policies did not conform to  best practices for product development because those policies lacked major  decision reviews at several key points in the project life-cycle that would  allow decision makers to make informed decisions about whether a project  should be authorized to proceed in the development life cycle. Further, in response to GAO’s designation of NASA acquisition management  as a high risk area, NASA developed a corrective action plan to improve  the effectiveness of NASA’s program/project management. As part of this  initiative, NASA has taken a positive step to improve management oversight  of project cost, schedule, and technical performance with the establishment  of a baseline performance review reporting to NASA’s senior management. Our Observations

We assessed 19 large-scale NASA projects in this review. Four of these  projects were in the formulation phase where cost and schedule baselines  have yet to be established, while 15 had entered implementation. Nine of  the 15 projects experienced signiﬁ cant cost and/or schedule growth from  their project baselines, while ﬁ ve of the remaining projects had just  entered implementation and their cost and schedule baselines were  established in ﬁ scal year 2009. These projects had an average development cost growth of  18.7 percent—or almost $121.1 million—and schedule growth of over 15  months, and a total increase in development cost of over $1.2 billion. Over  half of this total increase in development cost—or $706.6 million—occurred  in the last year. See table 1 below for the cost  and schedule growth of the NASA projects in the implementation phase. These  factors—characterized as project challenges—were evident in the projects  that had reached the implementation phase of the project life cycle, but  many of them began in the formulation phase. In part as a result of immature technologies and  an unstable design, MSL delayed its launch date by 25 months, and  development costs have grown by more than $660 million. On the ﬁ rst page, the  project proﬁ le presents a general description of the mission objectives for  each of the projects; a picture of the spacecraft or aircraft; a schedule  timeline identifying key dates for the project; a table identifying  programmatic and launch information; and a table showing the baseline  year cost and schedule estimates and the most current available cost and  schedule data; a table showing the challenges relevant to the project; and a  project status narrative. GAO staff who made major  contributions to this report are listed in appendix VI. We did not validate the data  provided by the National Aeronautics and Space Administration (NASA). In addition, NASA received an appropriation from the American Recovery  and Reinvestment Act of 2009 (ARRA). Appendix III: NASA Life Cycle For Flight Systems Compared to a Knowledge-Based Approach

GAO has previously conducted work on NASA’s acquisition policy for space- ﬂ ight systems, and in particular, on its alignment with a knowledge-based  approach to system acquisitions. Examples  are still limited to paper studies.
Why GAO Did This Study

The National Aeronautics and Space Administration (NASA) plans to invest billions in the coming years in science and exploration space fl ight initiatives. The scientifi c and technical complexities inherent in NASA's mission create great challenges in managing its projects and controlling costs. In the past, NASA has had diffi culty meeting cost, schedule, and performance objectives for many of its projects. The need to effectively manage projects will gain even more importance as NASA seeks to manage its wide-ranging portfolio in an increasingly constrained fi scal environment. This report provides an independent assessment of selected NASA projects. In conducting this work, GAO compared projects against best practice criteria for system development including attainment of knowledge on technologies and design. GAO also identifi ed other programmatic challenges that were contributing factors in cost and schedule growth of the projects reviewed. The projects assessed are considered major acquisitions by NASA--each with a life-cycle cost of over $250 million. No recommendations are provided in this report; however, GAO has reported extensively and made recommendations on NASA acquisition management in the past. GAO has designated NASA's acquisition management as a high risk area since 1990.

What GAO Found

GAO assessed 19 NASA projects with a combined life-cycle cost of more than $66 billion. Of those 19 projects, 4 are still in the formulation phase where cost and schedule baselines have yet to be established, and 5 just entered the implementation phase in fi scal year 2009 and therefore do not have any cost and schedule growth. However, 9 of the 10 projects that have been in the implementation phase for several years experienced cost growth ranging from 8 to 68 percent, and launch delays of 8 to 33 months, in the past 3 years. These 10 projects had average development cost growth of almost $121.1 million--or 18.7 percent--and schedule growth of 15 months, and a total increase in development cost of over $1.2 billion, with over half of this total--or $706.6 million--occurring in the last year. In some cases, cost growth was higher than is reported because it occurred before project baselines were established in response to the statutory requirement in 2005 for NASA to report cost and schedule baselines for projects and implementation with estimated life-cycle cost of more than $250 million. Additionally, NASA was recently appropriated over $1 billion through the American Recovery and Reinvestment Act of 2009. Many of the projects GAO reviewed experienced challenges in developing new or retrofi tting older technologies, stabilizing engineering designs, managing the performance of their contractors and development partners, as well as funding and launch planning issues. Reducing the kinds of problems this assessment identifi es in acquisition programs hinges on developing a sound business case for a project. Based, in part, on GAO's previous recommendations, NASA has acted to adopt practices that would ensure programs proceed based on a sound business case and undertaken initiatives aimed at improving program management, cost estimating, and contractor oversight. Continued attention to these efforts and effective, disciplined implementation should help maximize NASA's acquisition investments.