More than a third of the cost  increase was caused by requirements and other changes. Revised JWST Cost Estimate Is Not Fully Consistent with Best Practices for Reliable and Credible Estimates and the Integrated Master Schedule Is Not Finalized

Our analysis of JWST’s revised cost estimate showed that it is not fully  consistent with best practices for developing reliable and credible  estimates, although project officials took some steps in line with best  practices in the development of the estimate. In addition, we  found that the cost estimate included all life cycle costs for the project. Specifically, the project’s estimate was found to substantially meet the  best practice criteria for being comprehensive, and the remaining three  characteristics of being well documented, accurate, and credible were  found to be only partially met. The credibility of the estimate was lessened  because project officials did not perform a sensitivity analysis that would  have identified key drivers of costs, such as workforce size. Technically Challenging JWST Project Lacks the Schedule Reserve Flexibility and Commensurate Oversight of Integration and Test Efforts

Project officials report that the JWST schedule has 14 months of reserve,  which meets Goddard guidance for schedule reserve; however, only 7 of  the 14 months are likely to be available for the last three of JWST’s five  complex integration and test efforts. GAO’s prior work shows that it is  during integration and test where problems are commonly found and  schedules tend to slip. Given that JWST has a challenging integration and  test schedule, this could particularly be the case. The project has made  some significant progress in the past year, notably successfully  completing development of the 18 primary mirror segments—considered  JWST’s top technical risk. Nevertheless, ongoing challenges are  indicative of the kinds of issues that can require a significant amount of  effort to address. For example, instrument challenges have delayed the  first integration and test effort. In addition, key long-term risks on  subsystems with a significant amount of work remaining will not be retired  until 2016. Currently, NASA’s plan for project oversight calls for one  independent system integration review about 13 months before launch. While this is consistent with what NASA requires for its projects, this  approach may not be sufficient for a project as complex as JWST. JWST is one of NASA’s most technologically  complex projects to date. For  example, based on recommendations from the ICRP, the project has  instituted meetings at various levels throughout NASA and its contractors  and subcontractors. The new system should allow for better tracking of  risks than did the previous system. While these enhancements to the oversight of the project are steps in the  right direction, it will take time to assess their effectiveness. It is also one of the most expensive,  with a recent major replan resulting in a total cost of $8.8 billion. Without a plan to address  such reductions in future years, the project could once again become  susceptible to communication and oversight problems identified in earlier  reviews, which could also have a detrimental impact on continued project  performance. Recommendations for Executive Action

To ensure that the JWST life-cycle cost estimate conforms to best  practices, GAO recommends that the NASA Administrator direct JWST  officials to take the following three actions to provide high-fidelity cost  information for monitoring project progress:  improve cost estimate documentation and continually update it to  reflect earned value management actual costs and record any  reasons for variances,  conduct a sensitivity analysis on the number of staff working on the  program to determine how staff variations affect the cost estimate,  and perform an updated integrated cost/schedule risk analysis, or joint  cost and schedule confidence level analysis, using a schedule that  meets best practices and includes enough detail so that risks can be  appropriately mapped to activities and costs; historical, analogous  data should be used to support the risk analysis. To ensure that technical risks and challenges are being effectively  managed and that sufficient oversight is in place and can be sustained,  GAO recommends that the NASA Administrator direct JWST officials to  take the following three actions:  conduct a separate independent review prior to the beginning of the  OTIS and spacecraft integration and test efforts to allow the project’s  independent standing review board the opportunity to evaluate the  readiness of the project to move forward, given the lack of schedule  flexibility once these efforts are under way,  schedule the management review and approval to proceed to  integration and test (key decision point D or KDP-D) prior to the start  of observatory integration and test effort, and devise an effective, long-term plan for project office oversight of its  contractors that takes into consideration the anticipated travel budget  reductions. GAO staff who made  major contributions to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to assess (1) the extent to which NASA’s revised  cost and schedule estimates are reliable based on GAO best practices,  (2) the major risks and technological challenges the James Webb Space  Telescope (JWST) project faces, and (3) the extent to which the National  Aeronautics and Space Administration (NASA) has improved the  oversight of the JWST project.
Why GAO Did This Study

JWST is one of NASA's most expensive and technologically advanced science projects, intended to advance understanding of the origin of the universe. In 2011, JWST was rebaselined with a life cycle cost estimate of $8.8 billion and a launch readiness date in October 2018--almost nine times the cost and more than a decade later than originally projected in 1999. Concern about the magnitude of JWST's cost increase and schedule delay and their effects on NASA's progress on other high-priority missions led conferees for the Consolidated and Further Continuing Appropriations Act, 2012, to direct GAO to report on the project. Specifically, GAO assessed (1) the extent to which NASA's revised cost and schedule estimates are reliable based on best practices, (2) the major risks and technological challenges JWST faces, and (3) the extent to which NASA has improved oversight of JWST. To do this, GAO compared NASA's revised cost and schedule estimates with best practice criteria, reviewed relevant contractor and NASA documents, and interviewed project and contractor officials.

What GAO Found

The National Aeronautics and Space Administration (NASA) has provided significantly more time and money to the James Webb Space Telescope (JWST) than previously planned and expressed high confidence in the project's new baselines. Its current cost estimate reflects some features of best practices for developing reliable and credible estimates. For example, the estimate substantially meets one of four cost characteristics--comprehensive--that GAO looks for in a reliable cost estimate, in part because all life cycle costs were included. The estimate, however, only partially met the other three characteristics--well documented, accurate, and credible--which detracts from its reliability. For example, the estimate's accuracy, and therefore the confidence level assigned to the estimate, was lessened by the summary schedule used for the joint cost and schedule risk analysis because it did not provide enough detail to determine how risks were applied to critical project activities. The estimate's credibility was also lessened because officials did not perform a sensitivity analysis that would have identified key drivers of costs, such as workforce size. Program officials believe that it would have been difficult to fully address all best practice characteristics. GAO believes there is time to improve the estimate and enhance the prospects for delivering the project according to plan.
Project officials report that the JWST schedule has 14 months of reserve, which meets Goddard guidance for schedule reserve; however, only 7 of the 14 months are likely to be available for the last three of JWST's five complex integration and test efforts. GAO's prior work shows that the integration and test phases are where problems are commonly found and schedules tend to slip. Given that JWST has a challenging integration and test schedule, this could particularly be likely. The project has made some significant progress in the past year, notably successfully completing development of the 18 primary mirror segments--considered JWST's top technical risk. Nevertheless, ongoing challenges are indicative of the kinds of issues that can require significant effort to address. For example, instrument challenges have delayed the first integration and test effort. In addition, key long-term risks on subsystems with a significant amount of work remaining will not be retired until 2016. Currently, NASA's plan for project oversight calls for one independent mission-level system integration review about 13 months before launch. While this is consistent with what NASA requires for its projects, this approach may not be sufficient for a project as complex as JWST.
JWST has taken several steps to improve communications and oversight of the project and its contractors--such as taking over responsibility for mission systems engineering from the prime contractor; instituting meetings that include various levels of NASA, contractor, and subcontractor management; and implementing a new risk management system to allow for better tracking of risks. The enhancements to the oversight of the project are steps in the right direction, but it will take time to assess their effectiveness and ensure that the efforts are sustained by the project in the future. Reductions in travel budgets, however, could require the project to adjust the oversight approach that was adopted as a result of the replan. Additional reductions in travel budgets are anticipated in future years, but officials do not have a plan to address such reductions and their potential impact on continuing the current oversight approach.

What GAO Recommends

GAO recommends NASA take six actions including, among others, to take steps to improve its cost estimate; to conduct an additional, earlier independent review of test and integration activities; and to develop a long-term oversight plan that anticipates planned travel budget reductions.