On the basis of the  replan, NASA announced that the project would be rebaselined with a life- cycle cost at $8.835 billion—a 78 percent increase—and would launch in  October 2018—a delay of 52 months. One recommendation was  that the project should perform an updated integrated cost/schedule risk,  or JCL, analysis. NASA concurred with these two  recommendations. JWST Project Is Generally Executing to Its 2011 Cost and Schedule Baseline; Recent Performance Has Declined

The JWST project is generally executing to its September 2011 revised  cost and schedule baseline. Through the administration’s annual budget  submissions, NASA has requested funding for JWST that is in line with  the rebaseline plan and the project is maintaining 14 months of schedule  reserve to its October 2018 launch date. Cumulative performance data  from the prime contractor, which is responsible for more than 40 percent  of JWST’s remaining $2.76 billion in development costs, indicate that  work is being accomplished on schedule and at the cost expected. The JWST project is  maintaining oversight established as part of the replan, for example, by  continuing quarterly NASA and contractor management meetings and  instituting a cost and schedule tracking tool for internal efforts. The  project, however, is not planning to perform an updated integrated cost  and schedule risk analysis, which would provide management and  stakeholders with information to continually gauge progress against the  baseline estimates. Despite these improvements in oversight, JWST project officials said that  they are not planning to perform an updated integrated cost/schedule risk  analysis—or joint cost and schedule confidence level (JCL) analysis as   GAO’s cost estimating best practices call for  we recommended in 2012. a risk analysis and risk simulation exercise—like the JCL analysis—to be  conducted periodically through the life of a program, as risks can  materialize or change throughout the life of a project.updated on a regular basis, the cost estimate cannot provide decision  makers and stakeholders with accurate information to assess the current  status of the project. Project Made Progress Addressing Technical Risks; Challenges Persist

The JWST project has made progress in addressing some technical risks;  however, other technical challenges exist that have caused development  delays and cost increases at the subsystem level. This was the second time in  less than 2 years that the cryocooler subcontract was modified. Near-term Funding Constraints May Limit Project’s Ability to Meet Future Commitments

Several current near-term funding constraints such as low cost reserves,  a higher-than-expected rate of spending, and potential sequestration  impacts are putting at risk NASA’s ability to meet its cost and schedule  commitments for JWST. The need to allocate a significant portion of cost reserves in fiscal year  2014 and 2015 has been driven primarily by the technical issues with the  MIRI cryocooler. The project shares this  concern given that Northrop Grumman’s cost reserves are eroding faster  than anticipated. This direction by NASA could  have an impact on other major NASA projects. However, the schedule lacked a schedule  risk assessment—a best practice that gives decision makers confidence  that the estimates are credible based on known risks and allows  management to account for the cost of a schedule slip when developing  the life-cycle cost estimate. Recommendations for Executive Action

We recommend that the NASA Administrator take the following two  actions:  In order to ensure that the JWST project has sufficient available  funding to complete its mission and meet its October 2018 launch  date and reduce project risk, ensure the JWST project has adequate  cost reserves to meet the development needs in each fiscal year,  particularly in fiscal year 2014, and report to Congress on steps it is  taking to do so, and In order to help ensure that the JWST program and project  management has reliable and accurate information that can convey  and forecast the impact of potential issues and manage the impacts of  changes to the integrated master schedule, perform a schedule risk  analysis on OTE, ISIM, and cryocooler schedules, as well as any  other subschedules for which a schedule risk analysis was not  performed. We maintain that NASA should provide more  detail to Congress on its plans given the already constrained cost reserve  posture the project has early in fiscal year 2014 and past issues with low  levels of cost reserves that forced the project to defer work, which led to  significant cost increases and schedule delays. 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 the James Webb  Space Telescope (JWST) project is meeting its cost and schedule  commitments and maintaining oversight established as part of the  project’s replan, (2) the current major technological challenges facing the  JWST project, (3) the extent to which cost risks exist that may threaten  the project’s ability to execute the project as planned, and (4) the extent  to which the JWST project schedule is reliable based on best practices. We also reviewed the project’s analysis of the estimate at  completion for internal work being performed on the Integrated Science  Instrument Module.
Why GAO Did This Study

JWST is one of NASA's most complex and costly science projects. Effective execution of the project is critical given the potential effect further cost increases could have on NASA's science portfolio. The project was rebaselined in 2011 with a 78 percent life-cycle cost estimate increase --now $8.8 billion--and a launch delay of 52 months--now October 2018. GAO has made a number of prior recommendations, including that the project perform an updated cost and schedule risk analysis to improve cost estimates. GAO was mandated to assess the program annually and report on its progress. This is the second such report.
This report assesses the (1) extent to which the JWST project is meeting its cost and schedule commitments and maintaining oversight, (2) current major technological challenges facing the project, (3) extent to which cost risks exist that may threaten the project's ability to execute as planned, and (4) extent to which the JWST project schedule is reliable based on scheduling best practices. GAO reviewed relevant NASA and contractor documents, interviewed NASA and contractor officials, and compared the project schedule with best practices criteria.

What GAO Found

The James Webb Space Telescope (JWST) project is generally executing to its September 2011 revised cost and schedule baseline; however, several challenges remain that could affect continued progress. The National Aeronautics and Space Administration (NASA) has requested funding that is in line with the rebaseline and the project is maintaining 14 months of schedule reserve prior to its launch date. Performance data from the prime contractor indicate that generally work is being accomplished on schedule and at the cost expected; however, monthly performance declined in fiscal year 2013. Project officials have maintained and enhanced project oversight by, for example, continuing quarterly NASA and contractor management meetings and instituting a tool to update cost estimates for internal efforts. Program officials, however, are not planning to perform an updated integrated cost/schedule risk analysis, as GAO recommended in 2012, stating that the project performs monthly integrated risk analyses they believe are adequate. Updating the more comprehensive analysis with a more refined schedule and current risks, however, would provide management and stakeholders with better information to gauge progress.
The JWST project has made progress addressing some technical challenges that GAO reported in 2012, such as inadequate spacecraft mass margin, but others have persisted, causing subsystem development delays and cost increases. For example, the development and delivery schedule of the cryocooler--which cools one instrument--was deemed unattainable by the subcontractor due to technical issues and its contract was modified in August 2013 for the second time in less than 2 years, leading to a cumulative 120 percent increase in contract costs. While recent modifications have been made, execution of the cryocooler remains a concern given that technical performance and schedule issues persist.
Overall the project is maintaining a significant amount of cost reserves; however, low levels of near-term cost reserves could limit its ability to continue to meet future cost and schedule commitments. Development challenges have required the project to allocate a significant portion of cost reserves in fiscal year 2014. Adequate cost reserves for the prime contractor are also a concern in fiscal years 2014 and 2015 given the rate at which these cost reserves are being used. Limited reserves could require work to be extended or work to address project risks to be deferred--a contributing factor to the project's prior performance issues. Potential sequestration and funding challenges on other major NASA projects could limit the project's ability to address near-term challenges.
GAO's analysis of three subsystem schedules determined that the reliability of the project's integrated master schedule--which is dependent on the reliability of JWST's subsystem schedules--is questionable. GAO's analysis found that the Optical Telescope Element (OTE) schedule was unreliable because it could not adequately identify a critical path--the earliest completion date or minimum duration it will take to complete all project activities, which informs officials of the effects that a slip of one activity may have on other activities. In addition, reliable schedule risk analyses of the OTE, the cryocooler, or the Integrated Science Instrument Module schedules were not performed. A schedule risk analysis is a best practice that gives confidence that estimates are credible based on known risks so the schedule can be relied upon to track progress.

What GAO Recommends

Congress should consider directing NASA to perform an updated integrated cost/schedule risk analysis. GAO recommends that NASA address issues related to low cost reserves and perform schedule risk analyses on the three subsystem schedules GAO reviewed. NASA concurred with GAO's recommendations.