	Introduction

In late 1997, the National Aeronautics and Space Administration (NASA) is scheduled to begin assembling the International Space Station (ISS). Objectives, Scope, and Methodology

The Chairman of the Subcommittee on Investigations and Oversight, House Commerce Committee, asked us to review the program’s cost and schedule status and NASA’s actions to improve cost reporting. The ISS Program Still Faces Substantial Cost and Schedule Threats

The ISS program has been producing flight hardware since 1993. However, it continues to face cost and schedule issues that threaten the already limited financial reserves available to complete the station within its $17.4-billion total and $2.1-billion annual budget, including (1) the large number of authorized unpriced changes to the prime development contract, (2) unfavorable cost and schedule trends, and (3) potentially understated cost estimates at completion. If a problem’s solution could not be funded by available reserves, program managers could be faced with either exceeding the annual funding cap or deferring or rephasing other activities, thus possibly delaying the development schedule and likely increasing overall funding requirements. It also predicted that several U.S. Performance Measurement Systems Being Implemented, but Problems Remain

NASA has made significant progress in implementing detailed and comprehensive performance measurement systems at its major contractors and product group subcontractors working on the prime development program. NASA has made slower progress in obtaining performance measurement data from nonprime contractors. This task is made more difficult because the performance measurement systems specified by the centers’ contracts do not prescribe the same level of disciplined planning and contractor conformity to validated performance measurement systems as required of the ISS prime development contractor, and nonprime contract managers are not as familiar with the newer performance measurement concepts as the prime contract managers are. 5. 6.
Why GAO Did This Study

Pursuant to congressional request, GAO reviewed the National Aeronautics and Space Administration's (NASA) International Space Station (ISS) program, focusing on: (1) the program's cost and schedule status; and (2) NASA efforts to improve its cost reporting.

What GAO Found

GAO found that: (1) over the past several years, ISS flight hardware has been produced; (2) as of April 1996, the ISS prime contract was about $89 million over cost and about $88 million behind schedule; (3) overall, the prime contract is 45-percent complete and these variances are within planned funding levels; (4) however, many cost threats to the development program remain, and financial reserves needed for unexpected contingencies remain limited over the next few years; (5) if available reserves ultimately prove inadequate, program managers would have to either exceed the annual funding limitation or defer or rephase other activities, thus possibly delaying ISS's schedule and likely increasing its overall cost; (6) NASA has made progress toward ensuring that the ISS prime development contractor and its major subcontractors implement effective performance measurement systems for managing their contracts, but a complete performance measurement system is still not in place; and (7) also, NASA has made slower progress implementing effective performance measurement systems on its contracts for developing ground-based and on-orbit capabilities for using and operating ISS.