Congress, NASA, and the International Space Station: A New Civility? Part 2
A summary of hearings before the House Science Committee on Space Station Cost Overruns, 4 April 2001
Panel 1: Analysts, Critics, and Advisors
The hearings opened with a panel of three witnesses: Marcia Smith from the , Congressional Research; Robert Polutchko, a member of the 1998 Cost Assessment and Validation (CAV) Task which looked at problems the ISS was having, and Russell A. Rau, Assistant NASA Inspector General for Audits.
Marcia Smith [prepared statement] spoke of how the cost of the space station grew from the $8 billion dollar program started under Ronald Reagan in 1984 which would have placed a space station into orbit by 1992 to the current program that could cost anywhere from $28.1 to $30 billion and not be complete until 2006. This current cost estimate, represents more than a 60% increase in the cost cited in 1993 when Space Station Freedom was redesigned into the International Space Station.
Smith also spoke of the numerous attempts to kill the space station with 22 attempts on her tally since 1991 – all of which were unsuccessful (although one vote on the House floor in 1992 came within one vote of killing the ISS).
Reading from her prepared statement , Smith said “Congress has steadfastly supported the program – though sometimes with very close vote margins – through these many years. The questions Congress will need to
address this year are whether to insist that NASA stay within the cap imposed last year or to relax that cap or permit the cost increase to be covered by the contingency funds. If the decision is made to retain the cap, questions are likely to arise about how to cope with the risk of continuing dependence on Russia and the impact of potentially reducing the amount of research that can be conducted there. If the cap is relaxed, the issue would remain of where additional funding might be found. Congress may also decide to direct NASA to build some, but not all, of the capabilities currently under review. For example, the decision could be made to build the Crew Return Vehicle, but not the Habitation Module.
The choices are difficult, and there are no guarantees that, whatever decision is reached this year, Congress will not be presented with announcements of further cost growth in the future. That is one aspect of the space station program that has remained constant throughout the past 17 years.”
In reflecting back upon the Cost Assessment And Validation Task Force (CATV) Advisory Committee on the International Space Station (aka the Chabrow Report) Robert Polutchko [prepared statement] said that “the CAV Task Force Report outlined a number of issues, developed a series of findings, identified major risk areas and provided nine recommendations. Over the several months following the release of the report, it became apparent from the subsequent Committee Hearings that the ISS Program did not have serious disagreement
to the vast majority of the CAV issues, findings or recommendations. Quite to the contrary, NASA found that the CAV report was constructive and helpful.”
In an attempt to explain why a $4 billion cost overrun would appear at this point in the ISS program, Polutchko said that “the underlying issue here seems to be a continuation of a “success oriented” planning, budgeting and management approach that necessitates a large amount of parallel,
workaround and re-work activities which results in additional cost and schedule risks to the overall program. For even a modestly complex development program, when highly integrated schedules, budgets and task plans are baselined without adequate margins, reserves and risk mitigation expenditures, inefficient and costly program turmoil and disruption become the everyday way of life.”
Polutchko noted that “the current status of the ISS Program seems to strongly suggest that this management approach remains as pervasive on the program today as it was three years ago. Program management had continually predicted that the hardware and software developments will meet
planned performance goals of schedule and cost, despite the fact that similar predictions in the past had not been realized. One unfortunate characteristic of this misguided management approach is that frequent, major re-planning and re-baselining exercises then require very high and untimely traffic in administrative and contractual change management. This process in and of itself causes costly inefficiencies for nearly every segment of the program.”
The recommendation offered was that “realistic task planning, scheduling and budgeting remains a critical program deficiency and, actions to reform the management approach to this process is desperately needed.”
Polutchko expressed open concern that the current approach NASA was taking – i.e. to defer Hab, reboost, and crew return capabilities “seems to indicate that we are close to deciding to accept an almost unbounded risk for the indeterminate future with regard to the viability of timely logistics, propulsion and crew return support from our Russian partners. This approach as well as indefinitely deferring the U.S. Habitation Module limits the ISS to three (vice six) crew members until sufficient Soyuz capsules can (or will) be made available which, in all likelihood in the interim, will adversely impact the amount of science return. In addition, it is very likely that additional, expensive Shuttle
flights may be required to provide the back-up to, and a gap filler for, the Progress vehicles.”
In concluding, Polutchko urged the committee to maintain its “steadfast support of the program and encourage NASA to take a fresh look at conservative planning and rebaselining of the ISS program, including reconsideration of the major deletions that NASA believes must be made in
order to comply with existing fiscal funding and cap requirements. Yes, the rebaselined ISS program will require substantial additional funding but, on the other hand, providing a Space Station that has severe operational constraints and much reduced science return may not be in the best interests of our nation and our partners.”
Russell Rau [prepared statement] focused on the performance of the ISS prime contractor, Boeing, noting that the NASA OIG had performed a series of assessments which found that Boeing has been operating under unrealistic cost estimates and an inappropriate managerial approach. In 1999 Boeing said that their estimated variance at completion (i.e. cost overrun) would be $986 million. This was a $200 million increase over what had been projected a year earlier. NASA took a more conservative approach and estimates that this cost overrun was likely to exceed $1.2 billion.
Rau said (in his prepared statement) that “our oversight of the ISS has found that NASA could make many improvements in program management. Some of NASA’s ISS management practices were inconsistent
with the high-risk, technologically complex environment of the ISS Program. The international aspects of the program also compound the challenges facing NASA management.” He went on to say that “In our February 2000 report, we indicated that independent estimates of ISS contract costs were not routinely performed by an activity outside the program management
chain of command. The ISS Program Office does not conduct truly independent assessments given its management responsibilities for the Program. We recommended that such independent estimates be performed, and NASA agreed to obtain them as part of the IAR process. Since that time, however, NASA has not performed an IAR. Independent cost estimates of both the ISS Program and its contracts serve NASA management as well as the Congress and OMB by providing a “nonadvocate” perspective
on cost estimating assumptions and methodologies used to develop cost, budget, and other financial information. ”
Rau recommended that “NASA can use the framework established by the National Aeronautics and Space Administration Authorization Act of 2000 to accurately report ISS costs. In addition, improvements to existing contract and program management guidance can strengthen oversight of the ISS Program. The combination of the following actions will help ensure the most current status of the ISS Program is reported to the Congress, OMB, and NASA management: annual accounting for, and GAO verification of, statutory funding limitations as required by the National Aeronautics and Space Administration Authorization Act of 2000; review by the NASA OIG of NASA notifications, if any, of changes in ISS costs that require contingency funding above the statutory caps as required by the National Aeronautics and Space Administration Authorization Act of 2000; improved use of EVM systems and data for monitoring contractor performance; periodic independent life-cycle cost estimates; regular performance of IARs that include independent estimates of costs to complete ISS contracts; and timely implementation of actions agreed upon in response to independent reviews.”
Rep. Boehlert asked the panelists if they felt that NASA was finally coming to grips with reality with regard to their budgetary and managerial problems suggesting that “part of the uniform at NASA is rose-colored glasses – I hope the glasses have now come off.”
Rau responded that his office wasn’t sure why NASA did not avail itself of standard tools to track costs. Marcia Smith replied that NASA’s own estimates are inexact referring to the characterization given to the $4 billion cost overrun estimate by NASA as being a “50/50” estimate – i.e. one that had a 50% chance of being wrong – or right. This should be an indication, according to Smith, that this is not the end of the costs to be added to the overrun figure.
Smith said that NASA itself came back a year later with a cost double the original estimate. All told, $41 billion has been spent to date on the space station ($11 billion prior to 1993, $30 billion since 1993) This cost does not include the cost of the Shuttle missions required to build and then maintain the spacer station. When that is added in the General Accounting Office came up with a $96 billion overall lifecycle cost.
Rep. Rohrabacher repeated the fact that the space station had been presented by NASA to Ronald Reagan in 1984 as costing $8 billion to develop. “Did someone lie to Ronald Reagan?” He asked. He the repeated earlier comments wherein he said that creative ways need to be found to allow the ISS to be completed without sacrificing content.
Rep. Rivers (D-MI) asked about the overall goals of the ISS and what effect all of the cost overruns and redesigns have had on them. Marcia Smith reminded everyone in looking back at what was originally conceived Smith said that the ISS is far from the ISS that the U.S. and its partners have envisioned. Smith cited the fact that the original space station – Space Station Freedom had three main components: a manned spacecraft, a co-orbiting, man-tended facility, and a polar orbiting Earth observation platform. The manned base was complete with maintenance hangars and huge solar arrays.
Rep. Rivers asked if that original, much grander concept had been pursued, would the cost have been even greater now. Smith agreed that it would. Rivers then asked if the funds to cover these costs would come from other NASA programs. Smith replied that NASA had said (as had the Bush Administration) that the cost of completing the ISS was not going to come out of other programs – instead it would all come from NASA’s human space flight budget. Rivers asked if this is why the small amount of work being done on Martian exploration was put to a halt. Smith replied that this was the reason that Mars work – and a number of other lesser priority tasks- were shut down so as to free up funds to focus on completion of the ISS.
Rep. Weldon (R-FL) reminded the committee that the Clinton Administration had put the Russians into the critical path of the ISS program and that a long, 18 month hiatus was the result when the Service Module was delayed. Weldon asked how much of the $ 4 billion could be attributed to delays caused by Russia.
Robert Polutchko replied that this was hard to say since people were put to work on other tasks during the hiatus. Indeed, having the opportunity to have a large number of hardware items waiting at Kennedy Space Center allowed integrated testing to be done – testing that allowed NASA to find problems on the ground instead of experiencing them in space.
Weldon then asked if there was any evidence that the scope – and existence – of this cost overrun had been purposefully hidden by NASA. Rao replied that the Inspector General’s office had no evidence that it had been hidden. They did, however, know – and so did other parts of NASA – that there was a problem developing.
Rep. Jackson Lee (D-TX) came to NASA’s defense saying that the committee and NASA critics really didn’t have much basis upon which to complain given that they had all expected NASA to do more with less year after year. Such things are to be expected when this environment prevails. “Don’t point the finger at the ones who were told to cut” she said. She then went on o say that she is outraged that there will not be a full crew complement on the ISS.
Marcia Smith replied that “a constant companion of the ISS has been cost growth. As such, it is hard to blame anyone in particular for the cost overrun. Smith suggested that it might be interesting to ask NASA how it came up with the original $8 billion estimate in 1984 – one they doubled little more than a year later.
Rep. Culberson (R-TX) asked about the Boeing cost overrun. Marcia Smith said that Boeing says it is $986 million while NASA says it is more like $1.2 billion. She added that NASA had said in testimony before the committee last year that it estimate that around $1 billion of the cost growth seen at that point was attributable to delays caused by Russia. Polutchko added that NASA had its own domestic problems and that not all of the schedule delay could be pinned on Russia. Polutchko characterized the situation as “NASA has been running a race with one lead shoe”.
Culberson asked if there was any way to get a more stable budget environment – perhaps by allowing budgets to be set over several years. Polutchko replied enthusiastically that multi-year funding was indeed the way things should be done.
Rep. Gutknecht (R-MN) suggested that some members of the committee were engaging in revisionist history. He noted that he was the only Science Committee member who also sits on the Budget Committee. He reminded everyone that in all but one year in the past 6 years, Congress has actually given NASA more money than was in the President’s request. He then noted that watching the budget go “up and up and up” made it hard for him and his colleagues to continue to justify the program based upon the benefits it would provide.
Related Links
° Statement of Daniel S. Goldin, NASA Administrator
° Oral Statement by Dan Goldin before the House Science Committee
° Testimony of Russell A. Rau, NASA Assistant Inspector General for Auditing
° Statement by Rep. Boehlert regarding Space Station Cost Overrun Hearing
Background Information
° Space Station User’s Guide, SpaceRef
° House Science Committee
° NASA Office of Congressional Affairs
°28 February 2001: Memo NASA Staff: FY 2002 Budget Blueprint Overview by NASA Associate Administrator for Space Flight Joe Rothenberg, NASA HQ
°27 February 2001: Letter from Reps Rohrabacher and Weldon to Dan Goldin Regarding JSC Center Director George Abbey’s Reassignment, House Science Committee
°23 February 2001: Letter from (former) JSC Center Director George Abbey to Senior Staff: Actions Required to Address ISS Budget Challenges
°23 February 2001: NASA Administrator Appoints Johnson Space Center Director to Senior Assistant Position, NASA PAO
