Meeting Charter: House Science Committee Hearing on Space Station Cost Overruns

Committee on Science

March 29, 2001

Hearing: Space Station Cost Overruns, 2318 Rayburn House Office Building, Wednesday, April 4, 2001, 10:00 am

1. Purpose of the Hearing

On Wednesday, April 4, 2001 at 10:00 am in 2318 Rayburn, the Committee on Science will hold a full committee hearing on the Space Station program. The hearing will
review NASA’s management of the Space Station program, the status and underlying causes of recent cost growth, risks associated with increased reliance on
international partners, the re-prioritization of planned science, and actions NASA is taking to address these issues. The hearing will consist of the following two panels
of witnesses.

Ms. Marcia S. Smith, Specialist, Aerospace and Telecommunications Policy, Congressional Research Service will testify on: (1) highlights of the Space Station
program’s major milestones; and (2) history of cost growth and program delays.

Mr. Robert J. Polutchko, Member, Cost Assessment and Validation (CAV) Task Force, will testify on: (1) findings and recommendations of the 1998 CAV Task
Force; (2) an assessment of the current cost overrun in light of the recommendations of the CAV Task Force; and (3) recommendations to prevent further unforeseen
cost growth.

Mr. Russell A. Rau, Assistant Inspector General for Audits, NASA, will testify on: (1) the overall management and adequacy of cost and schedule reporting on the
Space Station program; (2) NASA’s management of Space Station contracts; and (3) adequacy of NASA’s independent review process and cost estimating capabilities.

Mr. Daniel S. Goldin, Administrator, NASA will testify on: (1) the current status and cost growth on the Space Station program; (2) the underlying causes of the cost
growth; and (3) the steps NASA is taking to control cost growth and schedule slippage, manage risks associated with increased reliance on international partners, and
address the re-prioritization of planned science.

2. Space Station Cost Overrun

On January 22, 2001, NASA informed the committee staff that costs on the Space Station program had grown significantly — by several billion dollars over the next five
years. NASA cited several factors as the primary reasons for the unprecedented increase in the cost of the program- higher than anticipated expenditures to solve
hardware/software anomalies, hardware obsolescence issues, and unanticipated growth in manpower requirements for the assembly and operation of the Space Station.

The table below provides a comparison of the five-year budget runout submitted by the Clinton Administration for FY 2001 and NASA’s March 8, 2001 reassessment
of program funding requirements for the same period. NASA now projects that in order to continue the program as originally planned, an additional $4 billion will be
required for FY 2002-FY2006 – an increase of over 50%. To address this situation, NASA is conducting a “bottoms-up analysis” of the program that is expected to be
completed in mid-May. This review will establish a new baseline for the program and significantly reduce the planned capability of the Space Station.

The table also shows the Administration’s FY 2002 budget request for NASA. President Bush has requested a $1 billion increase in funding for the Space Station over
the next five years. In addition, the FY02 budget request proposes to constrain cost growth through management reform and by deleting funding for several major
development activities.

* Includes R&D phase of Crew Return Vehicle (CRV), but does not include approx. $1 billion in CRV development

** FY02 Request deletes funding for CRV, Habitation Module, and US Propulsion Module (limiting to a 3-person crew)

3. The President’s FY 2002 Space Station Budget

The President’s FY02 budget request proposes to offset a large portion of the cost growth by redirecting funding for the Crew Return Vehicle (CRV), the Habitation
Module, and the U.S. Propulsion Module. In addition, funding for U.S. research equipment and associated support will be aligned with the new assembly schedule that
will result from NASA’s ongoing bottoms-up analysis. NASA estimates that research funding will be reduced by 40%. The budget request also states that U.S.
development will be complete once the Space Station is ready to accept the hardware elements of the international partners. This milestone, referred to as “U.S. Core
Complete,” will be reached following the successful integration of Node 2, currently planned for November 2003. [1] The President’s budget further commits that any
additional cost growth will be offset by efficiencies found within the human space flight programs and will not affect NASA’s other research programs.

These changes will have a significant impact upon the mission of the station. The CRV and the Habitation Module provide the “lifeboat” and housing capability for a
full 7-member permanent crew. Without the CRV and the Habitation Module, the Space Station will be limited to a 3-member permanent crew and the program will be
required to rely on Russia to provide Soyuz capsules every six months for the life of the of the space station program. This reduction in crew size will limit the science
that can be performed on the Space Station. NASA has intimated that two of the three crewmembers, and at times all three, will be needed simply to operate and
maintain the Space Station. NASA is examining and prioritizing its research strategy to reflect the reduced size and availability of the crew. Early indications are that
emphasis will be placed on Biomedical and Biotechnology research. Additional research areas, such as the physical sciences, fluids & combustion, and biological
sciences will be phased in as research opportunities are demonstrated and additional facilities are deployed.[2]

The deletion of funding for the U.S. Propulsion Module does not directly affect the science that can be performed on the Space Station. It will, however, undermine the
U.S. goal of developing a propulsion capability independent of the Russian Progress propellant re-supply vehicles. NASA’s contingency plan is to rely on the Shuttle
to perform Space Station orbit maintenance. However, increased reliance on the Shuttle for orbit maintenance may require additional Shuttle flights to be added to the
manifest.

4. Management Reforms

The President’s budget requires NASA to take steps to restore cost estimating credibility (including the use of an external review to validate cost estimates). The
budget also requires NASA to transfer Space Station program management reporting from the Johnson Space Center in Houston to NASA Headquarters until a new
program management plan is developed.

5. 2000: A Year of Accomplishments

NASA has made significant progress in assembling and operating the Space Station. Over the past 12 months, there have been 14 successful flights to the Space Station
– 8 Shuttle, 2 Proton, 1 Soyuz, and 3 Progress flights. In July 2000, the Russians finally launched the long-awaited Service Module (Zvezda), allowing major assembly
flights to resume after a 19-month hiatus. Other major assembly flights this year launched structural elements (Z1 truss), attitude control hardware (control movement
gyros), solar arrays for power generation, and the U.S. Laboratory, “Destiny.” In November 2000, the Expedition 1 Crew became the first permanent crew aboard the
Space Station. The Expedition 2 Crew was launched last month and is currently aboard the Space Station. In addition, the vast majority of remaining U.S. hardware is
at the launch site at the Kennedy Space Center undergoing integration testing and preparation for launch and assembly on-orbit.

6. Questions

Witnesses will be asked the following questions (not all witnesses will answer each question):

• What is the current status of the Space Station and the status of cost growth?

• What has been the history of cost growth and schedule delays on the program?

• What are the underlying causes of the cost growth on the program?

• What actions are being taken to control cost growth and schedule slippage, manage risks associated with increased reliance on international partners, and address the
  re-prioritization of planned science?

• What issues raised by the 1998 Cost Assessment and Validation Task Force have not been adequately addressed by NASA and continue to be problematic?

• Does the cost and schedule reporting system on the ISS program accurately reflect the status of the program?

• How well has NASA managed contracts on the Space Station program?

• Does the ISS program conduct adequate independent audits and reviews and does the program have adequate capabilities for independent cost estimating?

[1] NASA has indicated that this date may slip to October 2004 pending the results of its bottoms-up review.

[2] NASA is continuing to study several alternative habitation concepts that would enable a 6-member permanent crew. A 6-member crew, however, would double the
number of Soyuz capsules required from Russia for emergency crew return.