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Performance and Accountability Series:

January 2003:

Major Management Challenges and Program Risks:

National Aeronautics and Space Administration:


A Glance at the Agency Covered in This Report:

The National Aeronautics and Space Administration’s mission encompasses

* human exploration and development of space,

* the advancement and communication of scientific knowledge, and

* research and development of aeronautics and space technologies.

Its activities span a broad range of complex and technical endeavors—

from investigating the composition, evaluation, and resources of Mars; 

its international partners to complete and operate the International 

Space Station;to working with to providing satellite and aircraft 

observations of Earth for scientific and weather forecasting purposes; 

to developing new technologies designed to improve air safety.

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[End of figure]

This Series:

This report is part of a special GAO series, first issued in 1999 and 

updated in 2001, entitled the Performance and Accountability Series: 

Major Management Challenges and Program Risks. The 2003 Performance 

and Accountability Series contains separate reports covering each 

cabinet department, most major independent agencies, and the U.S. 

Postal Service. The series also includes a governmentwide perspective 

on transforming the way the government does business in order to meet 

21st century challenges and address long-term fiscal needs.The 

companion 2003 High-Risk Series: An Update identifies areas at high 

risk due to either their greater vulnerabilities to waste, fraud, 

abuse, and mismanagement or major challenges associated with their

economy, efficiency, oreffectiveness. A list of all of the reports in 

this series is included at the end of this report.

GAO Highlights:

Highlights of GAO-03-114, a report to Congress included as part of 

GAO’s Performance and Accountability Series.

Why GAO did This Report:

In its 2001 performance and accountability report on NASA, GAO 

identified important management, oversight, and workforce issues 

facing the agency. The information GAO presents in this report is 

intended to help sustain congressional attention and an agency focus 

on continuing to make progress in addressing these challenges—and 

others that have arisen since 2001—and ultimately overcoming them.  

This report is part of a special series of reports on governmentwide 

and agency-specific issues.

What GAO Found:

The National Aeronautics and Space Administration (NASA) continues 

to face challenges that threaten its ability to effectively run its 

largest programs.  NASA is taking steps to address these challenges.  

But because they are rooted in NASA’s culture and long-standing ways

of doing business, NASA will need to make a major transformation.

* Strengthening strategic human capital management.  NASA is facing 

shortages in its workforce, which could likely worsen as the workforce 

continues to age and the pipeline of talent shrinks.   This dilemma is 

more pronounced among areas crucial to NASA’s ability to perform its 

mission, such as engineering, science, and information technology.  

NASA is addressing this challenge through strategic planning, a new 

workforce planning and analysis system, and requesting additional 

personnel flexibilities, among other initiatives. 

* Controlling International Space Station costs.  Development costs 

for this premier project have soared to the point where NASA has 

had to cutback the program substantially, including reducing 

construction, the number of crew members, and scientific research.  

This has raised concern among NASA’s international partners, who have a 

large stake in the scientific research to be performed on the station.  

NASA is instituting management and cost-estimating reforms.  But it 

must  still reach agreement with its partners on its planned cutbacks.

* Reducing space launch costs.  NASA recognizes the need to reduce the 

costs of space launches and replace its aging space shuttle.  The 

administration recently submitted an amendment to NASA’s fiscal year 

2003 budget request, which (1) extends the life of the space shuttle 

and enhances its reliability, (2) funds the development of a new 

vehicle for ferrying crew to and from the space station, and (3) alters 

the time frame for a shuttle replacement.  Accomplishing these and 

other goals related to space launches will be difficult and risky in 

light of the technology advances NASA would like to pursue and the high 

degree of communication and coordination required among industry and 

government partners.

* Improving contract management.  NASA spends most of its funds on 

acquisitions.  Yet, for many years, it has been unable to oversee 

contracts effectively, principally because it lacked accurate and 

reliable information on contract spending and it placed little emphasis 

on end results, product performance, and cost control.  NASA has 

addressed many acquisition- related weaknesses and is beginning to 

tackle one of its most formidable barriers to sound contract 

management—the lack of a modern, integrated financial management 

Considerable work remains to be done since NASA is only in the early 

stages of designing and implementing this new system, and NASA reported 

that it is already facing challenges in terms of cost, 

and security.

What Remains to be Done:

To make its improvement initiatives fully successful, GAO believes that 

NASA will need to

* move to a results-oriented culture and provide the sustained 

attention needed to make sure human capital reforms stay on track;

* overcome barriers facing implementation of its financial management 

system and transform its financial management organization so that it 

better supports NASA’s core mission; and

* successfully follow through on planned oversight improvements 

so that costs and scheduling risks can be mitigated. 


Transmittal Letter:

Major Performance and Accountability Challenges:

GAO Contacts:

Related GAO Products:

Performance and Accountability and High-Risk Series:

This is a work of the U.S. Government and is not subject to copyright 

protection in the United States. It may be reproduced and distributed 

in its entirety without further permission from GAO. It may contain 

copyrighted graphics, images or other materials. Permission from the 

copyright holder may be necessary should you wish to reproduce 

copyrighted materials separately from GAO’s product.

January 2003:

The President of the Senate and the

Speaker of the House of Representatives:

This report addresses the major management challenges and program risks 

facing the National Aeronautics and Space Administration (NASA) as it 

seeks to advance human exploration and development of space, advance 

and communicate scientific knowledge, and research and develop 

aeronautics and space technologies. The report discusses the actions 

that NASA has taken and that are under way to address the challenges 

GAO identified in its Performance and Accountability Series 2 years 

ago, and major events that have occurred that significantly influence 

the environment in which the agency carries out its mission. Also, GAO 

summarizes the challenges that remain, new ones that have emerged, and 

further actions that GAO believes are needed.

This analysis should help the new Congress and the administration carry 

out their responsibilities and improve government for the benefit of 

the American people. For additional information about this report, 

please contact Allen Li, Director, Acquisition and Sourcing Management, 

at (202) 512-4841 or at

Signed by David M Walker:

David M. Walker

Comptroller General

 of the United States:

[End of section]

Major Performance and Accountability Challenges:

NASA is at a critical juncture. Since its inception, NASA has advanced 

space exploration and scientific knowledge and accomplished unparalled 

feats of engineering. But NASA now faces challenges, particularly in 

terms of maintaining a skilled workforce, controlling costs, and 

providing effective oversight for important projects. Recognizing the 

need for change, NASA’s Administrator has recently articulated a new 

vision for NASA--one that is science-driven, not destination-driven. To 

put NASA on a better footing to fulfill this vision, the agency is 

taking on a major transformation aimed at eliminating stovepipes, 

becoming more integrated and results-oriented, and reducing risks while 

working more economically, efficiently, and effectively.

We have identified four performance and accountability challenges 

facing NASA. These include:

* strengthening strategic human capital management,

* controlling International Space Station costs,

* reducing space launch costs, and:

* improving contract management.

Collectively, these challenges seriously affect NASA’s ability to 

effectively run its largest programs. With an aging workforce, for 

example, NASA is facing the loss of science and engineering expertise 

across its mission areas. Moreover, cost overruns have prevented NASA 

from achieving its original goals with the International Space Station 

and taken away resources from other programs. Weak contract management 

and financial controls pose additional risks across the agency. 

Therefore, we have placed this area on our high-risk list.

Since our last Performance and Accountability Series report,[Footnote 

1] issued in January 2001, NASA has been taking actions to address each 

of its challenges. For example, NASA has hired new staff, who helped 

address imbalances in some critical skill areas in the shuttle program, 

and it has also developed a strategic human capital plan to enhance its 

entire workforce. In an effort to control space station costs, NASA 

made substantial cutbacks in the space station program and is 

instituting management and cost-estimating reforms. NASA also took 

significant steps to improve contract management, including reducing 

its use of unnegotiated contract changes and beginning to implement a 

new integrated financial management system. However, we are continuing 

to categorize contract management as high risk since key actions remain 

to provide the oversight needed for the more than $12 billion NASA 

spends annually on its contracts.

Moreover, in our last report, we had identified NASA’s faster-

better-cheaper approach to space exploration as a major management 

challenge. However, since NASA decided to end this approach as a 

preference for managing its programs and projects, we removed this 

designation. We added reducing space launch costs as a challenge, given 

the wide range of complex and difficult tasks that need to be addressed 

for NASA’s plans for future space travel to succeed.

While NASA is taking positive steps toward addressing management 

problems, its ultimate challenge will be in tackling the root problems 

impeding its major programs. This will require instituting a 

results-oriented culture that fosters knowledge sharing and empowers 

its workforce to accomplish programmatic goals; making sure that the 

agency adheres to rigorous and effective management controls to prevent 

cost overruns and scheduling problems; transforming the financial 

management organization so that it better supports NASA’s core mission; 

and sustaining commitment to change.

[See PDF for image] - graphic text:

[End of figure] - graphic text:

Strengthening Strategic Human Capital Management:

Like many agencies, NASA is facing substantial challenges in attracting 

and retaining a highly skilled workforce. Left unchecked, for example, 

reductions in the space shuttle workforce could have jeopardized NASA’s 

ability to safely support the shuttle’s planned flight rate. NASA is 

taking comprehensive steps to address this problem across all mission 

areas, but implementing a strategic approach to marshaling, managing, 

and maintaining human capital represents a significant challenge.

Leading public organizations here in the United States and abroad have 

found that strategic human capital management must be the centerpiece 

of any serious change management initiative and efforts to transform 

the cultures of government agencies. People are an agency’s most 

important organizational asset. They define its culture, drive its 

performance, and embody its knowledge base. Because serious human 

capital shortfalls are eroding the ability of many agencies to 

effectively perform their missions, we designated strategic human 

capital management as a governmentwide high-risk area in January 2001 

and continue to designate it as high risk today. Plainly, the problem 

is not federal employees. Rather, the problem is the lack of a 

consistent strategic approach to marshaling, managing, and maintaining 

the human capital needed to maximize our government performance and 

ensure its accountability.

We reported in January 2001 that NASA’s shuttle workforce had declined 

significantly in recent years to the point of reducing NASA’s ability 

to safely support the shuttle program. Many key areas were not 

sufficiently staffed by qualified workers, and the remaining workforce 

showed signs of overwork and fatigue. To the agency’s credit, NASA has 

recognized the need to revitalize the shuttle’s workforce, discontinued 

its downsizing plans for the shuttle program in December 1999, and 

initiated efforts to hire new staff. In September 2001, we testified 

that NASA was hiring approximately 200 full-time equivalent staff and 

that it had focused more attention on human capital in its annual 

performance plan by outlining an overall strategy to attract and retain 

a skilled workforce. But even with these gains, there were still 

considerable challenges. For example, NASA’s new staff would require 

considerable training, and the agency still needed to deal with 

critical losses due to retirements in coming years.

Data obtained from NASA since September 2001 show that these challenges 

have not been mitigated, and work climate indicators continue to 

reflect high levels of job stress. In addition, while new hires helped 

address staffing needs in some critical skill areas in the shuttle 

program, staffing shortages in many key areas still remain a problem. 

These areas include subsystems engineering, flight software 

engineering, electrical engineering, environmental control, and 

shuttle resources management. NASA’s hiring posture for fiscal year 

2003 will target areas where skill imbalances still exist in the 

shuttle program.

Figure 1: Shuttle Undergoing Inspection at the Kennedy Space Center:

[See PDF for image]

[End of figure]

As we testified in July 2002, NASA believes that similar workforce 

problems affect the entire agency and that, as a result, its ability to 

perform future missions and manage its programs may be at risk. The 

average age of its workforce is over 45, and the agency is finding it 

particularly difficult to hire people with engineering, science, and 

information technology skills--fields critical to NASA missions. At 

this time, within the science and engineering workforce, the over-60 

population outnumbers the under-30 population nearly 3 to 1. Currently, 

15 percent of NASA’s science and engineering employees are eligible to 

retire; within 5 years, about 25 percent will be retirement eligible. 

At the same time, the pipeline of people with science and engineering 

skills is shrinking, and competition for workers with those skills is 

intense. According to NASA’s Inspector General, the agency also faces 

the loss of significant procurement expertise through the year 

2007.[Footnote 2] Coupled with these concerns, NASA has limited 

capability for personnel tracking and planning, particularly on an 

agencywide or programwide basis. Further, NASA acknowledges that it 

needs to complete and submit to the Office of Management and Budget 

(OMB) a transformation workforce restructuring plan, which it notes 

that, in conjunction with its strategic human capital plan, will be 

critical to ensuring that no skill gaps or deficiencies exist in 

mission critical occupations.[Footnote 3]

NASA is taking steps to address its workforce predicament. For example, 

it is developing an agencywide integrated workforce planning and 

analysis system as part of its new financial management system. The new 

system is expected to track the distribution of NASA’s workforce across 

programs, capture critical competencies and skills, determine 

management and leadership depth, and facilitate gap analyses. NASA 

already completed a pilot of an interim competency management system at 

one of its centers. The interim system will facilitate a gap analysis 

of human capital in terms of skills and competencies. NASA plans to 

implement the interim system agencywide in 2003, and integrate it with 

the new comprehensive workforce planning and analysis system in 2005. 

The new system should foster better management of the existing 

workforce and enable better strategic decisions about future 

workforce needs.

NASA also developed a strategic human capital plan, which identifies 

human capital goals, problems, improvement initiatives, and intended 

outcomes and incorporates strategies and metrics to support the 

goals.[Footnote 4] The plan has been reviewed and approved by OMB and 

the Office of Personnel Management (OPM). According to NASA, the plan 

is based on OMB’s scorecard of human capital standards and OPM’s 

scorecard of supporting human capital dimensions, as well as our own 

model, which we published in March 2002.[Footnote 5] Our model is 

designed to help agency officials effectively lead and manage their 

people and integrate human capital considerations into their daily 

decision making and the program results they seek to achieve. In doing 

so, the model highlights the importance of a sustained commitment by 

agency leaders to maximize the value of their agency’s human capital 

and to manage related risks. Consistent with OPM’s and OMB’s views, our 

model of strategic human capital management embodies an approach that 

is fact-based, focused on achieving strategic results, and incorporates 

merit principles and other national goals.

Additionally, NASA has renewed attention to hiring applicants just out 

of college and intends to pursue this even more aggressively in coming 

years. It is undertaking a number of initiatives and activities aimed 

at acquiring and retaining critically needed skills, such as using the 

new Federal Career Intern Program to hire recent science and 

engineering graduates, supplementing the workforce with nonpermanent 

civil servants where it makes sense, and implementing a program to 

repay student loans to attract and retain employees in 

critical positions.

NASA has also incorporated a strategic objective and two performance 

goals and supporting indicators to address human capital in its fiscal 

year 2003 performance plan. The plan includes a goal to align 

management of the agency’s human resources to best achieve its 

strategic goals and objectives along with a second goal to attract and 

retain a workforce that represents America’s diversity at all levels 

and to maximize individual performance through training and development 

experiences. Recognizing its human capital management challenge, NASA 

has included strategies in the plan that will focus on restructuring 

and revitalizing its workforce.

Further, the 107th Congress considered a series of legislative 

proposals developed by NASA to provide it with further flexibilities 

and authorities for attracting and retaining a skilled workforce. These 

included streamlining hiring procedures; making noncompetitive 

conversions of term employees to permanent positions; offering larger 

recruitment, relocation, and retention bonuses; expanding use of early 

retirement; and providing authority for permanent and enhanced buyouts. 

In testifying before Congress on the legislative proposals in July 

2002, the NASA Administrator indicated that the provisions, taken 

together as an integrated package, form a strong nucleus in support of 

NASA’s strategic human capital plan and The President’s Management 

Agenda and will enable NASA to avert a serious human capital crisis.

During those same hearings, we testified that several of the NASA 

issues mirror aspects of other legislative proposals such as the 

Federal Human Capital Act of 2001 (S. 1603, 107th Cong., 

2001),[Footnote 6] and noted that while we had not performed a detailed 

analysis of the support behind NASA’s legislative proposals, several 

points as outlined as follows were worthy of consideration:

* First, the addition of flexibilities and authorities alone will not 

solve workforce problems. Agencies need to undertake a wide array of 

initiatives to attract, retain, and motivate a top quality workforce. 

These include such actions as revitalizing recruiting and college 

relations efforts; conducting employee feedback surveys to set 

priorities and assess progress; conducting employee preference surveys 

so employees can be given the opportunity to work in areas that 

interest and energize them consistent with overall institutional needs; 

inventorying the skills and knowledge of existing employees; initiating 

professional development programs for newly hired staff to help them 

transition and progress; implementing modern, effective, and credible 

performance appraisal and management systems; redesigning training 

programs to directly link them to core competencies; and implementing 

employee-friendly benefits, such as day care centers, business casual 

dress, flextime, and public transportation subsidies.

* Second, agencies need to make the most of current flexibilities and 

authorities already available. These flexibilities are identified by 

OPM in its guide, Human Resource Flexibilities and Authorities in the 

Federal Government. They include such things as the ability to use 

commercial recruiting firms to recruit for vacancies; customize merit 

promotion plans and performance systems; increase basic pay to attract 

and retain staff with unusually high or unique qualifications; and 

grant substantial cash incentive awards. Agencies should develop a 

sound business case for using these flexibilities by focusing on how a 

given flexibility will address human capital challenges and ultimately 

improve agency results. In tandem with exercising these flexibilities, 

agencies must learn to effectively balance their pay and incentive 

programs to encourage both individual and team contributions to achieve 

results. In our December 2002 report, we identified 6 key practices for 

the effective use of human capital flexibilities. These practices are 

(1) planning strategically and making targeted investments, 

(2) ensuring stakeholder input in developing policies and procedures, 

(3) educating managers and employees on the availability and use of 

flexibilities, (4) streamlining administrative processes, (5) building 

transparency and accountability into the system, and (6) changing the 

organizational culture.[Footnote 7]

* Third, agencies need effective succession planning. NASA’s workforce 

profile, particularly for science and engineering workers, points to 

the need for this. Faced with the same problems at GAO, we reinstated 

our Executive Candidate Development Program, under which candidates are 

selected through a rigorous competitive process and are prepared for 

assignments at the SES level. While the potential loss of expertise 

through retirements will be substantial, this turnover also affords 

NASA’s Administrator the opportunity to change culture, skill mix, 

deployment locations, and other agency attributes. NASA will, however, 

need to leverage technology and enhance its training efforts to help 

make this transition and facilitate needed knowledge 

sharing initiatives.

* Fourth, agencies must ensure that strategic human capital plans are 

results-oriented and data-driven. This includes developing appropriate 

information on the number and location of employees and their key 

competencies and skills as well as data on the profile of the 

workforce, and performance goals and measures for human capital 

approaches. Further, this data must be used effectively to develop 

strategies that continually ensure they have the right mix of employees 

to meet future needs. A key to success in this area also will be NASA’s 

ability to implement its new financial management system, since it will 

encompass the new workforce planning and analysis system.

We will continue to monitor NASA’s progress in resolving its human 

capital problems, including how well its human capital initiatives and 

reforms and any new and existing flexibilities and authorities are 

helping to strategically manage and reshape its workforce.

Controlling International Space Station Costs:

The International Space Station is characterized as one of the most 

challenging engineering feats ever attempted. It also represents an 

important effort to foster international cooperation in scientific 

research and space exploration. But development costs for the 

International Space Station have soared to the point where NASA has had 

to make substantial cutbacks in the program. Specifically, the cost to 

complete assembly has mushroomed by about $5 billion to the current 

estimate of about $30 billion, and while assembly of the station was 

originally expected to be completed in 2002, NASA now expects it to be 

done in 2006. This has negatively impacted NASA’s credibility with 

Congress and raised concern among international partners and the 

scientific community about the viability of the space station. NASA is 

taking action to keep costs in check, but its success in this area 

still faces considerable challenges.

NASA has had difficulty predicting and controlling costs and scheduling 

for the space station since its inception in 1984. In September 1997, 

we reported that the cost and schedule performance of the space 

station’s prime contract, which showed signs of deterioration in 1996, 

had continued to worsen steadily and that the program’s financial 

reserves for contingencies had deteriorated, principally because of 

program uncertainties and cost overruns. In our January 2001 

Performance and Accountability Series report, we reported that the 

prime contract for the space station was initially expected to cost 

over $5.2 billion, and the assembly of the station was expected to be 

completed in June 2002. But by October 2000, the prime contractor’s 

cost had grown to about $9 billion, of which $986 million was for cost 

overruns, and the station was not expected to be complete until 

April 2006. NASA’s Office of Inspector General (OIG) reported the same 

cost overrun in a February 2000 audit report, and based on 

recommendations in that report, NASA agreed to take several actions, 

including discussing the prime contractor’s cost performance at 

regularly scheduled meetings and preparing monthly reports to senior 

management on the overrun status.

Figure 2: The International Space Station:

[See PDF for image]

[End of figure]

Our July 2002 report on the International Space Station shows that 

the reasons for continued cost growth include an inadequate definition 

of requirements, changes in program content, and schedule delays and 

inadequate program oversight. NASA has controls in place that should 

have alerted management to the growing cost problem and the need for 

mitigation, but these were largely ignored because of NASA’s focus 

on fiscal year budget management rather than on total program 

cost management.

The estimated cost growth is having a profound effect on the utility of 

the space station--with substantial cutbacks in construction, the 

number of crew members, and scientific research. As a part of the space 

station restructuring, further work and funding for the habitation 

module and crew return vehicle have been deferred, thus requiring the 

on-orbit crew to be reduced from seven to three members. This will 

limit the crew-member hours that can be devoted to research. 

Additionally, NASA has cut back from 27 to 20 the number of facilities 

available for research. This will eliminate some experiments, such as 

those relating to biotechnology. NASA’s international partners and the 

scientific community are not satisfied with these and other reductions 

in capabilities and have raised concerns about the viability of the 

space station science program.

NASA is instituting a number of management and cost-estimating reforms. 

But there are significant challenges to their successful 

implementation. First, NASA is now preparing a life cycle cost estimate 

for the program based on a three-person crew. However, between now and 

submission of the fiscal year 2004 budget, NASA and OMB must agree on 

the estimate. Furthermore, NASA’s financial management system used to 

collect required space station cost data has proven inadequate. Second, 

NASA must decide how research can be maximized with only a three-person 

crew. Third, NASA has not yet reached an agreement with its 

international partners on an acceptable on-orbit configuration and 

sharing of research facilities and costs. Thus, the capacity and 

capabilities of the space station, the scope of research that can be 

accomplished, and the partners’ share of operating costs are unknown at 

this time. In addition to the reforms, NASA has requested additional 

funding for the space station program in its revised fiscal year 2003 

budget request.

Reducing Space Launch Costs:

Until last November, NASA was pursuing a $4.8 billion, 5-year program-

-known as the Space Launch Initiative (SLI)--to build a new generation 

of space vehicles to replace its aging space shuttle. This was part of 

NASA’s broader plan for the future of space travel--known as NASA’s 

Integrated Space Transportation Plan--which involved operating the 

space shuttle through 2020 and developing successive generations of 

transportation vehicles that would begin to be deployed around 2011. 

The primary goals for SLI were to reduce the risk of crew loss as well 

as substantially lower the cost of space transportation so that more 

funds could be made available for scientific research, technology 

development, and exploration activities. Currently, NASA spends nearly 

one third of its budget on space transportation.

Figure 3: NASA Illustration of Its Second Generation Transportation 


[See PDF for image]

[End of figure]

We reported in September 2002 that SLI was a considerably complex and 

challenging endeavor for NASA--from both a technical and business 

standpoint. For example, it would require NASA to develop and advance 

new technologies for the new vehicle, including (1) new airframe 

technologies that will include robust, low-cost, low-maintenance 

structure, tanks, and thermal protection systems, using advanced 

ceramic and metallic composite materials, and (2) new propulsion 

technologies, including main propulsion systems, orbital maneuvering 

systems, main engines, and propellant management. The program would 

also require NASA to carefully coordinate and communicate among 

industry and government partners since agreements need to be reached on 

what the basic capabilities of the new vehicle will be, what designs or 

architectures should be pursued, how development costs will be shared, 

and what individual partner responsibilities will be. Lastly, the SLI 

project would require careful oversight, especially in view of past 

difficulties NASA has had in developing the technologies for reusable 

launch vehicles to replace the space shuttle. These efforts did not 

achieve their goals primarily because NASA did not develop realistic 

cost estimates, timely acquisition and risk management plans, or 

adequate and realistic performance goals.

Most important, however, we reported that NASA was incurring a high 

level of risk in pursuing its plans to select potential designs for the 

new vehicle without first making other decisions that would have a 

large impact on the SLI program. These included decisions on what DOD’s 

role would be in the program; what the final configuration of the 

International Space Station would be; and what overall direction NASA’s 

Space Transportation Plan would take. At the time, there were 

indications that NASA and DOD differed on priorities and requirements 

for the program. Also, NASA had yet to come to agreement with its 

international partners on space station issues that could dramatically 

impact SLI requirements, such as how many crew members would operate 

the station. Moreover, NASA was still in the process of reassessing its 

overall space transportation plans.

NASA agreed with our findings and took steps needed to refocus its 

space launch efforts. On October 21, 2002, NASA postponed its Systems 

Requirements Review (SRR) for SLI so that it could focus on defining 

DOD’s role, determine the future requirements of the International 

Space Station, and firm up the agency’s future space 

transportation needs.

In November 2002, the administration submitted to the Congress an 

amendment to NASA’s fiscal year 2003 budget request to implement a 

new Integrated Space Transportation Plan. The new plan makes 

investments to extend the space shuttle’s operational life for 

continued safe operations and refocuses the SLI program on developing 

an orbital space plane--which provides a crew transfer capability to 

and from the space station--and next generation launch technology.

We will continue to monitor NASA’s progress in reducing launch costs 

and position ourselves to advise the Congress accordingly. As it 

proceeds forward with its revised plans, it will still be important for 

NASA to implement management controls that can effectively predict what 

the total costs of the program will be and minimize risks. These 

include cost estimates, controls designed to provide early warnings of 

cost and schedule overruns, and risk mitigation plans. With such 

controls in place, NASA would be positioned to provide its managers and 

the Congress with the information needed to ensure that the program is 

on track and able to meet expectations.

Correcting Weaknesses in Contract Management:

Much of NASA’s success depends on the work of its contractors--on which 

it spends the greatest part of its funds--$12.7 billion or 90 percent. 

But for many years, NASA has not been able to effectively oversee 

contracts, principally because it lacked accurate and reliable 

information on contract spending and it has placed little emphasis on 

end results, product performance, and cost control. NASA has addressed 

many acquisition-related weaknesses, but key tasks remain, including 

completing the design and implementation of a new integrated financial 

management system.

Since 1990, we have identified NASA’s contract management function as 

an area at high risk due to its ineffective systems and processes for 

overseeing contractor activities. Our reports and testimonies since 

then have demonstrated just how debilitating these weaknesses in 

contract management and oversight can be to important space programs. 

Our July 2002 report on the International Space Station, for example, 

found that NASA did not effectively control costs or technical and 

scheduling risks, provide adequate oversight review, or effectively 

coordinate efforts with its partners. In other examples, we found that 

NASA lacked effective systems and processes for overseeing contractor 

activities and did not emphasize controlling costs.

In addition, NASA’s ability to collect, maintain, and report the full 

cost of its projects and programs is weakened by diverse and often 

incompatible center-level accounting systems and uneven and nonstandard 

cost-reporting capabilities. The agency’s financial management 

environment is comprised of decentralized, nonintegrated systems with 

policies, procedures, and practices that are unique to its field 

centers. For the most part, data formats are not standardized, 

automated systems are not interfaced, and on-line financial information 

is not readily available to program managers. Thus, it is difficult to 

ensure that contracts are being efficiently and effectively implemented 

and that budgets are executed as planned.

NASA’s lack of a fully integrated financial management system also 

hurts NASA’s ability to provide data required for external reporting 

purposes. For example, in March 2002, we testified that NASA was unable 

to provide us with detailed support for amounts that it reported to 

Congress as obligated against space station and related shuttle program 

cost limits as required by the National Aeronautics and Space 

Administration Authorization Act of 2000.[Footnote 8] Furthermore, 

NASA’s independent auditor, Pricewaterhouse Coopers, disclaimed an 

opinion on the agency’s fiscal year 2001 financial statements and 

identified significant internal control weaknesses related to 

accounting for space station material and equipment and to computer 

security. This action is in contrast with the unqualified or “clean” 

audit opinions of its previous auditor for fiscal years 1996 

through 2000. Also in contrast with NASA’s previous auditor’s opinion, 

Pricewaterhouse Coopers concluded that NASA’s financial management 

systems do not substantially comply with the requirements of the 

Federal Financial Management Improvement Act of 1996[Footnote 9] 

(FFMIA). FFMIA builds on previous financial management reform 

legislation by emphasizing the need for agencies to have systems that 

can generate timely, accurate, and useful information with which to 

make informed decisions and to ensure accountability on an 

ongoing basis.

In recent years, NASA made progress in addressing its contract 

management challenges. In July 1998, for example, we reported that 

NASA was developing systems to provide oversight and information needed 

to improve contract management and that it had made progress evaluating 

its field centers’ procurement activities on the basis of international 

quality standards and its own procurement surveys. In January 1999, we 

reported that NASA was implementing its new system for measuring 

procurement-related activities and had made progress in evaluating 

procurement functions in its field centers.

NASA has also made progress reducing its use of undefinitized contract 

actions[Footnote 10]--that is, unnegotiated (i.e., uncosted) contract 

changes. Both NASA’s Office of the Inspector General and we have 

reported our concerns about NASA’s frequent use of undefinitized 

contract changes. In 2000, we reported concerns about NASA’s use of 

such actions, since this practice could result in contract cost 

overruns and cost growth in the International Space Station program. 

NASA’s Office of the Inspector General is currently conducting a review 

of NASA’s management of undefinitized contract actions. Data provided 

by NASA show significant reductions in the use of these actions. NASA 

officials attribute recent declines to increased management controls 

and emphasis by NASA centers on limiting undefinitized 

contract actions.

Moreover, NASA recognizes the urgency of successfully implementing 

a fully integrated financial management system. NASA is working on 

implementing such a system and expects a new system to be fully 

operational in fiscal year 2008. NASA has estimated the life cycle 

costs of this system to be $861 million.[Footnote 11] This is NASA’s 

third attempt toward implementing a fully integrated financial 

management system. NASA abandoned the first two efforts after 12 years 

and after spending $180 million. According to NASA, the agency’s 

current approach focuses on learning from other organizations’ 

successes in implementing similar projects, as opposed to revisiting 

its own failures. NASA has also abandoned its prior approach of 

attempting to acquire and implement the entire system all at once. 

Instead, the project is being broken down into manageable pieces. That 

is, it is being split into modules that NASA states it will implement 

individually, based on the availability of proven commercial-off-the-

shelf (COTS) software products. NASA initially segmented implementation 

of the integrated financial management project into 14 modules, but has 

since reorganized the program into 8 modules. One of the first modules 

NASA plans to implement is the core financial module, which is expected 

to be fully operational in June 2003. According to NASA officials, the 

core financial module will provide NASA’s program managers with timely, 

consistent, and reliable information for management decisions as well 

as the ability to tie all agency costs to major activities, including 

civil service personnel costs.

While NASA has made some progress, much work remains to strengthen 

contract oversight. First, NASA has encountered some difficulty in 

implementing its new financial management system. As we testified in 

July 2002, a recent NASA review found that the total cost estimate for 

deployment of the core financial module at all NASA centers had grown 

considerably beyond the cost initially contemplated. The review also 

acknowledged that interoperability and security vulnerabilities exist 

within the current information infrastructure, although specific 

details were not provided. Furthermore, NASA reported that the agency’s 

technical project resources are stretched to the point where the impact 

of any individual schedule mishap could have a systemwide effect. To 

address these continuing problems, the Administrator appointed an 

executive to provide leadership and accountability in the direction and 

operation of the new system. He also recently decided that the near-

term focus of the program should be to ensure a successful and rapid 

deployment of the core financial module--the backbone of the system--

and that the schedule of the remaining modules should undergo further 

risks assessments before moving forward. The keys to success as NASA 

moves forward in acquiring and implementing its new financial 

management system are to employ proven best practices, including 

(1) aligning its selection of commercial components of the system with 

a NASA-wide blueprint, commonly called an enterprise architecture; 

(2) analyzing and understanding the dependencies among these commercial 

components before acquiring and implementing them; (3) following an 

event-driven system acquisition strategy; (4) employing effective 

acquisition management processes, such as those governing requirements 

management, risk management, and test management; (5) ensuring that 

data existing in legacy systems are corrected before being loaded into 

the new system, so that data errors will not be perpetuated in the new 

system; and (6) proactively positioning NASA for the business process 

changes embedded in the new system by, for example, providing adequate 

formal and on-the-job training.

Second, NASA still needs to ensure that it has the right data to 

oversee its programs and contractors--specifically data to allow 

comparisons of actual costs to estimates, provide an early warning of 

cost overruns or other related difficulties, and monitor contract 

performance and make program requirement trade-off decisions. As we 

reported in August 2001 and again in March 2002, despite its past and 

current efforts, NASA does not track the actual costs of completed 

space station components, even though it often estimates costs at the 

component level for planning and budgeting purposes. Several factors 

contribute to this situation, including ineffective policies and 

procedures for updating cost estimates at each major design phase. NASA 

is also not yet able to uniformly ensure that contractors provide cost 

data at a level that will give managers the information they need to 

assess the validity of previous cost estimates, fully monitor the work 

being performed, and appropriately identify cost drivers. NASA has 

begun taking actions to improve the type and detail of cost data 

available for some large programs, but these efforts are not 

yet complete.

Because more work is needed to demonstrate substantial progress in 

resolving the root causes of NASA’s contract management weaknesses, we 

are retaining contract management as a major management challenge and a 

high-risk area. We are continuing to monitor NASA’s progress in 

addressing contract management weaknesses. In response to a May 

24, 2002, bicameral, bipartisan request from the Senate Commerce, 

Science, and Transportation Committee and the House Science Committee, 

we are currently assessing the extent to which NASA’s management of the 

financial management system acquisition is in accordance with 

effective system acquisition practices and is designed to support 

NASA’s decision-making needs and external reporting requirements.

Addressing the Challenges Requires Broader Steps:

NASA’s management challenges reflect a deeper need for broad cultural 

change within the agency. Particularly important is the need to shift 

its overall orientation from processes to results; stovepipes to 

matrixes; hierarchical to flatter and more horizontal structures; 

management control to employee empowerment; and reactive behavior to 

proactive approaches. Making such a shift will require redefining and 

communicating priorities and values, and a performance management 

system that will reinforce agency priorities. It will also require a 

fundamental reassessment of the organizational layers, levels, units, 

and locations and possibly realignment to support the agency’s 

strategic plan and desired transformation.

NASA is hardly alone in this respect. Federal agencies generally need 

to reexamine their policies, programs, and operations in light of a 

number of trends, including the changing nature of the economy; rapidly 

evolving science and technology; dramatic shifts in the age and 

composition of the population; diverse, diffuse, and asymmetrical 

security threats; and long range fiscal challenges. Leading public and 

private organizations here in the United States and abroad have found 

that to successfully transform themselves, they must often change their 

culture. Leading organizations also understand that their people, 

processes, technologies, and environments are the key enablers that 

drive cultural change.

NASA’s Administrator recognizes the scope of the transformation 

needed at NASA. In fact, in early 2002, he stressed that NASA must 

avoid getting distracted with challenges that call for simply 

incremental or marginal improvements and dedicate itself to overcoming 

its limits by finding entirely new ways to achieve its objectives. 

Moreover, to become a science-driven organization,[Footnote 12] the 

Administrator called for a new commitment to fiscal responsibility and 

wise use of assets. The Administrator also underscored the need to 

eliminate stovepipes within the agency to build an integrated strategy 

that links human space flight and robotic space flight in a stepping 

stone approach to exploration and discovery. To make its 

transformation, NASA is primarily using the five major initiatives from 

The President’s Management Agenda (strategic management of human 

capital, competitive sourcing, improved financial performance, 

expanded electronic government, and budget and performance integration) 

as a guide to enact management reforms within the agency.

The success of NASA’s transformation will hinge on its ability to solve 

financial and contract management problems since these problems 

threaten the success of virtually every major program. While NASA’s 

efforts to design and implement a new financial management system and 

other actions taken certainly move NASA forward in this area, other 

issues remain. Specifically, NASA is not yet able to uniformly ensure 

that contractors provide cost data at a level that will identify cost 

drivers, give managers the information they need to make trade-off 

decisions, and link back to cost estimates. Also, NASA has not yet 

shifted management attention away from yearly budgets to total costs or 

the need to adhere to controls that focus on reducing cost, scheduling, 

and performance risks. Overall, our reviews as well as NASA’s show that 

finance is not viewed as intrinsic to NASA’s program management 

decision process, nor does it focus on what “could” and “should” take 

place from an analytical cost-planning standpoint.

To address these issues, NASA must transform its financial management 

operations so that it better supports NASA’s core mission. 

Specifically, as discussed in our study of leading private sector and 

state organizations,[Footnote 13] NASA must go beyond obtaining an 

unqualified audit opinion toward (1) routinely generating reliable cost 

and performance information and analysis, (2) undertaking other value-

added activities that support strategic decision-making and mission 

performance, and (3) strengthening NASA’s financial team to better 

support the agency’s mission and goals. NASA must also view the 

implementation of its new financial management system as an opportunity 

to fundamentally change the way it does business. As we found in the 

same study, to reap the full benefit of a modern, integrated financial 

management system, these organizations reengineered their core business 

processes. In fact, productivity gains typically result from more 

efficient processes, not from simply automating old ones.

Lastly, to successfully implement its human capital plan, financial 

management, and other reforms, NASA will need sustained commitment from 

senior leaders. Changing an organization like NASA with its deep-seated 

culture and tradition is a massive undertaking that will take 

considerable effort and time to implement. Given the high stakes 

involved, it is critical that NASA’s leadership provide the necessary 

direction, oversight, and sustained attention to ensure that reforms 

stay on track. In this regard, NASA’s Administrator comes to the 

position with a strong management background and expertise in financial 

management. He has already made a personal commitment to change the 

workforce and the way NASA does business. Moreover, NASA has appointed 

a chief operating officer in order to provide sustained management 

attention to strategic planning, organizational alignment, human 

capital strategy, performance management, and other elements necessary 

for transformation success. The challenge ahead for NASA will be to 

achieve the same level of commitment from managers at NASA centers so 

that NASA can effectively use existing and new authorities to manage 

its people strategically and quickly implement the tools needed to 

strengthen management and oversight.

[End of section]

GAO Contacts:

Subjects covered in this report: Strengthening strategic human capital 

management; ; Controlling International Space Station costs; ; Reducing 

space launch costs; ; Correcting weaknesses in contract management; 

Contact persons: Allen Li, Director; Acquisition and Sourcing 

Management; (202) 512-4841;; ; Gregory D. Kutz, Director; 

Financial Management and Assurance; (202) 512-9505;

[End of table]

[End of section]

Related GAO Products:

Performance and Accountability Series:

Major Management Challenges and Program Risks: A Governmentwide 

Perspective. GAO-01-241. Washington, D.C.: January 2001.

Major Management Challenges and Program Risks: National Aeronautics and 

Space Administration. GAO-01-258. Washington, D.C.: January 2001.

High-Risk Series: An Update. GAO-01-263. Washington, D.C.: 

January 2001.

Human Capital:

Human Capital: Effective Use of Flexibilities Can Assist Agencies 

in Managing Their Workforces. GAO-03-2. Washington, D.C.: 

December 6, 2002.

NASA Management Challenges: Human Capital and Other Critical Areas Need 

to be Addressed. GAO-02-945T. Washington, D.C.: July 18, 2002.

Managing For Results: Using Strategic Human Capital Management to Drive 

Transformational Change. GAO-02-940T. Washington, D.C.: July 15, 2002.

Managing for Results: Building on the Momentum for Strategic Human 

Capital Reform. GAO-02-528T. Washington, D.C.: March 18, 2002.

A Model of Strategic Human Capital Management. GAO-02-373SP. 

Washington, D.C.: March 15, 2002.

Space Shuttle Safety: Update on NASA’s Progress in Revitalizing 

the Shuttle Workforce and Making Safety Upgrades. GAO-01-1122T. 

Washington, D.C.: September 6, 2001.

Human Capital: A Self-Assessment Checklist for Agency Leaders. GAO/OCG-

00-14G. Washington, D.C.: September 2000.

Space Shuttle: Human Capital and Safety Upgrade Challenges Require 

Continued Attention. GAO/NSIAD/GGD-00-186. Washington, D.C.: 

August 15, 2000.

Space Shuttle: Human Capital Challenges Require Management Attention. 

GAO/T-NSIAD-00-133. Washington, D.C.: March 22, 2000.

Human Capital: A Self-Assessment Checklist for Agency Leaders. GAO/GGD-

99-179. Washington, D.C.: September 1999.

International Space Station:

Space Station: Actions Under Way to Manage Cost, but Significant 

Challenges Remain. GAO-02-735. Washington, D.C.: July 17, 2002.

NASA: Compliance With Cost Limits Cannot Be Verified. GAO-02-504R. 

Washington, D.C.: April 10, 2002.

NASA: Leadership and Systems Needed to Effect Financial Management 

Improvements. GAO-02-551T. Washington, D.C.: March 20, 2002.

NASA: International Space Station and Shuttle Support Cost Limits. GAO-

01-100R. Washington D.C.: August 31, 2001.

Space Station: Inadequate Planning and Design Led to Propulsion Module 

Project Failure. GAO-01-633. Washington, D.C.: June 20, 2001.

Space Station: Prime Contract Changes. GAO/NSIAD-00-103R. 

Washington, D.C.: May 11, 2000.

Space Station: Russian-Built Zarya and Service Module Compliance 

With Safety Requirements. GAO/NSIAD-00-96R. Washington, D.C.: 

April 28, 2000.

Space Station: Russian Compliance with Safety Requirements. GAO/

T-NSIAD-00-128. Washington, D.C.: March 16, 2000.

Space Station: Russian Commitment and Cost Control Problems. GAO/NSIAD-

99-175. Washington, D.C.: August 17, 1999.

Space Station: Cost to Operate After Assembly Is Uncertain. GAO/

NSIAD-99-177. Washington, D.C.: August 6, 1999.

Space Station: Status of Russian Involvement and Cost Control Efforts. 

GAO/T-NSIAD-99-117. Washington, D.C.: April 29, 1999.

Space Station: U.S. Life-Cycle Funding Requirements. GAO/

T-NSIAD-98-212. Washington, D.C: June 24, 1998.

International Space Station: U.S. Life-Cycle Funding Requirements. GAO/

NSIAD-98-147. Washington, D.C.: May 22, 1998.

Space Station: Cost Control Problems. GAO/T-NSIAD-98-54. 

Washington, D.C.: November 5, 1997.

Space Station: Deteriorating Cost and Schedule Performance Under 

the Prime Contract. GAO/T-NSIAD-97-262. Washington, D.C.: 

September 18, 1997.

Space Station: Cost Control Problems Are Worsening. GAO/NSIAD-97-213. 

Washington, D.C.: September 16, 1997.

NASA: Major Management Challenges. GAO/T-NSIAD-97-178. 

Washington, D.C.: July 24, 1997.

Space Station: Cost Control Problems Continue to Worsen. GAO/

T-NSIAD-97-177. Washington, D.C.: June 18, 1997.

Space Station: Cost Control Difficulties Continue. GAO/T-NSIAD-96-210. 

Washington, D.C.: July 24, 1996.

Space Station: Cost Control Difficulties Continue. GAO/NSIAD-96-135. 

Washington, D.C.: July 17, 1996.

Launch Costs:

Space Transportation: Challenges Facing NASA’s Space Launch Initiative. 

GAO-02-1020. Washington, D.C.: September 17, 2002.

Space Transportation: Critical Areas NASA Needs to Address in Managing 

Its Reusable Launch Vehicle Program. GAO-01-826T. Washington, D.C.: 

June 20, 2001.

Space Transportation: Progress of the X-33 Reusable Launch Vehicle 

Program. GAO/T-NSIAD-99-243. Washington, D.C.: September 29, 1999.

Space Transportation: Status of the X-33 Reusable Launch Vehicle 

Program. GAO/NSIAD-99-176. Washington, D.C.: August 11, 1999.

Contract Management:

Space Station: Actions Under Way to Manage Cost, but Significant 

Challenges Remain. GAO-02-735. Washington, D.C.: July 17, 2002.

NASA: Compliance With Cost Limits Cannot Be Verified. GAO-02-504R. 

Washington, D.C.: April 10, 2002.

NASA: Leadership and Systems Needed to Effect Financial Management 

Improvements. GAO-02-551T. Washington, D.C.: March 20, 2002.

NASA: International Space Station and Shuttle Support Cost Limits. 

GAO-01-1000R. Washington, D.C.: August 31, 2001.

Space Station: Inadequate Planning and Design Led to Propulsion Module 

Project Failure. GAO-01-633. Washington, D.C.: June 20, 2001.

Space Station: Prime Contract Changes. GAO/NSIAD-00-103R. 

Washington, D.C.: May 11, 2000.

Executive Guide: Creating Value Through World-class Financial 

Management. GAO/AIMD-00-134. Washington, D.C.: April 1, 2000.

NASA Procurement: Status of Efforts to Improve Oversight. GAO/NSIAD-98-

198R. Washington, D.C.: July 13, 1998.

NASA: Major Management Challenges. GAO/T-NSIAD-97-178. 

Washington, D.C.: July 24, 1997.

High-Risk Program: Information on Selected High-Risk Areas. GAO/HR-97-

30. Washington, D.C.: May 16, 1997.

NASA Procurement: Contract Management Oversight. GAO/NSIAD-97-114R. 

Washington, D.C.: March 18, 1997.

NASA: Procurement Assessments. GAO/NSIAD-97-80R. Washington, D.C.: 

February 4, 1997.

NASA: Contract Management. GAO/NSIAD-96-95R. Washington, D.C.: 

February 16, 1996.

[End of section]

Performance and Accountability and High-Risk Series:

Major Management Challenges and Program Risks: A Governmentwide 

Perspective. GAO-03-95.

Major Management Challenges and Program Risks: Department of 

Agriculture. GAO-03-96.

Major Management Challenges and Program Risks: Department of Commerce. 


Major Management Challenges and Program Risks: Department of Defense. 


Major Management Challenges and Program Risks: Department of Education. 


Major Management Challenges and Program Risks: Department of Energy. 


Major Management Challenges and Program Risks: Department of Health and 

Human Services. GAO-03-101.

Major Management Challenges and Program Risks: Department of Homeland 

Security. GAO-03-102.

Major Management Challenges and Program Risks: Department of Housing 

and Urban Development. GAO-03-103.

Major Management Challenges and Program Risks: Department of the 

Interior. GAO-03-104.

Major Management Challenges and Program Risks: Department of Justice. 


Major Management Challenges and Program Risks: Department of Labor. 


Major Management Challenges and Program Risks: Department of State. 


Major Management Challenges and Program Risks: Department of 

Transportation. GAO-03-108.

Major Management Challenges and Program Risks: Department of the 

Treasury. GAO-03-109.

Major Management Challenges and Program Risks: Department of Veterans 

Affairs. GAO-03-110.

Major Management Challenges and Program Risks: U.S. Agency for 

International Development. GAO-03-111.

Major Management Challenges and Program Risks: Environmental Protection 

Agency. GAO-03-112.

Major Management Challenges and Program Risks: Federal Emergency 

Management Agency. GAO-03-113.

Major Management Challenges and Program Risks: National Aeronautics and 

Space Administration. GAO-03-114.

Major Management Challenges and Program Risks: Office of Personnel 

Management. GAO-03-115.

Major Management Challenges and Program Risks: Small Business 

Administration. GAO-03-116.

Major Management Challenges and Program Risks: Social Security 

Administration. GAO-03-117.

Major Management Challenges and Program Risks: U.S. Postal Service. 


High-Risk Series: An Update. GAO-03-119.

High-Risk Series: Strategic Human Capital Management. GAO-03-120.

High-Risk Series: Protecting Information Systems Supporting the Federal 

Government and the Nation’s Critical Infrastructures. GAO-03-121.

High-Risk Series: Federal Real Property. GAO-03-122.



[1] U.S. General Accounting Office, Major Management Challenges and 

Program Risks: National Aeronautics and Space Administration, 

GAO-01-258 (Washington, D.C.: Jan. 2001).

[2] National Aeronautics and Space Administration, Audit Report: 

Procurement Workforce Planning, IG-01-041 (Washington, D.C.: 

Sept. 2001).

[3] As stated in President’s Management Agenda Action Plans For The 

National Aeronautics And Space Administration, (Washington, D.C.: May 

9, 2002). This document is an agreement between NASA and OMB on NASA’s 

plans for addressing the governmentwide initiatives in The President’s 

Management Agenda. 

[4] NASA has also developed a companion strategic human capital 

implementation plan that contains detailed action plans for the 

improvement initiatives.

[5] U.S. General Accounting Office, A Model of Strategic Human Capital 

Management, GAO-02-373SP (Washington, D.C.: Mar. 15, 2002).

[6] We testified on this proposed legislation in March 2002.

[7] U.S. General Accounting Office, Human Capital: Effective Use of 

Flexibilities Can Assist Agencies in Managing Their Workforces, 

GAO-03-2 (Washington, D.C.: Dec. 6, 2002).

[8] Section 202 of P.L. 106-391.

[9] Section 801 of P.L. 104-208.

[10] An undefinitized contract action means a unilateral or bilateral 

contract modification or delivery/task order in which the final price 

or estimated cost and fee have not been negotiated and mutually agreed 

to by NASA and the contractor. 48 CFR 1843.7001.

[11] Life cycle costs include implementation efforts through fiscal 

year 2008 and major upgrades, plus operation and support costs for each 

module for the first 2 years after the module goes live.

[12] Specifically, the Administrator would like the science of 

exploration and discovery to determine where NASA should go next and 

also to use technology to enable advances and to facilitate greater 


[13] U.S. General Accounting Office, Executive Guide: Creating Value 

Through World-Class Financial Management, GAO/AIMD-00-134 (Washington, 

D.C.: Apr. 1, 2000). Our executive guide was based on practices used by 

nine leading organizations--Boeing, Chase Manhattan Bank, General 

Electric, Pfizer, Hewlett-Packard, Owens Corning, and the states of 

Massachusetts, Texas, and Virginia.

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