Assessments of Selected Large-Scale Projects

GAO-11-239SP: Published: Mar 3, 2011. Publicly Released: Mar 3, 2011.

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Cristina T. Chaplain
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GAO's work has shown that the National Aeronautics and Space Administration's (NASA) large-scale projects, while producing groundbreaking research and advancing our understanding of the universe, tend to cost more and take longer to develop than planned, and are often approved without evidence of a sound business case. Although space development is complex and diffi cult by nature, GAO has found that inherent risks are compounded by the need for better management and oversight practices. GAO has designated NASA's acquisition management a high risk area. This report provides a snapshot of how well NASA is planning and executing its acquisition of selected large-scale projects. It also provides observations about the performance of NASA's major projects and project management, outlines steps NASA is taking to improve its acquisitions, identifi es challenges that contribute to cost and schedule growth, and assesses 21 NASA projects, each with an estimated life-cycle cost of over $250 million.

GAO assessed 21 NASA projects with a combined life-cycle cost that exceeds $68 billion. Of those 21 projects, 16 had entered the implementation phase where cost and schedule baselines were established. Development costs for the 16 projects had an average growth of $94 million--or 14.6 percent--and schedules grew by an average of 8 months. The total increase in development costs for these projects was $1.5 billion. GAO found that 5 of the 16 projects were responsible for the overwhelming majority of this increase. The issue of cost growth is more signifi cant than the 14.6 percent average would indicate because it does not capture the cost growth that occurred before several projects reported baselines in response to a statutory requirement in 2005. Specifi cally, the 13 projects that GAO has reviewed over the past 3 years that established baselines prior to 2009 experienced an average development cost growth of almost 55 percent, with a total increase in development costs of almost $2.5 billion from their original confi rmation baselines. This does not refl ect considerable cost and schedule growth that will likely be experienced by NASA's largest science program--the James Webb Space Telescope (JWST). Based on the fi ndings of the independent panel that recently reviewed the JWST project and information that we obtained from project offi cials, it is likely that JWST will report signifi cant cost and schedule growth, estimated to be $1.4 billion or more and up to 15 months, respectively. Many of the projects GAO reviewed for this report experienced challenges in the areas of technology, design, funding, launch vehicles, development partner performance, parts, and contractor management. Reducing the kinds of challenges this assessment identifi es in acquisition programs hinges on developing a sound business case for a project. The development and execution of a knowledge-based business case for these projects can provide early recognition of challenges, allow managers to take corrective action, and place needed and justifi able projects in a better position to succeed. The inherent complexity of space development programs should not preclude NASA from achieving what it promises when requesting and receiving funds. In response to GAO's designation of NASA's acquisition management as a high risk area, NASA has developed a corrective action plan to improve the effectiveness of acquisition project management. The plan identifi es fi ve areas for improvement, each of which contains targets and goals to measure improvement. As part of this initiative, the agency is continuing its implementation of a new cost estimation tool, the Joint Cost and Schedule Confi dence Level, to help project offi cials with management, cost and schedule estimating, and maintenance of adequate levels of reserves. GAO is not making any new recommendations in this report. Instead GAO is issuing another report concurrently (GAO-11- 364R) that describes in more detail some of the issues identified in this report, such as transparency in project costs and lack of a consistent design metric, and will make recommendations to address the issues.

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