GAO Slams NASA's Cost Estimating for Orion, SLS

The Government Accountability Office (GAO) has sharply criticized NASA’s cost estimating for its new human spaceflight programs — the Space Launch System (SLS), the Orion spacecraft, and associated ground systems.  It found that NASA is using a “tailored” scope of work as the basis for its preliminary cost estimates that does not conform to “best practices” for cost estimating.

GAO states that NASA is building its preliminary cost estimates only for initial versions of the vehicles.  The SLS cost estimate, for example, is only for the first flight of the 70 metric ton (MT) version of the rocket, not for the second flight, for which NASA is already incurring costs, never mind for future, more capable (105- and 130-MT) versions of the rocket itself.  The estimate for Orion does not include costs for production, operations, or additional spacecraft, nor does it include $4.7 billion spent on Orion during the Constellation program.  The ground systems estimate is only for work through 2017 (the first SLS flight), not for additional work needed for future SLS variants.

“GAO recognizes that defining life cycle costs can be difficult when uncertainties exist, and that best practices for cost estimating look favorably on evolutionary development.  Even so, best practices expect that a high-quality cost estimate will account for program uncertainties, forecast a minimum and maximum range for all life cycle costs, and clearly define the characteristics of each increment of capability so that a rigorous life cycle cost estimate can be developed. … The limited scope that the agency has chosen …. means that the estimates are unlikely to serve as a way to measure progress and track cost growth over the life of the program. … Insight into program costs helps decision makers understand the long-term affordability of programs — a key goal of the National Space Transportation Policy — and helps NASA assess management of its portfolio to achieve increasing capabilities as directed in the NASA Authorization Act of 2010.”

The report states that development of SLS through its first flight in 2017, the ground systems for that effort, and the first two Orion flights in 2017 and 2021 are estimated by NASA to cost between $19-22 billion as follows:  SLS, $7.7-8.6 billion; ground systems, $2.8-3.1 billion; and Orion., $8.5-10.3 billion.

GAO recommends that NASA:

• establish a separate cost and schedule baseline for SLS’s second flight (EM-2) of the initial, 70-ton version of the rocket.   If NASA plans to continue using that “Block 1” version, it should establish separate life cycle cost and schedule baselines for those additional flights.
• establish separate cost and schedule baselines for each additional capability of SLS, Orion and ground systems.  “While NASA cannot fully specify costs due to lack of well-defined missions or flight manifests, forecast a cost estimate range — including life cycle costs — having minimum and maximum boundaries.”
• include the costs for Orion that were expended during the Constellation program ($4.7 billion).