Review of NASA’s Major Acquisitions Highlights Progress and Risks
Persistent challenges related to cost containment and schedule delays contributed to the agency’s acquisition management being designated as a high-risk area in 1990. Provisions included in the proposed Leadership Act of 2015 will impact NASA’s leadership structure, budget development, and contracting authorities as well as acquisition management. Over the last 5 years, efforts to address issues around major programs have resulted in some improvements. However, further room for improvement to management challenges remains, particularly for NASA’s largest projects. In FY 2016, NASA is expected to spend over $6 billion on 18 major projects. Each of these key investments has a total life-cycle cost that exceeds $250 million. Combined, they represent nearly $54 billion in total investment.
These major initiatives include the Space Launch System and Orion Multi-Purpose Crew Vehicle (Orion), Mars 2020 and Europa, as well as the Ice, Cloud, and Land Elevation Satellite-2. NASA space flight projects life cycles consist of two phases: formulation and implementation. Formulations comprises the project’s concept to its preliminary design. Implementation includes building, launching, and operating the system. By 2009, issues related to project cost and schedule performance prompted the Government Accountability Office (GAO) to begin conducting annual reviews of NASA’s major programs. Excluding the James Webb Space Telescope (JWST), the portfolio of 12 projects in the implementation phase reached the lowest levels of cost growth and scheduled delays since reviews began 15 years ago. Overall development cost growth for the 12 projects fell to 1.3 percent in 2016 and launch delays for the same projects averaged 4 months.
Major Projects Included in NASA’s Annual Review
Over the last 5 years, positive changes, like new policies and adoption of best practices, have contributed to the improved performance of NASA’s projects. Additionally, monitoring has highlighted key elements for the organization to target going forward. For example, most of the current projects stayed within cost and schedule baseline development estimates. When a project exceeds that cost level by 30 percent, it is rebaselined. As a result, NASA has rebaselined a major project 8 out the last 9 years. This rebaselining is consistent with the continued cost and schedule growth experienced by the portfolio. Two of the projects being reviewed, the Space Launch System and Orion, are approaching the stage between their critical design and system integration reviews, when rebaselining most frequently occurs. These two projects also face cost, schedule, and technical risks that could materialize in the near future, producing a ripple effect across the portfolio and potentially having severe consequences for smaller, critical projects. A final report on the annual assessment of NASA’s major projects is expected to be completed in late March 2016.
Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWinIQ. Follow me on twitter @GovWinFuss.
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