NASA Acquisition Management

What We Found | What Needs to Be Done | Key Reports

Why It's High Risk

The National Aeronautics and Space Administration (NASA) plans to invest billions of dollars in the coming years to explore space, understand Earth’s environment, and conduct aeronautics research. GAO has designated NASA’s acquisition management as high risk in view of persistent cost growth and schedule slippage in the majority of its major projects.

GAO’s work has focused on identifying a number of causal factors, including:

antiquated financial management systems;
poor cost estimating; and
underestimating risks associated with development of its major systems.

^ Back to topWhat We Found

NASA has taken steps to improve its acquisition management and continues to work to address systemic weaknesses by adopting practices that focus on closing specific knowledge gaps before commitments are made to a new project.

In 2007, NASA developed a plan to improve how it manages its acquisitions, including plans to:

strengthen project management;
increase accuracy in cost estimating;
facilitate monitoring of contractor cost performance;
improve agencywide business processes; and
improve financial management.

The plan identifies specific actions to be taken in each area and establishes points of accountability and metrics to assess progress.

NASA has made some progress on the management and oversight of its major projects to improve overall acquisition outcomes, including:

revising its acquisition and engineering policies in 2007 to incorporate elements of a knowledge-based approach that should allow the agency to make better-informed decisions
enhancing cost-estimating methodologies and as of 2009 ensuring that independent analyses are used to provide decision makers with an objective representation of likely project cost and schedule results
implementing a management review process in 2006 to enable it to more effectively monitor a project’s performance, including cost, schedule, and cross-cutting technical and nontechnical issues
updating and increasing the availability of program and project management learning and development activities. As of October 2009, NASA has certified all major program and project managers to ensure they possess the necessary competencies, training, and experience pursuant to OMB’s guidance.

Although not part of its improvement plan, NASA continues to utilize earned value management to assess contract performance. NASA has also initiated an effort to develop and pilot agency processes with a long term goal of improving NASA’s ability to utilize earned value management as a performance assessment tool for in-house projects.

A key initiative aimed at improving contractor cost performance monitoring has not been fully implemented. In addition, NASA is completing work aimed at identifying the root causes of its acquisition issues. It may take several years before it is apparent whether the initiatives will significantly improve NASA’s acquisition performance.

GAO’s work continues to find that NASA has difficulty meeting cost, schedule, and performance goals for many of its projects. For example, GAO reported in 2010 that 10 major NASA projects have experienced:

cost growth averaging almost $121.1 million, or 18.7 percent
15-month schedule delays on average.

Many of these projects experienced challenges, including developing new or retrofitting older technologies, stabilizing engineering designs, managing the performance of contractors and resolving issues with partners.

^ Back to topWhat Needs to Be Done

In order to improve its acquisition management, NASA must:

continue its work in implementing a corrective action plan to improve the effectiveness of its project management. Successful implementation of the plan will gain even more importance in an increasingly constrained fiscal environment;
continue to define the metrics it uses to monitor progress of its acquisitions at key milestones, such as project confirmation and critical design review;
track its decisions against those metrics once the mentioned measures are fully defined;
demonstrate positive outcomes in controlling cost growth and schedule slippage in its major programs and projects. This could take several years to become apparent given the long-term nature of spacecraft development.