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Over budget, behind schedule: NASA's SLS megarocket faces congressional review

NASA's forthcoming moon-rocket program is so costly that the agency will need to let Congress know of budgetary overruns while reviewing the program, NASA's inspector general said in a March 10 report.

The inspector general examined the Space Launch System (SLS) — the rocket that NASA hopes to start sending on test flights starting in 2021 — as well as the rocket's program costs and contracts, to see how the rocket's development was proceeding.

The actual development cost of the SLS program has soared to at least 33% beyond its original, Congress-approved agency baseline commitment (ABC) of $7 billion, which doesn't include $2.7 billion of formulation costs, the report concludes. (The figures are based on fiscal 2019 numbers.)

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The first completed core stage of NASA's Space Launch System rocket rolls out to the agency's Pegasus barge on Jan. 8, 2020, ahead of its journey from NASA's Michoud Assembly Facility in New Orleans to NASA's Stennis Space Center in Mississippi. (Image credit: NASA)

NASA's estimates show the SLS program grew to costs of $8.75 billion (only 25% more than  the original cost estimate from the beginning of the SLS program, or baseline), but the agency had removed $889 million in costs related to engines and solid rocket boosters, "because SLS Program officials determined those activities were not directly tied to Artemis 1," the rocket's first test flight, the inspector general said in the report. Because NASA did not "rebaseline" the program to account for the lower cost, this "masked" the growth of SLS, the report added.

"We found that the program exceeded its Agency Baseline Commitment (ABC) — that is, the cost and schedule baselines committed to Congress against which a program is measured — by at least 33 percent at the end of fiscal year 2019," the report stated.

The study examined how well SLS is meeting its cost and scheduling goals, including how NASA is tracking and reporting these goals and how contracts are being managed. The authors of the report found that NASA "continues to struggle managing SLS program costs and schedule," struggles that "can be attributed to challenges with program management, technical issues and contractor performance."

NASA's Orion spacecraft, which will launch on the SLS rocket, is lifted into a thermal cage ahead of its move to to the vacuum testing chamber at NASA's Plum Brook testing station in Sandusky, Ohio. (Image credit: Rad Sinyak/NASA)

SLS, which was initially supposed to fly in November 2018, has now exceeded its baseline cost and schedule commitment to Congress by at least 33% — but that number could reach 43% or higher if Artemis 1, a test flight that will send an uncrewed Orion spacecraft around the moon, is pushed beyond November 2020, the inspector general said. And that will likely happen, since NASA doesn't expect to send the first flight to the moon until the latter half of 2021.

NASA's cost tracking does not show how much the delays are affecting the program's baseline, the report added. At the end of fiscal 2020, NASA will have spent more than $17 billion on SLS, which includes $6 billion "not tracked or reported as part of the ABC," the report stated.

Building contracts for SLS are also encountering challenges, contributing to $2 billion of cost overruns and two years of schedule delays, the inspector general said. Some of the problems listed in the report include:

  • Core stage production issues "driven mostly by Boeing's poor performance." (Boeing is NASA's prime contractor for the design, development, testing and production of the SLS core stage.)
  • Issues with Boeing software development for the Interim Cryogenic Propulsion Stage (ICPS) that will push the Orion spacecraft toward the moon.
  • Incremental contract modifications for boosters manufactured by Northrop Grumman, creating an "administrative burden."
  • Technical issues related to propellant liner in the booster, and insulation and development of the engine controller unit for the SLS rocket's RS-25 engines, which the report attributes both to Northrop Grumman and Aerojet Rocketdyne.

"While NASA has addressed many of the problematic issues in core stage, ICPS, booster and RS-25 engine development, we expect additional cost increases totaling approximately $1.4 billion," the report said. That includes $1.3 billion for stages, $107 million for boosters and $41 million for ICPS before the launch of Artemis 1.

"That said," the report added, "NASA is positioned to gain efficiencies in future production of its core stage, upper stage, boosters and RS-25 engines if they apply lessons learned from the current development phase."

The report recommends that NASA do the following:

  • Tell Congress that the SLS program overran its ABC by at least 30%.
  • Seek more transparency in current, future and overall cost and schedule estimates for SLS and other human spaceflight programs by reviewing NASA program management policies and the Human Exploration and Operations Mission Directorate. 
  • Create a cost-accounting model that would separate each SLS "deliverable" to make it easier to track costs and performance and award fees.
  • Assign NASA on-site personnel to perform "monitoring and reporting on the performance of the contractor," in cases of large award contracts.
  • Do a formal review of each contract's scope of work and technical requirements, "to assist in eliminating incremental contract value increases and lessening contract management burden."

Two senior NASA officials published their response at the end of the report, saying that the agency is assessing SLS. This includes a new joint review called a "cost and schedule confidence" analysis and an independent technical and program assessment.

"NASA leadership will review the results of these assessments and then rebaseline the SLS program. NASA will communicate the results of these reviews to Congress and will comply with all applicable reporting requirements," said the statement, which was written by Douglas Loverro, NASA associate administrator for human exploration and operations, and Thomas Whitmeyer, NASA acting deputy associate administrator for exploration systems development.

Boeing's statement on the inspector general's report also acknowledged difficulties with development but pointed to results that will pay off in future builds of SLS. 

"Such an undertaking has certainly had its cost and schedule challenges over the years, but the investment has paid off in bringing together the required talent, technology and tooling to build this unprecedented deep-space rocket," Boeing officials said in a SpaceNews report. "The hard-earned experience acquired during initial SLS development is resulting in significant savings and efficiencies in subsequent development and production."

The Office of Inspector General acknowledged that there is "difficulty of setting baselines long into the future," but warned that the full SLS program cost "will not be readily transparent, because NASA is not tracking and reporting all costs against an official baseline.

"Further," the report warned, "although SLS program budget requests and past costs will be reported through the annual budget planning process, total costs beyond Artemis 1 will have no baselines against which to measure progress, because those activities are not within the scope of the ABC reporting process."

Follow Elizabeth Howell on Twitter @howellspace. Follow us on Twitter @Spacedotcom and on Facebook

 

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