Contractors continue to win awards, despite SLS and Orion delays


WASHINGTON – A new report from the Government Accountability Office has found that leading contractors from the Space Launch System and the Orion spacecraft have received hundreds of millions of dollars in award fees, despite continuing problems that are likely to lead to further delays in the programs.

The June 19 report, which included an extraordinarily strong response from NASA, concluded that the agency should use the upcoming contractual negotiations with Boeing for SLS and Lockheed Martin for Orion to find different ways of structuring awards "to encourage contractors to achieve better results". results. "

"NASA's award plans for SLS internships and Orion's aircraft contracts provide hundreds of millions of dollars to encourage contractor performance, but programs remain lagging and costly," the report said.

Boeing, for example, received $ 271 million in premium fees during the life of its SLS contract, the report noted. That includes $ 146 million since NASA established formal cost and schedule baselines for the program, 81 percent of the total that Boeing could have earned.

Boeing has received "excellent" or "very good" rating scores since 2014, with the exception of the most recent period included in the report from October 2017 to September 2018, when it received a lower "good" score.

During that time, however, the timeline for the first SLS release fell for several years. The GAO noted in its report that the program will not meet a planned launch date for June 2020 due to problems in progress, particularly with the development of the rocket's central stage. NASA officials said that there are six to 12 months of "risk" for this release date, which means it may fall until June 2021.

Dennis Muilenburg, president and CEO of Boeing, did not address the report in a June 19 speech at the John F. Kennedy Library in Boston, where he discussed the company's various space activities, including SLS. "The first release is next year, a release unrolled," he said.

At a meeting of a NASA Advisory Board committee on May 28, Bill Hill, associate deputy administrator for exploration systems development at NASA, said the agency is still trying to make the first SLS launch in 2020, even if decide to maintain a "green race" static fire test of the central stage. "Obviously, everything has to go perfectly" to keep the launch date of 2020, he said, "but there is a shot."

The GAO report suggested that NASA and Boeing were blaming each other for delays in SLS development. NASA said Boeing did not hire enough technicians to work in the core stage, initially designating 100 people before increasing to 250. Boeing responded that NASA provided new estimates of the loads that the stage would experience after the critical analysis of the project, significant changes enough "that they invalidated the legacy systems that Boeing planned to use, which required rework."

The GAO also criticized NASA for underestimating the cost increases in the SLS program. According to the agency, the cost of SLS development grew just over $ 1 billion, or 14.7%, above its benchmark cost estimate of $ 7.021 billion. The report noted, however, that during a replanning effort in late 2017, NASA changed some costs associated with obtaining SLS ready for its first launch for later in the program. This actually reduced the cost of the baseline by $ 782 million, making cost-effectiveness now increase by 29 percent. This is close to the 30% limit for surplus costs, where a program must be formally authorized again by Congress.

The report also identified issues with the Orion program as well as Terrestrial Exploration Systems, which include the mobile device launcher and other equipment and services required to support the launch of SLS / Orion. Lockheed Martin earned $ 294 million in Orion premium rates during the contract, including $ 88 million, or 93% of the total available, since its confirmation review.

"The Orion program is not on schedule to meet the launch date of June 2020 for the first mission," the report said, due in part to delays in the service module built in Europe. The spacecraft's crew module, however, is "almost [on] the critical path "due to component failures in its avionics system encountered during the test.

In an eight-page letter included in the report as NASA's response, Bill Gerstenmaier, NASA's associate administrator for human exploration and operations, vigorously defended the management of the SLS agency, Orion and ground systems.

"The GAO report does not recognize that NASA is building some of the most sophisticated hardware ever built," he wrote. As he did in the past, he said the problems encountered by NASA and its contracts "are proportional to first-time production programs on a large scale and should not be unexpected."

"The GAO report repeatedly projects the outcome of the worst case scenario," he wrote later in the letter, adding that NASA "makes exception to the unnecessarily negative language used in the report title and section headings and the lack of recognition of the progress of the report. Agency did. "

Despite this criticism, Gerstenmaier said that NASA has agreed, in part or in full, to the four recommendations made by GAO, from adjusting the baseline of SLS costs to reassessing strategies for granting incentives to its contractors.

The GAO, which usually limits its response to the agency's responses to the way it accepted the report's recommendations, included several additional comments on NASA's letter, including one about using the worst possible scenarios. The GAO responded that top NASA officials said the June 2020 launch was "unlikely" because of development issues.

"It would be misleading for us to continue reporting the release date in June 2020 when we were told there was a significant risk for that date," the report said. "We then use the information provided by NASA to report that the first launch may occur by June 2021 if all risks are realized."


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