WASHINGTON – NASA’s inspector general criticized the agency for accounting for the costs of the Orion program in a new report, arguing that it has “hampered the overall transparency” of the program amid soaring costs and schedule delays.
In a July 16 report, NASA’s Office of the Inspector General (OIG) raised several issues with the costs of the Orion program, including the agency’s decision to exclude many costs from a formal cost estimate for the program, as well such as the “overly generous” award fees paid to the prime contractor, Lockheed Martin, over the life of the program.
As of January 2020, the latest financial data was available, NASA spent $ 16.7 billion on Orion, which dates back to the Constellation program. NASA estimates to spend $ 12.8 billion on Orion through 2030, primarily on the production of future spacecraft.
While that suggests a total Orion through 2030 of $ 29.5 billion, NASA’s formal estimate for the program’s life cycle costs is $ 11.3 billion, which covers development through the Artemis 2 mission. That total excludes the $ 6.3 billion spent on Orion during the now-defunct Constellation program and an estimated cost of $ 10 billion for missions beyond Artemis 2.
While life cycle cost estimates are supposed to cover the entire program, NASA granted approval for a custom cost estimate, concluding, according to the report, that it would be difficult to estimate the total cost “for a human exploration program. long-term that is likely to last for several decades. ” However, the OIG said that approach limited the ability of those outside the agency to track development “and determine if new planning or a new line of program funding is required and schedule expectations.”
“Furthermore, without a comprehensive and comprehensive picture of Orion’s life cycle cost, it is difficult for Congress and other stakeholders to have the information necessary to inform strategic decisions about future human exploration priorities,” added the OIG report.
Even with the limited scope of life cycle costs, there are signs of cost overruns. While NASA used the $ 11.3 billion as its formal “agency base commitment” for Orion, the costs are now estimated at $ 12.2 billion, of which $ 7.7 billion is for development. Those development costs have grown by almost 14%, approaching the 15% threshold that requires formal notification from Congress. OIG said additional cost growth of approximately $ 500 million is currently projected through 2023.
The report says Lockheed Martin’s “performance deficiencies” contributed to those cost overruns and some schedule cuts, though those delays have been masked to some extent by increased schedule issues with the Space Launch System. OIG, citing internal NASA documents, said the Artemis 1 mission is slated to launch in November 2021 and Artemis 2 in August 2023, although agency leadership has yet to confirm those dates.
Despite those challenges, the OIG report found that Lockheed still received $ 740.9 million in award fees dating back to 2006, or 90.2% of the total amount the company was eligible to win. Part of that is that the final scores given to the company during its performance evaluations “were consistently higher than the composite of the individual factor scores” used in that evaluation.
NASA officials say officials can increase those scores by considering high-level issues beyond the company’s reach. However, the OIG concluded that “considering their work consistently ‘Excellent’ seems overly generous given the long cost of the program and the growth of the schedule.”
The OIG made three recommendations to NASA: Include all costs for Orion in future reports, adjust production schedules for the subsequent Orion spacecraft, and minimize award fees if future contracts have to be modified due to contractor performance.
The agency, in a response included in the report, said it would implement all three recommendations. However, the OIG noted that NASA made no commitment to include the constellation-era Orion costs in those future reports. Doing so may not be feasible, the OIG acknowledged, but “in our view, a full picture of Orion life cycle costs should include all costs related to a program, regardless of source of funding or management control. about its planned useful life. “
