NASA's Challenges to Meeting Cost, Schedule, and Performance Goal

NASA Inspector General Paul Martin today released a report examining the major challenges facing NASA as it seeks to meet cost, schedule, and performance goals on its space programs.


Throughout its 50year history, NASA has been at the forefront of science and space exploration and the Agency's missions have resulted in numerous scientific discoveries and technological innovations. Unfortunately, in addition to their scientific accomplishments many NASA projects share another less positive trait - they often cost significantly more to complete and take longer to launch than originally promised.

In an effort to gain a better understanding of the major challenges facing NASA project managers, the OIG interviewed 85 individuals involved in all levels of project development from both inside and outside the Agency including current and former Administrators, Associate Administrators, Center Directors, and project managers and staff. Based on these interviews, the OIG identified four issues that appear to present NASA with its greatest challenges to successfully meeting cost, schedule, and performance goals:

- Optimistic Agency Culture - A culture of optimism and a "can-do" spirit permeate all levels of the NASA workforce. Although essential to overcoming the extraordinary technological challenges inherent in the development of unique, first-of-their-kind space systems, this same optimism can sometimes lead managers to overestimate their ability to overcome the risks inherent in delivering such projects within a set budget and timetable. To underscore this point, when asked whether their projects had been successful every project manager we interviewed answered in the affirmative, regardless of the project's fidelity to cost and schedule goals.

- Underestimating Technical Complexity - Project managers cited the technical complexity inherent in most NASA projects as a major challenge to meeting cost and schedule goals. Because NASA projects often involve new and unique technologies, managers lack historical data, cost models, lessons learned, and other information to help estimate the effort needed to develop the required technologies. In addition, NASA projects often involve combining several interdependent technologies and the resulting complexities are often difficult to predict. Moreover, unlike land-based systems NASA systems function remotely in space where repair or replacement is extremely difficult or impossible and consequently require more testing than other types of development efforts. Finally, because space systems are often one-of-a-kind instruments, NASA cannot produce sufficient quantities to benefit from economies of scale in which the average cost would decrease as the quantity manufactured increases.

- Funding Instability - More than 75 percent of the individuals we interviewed stated that funding instability - whether resulting from decisions made by the President and Congress or internally within NASA - was among the most significant challenges to project management. Inadequate funding in the early phases of a project's life cycle decreases management's ability to address key risks at project inception. Absent sufficient funding, project managers may need to defer development of critical technologies to a time when integration of those technologies may be more difficult or when the costs of material and labor may be greater.

- Limited Project Manager Opportunities - Most project managers and senior officials we spoke with said that experience and on-the-job-training are key factors in a project manager's ability to manage cost, schedule, and performance goals effectively. However, they expressed concern that NASA does not have enough small missions to provide a training ground for new project managers; that the Agency's in-house capabilities have declined as it increasingly relies on contractors to support project development; and that NASA engineers spend most of their time overseeing contractor efforts rather than building spaceflight components and therefore have limited opportunities to gain practical "hands-on" experience.

Although NASA has made positive strides to improve project outcomes, the Agency needs a "unity of effort" - including strong, consistent, and sustained leadership by the President, Congress, and NASA managers - to meet the challenges outlined in the OIG report and achieve more consistent fidelity to cost and performance goals. Articulating a clear, unified, and sustaining vision for the Agency and then providing the necessary resources to execute that vision is a critical cornerstone of success.

For their part, NASA leaders must temper the Agency's culture of optimism by requiring realistic cost and schedule estimates, well-defined and stable requirements, and mature technologies early in project development. In addition, they must ensure that funding is adequate and properly phased and that funding instability is identified as a risk and accounted for in a project's risk mitigation strategies. Finally, they must be willing to take remedial action when these critical project management elements are not present.

The OIG plans to conduct additional audit work that more closely examines the challenges identified in this report and offers specific recommendations for management action.

The full report is available on the OIG's website at http://oig.nasa.gov/ under "Reading Room" or at http://oig.nasa.gov/audits/reports/FY12/IG-12-021.pdf

For more information or media inquiries, please contact Renee Juhans at Renee.N.Juhans@nasa.gov or at (202) 358-1220.

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