Title: As NASA Plans Its Return to the Moon, Greater Visibility Into
Spending Could Help Address Cost Concern

Description: When NASA launched Artemis I last November, it used the
world's most powerful rocket. The same rocket design, or Space Launch
System, will be used in the Artemis II and III missions, with the goal
of returning Americans to the moon for the first time since the 1960s.
But the costs of these missions are, according to NASA officials
themselves, unaffordable. What could this mean for NASA's lunar
aspirations, and what can be done to reduce costs? We find out more from
GAO's Bill Russell.

Related GAO Work: GAO-23-105609, Space Launch System: Cost Transparency
Needed to Monitor Program Affordability 

Released: September 2023

[Music]

[Bill Russell:] There's a lot of effort to get back to the moon. But the
question is, what is the right price tag?

[Holly Hobbs:] Hi, and welcome to GAO's Watchdog Report. Your source for
fact-based, nonpartisan news and information from the U.S. Government
Accountability Office. I'm your host, Holly Hobbs. When NASA launched
Artemis I last November, it used the world's most powerful rocket. The
same rocket design, or Space Launch System, will be used in the Artemis
II and III missions, with the goal of returning Americans to the moon
for the first time since the 1960s. But the costs of these missions are,
according to NASA officials themselves, unaffordable. What could this
mean for NASA's lunar aspirations, and what can be done to reduce these
costs? We'll get an update from GAO's Bill Russell, an expert on NASA
programs and a director in our Contracting and National Security
Acquisitions team. Thanks for joining us, Bill.

[Bill Russell:] Nice to be here, Holly.

[Holly Hobbs:] Bill, all NASA projects are pretty expensive? Why are we
talking about this one?

[Bill Russell:] The costs for this program are important because it's
one of NASA's biggest projects. It was also a cost driver in
development. They had lots of schedule slips, lots of cost overruns that
affected the entire NASA's portfolio. So keeping an eye on how the Space
Launch System is doing and production is really important as they plan
to spend $2.5-or-so billion dollars a year on that.

[Holly Hobbs:] It seems like the first launch system for Artemis I would
be the most expensive, right? Because they're developing the technology
and they're testing it, and then the costs should come down from there
for the subsequent missions because they don't have those costs. Why is
that not true here?

[Bill Russell:] Well, this is one of the key findings of the report is
really around the transparency. Once the Space Launch System
successfully completed Artemis I, the tracking of some of those
costs--how much does it take to build the next core stage, the next
booster--those sorts of things are not tracked in the same way. So one
would assume as you build something over and over that the cost would go
down. Our initial indications have shown that that might not be the
case, but until there's more transparency around how each of those
efforts are going, it's hard to say. And we think it's really important,
given the magnitude of spending--we're talking, you know, a few billion a
year-- that NASA have a better sense of the progress that they're making.

[Holly Hobbs:] So NASA makes costs estimates for its projects and it
plans for those costs, right. What's going wrong here? 

[Bill Russell:] They do have when they got to the Artemis I completion
date, they put out a 5-year estimate of production costs for the Space
Launch System. They also do budget estimates and budget requests as part
of their funding every year. The issue is that it's hard to isolate
exactly what costs are associated with the recurring production that you
need to support future Artemis missions versus developing new
capabilities. Like Artemis IV, they're going to have a new version of
the Space Launch System called Block 1B--that's bigger and more capable.
So parsing out if there are cost overruns--is that because of the new
system, is that because of unexpected production costs from the old
system? It's just very hard to tell. And that's part of what we found in
this report. It's just that lack of transparency makes it very difficult
to understand what's going well, what might need some improvement.

[Holly Hobbs:] And so NASA officials have said these costs are
unaffordable. What are they doing to them? 

[Bill Russell:] They are taking some steps to increase the transparency
and to try to reduce the long-term costs of the program. Those have to
do with stabilizing the requirements for the flight schedule. So, for
example, I talked about that new, more capable version of the system
that will be needed for Artemis IV. So just having a concrete decision
that that's the plan, right, helps the contractor be more efficient and
tend to meeting those expectations. They're also contemplating changing
their acquisition strategy. So, for example, going from an environment
they're in now-- where you just pay the contractors costs plus a little
bit of fee, no matter what happens on the program--to one where it's we
call it a more fixed-priced environment where the contractor says this
is the number to deliver the system, and if it goes above that number,
it's up to the contractor to cover those costs. So it shifts some of the
burden to the contractor when it comes to the cost risk. So that's just
a couple of things that they're contemplating. But it's too early to
tell how those are going to pan out.

[Holly Hobbs:] Assuming these cost issues remain. What the potential
impact on NASA's plans or its schedule?

[Bill Russell:] Less so the schedule, but in terms of the long term
affordability of the program, just in NASA's 2024 budget request, the
Space Launch System is about 37% of the anticipated cost to go back to
the moon to support Artemis. So if that goes up a significant amount,
obviously that puts pressure on the entire program. That's a pretty
significant cost driver. So maintaining good visibility on what's
happening with the production of the system is important to maintaining
visibility into the health and the affordability of the overall mission
going forward.

[Holly Hobbs:] If these programs are so expensive and are unaffordable,
I think there's a group of Americans who are going to ask, why are we
even doing this? Why are these missions so important?

[Bill Russell:] The missions certainly are important. As you saw, India
just landed one of its spacecraft on the moon. There's a lot of effort
to get back to the moon, to human exploration, not just of the moon, but
on to Mars. But the question is, what is the right price tag for that?
And it's important that not just NASA, but the Congress and the American
taxpayer, has a sense of what we're willing to pay for that. And as
costs go up to have that conversation around, does it still make sense
for the mission goals. So it may be that it's worth it if SLS cost twice
as much as it's anticipated, that still might be the best thing to do to
achieve our national aims to be a space faring nation. But it might not.
So just having the relevant information to have that dialog I think is
important.

{MUSIC}

[Holly Hobbs:] So Bill just told us that while NASA officials know their
Artemis Space Launch System projects are unaffordable, NASA also lacks
some of the transparency needed to help it and Congress make decisions
about these costs. So, Bill, what more do we think NASA needs to be
doing to address these costs?

[Bill Russell:] This is one where we didn't make a new recommendation
because we had an old one from 2014 that really set the stage for what
we're seeing now. Back then, as the program was in development, we
noticed that some of the anticipated costs for production past Artemis I
were not included in their cost and schedule baseline. And we
recommended back then that they take steps to change that, so they do
account for some of these recurring production costs. Fast forward to
today. we're seeing some of the things that we were worried about almost
a decade ago, which is that you're building multiple copies of Space
Launch System, but you don't have a lot of transparency on how it's
going in terms of the costs and what to expect going forward. So what we
did is just reiterated that recommendation.

[Holly Hobbs:] And last question, what's the bottom line of this report?

[Bill Russell:] The bottom line is NASA needs to improve the
transparency around the costs of this important program. Right now, it's
hard to tell how well the program is doing in production. It's a key
system to go back to the moon and beyond. And NASA could do a better job
of keeping track of those costs.

[Holly Hobbs:] That was GAO's Bill Russell talking about his recent
review of NASA's efforts to address affordability in their Space Launch
System. Thanks for your time, Bill.

[Bill Russell:] Thank you.

[Holly Hobbs:] And thank you for listening to the Watchdog Report. To
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