Space Shuttle: Upgrade Activities and Carryover Balances (Testimony,
10/01/97, GAO/T-NSIAD-98-21)
Pursuant to a congressional request, GAO discussed the National
Aeronautics and Space Administration's (NASA) space shuttle program,
focusing on: (1) the effect of a funding transfer from the Space Shuttle
program to the International Space Station Program on major shuttle
upgrade projects and the status of those projects; (2) the role
carryover balances had in the transfer and in funding upgrades; and (3)
funding for future upgrades.
GAO noted that: (1) the $190-million funding transfer to the space
station program did not adversely impact current or near-term upgrade
projects; (2) four current projects, which account for about 91 percent
of the total funding provided for upgrade activities in fiscal year
1997, could not have used the transfer funds; (3) even though they
experienced technical problems and associated schedule slips, the
projects' financial reserves were sufficient to fund the problems
experienced; (4) the transfer funds were also not needed for
supportability upgrades because they began more slowly than planned due
to a longer-than-anticipated approval process; (5) as a result, only
about $40 million of the $70 million in funds allocated in fiscal year
1997 to the new supportability upgrade effort will be used--the
remainder will carry over to support fiscal year 1998 activities; (6)
the $190 million transferred to the space program was available because
of the large amount of carryover within the shuttle program; (7) without
the transfer, the shuttle program would have had about a $600-million
budget carryover at the end of fiscal year 1997; (8) however, shuttle
program managers estimated that they would need only $395 million in
carryover at that time; (9) NASA has used carryover to fund upgrades in
the past and plans to continue doing so in the future; (10) NASA
designated $70 million in fiscal year 1996 carryover funds to initiate
the new supportability upgrade effort, and it plans to use another $95
million for this purpose in fiscal year 1998; (11) depending on the
future upgrades selected, costs could range from hundreds of millions to
several billions of dollars; (12) NASA is defining an upgrade program to
keep the shuttle a viable space transportation system at least through
the planned mission life of the space station about 2013; (13) other
planning assumptions include increasing the shuttle's flight rate from
about 8 to 15 times a year, obtaining other customers, and operating the
shuttle to 2030; (14) in addition to annual funding requests for safety
and performance upgrades and the continued use of excess carryover, NASA
plans to use any savings that are generated within the shuttle program
to fund its upgrade activities; (15) the extent to which these sources
will be available in the future is uncertain; (16) funding needs for
future upgrades will be driven by a number of questions related to such
issues as how long the shuttle will be required and whether viable
alternatives can be developed to support space station operations and
other human space flight requirements.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-NSIAD-98-21
TITLE: Space Shuttle: Upgrade Activities and Carryover Balances
DATE: 10/01/97
SUBJECT: Unobligated budget balances
Budget administration
Space exploration
Reprogramming of appropriated funds
Aerospace research
Cost control
Aerospace engineering
Cost-based budgeting
IDENTIFIER: Space Shuttle
NASA International Space Station Alpha Program
Space Shuttle Alternate High Pressure Turbopump
NASA Multifunction Electronic Display Subsystem
Space Shuttle Large Throat Main Combustion Chamber
Space Shuttle Super Lightweight Tank
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Cover
================================================================ COVER
Before the Subcommittee on Space and Aeronautics, Committee on
Science, House of Representatives
For Release on Delivery
Expected at
10:00 a.m., EST
Wednesday,
October 1, 1997
SPACE SHUTTLE - UPGRADE ACTIVITIES
AND CARRYOVER BALANCES
Statement of Allen Li, Associate Director, Defense Acquisitions
Issues, National Security and International Affairs Division
GAO/T-NSIAD-98-21
GAO/NSIAD-98-21T
Space Shuttle
(707289)
Abbreviations
=============================================================== ABBREV
AHPTP - alternate high pressure turbopump
LTMCC - large throat main combustion chamber
MEDS - multifunction electronic display system
NASA - National Aeronautics and Space Administration
OMB - Office of Management and Budget
SLWT - super lightweight tank
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss two aspects of the
National Aeronautics and Space Administration's (NASA) space shuttle
program--upgrade activities and carryover balances.
In May 1997, the House Science Committee expressed concern about
NASA's plans to take $190 million from the space shuttle program to
help offset additional costs in the International Space Station
program. According to NASA, the funds were available for transfer
because of the high carryover balances projected to be available at
the end of fiscal year 1997. The funding transfer was made, with a
significant portion of the funds coming from the safety and
performance upgrade portion of the shuttle program. Pursuant to the
Committee's request, we agreed to review (1) the effect of the
funding transfer on major shuttle upgrade projects and the status of
those projects, (2) the role carryover balances had in the transfer
and in funding upgrades, and (3) funding for future upgrades.
BACKGROUND
---------------------------------------------------------- Chapter 0:1
The space shuttle is the United States' only means for transporting
humans to and from space and NASA considers safe operation of the
shuttle as its top priority. The shuttle has flown 86 missions over
the past 16 years. It will be required well into the next century
for space station assembly and operations support and other human
space flight missions. Upgrades will be a necessary part of the
program until the space shuttle is replaced. NASA's strategy is to
identify and prioritize upgrades to meet the program goals of (1)
improving system safety, (2) supporting the flight manifest, (3)
improving system supportability and reliability, and (4) reducing
system operating costs.
NASA began a new supportability upgrade program in fiscal year 1997
to combat obsolescence in, and improve the reliability of, the space
shuttle. This program involves updating and modernizing shuttle
components, such as the checkout and launch control system at Kennedy
Space Center. According to NASA, supportability upgrades are
required to help ensure continued safe shuttle flight operations.
Future plans for the shuttle that could influence upgrade decisions
are currently being formulated. At the direction of the Office of
Management and Budget (OMB), NASA is developing a space
transportation strategy. In support of that strategy, NASA is also
developing a common space transportation technology development plan.
Taken together, these plans are intended to guide decisions related
to future investments in space transportation systems. The strategy
is to be coordinated with both the Department of Defense and the
commercial sector to ensure an integrated approach to U.S. space
transportation in the 21st century. These documents are to accompany
NASA's fiscal year 1999 budget submission to OMB.
NASA's budget for the space shuttle in fiscal year 1997 was $3.15
billion, including $636 million in the safety and performance
upgrades line item. Space shuttle funding is available for
obligation over a 2-year period. Funding that cannot be used in the
year it is appropriated can be carried over to help cover program
costs in the next fiscal year. Carryover includes unobligated funds
as well as funds that have been obligated for goods and services but
for which costs have not been incurred. The amount of carryover at
the end of a fiscal year is determined by the total budgetary
resources available less the costs incurred that year. Total
budgetary resources consist of carryover from the prior year plus new
budget authority.\1
--------------------
\1 For a discussion of carryover balances, see NASA Budget:
Carryover Balances in Selected Programs (GAO/NSIAD-96-206, July 16,
1996) and (GAO/T-NSIAD-96-207, July 18, 1996).
SUMMARY
---------------------------------------------------------- Chapter 0:2
The $190 million funding transfer to the space station program did
not adversely impact current or near-term upgrade projects. Four
current projects, which account for about 91 percent of the total
funding provided for upgrade activities in fiscal year 1997, could
not have used the transferred funds. Even though they experienced
technical problems and associated schedule slips, the projects'
financial reserves were sufficient to fund the problems experienced.
The transferred funds were also not needed for supportability
upgrades because they began more slowly than planned due to a
longer-than-anticipated approval process. As a result, only about
$40 million of the $70 million in funds allocated in fiscal year 1997
to the new supportability upgrade effort will be used; the remainder
will carry over to support fiscal year 1998 activities.
The $190 million transferred to the space station program was
available because of the large amount of carryover within the shuttle
program. Without the transfer, the shuttle program would have had
about a $600 million budget carryover at the end of fiscal year 1997.
However, shuttle program managers estimated that they would need only
$395 million in carryover at that time.
NASA has used carryover to fund upgrades in the past and plans to
continue doing so in the future. For example, NASA designated $70
million in fiscal year 1996 carryover funds to initiate the new
supportability upgrade effort, and it plans to use another $95
million for this purpose in fiscal year 1998.\2
Depending on the future upgrades selected, costs could range from
hundreds of millions to several billions of dollars. NASA is
presently defining an upgrade program to keep the shuttle a viable
space transportation system at least through the planned mission life
of the space station--about 2013. Other planning assumptions include
increasing the shuttle's flight rate from about 8 to 15 times a year,
obtaining other customers, and operating the shuttle to 2030. In
addition to annual funding requests for safety and performance
upgrades and the continued use of excess carryover, NASA plans to use
any savings that are generated within the shuttle program to fund its
upgrade activities. However, the extent to which these sources will
be available in the future is uncertain.
Funding needs for future upgrades will be driven by a number of
questions for which answers are not yet apparent. These questions
are related to such issues as how long the shuttle will be required
and whether viable alternatives can be developed to support space
station operations and other human space flight requirements.
--------------------
\2 The $70 million for upgrade activities in fiscal year 1997
included $50 million for supportability upgrades and $20 million for
studies of long-term upgrades. For fiscal year 1998, NASA plans to
use $75 million for supportability upgrades and another $20 million
for continued study of long-term upgrades.
FUNDING TRANSFER DID NOT
ADVERSELY IMPACT CURRENT AND
NEAR-TERM UPGRADE PROJECTS
---------------------------------------------------------- Chapter 0:3
Transferring funds from the shuttle program had no impact on ongoing
upgrades because reserves available in those projects were sufficient
to fund the technical problems experienced. Likewise, the funds
would not have benefited the supportability upgrade effort because it
took longer than planned to initiate those projects.
The four largest ongoing shuttle upgrades represent about 91 percent
of the $636 million funding for upgrades in fiscal year 1997. These
projects involve the design and development of the (1) alternate high
pressure turbopump (AHPTP), (2) super lightweight tank (SLWT), (3)
large throat main combustion chamber (LTMCC), and (4) multifunction
electronic display system (MEDS). Each of these projects has
remained within its initial funding profile because each project has
sufficient financial reserves to cover the costs of development
problems and schedule delays they have experienced so far. Two of
the projects, SLWT and LTMCC, are essentially complete and NASA
officials do not anticipate any more development problems. It is
still possible that the other two projects could experience further
development problems, exhaust their remaining financial reserves, and
require additional funding. However, NASA officials believe that
reserves would be available elsewhere within the shuttle program if
the projects' remaining reserves are insufficient. Table 1
summarizes the cost and schedule status of the four largest upgrades
currently underway. Additional information on the status of the four
upgrades is in appendix I.
Table 1
Cost and Schedule Changes for Four
Largest Shuttle Upgrades
Initia Curren Fundin Schedu
l t g le
fundin fundin estima Initial Current change
g g te schedule schedule s
estima estima Change (month/ (month/ (month
Upgrade projects te\a te\a \a year) year) s)
-------------------- ------ ------ ------ ------------ ------------ ------
AHPTP $1,056 $971 $-85 10/97 7/98 +9
SLWT 173 156 -17 12/97 5/98 +5
LTMCC 118 77 -41 10/97 1/98 +3
MEDS 230 206 -24 2/98 1/99 +11
--------------------------------------------------------------------------------
\a Dollars in millions.
Activities under the new supportability upgrade program have begun
more slowly than planned because projects took longer than
anticipated for approval. Before work begins, upgrades must be
approved through the shuttle Program Requirements Control Board.
Proposals to modify the shuttle are thoroughly reviewed through a
very formal process before they are approved by the Board. As a
result, only about $40 million of the $70 million allocated to the
new supportability upgrade effort will be used in fiscal year 1997;
the remainder will carry over to support fiscal year 1998 activities.
HIGH CARRYOVER BALANCES ENABLE
TRANSFERRING FUNDS AND FUNDING
UPGRADES
---------------------------------------------------------- Chapter 0:4
The $190 million transferred to the space station program was
available because of the large amount of carryover within the shuttle
program. Without the transfer, the carryover in the shuttle program
would have been about $600 million at the end of fiscal year 1997.
In contrast, between fiscal year 1993 and 1996, carryover in the
shuttle program averaged about $400 million annually. Two factors
contributed to much higher than average estimated carryover at the
end of fiscal year 1997. First, the $467 million carryover from
fiscal year 1996 into 1997 was higher than normal. Second, shuttle
program costs in fiscal year 1997 were less than originally
estimated. NASA initially estimated program costs for fiscal year
1997 at about $3.1 billion, but its most recent estimate is now
almost $100 million less.
In May 1997, shuttle program officials indicated that they would like
to have a carryover balance of $395 million at the end of fiscal year
1997--for forward funding on contracts ($200 million), reserves for
estimating uncertainties ($100 million), and supportability upgrades
($95 million). NASA's estimated fiscal year 1997 carryover of about
$400 million is consistent with the program's average annual $400
million carryover for the four preceding fiscal years. However, it
is substantially higher than the $138 million that NASA officials had
projected last summer would be carried over from fiscal year 1997 to
fiscal year 1998. The $138 million estimate did not include
carryover for reserves or supportability upgrades and assumed a much
lower carryover from fiscal year 1996.
In July 1996, NASA estimated that its carryover balance in the
shuttle program would be about $152 million on September 30, 1996.
However, the actual carryover balance on September 30, 1996, was over
$467 million. The large increase was due to NASA not using all of
its program reserves ($122 million), underspending or underrunning
costs in some program elements ($185 million), and reserving funds to
cover costs associated with the transition to a single space flight
operations contract for the shuttle ($19 million).
NASA has used carryover to fund shuttle upgrades in the past and
plans to continue doing so in the future. NASA designated $70
million in fiscal year 1996 carryover funds to initiate a new effort
involving supportability upgrades in fiscal year 1997, and it plans
to use another $95 million for this purpose in fiscal year 1998.
Beginning in fiscal year 1999, supportability upgrades will be funded
as a part of the safety and performance upgrade portion of the
shuttle program's budget. Some of the supportability upgrades
approved so far include upgrading the checkout and launch control
system. Funds are also being used to study potential long-term
upgrades such as liquid flyback boosters.
ISSUES WARRANT CONSIDERATION
BEFORE FUNDING FUTURE UPGRADE
REQUIREMENTS
---------------------------------------------------------- Chapter 0:5
NASA is presently defining an upgrade program to keep the shuttle a
viable space transportation system at least through the planned
mission life of the space station, about 2013. Additional planning
assumptions include operations until 2030, a flight rate of 15 per
year, and use of the shuttle by both the Department of Defense and
commercial customers.
The potential funding requirements for future shuttle upgrade
activities could be substantial. NASA has identified about 70
potential modifications to the shuttle with an estimated total cost
of $5 billion to $7 billion. Most of this estimated cost relates to
development of the liquid flyback booster. Over 30 upgrades with an
estimated total cost of about $322 million have already been approved
for implementation or study.
NASA plans to use a variety of sources to fund these activities,
including the safety and performance upgrade budget line, the
continued use of excess carryover balances, and savings from the new
space flight operations contract. Shuttle program officials are
depending on the last two sources to build an account to help fund
future upgrades. However, the extent to which all of these sources
together will provide sufficient funding for upgrades is uncertain.
For example, NASA's overall future budgets are currently planned at
slightly reduced levels, but larger reductions may occur. Also, the
continuing availability of sufficient excess carryover balances is
questionable, and the level of any future savings under the space
flight operations contract is unknown. Ongoing NASA studies,
including the one directed by OMB, are expected to provide additional
information about the shuttle's role in the Nation's space
transportation strategy. The results of these studies will help
initiate the necessary debate for shaping the U.S. government's
future space transportation policy.
Funding needs for future upgrades will be driven by a number of
questions for which answers are not yet apparent. These questions
are related to such issues as (1) how long the shuttle will be
required, (2) what upgrades will be needed to maintain the shuttle's
safe operation, (3) whether there will be any savings from the space
flight operations contract and excess carryover, (4) who should pay
for required upgrades if the shuttle is privatized, and (5) whether
there are viable alternatives to the shuttle to support space station
operations and other human space flight requirements.
-------------------------------------------------------- Chapter 0:5.1
Mr. Chairman, this concludes our statement. We would be happy to
answer any questions that you or members of the Subcommittee may
have.
STATUS OF THE FOUR LARGEST ONGOING
SHUTTLE UPGRADES
=========================================================== Appendix I
The National Aeronautics and Space Administration's (NASA) four
largest ongoing upgrade projects involve the design and development
of the (1) alternate high pressure turbopump (AHPTP), (2) super
lightweight tank (SLWT), (3) large throat main combustion chamber
(LTMCC), and (4) multifunction electronic display system (MEDS).
ALTERNATE HIGH PRESSURE
TURBOPUMP
------------------------------------------------------- Appendix I:0.1
The AHPTP project is designed to upgrade the shuttle main engine's
high pressure oxygen and hydrogen turbopumps. The turbopumps inject
liquid oxygen and hydrogen fuel into the engine's combustion chamber
where they mix and burn to generate power for shuttle launch. The
oxygen turbopump has completed development and is operational on the
shuttle. The hydrogen pump development was suspended in fiscal year
1992 and restarted in fiscal year 1994. The hydrogen pump is
currently scheduled for its first flight in July 1998.
NASA officials told us that the technical difficulties associated
with the hydrogen pump are due to design problems related to cracks
in the housing and turbine blades. At this point, the solution is to
redesign and retest to verify that the problems are resolved.
According to NASA officials, currently available or planned funding
reserves are adequate to cover any additional costs. As a result,
NASA officials said that additional funding would not benefit the
project.
SUPER LIGHTWEIGHT TANK
------------------------------------------------------- Appendix I:0.2
SLWT will provide the shuttle with additional lift capability to
support space station assembly and operation. The tank is built from
a new aluminum alloy that reduces the tank's weight and provides the
shuttle with an additional 7,500 pounds of lift capability. SLWT is
currently scheduled for its first flight in May 1998.
SLWT technical problems have been primarily associated with welding
the new aluminum alloy. When welds intersect, cracks can occur which
cause time consuming repairs. According to NASA officials, the
problems are related to the manufacturing process, and solutions have
been identified and implemented. SLWT has completed development and
has been certified for flight. The first flight tank is currently
being manufactured.
Project officials believe there are sufficient reserves to fund any
unforeseen problems. The SLWT project completed development with
about $20 million in reserves with another $12 million in reserves at
headquarters.
LARGE THROAT MAIN COMBUSTION
CHAMBER
------------------------------------------------------- Appendix I:0.3
Liquid oxygen and hydrogen fuel mix in the space shuttle main engine
combustion chamber to generate the engine's power. LTMCC, which is
an advanced design of the current combustion chamber, will reduce the
operating temperature and pressure within the engine and thereby
increase the engine's safety margins. LTMCC is on schedule and
within estimated cost and is currently scheduled for its first flight
in January 1998.
MULTIFUNCTION ELECTRONIC
DISPLAY SYSTEM
------------------------------------------------------- Appendix I:0.4
The space shuttle orbiter currently provides flight control
information to crew members through cathode ray tube displays,
instruments, and meters. The current system consists of hardware
based on 1970s technology, which creates ongoing logistics support
problems because of wear, aging, and component obsolescence. MEDS is
being designed to simplify orbiter operations, increase the life of
the orbiter's displays, and increase the reliability of the system.
MEDS is currently scheduled to become operational in January 1999.
MEDS has a development problem with the glass required for the
displays. NASA attempted to develop a U.S. supplier for the glass.
However, the supplier chosen was subsequently unable to meet program
production requirements and could not meet the stringent quality
standards for the severe operational environment of the orbiter. As
a result, the U.S. supplier's contract has been terminated, and the
glass is being purchased from a foreign source.
NASA estimates that obtaining a new glass supplier will add about $20
million to the cost of the project, but reserves have thus far been
adequate. However, contract negotiations for the new glass supplier
are not complete, and the contractor's proposal is $6.8 million more
than available in program reserves. NASA officials told us that they
hope to resolve this issue through contract negotiations. The
officials said that, if negotiations are not successful and the
increased cost materializes, they will use funds within the shuttle
program to meet the additional funding requirement.
*** End of document. ***
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