NASA OIG: Surprise, Surprise: Orion Is Behind Schedule, Over Cost, And Lacks Transparency
NASA OIG: NASA’s Management of the Orion Multi-Purpose Crew Vehicle Program
“We found that NASA’s exclusion of more than $17 billion in Orion?related costs has hindered the overall transparency of the vehicle’s complete costs. Both federal law and NASA policy call for a Life Cycle Cost estimate for all major science and space programs costing more than $250 million, and for the Agency Baseline Commitment (ABC) to be based on all formulation and development costs. The Orion Program received approval from the NASA Associate Administrator to deviate from those requirements, resulting in exclusion of $17.5 billion in Orion?related costs from fiscal year (FY) 2006 to FY 2030 due to the Agency’s tailored approach to program management and cost reporting. Although these exclusions have been approved, the tailoring of these cost reporting requirements significantly limits visibility into the total amount spent on development and production efforts.
We also found that Orion has continued to experience cost increases and schedule delays. Since the cost and schedule baseline was set in 2015, the program has experienced over $900 million in cost growth through 2019, a figure expected to rise to at least $1.4 billion through 2023. At the same time, the program’s schedule for Artemis I has slipped more than 3 years, while the schedule for Artemis II has slipped 2 years. Additional delays are likely as both Orion and SLS complete development efforts for Artemis I in the next 16 months and prepare for Artemis II. Meanwhile, Orion is proceeding with production of crew capsules for future Artemis missions before completing key development activities, increasing the risk of additional cost growth and schedule delays as issues are discovered late in the development effort, potentially requiring costly rework.
Further, NASA’s award fee practices have hindered the program’s control of contract costs. Given the Orion Program’s significant cost increases and schedule delays, we found that NASA has been overly generous with award fees provided to Lockheed. From contract inception in 2006 through January 2020, Lockheed received $740.9 million in award fees. We attribute these overly generous award fees to the subjective nature of award fee evaluations coupled with nebulous and dated criteria used by the program. The result, for both the Orion Program and frequently other NASA programs, is that adjectival ratings such as “Excellent” given to the contractor often do not accurately reflect performance shortfalls. At a minimum, we question $27.8 million in fees awarded to Lockheed from September 2006 to April 2015. In addition, we found the continued use of the “Award Fee for End-Item Contracts” clause can serve as a disincentive to contractor performance because of the second opportunity to collect unearned fees once the end-item (in this case, the Orion capsule) is delivered.”
NASA OIG: NASA’s Management of the Orion Multi-Purpose Crew Vehicle Program (2016)
“Over its life, the Orion Program has experienced funding instability, both in terms of overall budget amounts and the erratic timing of receipt of those funds. In past reports, we noted that the most effective budget profile for large and complex space system development programs like Orion is steady funding in the early stages and increased funding during the middle stages of development. In contrast, the Orion Program’s budget profile through at least 2018 was nearly flat and Program officials acknowledged that this funding trajectory increased the risk that costly design changes may be needed in later stages of development when NASA integrates Orion with the SLS and GSDO. … We also found prime contractor Lockheed Martin is expending its management reserves at a higher rate than both the Program and the company expected and that, if continued, would deplete its reserve account almost a year before the planned launch of EM-1. Moreover, we found NASA is not monitoring the impact of this possibility on the Orion Program.””
– Lockheed Martin’s Bad Orion Marketing Hype, earlier post
– Lockheed Martin’s Flawed Comparison Between Orion and Dragon, earlier post
– NASA Orion Buying Spree Makes Texas Happy Again, earlier post
This is news? It would be news IF they were on schedule and on budget.
And these are the experienced legacy experts!
I have historical respect for Lockheed and much of the aerospace industry, but this has got to stop! I know NASA has essentially handed them the keys to to the kingdom, but where is the ethical backbone of somebody on either side of this!?!
Thank heavens for Elon Musk and the SpaceX team. Perhaps we will finally get the space program we want (deserve is another question) at a price we can afford, and in turn leverage to bigger and greater things!
Let us fly Orion and SLS, and the place it in a museum as a cautionary tale and reminder of a path that lead this country and our people nowhere!
Heaven help us yes, but ultimately heaven helps those that help themselves!
The experienced legacy experts that did Project Apollo and the Space Shuttle are long gone. NASA has not built a new rocket since the 1970’s unless you count the Ares I “stick”.
I guess the moral of this story is that when you put your departed ex-civil servants in as the contractor manager, you should tend not to give them glowing recommendations when they don’t perform. Pretty soon everyone wonders how they get glowing recommendations, high award fees and why your program is way over cost and way behind on schedule.
Well, it’s not like they’re rushing to meet a deadline. But seriously, why are there awards in any of these contracts? None of them are based on meeting the schedule or staying within budget.
Because, as a rule, LegacySpace will not even draft a RFQ response without a few $10ks up front, sight unseen. If you actually want them to do work? Well, you need to pay them to choose the size, shape and colour of the meeting room tables these days.
When you say “table”, you are of course referring to the “system planning platform”, which requires specification documents, certified aerospace fabrication techniques, inspection and possibly a full-up test campaign to certify that it’s ready for use. Now, if you want it to be reusable, that has not been shown to be cost effective.
Actually, no. Meeting room tables aren’t billed to contracts; that’s out of overhead and operating expenses. The cost comes out of the company’s own money, and it’s amazing how much more streamlines a process can be when the company is paying rather than their customer.
This is not a surprise after almost half a century of humans not being out of low earth orbit. What would be a surprise is something being done about it other than by Space X.
I suspect that, if you were to ask, NASA, Lockheed and Boeing would all tell you that their progress is as good as possible and maybe even better than should be expected. The worrying thing is that, from their perspective, this is true. They really don’t know how to do any better than this.
NET November 21 for Artemis 1 and August 23 for Artemis 2.
I don’t know what to say that hasn’t already been said.
Possibly ‘indefinitely deferred pending strategic direction review’ if there are serious changes at the top in the US government November this year.
My point? The way NASA’s direction is set and maintained now actually makes it surprising if they ever reach any major goals. If we want to see humans walk on the Moon again, then Starship is currently the only game in town.
Without SpaceX I think it is highly likely that the human space flight program at NASA would be effectively ending and we would see ISS deorbited.
Why did I hear somewhere that Orion was all finished and just waiting for SLS?
As for the rest, has anyone else noticed that the OIG has become increasingly candid in their assessments of the systemic roots and problems with cost-plus contracting?
I remember when people trying to understand costs were given some respect by the program/project people they dealt with, or at the least treated well to get on their good side. If the numbers don’t look good, at least we are nice! Weather this was GAO, internal personnel, or the IG of course. This all changed under Gerst. The top sets the tone, and Gerst made his disdain for anything costs and his contempt for anyone talking costs well known. I have it on good word SLS/Orion people walk in to see IG people for these audits looking at them like Sh*t. This alone might easily explain the more candid language in these IG reports of late. It was long overdue.
People who aren’t even competent enough to see these are not the people your program want’s on your bad side now run SLS/Orion.
I don’t quite follow your meaning. I think Gerst shielded his people, both in NASA and Lockheed and he did so for a long time, which is why the program is now so far behind. when the program and it’s managers and Gerst failed to make progress leaders like Bolden turned to Gerst for explanations instead of turning to him to get the program under control. Some of us never thought he was the right sort to lead such an effort. Others before him, developing earlier programs, had performed a lot of DDT&E and had a lot of experience managing significant contractual effort. Gerst was selected because he came out of the Ops organization. That would have made more sense if we’d ever gotten to an operational phase on these programs. At the rate they’ve been going they never will.
Gerst’s situation was not unique. NASA put operations people into the leadership positions everywhere, NASA and contractor, The ops way is to hold lots of meetings, have lots of discussions and dialog and make decisions by committee votes rather than using basic physics and common sense. So don’t anticipate that this situation with NASA being able to get anything done will change anytime soon.
Compare those dollar figures to the Apollo dollar figures in this Forbes article.
https://www.forbes.com/site…
From the article:
“$1.08 billion – Amount spent by one of Apollo’s contractors—North American Rockwell’s Space Division (which later became part of Boeing)—on subcontractors for development during the Apollo program.”
In today’s dollars that would be ≈ $7.56 billion.
Yes, but no one had built a deep space capsule before the Apollo CSM was built. So it was not surprising it was expensive. And they did it with slide rules on drafting tables. The computer simulations and CAD software is suppose to make it cheaper to do now.
That’s exactly my point.
If you compare the Apollo dollar figures to the current dollar figures for Orion & SLS it will illustrate just how inept those two programs really are.
If you think the Orion news is bad, remember, this is like an IRS audit saying Pablo Escobar was merely a man with tax issues.
At what point do we cut bait? Will the SpaceX Starship land on the Moon before SLS and Orion even flies?
I’m pretty sure that NASA, Lockheed and Boeing have all retained PR experts, on very generous advances, to draft press releases praising SpaceX on their remarkable achievement but hammering home why the smaller and shorter-ranged SLS/Orion system is still needed for the Artemis program.
I wanted to challenge a contractor once because they did a lousy job, and eliminate, or at least reduce, their reward fee. Apparently it wasn’t bad enough and management gave them their full fee as I was told it was expected.