The National Aeronautics and Space Administration, or NASA, was established in 1958 under the Eisenhower administration. Its main purpose was to act as an independent agency to direct the nation’s space missions and research programs. Over the past 45 years, since its inception, NASA has experienced many problems and has received recent negative publicity. NASA has had longstanding managerial problems on the inside and with outside contractors. They have also failed to estimate costs and have conducted projects well beyond what their budget dictates.
An example of that would be with the failed X-33 project, among others. This analysis will explore these areas of NASA and provide preliminary recommendations as to how the program can better itself, from management to new vehicles. Although research of National Aeronautics and Space Administration’s (NASA) government contractors over the last thirty years did not uncover any major allegations of shoddy workmanship or under spec deliverables, it did reveal serious issues with regard to billing fraud and huge bonuses paid out on over budget projects.
Over the years there have been numerous allegations of fraud and abuse by NASA contractors. Finally in November 2000 the government was able to win a settlement against the Boeing Company of Seattle and the Houston-based United Space Alliance for a total of $825,000. In addition to the money that was awarded, these two companies agreed to forfeit any rights they have to collect on $1. 2 million in unpaid invoices. This settlement was related to allegations that false claims had been submitted for work supposedly performed between 1986 and 1992 under the NASA Space Shuttle and Space Station Freedom programs.
Originally, the Rockwell Space Operations Company (RSOC) was the contractor who was hired to manage the two programs. An RSOC sub-contractor, Omniplan Corporation, is accused of being involved in numerous fraudulent billing activities. The result of this fraud was that the United States was overcharged millions of dollars. The Boeing Company acquired RSOC in 1996 and at that time United Space Alliance took over the management of the two space programs. The government tried to sue Omniplan in 1993, but the company went bankrupt.
In January 2000 the government then filed suit against RSOC claiming that they had submitted Omniplan’s false invoices. It is the government’s contention that a company is responsible for the billing accuracy of its sub-contractors and RSOC should have been validating that all costs submitted by Omniplan were legitimate. Invoices submitted included personal costs related to private homes, jewelry, and vacations abroad. It was also uncovered that Omniplan was leasing buildings and equipment to itself by setting up phony companies.
The outrageousness of the fraud in the programs is only matched by the huge bonuses that have been paid out to contractors for projects that have been grossly over budget. An example would be the Gamma Ray Observatory, which came in at forty million dollars over budget in 1993, and NASA gave them a five million dollar bonus just because it was a “huge technical feat”. Although the space program has many benefits for our society, past history tells us that serious controls need to be put in place to monitor the programs financials.
The amount of waste that has occurred and potentially could occur in the future is unacceptable and puts the future of the program in jeopardy. Publicity surrounding the fraud and waste in the NASA programs has forced the government to step back and revalidate the value of the space program. In 2001 the Floyd D. Spence National Defense Authorization Act for fiscal year 2001 established the Commission on the Future of the United States Aerospace Industry. Their task was to assess the future of the U. S. rospace industry and to recommend actions to be taken by the Federal Government to support the ability of the U. S. aerospace industry to remain robust in the future.
The Commission was given a broad mandate by the Congress and it contained a number of key items such as “the adequacy of the current acquisition process of federal departments and agencies; the procedures for developing and fielding aerospace systems incorporating new technology in a timely fashion; and the policies, procedures, and methods for the financing and payment of government contracts” (Commission of the Future, 2001).
At the time this commission was formed, Vice President Dick Cheney issued the following statement, “The United States aerospace industry plays a major role in our national defense, economic growth, scientific advancement, and quality of life” (Commission of the Future, 2001). This statement mirrors how most Americans feel, but it is imperative that this commission takes steps to eliminate the fraud and waste in the NASA programs. NASA puts a lot of money into the economy and almost every state in the union receives some benefit from the space programs or from companies that are created for space program research.
NASA contributes different percentages of their annual budget to Science, Aeronautics, Exploration, Space Flight Capabilities and Inspector General. It also distributes monies to different companies, nonprofits, universities, and research centers involved in astronomy, aeronautical and astronomical research. NASA’s budget has been negatively affected for numerous reasons; one in particular is failure to estimate costs appropriately. An example of NASA’s failure to estimate costs is the International Space Station (ISS). In 1993, NASA said the space station would cost $17. illion and no more than $2. 1 billion per year.
NASA has had continual overrun costs, has not estimated costs appropriately, and is almost $5 billion over budget. The General Accounting Office has reported that the financial books are undocumented shambles and that there is not enough information to confirm or refute the financial information, which could lead to the reasons why there were overrun costs. Congress has chastised managers for mismanaging International Space Station Costs. Managers should know how to predict costs.
OKeefe, Administrator for NASA said a Marshall-developed software could restore public confidence and better determine costs. Another issue that NASA has to deal with is its aging fleet of space shuttles. With NASA’s fleet of four space shuttles well in its thirties, since they were developed in the 1970s and first flown in 1981, they are fast becoming outdated museum pieces. In fact the space shuttle Enterprise is already a museum piece, now the property of the Smithsonian Institute. NASA’s latest casualty, the space shuttle Columbia, was in fact its oldest orbiter in the fleet.
Columbia was delivered to Kennedy Space Center in 1979 and began the Space Shuttle program by being the first to launch into orbit in 1981. The space shuttles Discovery and Atlantis were next to go into operation in 1984 and 1985 respectively. The space shuttle Endeavour is the youngest in the fleet, starting its first operation in 1992 replacing the space shuttle Challenger. Twenty-two years does not seem fitting of the words “old” or “aging”, especially when considering the shuttles were meant to withstand one hundred flights. But numbers of flights is not the only criteria for considering a space shuttle old.
The space shuttles were also built with a one decade limit in operation time. Clearly, that time limit had been reached. NASA’s attempt to replace the aging fleet of space shuttles proved to be a fiasco. In 1994 a revolutionary SSTO (single stage to orbit) solution was considered to replace the space shuttles. One such proposed SSTO project was the X-33. The X-33 SSTO, unlike the current multi-stage launch booster rockets of the space shuttle, was meant to launch like a rocket without shedding any rocket components on launch and land like an airplane.
The X-33 had been plagued with excessive weight and leaky composite liquid-hydrogen tank problems. After spending more than $912 million by NASA and $356 million by Lockheed Martin and other contractors, the project was terminated in 2001. Arthur Stephenson, director of NASA’s Marshall Space Flight Center in Huntsville, Alabama said, “What we’re hearing from industry and our own evaluation is that we believe a single-stage-to-orbit vehicle for a second-generation vehicle is not viable at this time. ” (David, 2001) Problems at NASA have not just involved money and the actual spacecrafts.
Personnel problems have continued to plague the program. Sean O’Keefe, the newest administrator of NASA noted that an “agency is only as strong as its people. ” Quite a profound statement to make after walking in to the mess he had to deal with after the sudden resignation of Dan Goldin, the previous administrator for the past ten years. Up until O’Keefe’s entrance to NASA, employee satisfaction was at an all time low. During Goldin’s tenure at NASA, he “bullied his way through the agency” and “was a very brutal person to work for.
Some NASA employees complained that his mantra of “better, cheaper, faster” was taking an emotional and physical toll on them. Many employees suffered from RSI, or repetitive stress injury, which they directly relate to the “control freak” management styles of group leaders, that at one point disallowed some employees to seek outside hobbies not related to work. Goldin overreached, pushing managers, engineers and scientists so past their breaking point that employees began turning in their resignations.
NASA was already facing an unsteady future with the serious shortage of college students pursuing engineering, science or math degrees that something needed to be done. Dan Goldin’s “better, faster, cheaper” management style was not working. The agencies financial problems were spiraling out of control. Employee moral and productivity was at an all time low. In October, 2001 Goldin resigned from his position at NASA. Shortly thereafter President Bush nominated Sean O’Keefe, Deputy Director of the Office of Management and Budget.
The main goal was to get O’Keefe into office to help control the reeling finances and to also create a new management style to help retain the “cream of the crop” employees that the administration just could not afford to lose. NASA needs to address its financial problems and its technology issues. From a financial perspective, there needs to be greater oversight of NASA with regards to both budget and projects. The first and most important step would be to bring in an external agency to manage the finances of NASA; this could bring order to their chaos and help them to plan their budget more appropriately.
Controls need to be put in place to stop serious budget overruns and to better keep track of contractor spending, this external agency could manage those controls. The bills that were passed to help manage NASA better are a good start but without more detailed analysis of budgets start to finish they may not meet their goals. They have also initiated a project to move to a new financial system but this system needs to be monitored externally to truly bring back public confidence.
NASA has had some unsuccessful attempts at building a replacement for the aging fleet of shuttles. Since they are tasked with research and development, and it is their duty to research new technologies and create new options for space exploration, these efforts should not be viewed as failures. It was a good project and was worth researching but in the end realizing that it was not feasible and stopping the X-33 project at that time was the right decision instead of continuing to dump money into a failing project.
At this point it would seem the best option for space exploration would be to take a step back and join the rest of the world in going with the proven technology of multi-stage rockets that can be built and operated cheaper than the current space shuttle line. The future is an X-33 type SSTO system but until the technology catches up with the design we will have to rely on what technology we have today. The time that transpired between the Challenger and Columbia disasters should have been enough to allow NASA to rectify its budgetary and management problems.
But apparently seventeen years was not enough time for NASA to put its house in order. Cases of fraud, inadequate projection of budgets, poor financial record-keeping and counter-productive management styles or philosophies had not decreased in that time. Those problems had plagued NASA and its contractors to a point where safety took a back seat to former NASA administrator, Dan Doldin’s “better, faster, cheaper” management style, the result of which turned out to be “worst, slower, outdated, over-budget and deadly.
These problems had led to an agency with unsatisfied employees, over-budget spending, and an outdated fleet of space shuttles. Reforms in all aspects of NASA must take place immediately. The solution to problems of over-spending, corrupt contractors, aging fleet of shuttles and safety must all stem from its leadership and management. It is now up to Sean O’Keefe, NASA’s current administrator, to breathe life into his own words, “an agency is only as strong as its people. “