NASA IG Report Raps Marshall for Test Stand Construction Costs

Marshall test stands 4693 and 4697. (Credit: NASA)

A new audit by the NASA Office of Inspector General (IG) criticizes officials at Marshall Space Flight Center for cost overruns on two engine test stands and failing to properly consider other locations for their construction.

The audit found costs for building test stands 4693 and 4697 increased 88 percent from the initial project budget of $40.5 million to a final cost of $76 million. The stands were built to to test the liquid hydrogen and liquid oxygen tanks for the core stages of the Space Launch System (SLS).

The cost increase came from several factors. NASA paid the contractor a premium of $7.6 million to expedite construction of the stands in order to meet a planned SLS launch date of 2017. The initial contract was awarded even though requirements and testing capabilities were not fully understood.

“As the testing requirements matured, NASA modified the contract to meet changing requirements, added additional features, and made other modifications that raised the contract price by $20.3 million,” the audit states. “In addition, NASA did not establish adequate funding reserves to cover these changes and therefore had to secure $35.5 million in additional funding over the planned budget.”

The IG report also criticizes the NASA center for failing to consider other possible locations to build the test stands. As a result, officials “cannot ensure it made the most cost-effective decision regarding where to build the stands,” the audit states.

The report recommends NASA officials:

  1. perform a comprehensive review of Program-funded construction projects to ensure adequate analysis, including all life-cycle costs, is completed prior to project initiation;
  2. develop additional construction project guidance for establishing unallocated construction reserves for program-direct construction facility projects to better account for significant expected risks; and,
  3. ensure facility needs, such as construction of new facilities and/or modification of existing facilities, are appropriately included in program planning and scheduling and that testing requirements are adequately understood prior to committing the Agency to construction or modification of test facilities.

NASA management concurred on all three recommendations. However, the IG found the space agency’s response to the third recommendation about including facility needs in program planning and scheduling.

“However, the Agency considered this action to be complete since program planning and scheduling requirements are identified in “NASA Space Flight Program and Project Management Requirements,” NASA Procedural Requirements (NPR) 7120.5E,” the report states.

“We disagree. NPR 7120.5E, originally issued in 2012, was in place prior to the start of the test stand construction effort examined in this audit,” the report adds. “As such, it was insufficient to prevent the concerns identified in this report and further action is needed to ensure the issues do not reoccur in future projects.”

The report’s summary follows.

Construction of Test Stands 4693 and 4697
at Marshall Space Flight Center
NASA Office of Inspector General
Report No. IG-17-021
May 17, 2017

[Full Report]

Why We Performed This Audit

Test stands for large rocket propulsion systems are used to test system components under controlled conditions on the ground as part of the process to certify the systems for flight. Such stands cost tens or hundreds of millions of dollars to build or refurbish and may sit idle for many years after the programs for which they were built end. In August 2013, NASA entered into an agreement with the Army Corps of Engineers to plan and build two test stands at Marshall Space Flight Center to test the liquid hydrogen and liquid oxygen tanks that are part of the core stage of the Agency’s new heavy-lift rocket, the Space Launch System (SLS). An essential component to achieving the Agency’s goal of expanding human presence in the solar system, the SLS is designed to launch crews of up to four astronauts beyond low Earth orbit on the Orion Multi-Purpose Crew Vehicle (Orion), as well as cargo needed for NASA’s future exploration missions. NASA spent approximately $76 million to build the two test stands.

We initiated this review to assess NASA’s acquisition approach for the test stands; the cost, schedule, and performance of the construction project; the justification for placing the stands at Marshall; and plans for future use of the stands. We reviewed Federal and NASA policies, regulations, and plans; interviewed officials from NASA and Army Corps of Engineers; and reviewed contract documentation and various Agency studies concerning planning and construction of the test stands.

What We Found

In an attempt to meet a 2017 launch date for the SLS, NASA expedited construction of the test stands and paid the contractor a premium of approximately $7.6 million to complete construction on a compressed timetable. Moreover, because the stand designs were based on preliminary testing specifications, the requirements and testing capabilities that would be needed were not fully understood when the construction contract was awarded. As the testing requirements matured, NASA modified the contract to meet changing requirements, added additional features, and made other modifications that raised the contract price by $20.3 million. In addition, NASA did not establish adequate funding reserves to cover these changes and therefore had to secure $35.5 million in additional funding over the planned budget. Finally, because NASA did not adequately consider alternative locations before selecting Marshall as the site for the test stands, it cannot ensure it made the most cost-effective decision regarding where to build the stands.

What We Recommended

To improve the decision-making process for construction of test stands and facilities, we recommended NASA’s Assistant Administrator for Strategic Infrastructure perform a comprehensive review of Program-funded construction projects to ensure adequate analysis, including all life cycle costs, is completed prior to project initiation, and develop additional construction project guidance for establishing unallocated construction reserves for program-direct construction facility projects to better account for significant expected risks. We also recommended NASA’s Associate Administrator for Human Exploration and Operations ensure facility needs, such as construction of new facilities and/or modification of existing facilities, are appropriately included in program planning and scheduling and that testing requirements are adequately understood prior to committing the Agency to construction or modification of test facilities.

We provided a draft of this report to NASA management who concurred with each of the recommendations and described corrective actions the Agency plans to take. We consider management’s comments to Recommendations 1 and 2 responsive; therefore, these recommendations are resolved and will be closed upon verification and completion of proposed actions.

Although NASA management concurred with Recommendation 3, the Agency’s response did not adequately address the intent of the recommendation. NASA management agreed that modifying existing facilities or constructing new facilities to meet a specific program requirement should be included in program planning, and the driving requirements for those efforts should be clearly understood prior to committing Agency resources. However, the Agency considered this action to be complete since program planning and scheduling requirements are identified in “NASA Space Flight Program and Project Management Requirements,” NASA Procedural Requirements (NPR) 7120.5E. We disagree. NPR 7120.5E, originally issued in 2012, was in place prior to the start of the test stand construction effort examined in this audit. As such, it was insufficient to prevent the concerns identified in this report and further action is needed to ensure the issues do not reoccur in future projects. Therefore, this recommendation remains unresolved pending further discussion with Agency officials.

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  • Kapitalist

    And Ukrainian rockets are launched from a raft at sea. They are very much more intelligent than the NASA bureaucrats.

  • JamesG

    If you’re wasting BILLIONS of dollars, whats a few tens of millions among friends, contractors, and campaign contributors eh?

  • Mr Snarky Answer

    Forrest for the trees. The IG should be investigating why we are wasting money on obsolete SLS before it flies.

  • publiusr

    Sigh–Bezos has rocket problems of his own–but let’s gang up on old space.

    I’m glad the internet wasn’t around in the 60’s–or the guys here would have gotten the Saturn V killed.

    The test stand is done by and large. Be happy.

  • duheagle

    The Saturn V had work waiting for it. The SLS doesn’t.

    The test stands for it stand a pretty good chance of being used about as often as the J-2X. As long as another of Shelby’s favorites gets the eventual contract to tear them down, he probably doesn’t care.

  • ReSpaceAge

    Shame they didn’t Kill the Saturn V. If they had the DoD would have kept flying faster and higher and we would likely be living and working on the moon and Mars by now.

    alternative history lolol

  • publiusr

    I very much doubt that. The air farce killed the Saturns for STS after all–and we;ve been doing laps in LEO ever since.

  • Jeff2Space

    Saturn V was killed because it was too expensive. The space shuttle was supposed to make access to space much more affordable (it failed to do so). SLS will be hideously expensive to operate, but with a much less frequent flight rate than the space shuttle, so its utility is quite questionable.

  • Jeff2Space

    No, the Air Force did not kill the Saturns.

  • Jeff2Space

    Actually, the Saturn V didn’t have “work waiting for it” once the later manned lunar missions were cancelled. Skylab was launched using a “surplus” Saturn V from the cancelled lunar missions since production of the Saturn V was shut down many years before.

  • Jeff2Space

    You mean the bankrupt Sea Launch venture? Yeah, shining example of “intelligence” that.

  • ReSpaceAge

    SpaceX next static fire is planned for the 27th. Maybe launches every 2 weeks is real.

    Critical path

    🙂

  • Mr Snarky Answer

    Looks like a red neck arch to triumph

  • Mr Snarky Answer

    Well we know the limitation of getting 2 week flight rate wasn’t 39A…

  • Mr Snarky Answer

    Wow, this is stunning ineptitude. The Air Farce must have a time machine…

    The AF wasn’t pulled into STS until later into the development when NASA was asked..told by Nixon budget office to justify the flight rate of a reusable vehicle. That is when the payload bay went from 40′ to 60′ and delta wing was adopted for x-range over Max Faget’s preferred straight wing.. How did they AF then go back in time and cancel “the Saturns”??

  • publiusr

    They were pushing for Titans the whole while. Segmented solids–the whole deal.

    Remember MOL

    See my post here about how the fix was in:
    http://up-ship.com/blog/?p=29654

    The Air Farce–behind the scenes–went after the Saturns
    https://en.wikipedia.org/wiki/Saturn_I#Near-cancellation

    The ABMA was done dirty by the blue suits–that’s a fact.

  • publiusr
  • Jeff2Space

    I see. You meant the cancellation on the DOD side before the Saturn program produced any flying hardware. I thought you meant the cancellation of Saturn production, which happened well after NASA took over the program and had started flying Saturn V.

  • publiusr

    There is a lot of things that went on behind the scenes. Gen Medaris became a man of the cloth not long after. He advocated for Troop rockets–and thought the Saturns could be of use to both military and civilian concerns.

    Forests of smaller all solid ICBMs? He thought that a way to madness.