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Cost overruns plague U.S. space agency

NASA can land a spacecraft on a peanut-shaped asteroid 150 million miles away, but it doesn't come close to hitting the budget target for building its spacecraft, according to congressional auditors. NASA's top officials know it and even joke about it.
SCI NASA Spending
In this file artist drawing, the now 2011 Mars Science Laboratory appears on the surface of Mars. The Mars laboratory, whose projected costs have ballooned over the years from $650 million in 2003 to $2.3 billion by early 2009.AP
/ Source: The Associated Press

NASA can land a spacecraft on a peanut-shaped asteroid 150 million miles away, but it doesn't come close to hitting the budget target for building its spacecraft, according to congressional auditors. NASA's top officials know it and even joke about it.

This week auditors found that on nine projects alone NASA is nearly $1.1 billion over cost estimates that were set in the last couple of years.

Congress' financial watchdog, the Government Accountability Office, reviewed NASA's newest big-money projects and found most were either over budget, late or both. That doesn't include two of NASA's largest spending projects whose costs have wildly fluctuated and still aren't firm — replacements for the space shuttle fleet and Hubble Space Telescope.

Historically, overruns have caused NASA to run low on money, forcing it to shelve or delay other projects. Often, the agency just asks taxpayers for more money.

In fact, NASA got $1 billion from the new stimulus package. It's to be spent on climate-watching satellites and exploration among other things.

"Getting an extra infusion of money doesn't necessarily mean you have a capability to spend it well," said Cristina Chaplain, GAO's acquisitions chief who wrote the study.

A second GAO report used NASA as one of its leading poster children for bad practices in estimating costs. The space agency, which has a budget of about $18 billion, needs "a more disciplined approach" to its projects, the GAO said. NASA spending has been on GAO's "high risk" list since 1990. Its cost overrun problems will be the subject of a House Science Committee hearing Thursday.

"A cancer is overtaking our space agency: the routine acquiescence to immense cost increases in projects," NASA's former science chief Alan Stern wrote in an op-ed piece in the New York Times in 2008. He quit last year over the shifting of money to pay for cost overruns.

NASA's spending problems are so predictable and big that two years ago Congress put it under the same tough budgeting rules as the Defense Department. That means NASA must notify Congress if a program's cost rises by more than 15 percent. The GAO report issued Monday was the first using NASA's new requirements.

In a statement to The Associated Press, NASA said its missions "are one-of-a-kind and complex, which always makes estimating challenging... We do believe NASA is a good investment of federal funds and strive to provide the best value." The agency statement said external forces, such as launch availabilities, also cause delays and cost increases. The agency says it has improved its cost estimating.

Last December then-NASA administrator Michael Griffin tried to compare cost overruns — like the $400 million extra needed for the Mars Science Laboratory — with do-it-yourself projects that keep requiring extra trips to the hardware store. When a reporter quipped that his do-it-yourself projects use his own money, Griffin drew laughter with his response: "And we are spending your own money for this."

Imposing financial discipline, as GAO urges, "is an uphill fight," said Smithsonian Institution space scholar John Logsdon, who is on NASA's advisory council.

In the latest report, NASA couldn't provide the GAO with current accurate estimates on two of its hugest projects so the watchdog agency merely cited ballpark guesses:

  • The program to build new spaceships to send astronauts back to the moon would cost somewhere around $37 to $49 billion and already has financial and technical risks, the GAO found.
  • The multibillion-dollar James Webb Space Telescope, whose current cost is unknown, was at least $1 billion over estimates three years ago, before NASA began its new cost accounting methods.

NASA has cost overruns for several reasons, said the GAO's Chaplain. Those include poor cost estimating at the beginning, trying to do cutting-edge science, constantly changing designs, and poor contractor performance. Six of the projects had problems with contractors, including lack of experience, that led to delays or higher costs.

In his December news conference, Griffin said there isn't a very good way to estimate at the front end of a mission what it's going to take to achieve scientific priorities.

Griffin, whose replacement hasn't been named yet by President Barack Obama, said scientists tend to downplay costs early to convince NASA that their project is cheaper than someone else's. Later, once NASA commits and the money is being spent, more bucks are needed. So NASA spends more instead of canceling the project.

That's a problem everyone knows about and accepts, but shouldn't, Chaplain said.

The Mars Science Laboratory, which has ballooned to a $2.3 billion price tag, is a good example of NASA's approach. In 2003, its cost was put at $650 million on the National Academy of Sciences wish list, which NASA used to set priorities.

But on Tuesday, Doug McCuistion, who heads NASA's Mars exploration program, said the proper estimate to start with was $1.4 billion, not $650 million because it was not an official NASA projection.

By last December, the number was up to $1.9 billion. Then technical problems delayed launch plans from this year to 2011, adding another $400 million. The extra money came from cuts to other science projects.

"The costs of badly run NASA projects are paid for with cutbacks or delays in NASA projects that didn't go over budget," Stern wrote in his newspaper piece. "Hence the guilty are rewarded and the innocent are punished."