WASHINGTON — Conversion of shuttle-era solid rocket boosters and engines for use on the Space Launch System has cost NASA billions more and taken years longer than originally planned, the agency’s inspector general concluded.
In a May 25 report, NASA’s Office of Inspector General (OIG) stated that contracts that date back to the Constellation program more than 15 years ago have suffered about $6 billion in cost increases related to both changes in scope of the contracts as well as technical issues. Those contracts have also experienced more than six years of delays.
The contracts cover work by Northrop Grumman to develop and produce five-segment solid rocket boosters for the SLS based on the four-segment boosters used on the shuttle, and work by Aerojet Rocketdyne to adapt Space Shuttle Main Engines, also known as the RS-25, for the SLS core stage.
The contracts, covering development and production of the boosters and engines, originally had a combined value of $7 billion over 14 years. The cost-plus contracts are now worth at least $13.1 billion over 25 years, of which $8.6 billion has been spent to date. The OIG reported that the overruns have the effect of increasing the cost of a single SLS mission through Artemis 4 by $144 million, to $4.2 billion each.
A key factor in the overruns was an underestimation of the difficulty of adapting shuttle-era hardware for the SLS. “While the RS-25 is a highly mature system, significant technical upgrades are required before it can be installed on the SLS due to the rocket’s increased technical complexity,” the report stated, ranging from increased heat that required additional information to other system modifications to increase the flow of propellants to the engines.
Aerojet also had to design a new engine controller unit, which contains the electronics for operating the RS-25, because parts for the original unit were no longer available. However, the report found that Aerojet’s plans for the unit “lacked a comprehensive understanding of controller design requirements and an agreed-upon scope of work, which resulted in significant technical issues culminating in increased costs and expanded schedule.”
The solid rocket booster also has significant overruns, particularly with its propellant liner and insulation, a new component that replaced an asbestos-based insulation used on shuttle-era boosters. That work started as a $4.4 million contract modification in 2011, but Northrop ultimately charged NASA $253 million for the work, including $28.5 million in award fees.
NASA contracting officers objected to paying the award fee, denying two requests by Northrop for the fee. The OIG report noted that agency officials then appeared to go around standard procedures by convening an “independent assessment team” of former NASA employees, who recommended the agency pay the award fee. The report called that effort a “significant and continuous disregard for Agency regulations and official processes.” NASA eventually agreed to pay Northrop $24.5 million.
That incident was just one of several examples of procurement shortfalls cited by the OIG report. It noted that only a handful of employees work on the booster and engine contracts, with limited supervisory review. It also took nearly 500 days to finalize one booster contract, outside of the guidance to do so within 180 days. Despite that delay, procurement lawyers were given only six hours to review a 1,500-page contract, “likely contributing to unidentified omissions of required clauses and lack of a fully-defined scope of work.”
The report noted that NASA is attempting to reduce costs for both future SLS boosters and the restart of RS-25 engine production. It cautioned, though, that “NASA’s efforts likely will fall short of its expected savings given the continuing impact of efforts to restart RS-25 engine production and manage the complexity of upgrading and integrating heritage components.”
OIG offered eight recommendations to NASA to address booster and engine contract issues, such as shifting to fixed-price contracts for new RS-25 engines. NASA accepted, partially or completely, all the recommendations, but noted that it had already examined the RS-25 engine production issue and concluded that, given the work needed to restart production lines, a cost-plus contract was the better contracting approach.
The NASA response was unusually critical of OIG’s overall assessment. Agency officials “are concerned that the foregoing report offers an incomplete view of the program’s decision-making regarding its boosters and engines elements and that the information in the report is presented without the context that would have rendered it more accurate,” stated a NASA response signed by Jim Free, NASA associate administrator for exploration systems development, and Karla Smith Jackson, assistant administrator for the office of procurement. “As a result, the directorate and the program do not concur with, nor endorse, the facts as presented in the body of the report.”
OIG stood by the findings of its report. “We take issue with this summary characterization and are disappointed that in its formal response the Agency failed to specify the facts in the report with which it disagrees,” the report states.
