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B-173677 Analysis of Cost Estimates for the Space Shuttle and Two

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B-173677 Analysis of Cost Estimates for the Space Shuttle and Two .. , ‘& (-p-Jy REPORT TO -THE CONGRESS lllllllllllllllllllllllllllllllllllllllllllllIllll LM096342 Analysis Of Cost Estimates For The Space Shuttle And Two Alternate Programs g-173677 National Aeronautics and Space Administration BYTHECOMPTROLLERGENERAL OFTHE UNITED STATES JUNE la1973 COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON. D.C. 20540 B-173677 To the President of the Senate and the '4 Speaker of the House of Representatives This is our report on the analysis of cos-t estimates for the Space Shuttle and two alternate programs of the ! National Aeronautics and Space Administration that we F,: /' Yh1-7_ prepared at the request of Senator Walter F. Mondale. Our review was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C. .53), and the Accounting and Auditing Act of 1950 (31 U.S.C. 67). Copies of this report are being sent to the Director, Office of Management and Budget, and to the Administrator, National Aeronautics and Space Administration. Comptroller General of the United States Contents Page DIGEST 1 CHAPTER 1 INTRODUCTION 5 What is the Space Shuttle Program? 5 What alternative systems were con- sidered by NASA? 6 Scope 0-f review 8 2 REVIEW OF NASA'S COST ESTIMATES 10 New estimates submitted by NASA, on April 27, 1973 10 Issues regarding NASA's cost estimates 11 3 ECONOMIC AND EFFICIENCY COMPARISONS 25 The economic justification issue 25 Economic comparison method 25 Economic comparison of space transportation systems 26 Total launch system costs per pound of payload placed in orbit 29 NASA's efficiency index 31 4 FISCAL YEAR FUNDING ANALYSIS 32 5 AGENCY COMMENTS 35 6 CONCLUSIONS AND RECOMMENDATIONS 40 Conclusions 40 Recommendations 43 APPENDIX I Missions comprising the 80-mission, 581-flight mission model 45 II Additional unreviewed data submitted by NASA 57 III Letter dated May 21, 1973, from the Administrator of NASA 61 APPENDIX Page IV Principal officials of the National Aeronautics and Space Administration responsible for the activities dis- cussed in this report 67 ABBREVIATIONS DOD Department of Defense GAO General Accounting Office NASA National Aeronautics and Space Adminis- tration COMPTROLLERGENER4L'S ANALYSISOF COSTESTIMATES FOR REPORT TO THE CONGRESS THE SPACE SHUTTLE AND TWO ALTER!'lATE PROGRAMS National Aeronautics and Space Administration 8-173677 ----A-DIGEST Wh'YTHE REVIEW WAS MADE these two alternatives and a third alternative which GAO calls the new On March 15, 1972, the National expendable systems. \ Aeronautics and Space Administration 7 /-(NASA) said that its cost estimates indicated the Space Shuttle would On April 27, 1973, NASA provided GAO cost about $5.2 billion less than with new preliminary estimates based an expendable alternative for per- on further studies of Shuttle utiliza- forming the same mission. The Gen- tion; NASA stated that these esti- eral Accounting Office (GAO) refers mates are within the same general to that alternative as the current annual budgetary requirements as its expendable systems. March 15, 1972, estimate. A compari- son of the two estimates is shown : Senator Walter F. Mondale asked GAO below. to review the cost estimates for Total program cost estimates March 15, 1972 April 27, 1973 Number of flights planned 58‘1 779 (billions) cost: Current expendable systems $48.3 $66.2 Space Shuttle 43.1 50.2 Estimated savings $ 5.2 $16.‘3 Reports prepared by NASA's contrac- The March 1972 estimates cover the tor, the Aerospace Corporation, period to 1990; the April 1973 esti- provided GAO with the information mates cover the period to 1991. The for the new expendable systems cost March 1972 estimates are stated in estimated at $45.7 billion for 581 1971 dollars (i.e., at price levels flights. NASA did not include this prevailing in 1971), and the April estimate in its March 1972 estimates, 1973 estimates are stated in 1972 and it did not make an estimate for dollars. the new expendables for 779 flights. Tear Sheet. Upon removal, the report cover date should be noted hereon. With the Senator's agreement, this FINDINGSAND CONCLUSIONS report is being released to the Congress because of the widespread GAO is not convinced that the choice interest in the Space Shuttle. of a launch system should be based principally on cost comparisons. Background GAO cites five other issues which it believes should be considered in the The Space Sh~i~aD~~DOSedspace decision. These issues are: $,~anspoLrJaL~~~sJ.efl which, as planned, would be sent into orbit and return to earth to be reused on 1. Whether the space programs rank other flights. sufficiently high among national interests to justify the estimated For the most part, the expendable commitment of about $8 billion to systems are existing systems which have been used on other space mis- sions. As a system they are not the-Uniied States will need and reusable, although some components of want to make substantial use of space the systems can be recovered economi- in the years to come--not just to cally and used again. 1990 or 1991 but for the indefinite future. NASA believes that space The Space Shuttle is a manned space activities are already recognized transportation vehicle; the expend- as essential continuing needs for able systems have limited capability both civil and military purposes, in this regard. The orbiter portion that the benefits of space will of the Space Shuttle will have a increase in the future, and that crew of four who will fly it back to the Nation will continue to support earth for an unpowered, airplane- space activities. like landing. 2. Whether the value of the new The Shuttle would be used to achieve technology that might result from various objectives for NASA, the the Space Shuttle Program would Department of Defense, and others justify its selection. a during the 1980s and later. The scientific equipment which the space vehicle carries to achieve these 3. Whether the Space Shuttle offers objectives is called the payload. unique capabilities and the kind of flexibility which the U.S. space The Shuttle is to perform certain program should have. NASA believes functions that the alternative that it does have unique capabili- expendable transportation systems ties--such as the retrieval of cannot, e.g., retrieve payloads unmanned satellites for refurbish- from orbit and bring them back to ment and reuse and the routine use of earth for repair, refurbishment, and men in space to enhance scientific reuse. This difference in payload research, civil applications, and concept makes economic comparisons national security activities and to complex and uncertain because the take advantage of as yet unforeseen specific design and cost of payloads opportunities in space--and that for each mission depends on the these valuable capabilities are one space transportation system avail- of the important justifications for able. the Space Shuttle. 2 FIGURE 7-l COMPARISONOF SHUTTLE WITH TITAN Ill C ( b EXPENDABLE DROP TANK SPACE SHUTTLE ORBITER CARGO BAY SOLID ROCKET BOOSTERS ,SPACE SHUTTLE MAIN ENGINES SPACE SHUTTLE TITAN 3 C this as an effort involving only about l-1/2 man- years and does not believe these vehicles are realistic alternatives to the Space Shuttle. Aerospace Corporation identified the new expend- able launch vehicle family as consisting of cur- rent low-cost technology based primarily on Titan III which is the present launch vehicle family with the lowest cost per pound for placing payloads in earth orbit. The new expendables alternative developed by the Aerospace Corporation comprises only 3 families and 16 separate configurations. There is 1 con- figuration in the Scout family and 1.2 in the Titan family. Saturn is dropped and two larger Titan configurations are added, providing maximum weight capacity to lOO-nautical-mile orbit of 91,000 and 98,000 pounds. The Thor family is dropped and a new family using solid rocket booster and standardized second stage is sub- stituted. SCOPE OF REVIEW During the course of our review, we visited NASA's headquarters in Washington, D.C., and the following NASA centers: Johnson Spacecraft Center, Houston, Texas; Kennedy Space Center, Cape Kennedy, Florida; and Marshall Space Flight Center, Huntsville, Alabama. We also visited the Aerospace Corporation and the Air Force's Space and Missile Systems Organization, El Segundo, California, and Air Force's headquarters, Washington, D.C. To the extent that resources and time permitted: 1. We assessed comparative cost estimates of alter- native space transportation systems. We selected those areas which, after preliminary review, we deemed most subject to question. We also considered whether there was likely to be data from prior experience with which to judge the reasonableness of individual estimates. 8 2. We used NASA-supplied procedures to show the im- pact of NASA’s March 1972 cost estimates on the future levels of NASA’s annual budgets. 3. We compared NASA’s estimates of the long-range costs of the Space Shuttle Program and alternatives using a procedure called discounting to consider the time value of money. We discussed our findings with NASA staff and considered their comments in preparing this report. We made no judgment about the economic or other worth of the missions or payloads for which the Space Shuttle Program or alternative systems would be used, nor did we consider whether NASA’s selection of the Space Shuttle Program was justifiable on such non- economic grounds as advancement of space technology or na- tional prestige. It is clear without detailed review that the economic justification for the Space Shuttle Program depends on the priorities which the Nation places on future space exploration and experimentation. In arriving at its March 1972 cost estimates, NASA assumed numbers and types of missions which it stated are consistent with a NASA budget level of about $3.4 billion in 1971 dollars.
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