At a House Science Committee hearing (11/5) to review recommendations to contain cost overruns in the assembly of the International Space Station, the Bush Administration issued an ultimatum to NASA: get the ISS back on track or the project may be permanently curtailed.

A $4 billion cost overrun to complete assembly of the ISS was announced by NASA in January.  The Bush Administration, to reduce expenses, stopped development of the Crew Return Vehicle, Node 3, habitation module, and propulsion module.  Despite the reductions, in May it was revealed that costs had grown by another $800 million.

To assess the financial management of the ISS and make recommendations to get spending under control, on July 1 NASA formed the International Space Station Management and Cost Evaluation Task Force, chaired by A. Thomas Young. The task force released its report on November 1. 

The Young Panel recommends: 1) extending crew rotations from four to six months, to reduce the number of Shuttle flights to four per year; 2) cutting contractor staff in operations and sustaining engineering, as well as civil service personnel; 3) establishing an Associate Administrator at NASA, with total responsibility for engineering and research; and 4) prioritizing research to maximize limited resources.

The Panel said the program should be reviewed in two years.  If NASA adequately contains assembly costs for the core ISS, the project could be expanded to include a six or seven member crew. But if cost overruns continue, the ISS should be frozen with a crew of only three.

Science Chairman Sherwood Boehlert (R-NY) said, "The era of the blank check for NASA is over."  He endorsed the Panel"s recommendations. "I think the Young Task Force and the Administration have outlined the proper way to make the best of a bad situation.  We need to complete the core elements of the Space Station within the existing budget."

Ranking Committee Member, Ralph Hall (D-TX) warned it would be not only a waste of taxpayer"s money to have an ISS with just three crew members, but would violate agreements with our international partners.

Space & Aeronautics Subcommittee Chairman Dana Rohrabacher (R-CA) called for creative solutions and reforms to solve NASA"s problems, saying we "can"t just push billions and billions [of dollars] into the program." 

Congressman Nick Lampson (D-TX) reminded the Committee that NASA"s budget was reduced every year for nearly a decade and it has been a "long time since NASA has had a blank check."

Congressman Weldon (R-FL) emphasized NASA is not solely to blame for the ISS problems.  The Young Panel states the $2.1 billion cap placed on spending in 1994 by the Clinton Administration was "counterproductive" and caused delays in assembly and program cost growth.

As explained by the Young Panel, "imposition of annual budget caps forced the program to an inefficient spend profile and reinforced the management"s focus on meeting annual budgets rather than on total cost management."

Weldon said the Bush Administration claims to be a big supporter of the human space program, but it is not reflected in its budget.   He attacked the Administration for cutting our nation"s spending on research and development, which is critical to maintaining our competitiveness.

Following are highlights of the testimony presented to the Committee:

On technical merits, A. Thomas Young praised NASA"s assembly and operation of the ISS.  There have been 21 missions to date.  "All have been successful, with no major anomalies," Young said.

According to Young, NASA cannot rationalize the cost overruns by blaming the complexity of the program.  Instead, the problems lie with the agency"s "inadequate methodology, tools and controls."

"There are multiple budgeting techniques and multiple reporting techniques," Young explained.  "NASA ISS support and ISS contractors estimate and report in a myriad of methods.  Financial forecasting and strategic planning suffer from insufficient forward analysis and planning due to division of financial authority and responsibility, lack of experience financial personnel and modern tools, diverse and often incomplete accounting systems, and uneven and non-standard cost reporting capabilities."

"At this phase of the ISS program," he said, "deleting more hardware saves very little money since the bulk of the expenditures are in the people category."

Young recommended prioritizing ISS science research to obtain the highest value from limited resources.  "The Task Force," he said "is unanimous in that the highest research priority should be solving problems associated with long-duration human space flight, including the engineering required for human support mechanism."

Sean O"Keffe, Deputy Director, Office of Management and Budget

"Space Station," Sean O"Keffe announced in no uncertain terms, "must restore management and cost credibility."

"If NASA can show it is on track to meet this performance standard after two years [assembly of the core elements within the $8.3 billion budget], against a checklist of specific actions and conditions," he announced, "then the Administration will reassess the resource needs to achieve an expanded end-state beyond core complete."

But "If NASA fails to meet the standards," O"Keffe warned, "then an end-state beyond core complete is not an option."  In other words, the crew will not be expanded beyond three, limiting life science research, which is critical to mounting a human mission to Mars.

"The strategy," O"Keffe said, "places the burden of proof on NASA performance to ensure that NASA fully implements the needed reforms."

O"Keefe said "Understanding what the research priorities are for the Space Station is critically important to making the greatest use of the core complete station."  OMB and the Office of Science and Technology Policy will "be working closely with NASA and the research community in firmly setting [the research] priorities."

O"Keefe cautioned "any [spending] increases to fund an expanded end-state for the Space Station must be prioritized against other research activities of the agency and the nation."

He acknowledged the management reforms will be "unpleasant in the near-term," but they are the "medicine that will restore NASA"s health and produce great benefits to the nation in the long run."

Other reforms NASA is pursuing, according to O"Keefe, include:

• Initiation of a non-government organization (NRO) to manage Space Station research.
• Continued privatization of the Space Shuttle
• Restructuring the Johnson Space Center
• Additional outsourcing and streamlining
• Shifting retirement funding to all agencies so it is part of their integrated human capital strategy

"New leadership is now necessary to continue moving the ball down the field with the goal line in sight," O"Keffe said.  "The Administration recognizes the importance of getting the right leaders in place as soon as possible, and I am personally engaged in making sure that this happens."