tv NASA Projects Cost Overruns CSPAN June 18, 2018 11:57pm-1:56am EDT
especially partisanship that rewards division. >> i think any elected leader in this country should effectively represent everyone. we should almost take a pledge never to divide us. that does not mean they don't go out there and say why they should vote for me or someone else or why my ideas are better than someone else. but taking it to the step where you are cultivating a spirit of division is one thing that is going on in the country which is insidious. if you have the privilege of serving, in addition to swearing to defend and protect the constitution, we should plan pledge to the american people that will not say things to divide us. we will go out of our way to
subcommittee no space will come to order. the chair has authorized to declare recesses of the subcommittee at any time. welcome to the hearing entitled nasa, cost and schedule overruns, acquisition and overrun challenges. i will recognize myself for five minutes for an opening statement. nasa is at a critical juncture as it lays out the roadmap. while determining the best business approach. however that you think was the breath of their work. they're also launching spacecraft systems in developing critical technologies to enable u.s. leadership in space. strategic planning, utilization of contract mechanisms and
improving management and oversight will be a crucial part of effective, affordable and sustainable success for nasa. i'm a tireless advocate for nassau. we need to ensure that masses being a good steward managing resources in which we have been entrusted. we'll look at methodologies and nasa program management. procurements look at the annual budget. the fiscal year 16 nassau procured a $2.6 billion to nearly 41 procurements.
nasa has been plagued for years which resulted in substantial cost overruns. generally it's a high profile major programs that get the most scrutiny. there are other well-documented issues, many of which could constitute and warranted dedicated hearing. in may of this year they released the annual assessment of nassau projects those exceeding 250 million in appropriations. this covered 26 major projects so community will have a hearing about the space telescope next month.
gao reported in the major program portfolio primarily due to the fact that nine out of 17 projects in development are experiencing cost as a result of risky program management decisions technical challenges and issues last year they assessed that the projects were continuing a positive trend of limited costs and growths in stabilizing designs. however, gao noted that more of the expensive projects works pressing the phrase of their life cycles when the cost growth was most likely. they also look at cost method such as joint cost, the jcl
process and nasa management techniques related to termination. we are interested in the nassau inspector general's recommendation especially if there is a need to continue to use the jcl process or adopt another cost estimating technique. we will investigate these and other questions. you have spacex and agreements next how do we perform safely and efficiently. what are the pros and cons it's and oversight of the nash
progress. and do they hold you accountable for overall performance gao noted that nasa is looking at $61 billion over the lifecycle of over 26 measure programs. that doesn't account with other procurements or significant portion of nasa's spending authority. whether large or small, all of the business decisions matter. decisions made now have long-lasting implications on the mission success and leadership. i want to think the witness for being here. i did not get a chance to shake your hands. we are looking forward to
testimony and the challenges that nasa is facing. i would like to recognize ranking member of the subcommittee of california. >> thank you for having this hearing. i look forward to your testimony. when you think about nassau, nasa is a unique agency. it's also a cutting-edge agency that serves to inspire. those of us who grew up during the space race certainly understood that inspiration i motivated us to go into the sciences. it's not often we walk into the hearing room and see line of folks waiting to get in. we are joined by the interns in that next generation that hopefully will inspire and move us forward.
thank you to the interns who are here. you are the future in terms of thinking about the role here we have a role with oversight. those with nasa don't have an easy job. trying to think about the future looks like trying to put the projects together. as were doing things we haven't done before you encounter the unexpected. resolving the issues are hard and there's no simple fix for these situations. i have no doubt that the workforce is looking to find those and collaborates and
provides greater funding certainty and provides cost estimation tools and techniques. today's discussions with the search for corrective action cannot take away from the accomplishments and discoveries made by hubble and the international space station. these discoveries would not have happened had the nation not made the hard decision to enable them to go through. we have been well rewarded with innovations thanks to the work by nasa's contractors and the colleges and universities. one area for improvement is the better agreement, the inconsistent measurement of the programs as noted in the review of nasa earth science in 2010. some people characterized this
of the web space telescope using an initial baseline project of $1 billion. this was an initial range in 96, that's not based on a detail analysis. a detailed analysis is needed to see where nasa makes a commitment from congress. the initial baseline was established in 2009. according to that, it was estimated to have a lifecycle cost of about 5 billion. that's a different number than 1 billion. in closing, the topic is timely, nasa needs to effectively manage the program and will gain importance as they seek to manage the portfolio in an increasingly constrictive environment.
i look forward to a robust discussion at the hearing. i yield back. >> thank you. i would like -- in fact before a recognize her next speaker i want to reiterate thank you for saying this, i met some of you outside of the hall and we were elated that we had these nassau interns in here. we appreciate the good work you're doing. we want to patch on the back. you are our future in the space program. thank you for being here. i want to introduce chairman of the committee. >> thank you. this committee has demonstrated that u.s. leadership in space is a bipartisan priority. our vote on the authorization act was a clear demonstration of
that. congress and the administration supports consistent focus program in the current budget demonstrates that result. nasa received a favorable authorization. the budgets are good start but they need to be followed up with oversight to make certain taxpayers funds are spent well. this could undermine the projects the american people support. we held hearings looking at the programs. sos, commercial crew and others. the subcommittee will have a hearing next month about the program breach and the ceo has agreed to testify. gao's report identified significant cost and deadline problems with all of the
high-interest programs. sos and -- has poor performance due to risky involvement. they found the rich initial crew contractors have delays in the testing schedule. nasa expects the program to exceed the cost baseline. gao assessed other projects this year. the wide-field infrared survey telescope remains a serious concern for congress. the committee requested but to not receive the lifecycle cost estimate required by fiscal year 2018 omnibus. congress has a responsibility to authorize an appropriate funding necessary. congress also has the responsibility to not let cost overruns to track from other priorities such as research and small and medium class missions.
it's time for contractors to deliver. the 2018 act take steps to oppose a contractor responsibility watchlist. this that penalize poor contractors by restricting them from competing with further nasa work. nasa should continue to explore other options to look at the risk of these programs such as levering purchases and public-private prid partnershipt benefit taxpayers. anything short of that will undermine congressional confidence in the ability to deliver on promises at a reasonable cost. if space exploration is going to continue turn trust thing contractors will need to deliver on time and on budget. if they can't they should face
sanctions. i look forward to our witnesses testimony. i yield back my time. >> thank you. i want introduce the gentleman from texas. >> thank you very much. thank you for holding hearing. thanks to our witnesses for being here. this morning we hope we are going to get -- particularly will be providing answers to key questions. it's nasa's abilities to manage cost and schedule the same syndicate in its recent report
if it's getting worse what should be done, particularly by this committee? costs and schedules could be difficult projects that push the state-of-the-art science and engineering. the signs are what we expect of space programs. that said, we can do better and particular we can improve our ability to identify early on when we can still make design decisions when it runs the risk of exceeding budget constraints and if so, what options we have at our disposal to make sure it meets our budget constraints. at the stakeholders including
the national academy expressed concern that they could run into potential problems, nasa established expert groups who review the costs and objectives for the missions. i commend nasa for taking this action. the steps are being taken and while there is still time to reconsider the scope and approach of the nations who preclude the cost expectations. i look forward to discussing learning opportunities in determining whether the future would benefit from incorporating similar processes to minimize future schedule delays and cost
increases. one thing i learned while serving on the committee is that nasa is a unique engine of innovation. a force for pushing new advanc advances. but i'm anxious to hear from witnesses on whether cost models based on the past and traditional porch approaches are being updated to reflect the changes in manufacturing, operations and technology environment. the r&d on cost and schedule models needed. other others that could help nasa improve we do have a lot to discuss this morning. i look forward to hearing from our witnesses. >> thank you. i like to introduce our witnesses.
our first witnesses christina, director contracting and national security acquisitions at the u.s. accountability office. among other topics she has led reviews on the iss and crew projects that nassau. she received her bachelor's degree and masters degree in journalism from columbia university. welcome. our second witnesses mr. stephen drew said. serving as the associate administrator of nassau. higher strategic and prior to this appointment serve as an associate administrator where you formulated and executed the agency space technology
programs. graduate of the university of virginia where they received a bachelor of science in electrical engineering. thank you for being here. >> are third witnesses paul martin. inspector general of nassau. prior to this appointment he served as the deputy department of justice in the office of inspector general. he has a bachelor of arts in journalism from pennsylvania state university thank you for being here. vital witness is mr. daniel dunn bacher. executive director of the american institute of aeronautics, or a iaa.
i served three years in germany. i thought that's how i pronounce her name. is the administrator of nasa's human aspiration and operations mission directorate. he earned his bachelor degree in mechanical engineering from purdue on a masters in the university of alabama in huntsville. yes completed the senior managers and government program at harvard. i want to recognize's chaplain for five minutes. >> chairman and ranking members, thank you for inviting me to discuss schedule performance of nasa's largest project. since we began our assessments of major projects we have seen estimate progress.
her most recent review found that performances worsened after several years following a general positive trend. specifically as shown in the graph, the average launch delay which is the yellow line with stocks increase from seven months to 12 months in this report. this was the first year we cannot determine the extent because nasa doesn't have a current estimate for the alliant program. the concert 22% of $30 billion of development costs. even without including orion it increased to 18.8% up from 15.6% in 2017. we expect the number to increase once orion is factored in and morris large projects including space launch system and others
are in different stages of development. when we started this in 2009, the schedule growth was more problematic than depicted. any baselines have been set a few years prior in response to statutory requirement aimed at have a more consistent reporting. it has been a struggle for congress to hold them accountable. in 2012 you can see the impact james webb had when it increased from 4.9 billion to 8.8 billion. the next graph to pick some of the reasons why, they're not so different than what we've seen in the past. cost and schedule growth sometimes beyond the project which might include a delivery
launch vehicle. other times, the dark blue circle it was due to risking management decisions. human space programs have been operating with very low cost of reserves which limits the ability from forcing technical challenges. in other cases they have technical problems that can sometimes be avoided. the reporting delays workmanship errors and also because of things that are unique to the telescope. were looking at it more could of been done for the workmanship issues. nasa has made strides in developing tools and approaches. as shown in the graph projects are increasingly building more knowledge about critical technology's they don't discover
problems on their more expensive and time-consuming. they're building more knowledge about design. there improve schedules and oversight processes. we recognize the process simply more can be done to put things on sounder footing. the spaceflight project should not be operating with low-cost schedule reserves. projects should update estimates but are more reluctant to do so. for james webb and updated estimate may look at the current delays of done a few years ago. we find that some projects don't manage contractors well and react only after things become overwhelming. we've seen workmanship tears and they can have dramatic impact. lastly, nasa should take steps needed to look at cost growths
that they don't overwhelm a portfolio. we did this when we undertook in review of the telescope before more costly phases begin. this should continue. in conclusion, we recommend recognize that nasa projects are complex. some growth is in evitable when you push the state. more can be done to limit risks that exasperate problems. this concludes my statement. i'm happy to answer questions. >> i now recognize mr. jersey for five minutes. >> mr. chairman, i'm pleased to have the opportunity to discuss program management accomplishments and challenges. nasa's focused on science and exploration. the agency has developed a process for program formulation.
nasa's challenge is to develop and improve our program management capability to ensure efficiency and accountability. must execute and deliver missions on cost and on schedule. there are significant risks and were focused on identifying and characterizing risks as quickly as possible. you must take credit of action promptly. nasa implements a regular rigorous process. they go through key decision gates. at key decision points see they have an established baseline schedule. this commitment is a baseline for which we evaluate performance. in 2009 nasa adopted the jcl
approach. this resulted in improved performance. that employs risk assessment to look at the confidence level. typically nasa establishes this around a 70% confidence level. since they established the policy programmatic performance has improved as nasa has launch more projects at or near their original cost. they're committed to providing parties to accomplish our mission effectively. they utilize multiple authorities including but not limited to federal acquisition regulation, grants, cooperative agreements international agreements another's.
they expanded projects were appropriate but it portion of funds increased from 26% to 25%. the approach has approved the performance there strengthening program controls including industry standards. nasa began the process of applying an in-house capability in 2013 and has broadened its use in this fashion over time. nasa is leading the effort through an effort to strengthen and schedule management to look at best practices. the decision to conduct independent reviews along with
our continued support for regular gao reviews and audit illustrate our commitment to transparency and identified risks as early as possible. finally will continue to accept the big challenges that the committee and nation placed before us. we will continue to incorporate technical issues. we do things that have never been done before. the probe will dive into the sun's corona. the space telescope will offer itself million miles from and operate at minus 380 degrees fahrenheit. the space launch system will enable units to travel deeper into space. they must develop and test things under that can only be demonstrated on earth.
thank you for the invitation to testify. members of the subcommittee, over 60 years nasa has been responsible for technological innovations. they cost significantly more to complete it takes much longer to launch than originally planned. our office has examined successes and failures in project management by examining the challenges the agency has faced in meeting cost, schedule and performance objectives on the tools developed to address shortcomings. we identified four factors to successful project outcomes.
>> in fact several people offered a name for this phenomenon calling it the hubble or the expectation that projects that failed to meet initial cost and schedule roles will receive additional funding and subsequent scientific success will overshadow the problems. hubble space telescope was $1 billion more in two years away from initial estimates that people don't remember that. instead they rightfully remember the stupendous images of the universe. while a few projects in the recent past was because of performance the two big to fail mentality pervaded thinking with the larger most important missions while understandable given the agency resources the cost overrun can result in delays of other missions as funding
is prioritized. technical complexity. that is inherent in the nasa projects remains a major challenge for cost and scheduled rolls with project managers attempting to put the amount of time and money needed to develop one-of-a-kind and first of their kind technologies. we found nasa historically has underestimated the effort needed to develop mature and integrate such technologies. to help project managers schedule the cost overruns nasa has implemented initiatives and i highlight two of them this morning. jcl required since 2009 for all projects with a lifecycle cost $250 million that analysis calculates the likelihood that it will achieve its objective within budget and on time. the process uses software
models to combine cost and schedule and risk and uncertainty to evaluate how the expected event and unexpected events could affect the cost and schedule it our examination of nasa's use of jcl has mixed success on evenly applied across projects. contractors nasa makes use of multiple procurement vehicles for projects including cost reimbursement contracts as well as funded agreements used for development of commercial cargo with true capabilities. as nasa looks increasingly to the private sector with the leverage of resources and must ensure that the contracting mechanisms it uses are best suited to maximize the agency's significant investments. so to meet cost roles agency leaders from that optimism by
commanding more realistic cost estimates well-defined and stable requirements and technologies early with project development and in addition congress managers must ensure that funding is adequate and properly spaced and finally the agency must be willing to take action up to and including termination for these critical project elements and in our judgment with these challenges can only be accomplished through leadership that is clear and unified with the sustaining vision for nasa to provide the necessary resources to execute that vision. thank you. >> thank you very much. >> now i will recognize mr. dumbacher for five minutes to present testimony.
>> please for sure but. >> to distinguish members of the subcommittee thank you for the opportunity to address you today. your support is to be commended i said before view as a former national program manager and educator as the current executive director as the arrow space society that the work nasa employees in the work does is the team that should be commended for their accomplishments under their strengths. the plans are complex and a great deal planning and commitment is necessary to execute a successful mission every program has unique challenge the nasa industry team works hard to address these issues and develop solutions incrementally make respect -- progress to the respective missions no matter how well thought out the plan it is difficult to estimate the cost and schedules of these complex one-of-a-kind projects. all federal government departments and agencies are
operating in heightened physical responsibility accordingly we have updated policies and guidance to focus on the formulation of cost estimation with the baselines designed of key decision points and formal requirements. especially during those implementation phases nasa has a process to ensure that rigorous cost assessment is performed interacted with the performance periodic review processes nasa instituted this the policy nearly a decade ago the cost has improved and from my perspective the issues experienced in the nasa projects can be assessed from two categories. one is the need for stable predictable and consistent funding and workforce development. project management has three basic problems a change of any
variable directly affects the other two. cost and schedule issues do arise when unanticipated changes to program or development challenge arises particularly during first-time production and in the technical capability is pushed. disruptions to the funding stream along with policy and priority shifts like schedules and contracts can lead to an additional cost is also quite difficult for nasa to plan and implement without sufficient resources or reserves. the key issue is projects developed under the flatline budget that requires project managers to realign the work as they go to stay under the budget cap with those priority decisions with those inefficiencies to break those linkages across the budget the circumstances add to program cost we learn this lesson with the international space
station now we will repeat that lesson with orion. the current budget process with the regular use of continuing resolutions and appropriations and government shutdowns has plan is one -- multiple planning scenarios. as stated in our previous testimony the need to constantly to plan for appropriation outcomes in different budget planning levels along with flexible blueprints invites communication and confusion also the inability to include appropriate plant margins. but it is difficult because that is the first target for budget reduction in the appropriations process. a separate but related issue is workforce challenge with the aerospace community impacted as a whole with a nationwide shortage for workers required the stem fields and nearly 30% of the
nation's aerospace workforce is over the age of 55 and 20% are younger than 35. more concerning is the lack of development programs. the vast majority of the humans the slight workforce has been hired and trained after shuttle development space station development provides expertise but experience is minimal and to develop the space shuttle to mostly retired. so for the united states to continue the long-held exploration leadership significant investment must be made to address the workforce development through hands-on real-world research. key technical challenges for the future of space exploration with nuclear propulsion onboard assembly and microgravity should be stressed in such investment would meet research and
engineering needs while providing valuable experience. well-developed leadership is necessary for a program to have success to ensure the expertise to assess and balance the priorities and in conclusion i think this committee for the opportunity to talk today and i look forward to your questions. >> we appreciate it. now i would like to recognize myself for five minutes for questions. i have a bunch of questions that i'm sure everybody else does too so get right to the point want to cover as much ground as we can. and with the overrun cost schedules some of these programs have suffered cancellation or they got stuck the performance not excuses the agency is a provider but
with that in mind with nasa's options what acquisition mechanisms such as cost-plus or these agreements are most useful for performance? holding the provider as well as agency management accountable for meeting that requirement and i ask you first mr. dumbacher. >> congressman the appropriate acquisition tool depends on the objectives of the program and be scientific engineering issue and is associated with that. typically we have experience with those cost-plus contracts in this country and nasa uses that a lot there is a discussion of public-private partnerships which can be valuable and has been tried in the past some successful and some not but when we consider
all of this we consider the objectives the program and what are the incentives and motives necessary for success? with how does that apply with public-private partnership? is we need to sort through those to make valid conscious and objective decision. >> thank you. the same question ms. chaplin if you would answer that. >> with a fixed price contract the contractor bears most the risk but it isn't really appropriate if you have a lot of unknowns at the beginning but if you don't know how long it will take or how much it will cost than the government does need to bear the risk of the contract and that's where cost-plus comes in.
>> thank you. we are talking about cost-plus so the second part of my question is does the contract provide any incentive to complete the project on time and on schedule? >> typically the incentive is built into the contract they come through the work fee so some could be tied to performance or quality others could definitely be tied to cost of schedule. >> just to add a little bit to that, when we do the cost-plus award fee and the incentive fee in the past we do and can make scheduled performance and cost performance as part of the criteria and that is typically included. >> okay mr. martin the acquisition would encompasses a great deal in putting strategic planning and the development of clear
requirements and for many years the dod has robust training for defense acquisition professionals. what improvements such as training certification and career progression is necessary from the acquisition process? >> i know nasa has invested heavily in the cost estimators with project management. but i still think may be more could be done with certain techniques and with program management issues and managing contracts. >> so to retain those project managers is a real challenge for the agency. mr. dumbacher suggested 50% of the workforce is over 50 years old with a diminishing number of these project managers it is a real concern.
>> what do you think they can gain from these experiences? >> i am not familiar with that. >> you think that defense acquisition is a very good model for training programs of all kinds of issues. >> nasa recently took steps to control of the mission while in formulation. of the steps proven helpful and can similar messengers be implemented to control the cost? >> yes on w first we did the independent review board and they figure the growth had grown and with that budget that they had for the agreement they made those recommendations then they came
in to present the line and we have confidence based on their estimate going into phase b. >> but that is a way to minimize risk early in the program. >> thank you very much. >> each of you in your opening statement obviously touched on the complexity of budgeting and scheduling when you try to do something you may have never have done before. and i have to imagine that when we started on the apollo
missio mission, a lot of scheduling delays that as you get further down the road to understand what we have to do that there was more predictability. if we think about future missions and the context of what we talked about like mars 2033 we don't know how we are going to do that or the technology or the science. but as we go into deeper space , we are encountering more complicated projects. as we look at the balance of the commercial sector with more reliant on those external entities and maybe that was a little more control as you think about with these
companies that could be a little more for the predictability with another variable. and then to be much more engaged with countries like india or japan or the space agency with another complicated variable. as opposed to budgeting my sense is that budgeting and scheduling is reasonably accurate. >> i would like to note in the apollo era a lot of things had never been done before so those are very difficult to guesstimate now we have the benefit of time but there is a lot of things even if we have not done that particular missio mission, and i also know that over the decades, and i also know that over the decades agencies including nasa have been working very close together to look at the
historical cost in perspective so there is more knowledge there that gives an advantage but yes those other complexities do make it hard. >> think about that, learning from what we have done in the past to create more predictable models of budgeting and scheduling. so my profession as a doctor, as we care for populations will have a shared risk pool to say we will take care of this population and if we do really well then there is a reward on that but on the other hand we could share some of the risk but to share the
risk reward fees et cetera that have you noticed in that type of contracting to get better predictability? then not doing something that we don't? or something that there is some risk involved? i don't know. do not gamble just tossing on the last ten years nasa has moved to a new at that level of government with these commercial companies also have assumed we had a financial stake in the game so now putting their skin in the game that nasa will procure them as a service is interesting and has been relatively successful.
it has increased the cost schedule more timing in particular. >> as we said before with the strategic common interest between ourselves and our partners so therefore we share the risk in that partnership. we did do the fund is based ask agreement but then to go through the cost sharing and then allow the contractor to contribute resources.
frustrating when they hear project that cost millions or billions of dollars. so i would like to add you think is a good candidate for that watchlist but then to put on that list. >> and now we can start with you. >> it's a difficult question because there is a shared responsibility between nasa and the contractor so it's hard to parse out who is really responsible for the overrun. maybe a workmanship issue there could be a shared responsibility but with the
syndrome so what are other ways we can hold the contractors accountable? or other things we can do to keep and with that proposed hearing several weeks for mount to focus on those issues pacific to to put welding on the stage. so we have individuals and we have issues with international partnerships that is key to the future of nasa that she
was by nasa's budget will see a significant drop in anytime soon it is in the nature to extend with various constraints i don't think we are going to get a significant increase even if it has flatlined other agencies have been cut. yes, there are a lot of people who expect to keep the iss as it is and go back to the i don't think it's possible i think is very.
but no they are not missing. there is a finite amount of resources and we have very fortunate in the budget but that is where the cost estimation schedule is so important to come up with a realistic schedule to put it before the decision-makers at nasa and congress had nasa could say that the space telescopic cost a billion dollars ten years ago when proposed and it's a decision you do james webb not saying it should have been done but there was amazing things that you make a decision based on that but if you say yes to james webb you say no to a lot of other things.
>> data so we have to recognize. >> can you give a very brief response as well? >> i do think nasa is at risk over having too many programs. what we have been looking at over the years starting off with the 1516 budget that helps with cost overall. >> i now recognize the gentlelady from texas. >> thank you very much. ms. chaplin when you're 2017 you schedule the massive meeting and indicated october 2015 you decided to decentralize this independent assessment function but then
with information sharing, what about the d centralization? was that successful? >> we have not seen a visible impact their way yet. it is beneficial to have centralized expertise they can leverage each other a lot think we used to a model to put the responsibility of the mission director so he needs
the assessment so far i think you're doing an effective job and from the prior management projects including annual reviews but we do have a cadre of experts with the chief financial officer to have cost and schedule expertise that the review boards can draw upon and we have also given stewardship of project planning control to the office of the chief financial officer that has been a benefit not only to this cadre with cost estimating that improving skills and practices and capabilities and management. >> what are the most important things nasa can do to help you minimize cost? and then tuesday with the unexpected cost, where is the
shortage of skilled now we have taken on the effort to hire and train people in that area and i think that has paid off if we can continue to do that. independent assessment, and then we have a communiqué of lessons learned and systemic issues is putting corrective action plans in place to deal with those like a shortage of staff and all those things could be improved for performance. >> any other witness would like to comment? >> i would add a couple more things to his list which to update the cost and schedule estimates over time we see programs that are doing that
and then to focus on quality management because the workmanship issues come up all the time. there have been efforts to focus on that and more can be done. >> i would also like to add there is a need to recognize you need appropriate skills for the program of the lifecycle you are in so development skills are needed upfront in a development program and operational skills at the end and we need to make sure we work for the right skills at the right time. >> thank you very much. >> i recognize gentleman from oklahoma. >> thank you and thinking about the questions my colleague said, mr. jurczyk let's discuss january 2018 the gao found that commercial group program contractors they had additional schedule delays for their demonstration for
certification on the vehicles for spaceflight that could jeopardize the ability to maintain access to the international space station so will there be a cap? >> no. we have taken action and other actions we can take to minimize the risk so first is to buy three more seats on soy used to extend that ability to minimize the risk between the soy use contracted seed sending and a couple other things we are looking at is the bro -- boeing crew flight and the other is extending missions 140 days at 190 days and those are other actions we can take. >> but you confident the direction of contractors don't
have to use those measures? >> this summer we will have an assessment of both the space x and we will have a better handle whether or not we do take those additional measures over the summer and we can report back on that. >> fair enough. i yield back. >> thank you. i recognize the gentleman from virginia. >> chairman thank you very much. ms. chaplin, you mentioned it would be helpful for the frequent updates and that they come very sporadically. family and the home sales and unemployment claims and why are the contractors reluctant
to update on a regular basis? it has to be easier. >> it would be easier if they continually did it because then it wouldn't be such a chore to do it after a couple of years. but right now they set the baseline when they start the program. and in some cases i don't think they want to show the world what the cost truly is and then you have to ask for a healthy thing to do when conditions are changed and that had changed a few years. on the way to manufacture that would have been a good time that they did not do what.
>> but then the problems they have with budget. >> yes sir i would say that. but thank you for making it so clear left so why under promise and over perform? that is what my children do with me. so our job is to optimize the portfolio to have the most exploration initiatives we can. so we have taken the approach
of having a portfolio of small medium and large missions in the approach where we budget the missions at the 70% competence level that balances the risks and formulation and people can take them against the opportunity cost of budgeting and to to start the new missions. it is a matter of optimizing the portfolios for the budget. >> and to manage those expectations. >> they can do a better job. >> one of the realistic thing you're in greater danger of not getting the project started in the first place.
so i think what the problem is to be overpromised the maturity of technology always instructed like a lawyer on page three of the written statement there is a quote from the fume or just former administrator at the time talking about proponents of individual take on the difficulty in the wrists. so that has been a historic problem for nasa. >> you mange to interesting pieces of your testimony. what the part that was too optimistic with far more accountability but at the same time that level has a shortage we are over 50 years old now challenge, how do you ratchet up accountability in not
depressed the enthusiasm or the sense of work? or how in the agency that has to be? >> you are dancing on the agenda for the nice because you have to have that optimism in that freethinking to think of things that have never been done before to conceptualize and an incredibly different balance. so it is rocket science so a lot of those techniques through the other process need to force adherence through those requirements. >> mr. chair i yield back. >> i recognize the gentleman
are getting proposals this week to evaluate those in the ability that commercial thinks they can provide us compared to what we need and what we have or need in the future and the approach and what is their business plan? we don't have a regular definition for nasa but then to come to 2% that plan to make sure he have feedback and
input. >> to anticipate to have a more detailed plan to have a better understanding what commercialization means. >> we will get results in december of this year may be a couple of months probably first half of next calendar year we could lay that out with the industry input and then to be in a position to answer the question for the first six months of 2019? >> yes. i can get back to you on a more exact date if you would like. >> mr. martin you're on a commercial resupply services dated april 26, 2018. spacex average pricing will increase approximately 50% while orbital ap cares and
then it will decrease by roughly 15 but the multiple times the customers should not expect substantial discounts on reuse hardware. are you concerned about whether taxpayers will save money with the reusable offense and then is it possible to reuse but steve could probably answer this more specifically but i do that it is between three and 7% so there is a slight reduction -- reduction but is also a safety i.c.e. think
with your cost reduction visibility of your full sage. they are also working towards revisiting the very also looking at that approach. as anybody gains experience with the system, there is opportunity to further reduce the risk. and reduce much effort it takes to recondition that so there is opportunity but i cannot predict what additional
savings they may achieve at this point. >> any chance you can expand -- expound on the novel approach with reusable market? >> to assess that risk for all missions and i can get back to when that will be done. >> the gentleman from pennsylvania. >> i appreciate you highlighting the difficult position you are in with unpredictable funding streams. i'm trying to learn more about how that affects you on the ground day today. can you share more specific examples of how that could affect a particular project?
>> i am happy to take that because i lived it for a while. when you are working to put a plan together for the future or over a five year budget horizon and the budgeting process, every time it into go through that planning process. and if that was typically different from the appropriations process it was necessary to do what was supportive and inclusive with the president's budget request and i had to be ready as a program manager the appropriations did come in i had the ability to plan. >> what type of program were you managing?
>> mac bso s and orion programs that was supposed to take how long? >> at the time looking at first launch and the 2017 or 2018 timeframe during as my ten year we had to deal with the shutdown continual the glaciations on pennsylvania avenue and in addition to that the team's focus pulled away from the day-to-day management of the complex jobs.
>> i heard very similar things from other agencies with that constant re- planning and the chaos but another vehicle example is the impact of the shutdown can have at the end of the program it could take a couple of weeks to get ready and then a couple of weeks to cool down. if we have to shut down we lose a whole month of time when they talk about young people leaving nasa for the
higher-paying jobs in the private sector that also happens with the military but if there was one form you could suggest to improve to retain the talent what would it be? >> as i stated i would recommend good, real hardware programs with those technical needs for space exploration to give the students or young professionals legal experience because that. >> i just have to second that. but as the college was stacy's flight and that experience was
my entire career. >> also just to give a little bit of a story best him back and let get the group of people where we had the ability and required by the mentors in house and we tested the new technology that was the consideration for shuttle in that experience a forced us into that with a long-term career. >> just echoing the same things with their frustration spending their time to oversee the contractor's efforts and
this pushes the entire stability of all programs at risk and every government agency. i am hopeful you young americans are paying close attention to this conversation. >> i am concerned over the lack of optimism and the two big to fail attitude amongst project managers but i understand that perception that the projects are too big to fail because every day american treasure has been invested it is quite logical especially this early in the attitude of too big to fail.
but putting the accountability for contractors within these projects. >> more frequent conversations over the status of the projects adding more fidelity projects large or small and the last project i remember was a telescope mom -- telescope supposed to find a blackhole. is capped at $105 million but then they realize the independent cost assessment that would be 20 or 30% over the cap and nasa canceled it.
it got people's attention. >> generally speaking the contractors that are involved in cost overruns or the large projects, these are large, are they not? >> they are as that ever been addressed that most americans if we receive the bid to perform a particular service for the price a bid and held accountable. and yet within the federal government there seems to be an attitude we aren't accountable for that they won't be forced to perform.
>> so we are building systems for the first time no one has ever built before. in that case it is cost reimbursement. these incentives to hold the contract accountable and the incentive is tied to the award fee. so if they do not perform and they get a low score evaluation plan to receive much less profit or no profit of how they are scored to give the complex system retake this
approach the ultimate price to pay is a complete loss of profit. >> my time has expired. >> mr. foster. >> i would like to start by making an observation in the amount of funding you can think about having last week the federal reserve made the historic announcement wealth of americans went over $1 trillion it is up since obama signed the stimulus to trigger the economic growth going on today so when people tell you there is not enough
money to do this that scale is one fraction of $100 trillion i also want to resonate as a former project manager, i resonated with your design to keep your house expertise it is very difficult if you've never done it yourself so i learned all the integrated circuits before i decided now i could sit at the top for other engineers. this is crucial and we have to look very carefully with the rush to privatization to the risk of the in-house expertise that ultimately will cost many
because projects will not be managed as well as they could be so because isn't of that. >> what i think about the cost. >> also the legitimate technical risk. i would just like to say i hope my colleagues and peers are much more tolerant because it is okay to take significant tech goal with success is not assured but it turns out you said that the congress should be very understanding and much
less tolerant when everyone knows. i don't want to point fingers but for those that have been approved for those that really weren't going to get it done at that cost. it is just nasa but it happens everywhere in the government. so are there ways that you can identify times. >> i am suspicious that there isn't a real cost estimate. >> i can tell when i am that i
was but then before they make their decisions, to have more independent estimating to compare but i do believe that process now as opposed to years ago and i have one thing and you need to still do that and there is a concern within nasa to not take enough technical risk that we are too afraid to do that. >> nasa relies extensively on the national.
>> but i do think they to the cost estimates to make where you need the judgment that is where you need the judgment thinking back over my career, one key thing stands out and i have the do the cost estimate are the ones accountable for the duchenne. i have seen instances where the people making the initial estimate new they were moving on to something else than the new person said book at this. there is no accountability to execute to the cost estimate that starts.
>> and sociologically. there was a full set of questions when you go to the external contractor model who does the cost estimate and who takes responsibility with that model? i'm out of time. >> mr. chairman i will jump right in here the canadian space agency cancel the participation in the w first for budgetary reasons so what is the impact and the cost from the decision? >> that decision was factored into the project did we stay
she really affects the technology of government-backed project has the ability to early on to come up with a prototype software. >> what about the mission itself? >> do not change and they will meet the requirements of the mission as defined. >> we get chewed out within the next couple of weeks with
that documentation to be here. >> so many people here have assessment stable or predictable funding. so let's just imagine that congress has multiyear funding authority. so how does this authority change the planning for your programs? >> a think it would allow to plan once and you with challenges that were articulated before but you get the multi- year funding which is the replacement order after the challenger accident for major streams of funding for that project and they were
very successful to execute on schedule and on budget with the profile that ramped up and down like any rational project should so the adequate money when they needed it. that could be good for a lot of different agencies? mckinney large complex program with multiple years to execute, i would think so. >> can you answer that? >> so the first is a series of actions. first of all the restructured
>> yes i believe the actions taken are reasonable and they were already with the on-site presence that we will be looking to see how effective through the next review. >> here is wishing multiyear funding authority. i yield back. >> the chair recognizes the representative from california. >> this is an important hearing. i would like to think about what further congress could do to avoid the situation with the inconsistency between the
effectively sometimes face-to-face and that is one additional thing i can think of. >> with respect to the funding issues not actually the only dollar amounts but that is with the appropriation is impacted. >> i would and the environment we have these discussions is less punitive and more willing to hear the risks and the issues. i think we have to be careful to inadvertently set up a vicious cycle to conservativism and it goes around in a circle. it congress can do and the
subcommittee can do is to help establish an environment that allows for open communication on these issues. >> i was a learning experience. not knowing the answer before you start we need to foster discovery to take risks so let me close that i represent part santa clara county and thinking of the demographic issues with so much of the workforce being 50 years of age that that is in a key part of the country with silicon valley it is very expensive to
opportunity to make a difference so help to solve future problems and to provide those in addition to those infrastructure options would be extremely beneficial. from my experience teaching at perdue if you hit those first three bullets then the students will calm that is why they still want to come to nasa it is exciting work and so has the cachet that it always has. you something quick and he will be a long way down the road. >> i yield back. >> thank you very much i appreciate on --dash i apologize for the late two
hearings at exactly the same time which leads me to the first point, we need to make sure we hold nasa accountable and i have to assume that congress is not doing its job all that well. and talking about continuing resolutions and omnibus bills that we are doing our job as well. so please don't think there is any criticism coming from this said we don't realize, some of us don't, there is criticism on the way congress is doing its job. let me in a couple of questions with the cost overruns and then to achieve a
contract? is this a part of that? >> we have a pretty rigorous proposal and evaluation process including schedule estimates by the government to ensure what is proposed is executable. >> so you don't see this as a scheme by a corporation to get the contract? >> i do not that helps our understanding of this. and those that didn't have the
cost overrun what penalty does that company have that goes through the major cost overrun , what is the punishment? i believe you can take actions but if they did not meet the contract that could be denied down the road because they did not meet their obligation? >> it is possible but also with a contractor watch list
it has not been performing well. or for a period of time. that is one option to say do they look at contract performance? >> another thing is we have the reporting system so when we reevaluate some of that assessment goes into that assessment as well then they can draw on that with past performance. >> we have to be much more
disintegration of our system so we can afford any of this right now. also let me note with their 20 billion-dollar budget, we should be able to do a lot with $20 million. but when i first got involved, i realized the budget was not enough but for the projects themselves to minimize the loss of very scarce dollars. thank you very much my
thinking for your participation. we will finish by noon but there may be a member that wishes to ask a second set of questions. did you want to do follow-up question i thank you mr. chairman allowing me to ask more questions. ms. chaplin nasa has received multiple recommendations for scheduled estimates as well as performing joint chalk talk now is through the beginning
the method you have that scheduled continuity so elaborate why this was purposefully overlooked? >> at the time they did concur so i never had the official reason why it was overlooked. i think they were just reluctant to look at the cost a couple years later we recommended they at least do something similar to the scheduled risk analysis and it