NASA Investigation Uncovers Supplier Fraud That Cost the Agency $700 Million

NASA investigation finds supplier fraud caused failures that resulted in $700 million in losses.
Image credit: NASA

A NASA investigation has identified faulty materials as the cause of two launch failures that cost the agency more than $700 million. The faulty materials, which were supplied by long-term agency contractor, Sapa Profiles, Inc (SPI) have been found to be part of a 19-year long scheme to defraud customers including NASA.

In 2009 and 2011, two Taurus XL missions failed after the rocket’s fairing did not successfully separate on command. The failures resulted in the destruction of the agency’s Orbiting Carbon Observatory (OCO) and Glory satellites, a loss of more than $700 million and years of scientific work.

Following the second failure, officials from NASA’s Office of the Inspector General and the US Department of Justice began a Launch Services Program (LSP) investigation. In a public summary updated yesterday, LSP investigators detailed the discovery of “a 19-year scheme that included falsifying thousands of certifications for aluminum extrusions to hundreds of customers.” The faulty aluminum supplied by SPI was found to be the cause of both failures.

“NASA relies on the integrity of our industry throughout the supply chain. While we do perform our own testing, NASA is not able to retest every single component. That is why we require and pay for certain components to be tested and certified by the supplier,” said Jim Norman, NASA’s director for Launch Services at NASA Headquarters in Washington. “When testing results are altered and certifications are provided falsely, missions fail.”

In addition to suspending SPI from government contracting, the company has been ordered to pay a fine of $46 million. NASA has also proposed that SPI receive a government-wide debarment, a move that would bar the company from applying for any government contract in the future.

Andrew Parsonson is a space enthusiast and the founder of Rocket Rundown. He has worked as a journalist and blogger for various industries for over 5 years and has a passion for both fictional and real-life space travel. Currently, Andrew is the primary writer for Rocket Rundown as we look to expand our reach and credibility.