A NASA OIG report has found that the agency underreported the cost estimate of the Artemis 1 mission by nearly $900 million. Had the amount been considered, the agency would have been required to notify Congress and conduct a formal rebaselining.
The report published on March 10, examined NASA’s management of Space Launch System program costs and contracts. It found that the cost of the SLS development for the Artemis 1 mission had ballooned by 25% from an original estimate of $7.02 billion to $8.75 billion. However, this amount, the report noted, does not reveal the true extent of the mission’s costs overruns.
In 2017, following the delay of the Artemis 1 launch by up to 19 months, NASA conducted a “replan” of the SLS program. As part of this process, the agency removed $889 million for the development of the SLS boosters and RS-25 engines from the budget, deeming them not directly tied to the Artemis 1 mission.
In the judgement of the OIG, the removal of these costs should have reduced the SLS Program’s baseline cost for Artemis 1 from $7.02 billion to $6.13 billion. When this revised baseline cost is considered, NASA has overrun the projected budget for the mission by 33% through the end of the fiscal year 2019. Additionally, when the revised launch date of mid to late 2021 is considered, this increases to 43%.
According to federal law, once the cost overruns surpassed 30%, NASA was required to notify Congress and rebaseline program costs and schedule commitments. As soon as this notification has been made, the agency would have been required to stop funding the program within 18 months pending Congressional approval of the revised costs and schedule.
Despite the OIG report indicating that the 30% threshold had been met by late 2019, no notification to Congress was made.
In response to the report’s findings, NASA has stated that it does not agree with the OIG’s assessment that the rebaselining and reporting threshold was triggered. However, the agency has stated that it nonetheless plans to rebaseline the SLS program citing, “changes in scope as a result of the accelerated plants to put humans on the Moon by 2024.”
