eastern, we'll have live coverage of that briefing on c-span 2. can you also watch on c-span.org or listen on our radio app. there's a link to that report on our website, cspan.org. now here's a house subcommittee from earlier today to discuss a recent gao report on cost overruns at nasa. this is just over an hour.

>> good morning, subcommittee on space will come to order. without objection, the chair is authorized to declare recesses of the subcommittee at any time. welcome to today's hearing. entitled nasa cost and schedule overruns, acquisition and program management challenges. i will now recognize myself for five minutes. for an opening statement. nasa is at a critical juncture as it lays out details of its road map for human exploration missions. while determining the best business approach to success. human exploration doesn't encompass the breadth of nasa's total work. they're launching interplanetary spacecraft systems and advancing science and aeronautics research

and developing critical technologies to enable u.s. leadership in space. strategic acquisition planning, out illization of new contracting mechanisms and improving management and oversight will be a crucial part of effective affordable and sustainable mission success for nasa. at chairman of the space subcommittee and a proud representative of johnson space center in houston i'm a tireless advocate for nasa. however, its members of this committee, we have a responsibility to every taxpayer to insure that nasa is being a good steward, managing the resources with which we have been entrusted. today's hearing will touch upon a number of important oversight topics, including acquisition mechanisms, cost estimation methodologies and nasa program management. procurements represent over 90% of nasa's annual budget.

and in fiscal year '16 nasa procured over $18.6 billion through nearly 4 1,000 active procurements. that's a tremendous amount of work. unfortunately, nasa has been plagued for years with contract management issues. which have resulted in substantial cost overruns and schedule slips. generally, it's the high profile major programs which get the most scrutiny because of the funding and time associated with these procurements. however, there are other well documented issues. many of which could constitute impossibly warrant a dedicated hearing. in may of this year, the government accountability office released its annual assessment of major nasa projects. those exceeding $250 million in appropriations. this assessment covered 26 major projects. i'd like to note the

subcommittee will have a dedicated hearing about the james webb space telescope next month. but this project's long history of cost and schedule overruns is relevant to today's discussion as well. gao reported an overall deterioration in the major program portfolio. primarily due to the fact that nine out of 17 projects are experiencing cost and schedule performance growth as a result of risky program management decisions. significant technical challenges and issues, beyond the control of the projects, last year gao assessed that nasa projects were continuing a generally positive trend, of limiting costs and schedule growth, maturing technologies and stabilizing designs. however gao also noted that many of the more expensive projects were approaching the phase of their life cycles when costs and

schedule growth is most likely. the subcommittee will also specifically investigate cost methodologies, such as the joint cost and schedule confidence level. the jcl process and nasa management techniques relating to project schedule determination and the use of headquarters reserved funding. we are particularly interested in the nasa inspector general's recommendations on improvements with nasa's cost estimating methodologies, especially if there's a need to continue using the jcl process or adopt another cost estimating technique. furthermore, the subcommittee will investigate these and other questions, what acquisition mechanisms, cost plus, fixed price, award fee, space agreements, et cetera, are most appropriate for various types of procurements. next, how do these acquisition

tools incentivize the provider to perform safely and efficiently? what are the pros and cons? and then our existing appropriations funding authority sufficient for congressional oversight of major nasa projects. and lastly do current agency approaches hold just the agency and provider accountable for overall performance. and this is a very timely hearing today. and in the report last month gao noted that nasa is planning to invest about $61 billion over the life cycle of its current portfolio of 26 major programs and that doesn't even account for thousands of other procurements and a significant portion of nasa spending authority. whether large or small, all of nasa's business decisions matter. decisions made now have long lasting implications on nasa's

mission success and leadership. i want to thank the witness for being here. i'm sorry i was a little bit late. i didn't get a chance to shake each of your hands, but we're looking forward to your testimony on the challenges that nasa is facing in controlling program costs and schedule. i would like to recognize the ranking member of the subcommittee from california, mr. barrow. >> thank you for having this timely hearing and welcome to the witnesses, i do look forward to your testimony. when you think about nasa, nasa is unique agency. it's a source of national pride for us. but it also is a cutting-edge agency, that serves to inspire and you know, those of us who grew up during the space race certainly understood that inspiration and it motivated many of us to go into the sciences. i want to acknowledge, it's not that often we walk into a hearing room and see a line of

folks waiting to get in here. and i think we're joined by nasa's interns. and that next generation, that hopefully is going to inspire and move us forward. so thank you to the interns that are here. you are the future. in thinking about congress's role here, we clearly have a role of fiscal responsibility in oversight. and those at nasa don't have an easy job. i mean you are trying to think about what that future looks like. you're trying to put those projects together. and i appreciate that check and balance, as you're doing things that we've never done before. you often encounter the unexpected. i think that's why this is an important hearing. resolving cost and scheduling issues are hard. and there really is no simple fix for you know these types of situations. that said, you know i have no

doubt that nasa's talented workforce is looking to find those improvements of how it conducts project management, oversees contractors, collaborates with international partners, provides greater fu funding certainty and provides cost estimation tools. schedule delays and cost increases and the search for corrective actions cannot take away from the accomplishments and discoveries made by programs like hubble. the international space station and mars curiosity. these accomplishments and discoveries would not have happened had the nation not made the hard decisions that enable these projects to carry through in spite of scheduling delays and cost growth. and we've been well rewarded with countless innovations, thanks to the inspired work by nasa. the contractors and the nation's colleges and universities. one area for improvement is a better agreement on the baseline from which cost growth and schedule delay are determined.

the inconsistent measurement of cost growth across programs was noted in the national academy review of nasa earth science and space mission in 2010. some people characterize the cost growth of the web space telescope using an initial baseline cost of $1 billion to $1.5 billion. while this was the initial range cost estimated in 1996. that estimate was not based on a detailed analysis. a detailed analysis is needed to establish a baseline from which nasa makes a commitment to congress that it can design, develop and build a project at the cost specified. the initial baseline was established in fiscal year of 2009. and according to that baseline, jwst was estimated to have a life cycle cost of about $5 billion. that is a pretty different number from $1 billion. this topic is timely. nasa needs to effectively manage

its programs, will gain even more importance as the agency seeks to manage its wide-ranging portfolio in an increasingly constrained fiscal environment while pursuing ambitious goals such as exploring europa and sending humans far away from earth. i look forward to a robust discussion at today's hearing. with that, i yield back. >> before you recognize our next speaker, i want to reiterate. thank you for saying this, congressman babbin. we're elated that we've got all of these nasa interns in here and we really appreciate the good work you're doing. just want to pat you all on the back. you're our future in the space program, thank you for being here. now i'd like to introduce the chairman of the full committee, the gentleman from texas,

chairman lamar smith. >> this committee has demonstrated time and again that u.s. leadership in space is a bipartisan priority. our vote on the 2018 nasa authorization act in april was a clear demonstration of that. congress and the administration support a consistent focused space program in the current nasa budget demonstrates that resolve. nasa once again received one of the most favorable authorizations and appropriations of any agency. healthy budgets are a good start but they must be followed up with solid management and oversight to make certain taxpayers' funds are spent well. however excessive costs and missed deadlines may undermine the very nasa projects congress and the american people support. we recently held hearings discussing four of nasa's highest profile programs. s.o.s., orion. the subcommittee will have a

hearing about the breach. gao's report identified significant cost and deadline problems with all four of these high-interest programs. s.o.s. and jwst are identified having deteriorating costs and risky decisions involving technology. gao found that the commercial crew contractors continued to have significant delays in the test flight scheduling and nasa expects the orion program to exceed its cost baseline. gao assessed other nasa major projects this year as well. the wide field infrared survey telescope remain as serious concern for congress. this committee has requested but not received the w-first life cycle cost estimate that was required by the fiscal year 2018 omnibus. congress has a responsibility to authorize and appropriate funding necessary to accomplish the task it directs nasa to

carry out. congress also has a responsibility to not let cost overruns detract from other nasa priorities, such as research and small and medium-class missions. it is time for nasa contractors to deliver the 2018 nasa authorization act takes important steps to impose a contractor responsibility watch list. this watch list would penalize poor performing contractors by restricting them from competing for further nasa work. beyond contractor watch list, nasa should continue to explore additional options to reduce the cost of these large programs, such as leveraging program surpluses, early stage cost caps. firm fixed price contracts and public/private partnerships that benefit taxpayers. anything short of that will undermine congressional confidence in the contractor's ability to deliver on their promises at a reasonable cost.

if space exploration is going to continue to earn the public's trust, then contractors will have to deliver on time and on budget. if they cannot, then they should face sanctions. mr. chairman i look forward to our witnesses' testimony today and yield back the balance of my time. >> i'd like to introduce the gentlewoman from texas, ranking member of full committee ms. johnson. >> thank you very much. mr. chairman. and thank you for holding this hearing. thanks to our witnesses for being here. this morning we hope we are going to get a status update on nasa's management and his progress. particularly cost and schedule status on its large missions. to that end, i hope the hearing will provide answers to some of our key questions.

is nasa's ability to manage cost and schedule on its programs improving? or is it getting worse as the government accountability office seems to indicate in its recent report on nasa's major projects. if it is getting worse, what should be done particularly by this committee? cost and schedule could be expected to be difficult projects. that push the state of the art and science and engineering. challenging missions and transformational science are what we expect. of the space programs worthy of this great nation that said mr. chairman, we can do better. in particular, we need to improve our ability to identify early on when we can still make design decisions, when the project runs the risk ever exceeding budget restraints. and if so, what options do we

have in our disposal to make sure the program meets those budget constraints. the wide field infrared survey telescope is a good example. after stakeholders, including the national academies, express concerns that the w first could run into potential costs and schedule growth. nasa established expert groups to rigorously review the costs, engineering and science objectives for the mission. i commend nasa for taking this action. these steps are being taken before a final mission-first design is established and while there's still time to reconsider the scope and approach of the mission to preclude the possibility of exceeding costs, schedule expectations as it starts a development. mr. chairman, i look forward to discussing learning

opportunities such as this one in determining whether future nasa mission was benefit from incorporating similar processes to minimize the possibility of future schedule delay and cost increases. one thing i learned early on while serving on this committee, is that nasa is a unique engine of innovation, a force for pushing new advances in space technology and operations, that is why i'm anxious to hear from witnesses, whether cost and schedule models that are based on the past, traditional approaches to a national project development are being updated to reflect the changes in today's manufacturing, operations, technology environment. is the r and d on cost and schedule models needed? are there other tools to help nasa improve the management of cost and schedule in its acquisition of space systems? we do have a lot to discuss this

morning and i look forward to hearing from our witness. thank you and i yield back. >> thank you very much. now i'd like to introduce our witnesses. our first witness today is ms. christina chaplain, director of contracting and national security acquisitions a the the u.s. accountability office. ms. chaplain has lid reviews on the iss, the sls, and orion crew capsule, as well as commercial cargo and crew projects at nasa. miss chap lan received her bachelor's agree from international urt in boston and international master in journalism from columbia university. we welcome you, our second witness today is mr. steven engineersic, serving as the associate administrator of nasa, the agency's highest ranking career civil service position. prior to this appointment, mr.

jersey served as associate administrator of the space technology mission doctorate where he formulate and executed the space technology programs. mr. engineersic is a graduate of the university of virginia where he received a bachelor and a master of science in electrical engineering. thank you for being here. our third witness is the honorable paul martin. inspector-general of nasa. prior to this, mr. martin served as the deputy inspector-general at the u.s. department of justice in the office of inspector general. mr. martin holds a bachelor of arts in journalism from pennsylvania state university. and a jurist doctor from georgetown university law center. thank you for being here. our final witness today is mr.

daniel dunnbacher, the executive director of american institute of aeronautics and astronaughtics, is it mr. dunnbacher, i thought so, mr. dun dunnebacher has previously served as the associate administrator of the expiration systems development investigation of nasa's human exploration and operations mission doctorate. mr. dunnbacher earned his bachelor's degree in mechanical engineering from purdue and a masters in administration from university of alabama in huntsville and has completed the senior managers in government program at harvard university. so i'd like to recognize ms. chaplain for five minutes to present her testimony. >> chairman babbin, ranking membera, chairman smith and ranking member johnson thank you for inviting me today to discuss

the cost and schedule performance of nasa's largest projects since we began the assessment of nasa's major projects ten years ago, we've seen them reduce acquisition risk but our most recent review finds that performance has worsened after several years of following a positive trend. specifically, as shown in this graph, the average launch delay, which is the wello line with dots, increased from seven months in our 2017 report, to 12 months in this year's report this was the first year we could not determine the extent of cost growth because nasa does not have a current estimate for the orion program. orion accounts for about 22% of the $32 million. even without including owe highen, the overall development cost growth increased to 18.8%, up from 16.6% in 201717.

we expect this number to increase further once orion is factored in and probably even more as large projects, including james webb, space launch system and sfloration systems are in their rickiest phase of development. when we started our assessments in 2009 cost and schedule growth was more problematic than depicted. many baselines have been set a couple of years prior in response to a statutory requirement aimed at enabling more consistent reporting from nasa. it's a struggle to hold them accountable for years. can you see the impact that james webb had on the overcost growth when it's estimate agreed to 8.8 billion. this next graph depicts some of the reasons why projects costs and schedule growth. they're not so different from what we've seen in the past at

nasa and across government space programs. cost and schedule growth was sometimes due to issues beyond a project's control. the light blue circles, which might include a delivery, a late delivery and a delay of the launch vehicle. other times the dark blue circles, it was due to risky management decisions. for instance human space flight programs have been operating with very low cost and schedule reserves which has limited their ability to adjust unforeseen technical challenges. in other cases projects encounter technical problems that can be sometimes avoided and sometimes not. the james webb program is reporting delays for example due to workmanship errors that delayed the delivery of the spacecraft propulsion system and also because of unanticipated complexities involved with unfurling the sun shield which is unique to the telescope. we're looking at whether more could have been done to avoid the workmanship issues. since the mid 2000s, nasa has

made strides in developing tools and approaches to reduce cost and schedule growth. as shown in this graph for example, projects are increasingly building more knowledge about critical technologies, early, so they do not discover problem when is they're more expensive and time-consuming to fix. similarly, they're building more knowledge about design, before proceeding to immigration. nasa improved cost and estimating processes and its oversight processes. while we recognize nasa's progress, we believe more can be done. for example, the human space flight projects should not be operating with low cost and scheduled reserves. projects should also regularly more often reluctant to do so. for james webb, an updated estimate may have forecasted the current schedule delays if it were done a few years ago.

>> this type of assessment should continue. in conclusion, we recognize nasa projects are complex, they face inherent technical challenges, some cost and schedule growth is inevitable when you push the state of technology. but more can be done to limit management risk that often ex-as baits problems. chairman baumann and ranking member bara, this concludes my statement. >> i'm pleased to have the opportunity to discuss nasa's

program management of accomplishments and challenges. nasa is focused on a mission of science and sfloration. in support of this mission, agency has developed a rigorous process for program formulation, approval, implementation and evaluation. nasa's challenge to develop and improve program project capabilities to insure efficiency and accountability. >> we have to execute in an environment that includes some significant risk, sand and we are focused on identifying and characterizing risks as quickly as possible. we must take corrective actions promptly, whether mitigating, or monitoring identified risk. nasa implements a rigorous process for project formulation development and execution, projects proceed through a series of key decision gates. at kdpc, the agency commits to

deliver a project within an established baseline cost and schedule this agency baseline commitment is the baseline against which we evaluate performance. beginning in 2009, nasa adopted a joint confidence level or jcl approach to producing estimates and it's resulted in improved performance. the jcl deploys assessment to establish a confidence level for an estimate. typical nasa, establishes baselines for major projects around a 70% confidence level. since the agency established its jcl policy, program mattek policy has significantly improved as nasa has launched more projects at or near their original cost and schedule baselines. nasa is committed to applying a set of authorities to accomplish our mission efficiently and effectively. its strategic acquisition process uses authorities to meet

objectives. including federal acquisition regulation or f.a.r.-based projects, grants, cooperative agreements, international agreements and space act agreements, nasa has expanded its used of fixed price contracts where appropriate with percentage of funds nasa spends on firm fixed price contracts increasing from 26% in 2013, to 35% in 2016. >> the jcl approach has certainly improved our performance and we look forward to building on this success to address ongoing chal eggs with major projects. nasa is working to strengthen program planning and control through a series of initiatives including the application of industry standard earned value management processes. nasa began the process of applying an in-house evm capability in 2013, has broadened its use over time. nasa is leading an effort through the schedule initiative to strengthen schedule management by building a

community to identify and reinforce schedule management best practices. our decision to conduct independent reviews of both w first and jwst missions along with our continued support for regular gao reviews and audits illustrate our commitment to transparency and our determination to identify risks as early as possible and immediately take action to mitigate them. finally, mr. chairman, nasa will continue to accept the big challenges that the committee and the nation place before us, our missions will continue to incorporate cutting-edge technologies and to pursue the challenging goals that can only be accomplished in the hostile environment of space. nasa's mission do things that have never been done before. the parker solo probe will dive into the sun's corona, the space telescope will unfold a minimum miles from earth and operate at minus 380 degrees fahrenheit. the space launch system will

enable humans to travel deep near space than ever before. these missions will employ technologies that must be developed and tested on earth, but can only be demonstrated in space. all of this is to say that nasa must accept risk but we are committed to managing that risk and he is cuting within our cost and schedule commitments. thank you for the invitation to testify before you today. i look forward to answering any questions you may have. >> thank you, mr. jersey. i would like to recognize mr. martin for five minutes to present his testimony. >> members of the subcommittee over 60-year history, nasa has been responsible for numerous scientific discoveries and technological innovations. however, many of nasa's largest projects, cost significantly more to complete. and take much longer to launch than originally planned. our office has examined nasa's successes and failures in project management, by examining the longstanding challenges the agency has faced in meeting cost

schedule and performance objectives, as well as the tools it has developed to address the shortcomings. we identified four factors that present the greatest challenges to successful project outcomes. one is nasa's culture of optimism. two, underestimating technical complexity. three, funding instability and four, development of new project managers. my remarks this morning address the first two of these challenges. optimism. exemplified by the agency's greatest achievement, landing humans on the moon, and safely rurping them to earth. nasa's ability to overcome obstacles has become part of its can-do culture. however, our work has shown that this attitude contributes to development of unrealistic plans and performance baselines, particularly with respect to its largest projects. technological success, often at

a significantly greater cost than originally estimated. tends to reaffirm the mindset that project costs and adherence to schedule are secondary concerns. in fact. several people offered a name for this fphenomena, or the hubble expectation. projects that failed to meet initial cost and schedule goals will receive additional funding and subsequent scientific success will overshadow budget and schedule problems. the hubble space telescope was two years late and about $1 billion more than initial estimates. but most people don't remember that. instead, they rightfully remember its stupendous images of the universe, while a few projects in nasa's recent past have been canceled because of poor cost and schedule performance, a too big to fail mentality pervades agency thinking. when it comes to nasa's larger

and most important missions. while understandable given the investment of agency resources, cost overruns in these projects, can result in delays to other missions as funding is reprioritized. technical complexity. the technical complexity inherent in nasa projects remain as major challenge to achieving cost and schedule goals with project managers attempting to predict the amount of time and the amount of money needed to develop one of a kind and first of their kind technologies. we found that nasa historically has underestimated the level of effort needed to develop, mature and integrate such technologies. to help project managers avoid cost and schedule overruns, nasa has implemented a number of initiatives. i highlight two this morning. jcl. required since 2009, for all nasa projects, with life cycle

costs exceeding $250 million. a jcl analysis calculate the likelihood the project will achieve its objectives within budget and ontime. the process uses software models that combine cost, schedule, risk and uncertainty to evaluate how expected threats and unexpected events may affect a project's cost and schedule. our examination of nasa's use of jcl found mixed success, with cool unevenly applied across agency projects. contracting. nasa makes use of multiple procurement vehicles for its projects, including fixed priced, cost reimbursement contracts as well as funded space act agreements, used to spur development of commercial cargo and crew capabilities. as nasa looks increasingly to the private secretary tore leverage resources, it must insure that the contracting

mechanisms it chooses are best suited to maximize the agency's significant investments. in sum to meet cost and schedule goals, agency leaders must temper nasa's historic culture of optimism by demanding more realistic cost and schedule estimates, well defined and stable requirements and mature technologies early in project development. in addition, can congress and nasa managers must insure that funding is adequate and properly phased. finally, the agency must be willing to take remedial agency, up to and including termination when these critical project elements are not present. and our judgment meeting these project related challenges, can only be accomplished by leadership that articulates a clear, unified and sustaining vision for nasa and provides the necessary resources to execute that vision. thank you, sir.

>> thank you, mr. martin. now i'd like to recognize mr. dunnbacher for five minutes to present his testimony. [ inaudible ] [ inaudible ] >> you may want to push your button there i'm sorry. >> chairman babbin, ranking member and distinguished members of the subcommittee. thank you for this opportunity to address you, your support for the nation's space program is to be commended. i sit before you as a former nasa program manager, former educator and as the current executive director of the world's largest aerospace professional society. the work that nasa employs and its industry parterer ins do is challenging. the nasa industry team should be commended. programs are complex and a great deal of planning and commitment is necessary to execute a successful mission. every program has its challenges. the nasa industry team works hard to address these issues, develop solutions and incrementally make progress toward the respective missions.

no matter how much planning takes place or how well thought out the plan, it's difficult to estimate the cost and schedules of these complex, one of a kind projects. all federal government departments and agencies are orting ort i operating in a time of heightened fiscal accountability. formulation and implementation with robust cost estimatingings well defined baselines and designs and risk postures at key decision points and formal requirements and guidance. especially during the implementation phases of its projects, nasa has processes to insure that rigorous cost assessment is performed. program progress is tracked through the periodic performance review process. since nasa it's constituted its joint confidence level policy a decade ago, nasa's confident and schedule performance has improved. from my perspective, the issues experienced in the nasa projects can be assessed in two categories.

one, the need for stable, predictable and consistent funding and workforce development. simply stated, project management has three basic knobs, content, schedule and cost. change in any one of these three variables directly affects the other two. cost and schedule issue does arise when there are unanticipated changes to a program or when development challenges arise, particularly during first-time production and when technical capability is being pushed. disruptions to the budget process and funding stream along with major policy and priority shurts shifts affect schedules and contracts and ultimately lead to additional costs. it is quite difficult for nasa to plan and implement programs without sufficient resources or reserves. a key issue is projects vale under a flat-line budget. a flat-line budget requires project managers to realign the work as they go to stay under the budget cap, result hg in hard priority decisions and

inefficiencies that break the program linkages across schedule and budget. these circumstances can and do add to program costs and move schedules to the right we learned this lesson with the international space station, and yet now we're repeating it with sls and orion. the current budgeting process including the regular use of continuing resolutions, late-year appropriations and threats of government shutdowns results in endless multiing scenarios, the need to constantly have back-up plans for various potential appropriations outcomes, different budget planning level ace long with flexible workforce blueprints invites confusion and miscommunication. a related issue is the inability of nasa to include appropriate budget and schedule margin in its program planning. planned margin is difficult to include because it becomes the first target for budget reduction in the appropriations process. a separate but related issue that must be addressed is the

work forts challenge impacting the aerospace community as a whole there remain as nationwide shortage of workers for jobs, requiring science, technology, engineering, arts and mathematics. according to aviation week's 2017 workforce study, 30% of the nation's aerospace and defense workforce is over the age of 55 and 22% are younger than 35. more concerning is the lack of development program experience. the vast majority of the nasa human space flight workforce has been hired and trained after space shuttle development. space station voemt has provide orbit expertise, however launch system experience is minimal. nasa expertise that developed the space shuttle has mostly retired or passed away. for the united states to continue its long-held space exploration and leadership, significant investments must be made in addressing workforce vemtd via real-world hardware

programs and research. key technical challenges for the future of space exploration such as nuclear propulsion, on-orbit assembly and microgravity should be addressed. such investments would meet key research and engineering needs, while providing experience. it's also necessary for a program's mission success, balance risk and priorities in conclusion, i thank this committee for the opportunity to talk today and look forward to your questions. >> thank you, mr. dunnbacher, we appreciate it. now i would like to recognize myself for five minutes. for questioning. and i have a bunch of questions and i'm sure everybody else does. too. so if you could just get right to the point. abs these things, we want to cover this piece of ground as soon as we can. nasa has a history of overruns.

some of these programs have suffered cancellation as a result and this is simply got to stop. we need performance, not excuses from the agency as well as providers and with that in mind, of nasa's omgs options, what acquisition mechanisms such as cost plus, fixed price or space act greemgts are most useful in promoting performance and holding the provider as well as the agency management accountable for meeting the acquisition requirements. i swo ask you, first, mr. dunnbacher. >> congressman, i think the appropriate acquisition tool depends on the objectives of the program. and the scientific engineering issues and risks associated with that. we typically, we have a lot of experience with cost-plus contracts in this country. nasa uses that a lot for its

major programs. there's the discussion of public/private partnerships which can also be valuable and has been tried in the past. some successful, some not. when we consider all of this, we need to consider the objectives for the program. what are the incentives and the motives that are necessary for success. both in terms of how it would apply in a public/private partnership, as well as a cost plus arena. we need to sort through those and make valid conscious objective decisions. >> that same question, ms. chapla chaplain, if you would answer that. i don't need to repeat it, right? >> right. >> okay. >> with fixd price contracts, the contractor bears the most risk for meeting cost and schedule goals so that's irmain aim. that's a contract, but it's not really appropriate when when you're facing a lot of unknowns

at the beginning. if you're really stretching technology, don't know how long it's going to take, how much it's going to cost, in that case the government does need to bear the risk of the contract and that's where cost plus comes in. >> thank you, and then, we're talking about cost plus, i'm going to -- the second part of my question, to do cost plus contracts provide any incentive for the provider to complete the project on time and on schedule? >> there typically incentives built into the contract and they come through the award fees. so some may be tied to performance and quality and things like that but others could definitely be tied to cost and schedule. >> all right. thank you. mr. dunnbacher. >> when we have done cost-plus award fee and incentive fee in the past. we do and can make schedule performance and cost performance part of the evaluation criteria. that's typically included.

>> and then to mr. martin and miss chaplain as well. acquisition accomplish as great deal, strategic planning, procurement processes and the development of clear requirements. for many years the d.o.d. has employed a robust training and certification program for defense acquisition professionals what institutional improvements such as training, certification and career progression are necessary or perhaps missing from nasa's acquisition processes. >> i know nasa has invested pretty heavily in training cost estimators. and project management. they have conferences every year for example. but i still think maybe more could be done in that area. and certain techniques and especially more program management issues related to managing contracts. >> mr. martin. >> eye tracting and retaining the project managers is a real challenge for the agency, as mr.

dunnbacher suggested within nasa. 50% of the workforce is 50 years old and with a diminishing number of projects for the project managers to experience and cut their teeth on, it's a concern. >> do you think nasa can gain from d.o.d.'s experiences. >> i'm not as familiar with d.o.d.'s experiences. >> ms. chaplain? >> i think that defense acquisition university is a good model for training programs in all kinds of issues, it's something that nasa could look toward. >> thank you. mr. engineersic, nasa recently took steps to control the costs of the europa clipper and w first missions while in formulation. have these steps proven helpful and can similar measures be implemented on other major projects to control the cost? >> yes, on w-first we did an independent review board to comment ant look at the project early in phase a in formulation. they confirmed that the project

scope had grown and they were were not going to be able the mission within the budget that we for the management agreement. they made some recommendations, the project took those recommendations and adjusted the scope and replanned the cost and schedule estimates, they came in and presented their baseline to the all concerned and we have confidence based on their estimate given the replan that they have a solid estimate going into phase b. i think that, that and similarly for your clipper, i think that is a way to try to minimize cost and schedule risk early in the program. >> i'm out of time. i had several more questions, but thank you very much. i'd like to recognize the gentleman from california, the ranking member. >> thank you, mr. chairman. seech of new your opening statements, obviously touch on the complexity of budgeting and

scheduling. when you're trying to do something that you may never have done before. i have to imagine when we started on the apollo missions, lots of cost overruns, lots of scheduling delays, but as you got further down the road, understood what we've had to do, that started to produce and there was more predictability. as we think about the future missions and let's put it in the context of something we talk a lot about, mars, by 2033, we don't know the technology and the science and everything else. as we go into deeper space. we are encountering more complicated projects. as we look at the balance of the commercial sector. the entrepreneurial sector. more reliance on external entities, we did apollo, nasa

was the launch vehicle. the landing vehicle to the science mission. maybe a little bit more control as you think about working with outside contractors. >> that may be a little more unpredictability. i think that adds another variable. as the international community becomes much more engaged. you see countries like india and japan, european space agency start to do the science. complicated variable. so as opposed to budgeting and scheduling getting easier. my sense is budgeting and scheduling is going to get more difficult. is that a reasonable, reasonable accurate thought? i guess ms. chaplain? >> well i would like to note in the apollo error, a lot of things had never been done before. they were very difficult to estimate. i think we have the benefit of time and history there are a lot of things we can estimate even if we haven't done that

particular mission. and i also know that in the past decade the three space agencies, d.o.d., nro and nasa have been working very closely together to kind of gain that historical perspective and cost and build databases, so there is more knowledge there, that gives you an example. but yeah, those other complexities do make it hard. >> as we think about that. learning from what we've done in the past, trying to create more predictable models, for budgeting and scheduling, i think to chairman babbin's question, you know, i'll put it in the context of my profession as a doctor. we'll often, as we're caring for populations of patients, we'll have a shared risk pool, for a certain fee you know we're going to take care of this population of patients if we do really well, we improve health, et

cetera, there's a reward on that end. if on the other hand we do a bad job taking care of those patients, we share some of that risk. i don't know if in contracting, i think you touched on you know, the shared risk/reward have you noticed that you get better predictability when, not doing something that we know how to do and it is pretty predictable. but there is some risk involved. i don't know. >> nasa has a new agreement. particularly for development of transportation abilities for cargo and crew services to the international space station. billions of dollars to it. the commercial companies also have a significant financial stake in the game. so having them have their skin

in the game as well to develop these private capabilities of which nasa will procure them as service is an interesting, and has been relatively successful. >> as i am before, we choose either a far based contract, or a fixed price, or a partnership where it makes sense. strategic common interests between a partner or partners. we also share the risk there in that partnership. we did do a funding space act agreement for cargo. we've kind of moved away from that approach. and our latest partnerships have

been through fixed price contracts with cost sharing where we use the far rules to manage the relationship and allow the contractor. >> i'm out of time. >> thank you very much. i would like to recognize the chairman for the committee. >> thank you. a lot of nasa contractors seem to not be able to stay on schedule. they fall behind. they fail to perform as we do. we have a watch list for contractors who don't perform well. let me say that i think the american people are rightfully sometimes frustrated by the federal government when things

go wrong. when projects are not performed as they should. somehow no one is held responsible. i think it is frustrating for the american people when they see projects cost millions if not billions of dollars more than expected. i would like to ask you all who you think would be good candidates for that watch list. they need to be reminded of their obligations and perhaps sanctioned if they don't improve performance. but given your investigations, who are contractors we might consider putting on such a watch list list? >> it's a difficult question. in some cases, there's a shared responsibility between nasa and

contractors. it is hard to parse it out. it could be some shared responsibility there. if you look at what we're talking about, there are projects in our list where performance has been bad consistently over time. and nasa has canceled or proposed canceling a project, or is looking at whether to do that because of contract performance. >> who is that? >> one is for the sgss project. that would be general dynamics. so that project is being looked at. performance has been a longstanding issue. the other was the rmpbi, that w proposed for termination. that was harris corporation and formally, those are the more extreme cases.

but ultimately it is nasa's decision and they have to really investigate the situation. >> mr. martin, in your testimony, you made a couple of suggestions. trying to fill the too big to fill dro fill syndrome. what are some things we can do to keep projects on time and on budget? >> i think one is what you're doing today is an oversight hearing. the focus on the issues, aggressive oversight on gao is important. and i think a general sense of the folks that need to be held accountab accountable. there's human failure, we all fail. but there are avoidable mistakes. for example, the use of insolvent. the welding by boeing as the

prime contract. so we have individual avoidable mistakes, partnerships which are key to nasa, but when they're 14 months behind schedule, that impacts oren. >> it is very unlike reply nasa's budget will see a significant increase any time soon. it is not the nature of our spendi spending. i believe nasa had sort of a flat line budget. so many other agencies have been cut. yet there are a lot of people and pundits who expect tows keep the international space station as is. go back to them and then on to mars. and seem to think we'll do everything all the time.

i think in my opinion, that is not going to make some dilt decisions. i think it is naive. do you agree with that assessment? is there some magic solution that would enable them to do everything all the time? or would we have to take a hard look at the big missions, like the ones we have like the space station, or others to come like the moon and mars? >> no. you're not missing. i think it is all about choices. this is a finite amount of resources. that's why cost scheduling is so important. you can put it nasa and congress hflt nasa been able to say that the james webb telescope would cost $8 billion ten years ago when it was proposed then it is

a decision. you do james webb. and i'm not suggesting it should or shouldn't have been done. it will do amazing things. you make decisions based on that. if you say yes to that, you're saying no to a lot of other things. >> that's what we have to understand. my time is up but can you give as you brief response to that as well? >> i think nasa is at risk of having too many programs to pay for at one time. given la we've been looking at, we started with 15 to 16 projects. that helped them reduce cost overall. now we're looking at 26. >> thank you. thank you, mr. chairman. >> great questions. >> now recognizing the gentle lady from texas. miss johnson. >> thank you very much. in year 2027 of nasa's projects, you indicated in october 2015, nasa decided to decentralize its

independent assessment function and deploy to the agents at the centers in part to better use its work force to meet area knees such as program management and cost estimating. they had previously reported on the potential prediction this change could pose for project oversight. but stated that it was too early to assess its effort, its effect on agents, such as independents. the robustness of the reviews and information sharing. so now, one year later, are you able to tell us whether that decentralization was successful? >> we haven't seen a real visible impact either way yet. we're still very concerned about that move. i think it is beneficial to the agency to have centralized expertise in those areas.

they can leverage each a lot. >> do you have any comment? >> yeah. i think we've moved to a model where we're putting the responsibility and account tooblt a mission director to manage the programs to do that independent assessment. so far they've stepped up to the job and i think they're doing that in manipulating our space flight management processes, including reviews. we do still have a cadre of experts in the office of the chief financial office per have schedule and cost expertise that the review boards can draw on. and we've also given stewardship of project planning control to the office of the chief financial officer and that has been very beneficial. not only this cadre of people for scheduling cost estimating but improving our skills and processes and capabilities in cost and schedule. >> okay.

let me ask you this. what are the most important things that nasa can do to minimize costs and schedule growth, and when nasa is facing an unexpected cost growth and schedule delay, what are the tradeoffs nasa can make? and give me some examples of successful tradeoffs. >> so i think we continue to mature and effectively apply the joint confidence level process. it will be really important. i've seen it since 2009. i've seen the value of that. and budgeting projects at the agency coming in at the 70% confidence level. and i think we can do even better maturing that process. and i think we continue to have success there. i think we need to continue to focus on the development of the project management work force has been, has been noted,

including hiring and developing the talent through hands-on project management and experience and training. about 15 years ago, we then identified a shortage of skills in project planning and control and we've taken on an effort to hire and train people in that area. cost estimating new management. i think that has paid off and we need to continue to do that. we talked about independent assessments. we can continue to strengthen that. then we have communicating lessons learned and looking for systemic issues and challenges across programs and putting corrective actions plans in place to do that. like the control staff. we need to continue to do that and i think all those things can look to improve program performance. >> thank you very much. my time is up. any other witness would like to

come in to the questions in. >> i would like the add a couple more things. one would be to update cost estimates as risks change over time. we see programs to do that. and then focusing more on quality management. these workmanship issues do that all the time. i think more can be done. >> i would like to add, there is a need to recognize that you need appropriate skills for the portion of the program life cycle you are in. so development skills are needed upfront in a development program. operational skills at the end. and we need to make sure that we're working for the right skills at the right time. >> thank you very much. >> yes, ma'am, thank you. i would like the interrogatory gentleman from oklahoma now. >> thank you. thinking about the questions that my colleagues have had, let's discuss for a moment in

january of 2018, gao found the commercial crew program contractors, boeing and space x experienced delays for their inspections for human space flight and could it jeopardize the ability for access to the international ispace station. will there be a gap? access? >> no. we have other actions we can take to minimize the gap. the first is to buy three more seats on soyuz. that extends cape sgilt minimizes the risk of any gap between soyuz and the commercial crew coming online. a couple other things we're looking at. one is adding a third crew member to the building crew fight. the other is extending missions from approximately 140 days to

190 days and being able to space the soyuz launches out. that's other actions we can take to further mitigate the gap. >> what is the director they're going, that they won't have to use those measures? >> this summer, we'll have a better handle on taking those additional measures. we'll be glad to report back to you on that. >> thank you. that answers my questions. >> i would like the recognize the gentleman from virginia. >> thank you very much. thank you for being here. miss chaplain, you mentioned that it would be helpful to have much more frequent updates of cost and time awards. that these come very sporadically. in the family business, we update the projections at least once a month. in the federal government, we're getting all kinds of monthly

reports on new home sales and unemployment claims. why are nasa and contractors reluctant when it would be easier to tolerate? >> it would be easier if they continually did it. but right now they set the baseline when's they really start their program, and they don't revisit. i think they don't want to show what the cost really is. i think you see conditions change. in the james webb program. a lot of things that had changed in a few years. it took way longer than

anticipated. >> as we look forward, looking at requiring much more frequent updates on both cost and time line. >> it may be more of a rhetorical editorial comment. you wrote, including the regular use of continuing resolutions, the late year appropriations, results in endless multiple planning scenarios that result in whole schedules and accurate flight dates. is it then credible to say that congress plays a role in the problems that nasa has with budget and time line? >> yes, sir. i would say that. >> why not underpromise and overperform? that's what my children do with me.

my job is to deliver the most science or exploration missions we can for the budget given. so we have taken an approach of having a portfolio of small, medium and large missions and an approach where we budget these missions at the 70% confidence level. we think that balance is the risk of projects in formulation and implementation against the opportunity costs of budgeting more than at the 70% confidence level, and delaying starting new missions. it is a matter of optimizing the portfolios and delivering the content we can for the budget we have given. >> i would suggest that part of that is managing the expectations of the people whose expectations you have to. >> we can definitely do a better

job. >> mr. martin? >> i think one of the other realistic things, if you underpromise, you're in greater danger of not getting your project started in the first place. of attracting enough excitement and tacks on get it funded. so a problem is that they overpromise, obviously. overpromise the maturity of the technology. i was struck, like a lawyer going over a footnote on, page three of our written statement there's a quote from former administrator griffin. i think he was current administrator talking about projects, proponents of individual missions down playing the technical difficulty and risk grossly at times gain new start funds. i think that has been an historic problem for nasa. >> you raised two interesting pieces. one was that there is a culture of optimism that was too optimistic. and two, that we needed far more

accountability. at the same time, the level is to have a shortage of the fanl we need. more than half are over 50 years old. the proud challenge with the step kids. how do you ratchet up accountability and not depress the enthusiasm, the essential of worth, and also, how do you dampen the optimism in an agency that has to be so optimistic? ? >> you're dancing on the edge of a knife when you do that. you have to have that optimism, the free thinking to think of things that have never been built before. to start putting metal on them. if it was easy, nasa would be doing it. it is rocket science, after all. it is very difficult. and like in, nasa has brought in a lot of its cost estimating techniques. jcls and others, they need to force adherence to those

requirements. >> thank you. i would like to recognize the gentleman from alabama. i am concerned by the perceived process away from the current operational form at of the space station. there has not been in my judgment enough debate on what this transition involves. i have a question for the contractor and the nasa associate administrator, steven. first has nasa come one a definition of what commercialization of the international space station means? >> we have not been doing work in that area and i don't believe they have yet. i'll let steve -- >> so let me tell you where we are with i would say the more

detailed planning of the station transition. so we released a solicitation not too long ago for studies. industry studies on transitioning space station to some sort of collaborative or commercial enterprise. we're getting the proposals back this week. what we ask for is the capabilities that commercial thinks they can provide us as compared to what we need and what we have. being in the future. on the second their technical approach to achieving those capabilities. and third is their business plan. what is it? although we don't have a rigorous definition, nasa should be maybe 20, 30% user capability, and other government entities and commercial entities should use that capability. we should not be the 80% or 90%. to me, personally, i would not define it as commercial. so we'll get the studies back in

december. and that will inform a more detailed transition plan and we would be ready to come to you all and present plan and get your feedback and input on it. >> when do you anticipate having that more detailed plan that you can present to us that we have a better understanding of what this commercialization means? >> we'll get the results in december of this year. it would be some number of months. so probably the first half of next calendar year. we'll be able to come back and lay that out. informed by the industry studies and industry input. what looks feasible in the mid 20s time frame. >> so you'll be in a position to anxious the question in the first six months of 2019? is that my understanding? >> yeah. >> thank you. the audit of reapply services, dating 2018, notes that, quote,

spacex's average price will increase approximately 50% under crs-2. while orbital atks' average pricing will decrease by roughly 15%. the major difference between those contracts is space x's introduction of reusability. space x has noted multiple times that they should not expect discounts on reused hardware. my question is, are you concerned whether taxpayers will save money with reusable rockets, and second, is it possible that reuse may end up costing nasa and the united states. at a pair more overall in. >> steve could probably answer this more specifically. i believe there is a 3% to 7% reuse.

i believe it has happen once if not twice so far for commercial cargo. so there is a slight reduction. am i concerned? it is a safety issue. the launch services people need to assess the specific rocket and they have access before they launch it for launch. >> since mr. martin pointed the finger at you, with your insight -- >> i think he is right with respect to the marginal cost reduction, with the introduction of reusability of the first stage of the falcon 9 and they're working toward reusing the faring and they're looking at, announced they're looking at an approach to reuse the upper stage also. i think as they gain experience and as anybody gains experience with the system, i think there's opportunity to further reduce the risk. and reduce the cost by

understanding what the condition of the hardware is when it comes back and how much effort it takes to refly it. so there's opportunity. there i'm not able to predict what additional savings they might achieve. >> is there any chance you could expound on increased risk factor of using a novel approach, reusable rockets? >> it is in the process of assessing that risk for our missions. i can get back to you on that. >> thank you. >> we now interrogatory gentleman from pennsylvania, mr. lamb. >> thank you. i appreciate you highlighting the difficult position you're in when it comes to unpredictable funding streams on shut down the government. i'm trying to learn more about how that actually affects you on the ground, day to day.

this is a question for anyone. can you share some more specific examples of how that might have affected a particular project? >> i'll be happy to take that. i lived it for a while. what happens is, when you're working on a program and you're trying to put the plan together for the future, and what is my work plan for this year, over a five-year budget horizon, and as i work through the budgeting process, every time i have to plan to a different number, i have to go back through planning iteration process. so at a time when the president's budget request was significantly different from what was typically coming from the appropriations process, it was necessary to, a, to do the plan that was supportive and inclusive in the president's budget request, and i had to be

ready, as a program manager, if additional appropriations did come in, i at least had a plan and the ability to react to it. >> and what kind was that? >> this was the beginning of the sls asand orien program. >> at this time i was there, we were looking at first launch in the 2017, 2018 time frame. during my tenure as the program director, we had to deal with a government shutdown, continual negotiations on both ends of pennsylvania avenue, and then in addition to that, while i'm doing all that planning, the team's focus is pulled away from the day to day management of these technically complex jobs.

so we were working through all of that and had to deal with the government shutdown and work through that. and then all the multiple planning cycles. thank you. it seemed like you had something to add. >> very similar things from other agencies like missile defense. the kind of constant planning. another real example of the impact of a shutdown can have is a cryo test at the end of a program like james webb, it might take a couple weeks to get the facility ready for this test and then two weeks to cool down. and the shutdown, i think there was a shutdown. they were really worried. if we have to shut down, we'll lose a whole month of time. >> thank you. and again, a question for anyone. i think it is pressing. some of you have highlighted the

work force development issues you have within nasa and i think it was mr. dumbacher who talked about it. leaving the jobs in the private sector, which is a challenge across the government. it happens in the military, too. if there was one reform you could suggest, or one thing we could improve or strengthen to retain some of this talent, and to attract new talent, what would it be? >> well, as i stated in my testimony, the one thing i would recommend is good real hardware programs. to go address those needs. but to go give these students, these young professionals real hands on, hardware experience. that informs their capability and experience throughout their career.

>> the first program i worked on was a development project in house. we were able to build, test the hardware and that was critical throughout my entire career as i moved to a sub systems manager, line manager. i would second that. without that experience, i don't know how i would have been able to be as effective as i could be. >> there are a group of people of which i was one, robert was one, where we had the ability and we were asked and required by our mentors to test the engines in house. we tested the new technology that became the final flight configuration for shuttle. and that hands on experience, our mentors, our leaders forced us into that. they knew that it fit into the

long term career. >> just echoing the same thing. we talked to them, they're spending their time overseeing contractors' efforts and that's frustrating. >> thank you. i would like to recognize the gentleman from louisiana. >> thank you. it is uplifting to see the young americans today. these nasa interns. and i hope you young men and women are paying attention to the budget discussions. we are a nation that's $20 trillion in debt. should this body ever manage to produce a surplus, i is a $1 billion, it would require 20,000 billions of a billion-dollar surplus to address a $20

trillion debt. so i'm prayerful that nasa has a spirit of doing more with less. not only are individual projects at risk but certainly, anyone can recognize that a $20 trillion debt puts the entire stability of all programs at risk and every government agency. i'm very hopeful that you young americans are paying close attention on this conversation. i understand their perception. that their projects are too big to fail. a tremendous. a american traesh has been invested and therefore, it is quite logical for them to have

this cavalier attitude of too big to fail. what can this committee do? what can congress do to manage within the budget constraints? including, i like your thoughts, regarding accountability for contractors within these projects. >> i think more frequent conversations about the status of individual projects is important. more fidelity to the cost estimating that they do right now. and then projects, large or small, will be terminated, if they go too far over. and in preparation for this hearing, i think the last project that i remember being canceled was something called gems. a telescope that was supposed to look for evidence of black

holes. it was capped at $105 million. and then they realized that it would be 20% or 30% over the $105 million cap and nasa canceled it. and it got people's attention. >> generally speaking, the contractors involved in cost overruns these are for profit companies, are they not? >> they are, sir. >> and has that ever been addressed most, if we receive a bid from a contractor to perform a particular service, we expect that service performed for the right that was bid. there's a certain expectations of performance.

and yet within the federal government, it is within nasa's large projects, there seems to be an attitude of, we're not really accountable and we won't be forced to perform. >> a lot of the times, we're building systems that no one else has ever built before. so we use a cost reimbursement contract. they are tied to a fee. that is their fee. if they do not perform and they should get a low score against the performance evaluation plan,

and either much less profit or no profit, with how they're scored. so given the high risk nature, the nature of what we do, very complex systems with new technology, we take that approach and then we hold them accountable. >> that's all i have. >> mr. foster. >> thank you. >> the amount of funding that you can think of having in the last decades. last week the federal reserving made the announcement that the wealth of americans just went over $100 trillion.

this is up $45 trillion since president obama signed the stimulus reverse the economic collapse and triggers the economic growth that's going on today. so when people tell you there is not enough money to do this or that, the scale for that is one fraction of $100 trillion, might we think about. using to travel to mars or whatever your dream is. >> i would also want to say that i resonated as a former project manager and someone doing technical components for large federal projects. i very much resonated with your desire for in-house expertise. it is difficult on manage a project if you've never done it yourself. when i decided to manage a group doing a large number of integrated circuits, i learned the design control and made the circuits myself before i decided that now could i sit at the top and emit specifics.

this is crucial. and we have to look very carefully when we, this rush to privatization. runs the risk of losing the in house expert parise will cost more money because you'll have projects that are not managed as well as they should be. we have to be very cognizant of that. when bit cost overruns, there are two big general classes. the first are enthusiast cost estimates. the initial scoping or a project. the initial scoping is always done by people who are advocates for the project. you have to get adults in the room with experience to pull back and say, okay, how does this control costs. the other is legitimate technical risks. i would like to say, i hope that my colleagues would be much more tolerant of technical risk. it is to know take significant

technical risk. if you assemble a group of experts that say it is not assured but it is a good bet. and then you lose the bet. congress should be very understanding and tolerant. but much less when projects are approved, everyone in the room knows the, i don't want to point fingers but i'm sure in your minds, you know several projects that were approved where a large number of the people knew that they would be really get project done for that cost. it is not just nasa. i was wondering, are there ways that you can identify retrospective retrospectively, any sociological red flags would allow to you say, okay, i'm suspicious this is not a real cost estimate.

>> i can tell when i'm suspicious. there are very grand statements made about the program. and the achievements it will get too overly exaggerated. that's when you start wondering, are the estimates real? i would say in the case of nasa, i kind of trust the process they have. they do review the estimates pretty carefully. they have standing review boards that look at them before they make their review decisions. i do believe that their processes now, as opposed to a few years ago, are pretty rigorous in ensuring those estimates are complete. one thing you said about taking risks, you need to still do that. i think there's a concern within nasa and other places that were not taking enough technical risks, that were too afraid to

do that. >> with respect to science missions, nasa relies extensively on the findings of the national research council and identifying certain projects. so i think that's another check. >> they don't do cost estimates. they're sort of given external estimates, is my understanding. >> they don't could very good cost estimates but they do cost estimates. >> one key thing checks out. have the one doing the cost estimates. i have seen a couple instances, the people making the initial estimate knew they would be moving on to something else and then they brought a new person in and the new person was,

what's this? if there is an air of accountability and they know that they're ultimately accountable for that cost, for the cost estimate, that starts to get the behavior where i think you want it sociologically. >> i guess i'm out of time. >> thank you very much, chairman. i'll jump right in here. the canadian space agency last month canceled its participation for budgetary reasons. in your assessment, what will the impact be and the cost? which results from csa's decision to pull out of it? >> well, that decision was

factored into the project's replanning after the independent review of w first and was factored into the plan they brought forward to move from phase a to phase b. >> how does that affect the technology? >> i think that the project has a really good plan to develop it early on torsion reduce the risk of that. >> how about mission itself? does the capability, the mission goals, do they change? >> no. the level one science goals do not change and they will neat requirements of the mission as defined in the nrc. >> that's great news. so the 18 on the bus will

require a life cycle cost estimate by may 22nd. that's behind us. when will that be submitted to congress? >> we'll get you that within the next couple weeks. it has been done. it will be here, hopefully within the next two or so weeks. >> so many people call for the funding, let's close our eyes for a minute and imagine that congress might provide multiyear if you saiding authority. it is a pleasant thing. in that scenario, how would this change your planning? >> well, i think it would allow us to only plan once and execute to that plan and deal with the challenges that he had articulated before. the one example we have of getting multiyear funding was a

replacement order after the challenger accident. where congress appropriated multiyear funding and they were very successful in executing on schedule and on budget with a profile that ramped up and down like any project. >> so that might be for a lot of different agencies. >> for any large complex program, that will take multiple years to execute. >> so with limited time -- actually, you may be unable to answer this. the cost overruns and missed deadlines, what program attic changes would you make in light of that failure?

>> i can tell what you we have done. >> the first was a series of actions with northrup grumman. that also has allowed them to identify issues in a more time will you manner to minimize the cost of those years. we've added staffing to the team at northrup and we've really, i would say, strengthened the mission assurance function in personnel out there to deal with some of the workmanship and quality issues issued by miss chaplain and others to try to avoid these human errors that have caused scheduled delays. a small error or problem has a

very large effect on a program. >> we have not done significant oversight. >> i believe the actions have been reasonable. they've already had some onsight presence. we'll be looking to see how effective those actions are as we do our next review. >> here's wishing you multiyear funning authority. with that, i yield back. >> thank you. i think this is an important hearing and most of the questions have been asked. i would like to think about what could congress do in addition to avoiding the kind of situations

mr. lamb addressed, the shutdowns issue, the inconsistency between the presence requested budget and what lends uncertainty to the planning process. what could congress do to limit the uncertainty and funding? the idea of a multiyear funding program for large projects. can you give us further guidance to stem losses to our own actions? >> i'll start. i would say avoid overspecifying what your expectations are. avoid setting dates for a program. that limits their choices even more on what they can do.

>> i would echo that. we seem to be getting more and more direction to the appropriations process. particularly through the report. and the expectation is we will follow that direction. that is the solution space station and our ability to manage effectively. i think it is one additional thing. >> with respect to the funding issues, not only the actual dollar amount. it is the proper phasing of the appropriations. >> the environment in which we have these discussions is less punitive and more objective and more willing to their risks and understand the issues. you have to be careful that a lot of the, if we inadvertently

set up oversight leads to could not conservatism, and it keeps going around in a circle, what congress can do, this sub committee can do because of the oversight activities. it allows more open communication on these kinds of issues. >> i think the point mr. foster made, all scientists know. failure is a learning experience. science is testing and not knowing the answers before you start. let me close with sort of a parochial question. i represent part of santa clara county. nasa is located in santa clara county. thinki thinking, with so much of the work force being over 50 years

of age. the nasa ames facility is located in a key part of the country. it is in silicon valley. there is a lot going on with the tech community. although it is very expensive to live in santa clara county, they just built some housing for nasa employees. it is possible the maintain their synergy. i'm wondering in terms of that facility as well as others that are co-located with technology centers. what further we can do to move top scientists away from really better paying jobs into the agency, to make young people who are smart and who are good scientists want to work in nasa.

they want exciting work. they want to know they have an opportunity to make a difference and they want to help solve today and future problems. i think providing those and then in addition to the infrastructure problems that you have described would be extremely beneficial. from my experience, if you hit the first three bullets, then the students will come. that's why they go to spafl. that's why they want to come to nasa. nasa still has that cache that it is always had. so i think you'll be a long way down the road. >> thank you. >> thank you for your questions

and participation. the chair recognizes representative recoohrabacher o california. i apologize for being late to the hearing. obviously two important hearings had to happen at the same time which leads me to the first appointment. we need to make sure we hold nasa accountable. i have to assume that congress isn't doing its job all that well either. when we're talking about continuing resolutions and omnibus bills. that's a reflection on we're not doing our job as well. please don't think if there's any criticism, some of us don't realize that there's justified criticism on the way congress is doing its job. let me ask you a couple

questions about this. let me ask you, is a lot of this intentional low bidding on the part of companies in order to do this? is this part of it? >> we have a pretty rigorous request for proposal and proposal evaluation process. including indiana cost and schedule estimates by the government to ensure what is being proposed is executable. >> so you don't see this as a scheme by some big corporation to intentionally bid low, get contract and then realize, we'll have to pay for it later on.

>> i do not. >> anybody believe that at all? good. thank you. that helps our understanding of this. and a lot of these companies that do have the cost overruns, are companies and are worth billions and billions of dollars themselves. what penalty does a company have that goes through a major cost overrun and doesn't meet its commitment to a contract? what is the punishment? >> so you can take actions to punish company there awards and fees but often they're tied to multiple objectives so you're limited in terms of what you can do. so the ultimate thing is to cancel a program. >> what about the next one? can a company who didn't, can it

be because they haven't met flp obligation they could go on that list and nasa won't deal with them in the future for a period of. >> first, they, along with the programs, look at contract performance and will use the far process for, the other thing is we have the assessment reporting system. so when we evaluate a contractor on a regular basis, that assessment goes into that system as well as the others can draw

on that to use in assessing past performance. and whether to award them anything in the future. >> it seems the me we have to be much more diligent in that area. once he have accountability, we can expect to have more problems. i have to assume that we do not have the amount of discipline and the accountability that will teater companies. perhaps making bids should be held responsible. meaning that the money that is lost, perhaps, should perhaps be absorbed by the company. these are multi-billion dollar companies. if they're going to be taking the taxpayer money and failing in what they're claiming to do, why should the. at a pair pick it up?

we have a $20 trillion debt. if there is anything that will keep us from going into space, it will be the total disintegration of our economic systems so we cannot afford any of this stuff. i would also, let me note, we're going to have to, we have a $20 billion budget for nasa. $20 billion. we should be able to do a lot with $20 billion. let me just note when i first got involved, i realized the budget wasn't enough on accomplish the missions. i tried to focus international cooperation and private sector investment. so let's hope that is one avenue of making more revenue come in. we also have to make sure we pay attention to what this hearing is all about.

making sure that we're managing the actual projects themselves in a way to minimize the loss of very scarce dollars. >> thank you very much. >>you very much mister chairman. >> certainly, ladies and gentlemen, thank you for your participation. from what i understand, there may be a member who wishes to ask second set of questions, as long as we are able to do so within the timeframe, mister higgins, did you want to follow up?>> thank you mister chairman i have one question.>> one second, the chair recognizes representative higgins.>> thank you for allowing me to ask this question, nasa has received multiple wrecks develop costs and schedule estimates as well as perform joint cost and confidence level analysis, the

beginning stages of the implementation phase larger projects in december 2012, it was recommended that the project updated, according to the report nasa concurred with the recommendation yet no steps were taken to implement. further analysis to cates if implemented, and updated program may have updated schedule delays. among the challenges that nasa encounters, can you elaborate on why the recommendation was purposefully overlooked? >> at that time, they did confer as you said, i did not have her -- i did not ever have an official reason, they were just reluctant to relook at the cost. a couple of years later we recommended they at least do

something similar to do it cost schedule risk analysis and take a deeper look. we will do that ourselves working with the contractor, that was rejected by the contractor, then it was not until they were getting ready to work with the changes that they did a schedule risk analysis themselves and realized how far behind they really were. >> thank you for your candid answer. mister chairman, thank you for allowing me to answer this -- ask this second question.>> certainly, does any other member wish to ask a follow-up question? i am seeing none. i think the witnesses for their testimony and members for their questions. this hearing is adjourned.

today democratic and republican members of congress face-off in the 57th annual baseball game for charity. sunday, toward the library of congress exhibit on the centennial of world war i which showcases american ideas about the war through artwork, posters, photographs films, and documents. >> the idea of contributing to war through labor, the idea of growing your own food so as to conserve larger quantities for the war effort. this was by mabel wright. another individual, kind of rising to the surface during world war i. as you see here also, food conservation,

nutritious sources of food like corn. this was kind of new. one thing that is worth noting, in world war ii we were rationed. hoover believed if you encouraged police -- the belief that people to act correctly they would ration themselves.>> watch american artifacts sunday at 6:00 p.m. eastern at american history tv on cspan three. a hearing from earlier today, small business owners were talking about a workforce shortage. their efforts to attract qualified employees. this is over an hour. good morning i would like to call the hearing to order. welcome to our friends in the back of