Navigating NASA’s Project Management: Key Insights for Federal Contractors from GAO's Latest Assessment

The Government Accountability Office (GAO) recently issued a report highlighting significant improvements in NASA's cost and schedule performance for major programs. These observations provide important lessons and opportunities for federal contractors. Since 2023, NASA's total cost overruns have dropped from $7.6 billion to $4.4 billion, while schedule overruns have fallen from 20.9 years to 14.5 years. This success is largely owing to the Space Launch System (SLS) and Exploration Ground Systems (EGS) demonstrating their first capabilities before quitting the portfolio. These projects previously incurred $3.6 billion in cost overruns and were each delayed by four years.

The study stresses that NASA's category 1 programs, which are the most important and expensive, continue to drive overall cost performance. Despite the departure of SLS and EGS, category 1 projects continued to account for 81% of the portfolio's total cumulative baseline overrun in 2024. The Orion Multi-Purpose Crew Vehicle (Orion) alone accounted for 65 percent of the overrun, totaling $2.9 billion.

Looking ahead, NASA's Artemis-related category 1 programs are projected to influence the agency's overall cost performance. The Artemis initiative, which intends to return US humans to the moon, establish a long-term lunar presence, and eventually achieve human exploration of Mars, contains eight of the 14 category 1 programs. NASA established $9.6 billion in development cost baselines for three Artemis projects in December 2023: SLS Block 1B, Gateway Initial Capability, and Human Landing System Initial Capability. These, along with Orion, make for roughly 60% of the portfolio's $32.1 billion development expenses. Given the scope of these baselines, cost overruns might have a substantial influence on NASA's overall portfolio.

The report also discusses the success of projects in development, finding that the majority have not seen yearly cost increases or schedule delays since 2023. Specifically, 11 out of 16 big projects in development had no cost increases, while 13 out of 16 reported no timetable delays in 2024. Notable programs, like as Psyche and PACE, reported decreased development costs this year, demonstrating NASA's dedication to better project management.

NASA has made various initiatives to improve the performance of its main projects, particularly those that support the Artemis missions. In response to regulatory requirements, NASA established the Moon to Mars program office to oversee Artemis programs and improve cost and schedule estimation skills. The agency has also appointed a Chief Program Management Officer to improve program and project management policies, which will boost performance and mission success.

The GAO has made several recommendations to improve NASA's project management. As of April 2024, NASA had yet to fully implement 39 GAO recommendations, including eight high-priority ones. Implementing these recommendations could help NASA show progress in improving portfolio performance, particularly for significant programs supporting the Artemis missions.

NASA's attempts to develop crucial technologies for its main programs are equally noteworthy. Nine of the 11 projects reporting important technologies in 2024 have their technologies matured to technological readiness level 6 after undergoing a preliminary design assessment. This level entails displaying a representative prototype in a relevant setting, which can assist decrease technology-related costs and schedule delays.

These enhancements and initiatives provide several opportunities for federal contractors. For starters, the emphasis on Artemis-related initiatives presents considerable opportunities for companies working in aircraft and associated technology. Contractors can benefit from understanding the demanding standards and performance expectations of category 1 projects, particularly those related to the Artemis missions.

Second, the formation of the Moon to Mars program office demonstrates NASA's commitment to enhancing the integration and management of complex projects. Contractors working with NASA can benefit from this streamlined method to improve collaboration and performance on cooperative projects.

Furthermore, NASA's dedication to maturing technologies before product development is consistent with best practices that contractors can use to reduce risks and improve project results. Participating in programs that stress technological readiness can help contractors gain a competitive advantage for future NASA projects.

Finally, understanding NASA's cost and schedule baseline commitments can assist contractors in managing expectations and aligning their project management processes to NASA's standards. This alignment is critical for retaining a competitive edge and guaranteeing effective project execution.