APPENDIX 1H-TITLE PAGE, TRANSMITTAL LETTER, AND SUMMARY FROM GAO REPORT B-133340 OF JANUARY 31, 1964 Herewith is our report on certain management weaknesses noted in our review of Orbiting Solar Observatory projects administered by the National Aeronautics and Space Administration. Our review covered the period from January 1959 through December 1962. The Orbiting Solar Observatory projects are research and development efforts with the objective of making extended and more or less regular scientific observations of the sun from a point outside the earth's atmosphere. The first project spacecraft was successfully launched in March 1962, and other spacecraft are under development. Our review disclosed instances where management action by the agency adversely affected the costs of the projects. We found that the agency had established unrealistic delivery dates for two spacecraft. The dates had to be extended, and it became necessary to keep contractor personnel on project work longer than was actually necessary to integrate the experiments and complete the spacecraft. The amount of the contracts was increased by about $526,000 because of these extensions. We believe that these increased costs would have been avoided if the delivery dates had been consistent with experience available from other Orbiting Solar Observatory projects. We found also that the agency had awarded a contract for a backup spacecraft at a time when the facts known indicated that negligible time savings could be expected in the event the backup spacecraft was needed and that substantial nonrecoverable costs could be expected if the backup spacecraft was not needed. In our opinion, it was not reasonable for the agency to award this contract in light of the facts known at the time of award. As it developed, the backup spacecraft was not needed and nonrecoverable costs totaled about $273,000. Our review showed, in addition, instances of poor coordination between the technical and the administrative personnel of the agency. This poor coordination created a situation which unne necessarily limited competition for the first project spacecraft contract and resulted in a lack of administrative control over certain work being performed by the contractor. We are reporting on the matters observed during our review for the information of the Congress and to assist the National Aeronautics and Space Administration in minimizing the possibility of recurrence of such situations in carrying out future research and development projects. The agency does not agree with our views on most of the matters summarized above. Agency comments on our review were received on July 12, 1963, and were supplemented at our request by letters dated September 19, 1963, and October 29, 1963. Agency comments have been considered and are discussed in this report. Copies of this report are being sent to the President of the United States and to the Administrator, National Aeronautics and Space Administration. By Campbell Comptroller General SUMMARY OF FINDINGS Our review of the management of selected phases of the OSO projects showed that, in some instances, NASA management action led to increased project costs which, we believe, could have been avoided. These management actions were the establishment of unrealistic spacecraft delivery dates and the award of a backup spacecraft contract which, in our opinion, was not reasonable in light of the facts known at the time of award. The poor Our review showed, in addition, instances of poor coordination between NASA technical and administrative personnel. coordination created a situation which unnecessarily limited competition for the first OSO spacecraft contract and resulted in a lack of administrative control over certain work being performed by the contractor. While our review of the OSO projects showed instances of management action which adversely affected project costs and certain weaknesses in administrative control over contracting operations, these deficiences should not be considered typical of the entire project. For many of the management areas examined, we found no significant weaknesses. We are reporting on those instances of management weakness that we did observe, for the information of the Congress and to assist NASA in minimizing the possibility of recurrence of such situations in carrying out future research and development projects. Our findings are summarized below and are discussed more extensively on succeeding pages, as indicated. PROJECT COSTS INCREASED BECAUSE DELIVERY DATES SET BY GSFC FOR THE S-17 AND S-57 SPACECRAFT The amount of the contracts for the S-17 and S-57 spacecraft was increased by about $526,000 when the initial contract delivery dates set by GSFC had to be extended. The delivery dates were extended because the organizations responsible for experiment development and fabrication could not deliver the experiments to the spacecraft contractor at the scheduled time. As a result it became necessary to keep OSO-experienced personnel on OSO work longer than was actually necessary to integrate the experiments and complete the spacecraft. Our review showed that there was ample reason for GSFC to have foreseen, at the time that spacecraft delivery dates were set, that experiment development and fabrication could not keep pace with the scheduled development of the spacecraft at BBRC. We believe that the $526,000 increase because of the extended delivery dates would have been avoided if the initial delivery dates had been consistent with experience available from prior OSO spacecraft projects. (See p. 14). AWARD OF S-16 BACKUP SPACECRAFT CONTRACT WAS NOT REASONABLE About 8 weeks before the scheduled launch of the S-16, GSFC awarded a contract to BBRC for the design and fabrication of a backup spacecraft to be delivered in 36 weeks. The advantage of having the backup spacecraft under development before launch of the S-16 was that, if the S-16 mission failed, the project would move forward with less loss of time. To obtain this advantage it was necessary to accept the fact that, if the backup was not needed, nonrecoverable costs would be incurred. Our review showed that, at |