This is our report on the cost-benefit analysis used in support of the Space Shuttle Program of the National Aeronautics and Space Administration that we prepared at the request of Senator Walter F. Mondale.

Our review was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing Act of 1950 (31 U.S.C, 67).

Copies of this report are being sent to the Director, Office of Management and Budget, and to the Administrator, National Aeronautics and Space Administration.

Denver R. Pacts

Comptroller General

of the United States

I Letter dated February 17, 1972, from Senator Walter F. Mondale

49

II

Letter dated May 24, 1972, from the Deputy
Administrator, National Aeronautics and
Space Administration

51

III

Principal officials of the National Aeronau-
tics and Space Administration responsible
for the activities discussed in this re-
port

53

COMPTROLLER GENERAL'S
REPORT TO THE CONGRESS

COST-BENEFIT ANALYSIS USED IN SUPPORT

OF THE SPACE SHUTTLE PROGRAM

National Aeronautics and Space Administration
B-173677

DIGEST

WHY THE REVIEW WAS MADE

Senator Walter F. Mondale requested that the General Accounting Office (GAO) review the cost-benefit analysis used by the National Aeronautics and Space Administration (NASA) in support of the Space Shuttle Program announced in January 1972. With the Senator's agreement, this report is being released to the Congress in view of widespread interest in the space shuttle.

RESULTS OF REVIEW

NASA has proposed that a space shuttle be developed for U.S. space transportation needs for NASA, the Department of Defense (DOD), and other users in the 1980's. (See p. 7.)

The primary objective of the Space Shuttle Program is to provide a new
space transportation capability that will (1) reduce substantially the cost
of space operations and (2) provide a future capability designed to support
a wide range of scientific, defense, and commercial uses. (See p. 7.)
The space shuttle will be the first space vehicle that can be used again and
again. It will be boosted into space through the simultaneous operation of
its solid-propellant booster engines and its orbiter-stage, high-pressure,
liquid oxygen-liquid hydrogen main engines. The booster rockets will detach
at an altitude of about 25 miles and descend into the ocean to be recovered
and reused. The orbiter, under its own Dower, will continue into low earth
orbit. The orbiter will look like a delta-winged airplane and will have a
crew of four--pilot, copilot, and two specialists--who will fly it back to
earth for an airplane-like landing. (See p. 7.)

The orbiter will have a cargo compartment measuring about 60 feet in length
and 15 feet in diameter. It will be able to place 65,000 pounds in a
100-nautical-mile due east orbit and 40,000 pounds in a polar orbit. Pro-
pulsive stages (tugs) will be used to propel satellites into higher orbits
or to achieve escape velocity. (See p. 8.)

NASA analysis

NASA contracted with Mathematica, Incorporated, for an analysis of how eco-
nomical the shuttle would be compared with expendable launch systems.
(See p. 14.) Mathematica was directly supported by analyses conducted by

Tear Sheet

The Aerospace Corporation and the Lockheed Missile and Space Company. (See p. 15.) This team used the results of numerous studies concerning space transportation systems and payloads for the 1979-90 period. (See p. 14.)

These analyses were based on a comparison of estimated total space program costs for three alternative space transportation systems.

--The current expendable system.

--The new expendable system.

--The space shuttle system. (See p. 14.)

"Total space program cost" was defined by Mathematica as the sum of (1) launch system life-cycle costs and (2) payload system life-cycle costs. (See p. 14.)

During these analyses, the shuttle was evaluated only in terms of those capabilities common to the three alternative space transportation systems identified. Additional benefits and options that a reusable system might offer were not considered in the analyses. (See p. 14.)

For these analyses NASA and DOD postulated space missions involving different numbers of flights during the 1979-90 period. The studies estimated the costs and other economic characteristics expected for each of the three alternative space transportation systems in performing these missions. (See p. 15.)

GAO analysis

The primary focus of GAO's analysis was the study by Mathematica. NASA and Mathematica officials stated that this study demonstrated the shuttle to be economically justified. (See p. 7.)

1

GAO examined into the economics of the Space Shuttle Program on the basis of a comparison of estimated total space program costs for the shuttle and the current expendable system. Although the estimated cost of the new expendable system was lower than the cost of the current expendable system, GAO did not consider it in the study because of the (1) uncertainty in cost estimates for any new class of systems, including this one, and (2) lack of time to review the new expendable launch system estimates. (See p. 22.)

GAO did not make an independent cost-benefit analysis of the Space Shuttle Program. GAO worked with estimates received from Mathematica for two representative configurations of the space shuttle--one a reusable solid booster shuttle and the other a reusable liquid booster shuttle. (See p. 11.) GAO did not analyze NASA's March 1972 estimate for the Space Shuttle Program. (See p. 11.) The following table shows the life-cycle (development, procurement, and 12-year operations) costs for the NASA estimate and the two representative configurations from Mathematica. (See p. 34.)