DoD Lessons for NASA’s Vision for Space Exploration

Defense Industry Daily has highlighted the recent (July 12) testimony of Robert E. Levin, Director for Acquisition and Sourcing Management at GAO about the factors that lead to endemic cost overruns in the acquisition of space systems.

The root problem is simple:

"There is a widespread belief among DOD and other officials involved with space programs that DOD starts more programs than it can afford in the long run, forcing programs to underestimate costs and over-promise capability and creating a host of negative incentives and pressures.”

Specific issues cited by officials interviewed by GAO included:

Because programs are funded annually and priorities have not been established, competition for funding continues over time, forcing programs to view success as the ability to secure the next installment rather than the end goal of delivering capabilities when and as promised.

Having to continually "sell" a program creates incentives to suppress bad news about a program's status and avoid activities that uncover bad news.

When combined with the high cost of launching demonstrators into space, the competition for funding often encourages programs to avoid testing technologies in space before acquisition programs are started.

NASA’s Vision for Space Exploration has already raised worries that it plans far more than could be reasonably encompassed within the projected space budget. Given that the pressures of overspending tend to fall hardest on science programs (see, for example, complaints by the American Astronomical Society and the American Geophysical Union), it is hard to feel sanguine about the future of space-based science.
NASA does come out relatively better than DoD with respect to one of the GAO’s concerns:

… [w]hen faced with lower budgets, senior executives within the Office of the Secretary of Defense and the Air Force would rather make across-the-board cuts to all space programs than hard decisions as to which ones to keep and which ones to cancel or cut back.

NASA has generally taken the opposite approach, cutting whole programs rather than “sausage slicing” the budget. Administrator Mike Griffin has committed to upholding that policy.