NASA confirmed its Space Launch System rocket program is unaffordable. Here's how the space agency can cut taxpayer costs.

MELBOURNE, Fla. — A federal watchdog agency tasked with government spending oversight took aim again at NASA's multibillion-dollar Space Launch System rocket, the backbone of the agency's lunar-focused Artemis program.

The report, released last week, criticized NASA's lack of transparency and tracking of production cost overruns as reasons why the agency's SLS rocket program doesn't offer long-term sustainability or affordability. It also laid out NASA's short-term plans to reign in the costs of the world's most powerful rocket.

Senior NASA officials agreed, admitting to the U.S. Government Accountability Office "that at current cost levels, the SLS program is unaffordable."

Artemis is NASA's flagship attempt to return U.S. astronauts to the moon and establish a long-term human presence as a stepping stone before venturing onto Mars. The successful uncrewed Artemis I demo flight, which launched last November from Kennedy Space Center in Florida, carved a path for Artemis II with a crew of four to launch sometime late next year.

It will mark the first time humans will venture beyond low Earth orbit since 1972.

NASA's poor tools: Estimation and lack of oversight

The Government Accountability Office listed two major concerns about the cost of the Space Launch System: NASA needs to do a better job of providing consistent transparency and oversight of production costs, and the agency needs to move away from an old contracting structure that saddles the government with too much cost risk.

Rather than outlining a Space Launch System budget and cost estimate for the duration of the Artemis program, NASA only required cost and schedule commitments to be estimated through the first demonstration flight, which the agency successfully completed last year. After that, the agency only requires a rolling five-year estimation of production and operation costs to be updated annually — something NASA hasn't done since April 2022.

"These estimates do not track costs by Artemis mission or for recurring production items," the Government Accountability Office said in its report. "Ongoing production and other costs needed to sustain the program going forward are not monitored."

Of NASA's 2024 federal budget request, the Space Launch System rocket for the Artemis III mission accounted for 37% — $2.5 billion — of the amount requested for the entire Artemis program, according to a Government Accountability Office analysis.

Without tracking reoccurring production costs every year of things like the rocket's core stage booster and its four main engines, it's impossible to keep spending under control.

"Neither the 5-year production and operation cost estimate nor the annual budget requests are a substitute for a cost baseline, and are poor tools to measure cost performance over time," the GAO report said. "Understanding the full cost of the SLS program will help decision-makers monitor program performance and assess the long-term affordability of the program."

NASA's four-step plan for out-of-control SLS costs

Also laid out in the GAO's report were four key strategies that NASA believes it can enact to impact the lifetime cost of the SLS:

• Stabilizing the flight schedule — The GAO reported last year that changes to the Artemis flight schedule caused significant cost uncertainty. "In February 2022, NASA officials stated that the program expects that a stable flight schedule will result in significant cost savings in future years," the report said.
• Achieving learning curve efficiencies — "NASA officials stated that the (Artemis) program plans to or has already structured the production and operation contracts to encourage the contractors to become more efficient with recurring hardware production," the report said. With the first flight under the agency's belt and components of the next two already nearing the end of production, there is less risk of "first time build" constraints and more opportunity to identify cost savings.
• Encouraging innovation — "NASA has reported that the program has made some progress in reducing program costs by encouraging contractors to pursue innovative manufacturing techniques or tools to streamline production," the report said. Taking advantage of newer production practices creates opportunities for time and cost savings.
• Adjusting acquisition strategies — Going forward, once the agency achieves stability of the SLS flight schedule and contractors achieve maturity with their production strategies, NASA will lean more heavily on fixed-price contracts. This means that NASA will give contractors a set amount, and the contractors, instead of the taxpayers, will be responsible for the cost risk of anything beyond that amount.

"Implementing our prior recommendations to establish cost and schedule baselines that capture these ongoing, recurring production costs would begin to improve transparency into the program," the GAO said. "NASA has made some progress toward implementing these strategies, but it is too early to fully evaluate their effect on cost."

Could NASA purchase SLS services instead of hardware?

One last option that could dramatically reduce the taxpayer cost of the SLS is for NASA to explore a completely different operation model for the SLS rocket and Artemis program.

Though the GAO did not provide much context, for missions beyond Artemis V and VI, which the agency has already inked contracts on, NASA could become an SLS customer rather than an owner, purchasing launch services much in the same way it currently does with SpaceX and its Falcon 9 rockets.

"In essence, NASA would purchase future SLS launches and payload capabilities from a contractor who would own, operate, and integrate the SLS vehicle," the report said.

NASA has touched on this option before, but details remain sparse about how this would work.

"(NASA) officials told (the GAO) the agency is still reviewing its future strategy in advance of releasing a request for proposals," the report said.

Contact Jamie Groh at [email protected] and follow her on X at @AlteredJamie.