Based on Boeing’s current expenditure rate, NASA will need to increase the contract value by approximately $800 million to complete the first Core Stage for delivery to the Kennedy Space Center in December 2019. If the EM-1 launch takes place in June 2020, more than $400 million—for a total of $1.2 billion—would need to be added to the contract. This amount would only ensure delivery of Core Stage 1 and would not include the billions more required to complete work on Core Stage 2 and the EUS.
[...]contracting officers approved contract modifications and issued task orders to several contracts without proper authority, exposing NASA to $321.7 million in unauthorized commitments, most of which will require follow-up contract ratification.
[...]the Agency’s plans are on hold for acquiring additional Core Stages. Given that NASA officials estimate needing 52 months of lead time from issuing a contract to delivery, the earliest a third Core Stage can be produced is 2023, jeopardizing planned launch dates for future missions that require the rocket, including EM-2 and potentially a science mission to Europa, one of Jupiter’s moons, in 2022.
To its credit, the SLS Program has taken positive steps to address management and procurement issues related to the Boeing Stages contract, including making key leadership changes; requesting reviews of Boeing’s management, financial, and estimating systems; adding routine, in-depth performance reviews; and changing the procurement process to improve internal controls. However, the impact of these actions on improving Boeing’s future contract performance is uncertain.
From 2009 to 2016, a contracting officer exceeded his $2.5 million warrant by making multipleunauthorized commitments in the amount of $318 million for contracts for Michoud operations,Interim Cryogenic Propulsion Stage production, and advanced booster development. Thisindividual was also the primary contracting officer for the Boeing Stages contract. An issue withexceeding warrants was initially discovered in December 2016 during an internal annualself-assessment reviewed and signed by the Marshall procurement manager. However, thissituation was not acted upon or timely disclosed to NASA OIG as prescribed by the NASA FARSupplement.46 Based on an August 2017 referral from the Marshall Acquisition IntegrityProgram, NASA OIG initiated an investigation and provided its findings to Marshall managementin October 2017.47 As a result, Marshall officials terminated the contracting officer’s warrantand reassigned him pending final outcome of an inquiry into his actions and follow-upnegotiations to ratify the contractual actions committed over his warrant authority. As ofAugust 2018, Center management has not taken disciplinary action against thecontracting officer.
Although management concurred with Recommendation 1, we do not find their comments fully responsive. Finally, NASA management did not concur with Recommendation 6. Accordingly, recommendations 1 and 6 will remain unresolved pending further discussions with Agency officials.
Recommendation 1: Develop a corrective action plan for completing the two Core Stages and EUS and brief that plan to Boeing and senior NASA officials to gain their approval.Management's Response: NASA concurs with this recommendation. As stated in the "Positive Steps Taken to Address Procurement and Management Issues" section of the OIG's report, NASA apprised Boeing of the existing performance challenges in early 2018 and directed Boeing to develop a corrective action plan to address systemic issues to better control cost and schedule. This recommendation will be satisfied by the completion of a current study that demonstrates the manufacturing facility capability to meet applicable schedules
NASA attempted to obtain a lower cost for the SLS by removing reporting requirements such as not having EUS cost to be separately reported. The annual award fee, instead of every 6 months, was another attempt to reduce cost. The observed contractor performance showed that this approach, although it reduced contract value, did not allow the insight needed into contractor performance. If the contractor performance would have been better, this approach would have reduced cost to the Government.
This could be first significant test for Bridenstine, but I guess that’ll depend on how much congress takes notice.
Boeing response reported ....
Boeing response reportedhttps://twitter.com/spacebrendan/status/1050048925342810112
Quote from: FutureSpaceTourist on 10/10/2018 03:44 pmBoeing response reportedhttps://twitter.com/spacebrendan/status/1050048925342810112Typical smug response... 5 years from now they'll give the same one...
Quote from: FutureSpaceTourist on 10/10/2018 03:17 pmThis could be first significant test for Bridenstine, but I guess that’ll depend on how much congress takes notice.Prediction: Congress won't take notice....
Page 19 is interesting.Boeing has received $323M, 90% of the maximum possible in performance bonus fees.
...we recommended the Agency (7) implement, by October 2018, an acquisition strategy for building additional Core Stages beyond Core Stage 2 that includes consideration for awarding the contract as a fixed-price, end-item deliverable contract with each Core Stage separated into unique task orders.
And that's fair. It is hard and technically complex. But what's left unsaid in the report, but will be said here, is that maybe NASA just isn't as good as others right now at building big rockets. It's been 40 years since they developed the space shuttle.
... due to continued production delays with the SLS Core Stage and upcoming critical testing and integration activities, current NASA schedules indicate launch dates of mid-2020 and mid-2022, respectively.
Quote from: FutureSpaceTourist on 10/10/2018 03:44 pmBoeing response reported ....Boeing refers to SLS as an "unprecedented rocket program," but the whole point of a Shuttle-derived design was that it was to reduce costs by the use of hardware precedents. On top of that, SLS's performance specs are not too different from those of a decades-old rocket, the Saturn 5. Oh, and Boeing, which absorbed Rockwell International some years ago, was the prime contractor for the Shuttle and much of the Saturn 5. The SLS program is very much "precedented."EDIT: 'V' -> '5' in penultimate sentence, for consistency.