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C~DQL~I~5~
OVERSIGHT
SPACE SHUTTLE COST, PERFORMANCE,
AND SCHEDULE REVIEW
HEARING
BEFORE THE
SUBCOMMITTEE ON
SPACE SCIENCE AND APPLICATIONS
OF THE
COMMITTEE ON
SCIENCE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
NINETY-SIXTH CONGRESS
FIRST SESSION
~S LAW SCHOOL UBRA1~
JUNE 28, 1979
CAMDEN, N. J. 08102 _____
)VERNMENT DOCU~EN~[NO. 31]
Printed for the use of the
Committee on Science and Technology
* ~/9r~,7
U.S. GOVERNMENT PRINTING OFFICE
50-3650 WASHINGTON: 1979
(T NOV 51979
/ ~i
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COMMITTEE ON SCIENCE AND TECHNOLOGY
DON FUQIJA, Florida, Chairman
ROBERT A. ROE, New Jersey
MIKE McCORMACK, Washington
GEORGE E. BROWN, JR., California
JAMES H. SCHEUER, New York
RICHARD L. OTTINGER, New York
TOM HARKIN, Iowa
JIM LLOYD, California
JEROME A. AMBRO, New York
MARILYN LLOYD BOUQUARD, Tennessee
JAMES J. BLANCHARD, Michigan
DOUG WALGREN, Pennsylvania
RONNIE G. FLIPPO, Alabama
DAN GLICKMAN, Kansas
ALBERT GORE, JR., Tennessee
WES WATKINS, Oklahoma
ROBERT A. YOUNG, Missouri
RICHARD C. WHITE, Texas
HAROLD L. VOLKMER, Missouri
DONALD J. PEASE, Ohio
HOWARD WOLPE, Michigan
NICHOLAS MAVROULES, Massachusetts
BILL NELSON, Florida
BERYL ANTHONY, JR., Arkansas
STANLEY N. LUNDINE, New York
ALLEN E. ERTEL, Pennsylvania
KENT HANCE, Texas
JOHN W. WYDLER, New York
LARRY WINN, JR., Kansas
BARRY M. GOLDWATER, JR., California
HAMILTON FISH, JR., New York
MANUEL LUJAN, JR., New Mexico
HAROLD C. HOLLENBECK, New Jersey
ROBERT K. DORNAN, California
ROBERT S. WALKER, Pennsylvania
EDWIN B. FORSYTHE, New Jersey
KEN KRAMER, Colorado
WILLIAM CARNEY, New York
ROBERT W. DAVIS, Michigan
TOBY ROTH, Wisconsin
DONALD LAWRENCE RITTER,
Pennsylvania
BILL ROYER, California
HAROLD A. GOULD, Executive Director
PHILIP B. YEAGER, General Counsel
REGINA A. DAVIS, Chief Clerh
PAUL A. VANDER MYDE, Minoritij Staff Director
SUBCOMMITTEE ON SPACE SCIENCE AND APPLICATIONS
DON FUQUA, Florida, Chairman
RONNIE G. FLIPPO, Alabama LARRY WINN, JR., Kansas
WES WATKINS, Oklahoma ROBERT K. DORNAN, California
MARILYN LLOYD BOUQUARD, Tennessee KEN KRAMER, Colorado
BILL NELSON, Florida
GEORGE E. BROWN, JR., California
SUBCOMMITTEE STAFF
DARRELL R. BRANSCOME
DANIEL E. CAssIDY
GERALD E. JENKS
THoMAs N. TATE
(II)
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CONTENTS
WITNESSES
June 28, 1979: Page
Dr. Robert A. Frosch, Administrator, NASA 3
Dr. William Perry, Under Secretary of Defense for Research and
Engineering 37
George Jeffs, president, Aerospace Group, Rockwell InternationaL - - 63
James M. Stone, vice president, Thiokol Corp 80
Kenneth Timmons, vice president and general manager, Michoud
Operations, Martin Marietta 102
APPENDIX
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
Dr. Robert A. Frosch, NASA_L_ 115
Dr. William Perry, Under Secretary of Defense for Research and Engi-
neering 170
George Jeffs, Rockwell International 177
James M. Stone, Thiokol Corp 187
Kenneth Timmons, Martin Marietta 198
(III)
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SPACE SHUTTLE COST, PERFORMANCE, AND
SCHEDULE REVIEW
THURSDAY, JUNE 28, 1979
U.S. HOUSE OF REPRESENTATIVES,
COMMITTEE ON SCIENCE AND TECHNOLOGY,
SUBCOMMITTEE ON SPACE SCIENCE AND APPLICATIONS,
Wa~shington, D.C.
The subcommittee was convened at 9 a.m., in room 2318, Rayburn
House Office Building, Hon. Don Fuqua (chairman of the subcom-
mittee), presiding.
Mr. FUQUA. The subcommittee will be in order.
Today the Subcommittee On Space Science and Applications will re-
view the current cost, schedule, and performance status of the Space
Shuttle program and will examine the need for a $220 million budget
amendment which has been requested by NASA.
On March 28, of this year, H.R. 1786, the fiscal year 1980 NASA au-
thorization bill, was passed by the House of Representatives. On May
14 of this year, the President transmitted to the Congress an amend-
ment to the 1980 budget to increase by $220 million NASA's fiscal year
1980 authorization and specifically for the Space Shuttle program
stating that these additional resources are needed to~maintain the de-
velopment and production pace necessary to meet civil and military
requirements.
The Senate, in considering the original fiscal year 1980 NASA
budget request and the budget amendment, has included the $220 mil-
lion in the amendment to H.R. 1786. The Senate. passed the bill, H.R.
1786, as amended on June 14, 1979, and the $220 million will be one
item of major difference between the House action and the Senate
action.
The subcommittee is recorded in strong support of the Space Shuttle
program for many years. We are also on record for questioning the
wisdom of limiting the Space Shuttle capability with a four-orbiter as
opposed to a five-orbiter fleet.
The budget amendment was transmitted to Congress only a few
weeks after the committee's February authorization hearings where
both the NASA fiscal year 1979 supplemental request and the fiscal
year 1980 authorization request were being considered. Considering
the subcommittee hearings in February with headquarters officials,
field hearings at the Space Shuttle development centers, and field
hearings at the contractors, the timing of this subsequent budget
amendment raises questions with regard to the accuracy and candor of
testimony and responses to questions in the February hearings. It is
(1)
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2
most difficult to understand how a problem of this magnitude de-
veloped between March and May.
Today the subcommittee will examine the basis for the $220 million
budget amendment, how the funding problem developed, impact on
production Orbiter schedules of the reallocation of more than $70
million from production to D.D.T. & E. in fiscal year 1979, what NASA
and the contractors are doing to assure that the problem does not
repeat itself, the impact of schedule slips on both civilian and military
requirements, NASA's current cost and schedule assessment for the
D.D.T. & E. program and NASA's plan for establishing a firm sched-
ule and a resource plan for the production phase of the Shuttle
program.
I would like to at this time yield to the distinguished ranking minor-
ity member of the subcommittee and one that has been involved in this
program since long before its inception, the gentleman from Kansas,
Mr. Winn?
Mr. WINN. Thank you, Mr. Chairman. I want to take this oppor-
tunity to again publicly state my support for the Space Shuttle pro-
gram. I have been involved with this program from its inception and
I am thoroughly convinced that this expenditure of tax dollars is more
than justified. WTe are just beginning to see the vast benefits of our
space program and the Shuttle offers the promise to unfold many more
opportunities. Even the administration seems to be enthusiastically
supporting the program for the many potential benefits that it can
bring to our Nation.
I must admit though that I am not happy about the purpose for
which these hearings are being held. The apparent cost overruns which
have been incurred could have profound effects on the entire space
program, not just the Space Shuttle. The political controversies that
will occur because of these overruns will continue for some time and
may do irreparable damage to the integrity of NASA as a mission-
oriented agency.
The factor which distresses me most. though is the fact that these
overruns come as somewhat of a surprise. For 12 years I have been
actively involved with NASA programs. I started visting the cen-
ters and contractors that were involved in the Shuttle program in
the early 1970's. I remember visiting the wooden Shuttle Orbiter
mockups long before we even thought of building any hardware.
After the hardware development started, the chairman and I per-
sonally visited each of the lead centers and prime contractors each
and every year to get a firsthand account of the status and the
future of the program.
Time and time again we asked the same quest.ions-"Are we on the
cost plan of $5.22 billion and are we on schedule ?" And time and
time again we were told that we were on schedule and within the
$5.22 billion.
Over a year ago we began to realize that supplemental funding
would be required and a schedule slip would occur. However, this
did not. seem unreasonable. A 10-percent cost growth in 10 years
for a high technology program should probably be commended.
Now, though, just a few weeks after the passage of that supple-
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mental legislation we are looking at a substantially larger overrun
and a further schedule slip.
This makes me feel like a total failure. After spending all of these
years traveling from one briefing on the Shuttle status to the next,
I feel like I have totally wasted my time. The visits gave me the con-
fidence to go before my colleagues in the House of Representatives
and fight for the necessary support to move this program along. I
can see now that it was a false sense of confidence.
As late as last fall, when we held our Shuttle cost and schedule
review hearings, I impressed upon John Yardly the importance of
making sure that the fiscal year 1979 supplemental request be large
enough. I think my words were, "We can only go to the well once."
Now a matter of a few weeks later we have reprogramed another
$80 million in fiscal year 1979 and added another $220 million to the
fiscal year 1980 budget and we are looking at a total D.D.T. & E.
estimate in the neighborhood of $6 billion.
I don't know whether I was misled about the total D.D.T. & E. cost
estimate or whether people just were not aware that the program
was going to exceed the limit. In some ways I would hope that I was
misled because it would at least show that someone was assessing
whether the program was going to stay within the $5.22 billion.
I can appreciate the problems that NASA faces in attempting to
support the administration budget policies and manage those com-
petitive contracts. However, 1 was confident that sufficient mechanisms
were available to allow the program managers to communicate any
form of managerial problems that may require the assistance of this
committee and of the Congress.
Mr. Chairman, we face a yeoman's task, a task I do not relish. We
must reestablish our own confidence before we can face our col-
leagues in the House. I hope these hearings and subsequent conversa-
tions will adequately relieve my concerns and allow me to continue
the avid support for NASA that I have displayed in the past.
Thank you, Mr. Chairman.
Mr. FUQUA. Thank you, Mr. Winn.
Mr. Flippo?
Mr. FLIPPO. Nothing at this time, Mr. Chairman. Thank you.
Mr. FUQTJA. Our first witness this morning will be Dr. Robert A.
Frosch, the Administrator of the National Aeronautics and Space
Administration.
Dr. Frosch, we will be happy to hear from you.
STATEMENT OP DR. ROBERT A. PROSCH, ADMINISTRATOR
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
Dr. FROSCH. Thank you, Mr. Chairman.
I am here today to discuss the Space Shuttle program, its status and
problems, and our plans for fiscal year 1979 and fiscal year 1980 with
particular emphasis on our request for a fiscal year 1980 authorization
budget amendment in the amount of $220 million. As the subcommit-
tee knows from our briefings and from the staff reviews at our centers
and contractors, it has been necessary for us to spend more resources
to accomplish the development program than we had planned, and
the completion of this development will take longer than anticipated.
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With your permission, I would like to submit my full statement for
the record and limit my oral testimony before you to a synopsis that
highlights the status of the Shuttle program .today and the justification
of the President's fiscal year 1980 budget amendment in the amount
of $220 million.
Mr. FUQTJA. Without objection, the statement in its entirety will be
printed in the record and you may summarize it in any fashion you
may desire.
[The prepared statement of Robert A. Frosch follows:]
STATEMENT OF ROBERT A. FROSCH, ADMINISTRATOR, NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
Mr. Chairman and members of -the subcommittee: I am here today to discuss
the Space Shuttle program, its status and problems, and our plans for Fiscal
Year 1979 and Fiscal Year 1980 with particular emphasis on our request for an
Fiscal Year 1980 Authorization Budget Amendment in the amount of $220 million.
As the Subcommittee knows from our briefings and from the staff reviews at our
centers and contractors, it has been necessary for us to spend more resources to
accomplish the development program than we had planned, and the completion of
this development will take longer than anticipated.
With your permission, I would like to submit my full statement for the record
and to limit my oral testimony before you to a synopsis that highlights the status
of the Shuttle program today and the justification for the President's Fiscal Year
1980 Budget Amendment in the amount of $220 million.
First, I want to stress that I have found no reason to question the basic
soundness of the Shuttle concept or its technical design.
Second, I wish to make it clear for the record that the Carter Administration
is -fully committed to this program, with an emphasis on having an operational
four-orbiter, two-site capability as early as possible to meet critical space pro-
gram needs, particularly in the national security sector.
Third, I would like to outline for you our current best schedule estimates for
those operational capabilities, assuming that the Fiscal Year 1979 supplemental
and Fiscal Year 1980 requests of both NASA and DOD are approved by the
Congress. Our focus has been upon completion of the initi~l development and ac-
complishment of the first successful manned flight.
We believe that is the proper focus of our attention, but we recognize that we
iieed also to assure adequate emphasis on the overall program schedule, includ-
ing production.
As the Subcommittee knows, over the past few- weeks we have conducted an
intensive assessment of the work remaining until STS-1, the first manned orbital
flight. The next key milestone on the path to STS-1 is movement of the orbiter
Columbia out of the Orbiter Processing Facility (OPF) at the Kennedy Space
Center (KSC) to the Vehicle Assembly Building (VAB). On Monday, I reviewed
the - detailed integrated plan that covers all the known work necessary to com-
plete the manufacturing work and checkout in the OPF. If we can accomplish all
these tasks in the right order, and if we have allowed enough time for the in-
evitable work-around problems we will have, then we could finish the basic work
on the Orbiter in November and move it to the VAB before Christmas. This
s~hedule could culminate in a first launch by the end of March. If I include some
conservatism-such as the possibility we would need to return to the VAB from
the pad before launch, or an allowance for unknown uncertainties, I would have
to add some 10 to 12 weeks to that date. In summary, I feel we have one chance
in five of launching -by the end of the first quarter; I believe the chance of flight
by the end of the second quarter of 1980 is 50-50.
Operational flights of the first orbiter will begin in the late summer of 1981.
The second orbiter, 099, will be delivered in the spring of 1982. We are scheduling
delivery of the third orbiter, 103, in the summer of 1983 to support the initial
operational capability at Vandenberg Air Force Base, scheduled for the winter of
1983. Orbiter 104 will be scheduled for delivery in late 1984.
Fourth, we are experiencing a DDT&E cost growth of about 15 percent, and a
schedule extension of about the same degree, when measured against the Ad-
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ministration's 1972 commitments. While I am not satisfied with this performance,
I believe that our performance to date and projected into the future, when tested
against those estimates at the beginning of the program compares favorably with
other complex, high technology development programs.
Lastly, much has been said about technical problems encountered during devel-
opment of the orbiter, the main engines, the external tank, and the solid rocket
boosters. I would like to point out that the very essence of the development
process-and of the advanced capability it engenders-is the discovery of tech-
nical problems and the successful application of new solutions. We find and solve
the major difficulties in a new system on the ground; spaceflight is not the proper
domain for such experimentation.
The remainder of my statement treats each area of development in some detail,
and notes the cumulative effect of schedule extensions and cost estimate changes
which have resulted in the need for the Budget Amendment. I would like to first
review the current status of the program.
Space Shuttle development is in a period of peak activity with primary con-
centration on the remaining work needed before the first orbital flight: Our plans
for fiscal year 1979 have been predicated on receiving the full $185 million sup-
plemental appropriation and now include a reallocation of $70 to $90 million from
production to development to meet current needs. It is crucial that the supple-
mental funds be available at the earliest possible date. These funds are necessary
to maintain the high rate of activity required for development efforts throughout
all of fiscal year 1979. To allow for approval of the supplemental funds as late
as July, and to accommodate technical problems, it has been necessary to re-
strict funding in our production program through the third quarter of this fiscal
year. This production restriction, together with the reallocation of funds from
production to development and delays in structural testing will cause Orbiter
099 (Challenger) to be delayed approximately 6 months. We now expect to de-
liver Challenger to KSC in March of 1982.
5PACE SHUTTLE STATUS
With respect to the Space Shuttle development program, all major system ele-
inents are proceeding in test and manufacture, and major ground test programs
are being conducted and completed. The design certification review of the overall
Space Shuttle configuration was completed in April. In general, development test-
ing throughout the program has been successfully completed or soon will be, and
we are now deeply involved in the qualification of flight configured elements. This
in-depth qualification testing involves tests in all Shuttle projects to give us the
assurance that every element willperform its function in flight reliably.
The Mated Vertical Ground Vibration Test conducted at the Marshall Space
Flight Center (MSFC) has been successfully completed, and these Space Shuttle
elements have been shipped to the KSC for us in verification testing of the KSC
facilities and prelaunch checkout processes. This is now underway and the ex-
perience obtained from handling this full scale hardware and the numerous fit
checks with all the launch facilities have been very useful. The second phase of
the main propulsion system tests at the National Space Technology Laboratories
(NSTL) has started and will continue through 1979. These tests include three
main engines of flight configuration mounted on an orbiter aft fuselage, with
propellants being fed from a flight-type external tank. A 54 second firing was
made on June 12, 1979. Preparation for the next firing at full duration is nearly
complete, and the test should be accomplished this week.
The Orbiter 102 (Columbia), which will be used for the orbital flight tests,
has been delivered to KSC where it is being prepared for the initial launch. De-
liveries of the engines, the external tank, and the solid rocket boosters to KSC
for this first flight will be completed early this summer.
In the orbiter project, the structural test article is currently in test under sub-
contract by the Lockheed Corporation in Palmdale, California. This test article
ha~ a flight worthy airframe and it will be converted to the second orbital vehicle,
Challenger, after structural testing is completed late this year.
Work on Columbia at KSC is proceeding at a slower pace than planned, and
there is considerably more work remaining to be accomplished before the first
flight than originally planned. The late arrival of Columbia, incomplete orbiter
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manufacturing and assembly work transferred to KSC, the high backlog of ther-
mal protection system (TPS) tile work remaining, and additional modifications
delaying testing and checkout have all contributed to delay in orbiter flight
readiness. The TPS tile problem is most severe. There are still about 10,000 tiles
to be installed at KSC. This includes tiles yet to be installed on the orbital ma-
neuvering system pods after they arrive at KSC and tiles which are removed due
to deficiencies. So far we have achieved an installation rate of slightly over 300
tiles per week as opposed to an originally planned rate as high as 650 per week
to be ready for a September 1970 rollout from the Orbiter Processing Facility
(OPF). However, learning is progressing and efforts are underway to improve
this situation by reorienting the management structure, expediting tile manufac-
ture, adding more manpower, and improving the training. To complete the tile
work in the OPF this year, we will need to achieve a 450 to 500 tiles per w-eek
rate.
During the past 2 weeks, we have had several full duration engine firings of
520 seconds each at XSTL, including a successful "over stress" test at 102 percent
RPL and we now- have achieved approximately 50,000 test seconds of engine
operation of the 80,000 seconds planned for STS-1 certification. The engine prob-
lem with the main oxidizer valve has been corrected by redesign and the main
engines are now operating satisfactorily. Previous major engine development
problems have been overcome and residual turbine problems are now being an-
alyzed. A plan to eliminate hydrogen pump turbine blade cracking to extend
operating life of the pump is well underway. This includes testing different blade
coatings, redesigning the blades, and studying new blade materials. In addition,
preliminary tests have shown that changes to the engine start sequence to reduce
temperature spikes have reduced the incidence of blade cracking. The three flight
engines for Columbia being acceptance tested at NSTL in Mississippi, are sched-
uled to be shipped to KSC this July and August.
However, recent problems did cause engine deliveries for Columbia to be
delayed, and engine manufacturing workforces w-ere maintained at higher levels
longer than planned at the Rocketdyne Engine Plant in Canoga Park, California.
To protect the engine development program against further test problems, three
additional engines and a number of additional engine components are being added
to the program, and deliveries of engines are also being accelerated. These steps
were taken to insure that sufficient engines would be available to meet any further
design or engine life problems that might be encountered during the engine devel-
opment testing at operating levels up to 109 percent of rated power.
Three external tank test articles have been completed and are in use on the
program for structural testing, launch facility verification and the main propul-
sion tests. Our first flight tank, the fourth to be built, has completed assembly
and is undergoing final checkout prior to shipment to KSC in early July. In
addition, four other flight tanks are in various stages of manufacture for future
flights. Thermal protection system application problems, plus late technical
changes for an orbiter bracket interference problem and relocations of a liquid
oxygen engine cut-off sensor, have delayed this first flight external tank by about
one month at increased project costs.
The fourth and final solid rocket motor (SRM) development firing was com-
pleted in February 1979, and the first of three qualification motor firings was
successfully completed in June. Efforts now are concentrated on completion of
qualification testing and delivery of booster subsystems for STS-1. Casting of the
propellant has been completed in all motor segments and some solid rocket booster
(SRB) subsystems are already at KSC. Due to development motor handling,
manufacturing and subsystem qualification test problems, the SRB development
program is using increased manpower and overtime. Tight manufacturing quality
control is necessary to insure success, since these solid rocket motors cannot be
test fired prior to use. Delivery of the final segment for the first complete flight
boosters is now scheduled for early August.
All facilities at KSC are complete and in place for the first manned orbital
flight. Although ground support equipment and the computerized launch process-
ing system (LPS) installations have been delayed, they are in the final stages of
completion and software validation is in process. Because software and com-
puters utilized for launch operations fell behind schedule early this year, addi-
tional shifts of personnel and extensive overtime have been required. The LPS
hardware deliveries have now been completed, simulation support is continuing
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for development of checkout procedures, and checkout sofeware is being devel-
oped and validated. Integration of all the ground support equipment will con-
tinue, and initial flight equipment is being checked out and processed for launch.
In summary, all elements of the program are now coming together for the first
launch. I would now like to address the reasons for the Budget Amendment.
BACKGROUND
Early in the Space Shuttle program NASA established a philosophy of main-
taining an austere budget environment. Budgetary reserves were maintained at
Headquarters and only utilized after review by the highest levels of management.
This was a different philosophy than used in Apollo, in which reserves were ap-
proved and maintained at lower levels of management. This new practice was
adopted to minimize program costs. Further, tight schedules were specified for
accomplishment of the development program, since working toward a tight but
achievable schedule would provide the minimum overall program cost, and we
l)udgeted accordingly. We have, of course, made adjustments to this plan as nec-
essary. In Fiscal Year 1978, we reallocated $100 million from Shuttle funds
planned for follow-on orbiter production into the development program. In Fiscal
Year 1979, the Administration requested, and the Congress has authorized, a
supplemental appropriation.
NEED FOR $220 MILLION BUDGET AMENDMENT IN FISCAL YEAR 1980
Last summer, during the initial preparation for the fiscal year 1980 budget
submission, we reassessed the program status and requirements based on a
success oriented schedule with the first Space Shuttle flight scheduled in Sep-
tember. We included reserves for fiscal year 1979 and fiscal year 1980, consistent
with an initial flight test in late 1979 and continued development flight tests
throughout fiscal year 1980. The recommended fiscal year 1979 Supplemental
appropriation request and fiscal year 1980 budget were consistent with this
plan. We started experiencing problems early in fiscal year 1979, and achieving
this schedule is no longer possible. Significant cost increases were indicated by
the Rockwell International Corporation, the orbiter prime contractor, in October;
similar increases followed from the other Space Shuttle elements later in the Fall.
We intended to handle these identified increases within our planned reserves, and
if the schedule had been maintained, the reserves probably would have been sufli-
cient. However, by April it had become clear that additional funds must be ex-
pended in fiscal year 1979 for thO Design, Development, Test and Evaluation
(DDT&E) phase and additional DDT&E resources in fiscal year 1980 are also
required. Therefore, in addition to the reallocation of fiscal year 1979 funding,
we requested the fiscal year 1980 Budget Amendment to accommodate program
growth experienced to date and the maintenance of larger work forces. We have
also increased our reserve requirements as a precaution against further problems.
It has also become apparent, based on information received from the con-
tractor and JSC, that the funding requirements for follow-on orbiter production
may be significantly in excess of those previously estimated. We are in the
process of intensive review of these funding requirements. It is clear that the
amount of any necessary increase over the previous estimates is subject to
engineering and management judgment in a number of areas. We have not
completed or flight tested the first orbiter and therefore do not have complete
data on actual effort required to build an operational orbiter. In our planning,
we expect to achieve considerably greater efficiency in producing the follow-on
orbiters, but the extent to which the efficiency can be improved is a matter of
judgment. Another important unknown is the amount of change activity that
will be required on the second, third, and fourth orbiter as a result of flight
test experience on the first. A third area which involves uncertainty is the
amount of engineering and related activities that will be required in support of
early flight activities and the duration for which it will be necessary to continue
various levels of support. Before we can arrive at a reasonably reliable estimate
of the cost of these orbiters, we will need to arrive at judgments with respect
to these uncertainties and to apply those judgments to the available data base.
This is the part of our cost review, now in process in preparation for our fiscal
year 1981 budget recommendation.
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The $220 million Bu~Jget Amendment is required to sustain the development
program at a higher rate of activity for a longer period of time than previously
planned. The original fiscal year 1980 budget preparation was based on a Sep-
tember-December 1979 first manned orbital flight (STS-1), with completion of
the flight test program in early 1981. Due to additional technical and manufac-
turing problems, the first manned orbital flight is now being delayed.
The orbiter portion of the fiscal year 1980 Budget Amendment provides for
the completion of tasks previously planned for fiscal year 1979, the incorpora-
tion of design changes, and increased development support through the flight
test program based on our fiscal year 1979 experience. Specifically, this in-
crease provides for additional orbiter and systems integration engineering sup-
port (Rockwell International) throughout the flight test program, and increased
manufacturing personnel to complete mission kits (unique flight, test and/or
support hardw-are) that were previously planned for fiscal year 1979. These
items w-ere delayed to fiscal year 1980 principally due to the TPS problems and
the need to transfer additional manpower for the solution of these problems in
fiscal year 1979. The orbiter qualification and certification test programs have
also experienced delays. Priority is being given to completing those tests designed
to certify subsystems for the first test flight. The test activities to demonstrate
required lifetime have been largely deferred to fiscal year 1980. A combination
of technical problems and schedule extensions have caused substantial cost
increases in subsystems such as the orbital maneuvering engine and the reaction'
control thrusters.
Among the orbiter subcontractor activities planned for fiscal year 1980, the
orbiter KU band communications/rendezvous radar system implementation was
previously delayed until flight STS-8. However, the design and development
effort for the KU band was substanttally underestimated and additional effort
is now required in fiscal year 1980. The development of the S-Band communi-
cations system to be used for payloads has encountered a number of technical
problems and is more complex than originally thought, thus requiring more ef-
fort. A partial redesign is required on the auxiliary power units to institute an
active cooling system to provide the capability for rapid restart of the system in
flight. The Honeywell flight control effort was substantially increased in fiscal
year 1980 based on our experience in fiscal year 1979. Additionally, as a result
of the experience in fiscal year 1979 and the schedule delay in STS-1, overall
subcontractor support and analysis activities will be retained for a longer
period of time and at a higher level than had been previously planned.
Further, there have also been cost increases in Space Shuttle support areas
including the main propulsion test program, the astronaut suit and its portable
life support system for extravehicular activity and also in the engineering and
simulation activities at JSC. The original astronaut suit [extravehicular mo-
bility unit (EMU)] contract estimates were optimistic and have been signifi-
cantly affected by vendor cost escalation and delays. Both subsystems use con-
cepts new to space flight application for the purpose of long term operational
advantages, and several costly design changes have been required during de-
velopment. The increased number of astronauts, requiring some small size suits,
has made it necessary to increase the number of sizes of EMU components and
therefore increased our cost and schedule estimates. A recent EMU failure
during astronaut training exercises in the watertank at JSC has further delayed
this effort and added additional cost.
The main engine increase is necessary due to the test failures experienced
in fiscal year 1979 and the need to phase the engine development to meet early
mission requirements. As a result of the main liquid oxygen valve failure in the
main engine last December, it has been necessary to further delay the main
propulsion system test. These tests, to verify propulsion system performance at
main engine operation of 100 percent rated power level, will extend from fiscal
year 1979 into fiscal year 1980 and additional tests have been added to certify
the system at the 109 percent rated power level. The fiscal year 1980 Budget
Amendment provides for more engineering and manufacturing manpower than
was previously planned, for rebuilding of development engines, and for added
engine tests to improve the engine performance to 109 percent of rated power.
The 109 percent power level is need for delivery of a G5,000 pound payload to a
150 nautical mile orbit, as well as abort requirements for specific missions. Cur-
rently, the engine operation has been demonstrated to above the 100 percent level
required for the early Space Shuttle missions. Engine testing to demonstrate the
PAGENO="0013"
9
109 percent power level planned for later Space Shuttle missions is now scheduled
for fiscal year 1980. It is anticipated that further design improvement to com-
ponents of the turbopumps and combustion :devices may be required to obtain this
higher performance level and to increase the engine operating life.
In addition, the delivery schedule of production engines has been accelerated
to implement a more efficient production build cycle. Also, three new engines
and additional components are being added to the production program with
funding starting in fiscal year 1980 and fiscal year 1981, to assure that sufficient
engine hardware is available in the test program.
The external tank (ET) portion of the Budget Amendment is principally at-
tributable to unexpected effort in the manufacture and application of the thermal
protection system in fiscal year 1979, and the need to further improve that sys-
tem. Manufacturing manpower greater than planned will be required through
fiscal year 1980 for TPS application. Also, a new development effort is required
starting in fiscal year 1980 to improve both TPS performance and overall ET
productibility. This action has been taken in an attempt to reduce the future
cost per flight of the Space Shuttle system. This new development effort will ex-
amine new materials and products as well as better thermal protection character-
istics for potential use on the external tank. This effort is designed to provide
improved performance of the external tank at less weight.
The launch and landing increase included in the Budget Amendment is neces-
sary to sustain a larger w~orkforce for launch operations than previously planned.
This requirement is based on our experience to date, which includes more develop-
ment contractor personnel and overtime than previously projected. Further, to
support around-the-clock launch operations and ground testing, we have con-
verted certain supporting functions to a thi~ee-shift operation. The automated
launch processing system (LPS), used for vehicle checkout, test and launch
control, has recently been converted to an around-the-clock operation for soft-
ware verification. The Budget Amendment will provide for the continuation of all
of these operations on a three-shift basis. Further, to relieve the LPS load some-
what, we are procuring an additional core memory to be used in the central data
subsystem, thus providing improved off-line usage of the system to check out
and validate new applications programs.
While the assessment of the cumulative impact of these development prob-
lems is continuing, it is clear that additional budget authority in fiscal year 1980
is required to continue the Space Shuttle development and test activities at an
effective pace. With the additional funding in fiscal year 1980, the resources ap-
plied to production activities will remain at the level contained in the original
fiscal year 1980 budget estimates. We have also proceeded into a detailed review to
establish a revised production program. This review includes the effect of re-
duced production funding in fiscal year 1979, the need for additional main engines
in the program and the increased manufacturing and assembly time requirements
that we have witnessed with Orbiter 102. While we cannot yet predict with
certainty what our requirements will be for fiscal year 1981, and beyond, it is
clear that the orbiter production deliveries will be delayed, as I indicated earlier.
We will continue further evaluation through the summer to establish our
fiscal year 1981 budget requirements. Delivery of the production orbiters is, of
course, dependent on the fiscal year 1981 and subsequent budgets. Of cdurse, much
of the analysis and understanding of what it really takes to manufacture an
orbiter is known from our exeprience on Columbia so far. However, much remains
to be done on this orbiter and many details of production still must be defined
to accurately predict the phased cost for the follow-on production. In fact, each
orbiter will require many custom operations during manufacture which is cer-
tainly not typical of normal produtcion programs. In addition, we are only now
starting to thoroughly understand the operational requirements for sustaining
engineering which must be included in our future budget requests. Knowledge in
this area is being accumulated as we work on Columbia and will be modified as
we provide the actual support required during the orbital flight test program.
The Administration is committed to requesting and applying the necessary re-
sources in future years sufficient to assure meeting the essential DOD and civil
operational schedule requirements.
In summary then, the requirement for the fiscal year 1980 Budget Amend-
ment arises from the cumulative impact of problems encountered in main engine
testing, installation of thermal protection on the orbiter and external tank,
PAGENO="0014"
10
qualification testing of orbiter systems and other development activities. The
$220 inillioiģ is requested to augment the $610.5 million for Design, Development,
Test and Evaluation included in the basic fiscal year 1980 budget request. With
the amended budget, we expect to be able to conduct the first orbital flight test,
to continue ground testing to verify system life and performance and to con-
tinue a series of orbital flight tests leading to an operational capability in 1981.
IMPACT OF NOT RECEIVING THE ~220 MILLION FOR FISCAL YEAR 1980
If additional funds for DDT&E were not available in fiscal year 1980, we
would have only about three-fourths of the funds required to support an efficient
program pace. If we did not replace these funds with production money, it would
be necessary to sharply reduce the overall DDT&E level of effort, delaying the
first orbital flight by up to an additional 6 months and other elements of the
Shuttle program up to a year more. I believe the successful first orbital flight is
more important to the ultimate schedule of prospective Space Shuttle users
than holding a particular production schedule. Thus, it is likely that we would
find it prudent, as we have in fiscal year 1979, to reallocate funds from Space
Shuttle production to make up all or a major part of the shortfall. This would
allow us to continue to concentrate efforts on conducting the first manned
orbital flight tests as soon as safely possible. However, this reallocation would
severely impact our production schedules, and make it impossible to meet our
civil and military requirements, including the start of operation at the Western
Test Range. I would hope that we could minimize the further delay on each
orbiter, but additional delays of the third and fourth orbiters could be as long
as a year, depending in part on future year funding levels.
The direct program cost impact of delays of this kind depend on many vari-
ables, including, of course the precise elements of the program that are delayed.
These direct costs would certainly exceed the $220 million requested, and could
range as high as a half billion dollars.
The indirect costs-including additional expendable launch vehicles and fore-
gone launch services revenues-also depend on the detailed program phasing
decisions we would make. These additional costs would be of the same general
size as the additional direct costs.
PROGRAM MANAGEMENT ACTIONS
We have taken a number of actions to strengthen management of the Space
Shuttle program. Some of these actions are corrective in nature while others
are designed to aid in understanding our status and to provide a better basis
for future decisions.
The need for corrective actions, especially in the prime contractor's sub-
contract management and cost analysis areas, was recognized late last Fall,
and w-e have proceeded to take those corrective actions. We placed initial em-
phasis on subcontractor escalation causes and "roll-through," that is, efforts
that have been deferred to a later year either by plan or as a result of the lack
of accomplishment.
Rockwell International has restructured its subcontracts management office
by integrating the technical managers and the cost managers into a single or-
ganizational unit. This will facilitate the exchange of data between these func-
tions so that cost impacts and technical prol)lems w-ill be recognized more
rapidly. Also, Rockwell has augmented its subcontracts management personnel
by about 30 percent. Rockwell has also established an improved system for track-
ing subcontractor budget impacts which requires certain data from the sub-
contract managers to be reviewed by program management on a monthly basis.
Rockwell and the subcontractors plan more frequent reviews for preparing
their resource requirements and have scheduled these reviews to support the
NASA budget process. These improvements will substantially increase visibility
into subcontractor performance.
In another important area, we have structured our award fee criteria to
motivate the contractor to improve the accuracy and timeliness of cost projec-
tions. We have a unique feature in our contract with Rockwell International
that enables us to adjust retroactively cost awards previously given, within
certain limits. This is a valuable feature for cost projections, where obviously the
quality of performance can only be determined after the period that the projec-
PAGENO="0015"
11
tions cover. We are stressing that provision in our determination of award fee
to be granted to Rockwell and, we believe this will have a positive impact on
improving cost projections.
A final area of corrective actions that we have also taken recently are actions
at the Kennedy Space Center to make the flow of the first flight article more
efficient, and achieve the first orbital flight as early as possible. Leadership and
lines of authority at KSC have been clarified regarding Space Shuttle work. We
have placed the KSC Shuttle Manager in charge of all KSC elements working
on the Shuttle. JSC has been assigned the full responsibility for completing the
installation and assembly of components on Orbiter 102. KSC will supply re-
sponsive support to JSC in this role. We have directed JSC to prepare a plan
and schedule of specific actions to improve the TPS situation. We are adding
TPS installers and supervisors, and we are reviewing all work methods. Finally,
we are examining KSC administrative areas with a view toward simplification
that could then speed up work flow. In addition, Rockwell International has
taken similar actions for their KSC operations.
These areas I have just covered are the actions we have already taken to
correct deficiencies and to improve management processes in the Space Shuttle
Program. We are also proceeding in other areas.
I have asked Dr. Lovelace to undertake an overall management assessment of
the Space Transportation System. He has assembled a small special senior staff
to assist him in this review of the STS management organization and processes.
The senior special staff members are: Dr. Richard C. McCurdy, former NASA
Associate Administrator for Organization and Management; Willis H. Shapley,
former NASA Associate Deputy Administrator; Maj. Gen. James Abrahamson,
F-16 Program Director, United States Air Force; A. Thomas Young, Deputy
Director, NASA Ames Research Center, and John E. O'Brien, Assistant General
Counsel for Procurement Matters, NASA Headquarters: Abraham Spinak, Asso-
ciate Director, NASA Wallops Flight Center, is executive assistant.
To utilize their expertise most effectively, these individuals will be afforded
the maximum of independence in the exercise of their responsibilities. A series
of fact finding reviews are underway and inputs will be made to Dr. Lovelace
for his analysis and use. Reviews were conducted in late May and early June
at the Johnson Space Center, the Marshall Space Flight Center, the Kennedy
Space Center, and the Rockwell International Corporation. Following additional
visits and activities, an interim assessment to Dr. Lovelace is projected for mid-
July, followed by his final assessment to me later in the summer.
In preparation for the fiscal year 1981 budget, I have asked the NASA Comp-
troller to undertake a detailed review of our cost and scheduling. A Space Shut-
tle resources requirements review team will analyze the fiscal year 1981 Space
Shuttle budget requirements and future year projections in detail, including
assessment of contractor and vendor estimates, to fully explore the basis of the
cost estimates `and to test the adequacy of the resources considering the potential
for future changes. The resources review will supplement the normal budget
review and estimating process, with completion scheduled in time to support the
fiscal year 1981 budget submission to O1~IB this fall.
SUMMARY
In summary, Mr. Chairman, I would like to reiterate that the Space Shuttle
program is technically sound and the fiscal year 1979 supplemental and fiscal year
1980 Budget Amendment will allow us to proceed with the development effort in
an efficient and cost effective manner towards the first orbital flight and estab-
lishment of an East Coast KSC operational capability. These additional develop-
inent funds will enable us to minimize further impact on delivery of production
orbiters and to continue to focus critical attention on important areas affecting
performance, for example, 109 percent engine operation and weight reductions.
These activities are essential to continued progress `towards attaining a polar!
near polar launch capability by early 1984 at the Vandenberg Air Force Base
and a timely operational orbiter fleet. In addition to the high priority national
security programs, polar/near polar launches from Vandenberg are essential to
support important civil science, technology and operational efforts in global
earth viewing and Earth-Sun dynamics.
Again, I would like to emphasize that the Administration is committed to
applying the necessary resources to the national Space Transportation System to
PAGENO="0016"
12
insure the successful and timely accomplishment of the essential performance
and schedule objectives of critical DOD and civil space missions.
Dr. FROSOH. Thank you, Mr. Chairman.
I am accompanied today by the Deputy Administrator of the
Agency, Dr. Lovelace, by Mr. John Yardley~ who is the Associate Ad-
ministrator for Space Transportation System, and by Bill Lilly who
is the Comptroller of NASA.
Mr. FUQUA. Very familiar faces I might say..
Dr. FROSCH. First, I want to stress that I have found no reason to
question the basic soundness of the Shuttle concept or its technical
design.
Second, I wish to make it clear for the record that the Carter
administration is fully committed to this program, with an emphasis
on having an operational four-orbiter, two-site capability as early as
possible to meet critical space program needs, particularly in the
national security sector.
Third, I would like to outline for you our current best schedule esti-
mates for those operational capabilities, assuming that the fiscal year
1979 supplemental and fiscal year 1980 requests of both NASA and
DOD are approved by the Congress. Our focus has been upon com-
pletion of the initial development and accomplishment of the first
successful manned flight.
We believe that is the proper focus of our attention, but we recognize
that we need also to assure adequate emphasis on the overall program
schedule, including production.
As the subcommittee knows, over the past few weeks we have, con-
ducted an intensive assessment of the work remaining until we launch
STS-1, the first manned orbital flight. The next key milestone on the
path to STS-1 is movement of the orbiter Columbia out of the orbiter
processing facility (OPF) at the Kennedy Space Center (KSC) to
the vehicle assembly building (VAB). On Monday, I reviewed the
detailed integrated plan that covers all the known work necessary to
complete the manufacturing work and checkout in the OPF.
If we can accomplish all these tasks in the right order, and if we
have allowed enough time for the inevitable work-around problems we
will have, then we could finish the basic work on the orbiter in Novem-
ber and move it to the VAB before Christmas.
This schedule could culminate in a first launch by the end of March.
If I include some conservatism-such as the possibility we would need
to return to the VAB from the pad before launch, or anallowance for
unknown uncertainties, I would have to add some 10 to 12 weeks to
that date. In summary, I feel we have 1 chance in 5 of launching by the
end of the first quarter of calendar year 1980; I believe the chance of
flight by the end of the second quarter of 1980 is 50-50.
Operational flights of the first orbiter will begin in the late summer
of 1981. The second orbiter, 099, will be delivered in the spring of 1982.
We are scheduling delivery of the third orbiter, 103, in the summer of
1983 to support the initial operational capability at Vandenberg Air
Force Base, scheduled for late 1983. Orbiter 104 will be scheduled for
delivery in late 1984.
Fourth, we are experiencing a D.D.T. & E. cost growth of about
15 percent, and a schedule extension of about the same degree, when
measured against the administration's 1972 commitments. While I am
PAGENO="0017"
13
not satisfied with this performance, I believe that our performance
to date and projected into the future, when tested against those esti-
mates at the beginning of the program, compares favorably with other
complex, high-technology development programs.
Lastly, much has been said about technical problems encountered
during development of the orbiter, the main engines, the external
tank, and the solid rocket boosters. I would like to point out that the
very essence of the development process-and of the advanced capa-
bility it engenders-is the discovery of technical problems and the
successful application of new solutions. We find and solve the major
difficulties in a new system on the ground; spaceflight is not the proper
domain for such experimentation.
The remainder of my statement treats each area of development in
some detail, and notes the cumulative effect of schedule extensions and
cost estimate changes which have resulted in the need for the budget
amendment. I would like to first review the current status of the
program.
In the interest of time I will skip to page 9 of my prepared text.
Mr. Chairman, I hope the subcommittee will agree with the Senate
decision to authorize the amended request for the Shuttle. I under-
stand that the full house voted yesterday to appropriate the funds
requested in the amended budget, except the $15 million for thrust
augmentation.
I would like to discuss the impact of not receiving the additional
$220 million. If additional funds for D.D.T. & E. were not available
in fiscal year 1980, we would have only about three-fourths of the funds
required to support an efficient program pace. If we did not replace
these funds with production money, it would be necessary to sharply
reduce the overall D.D.T. &~ E. level of effort, delaying the first orbital
flight by up to an additional 6 months and other elements of the Shut-
tle program up to a year more.
I believe the successful first orbital flight is more important to the
ultimate schedule of prospective Space Shuttle users than holding a
particular production schedule. Thus, it is likely that we would find
it prudent, as we have in fiscal year 1979, to reallocate funds from the
Space Shuttle production to make up all or a major part of the short-
fall. This would allow us to continue to concentrate efforts on con-
ducting the first manned orbital flight tests as soon as safely possible.
However, this reallocation would severely impact our production
schedules, and make it impossible to meet our civil and military re-
quirements, including the start of operation at the Western Test
Range. I would hope that we could minimize the further delay on
each orbiter, but additional delays of the third and fourth orbiters
could be as long as a year, depending in part on future year funding
levels.
The direct program cost impact of delays of this kind depend on
many variables, including, of course, the precise elements of the pro-
gram that are delayed. These direct costs would certainly exceed the
$220 million requested and could range as high as $i/2 billion.
The indirect costs-including additional expendable launch vehicles
and forgone launoh service revenues-~also depend on the detailed pro-
50-365 0 - 79 - 2
PAGENO="0018"
14
gram phasing decisions we would make. These additional costs would
be of ihe same general size as the additional direct costs.
Now I will turn to the summary on page 12. In summary, Mr. Chair-
man, I would like to reiterate that the Space Shuttle program is tech-
nically sound, and the fiscal year 1979 supplemental and fiscal year
1980 `budget amendment `will allow us to proceed with the develop-
ment effort in an efficient and cost-effective manner toward the first
orbital flight and establishment of an east coast KSC operational
capability.
These additional development funds will enable us to minimize
further impact on delivery of production orbiters and to continue to
focus critical attention on important areas affecting performance; for
example, 109 percent engine operation and weight reductions.
These activ)ities are essential to continued progress toward `attaining
a polar/near polar launch capability `by early 1984 `at Vandenberg Air
Force Base and a timely operational orbiter fleet. In addition to the
high priority national security programs, polar/near polar launches
from Vandenberg are essential to support important civil science,
technology, and operational efforts in global Earth viewing and Earth-
Sun dynamics.
Again, I would like to emphasize that the administration is com-
mitted to applying the necessary resources to the national space trans-
portation system to insure the successful and timely accomplishment
of the essential performance and schedule objectives of critical DOD
and civil space missions.
This completes my prepared statement, Mr. Ohairman. We will be
pleased to answer your questions.
Mr. FUQUA. Thank you, Dr. Frosch.
Based on the recent projections. the addition of the $185 million
fiscal year 1979 supplemental and the budget amendment of $220
million to the. Space Shuttle and anticipated possible other additions
down t.he line for the Space Shuttle. w~hat is the current cost estimate
of the Space Shuttle development program in 1971 dollars which we
have used as a base figure, including the revisions?
Dr. FRoscH. Tho current estimate including the revisions in 1971
dollars would come out. to something between $5.9 and $6 billion.
Mr. FUQITA. What percent increase?
Dr. FROSCH. That's about a 15-percent increase over the original
figure.
Mr. FUQUA. What part of this is overrun and what part is due to
changes or modifications?
Dr. FROSCH. `Well, I'm not sure I would know how to divide those
two, unless Bill Lilly has a clearer idea. I think we would have to look
at that and see whether there is some way we could separate those
definitionally and provide something for the record.
Mr. FUQtTA. Would that be possible?
Mr. LILLY. I would prefer to provide something for the record, Mr.
Chairman.
[The information follows:]
The original estimate of $5.15 billion in 1971 dollars has grown to $5.9 to $6
billion-a total cost growth of about 15 percent. Seventy million dollars of this
increase was caused by schedule stretchouts resulting from 0MB budget limita-
PAGENO="0019"
15
tions. The balance of the increase has resulted from technical problems en-
countered during development and test. The distinction between cost growth
resulting from contract changes and that from contract performance is a nego-
tiable item between the contractors and the government and has not yet been
determined.
Mr. FUQUA. What amount of funding will be required for the Space
Shuttle D.D.T. & E. program for 1981 and beyond?
Dr. FROSCH. We are just in the early process of working out 1981
and 1982 and 1983. It would be difficult for me to give a very precise
figure. Can you give an estimate, Bill? [Pause.]
It will be more than was shown in the 1981 column of the 1980
budget, that seems clear.
Mr. LILLY. Mr. Chairman, it will be in the neighborhood of about
$500 or $550 million after fiscal year 1980.
Mr. F~QUA. $500 to $550?
Mr. LILLY. Yes.
Mr. FUQ1JA. What is the impact on the schedule and funding of the
production program by reallocating the $70 million from production
to D.D.T. & E. in fiscal year 1979?
Dr. Fuoscn. I think that that impact is included in the delivery
dates that I gave in my statement. So the total impact including that
reallocation is shown in those dates.
Mr. FITQUA. You have underway a three-part analysis in NASA of
the program, the overall management assessment headed by Dr. Love-
lace, cost and scheduling by Mr. Lilly and technical status review
headed by yourself, Dr. Frosch. When will these be complete and
when can we possibly have the results made available to the com-
mittee?
Dr. FRosoH. I would ask my colleagues to speak for thclnselves.
Dr. LOVELACE. Mr. Chairman, in regard to the management review
that is underway now, it is anticipated that the final results of that
review would be available the first of September. There will be inter-
mediate milestones to brief and discuss the results with Dr. Frosch. I
believe that we would be in a position to discuss results and present
them to the committee in September; or, possibly, at the time of the
preauthorization hearings, we could cover them in detail.
Mr. LILLY. The timing on the cost and schedule analysis, Mr. Chair-
man, is essentially the same time period.
Dr. FRoscH. As for my examination of the technical status, I have
looked at most of what I want to examine at least in the first round.
There are one or two things still remaining. I would say that I have
satisfied myself so far that I have not been able to find any difficulties
of a basic or inherent nature or anything that is not an ordinary late
development kind of problem.
But there are some aspects that I want to hear about further from
John Yardley and som& of the project people, and I would expect
that I can meet or better the schedule of my colleagues.
Mr. FLIQITA. Dr. Frosch, when do you think that NASA will have
firm schedule and cost estimates for completion of the D.D.T. & E.
phase?
Dr. FRosoH. Bill?
Mr. LILLY. I believe it will be as firm as I can make it by the time
period I just gave you, Mr. Chairman, about the first of September.
PAGENO="0020"
16
Mr. FITQUA. Does that include also the production program?
Mr. LILLY. Yes, sir, it will.
Mr. FUQUA. Both will be about the same time?
Mr. LmI1Y. Yes, sir.
Mr. FIIQITA. Dr. Frosch, do you believe that the contractors are kept
currently informed as to the amount of funding that is being allocated
to their part of the program? I assume that there is a certain amount
of reserve that is not discussed with the contractors. But do you at
the beginning of each fiscal year when the money is signed and
sealed-what procedure do you use a.nd are the contractors currently
informed as to how much money they are going to have for that year?
Dr. FRoscH. I believe they are so informed, but I would like John
Yardley and Bill Lilly to comment.
Mr. YARDLEY. Yes. The general process is sta.rted even before the
beginning of the fiscal yea.r a.nd we have a program plan developed
for each contractor. Those moneys are what is intended to cover the
basic program as it is known at that time.
Now if changes come along, we try to cover those with reserves to
the best of our ability. I don't know of any of our maj or prime con-
tractors who ever got less money in the year then he was told at the
beginning of the year that he would get.
Mr. LILLY. I would just say the same thing John did, Mr. Fuqua,
that the contractors are fully expected to carry out the work defined
on the contract for the price that is in t.he contract. Those items that
are to be evaluated and cha.nges that might occur, these obviously are
discussed and they are aware of them, and we. forecast as well as we
can with the contractors.
Mr. FUQUA. How about the subcontractors that the contractor may
have?
Mr. LILLY. Of course, the subcontractors are the responsibility of
the prime contractor, and it is my belief that they are fully knowledge-
able also. I think that would be an a.ppropriate question for the prime
contractor, Mr. chairman.
Mr. F~Q~A. What happens if a contractor should underspend at
the early part of his fiscal yea.r or maybe overspend, does NASA go in
and take the money away, thinking that they have overfunded for
that year? Or if he is overspending do you automatically make up
the slack?
Mr. LILLY. Mr. Chairman, I think we ought to have John Yardley
answer this in terms of his own techniques of management and in terms
of control of the contractor. But in terms of underspending, I would be
quite surprised in most cases, but, no, we would not take any money
away.
Mr. FUQUA. I was just trying to give both sides of the picture..
Mr. YARDLEY. We're never ha.d any underspending in the 5 years
I've been here. We ha.ve, on occasion when people get into trouble,
reallocated among centers. For instance, at the end of 1978, we noted
that KSC was not actually spending as fast as they had planned. Now
they spend with a large group of small contractors but they did not
take any money awa.y from those contractors. They just slowed them
down. That's the only case I can recall.
As far as overspending, we look at the plans and see if the plans
look reasonable through the year and we have discussions with the
PAGENO="0021"
17
contractor if we think he is frontloading the effort and will run out
toward the end of the year. Generally, if we feel strongly about it, we
will put lids on how we can spend that money during the fiscal year.
We are currently doing that in fiscal year 1979.
Mr. FUQUA. Have you had cases where contractors have over-
allocated in the early part of the year and had to make a severe reduc-
tion at the end of the year?
Mr. YARDLEY. Yes. I think the Rockwell orbiter contractor in 1978
was that sort. Now I cannot say that NASA is not partially culpable
because we saw this frontload plan and we talked to them and I per-
sonally talked to them and said don't you think you would be better
off to hold this down so you can be sure of getting out of the fiscal year?
And they convinced me and the project people that they had enough
things that were going to be finished in the year that they could do it.
As it turned out, some planned things didn't get finished and they could
not take the people off. Then about June, they had to take serious action
such as cutting subcontractors way back and then starting them back
up in October and that sort of thing.
Mr. FUQUA. Is that part of the problem we have because of laying
off and building back up?
Mr. YARDLEY. Yes. I think we all underestimated the roll-through
impact and the stopping and starting. We saved some money in fiscal
year 1978, but it came back to bite us in fiscal year 1979. And the bill
for doing that work out of sequence was quite a bit larger than if we
had that money at the end of fiscal year 1978.
Mr. FUQTJA. One of the arguments for the $185 million supplemental
was if you didn't get it, you were going to have to lay off people. And
as soon as the fiscal year 1980 budget came into effect, you could start
hiring back.
When did you first learn about the problem that there might be
some accelerated cost increases?
Dr. FROSCH. I have to give the answer on two levels. In a formal
sense, that is, being informed that there was clearly a problem that
we had to do something about, it was some time in March when it was
made clear to me.
In the informal sense, I had somewhat been aware through our nor-
mal conversations in the course of the fall and very early in the winter
that there were possibilities of funding difficulties but also made aware
that it was by no means clear that these were going to be real when we
examined what the request meant and what really needed to be done
about them.
I can add in general that it is not uncommon for me to hear, not
only as Administrator of NASA but in previous jobs to hear at regular
intervals that there is a fiscal problem in a program. It is also not
uncommon for it to turn out that the problem is by no means what it
was originally said to be. It is common to have problems, to seek addi-
tional funds for the problems, and then to have later examination
make clear that one can deal with the problems without those funds.
So I am not usually in the habit of doing other than listening care-
fully to the informal early reports.
Mr. FUQUA. It appears that the first shoe fell in the fall and the
second one fell in March.
PAGENO="0022"
18
Dr. FROSCH. I would not call it a shoe falling in the fall at all. I
would say that there was some talk that there might conceivably be
a problem and the real analytic results came out in March that showed
that the worry was real.
Mr. FUQUA. Well, Dr. Froch, there is evidence that NASA manage-
ment was aware of the likelihood of additional funding requirements
in December of last year, and I quote from the first page of the report
by what is sometimes known in NASA circles as the Day report, report
of the budget and forecasting review team: "This study was initiated
because of a significant increase in cost projections by Rockwell, the
orbiter contractor. After the NASA budget for 1979 and fiscal year
had been established, the provision of level one allowance for program
adjustments normally served to cushion cost surprises."
And then, "The instance at hand may exceed that capability when
combined with other demands on allowance and program adjustments
in fiscal year 1979."
That apparently was made as a result of cost projections when it was
known that there were cost projection increases coming along.
Dr. FROSCH. Mr. Chairman. there are always cost projections and
many of them are projections for increases. The question is, at what
point does one decide those are correct and that in aggregate they are
something that cannot be handled by the reserves. That report con-
tains in the wording that you read an indication of what the decision
difficulty is. We maintain reserves precisely so that we can deal with
unexpected projections. The question is, are we going to run out of
reserves, not are t.here going to be difficulties.
John. would you like to comment. on that?
Mr. YARDLEY. Yes; the specific reason that we started Roy Day
into this study was we did have a large revelation from Rockwell in
October. When all the dust. settled on that. we allocated $77 million to
the development, problem that. they identified. out of our APA. And
we still had $117 million left. Then we tried to determine it what was
left would be enough. And that was the status at. that time. So Dr.
Froch is absolutely right, we established reserves and we expected
them to be. eroded. This was a little sooner and a little bigger erosion
than we expected.
However, at. that. time, I will hasten to add. Rockwell said, after
looking at. the rest of the year. that they would probably need another
$50 million for the rest of fiscal year 1979. Now, that was pretty re-
assuring because. I could cover that and they ai'e the biggest uncer-
tainty in the program-the Rockwell orbiter. But as it turned out, that
has not been nearly enough.
Mr. FUQv-A. But when did you find that. there was other growth in
the program?
Mr. YARIThEY. Well, about March we st.ill had substantial APA left.
It was less t.han half of what we started with, and we only had half
the fiscal year to go and the funding curve was coming down.
But at. that point we got in the spring preview. We received this on
March 9 and that identified some. additional requirements that had
not been identified previously. It showed us that it would use up all
of that APA plus about $20 million. We said that just is not satis-
factory. We have to solve those problems and have at least another
$50 million to carry us the rest of the year.
PAGENO="0023"
19
And that's what we put together in the analysis that was presented
to your staff in May, to the Senate in May and to others. That was a
transfer from production of $70 to $90 million and a $10 million trans-
fer from the teleoperator program.
Mr. FuQuA: How often do you have a Shuttle management meeting
here in Washington? Is it held on a regular basis or on an "as needed"
basis?
Mr. YARDLEY. There are a number of meetings. I have a monthly
meeting of all the program offices at all centers. In addition, the cen-
ters conduct monthly reviews of all the contractors. After those re-
views are done, Mike Malkin conducts reviews with the Shuttle people
on each of the major projects. So monthly you might say we run
through the whole thing.
Mr. FUQUA. Didn~t you discuss this problem in your October meet-
ing as to the growth?
Mr. YARDLEY. We probably did. I don't know for sure whether we
did. But what we discussed is just what I told you-that our reserves
had been hit, and about 35 percent of them were wiped out with that
October revelation.
Mr. FUQiJA. Still in October you did not know the magnitude of
the problem or if in fact it was a real problem?
Mr. YARDLEY. That's correct. We knew the magnitude of $77 million
of it.
Mr. FUQtLA. Yes; but you didn't know that there was any growth in
any of the other parts of the program in October?
Mr. YARDLEY. No. Now in November and December the Marshall
people came in and told us that they were going to need some more
money and the Kennedy people came in and said the same thing. We
looked at those carefully and they had some validity, I think the
Marshall number was something like $23 million, if my memory serves
me correctly. But that still gave us a pretty good APA, and the
requirements were pretty fuzzy so that we were somewhat suspicious
of the inputs at that time.
Mr. FUQUA. There was a raid on the cookie jar?
Mr. YARDLEY. Right.
Mr. FUQUA. When did the real problem begin to show up that there
was an indication that there was in fact a cost increase? You had a
meeting in October. Indications were that reserves were being de-
pleted. In November and December you had continued indications
that there was something maybe amiss in the program cost. Did you
ever consider Dr. Frosch-at that time you had been going to 0MB
to defend your fiscal year 1980 budget, is that correct?
Dr. FROSCH. No. At that pOint the budget-sometime in November
I guess-I don't remember the exact date-the budget had been closed
and finished so that we were not then in active discussions.
Mr. FUQUA. My point is did you ever consider reopening your
budget request with 0MB after it became repeatedly known that there
were cost increases, other centers were coming in. You had the $77
million and then the other two centers came in with requests did you
ever consider that maybe you had better go back to 0MB and relate
to them that there may be an unanticipated problem there?
Dr. FROSOH. No. At that point I would say I did not and I don't
think we did, institutionally, have any valid basis to go back and do
PAGENO="0024"
20
that. We would have been going back saying something like the cen-
ters are worried and they're beginning to think they need more money
and I think we had better put some more money in the budget. The*
question would have been how much and for what and the answer
would have had to be, "Well, we're not really sure how much and we're
not sure whether we'll need it. but we're working on it, so let's put
some more money in." I don't think that would have been a reasonable
thing for any of us to do. We just did not have a validated base of
information. We had some requests.
Mr. FUQIJA. I can agree maybe you didn't want to go in until you
had identified the specific cost.
Dr. FRosoR. Or Imew that in fact there really was that kind of
a requirement.
Mr. FUQUA. What were you doing at that time to find out if in fact
there was, a problem?
Dr. FROSOH. I think it was in John Yardley's hands. He had the Roy
Day review and some other things going on.
Mr. YARDLEY. Between January and March the NASA system goes
through the whole budget and regurgitates it to us in March. That
was going on in that time period. In January, we still had about 35
percent of our reserve left even after all these requests.
It turned out after they went through the review which took about
6 weeks to really digest all the data, that we determined what we
needed in additional fiscal year 1979 funds. And part of that, you
recall, is still uncommitted.
Mr. FUQtJA. Mr. Winn?
Mr. Wixx. Thank you, Mr. Chairman.
In listening to these answers to the questions, it seems to me that
you guys were drowning but you didn't really know for sure so you
didn't yell for help. That's just sort of a simple version of it. It seems
to me-that when you had an informal knowledge, Dr. Frosch, that
there might be some difficulties heading your way that you did not
come to the committee, either on an informal or a formal basis and
discuss this with us. Second, I agree with the chairman, it seems in-
teresting that either on an informal or formal basis with 0MB that
you didn't discuss the fact that you had some flags waving. It prob-
ably would not have helped the situation, the way it was developing,
but I think the committee and the subcommittee would not have been
as surprised as we were when you came back to us.
Would you care to comment on that?
Dr. FROSOJI. Yes. Our assessment through that period was that if
the problems that we were beginning to hear something about turned
out to be correct, our assessment was that they were of a level that
we still `had APA sufficient to cover them as part of the runout of
the year. And t.hat was in fact what the APA was for. I don't think
anybody felt in a position to go around raising flags on the basis of
the level of the information and worry that we had. Now this, as
the event turned out, was an error in judgment. In fact, the APA,
as we finally discovered the facts, was not adequate, and we would all
have been much better off had we realized that earlier and gone to
see what could be done about it. I am not saying that it is clear to
me that that was the case. But hindsight is a wonderful thing and
PAGENO="0025"
21
as I now look back, if we had all done something else, then the con-
elision would have been different. It is always a question of difficult
judgment as to when you cross the line between crying wolf because
you think something might happen and informing people because
you're pretty sure something might happen.
We felt that we did not have the kind of information that enabled
us and say that, we had a problem. We felt that we would probably
be calling it a problem when probably it could be handled and should
be handled within the funding we already had.
And that's what we chose to do. However, it turned out that there
was a problem that was not fully evaluated and that surfaced very
thoroughly somewhat later.
Mr. WINN. You could not yerify that you were drowning but your
lungs were filling.
Dr. FROSCH. I would have to say that we were not feeling that kind
of extremis. If I am to continue your metaphor, I would say that it
was clear to us that the water might be pretty rough, but it looked as
though we could swim that distance.
Mr. WINN. To change the subject a little bit, because I disagree with
you and it's hard for us to comprehend that. After the statements
today and the informal meeting yesterday I am no more convinced that
you are answering the questions now than when we met about 3 months
ago. But maybe something is going to show up.
In the September 1 review panel that the chairman discussed, is this
committee going to get a chance to meet with all of the members of
the panel or are we going to have the coach talking about his own
team?
Dr. FRoscu. I presume you are talking about the staff management
review.
Mr. WINN. I'm talking about Alan's review.
Dr. FROSCH. We had not constituted it as a panel but rather as an
expansion of the staff for this purpose. But I see no reason why the
committee could not talk to or call upon those people who have been
involved.-
Mr. WINN. The chairman and I have known most of them and we
have great faith in their ability, but again a lot of them are NASA
graduates, and we want to be able to ascertain whatever comes out of
it is going to be their version and ask them some questions rather than
your version.
Dr. Fuoscu. I think that would be perfectly fine. I would suggest
that you choose the timing of that at a time when they feel they have
pretty well completed their review and come to their conclusions.
Mr. WINN. I understand that and I know they are busy men.
Dr. LOVELACE. Mr. Winn, may I interject one point. There will only
be one version and you certainly will have the opportunity to satisfy
yourself on that point by talking directly with the people involved.
Mr. WINN. Dr. Frosch, in your written statement you mentioned that
the budgetary reserves were maintained at headquarters which has
been the policy for quite some time. After the last 2, 3, or 4 months
do you anticipate changing this policy in any w~ay?
Dr. FROSCH. That's the kind of question that I will want to address
after the groups that have been looking at management and fiscal
PAGENO="0026"
22
aspects report to me. I have not tried to do any independent examina-
tion of that myself. I am depending upon their recommendation.
Mr. WINN. Do you think there is any possibility that headquarters
or the centers or the contractors have become reserve happy?
Dr. FRoscH. In what sense
Mr. WINN. They just get a little complacent or a little apathetic be-
cause they know those reserves have been there for years and they can
always fall back on them. The contractor feels, well, we are so far into
this contract and we are so far along on the schedule. The centers feel
t.hey a.re on schedule or could ma.ke schedule but they are running
short of money. But there's a. big fat reserve sitt.ing up there in Wash-
ington and we will eat into that for a while.
Dr. FRosdH. I think that's a very legitimate worry. I think it would
have been a more legitimate worry a couple of years ago before we
went through some of the fiscal vicissit.udes of the past year or two,
including a supplemental and an amendment.
It would be difficult for me to believe that the people in the various
levels of t.he project and contractor can now believe or could have be-
lieved in the course of the past year, after we had to go for a supple-
mental, that there were large reserves to be eaten into. They knew
there were reserves and we thought they were adequate to cover the
problems that were reasonable to arise, but I don't think anybody could
believe that .the.y were so large that one could relax and expect the re-
serve to bail them out of any trouble that came along.
Mr. Wixx. Whether they a.re large reserves or just reserves, don't
you think it is possible from headquarters clear on down to the con-
tractor or subcontractor that they feel all they have to do is make the
request and get their heads together and sooner or later they will get
that money?
Dr. FROSCH. I think it is unlikely that they have felt that way, be-
cause it has not been so easy for them to get. money for everything for
which they asked. As John pointed out, when requests came in they
were pretty carefully scrubbed and only part of wha.t was asked for
was likely to be allowed, based upon an assessment of headquarters
with the center and with the contractor as to what was really necessary
in those tasks.
Mr. WINN. The philosophy of maintaining the reserves at head-
quarters, as I understand it., was to minimize cost. Do you feel that in
light of the current program overruns and potential growth in the
production cost tha.t this philosophy is effective and, if so, how do you
know that it is effective? How do you measure your performance?
Dr. FRoscn. I was about to answer the first half. I think it has been
effective. I do not know how to find out be.ca.use I don't know how to
run the experiment both ways.
Mr. Wixx. You are saying compared to what?
Dr. FRoscH. Compared to what and compared to the same pro-
gram run a different way; we're not doing that experiment. I can
only say that having watched prograrn~ that did not have a reserve
system at all but depended upon living precisely within the budget
or coming back for thore money when required, my impression of the
history of the two kinds of programs is tha.t the ones without reserves
have habitually gotten into as much or more. difficulty. I think it still
PAGENO="0027"
23
comes out that our problem is not so much-and I say this in spite
of the large amounts of money involved-our problem is not so much
a question of whether we are overrunning. If there is a problem that
I have to inquire about, it is a~ question of whether the management
system allows us to be tightly managed but inevitably produces sur-
prises for ourselves and others. I think that's the question we have
to examine. But I think I really have to wait for what the teams have
to say before I can be sure that that guess of mine is correct.
What I'm saying is I think we are likely to discover that we have
an information and prediction problem as part of the consequence
of the way we are running the program rather than a problem in
managing the technical program or managing the actual expenditure.
Mr. WINN. We are faced with nearly another 2 y~ars of D.D.T. & E.
I am trying to figure out if there is any hope of being able to better
anticipate the future problems and project a realistic total program
cost. Maybe John or Bill would like to address that, or whoever wants
to answer.
Dr. FROSCH. Let me only comment that that is clearly one of the
major tasks that we have got to come to grips with in the next month
or two based on the informatiOn that is being collected. Is our problem
this question of prediction and estimation and if it is-and I'm guess-
ing now that that is one of the problems, maybe the problem-what are
we going to do about it? How are we going to improve our performance
in prediction?
Mr. WINN. In the last 2 or 3 months I have been waiting for some-
one to tell me what the problem is. I keep waiting for our own investi-
gative team, that has been going around the country, to tell us what
the problem is. Everything is very vague. I'm not trying to point a
finger, but I'm trying to get something to build a base on from now on,
because we just can't keep going back to Congress or the taxpayer. Do
you want to comment on that?,
Dr. FROSOH. Only to say that's what we are all trying to do. We have
an extremely complex program and we want to be sure we have the
facts straight and the analysis straight before we try to fix it.
Mr. WINN. I'm not patient, but I'm going to have to be patient
until around September 1, I guess.
One last question, Mr. Chairman.
I would like to ask Dr. Frosch about `the delivery dates and that
again may require Mr. Yardley to answer. The delivery date of
orbiter 103 is being delayed now until the summer of 1983. Is this de-
livery consistent with the DOD requirements?
Dr. FROSCH. We `have been discussing this with `DOD and we be-
lieve we are `agreed that it is consistent with the DOD' requirements.
Mr. WINN. If it is not consistent with DOD requirements, then it's
my understanding that DOD is going to have to make some substitu-
tions or do some more purchasing and that would be expensive. Am I
right?
Dr. FROSGH. If it is not consistent either we will `have to find some
way in the program by adjusting all the assets on the schedule to make
it consistent or DOD will have to, it is my understanding, essentially
buy insurance by purchasing expendable launch vehicles as back up for
certain of the events that would ot'herwise be launched on the `Shuttle.
That will be expensive.
PAGENO="0028"
24
Mr. WINN. When you get through with these deliberations and dis-
cussions I wonder if either on a formal or informal basis, again at the
discretion of the chairman, if you would keep us informed.
Dr. FROSCH. We certainly will. I can only say that perhaps you do
know, but I suspect you do not know how eager I would be to be able
today to tell you what our conclusions and what our actions would be.
That would, obviously, be the best thing from our point of view and
your point of view and everyone's point of view. The only reason I can-
not do that is because we are not really prepared to say. We are not
through with the analyses.
Mr. WINN. I understand that and I appreciate that. I just don't
think I can stand any more surprises this ye.ar.
Thank you, Mr. Chairman.
Mr. FUQtTA. Thank you, Mr. Winn.
Mr. Flippo?
Mr. FLIPPO. Thank you, Mr. Chairman.
I want to pursue a statement made by Mr. Yardley in regard to
other centers coming in for additional funding, if I might. I believe
you expressed some skepticism as to the legitimacy of those requests
that come in later. Would you care to comment on that further?
Mr. YARDLEY. Basically. When they first came in they had a valid
case for about a third of what they came in for. Now as time went on
and they kept coming back they made. a good case for more of it. But
other things had come up since that time. For example, we burned an
engine in December. That was not known when they were trying to
go the money in November.
So all I'm saying is they wanted to make sure they had enough APA,
hut they could not identify what they needed it for that early. They
were afraid it. would all be gone by the time they identified what it
would be needed for.
Mr. FLIPPO. When they came in, did they not make some original
projections? Is it total cost or the timing of the cost?
Mr. YARDLEY. We are talking about total fiscal year 1979.
Mr. FLIPPO. What type of actions or reactions do you consider when
you have some reason to question an estimate made by a center?
Mr. YARDLEY. They come up and present their case and we may say
that there is an item that looks to us like it's an allowance for a future
change. So we're going to take that out, and that sort of thing.
For instance, one of the centers you may be interested in is the
Marshall Space Flight Center. They may put an extra $10 million in
for propellants. If they eventually don't need the propella.nts they may
then use it for other things.
Mr. FLIPPO. I think those are very good things for you to pay very
close attention to. I think that may be part of the problem with some
other things in game playing and this type of activity, whether it be
Marshall or Kennedy or Johnson or anywhere else.
But would you have some past actions on the part of Marshall or
Kennedy or Johnson or any others in which they gave you cost pro-
jections and I would like you to submit some of them for the record,
if you would.
Mr. YARDLEY. Certainly, we can give you a complete history.
Mr. FLIPPO. I would like that. I think that is something that should
not be permitted to continue. I think we do have some problems, Dr.
Frosch.
PAGENO="0029"
25
[The information follows :]
The following are examples of actions taken by OSTS in the process of
analyzing POP 78-2 (July 1978) center submittals to Headquarters. These
actions were taken where it was determined that the requirements were not fully
justified or were too vague to base budget decisions upon.
ORBITER
Removed unidentified change allowance. Reduced provisioning consistent with
later FMOF. Deferred docking module and OMS payload bay kit 1 year.
ORBITER SUPPORT
Reduced IBM change projection and Shuttle Mission Simulator configuration
update.
Removed wind tunnel testing,: SAIL reserve, and Extravehicular Mobility
Unit anticipated and undefinitized~growths.
Rephased food gallery development.
SSME
Adjusted Rocketdyne burner, G&A and fee. Reduced propellants.
ET
Reduced Slidell computer support consistent with prior years. Reduced MMC
unnegotiated changes. Deferred weight reduction one year.
SRB
Reduced unnegotiated changes.
LAUNCH AND LANDING
Rephased anticipated changes. Reduced IBM and non-Rockwell development
contractor manpow-er. Reduced GSE change allowance and spares.
Dr. FROSCH. Mr. Flippo, I wonder if I might comment? I have been,
in the course of a possibly misspent career, project manager and pro-
gram manager and a manager of project managers and program
managers, so I have been through the whole set of psychological ex-
periences that one goes through. We all tend to refer to this as game
playing and, in a sense, there is a certain amount of gaming, but the
point really is that the elephant looks different when you have a dif-
ferent job and a different angle to look at the elephant. And the project
manager who has a particular job to do has always got to make sure
that he is going to have enough resources to do his job and he wants
to keep his reserves. He wants to make sure that if he gets into trouble
he can cover himself without always running back to headquarters.
That's a normal and natural thing to do and none of that should be
taken as an ad hominem remark about any of the people.
On the other hand, headquarters wants to have its control and it
knows that the guy who is doing the job wants to get it in his hands,
so we all get into a discussion knowing what everybody knows and
then work it out.
Mr. FLIPPO. What I am interested in is this $220 million budget
amendment that we are talking about. I understood Mr. Yardley to
say he had some skepticism about the cost estimates asked for by the
centers. I would like to know what impact that has and whether or
not the $220 million is needed.
Mr. YARDLEY. Let me correct a misimpression, Mr. Flippo. The
money and APA in question I was referring to was fiscal year 1979
PAGENO="0030"
26
money. For the first time in a dozen years NASA had asked for a $185
million supplemental. About the time 0MB said, "OK, we'll go ahead
and ask for it," these other things started to come in. But they were
not the fiscal year 1980 things. Up to the fiscal year 1980 review in
March, the only thing we had accumulated against fiscal year 1980 was
about a $48 million shortfall that Rockwell had identified in the fall.
So we had plenty of reserves for fiscal year 1980 at that time. When
everybody in the program worked through the system and looked at
schedule slippages and other things, that's when we got surprised in
mid-March because they came up with $150 million worth of extra
things that we had not anticipated.
Mr. FLIPPO. It was the timing of their request. And apparently when
it became evident that there was a shortfall in funds then everyone said
well perhaps this is the time to talk about what we anticipate for the
future?
Mr. YARDLEY. No; this is the normal midyear budget collection re-
view which would include three things. It would include their current
work plan for fiscal 1979 which still had 6 or 7 months to go, a reap-
praisal of what they thought they needed in 1980 which had not yet
gone through Congress, and then what they predict for fiscal year
1981. Now out of that we got a $600 million extra development bill
for those 3 years at that point.
Mr. FLIPPO. Just to summarize that particular question, do you
have any doubts as to the authenticity or the necessity of the requests
that were made from t.hose centers that we discussed in regard to the
$220 budget amendment?
Mr. YARDLEY. None at all. We scrubbed those very well. I think they
are very defensible. And, of course, once we accept those, then the
reserve for fiscal year 1980 goes negative and that's why the budget
amendment is required. And, of course, we have included in that $220
a substantial reserve for fiscal year 1980 because we are going to have
some more things we are going to learn.
Mr. FLIPPO. Mr. Chairman, I did have one or two other questions if
you would permit, and I will hurry on because I realize the time is
slipping by.
It would appear that after learning of significant additional fund-
ing requirements in the fall of 1978 that NASA did perhaps not give
much consideration to requesting additional funding from 0MB and
in addition when learning of additional funding requirements in
March of 1979 NASA's first reaction was to reallocate funds from
production, apparently, while fully understanding the excessive cost
penalties associated with such a plan.
Thirdly, back in fiscal year 1978 NASA made a decision to reallo-
cate funds to D.D.T. & E. from production rather than requesting a
supplemental. Now I do not consider that supplemental requests or
budget amendments should be submitted to Congress at the drop of a
hat, but I wonder if NASA gives proper consideration to these alterna-
tives? Is it possible that NASA has been too timid in asking for the
resources that they need?
Dr. FROSCH. There is no question that there is, what shall I say, a
cultural tradition at NASA that I found very clearly when I came
in that says we live inside our resources as we get them budgeted and
PAGENO="0031"
27
authorized and appropriated and we do our best not to keep running
back and asking for more money.
When we started to talk about a 1979 supplemental, one of the first
points that was made to me was that if we did this I would, as Ad-
ministrator, be breaking considerable precedent and people had to
search back through history to see when was the last time NASA had
to go for a supplemental. And I'm not sure I remember the time, but it
was at least a decade before if not a decade and a half. So it is a
point of institutional pride that we can manage within our resources,
and I don't think that's a bad thing. I think it is a good thing that our
first reaction when we are faced with a problem is how can we manage
within what Congress has authorized and appropriated for us to do to
get out of this difficulty without damaging the program? I think we
then have to assess whether we really are damaging the program by
not asking for additional funds. I feel just slightly betwixt and be-
tween since I have now gone to the well twice and Mr. Winn has quite
correctly called me on that as being something we should not have
done.
But I don't want to be in the other position of not going to the well
when I have to. But I certainly don't want to go running all the time.
Mr. FLIPPO. Has NASA given some consideration to delaying the
development of JOP or now known as Galileo, and the space telescope,
and some of these other programs?~
Dr. FRosdu. We did look at that. In fact, we looked quite formally-
I guess it must have been in March or April-at the whole range of
programs to see whether there was some way of avoiding doing this,
and the con~iusion was there was no way in which we could rearrange
those program moneys. In a sense, we never got to the question of what
damage we would do to the program because we could not find a way
to rearrange moneys that would make any sense in terms of obviating
the need for an amendment.
Mr. FLIPPO. Doctor, if I might just comment on the point you made
earlier about your information system and that sort of thing being
the problem, I think I would agree with that concept, not so much the
magnitude of this cost overrun and because you have a long history of
doing things relatively within cost projections-and I commend you
for that-but my concern is that perhaps you are not aggressive enough
in regard to 0MB in fighting for the kind of funds that we need to
maintain our technical capabilities in the program. You did rightly
refer to operating within the funds authorized by Congress. This
committee has consistently asked and has not been able to understand
why the shoestring approach that continues to erode our capability
in space when other nations are striving mightily to increase theirs.
So I think the problem, in addition to the problem that you describe,
is all of our ability to convince 0MB of the necessity of going for-
ward with a balanced program. We may very well wind up with
a veh1cle to get to space and nothing to carry in it, if we continue to
rob other programs.
I thank the gentleman for his remarks.
Mr. FUQUA. Thank you, Mr. Flippo.
Mr. Nelson?
PAGENO="0032"
28
Mr. NELSON. Thank you, Mr. Chairman. I have a number of ques-
tions, Mr. Chairman, and I will be as brief as I can.
Mr. FUQUA. We have all day and all night.
Mr. NELSON. I'm going to bore in and try to articulate my questions
such that they will be understandable so a meaningful response can be
forthcoming.
Dr. Frosch, was there a morale and a productivity problem in Cali-
fornia with the Rockwell people when they were installing the tiles,
such problem being occasioned by the fact that they knew their em-
ployment was going to cease once t.heir j oh was done; that is, the pink
slips were coming once they installed the tiles.
Dr.~ FROSCH. Well, we certainly speculated on whether there was
such a problem. I have no direct data on that and it has not really been
suggested by any data that I know of that that really was the case. I
would certainly not think it unusual if there was such a problem.
John?
Mr. YARDLEY. We suspected it and we talked to Rockwell, and I
think you ought to ask Rockwell this question later. My overall im-
pression after talking about it and worrying a.bout it is that there was
some, but it was not a significant factor, maybe a 5- or 10-percent type
of productivity loss because of that factor.
Mr. NELSON. So, as the overall management responsibility, you as-
sumed that tha.t was not the main reason. You are ascribing a 5- to 10-
percent factor to the overall tile problem that occurred in California?
Mr. YARDLEY. A morale productivity problem.
Mr. NELSON. Because the people were going to be terminated.
Mr. YARDLEY. Yes.
Mr. NELSON. To what would you ascribe the remaining 85 or 90
percent of the problem?
Mr. YAJUmEY. The problem was the tiles took a lot more work to
put on than was anticipated or planned. Another piece of the problem
was tha.t the tile manufacturing itself a.t Lockheed was not going on
schedule. The primary reason was not that they weren't building
them on the right schedule but that. there was a substantial rate of
rejection. This put Rockwell in the position of having to put blocks
of tiles on many times with tiles missing. They just couldn't wait and
they had to rebuild those tiles. So the combination of these factors
was primarily the reason.
Mr. NELSON. Dr. Frosch. there have been press reports that NASA
is considering a suborbital flight test of the Shuttle. Would you com-
ment on the status of this concept, and what would be the objectives
of such a. flight test, if it is true?
Dr. FRoscH. That is not now our plan. Our plan is that the first flight
be an orbital flight. There have been some suggestions over the years
that we not do an orbital flight first. The argument given is usually-
and I have to say that this has not come to me for any further deci-
sion, although it may-the argument usually given is that by going
suborbital, the first flight would not put the complete reentry thermal
and aerodynamic strain on the thermal protection system tiles and that
there might thereby be some advantage to having a first flight with a
lower stress on that part of the system.
It is clear that the counterargument is that while the stress on the
tiles may be lower, the stress on the entire rest of the system would be
considerably greater in order to do as a planned maneuver what we
PAGENO="0033"
29
really think of as an abort maneuver, plus the requirement that the
first landing would then be on the KSC landing strip rather than on a
dry lakebed. So that is the countervailing argument.
There is also the question of whether in fact by going into orbit we
might not have a better opportunity to inspect and possibly even make
changes to the tile system on a first flight, although I think the pos-
sibility would have to be looked at very carefully. So these are the
kinds of arguments involved.
I have not heard nor has anyone brought to me yet-I don't know
whether they will-a suggestion that we change our plans given that
set of arguments. I note that John is going to have a further look, be-
cause I know people are going to raise it with him, and I will await
his views on whether he even wants to bring a change possibility.
Mr. NELSON. With the Shuttle program you developed the lead center
concept. How well do you think it is working compared to your old
way of doing business?
Dr. FROSOH. That's one of the things I expect to get comments on
when I hear about the management examination that Al Lovelace has
been talking about. I do not yet feel in a position to answer that ques-
tion, Mr. Nelson.
Mr. NELSON. By the way; I want to echo Chairman Fuqua's request
where he asked for and you said you would provide a breakdown of
the $5.15 billion commitment by major program element, the orbiter,
main engine, et cetera.
Dr. FROSCIT. We can do that.
Mr. FUQIJA. Let me clarify. I was really asking for how much of
that with the increases added was the overrun versus program changes
that may have occurred. But you could make that same breakout.
Dr. FROSCIT. 1~Ve could do it in terms of such a breakout.
[The information follows:]
The original estimate of $~.15 billion (1971 $) commitment was at the total
program level and not in terms of system elements. The breakdown to element
level has been adjusted to the :1972 Work Breakdown Structure (WBS) after
completion of definition.
D.D.T. & E.
Original estimate
1971 dollars
Preliminary 1 (current estimate 1971 dollars)
Through fiscal Balance to
year 1980 complete Total
Orbiter $3. 513
$3. 851
SSME .580
.839
SRB .390
.330
ET .331
.353
Launch and landing .336
.364
Total - 5. 150
5. 737 $0. 280 $6. 017
Preliminary 1 (current estimate real year dollars)
Through fiscal Balance to
year 1980 complete Total
Orbiter
$5. 235
SSME
1.170
SRB
.473
ET
494
Launch and landing
.
. sss
Total
7. 927 $0. 513 $8. 440
I These estimates are subject to change as a result of the current Shuttle reviews.
50-365 0 - 79 - 3
PAGENO="0034"
30
Mr. NELSON. Are you considering now because of the delays that
possibly instead of six test flights you will have some lesser number,
perhaps four.
Dr. FROSCH. We have always considered, quite aside from the
delays, that the number of required test flights might be fewer or
more than the number planned in the schedule. In fact, the history
of that kind of test flight in the space program has been that generally
we have required fewer flights than originally planned. It was possible
to get more efficient data collection in essence than was planned. Right
now we are leaving it loose in the sense of saying we are going to do
the first one, two, three, or four and examine what our feeling of con-
fidence is for saying we have to do another test or we can begin
operational flying. It must be remembered that in this system there is
almost no difference between a test flight and an operational flight.
The actual maneuvering of the vehicle, the launch and reentry, are
essentially the same, although in a test flight, there being no specific
cargo requirements, one can tailor the flight profile to test and not to
any external requirement. But the real point of the transition comes
when the cargo ceases being flight instrumentation mostly and starts
being cargo for its own sake mostly.
Mr. NELSON. Under your present schedule, you are expecting about
a 6-month slip, are you not, in the first operational flight from what
was originally planned?
Dr. FROSCH. We have had enough original dates so I think I had
just better state the. dates. What I stated in my statement was that
we figure there is about a 20-percent chance of the first development
flight by the end of the first quarter and 50-50 by the end of the
second quarter.
Mr. NELSON. But I'm not asking about the first flight. I'm talking
about-
Dr. FROSCIT. The first operational flight, that I think is about a
7-month slip from what we had previously.
Mr. YARDLEY. Yes. We had planned for the end of February 1981
for the first one, and we are now talking about September. Now that's
a little fatter, particularly when you consider the possibility of four
instead of six flights. We think it is imprudent to schedule sooner on
the higher risk basis because of the customers involved.
Mr. NELSON. You are saying that considering four instead of six
test flights, you are still considering the operational flights to go in
September rather than February?
Mr. YARDLEY. That's correct. But that gives us enough cushion to
make the fifth flight without interrupting that.
Mr. NELSON. Yes; I understand and that's good.
Now, do you anticipate any problems with the users, the com-
mercial users, of the operational test flights? Are they prepared to
be. able to absorb the 7-month delay?
Dr. FROSCH. It will certainly mean that some of the early users who
had already arranged for the possibility of a backup expendable
launch vehicle will shift to and use that backup expendable launch
vehicle. And I think it is true that the bulk of the early users, com-
mercial users, had in fact planned against that contingency.
Mr. NELSON. OK. Now, how about the tracking and data relay satel-
]ite program? That was supposed to go in one of the first operational
PAGENO="0035"
31
flights, as I understood it. Now, what's the impact of the 7-month delay
on getting that satellite up there; what's the effect on that?
Mr. YARDLEY. It is still our first operational flight but it has slipped
7 months.
Mr. NELSON. Is there a problem with that?
Mr. YARDLEY. Well, sure, the problem is it's going to cost us more
money because we will have to maintain the existing network 7 months
longer. Now, from the standpoint of operational performance, we don't
really need the TDRSS until the Shuttle is flying anyhow. But there
are contractual commitments and things of that nature that will cost
more.
Mr. NELSON. Dr. Frosch, you said in your statement and in your
testimony_-and I can't remember the specific date but will you please
refresh my memory-your first delivery to Vandenberg for the DOD
mission out there has slipped from what to what now?
Dr. FROSCH. `Well, the delivery of orbiter 103 I think we stated as
the summer of 1983.
Mr. NELSON. What was it originally considered to be?
Mr. YARDLEY. In the schedule that went with the fiscal year 1980
budget, it was December of 1982.
Mr. NELSON. So about a 6-month slip.
[Pause.]
I am hesitating here only to make sure that I choose my wo1~ds very
carefully. I want to ask you_-perhaps I'd better do that in private_-
with regard to some of the DOD missions of a ėlassified nature. But
anyway I'm going to ask you about that in private with regard to_-
someone here has already asked this morning are you going to be able
to fulfill the DOD mission and the answer was "Yes." I want to get
into that in more detail.
Since you are slipping from December 1982 to summer of 1983 and
particularly how does all of that tie in with SALT and the SALT
verification? I will follow that up later on.
Dr. FROSCU. Mr. Nelson, I would suggest that that be a conversation
that includes representatives of the DOD as well as representatives of
NASA.
Mr. NELSON. Yes. I have had some extensive conversations already
on that and I want to explore that with you.
When our staff visited KSC in May there appeared to be some
questions with regard t'o the division of responsibility between John-
son and Kennedy for completion of the orbiter manufacturing and
accomplishment of the vehicle checkout. What management changes
have been initiated to resolve this discrepancy?
Dr. FROSCH. There were such problems. I would like to have John
Yardley describe the management changes that have been made.
Mr. YARDLEY. There was some confusion between Kennedy and
Johnson on responsibility for the work done at Kennedy on the Orbiter
that had not been completed. Traditionally we always ship vehicles
there with work to do and Ke~inedy completes that work. So tradition-
ally it would have been Kennedy's job.
Now in this particular case we became aware that the magnitude of
this job was considerably greater than it had `been our practice to do
with the Kennedy people, both the contractor and the NASA people.
PAGENO="0036"
32
It `had been a long time since they had a new vehicle where they had
to do this kind of work. Their organization was not really tailored to
do a big production job. So we gave Johnson the responsibility for all
the work in the Orbiter Processing Facility (OPF) for this one space-
craft. We are putting a senior Johnson man down there for that. The
Keunedy people are going to support him in getting that work done.
Rockwell moved their top manufacturing vice president down there
to take charge of all that manufacturing. He has two senior people
working for him.
Rockwell also moved the vice president-program manager down
there to oversee both the launch preparations and the work while it is
in OPF. Kennedy has the responsibility for testing in the OPF and,
of course, everything outside the OPF. We do have to mesh the test
schedule with the manufacturing schedule. They have been working
the last 4 weeks detailing all of this. They have worked out a good plan
and it has been reviewed and I think it is all coming together.
Mr. FLIrro. Would the gentleman yield at this point?
Mr. NELSON. Yes.
Mr. FLIPro. That brings a question to my mind about the overall
part of our probem here. When you were getting the cost increases in
last fall, the projected cost increases, was it the work to be completed
that you were unsure of or was it how to cost out those tasks to be per-
forme.dtha.t you were unsure of?
Dr. FROSCH. John, do you want to comment?
Mr. YARDLEY. I think it was some of both. In the case of the thermal
prOtection system, for example, we thought back there in the fall of
1978 we were going to be finished with it in February. Now here it is
June and we've still got about 9,000 tiles to go. We knew how many tiles
had to go on. We didn't know how many people it would take or how
soon it would be done. So that was the problem there.
It did not really become apparent to us until about the March time
frame that this would be a. big additional cost item too. We have a lot
of people working on those tiles now and it is taking fiscal yea.r 1979
money.
In the manufacturing work I don't think we thought we had as much
work when we delivered the vehicle as it really turned out. There is
controversy on that. All the known work has now been detailed and
scheduled and man loaded and costed. So I think we are in good shape
there.
What we are still uncertain of is what additional work is going to
come up in the next several months that extends that time period.
Mr. FLIPPO. So you feel that you have the tasks to be performed
now well in hand but you don't know what will come up later. Could
you elaborate on what actions you are ta.king to better understand how
to cost these workload functions? If I understand, sort of what you
have said in essence this morning is you have had all these figures in
that indicated you might have a problem and you weren't sure as
to the validity of those and you wanted to be very sure before you
said, hey, I've got a problem here. So that is really a management
judgment, is it not, as to when do I decide that I have a problem.
You mentioned systems earlier, is our reporting system adequate and
providing the right kind of data;
PAGENO="0037"
33
I don't know that a change in the system is going to aid us in man-
agement judgment as to when do we have a problem or when do we
say, hey, we may have a problem.
Dr. FROSOH. Let me try to describe that from my point of view. I
think what we were getting early in the fall was a statement that said
that, the XYZ subsystem is going to need more work than we thought
and that it is going to cost $15 million. That is an interesting piece of
information and it may well be right and you may agree that that's
the right number and the right dollars and so on, but the first thing
that has to be done is to find out what the work is on the XYZ system
that has to be done~. How do you know it's that much work and where
does the costing come out? How much manpower? How much mate-
rial and so on? That takes time and until you really work your way
down through it you ma.y not be convinced that you really want to
do that now. You may want to say, well, do we really have to do that
at all or can we wait 6 months and decide whether it has to be done
or should it really be done next year, et cetera? You have all that to
worry about.
With regard to the other part of your question as to will improved
nformation systems really help, I think to the extent to which it
turns out that we have not had a continual enough flow of that kind
of detailed information, that would help. The biggest loose factor
in all of this in my mind is not so much the question of what it costs
per man-hour or what it costs to buy a piece of equipment, although
there has been some problem there, or necessarily even in defining the
known tasks to be done. There are two questions. One is the question
of what are the unknowns and what are the things that are not going
to pass qualification. We tend to refer to those as the unknown un-
knowns, but they will happen.
The other question is what does one predict for the efficiency of
doing the tasks? One of the things that has become clear just as a
matter of fact is that in the planning over previous years the accom-
plishment of an event in the year of actual prediction has been some-
thing like 70 to 75 percent of what was planned. So, in fact the actual
production was smaller than the expected production. Now that is not
necessarily translatable into workers who weren't working. That may
be translatable into the possibility that the engineers who planned
it didn't understand that it was harder than they thought, which I
think is part of the TPS question. Even given that background of in-
formation, what do we now do in our planning? Do we continue to
take the engineer's hard estimates or do we say, well, the history of
the past 3 years is such that, we are going to take the hard estimates
and we're going to inflate them and so on.
What we have actually done in our current planning is the latter,
that is to say we have taken the hard estimates of known work and
said that's all very well but we in fact know that last year and the
year before they were the same grade estimates, but in fact on the
average they were off by some, percent.
So we are simply going to put in a deflator factor if you like and say
it is going to take x percent more work to do the work you say takes
100 percent. And so we are just adding that in. I think that is a fairly
conservative thing to do. Of course, there is a counterargument and
PAGENO="0038"
34
the counterargument is that you must be learning something. Every
time you do this you should be doing it better, so taking last year's
thing is much too conservative and you ought to be putting a learning
factor on. It is that set of judgments that we are trying to exercise,
and I know of no set of rules by which you can turn the crank and
draw those conclusions on a program which you have not done before.
Mr. FLIPP0. Thank you very much for your response, and I thank
the gentleman for his patience in yielding.
Mr. NELSON. Certainly.
Dr. Frosch, instead of the way that you designed the reprograming
of the funds you certainly considered the reprograming from other
programs such as the space telescope and Galileo and Landsat and so
forth. What was your thinking there that you did not do that kind of
reprograming?
Dr. FROSCII. We went about it in what I can describe as-although
it wasn't quite planned that way-what amounted to asking two
questions in sequence. One, where was there money? Without regard
to what it did to a program. where was there money that could be
reprogramed in some reasonable way that would produce enough
money to solve the shuttle program. And then having listed those
possibilities we were then prepared to ask the next question. It's all
very well that the money is there but what does that do to the NASA
program and the national program and so on? We never got to the
second question because we rapidly concluded that there were only
one or two possible places where there might be enough money. And
when we looked at them in terms of delaying that program, terminat-
ing the program, how much money actually gets picked up, and what
are the other consequences. that didn't look as if it would net enough
reprogramable funds in the time period of concern to really obviate
the need of asking for more money.
That being the case we didn't bother to ask ourselves whether it
was a. good idea. We just. said that. in any case we have to go and ask
for a budget amendment, and if we're going to ask for a budget
amendment, we had better ask for what we think is the right amount
for the subject at. hand. Then if we get into a discussion that we
really ought to take some of it. out of the rest of the NASA program,
then we can go into the discussion of how much we can cover that way.
Mr. NELSON. I commend you for the way you came to that conclu-
sion and also for the politics of it. It makes it easier for us. Even
though it is not. all that pleasant sometimes to go back and ask for
more money, it makes it easier for us to do it in the present posture.
Mr. Chairman, I have two more questions.
Earlier this year under our able chairman's leadership we put $27
million additional into the authorization bill for the fifth Orbiter.
Now given the fact of these delays and reprogramings that you have
testified about today, when do you anticipate that that $27 million
would start to plug into the process?
Dr. FROSCH. If we were to make a decision to build a fifth Orbiter,
the flow of facilities and construction is such that it. could not in any
case be built and then delivered-until about a year after 104 was
delivered. And if we work our way back from that day, what we really
discover is that we would initiate production seriously on a fifth
Orbiter in fiscal 1982 with some long lead activities in fiscal 1981.
PAGENO="0039"
35
So the fifth Orbiter issue now with these delays could not really
arise as a budgetary issue before fiscal year 1981.
Mr. NELSON. So in essenėe what you are saying is that even though
Chairman Fuqu'a's bill had the $27 million that the appropriations
bill does not have the $27 million in it and there is no water lost and
we will address that issue then 1 year from now when we are doing
the fiscal 1981 budget.
Dr. FROSOH. That is correct.
Mr. NELSON. All right. One further question. Is there any significance
between the June 1980, 50-50 probable launch date and any kind of
discussions that might have occurred between the United States and
the Soviet Union vis-a-vis the Soviet's concern that the Shuttle Or-
biter might be used as an antisatellite weapon.
Dr. FRosdu. None whatever. I have not discussed that question. It
has not affected our thinking about how to conduct the program at all.
My policy and my. understanding of the administration's policy and
my discussions with the White House staff make it clear that we are
proceeding with the Shuttle as we were going to proceed anyway.
Mr. NELSON. Mr. Chairman, I thank you. Thank you, Dr. Frosch.
Mr. FUQUA. Thank you, Mr. Nelson.
Dr. Frosch, what is your time schedule now to get the Orbiter out
of the Orbiter processing faóility at the Kennedy Center?
Dr. FRoscn. We are talking in terms of running our internal produc-
tion and operations schedule there aimed at a date like the end of No-
vember, but noting that what we really think will happen is some date
between that and about a month later.
Mr. FUQUA. By the end of this calendar year then.
Dr. FROSCH. Well, before Christmas.
Mr. FUQUA. Give or take 5 days. [Laughter.]
Dr. FROSCH. I say it that way because it is an important 5 days. It
is 5 days in which we all prefer to do other things than work on Shut-
tle Orbiters.
Mr. FtJQUA. I've been around here long enough to learn that some-
times you have to ask the right questions in order to get the appropriate
answers. I don't know whether the next question is going to be appro-
priate or not. I thought we had asked it before. But the $220 million
that you are requesting in the fiscal year 1980 budget, is that going to
be enough to get you through the fiscal year 1980 budget which ends
on September 30, 1980?
Dr. FR05CH. I want to answer the question as carefully as you asked
it, Mr. Chairman. I have to say that I believe the answer is yes, but
I am nervous. It is very simply the following situation: It is very clear
that the funding including that amount is sufficient to get us to a first
flight in the middle or late spring without any question and leaving
some reserve within the D.D.T. & K. budget some APA, some reserve.
It is also clear that delays in first flight mean that certain expendi-
tures 111 operations and orbita.l flight test OFT and procurement for
operations are also deferred so that as we delay these things we will
pick up some funding. I believe our fiscal year 1980 request with the
budget amendment is adequate for the schedule, but I cannot be posi-
tive that that is the case. The event will have to tell us. The difficulty
is if you ask if I need more money I could not give you~ an amount
nor a reason.
PAGENO="0040"
36
Mr. FUQUA. But the $220 million you a.re requesting is also based
on a success oriented testing program.
Dr. FROSOH. It is based on the assumption that we will not have
major technical difficulties tha.t we do not now know a.bout and that
the results of the qualification tests that. are now going on on various
components and subsystems will be what I would call kind of aver-
age results, that is, there will be some things that fail but nothing
which is a major problem, tha.t most things will satisfactorily pass
and that there will be no big glitches or failures in the qualification
program. I think that is a reasonable kind of assumption but it could
be wrong. Do you want to add anything to that, John?
Mr. YAROLEY. Well, I would only say that we made this $220 mil-
lion estimate a month or so ago. Since that time we now know more
about the Cape operation a.nd what it will take to get that thing
through the OPF and there are more dollars to do that that will
come out of the reserve than we planned. How many more dollars
we will find, you know, we hope our reserve will cover it. I'm like
Dr. Frosch, I'm more nervous with the $220 million, now that I know
we're talking about the end of June as a nominal date instead of
the end of March, but we are going to be working that problem for
the next month or so very hard and we should get closer to either
being comfortable or more nervous in that time period.
Mr. FUQIJA. Are you comfortable or nervous then?
Mr. YARDLEY. I'm nervous.
Dr. FRO5CH. Let me add one comment and that is that obviously we
are alert to potential management and information problems now to a
degree and in a way that we were not so alert 6 months ago. On the
other hand, we have not identified and therefore not made any formal
changes to any of our information or management systems. So there
remains, I have to say, some possibility that we could surprise our-
selves again, but I don't think so, because I `think we are in an informal
way, much more probing and alert than we were, even if we have not
made a formal system change.
Mr. FLIPPO. Just to see if I understand it a little better, are you say-
ing `that the $220 million will get you through June and the first orbital
flight?
Dr. FRoscH. I think we are certain it will get us through the first
orbital flight, something like March, April, and maybe into May, and
that at that point we would have some reserve left and `we would have
some possibility of picking up money from delayed OFT and delayed
buys of things for operational purposes, so that it looks all right as far
as we can possibly tell now. And it's not a matter of whether we can go
away tomorrow and get some more information. It is as far as we can
possibly tell now. I have answered that way and I hope that way of
answering makes clear that we are nervous for obvious reasons.
Mr. FUQUA. Thank you very much, Dr. Frosch~ Dr. Lovelace, Mr.
Lilly, and Mr. Yardley. We appreciate your being here. We are always
happy to have you. We hope that next time you come back that you feel
more comfortable with the ~220 million.
Dr. Fiuoscn. Thank you, Mr. Chairman.
Mr. FTJOUA. Our next witness is Dr. William Perry, the Under Sec-
retary of Defense for Research and Engineering.
PAGENO="0041"
37
Dr. Perry, we are pleased to have you before this subcommittee to-
day, and will you introduce your associates for the record? You may
proceed in any fashion you choose.
STATEMENT OP DR. WILLIAM J. PERRY, UNDER SECRETARY OF
DEFENSE FOR RESEARCH AND ENGINEERIN~+
Dr. PERRY. Thank you, Mr. Chairman. I have on my right Major
General Yost who is the Air Force Director of Space Systems and
Command, Control, and Communications, and on my left is Mr. Bar-
field who works in my office. I have a statement for the record which,
with your permission, I would like to submit.
Mr. FrJQIJA. We will make it part of the record and you may sum-
marize it.
[The prepared statement of Dr. Perry follows:]
PAGENO="0042"
38
Statement by
Dr. William J. Perry
Under Secretary of Defense for Research and Engineering
before the House Subcommittee on
Space Science and Applications
June 28, 1979
Mr. Chairman, I am pleased to appear before your Subcom-
mittee to discuss the Department of Defense requirements for
the Space Shuttle and impacts caused by delay in the availability
of the Space Shuttle.
Maj. General W. R. Yost, the Air Force Director of Space
Systems and Command, Control, and Communications is with me
today to assist in responding in detail to questions you may
have.
The Department of Defense is making increasingly greater
use of space in areas such as navigation, communications,
ballistic missile early warning, siirveillance and weather fore-
casting. In the l980s our space programs will be depending
to an increasing extent on the Space Shuttle.
PAGENO="0043"
39
The Department of Defense is opting to transition
spacecraft from launch on expendable boosters to launch on
the Space Shuttle. We are doing this because we receive
benefits of reduced launch costs, increased reliability,
increased weight and volume for our payloads, and perhaps
most important of all, increased flexibility. With the
Shuttle we are going to be~ able to recover our spacecraft
from low orbit to perform repair and technological updating.
We plan to use the Shuttleas a manned laboratory in space
for experiments; eventually we may perform on-orbit servicing
of spacecraft and assemble large structures in space.
We plan to begin the transition of our operational space-
craft to Shuttle launch in FY 1982 and this transition will
be complete by FY 1985. By the mid-l980s we will be nearly
totally dependent on the Shuttle for our space missions.
I should also mention the Shuttle's dependence on the
Defense Department. We have two major programs underway that
are crucial to the success of the Shuttle program. The Air
Force is developing the Inertial Upper Stage to deliver space-
craft from the Shuttle to high orbits. The Air Force is also
PAGENO="0044"
40
constructing Shuttle launch and landing facilities at Van-
denberg Air Force Base so that polar launches can ~e conducted
to support DOD and non-DOD space programs.
In May 1979 the President submitted a $220 million amend-
ment to the NASA FY 1980 Space Shuttle funding request. I
believe that these funds are essential to allow the national
Space Shuttle program to proceed in a reasonable manner.
NASA has very recently provided us revised Shuttle program
dates based on their best judgment at this time. They assume
early availability of the NASA FY 1979 Supplemental funding
request and approval of the $220 million additional funds in
FY 1980 which the President has requested.
We understand that the First Manned Orbital Flight may
not occur until the end of the second quarter of 1980. The
initial operational capability for the Shuttle at Kennedy
Space Center will be achieved in late summer 1981, and Orbiter
099, which is the second operational orbiter, will be delivered
in the spring of 1982. This schedule will support our initial
launches at KSC since our first experimental payload is not
scheduled on the Sh'uttle until late 1981 and our first operational
payload is not scheduled until early 1982.
PAGENO="0045"
41
Orbiter 103 delivery is now projected for the summer of
1983, which is six to nine months later than previously planned.
Orbiter 104 delivery is very late in 1984, about ayear later
than previously planned. These delivery dates are very depen-
dent on FY 1981 and FY 1982 funding decisions which have not
been made. The important point here is that even with these
dates, DOD can meet the December 1983 Vandenberg bC. We would,
however, require a flight proven orbiter from KSC eight months
prior to bC for Vandenberg facility checkout.
We are very concerned over the delays projected for
Orbiters 103 and 104 and will work very closely with NASA as
the Shuttle schedules are finalized and decisions are made on
FY 1981 and outyear funding. Our concern is based on the
adequacy of the orbiter fleet to meet national Shuttle traffic
demands which are projected to build up rapidly once the Shuttle
is operational. By 1983, for example, DOD will have transitioned
several programs importantto our national security to Shuttle
launch. In view of the need for a flight proven orbiter to
check out Vandenberg, there could be periods when only one
orbiter will be operational at KSC-. We also note that with
the projected NASA orbiter delivefy schedules, the nation would
be supporting operations at KSC and VAFB with three orbiters
for about a year. And only one of these orbiters would provide
PAGENO="0046"
42
full performance capability. While we are working closely
with NASA to establish firm Shuttle schedules, we also will be
examining our payload transition and backup booster planning
to determine if any adjustments are needed.
At the same time that orbiter production planning is
being examined, consideration must be given to assuring that
necessary logistic support - adequate spares - are provided
so that all four orbiters can be maintained in service once
they are delivered. Further, we must be sure that the option
remains open for NASA to acquire an additional orbiter should
increases in projected traffic, loss of an orbiter, or turn
around times longer than now projected require such a decision.
Delays in orbiter deliveries beyond those presently projected
would force consideration of an extended commitment to expendable
launch vehicle operations with attendant adverse operational
and economic impact.
Our program for Shuttle use remains carefully keyed to
NASA Shuttle development progress and orbiter production
schedules. The program has not changed since the President's
budget request was submitted to the-Congress early this year.
Effective coordination on the Shuttle program is maintained
through the Aeronautics and Astronautics Coordinating Board
which is co-chaired by Dr. Lovelace, Deputy Administrator,
PAGENO="0047"
43
NASA, and myself. Through this Board Dr. Lovelace and I are
able to address major issues of interest to both agencies and
to provide broad policy guidance within our respective agencies.
The Space Transportation System (STS) Committee provides a
means for detailed top management coordination on the Shuttle.
The STS Committee is co-chaired by the Air Force Assistant
Secretary for Research, Development and Logistics and the NASA
Associate Administrator for Space Transportation Systems.
Also, we have strong day to day field level coordination and
joint activity on the Shuttle; and, in addition, Air Force
officers have been detailed to NASA to assist NASA in speci-
fic areas of Shuttle development. Very recently the Air Force
has located a general officer at NASA Headquarters to further
strengthen our joint planning and program implementation
activities.
As a result of this careful coordination over an extended
period, our requirements hive been made known to NASA and
carefully considered in the Shuttle design. The Space Shuttle
orbiter is sized for DOD missions and can meet all of our
launch requirements for the foreseebble future. The Shuttle
will be an integral part of our future military space operations.
PAGENO="0048"
44
Through Fl 1978 we have spent $257.5 million in support
of our development and acquisition activities leading to DOD
Shuttle utilization. In Fl 1979 we are spending $390.7 million,
and in Fl 1980 we are requesting $444.8 million in ill appropria-
tions. The $444.8 million in Fl 1980 will be applied as follows:
IUS development - $67.3 million; Vandenberg Shuttle facilities -
$273.1 million; and, all other DOD preparations for Shuttle use,
including KSC launches - $104.4 million. The $444.8 million is
made up of $175.5 million RDT6E, 5191.1 million Procurement, and
$78.2 million Military Construction funding.
Over the past year we have made some changes in our program.
Briefly, we have rescheduled our Vandenberg Shuttle launch and
landing facility to provide an initial operating capability (IOC)
in late 1983 instead of mid-1983. We are providing for Shuttle
thrust augmentation in the initial design and construction of the
launch pad. The latest DOD launch model shows an increase in
Shuttle launches from 109 to 113 through 1991, and we are placing
greater emphasis on using the Shuttle as a manned laboratory in
space. Let me give you an overview of our Fl 1980 Shuttle related
activities.
We are providing a Shuttle launch and landing capability
at VAFB so that we can continue to support high inclination
DOD launches. Launches into sun synchronous, polar, or near
polar orbits cannot be conducted from KSC without unacceptable
performance loss and overflight of populated land areas during
launch. Since last year we have reoriented our VAFB activities
PAGENO="0049"
45
to phase our capability to conduct Shuttle operations start-
ing with an initial capability of six launches per year in
1983 and building toward a final capability to conduct up to
20 evenly spaced launches per year by mid-1985. Our previous
plan called for 20 launches per year capability in 1983.
This phased approach provides a better opportunity to incor-
porate, at VAFB, any changes which may be necessary based on
early ~flight experience at KSC andassures that the VAFB
Shuttle facility will be properly sized to meet national needs.
Last January we adjusted the DOD Space Shuttle program
to support an initial operational capability at Vandenberg
Air Force Base (VAFB) in December 1983 rather than June 1983.
A number of considerations were involved. First, we considered
the earliest firm date that Shuttle launches from Vandenberg
would be required. A review of military payload schedules
conducted by DOD concluded there are no firmly planned military
payload launches at VAFB that cannot be accommodated by the
revised schedule. There were several civil payloads considered
in this time frame, but they were not firm. Another factor
in determining Vandenberg availability was a desire to minimize
FY 1980 funding consistent with firm requirements for Shuttle
use.
50-365 0 - 79 - 4
PAGENO="0050"
46
Finally, NASA advised the DoD that thrust augmentation
is necessary to achieve the Shuttle's operational design
specifications. The full 32,000 lb Performance Reference
Mission 4 payload delivery capability projected for Shuttle
launches from VAFB is desired by both DoD and NASA.
To achieve this capability, NASA has selected a modifi-
cation to the Shuttle configuration which consists of a
single st'ap-on solid motor attached to each of the main
solid rocket boosters. This configuration is the simplest,
least risk, lowest cost option of several that were considered
by NASA in consultation with DoD. However, this configuration
impacts the design of the VAFB launch pad and the launch
mount which supports the Shuttle on the pad (funded Fl 1979
projects)
To accommodate this configuration, changes must be made
now in the initial design of the launch pad and the launch
mount. Additional model tests must be conducted to provide
acoustic and overpressure data supporting this revised design.
Pad retrofit at a later date to accommodate thrust augmentation
after the facilities are constructed would be a major under-
taking requiring extended disruption of Shuttle operations
and is not considered practical.
PAGENO="0051"
47
The time required for design, construction and activa-
tion of the launch pad and mount, which were funded in Fl 1979,
is critical in achieving an initial capability at Vandenberg
AFB. Thus, the pad design changes for thrust augmentation
significantly increased the technical and schedule risk asso-
ciated with achieving a June 1983 date. Other changes to VAFB
plans which may be necessary for storing and processing the
strap-on solid motors are not as critical from a schedule stand-
point. We will defer making these investments until firm
payload schedules dictate.
The full 32,000 lb payload delivery capability (Performance
Reference Mission 4) remains a valid Shuttle requirement for
the mid-l980s. Thrust augmentation is not required for military
payloads scheduled for Shuttle VAFB launch through Fl 1984;
however, NASA full capability Spacelab flights out of VAFB will
have to be delayed until thrust augmentation is available.
It is expected that planned payloads will grow in capability,
and therefore in weight, as new concepts evolve over time and
Shuttle thrust augmentation will be needed to fully utilize
the Shuttle's capabilities. -.
Fl 1979 funding for VAFB is being used for facilities,
equipment and software design, procurement of launch process-
ing and other common supportequipment, and launch pad
modifications. Site preparations at VAFB began in January
1979, and actual construction is scheduled to begin in
PAGENO="0052"
48
August 1979. FY 198~0 funding will provide for continued
facilities, equipment, and software design; ground support
systems integration and initial systems activation effort;
plus the continuation of procurement of common and unique
equipment. Our NILCON request for VAFB includes the orbiter
processing and hypergol maintenance and checkout facilities,
utilities, launch pad thrust augmentation provisions, and
relocation of existing Titan solid motor facilities to make
room for Shuttle snlid motor processing and storage.
The IUS is being developed for use on Shuttle launches
to deliver DoD spacecraft to higher orbital altitudes and
inclinations than the Shuttle alone provides and will also
be used by NASA for synchronous orbit and planetary missions.
DoD will also use the IUS on the Titan III to improve mission
success and reduce costs during the early Shuttle transition
period. The IUS when used on the Shuttle can deliver payloads
weighing up to 5,000 lbs to geosynchronous orbit. When used
on Titan hID, up to 4,000 lbs can be delivered to this orbit.
Our FY 1979 funding supports the IUS full scale development
which began in April 1978, procurement of IUS ground support
equipment, logistics support, and necessary modifications to
the SolidMotor Assembly Building at Kennedy Space Center (KSC).
The JUS design now has been baselined as a resultof
the Critical Design Review which is now complete.
PAGENO="0053"
49
In FY 1980 developmentof the basic two-stage IUS con-
figuration will be nearing completion. We will continue IUS/-
Orbiter integration efforts, and procure IUS airborne and
ground support equipment as well as pre-production vehicles to
support the initial flights. The first DOD IUS flight is
scheduled for late 1980 on a Titan hID vehicle, and for FY 1982
on the Shuttle. The first NASA IUS flight is scheduled to occur
on the Shuttle in 1981. We are now coordinating with NASA
the incorporation into the DOD IUS program of NASA-unique re-
quirements. NASA twin and twin plus spinner IUS configuration
development, funded by NASA for planetary missions, will continue
toward a first flight in 1982. As the various elements have
matured, IUS, orbiter and spacecraft interactions have led to
the requirement for IUS design changes to insure adequate per-
formance for the Galileo mission. Solutions appear to be at
hand, but additional funding may be required for these performance
improvements.
Other Shuttle activities include preparations for DOD launches
at KSC, payload integration, mission operations capabilities
development, and DOD modifications at Johnson Space Center (JSC).
Our FY 1979 funding covers continued development of airborne
support and interface verification equipment for DOD payloads,
design of security systems, procurement of security and ground
communications equipment, systems engineering, software develop-
ment, and continued implementation of the Johnson Space Center
controlled mode to support classified DOD missions. In
PAGENO="0054"
50
Fl 1980, payload integration efforts to support early DOD
Shuttle flights will continue. Facility modifications will
be made at JSC, and equipment will be procured to p~rovide
security to conduct Shuttle operations. Software validation
and verification will continue, and results from the manned
orbital flight tests of the Shuttle will be evaluated to
assure compatibility of DOD payloads.
DOD planning for early Shuttle launches is based on
using NASA's JSC for simulation, training, and Shuttle flight
control for all DOD missions. Since the JSC facilities, as
presently designed, cannot concurrently handle classified
and unclassified payload data, we have worked closely with
NASA to define modifications needed. A validated modification
approach will assure adequate protection of DOD c1assif~ied
data and have a minimum impact on concurrent civil space opera-
tions. This approach, called the controlled mode, is now being
implemented. Detailed design modifications of the JSC facilities
and procurement of essential additional equipment will continue
in FY 1980. We will acquire the controlled mode capability at
JSC In tine to support our first calssified payload launch on
the Shuttle. Our investment for this purpose will be held to a
minimum consistent with our essential security needs and projected
classified launches on the Shuttle through the mid-1980s. For
the longer term we feel that a dedicated backup DOD Shuttle
flight control facility will be required. Such a
PAGENO="0055"
51
backup control facility would avoid total dependence on the
single mission control facility at JSC and improve our
capabilities for certain missions in the late l980~. We will
include this requirement in~ any new facility which we may
consider to improve our satellite control capabilities and
enhance the survivability of our space systems. In the
interim we will be totally dependent on JSC. We have 19
classified launches scheduled through 1985, the earliest date
when any new facility capability could be brought on line.
The latest Department of Defense Space Mission Model for
the FY 1979 - 1991 period projects 113 Shuttle launches,
64 from KSC and 49 from VAFB. This is an increase in DOD
Shuttle traffic over the 109 launches we projected last year.
Initial DOD use of the Shuttle is planned for an experimental
payload in late 1981. The first DOD operational payload,
DSCS II, is scheduled for launch in 1982, and by the mid-l980s
all DOD payloads will have transitioned from launch on current
expendable boosters to Shuttle launch.
As we progress in our plan to use the Shuttle we also
plan to phase out current launch vehicles. Phase down of the
Titan III production line will begin in FY 1980 and the end
of new expendable launch vehicle production is planned for
PAGENO="0056"
52
FY 1983. However, we will retain a minimum number of these
vehicles and associated launch pads as a backup capability
through FY 1985. This is necessary to assure that.our
highest priority spacecraft can be launched if the Shuttle
encounters difficulties during transition. We will examine
both our payload transition and backup booster planning to
see if any adjustments are necessary as a result of the Shuttle
program schedule changes which are currently under consideration.
Within the past year we have begun to explore more fully
the manned laboratory capabilities of the Shuttle for conduct-
ing Defense experiments. The Space Test Program (STP) has
been tasked to serve in a pathfinder role for DOD in aggressively
exploring ways to use the Shuttle to conduct DOD experiments
in space more effectively. A plan has been developed and is
now being implemented. STP will develop suitable equipment
to support experiments in the Shuttle payload bay and to
allow the payload specialist to interact in real time with
the experiments.
We hope this approach will speed up the infusion of
technology into space systems, allDw more ideas to be tested
in a given time, and minimize our investment in bad ideas.
We will rely on man as an experimenter to react in real time
PAGENO="0057"
53
to unexpected events and allow the experiment design to be
less complex. A number of candidate experiments have been
defined at this poiht, and we are proceeding toward ~ur first
sortie mode Shuttle flight. We believe the experience gained
here will contribute greatly~ to defining the ultimate role of
military man in space.
In summary, the $220 million requested by the President
is essential to allow the national Shuttle program to proceed
in a reasonable manner and to support national security pro-
grams committed to use the Shuttle. The orbiter delivery
schedules now under discussion will permit the Department of
Defense to activate Vandenberg on schedule by December 1983.
The full 32,000 lb. payload delivery cap~bility for polar
launches remains a valid NASA/DoD requirement for the mid-l980s,
and we are now providing for thrust augmentation in our Vanden-
berg Shuttle launch pad design. We are moving aggressively to
transition our spacecraft to the Shuttle and to take full
advantage of the Shuttle's capabilities to achieve more
effective space operations. 1 solicit your full suppoit for
both NASA and DoD FY 1980 Shuttle funding requests.
PAGENO="0058"
54
Dr. PBimi~. Mr. Chairman, as this committee is aware and certainly
as is reflected in some of the questions you were asking some of the
NASA witnesses, the Defense Department is becoming increasingly
dependent, first of all, on space systems in general, and as time goes on,
specifically on the Shuttle.
Our dependence on space for navigation, communications, early
warning, surveillance and weather forecasting will become even great-
er in the decade of the 1980's. We will begin in 1982 to transition our
space systems to the Shuttle vehicle and later we will-be -conductmg~
all of our space operations with the Shuttle. The reason for this is that
we believe that the Shuttle will be cheaper and more reliable than cur-
rent launch vehicles. It will provide us greater weight and volume for
our new payloads and perhaps, most importantly, it will give us the
flexibility to recover payloads, to service vehicles in orbit, and to have
a man in space which we think will be extremely important in the dec-
ades ahead of us.
I would like to start off this testimony by reaffirming the support of
the Department of Defense for the Shuttle program. Our transition
plan involves phasing down our Titan III expendable launch vehicle
production beginning in fiscal 1980. So we are very close already to that
decision point. We plan to shut down the Titan III production line in
fiscal 1983 and to close up the launch complexes in fiscal 1985. By 1985,
we will be almost totally dependent on the Shuttle for our space mis-.
sions.
In the first 10 years of our use of this Shuttle we anticipate conduct-
ing 113 launches for an average of about 11 per year. Actually that
figure is a little misleading because we will be gradually increasing the
quantity and we will be approaching an average more like 15 per year
by the end of that period.
While I have stressed the dependence of the Department of Defense
on the Shuttle program I should also mention the other side of that
coin; namely, the Shuttle program's dependence on the Department of
Defense. We are developing the IUS, the inertial upper stage for all
users of the Shuttle-not only Department of Defense. We are also
developing a launch facility at Vandenberg Air Force Base. The
inertial upper stage will allow the Shuttle program to deliver payloads
to very high orbits.
For example, we will be able to carry 5~000 pounds to geosynchro-
nous orbit with the ITJS vehicle. The design of that stage is moving
along fine. The first lairnch of it is scheduled for next year. That will
be on a Titan vehicle. The first launch on the Shuttle will be 1981 for
a NASA payload and 1982 for a DOD payload.
Site preparation has started at Vandenberg. The actual construction
will start this fall. The reason for the Vandenberg facility primarily
is to accommodate polar or near polar launches without unacceptable
performance losses and without flying over populated land areas.
The pres~nt plan calls for t-he Vandenberg facility to achieve its ini-
tial opei~ational capability in December 1983. At that time we will have
the capabilit.y of conducting six launches per year. We will gradually
increase the ca~a~lity at Vandenberg so that by mid-1985 we will be
able to operate atth'e rate of up to 20 launches per year.
You have raised questions with NASA today about the impact of
the revised schedule. We have worked very closely with NASA and the
PAGENO="0059"
55
schedule which they have presented to you will support DOD require-
ments. Our first experimental payload will be launched in late 1981
on the Shuttle and the first perational payload in early 1982. Both of
those will be at Kennedy Space Center. And both of those are compati-
ble with present plans that NASA has for the Shuttle. Most crucial to
us are the launches at Vandenberg.
The present NASA plan calls for the delivery of vehicle 103 in the
late summer of 1983. We have an TOC planned in December of 1983
and we have the first DOD launch planned for 1984. That gives us ade-
quate time for the checkout of the Vandenberg facility and prepara-
tions for the first launch in the 1984 time frame.
Vehicle 104 is scheduled to be delivered 1 year later. Both of those
schedules, of course, depend on not only the technical issues and pro-
grammatic issues which you have been discussing with NASA today,
but they also depend on 1981 and 1982 funding.
To answer the question which several of the members asked relative
to the DOD programs, we can met the launch date of all planned DOD
programs if the schedule dates for the Shuttle Orbiter deliveries are
maintained.
I must say though that we have used up nearly all the margin of
the program by these slips and we are looking now at launches that are
going to occur 5 years from now-we have precious little margin left.
My concern in the program~ is simply a matter of prudent planning
and is oriented around two issues. First of all there is very little mar-
gin left in the schedule between the delivery of the orbiters and the
planned launch dates, and second, there will be no backup in terms of
orbiter vehicles `available. We will be operating for the first year with
a single orbiter vehicle at Vandenberg. So my concern is equally as
great for the delivery of 104 as it is for the delivery of 103.
Now we manifest that concern by providing backup expendable
launch vehicles. Our present program calls for four complete Titan III
vehicles and two sets of long-lead Titan hardware to be maintained as
a backup. I am reexamining with the Air Force whether those four
Titan vehicles provide adequate protection against all of the uncertain
factors which could occur in the next 5 years.
If, in our judgment, it is not an adequate hedge, we will be request-
ing additional funds in the Defense Department budget for more ex-
pendable launch vehicles. The margin for error which we have to be
concerned about is, first, the possibility of greater delays in the Orbit-
ers, notwithstanding the best judgments made today. Second, there is
always the possibility of an accident-either to an Orbiter or a pad.
And finally there is a possibility that our requirements will change
sometime in the next 5 years with the number and urgency of launches
we are talking about.
For all of those reasons we will be reexamining our plan for backup
expendable launch vehicles and should have within a few months a
judgment on that point which will be manifested, if there are any
changes required, in our budget request for 1981.
Any action we take-in order to avoid exorbitant cost for expend-
able launch vehicles-has to be taken before we begin to shut down the
production line. So it is a near-term decision for us.
Let me summarize very briefly the Defense Department's part of
the Shuttle program. By the mid-1980's we are scheduled to spend ap-
PAGENO="0060"
56
proximately $2 billion on the Shuttle program in the Defense Depart-
ment budget. To date we have spent oniy a small fraction of that,
through fiscal 1978 something in excess of $250 million. Our fiscal year
1979 budget is $390 million and our request in fiscal year 1980 is $445
million. The bulk of that money is going for Vandenberg facilities. The
second largest funding requirement is for the inertial upper stage ve-
hicle. I think there is one other point that is perhaps worth mention-
ing here. We are making a modification to the Johnson Space Center to
accommodate the control of our classified payload launches. The John-
son Space Center presently is an open facility. So we also have funding
in our budget to accommodate that change.
In summary, I would note that the Defense Department is depend-
ent on the Shuttle program and will be nearly totally dependent on
the Shuttle program by the mid-1980s. The request that NASA has
made for the budget amendment in 1980, we believe, is essential in or-
der to give us the opportunity to meet the schedule for vital national
security programs.
I am also concerned, even with the amendment, that sufficient margin
in the schedules exist. So we are reexamining the requirements for
backup expendable launch vehicles. We are completely and totally
committed and dedicated to the Shuttle. We believe that it is an
imaginative program which we aggressively support. We believe it
will give us much greater capability, and ultimately lower cost, in
our space operations than any other alternative. So we are soliciting
the support of this committee for the budget amendment request that
NASA has made.
I think that is perhaps all I will make in the way of preliminary
statements. I will be happy to try to answer the questions you may
have.
Mr. FUQUA. Dr. Perry, we have a rollcall vote. I think it would
be appropriate at this time to take a short `break to answer the roll-
call and we'll be right back.
[Recess.]
Mr. FUQUA. The subcommittee will resume.
Dr. Perry, you mentioned that the* time margin because of the
anticipated timeframe for launch of the Shuttle that the margins had
been somewhat used up between that and your expendable vehicles,
and you did say that you had an adequate supply of Titans, I believe,
to take care of the transition phase of expendable vehicles from the
time of 1981 of the first Shuttle launch.
Dr. PERRY. We have an adequate supply of Titans for all of the
planned expendable launches through 1984, and in addition to that we
are procuring four extra Titans for reserve and two sets of long-lead
parts beyond the four extra Titans.
Mr. FUQUA. That will not interfere then with your production line
that may have to be closed out at. some point?
Dr. PERRY. The present plan is to begin the phasedown of the pro-
duction line in fiscal 1980, but the production line would still be oper-
ating as late as 1982 even with that plan.
Mr. FUQUA. Then the slippage of the Shuttle schedule-has that
caused you to have to switch any of your Shuttle launches to expend-
able launches?
PAGENO="0061"
57
Dr. PERRY. No. The NASA schedule still accommodates all of the
dates that we were planning~ for DOD flights.
Mr. FUQUA. In the military construction `budget which just passed
the House recently the funds were deleted for the construction activi-
ties to support the Shuttle at Vandenberg. Is that going to delay any
of your Vandenberg launches?
Dr. PERRY. Yes; our best judgment now, Mr. Chairman, is that that
would occasion essentially a I 2-month delay in the activation at Van-
denberg, which is to say that it would slip from December 1983 to
December 1984. We have three DOD flights planned at Vandenberg
for this period, two in fiscal year 1984 and one in early fiscal year 1985.
Those then would not be able to use the Shuttle. We would have to
make those launches with expendable launch vehicles. So, if that were
sustained in the final authorization and appropriation bills, we would
have to then come back with requests for additional expendable launch
vehicles to accommodate that slip in the launch schedule. There would
be other problems as well. The' most immediate problem would be prob-
ably an increase in program cost of about $200 million to accommodate
the requirement for providing for the expendable launch vehicles.
Mr. FUQUA. Mr. Brown?
Mr. BROWN. Thank you, Mr. Chairman.
Dr. Perry, I am not as much up to speed on this project as I would
like to be. Some of my questions may therefore appear to be a little
stupid.
Can you tell me a little bit more about this intertial upper stage
system, how it works and if it is too complicated, would you supply
it for the record.
Dr. PERRY. The concept is quite straightforward. The Shuttle simply
delivers its payload to a low altitude orbit. If the mission can be per-
formed from that orbit, then the intertial upper stage is not needed.
If the mission requires a higher altitude, we need another stage to
carry the payload up to that altitude. The intertial upper stage is
simply a rocket-powered stage which will carry the payload from the
low-altitude Shuttle orbit up to a higher altitude orbit required by
the payload in order to perform its mission.
Mr. BROWN. All right, so when you talk about 4,000 or 5,000 pounds,
that includes both the rocket and the load it is carrying.
Dr. PERRY. The 5,000 is just the payload. That's the payload that
the TUS will carry to a geosynchronous orbit. So, if we want, for
example, to put a `communication's satellite at that orbit and it weighs
5,000 pounds, then the IUS will carry it to that orbit.
Mr. BROWN. I would assume that some reasonable proportion o'f
your missions will require boosting into higher orbits?
Dr. PERRY. Yes, that is correct..
Mr. BROWN. Can you give me a rough guess as to what proportion?
Dr. PERRY. Yes; in round figures about 50 percent of them.
Mr. BROWN. You are talking about somewhere on the order of, what
did you say-fl 0 or 120 DOD missions on the Shuttle up through 1991?
Dr. PERRY. That's correct. i~e get up to about 15 a year per year
bytheend of 1980's.
Mr. BROWN. Dr. Perry, it is obvious that several members of the
committee have an interest in these DOD missions, many of which
PAGENO="0062"
58
are classified. I have raised with you occasionally this question of
military-civilian interface in projects like this which sometimes makes
for difficulty on the part of our committees in determining appro-
priate actions or policies.
Could I presume to ask if it would be possible to get a classified
briefing on the military missions involved in this project at some
appropriate time? S
Dr. PERRY. Certainly, that could be provided at your convenience.
Mr. BROWN. Several other members of the committee are interested
and haven't had it-some may already have had it-it might be
easier to arrange it for several of us. I would like to investigate that
anyway.
I suspect that some of those issues do involve communication and
sensing from outer space which I am quite interested in as a civilian
activity and I would like more information.
You made a couple of statements which were somewhat provoca-
tive to me in your written testiriiony. For example, you look forward
to the eventuality of on-orbit servicing and large structural assem-
blies using the shuttle. Is that in both the near-Earth orbit and possi-
bly synchronous orbit that you are making reference to?
Dr. Pi~nmv. When I am describing the assembly of large structures
in orbit, I am describing the assembly taking place in near-Earth,
low-altitude orbit, but once assembled the structure may be pro-
pelled to a higher altitude, for example, to geosynchronous altitudes.
Mr. BROWN. Using the IUS?
Dr. PERRY. Probably not.
Mr. BROWN. Would the same kind of a rocket propulsion system
be usable for moving a space structure from lower orbit to upper
orbit?
Dr. PERRY. Not as the IUS is presently designed. The IUS would
certainly have to be modified in order to propel these larger space
structures.
Mr. BROWN. I saw an interesting science fiction program last night
here in the building in which this problem was solved with something
called a mass driver. It was essentially a linear electric motor which
was used to create a reaction by propelling a. mass out of the linear
motor and I presume driving whatever the motor was inbecided in
forward as the mass goes backwards. Have you been working on
anything like that?
Dr. PERRY. We have not been in the Defense Department, no.
Mr. BROWN. You never know.
In that connection, you have indicated several times that the Space
Shuttle has been designed for DOD mission and can meet-I think you
make the statement "can meet all your launch requirements for the
foreseeable future." Is that consistent with your statement about
eventually wanting an on-orbit servicing capability and a large struc-
tural assembly capability eventually, or is the eventuality further out?
Dr. PERRY. It is consistent from the very begi.nning of the DOD's
use of the Shuttle. I was trying t.o discriminate between missions that
are already planned and missions. that are not yet planned. We don't
vet have any planned missions for the assembly of large structures
in s~iace, but I anticipate that we will and probably within the time
frame we are talking about.
PAGENO="0063"
59
Mr. BROWN. And the on-orbit servicing which I think is really an
important mission.
Dr. PERRY. The on-orbit servicing will be an important feature of
the Shuttle within the same time frame.
Mr. BROWN. But you have not made specific plans for particular
launches to accomplish these kinds of missions?
Dr. PERRY. We have not made specific plans yet, for example, for
the assembly of large structures in space, but we are studying that. now,
and I anticipate that we will be making such plans and we will be
doing that early in the usage Of the Shuttle.
Mr. BROWN. Are you coordinating that with any studies that NASA
might be making?
Dr. PERRY. Yes. We have a very close coordination with NASA not
just at the senior management level but at working levels, all levels
in the organization.
Mr. BROWN. You may have testified on the results of your studies or
your tentative plans, and I'm unaware of it, but I do know that this
subcommittee has been looking at near Earth industrial developments
and other kinds of activities which would require space structures of
some sort, and it seems to me that the proper coordination is essential
in this kind of a forward planning operation.
Dr. PERRY. Yes. For example, if this large structure were to turn
out to be a very large antenna, the applications would be to civil as
well as to military programs, and probably we would want to sponsor
a single development program to do that rather than having two
separate ones.
Mr. BROWN. Correct. By a yery large antenna, are you thinking of
something like a radio telescope?
Dr. PERRY. Yes; a radio telescope or a communications antenna,
but it might involve structures which could be many hundreds or
thousands of feet in aperture. It is quite conceivable to assemble those
kinds of structures with the Shuttle program and quite inconceivable
to assemble them on the ground and launch them.
Mr. BROWN. We may have already had some discussions of this and
I don't want to probe into it too much, but basically I think we have
a concern about this cost overrun and schedule slippage in the Shuttle.
And yet in looking at it overall it seems to me that an overrun of the
order of magnitude of 15 percent and slippage of 6 months or so is not
particularly unusual in large systems of this sort. Have you com-
mented on this already?
Dr. PERRY. I have not commented on that. I would be happy to, if
you would like.
Mr. BROWN. Would you in the light of defense systems of compar-
able magnitude.
Dr. PERRY. In the Defense Department we submit to the Congress a
quarterly report called the SAR, the Systems Acquisition Report,
which summarizes the cost and, programmatic status of all of the major
programs. We have presently 58 programs that are included in that
SAR.. If you look at the cost history of those 58 programs from the
time of their development estimate, that is, when we submitted an esti-
mate based on the development proposal, and then compare that with
the cost estimate of the program today, aggregating all 58 of those pro-
grams and subtracting out the effects of inflation and subtracting out
PAGENO="0064"
60
the effects of increased quantities, we end up with an average of about
a 15-percent cost increase over the life of those programs.
These are all large programs, several billion dollars, and programs
whidh have a high degree of technical complexity, so they may be
fairly compared with the Shuttle program. They are all programs
which take place over maybe a 10-year time period. So without sug-
ge~ting that a 15-percent overrun is a good thing, if we are simply
looking for a standard of comparison, I would say DOD major pro-
grams are a fair standard of comparison for the Shuttle, and by that
standard the Shuttle falls in about the center of what our history has
been.
Mr. BROWN. And, of course. the importance of maintaining the kind
of surveillance which allows you to make early detections of any pos-
sible errors that may have caused these overruns and correct them,
I assume.
Dr. PEImY. That is true, but I would like to speak somewhat in de-
fense of NASA's committee perception. the committee's perception
of late calling of this overrun. My experience in the management of
DOD programs suggests they can go along for years without any real
evidence of problems, and the evidence begins to surface in a very brief
pe.riod of time when you reach what. is called the moment of truth in a
program, when you start assembling the equipment, and then all of
your hopes and dreams and aspirations have to be faced with the real-
ity of trying to make the hardware work. And when that happens,
the expectations or fears of problems that you may have been thinking
about for a year or two before that become quite concrete. I imagine
that is what has happened in the NASA program here. It is not
atypical of the way major cost and schedule problems develop on a
large and complex progra.m of this sort. They do tend to develop.
All of a sudden, even though you've had some indications of them for
months ahead, the really hard indications develop very suddenly
within a few months when you start trying to put the equipment
together.
Mr. BROWN. Again, I confess to my lack of detailed knowledge of
this, but in reading Dr. Frosch's testimony and listening to his com-
ments, I got the impression that what we see here is the accumulation
of a rather substantial number of relatively minor miscalculations,
I guess you might say, misjudgments or unanticipated difficulties and
not any one major thing.
For example, as I recall, he mentioned a problem with the hydro-
gen turbine blades, a problem with the tiles, heat shielding, the radar
docking, a problem with even the number and size of the extra-
vehicular mobility equipment which doesn't seem like a big thing to
me, but it may run into quite a few dollars. Am I misconceiving this
that we were caught up with an accumulation of a number of items at
this moment of truth, as you use the term, instead of any one major
thing?
Dr. `PERRY. I would make two comments about that. The first is that
I think that is a correct assessment, and I am differentiating between
a project where you are beginning to perceive a fundamental diffi-
culty, a fundamental overreaching. I do not think that is happening
in this program. I think it is an accumulation of relatively small
PAGENO="0065"
61
items. The second comment I would make is that I don't think we've
seen the end of that accumulation of small problems. I do not think
they have all surfaced yet, and I think NASA will be hearing about
more of them and this committee will be hearing about more of them.
I do not think the moment of truth has been fully reached, and it
will not be for several more months yet.
That is not a comment based on a specific knowledge of this pro-
gram. I am not intimately involved in the management of this pro-
gram. It is as an interested observer who has followed many programs
and watched their problems and it just seems to me that not all of the
problems have surfaced yet.
Mr. BROWN. That's my impression. I was just seeking to see if you
would confirm it. It also seems to me that there might be a possibility,
say, if the Shuttle were a production-run vehicle as like a major air-
craft procurement that some of that might be made up by virtue of
having worked out the bugs on the first model and being able to get
over your learning curve and achieve efficiencies of production on sub-
sequent units. Is there any possibility in this program that we could
recoup some of these miscalculations or losse~ or whatever you want
to call them.
Dr. PERRY. That is, of course, a possibility. I have to comment that
I spent 20 years of my career in industry managing a company and
trying to conduct large programs like this, and I had a sign which I
kept near my desk which helped me quite a bit and the sign said:
"Hope is the greatest enemy of the businessman." [Laughter.]
And I wouldn't want to count too much on the hope of this being
realized.
Mr. BROWN. Of course, the Shuttle isn't a very long production run.
Dr. PERRY. That's correct.
Mr. BROWN. I appreciate your response, Dr. Perry, and I will be
following up on this other matter of the DOD mission aspect.
Dr. PERRY. We will be happy to follow up with you on that.
Mr. FUQUA. Mr. Winn?
Mr. WINN. Thank you, Mr. Chairman.
Dr. Perry, does DOD have any input in the various Space Shuttle
review panels that are supposed to report around September 1?
Dr. PERRY. Let me answer that two different ways, Mr. Winn. I am
the Cochairman with Mr. Lovelace of the Coordinating Board between
NASA and Department of Defense, and at that level I will be dis-
cussing this problem with him. In addition to that, we actually have a
participating member of the review panel, General Abramson who was
the F-16 program manager. So in both of those respects we do.
Mr. WINN. I appreciate that. I was given the list when they were
selected over the telephone and a very short briefing, and I did not
recall you being the Coadministrator.
Dr. PERRY. That's the Aeronautics and Astronautics Coordinating
Board, the AACB. It is not specific to this project.
Mr. WINN. I'm talking about the special review board that was
referred to here a little while ago.
Dr. PERRY. The special review board, General Abramson is on the
board, but I would expect that the AACB will be reviewing the results
of this panel and in that respect as Cochairman I will be reviewing it
with Dr. Lovelace.
50-365 0 - 79 - 5
PAGENO="0066"
62
Mr. WINN. You would and could have some input.
Dr. PERRY. As I indicated, we have a heavy stake in this program
and are terribly interested in how it turns out.
Mr. WINN. This may have been asked because I was delayed in
getting back, but I would like to ask it for my own verification as to
whether DOD has increased its procurement of the Titan launch
vehicles to act as a backup. I referred to that in one of my earlier
questions.
Dr. PERRY. I will summarize that very briefly. I did mention it
before. We have four extra Titans planned for backup and we will be,
in the course of our 1981 budget review, considering whether we ought
to increase that number to give us a greater margin of safety. We will
have a judgment on that in the next few months.
Mr. WINN. How much money are you talking about, if you have
to get the backup Titans?
Dr. PERRY. We don't know yet. We have a study underway to
determine that right now. Titans in the past have cost us about $50
million apiece.
Mr. WINN. You can't get them for that now?
Dr. PERRY. No; I don't believe you could.
Mr. WTINN. How much do you allow for inflation, design changes?
Just from an information standpoint how much do you figure you
have to allow for that?
Dr. PERRY. That is one of the things we have asked the study to
tell us. Inflation alone though can be easily 7 or 8 percent per year, and
we would be talking about Titans that would be built in 1982 and
1983. So there would be a significant increment just for inflation
alone.
Mr. Wixx. `When do you think you will have that information?
Dr. PERRY. Within a few months.
Mr. `WINN. `Will you make that available to the committee on an
informal basis?
Dr. PERRY. If you would like, certainly. The. reason we are prepa.ring
it is to determine what our 1981 budget request ought to be and whether
we ought to include funds in the budget for this.
Mr. WINX. No; I understand that., but I think the fact is that mem-
bers of this committee are extremely interested in the whole kit and
caboodle and the more information we have as we go along rather than
just get the surprises and jolts-we'd like to know what we're going to
be faced with. It doesn't have to be a hearing.
Dr. PERRY. If the Milcon funding for Vandenberg is not approved
in 1980 then it is certain we will have to come back for more expend-
able launch vehicles, irrespective of our judgment about how much
reserve is needed. just to accommodate for the vehicles we will have to
launch from Vandenberg in 1984 that. would have been launched on the
Shuttle.
Mr. Wixx. Will four vehicles do the job or is that a part of the
study?
Dr. PERRY. That is the issue right now and that's the number that
I'm nervous about and that's the specific issue we will be examining
as to whether four is a sufficient margin.
Mr. WIXN. No wonder you can't give me a price if you don't know
the number. Thank you very much.
PAGENO="0067"
63
Thank you, Mr. Chairman.
Mr. FUQTJA. Mr. Flippo.
Mr. FLIPro. I think Mr. Winn covered my questions.
Dr. PERR~t. Excuse me, Mr. Winn. Let me just qualify one point. The
four that I have referred to we~ already have funded, that is, they are
already planned and programed. The question is whether there is to be
more than four and what the cost of those additional ones would be.
Mr. FLIPPO. My question was really in regard to the fifth Orbiter
and whether you were willing to support NASA with regard to that
fifth Orbiter.
Dr. PERRY. Yes.
Mr. FLIPPO. Thank you.
Mr. FUQUA. Thank you very much, Dr. Perry. We appreciate you
and your associates being here with us this morning.
Dr. PERRY. Thank you, Mr. Chairman.
Mr. FUQETA. Our next witness will be Mr. George Jeffs, the president
of the Aerospace Group of Rockwell International. I might say to Mr.
Jeffs and those who are scheduled to follow that it will be our intention
to probably go until about 12:15 and take a break for lunch and come
back at about 1 :30 and try to finish up as soon as possible. I realize that
some people have some schedule commitments that they are trying to
meet and I hope that they can be accommodated. We may conclude with
you, George, or we may not. It depends on how long your statement is
and how many questions we have. I don't know whether we will con-
clude prior to that time, but we will try to go about 12 :15 and take a
break.
We are very happy to have you and your associates and we appre-
ciate your being here with us. We will be happy to hear any comments
that you might desire to make.
STATEMENT OP GEORGE W. JEPPS, PRESIDENT, NORTH AMERICAN
AEROSPACE OPERATIONS AND CORPORATE VICE PRESIDENT,
ROCKWELL INTERNATIONAL CORP.
Mr. JEFFS. Thank you~ very much, Mr. Chairman.
Mr. Chairman and members of the subcommittee, I welcome this
opportunity to appear on behalf of Rockwell International's Space
Shuttle Orbiter, integration, and main engine programs. My statement
will address constrained budgeting management; fiscal year 1978 and
1979 program visibility; the Orbiter flight hardware shipment to
KSC; the Orbiter 102 status at KSC, the main engine status, Shuttle
system integration, the Orbiter increment 3 program and a summary.
The Rockwell International executives accompanying me today are
George B. Merrick, president of the Space Systems Group, Edward P.
Smith, vice president and general manager of the Shuttle Orbiter Di-
vision, Norman .J. Ryker, president of the Rocketdyne Division, and
Robert C. Lashbrook, vice président and controller of the Space Sys-
tems Group.
CONSTRAINED BUDGET MANAGEMENT
A constrained group management philosophy has been effectively
applied throughout the Space Shuttle program. For the purpose of
this specific discussion I have selected the Shuttle Orbiter as the ex-
PAGENO="0068"
64
ample; however, this process has been applied to other elements of the
program within our responsibility.
It provides for good communication at t.he beginning and through-
out the program. It limits the program to only absolutely essential
costs. It is a good practice, but it has its complications. I, therefore,
want to explain what constrained budgeting means as it has been
applied to our STS programs and call your attention to where we are
today.
Constrained budget. management provides a. fixed amount for the
program at the beginning of a fiscal year and often, it is less tha.n tha.t
commensurate with the. statement of work and schedule to be accom-
plished. And that is really by design. The program elements are con-
strained to specific dollar levels and the reserves are held at higher
NASA levels. There a.re, therefore., no provisions in Rockwell's budgets
for contingencies, or changes in t.he work content that may occur dur-
ing the year, although we hold back in our internal budget through the
course of the year to provide some flexibility. Whenever significant
management changes are identified either internally or by NASA,
some other program tasks have to be. deleted or deferred to later time
periods to make up for them.
The constrained budget management process-that is, fixed yearly
expenditures-forces restructuring and rescheduling of many sub-tier
level tasks to accommodate any significant change. Since a major por-
tion of the program is subcontracted, these revisions normally occur to
both Rockwell and our subconstractors' baselines. Inherent, therefore,
in this complex process is a. time la.g in establishing the best way to do
the job and the manitude of costs deferred to susequent years.
This requirement, of course, does not arise on other programs where
new dollars a.re provided for &tch new item as it arises. Through the
years we estimate that such additions to the program during a given
year have approached 25 percent of the baseline content. As a result
there will always be less than 100 percent of t.he originally planned
work accomplished each year, since we a.re continually adding to the
baseline.
To manage in this change environment, real-time decisionmaking
interfaces between the NASA and contractor element program of-
fices have been developed. A master change record system-a very
effective master change record system-is used on the Orbiter element
to implement these decisions. Concurrently, the master change record
is used as a key element. for cost management purposes.
In the early phases of a program, the constrained budgeting process
results in minimum total expenditures. However, as the D.D.T. & E.
program moves closer to completion, management reprograming flexi-
bility is greatly reduced, since detailed task schedules are no longer
movable. This is where we are today and have been since 1978. There
is no way to accommodate changes to the program without appro-
priate additional dollars. A management reserve is now essential for
real-time contingencies at the element contract level.
PISOAL YEARS 1978 AND 1979 PROG~RAM VISIBILITY
During the completion phase of the Orbiter at Palmdale in fiscal
year 1978 substantial unplanned effort. was added to the program. TJn-
PAGENO="0069"
65
planned effort consists of new program requirements, additional effort
required to accomplish existing tasks, and added effort in response to
test program results.
In June of 1978, NASA reiterated that funds for the new work were
not available and directed that Rockwell stay within the fiscal year
1978 funding limits. We advised NASA that we were concerned about
the potential magnitude of the effect of this deferred work on fiscal
year 1979 funding, and that it was going to take time to assess the
cost and schedule impact. During the next 3 months we were restruc-
turing the program, identifying costs, and reviewing internal and sub-
contractor cost inputs and schedule impacts.
This delay in visibility was further complicated by additional fund-
ing requirements that just happened to occur at that time period for
thermal protection system tile fabrication, OMS pod assembly and
test, and other changes which were being incorporated during the same
period.
Rockwell's award fee for cost performance was substantially reduced
for this delay in visibility. The reason given was marginal perform-
ance against the standard for providing such visibility. In actuality,
there is no standard for measuring performance in providing such
visibility while operating in such a constrained budget management
system. We were disappointed with this award fee and we have so
informed NASA.
The management system which provided us the ability to redefine
the fiscal year 1979 program content I believe is fundamentally sound
and gives us the information needed to do so.
In the future we will be more formal in communicating the interim
progress of these activities and the first order estimates of the cost and
schedule impact. We are providing such interim visibility in the "533"
reporting system. We've just begun to do that. This will apply to both
longer term program modifications as well as specific changes.
ORBITER FLIGHT HARDWARE SHIPMENT TO KSO
Orbiter 102-Columbia--was delivered to KSC in March. The ship-
ment of the Columbia to KSC `was preceded by a detailed delineation of
work deferred to KSC. This review was conducted over a period of
time and with detailed reviews on specific dates `by Rockwell and
NASA personnel at Palmdale in which KSC people did participate,
ours and NASA's. The tasks remaining to be completed on the vehicle
were not a surprise, although the magnitude of the effort for their
accomplishment was underestimated and further complicated by
temporary tile removal and cleanup.
The decision was made to ship the vehicle to KSC following check-
out but before all the flight tiles could be completed `due to late delivery
problems. This required parallel checkout of the vehicle and tile instal-
lation at KSC but, since they could be accomplished without interfer-
ence, we avoided serial schedule delay, which would have occurred had
we waited 3 to 4 months for delivery of all flight tiles.
Temporary tiles were installed to protect already installed flight
tiles during ferry flight. To minimize the subsequent cleanup job at the
Cape and potential damage to adjacent flight tiles, sticky-back tape
PAGENO="0070"
66
and "armour" tape were used for their installation and verified on
T-38 flights.
Additional armour tape was applied in certain areas for fairing and
it was this armour tape that initiated the damage experienced in the
preferry flight test on the 747 at Edwards Air Force Base. Subse-
quently, the temporary tiles were removed and the sticky-back tape
replaced with RTV-room temperature vulcanizing compound-for
their installation. Cleanup work of the RTV installation greatly in-
creased the magnitude of the tile task at KSC.
It has been suggested that configuration management was not rigor-
ously applied to the temporary tile installation but that is not so. The
tiles were designed, tested, installed to drawings, and applied by proc-
ess specification. Configuration management was not our problem, actu-
ally it was the extra "tender loving care" we attempted to provide in
the form of the "belt and suspenders" armour tape and the sticky-back
tape on the tiles.
Qualification of the Orbiter's subsystems and components is another
area of the program where concurrency is being utilized to improve
program schedule position and minimize program costs. Concurrency
of manufacturing, vehicle testing, and qualification testing is a com-
mon practice on research and development programs.
Orbiter 102 at KSC: I will now cover the extensive management
actions that have been implemented by Rockwell at KSC since the
Columbia arrived and its status. Our efforts have been timely, aggres-
sive, and thoughtful with respect to work plans, daily and weekly
schedules, and the application of resources to ready Orbiter 102 for
flight.
Ed Smith, vice president and general manager of the Space Systems
Group's Shuttle Orbiter Division, is leading the Rockwell team at KSC
to complete the orbiter mechanical and thermal protection systems in-
stallations and checkout while the vehicle is in the Orbiter Processing
Facility (OPF). This organization brings to bear key management
and technical resources of the corporation to insure the earliest pos-
sible rollout of the vehicle from the Orbiter Processing Facility.
A detailed integrated flow and build schedule has been established,
in conjunction with NASA, considering availability of hardware,
checkout sequences, manufacturing timing, and staffing plans. The sys-
tems installations are proceeding according to plan, and the rate of tile
installation is increasing toward planned levels. We have approxi-
mately 700 tile people working on that problem at KSC. Of those,
about 376 are installers. Of those installers, approximately 200 are
skilled people comprised of California people and people that had
gone through training courses before the vehicle arrived at KSC.
The critical thing here is to have the experienced leadership so that
some of the younger folks in the tile installation area can be properly
guided. We do have those capabilities in place.
Verification of the software is proceeding, and we are benefiting
from the background of checkout of the first orbiter, the Enterprise.
Rockwell's extra effort in facilitating all aspects of Orbiter 102's
hardware and software operations at KSC will be sustained. The same
thrust will continue through the element. stacking, the move to the
pad, checkout and changes at the pad, flight readiness firings and
PAGENO="0071"
67
launch. We are dedicated to completing the D.D.T. & E. as quickly as
possible without compromising safety.
Space Shuttle main engine: The development of the SSME is now
progressing well. The engine has accumulated over 400 tests-48,000
seconds-toward the goal of 65,000 single engine testing seconds prior
to first manned orbital flight. And 75,000 seconds will be accumulated
by the end of 1979.
The formal preliminary flight certification test has commenced,
and approximately 80 percent of the required 13 tests totaling 5,000
seconds run time has been accomplished. The certification tests will be
completed in July 1979. Actually, the 13-test series has now been com-
pleted. As a matter of fact, yesterday we completed the final test on
the engine to a duration of 823 seconds, which increased the cumulative
test time to over 5,200 seconds for the PFC engine, a very successful
test series. We have two or three things we are still looking at on the
engine but we think we can make fixes for those satisfactorily. And as
part of that effort, on June 25, a critical thrust level test for 520 seconds
duration at 102 percent was successfully run. The development prob-
lems experienced in the past 2 years have been satisfactorily resolved
for purposes of supporting first flight.
Plans and funding requiieinents are being analyzed that provide
for the start of engine development for the full-power level capability
in September 1979, and provide for final certification at full-power
level by the end of 1980. The certification of the engine at the full-
power level by the end of 1980 will support the present mission plans
being developed by NASA.
Flight engine delivery has progressed through the successful com-
pletion of hot fire testing of two of the three engines with the third
one scheduled for early ,July. The three engines will be delivered to
KSC in July 1979 to support the orderly flow from the OPF.
Three SSME engines are installed in the main propulsion test arti-
cle, and six tests have been completed. The main propulsion system
demonstrated successful performance at the 100-percent thrust rated
power level.
System integration: The major task of developing the requirements
for the integrated Space Shuttle elements and the allocation of these
requirements to the elements was completed early in the program. At
this point in time, oui~ major task is to review and assess the impact
of changes in these requirements on the overall system performance
and on the system interfaces. Control of the interface design docu-
ments is being formally accomplished at Rockwell through interface
control documents and configuration control drawings, as appropriate.
Direct support is being continuously provided to the. level II program
manager in the evaluation of proposed changes.
In support of the verificatiOn program, Rockwell system integration
has been responsible for the management and accomplishment of two
major ground tests. The ground vibration test, consisting of a quarter-
scale replicated model of the integrated vehicle and a full-scale ground
vibration test using flight-type hardware, has been successfully com-
pleted and has provided an outstanding data bank for the Shuttle
dynamic analyses. Further quarter-scale tests are now in progress to
PAGENO="0072"
68
verify the dynamic characteristics of realistic payload-orbiter
combinations.
The main propulsion test program at NSTL successfully completed
the first four exploratory tests last year to confirm test article and
facility compatibility. The verification test series was initiated this
spring wherein two test firings have been accomplished to date with
no significant system anomalies in the main propulsion system itself.
It is anticipated that the third firing in this series (static firing-6)
will be accomplished about July 1. We think we have resolved the
problems that were previously experienced.
Support to the launch facility at KSC has been provided on a con-
tinuing basis. The demonstration of vehicle processing using the
Orbiter 101 Enterprise has indicated the effectiveness of prior plan-
ning and interface definition.
At this point in the program, the development of the Vandenberg
Air Force Base facility design is underway. Analytical support and
facility design review support is being provided in a manner which
insures a good transfer of the experience gained at KSC to the design
of the Vandenberg Air Force Base facility.
Our evaluation now shows that the elements are meeting the allo-
cated design and performance requirements to adequately and safely
perform the intended missions.
Increment 3 production program: We have completed our negotia-
tions with NASA for the increment 3 contract. Our negotiated pro-
gram called for Rockwell orbiter expenditures of $356 million in fiscal
year 1979, $559 million in fiscal year 1980, and the delivery of Orbiter
103 in December of 1982. However, increment 3 fiscal year 1979 fund-
ing limitation in the first year of the contract has been constrained to
$256 million. This, of course, would cause a schedule extension unless
accompanied by increased funding, particularly in the 1980-81 time
period. With such funding additions, we believe a summer of 1983
delivery of Orbiter 103 is doable but very demanding.
It is demanding from the aspect of requiring doubling and then
tripling of our efforts relative to 1979, in 1980 and 1981, respectively,
and during the early phase of the program, having to incorporate as
yet undefined changes arising during the D.D.T. & E. program flight
tests.
Although Rockwell does not have visibility into the makeup of
NASA's estimates of multi-million-dollar increase requirements as
discussed recently with the Congress, we do believe it necessary to
c.arry adequate firm reserves for contingencies if the production pro-
gram is to meet the plan.
Mr. Chairman, I would like to summarize my remarks:
Constrained funding has been effective in our view in minimizing
program costs. It is most productive in the early phases. It results in
a continually changing program structure. which will always have
some time delay associated with final cost-visibility impacts of sig-
iiificant changes.
The application of cost-award fee contracts in combination with
constrained budgets is not inconsistent, but must accommodate ade-
quate time required for in-depth reviews before the contractor should
PAGENO="0073"
69
be required to formally report associated cost growth. It is my ob-
servation that the constrained funding and award, fee management
system has been ably practiced on Orbiter and main engine contracts
by NASA, Rockwell, and our subcontractors, resulting in a balanced
program versus time. This experience is providing a new manage-
ment system for future program applications.
The present financial contract reporting and visibility system is
fundamentally sound. Its formal and informal elements must be re-
tained. Changes which would limit program management flexibility
and degrade the ability to best balance the program in real time must
be avoided. Some additions in the formal system of enhancing pro-
jections with preliminary data can be made to provide added visi-
bility. Those data must be recognized as first order visibility as the
effects of major changes are being determined.
The reduction in Rockwell's award fee for the ti-month period end-
ing in December 1978, was attributed to marginal performance against
a standard. In fact, we are parties in pioneering the application of
this management process and in developing such a standard. We be-
lieve nothing should have been done differently, except for providing
interim formal reporting visibility of the in-depth review activities
in late summer of 1978, as they were taking place.
The configuration management system is excellent. There is no
evidence of inadequacies nor of its violation as it relates to Orbiter
102.
The program has a record Of over 7 years of accomplishments prior
to the delivery of Orbiter 102 to KSC. Rockwell has been aggressive
in support of Orbiter 102 at K5C and will continue to be through
the flight program. Wherever possible, we are pushing ahead at KSC
whether it be software, the launch pad, or other areas, to do all
Rockwell can do to provide a safe flight at the earliest possible date.
At this early phase of the. Orbiter production contract, funding is
already reduced under the `baseline plan. There are exercise underway
to deliver the production Orbiters earlier than we are currently plan-
ning. We believe, given the commensurate funding, that earlier de-
liveries can be accomplished, although they represent a real challenge
to NASA, Rockwell, other prime contractors, and the subcontractors.
There is little flexibility in the production program and adequate
provisions must be made in NASA's reserves for changes such as those
from Orbiter 102 D.D.T. & E. flights.
Mr. Chairman, although funding requirement visibility with re-
spect to the budgetary cycle timing, particularly the revised estimate
of last fall and the Orbiter added work presently extending schedules
at KSC, are of great concern to us all, these are only contributors to
the added program funding requirements recently presented to the
Congress by NASA.
Although Rockwell is not privy to the detailed makeup of these
projections, we believe them to be attributable to the recognition of
the need for adequate reserves to conduct the program, including
changes, through the completion of firmly established D.D.T. & E.
and production work and schedules ahead. Since no flexibility except
through added dollars exists, we would endorse this requirement in
principle.
PAGENO="0074"
70
I am ready for your questions and also have members of my team
here to respond to questions from you.
Mr. FUQUA. Thank you very much for your statement, George. We
have about reached the hour that we were contemplating taking a
break. Why don't we do that and come back at 1 :30. I am sure there
will be some questions.
Mr. JEFF5. We will be here.
Mr. FUQUA. Thank you very much. The subcommittee will stand in
recess until 1 :30.
[Whereupon, at 12:15 p.m., the subcommittee was adjourned to re-
convene at 1 :30 p.m. this same day.]
AFTERNOON SESSION
Mr. WINN. George, if you're ready I'll go ahead and ask my ques-
tions if you don't mind.
Mr. JEFF5. Yes, sir. Thank you.
Mr. WINN. I too want to welcome you here. It's nice seeing you on
our playing field instead of yours all of the t.ime.
Each year when you submit a. funding request to NASA to accom-
plish contracted objectives you probably go through some form of
negotiations to reach an equitable figure for the year.
What I'm wondering, has there ever been a year when you were not
provided the agreed upon amount of money?
Mr. JEFFS. The difficulty with answering that question is that, just
as you say, the. program managers go through a detailed review of the
work to be done through the yea.r and they end up with a handshake
with respect to how much is going to be required to accomplish the
tasks. Then, as new tasks come in as the year progresses, they are done
at the expense of some of those previously agreed upon ta.sks.
Mr. Wixx. Are you talking about changes?
Mr. JEFFS. Yes. Changes that. are either brought about by the com-
plexit.y of the work being more than had been anticipated and/or new
things required to be done to the vehicle.. If they don't have immediate
additional funds they "go for it," so to speak. In ot:her words, they try
to see if they can't absorb those additional work tasks within the total
dollars that had been originally planned, until they get to the point
where there's just no way to absorb any more. Then they've got to get
more money.
But the answer to your question directly is I don't think there has
been a case where we have gotten less money than the program man-
agers agreed that they were going to work to at the beginning of the
year.
Mr. WINN. What percentage would be changes originated by NASA
and which ones would come from your shop as you progress? That
would vary quite a bit.
Mr. JEFFS. I would like to give you a better answer. We're going to
go back and reflect on that some more and provide it for the record.
I think for the first quarter of this fiscal year it's about 5Q-50.~
Mr. WINN. Have you ever entered a fiscal year without knowing
what funds were going to be available for the next year at the negotia-
tion stage?
1 For the first S months of fiscal year 1979, NASA-dIrected changes have accounted
for 40 percent of the authorized work growth.
PAGENO="0075"
71
Mr. JEFrs. Yes, such as with increment 3 right now. For example,
for the first three quarters, we're spending at a given rate that's con-
sistent with the total expenditure for the end of the year. If, in fact,
there was difficulty with the $185 million supplement, then we would
have to move a lot of people off the program come July, or the fourth
quarter of the year. So we're expending at a rate, on increment 3, that
can either go up or go down, depending on what happens at the end
of this June.
Mr. WINN. If you were to enter into another program which util-
ized the same management philosophy that you discussed, centralizing
the contingencies at headquarters, what changes would you anticipate
in your corporation?
Mr. JEFFS. As I mentioned, I happen to favor some of the things
that the constrained budget management technique does for you at
the beginning of a program. It forces you to think very carefully
about all the tasks, the timing of the tasks, and the way we're going
about trying to accomplish the tasks.
For example, one of the fallouts of constrained budget manage-
ment earlier in the program, or in the earlier phases, was the utiliza-
tion of the static test article as a flight article. I think that in the
Apollo days we probably would have moved right ahead and tested
that vehicle to destruction. But I think that the very tight funding
constraints forced us to really scratch our heads and see if we couldn't
learn from it what we had to without destroying it and therefore mak-
ing it available for operations. I think that saved the program some-
thing on the order of $50 million to $100 million. This approach, along
with deferrals and more ingenious ways of getting additional data
beyond those specified for a given test is an example that falls out of
constrained management.
Now, I think that's possible in the earlier phases of a program, but
once you're gone through that phase and the drawings are hard and the
vehicle is built, then there's no flexibility for such creative mobility of
tasks or for modifying the way in which you approach them.
Mr. WINN. So when you enter into a negotiated contract and you
end up with a shake of the hand, as you describe it, you're sort of
playing a "have faith in me" or "trust me" type of philosophy because
of your experience in working with NASA.
You've talked about figures. You talk about round figures, based on
what they submit to you at the time, or what you submit to them at
the time. Am I right?
Mr. JEFF5. That's right. I think that NASA normally follows up
with a piece of paper on it though.
Mr. WINN. How soon?
Mr. JErrs. I think that it's not too late. On specific cases I'd have to
refer that to Mr. Smith.
Mr. SMITH. WTjthin weeks.
Mr. WINN. It would never go as long as a 60- to 90-day period?
Mr. S~rITIi. I believe there have been instances, but they are rare.
Mr. WINN. But isn't it true that, inflation alone, in a 60-day or 90-
day period would cost you additional money?
Mr. SMITH. If you didn't plan-
Mr. WINN. From what you agreed upon with a handshake, before
you got it in writing, is what I'm saying.
PAGENO="0076"
72
Mr. SMITH. In a pure sense, yes.
Mr. WINN. And in that 60- to 90-day period-I'm just speculating-
let's just say that there could be additional design changes or addi-
tional changes that would develop. That wouldn't be unusual, would
it?
Mr. S~irm. No?
Mr. WINN. And those would be costly.
Mr. SMITH. Yes.
Mr. WINN. Easily could be. Not necessarily, but they could be be-
cause the inflation is there. It's sailing right ai~ng ever~ month.
Mr. JEFFS. Yes, sir. But when there is agreement on a task, then it is
started, even though it still has not been completely determined how
such action is going to impact other tasks, to provide room for the
additional work.
Mr. WINN. You lost me there. Say that again in laymen's terms.
Mr. JEFFS. If it is decided 2 months into the year, after a hand-
shake on the total dollars, that something must be fixed or done dif-
ferently, then the program managers will review the problem, decide
what has to be done about it, when it has to be done, and how much
it's going to cost. The work is then started, and, at the same time, the
program managers are in the process of determining how they must
reconstruct the remainder of the program to make room for the effort,
providing additional funds cannot be provided above the total that
was agreed to at the beginning of the year.
Mr. Wixx. Where do they get the cost estimates?
Mr. J~ai'rs. They make the cost estimates.
Mr. WINN. They make them?
Mr. JEFFS. Yes, sir.
Mr. WINN. But somewhere along the line if you're the prime con-
tractor you would have to agree basically with their cost estimates or
say "We can't do it for that kind of money."
Mr. JEFFS. I'm sorry, sir. I misled you.
We make the cost estimates. By "they" I meant the program man-
agers, NASA and Rockwell, review the cost estimates and understand
what it's going to take to do that. Ofttimes it's with the subcontrac-
tor, for example.
Mr. WINN. When you enter into an agreement with a subcontractor,
you as the prime contractor, do you use the same type of verbal agree-
ment right at first, early on, before you get it into writing?
Mr. Ji~rrs. I think it depends on the problem. It depends on the
urgency of solving the problem. If it has to be done right now, some-
times they give them the go-ahead, just like a letter contract. Then
they work out the details in parallel, early parallel, with the subcon-
tractor on the content, the timing, and the cost.
Mr. WINN. I'm just trying to figure out if there's a better system
than the one that NASA's using at the present time.
Mr. JEFFS. Let me cite the example of the OMS pod. Presume there
are some differences in the `basic load inputs into the pod. The pods
are three-quarters built. We've got to fix the pods. Our people and the
NASA people review the new requirement and make sure it's real.
They review the approaches to fixing it, the time it's going to take,
and how they can fit it into the total program. They also get a first
PAGENO="0077"
73
order cost estimate, and then they start the work. But they're still in
the position of not having given the subcontractor anything but a
piece of paper to proceed and noting that we are going to negotiate
with him specifically on what it's going to cost and what we're going
to add to the contract for the work.
Mr. WINN. On page 3 of your testimony George, the bottom par-
agraph:
This delay in visibility was further complicated by additional funding require-
ments for thermal protection system tile fabrication, OMS pod assembly and
test, and other changes which were being incorporated during the same period.
Obviously, that was a combination of a lot of changes that were being
made.
Is that what is referred to somewhere in the trade as "Rockwell's
$100 million surprise to NASA"?
Mr. JEFF5. That was a contributor.
Mr. WINN. Your wording here says: "This delay in visibility was
further complicated * * *`~
Further, to me, means that there was something going on prior to
that, before these things became apparent.
Mr. JEFFS. There were a lot of things going on in the beginning of
the fiscal year 1978 and in the mid-part of the year that were driving
the dollars over the total handshake agreed upon dollars for that year.
In June of that year we made a special effort to defer tasks that we
could without damaging the program in subsequent years. We were
in the process of doing that, and at the same time compounding the
problem was the fact that we were having difficulties with the tiles at
Lockheed. So we had to give additional money to Lockheed because of
those tile problems. At the same time we had OMS pod problems. All
of this compounded the problem of holding the dollars, without any
new dollars `being added to the program, to the total that was agreed
to with NASA at the beginning of the year.
Mr. WINN. At that stage, at that point in time, is NASA fully cog-
nizant of the problems that you have, the changes that you're working
on your own, not the ones they make, but the ones you're making, or
discovering?
Mr. JEFFS. I would say that NASA was aware of the changes we
were making. The visibility that they might have in a dollar sense on
individual changes, that's not quite the same as knowing the total
`amount.
Mr. WINN. They don't have access to your bookkeeping?
Mr. JEFFS. No. In many cases, we hadn't finalized exactly what it
was going to cost us anyhow. We knew that we `had to do certain
things, so we go and do them and then restructure the program, be-
cause there's no point in having a vehicle all checked out and ready
to go without tiles on it. So obviously we put money in the tiles and
then we figure out how to take money out of `other areas to make up
for that new addition.
Mr. WINN. You're moving ahead prior to your actual written
funding.
Mr. JEFF'S. That's right. Actually, we `had a total funding for the
year, `so NASA hadn't changed that, unless, in fact, they could find
somewhere in the budget, such `as John Yardley talked `about, room
PAGENO="0078"
74
for some dollars they could put on that particular kind of a problem
toward the end of the year, like the Lockheed tile problem.
Mr. WINN. By the Lockheed problem do you mean the tile?
Mr. JEFFS. The tiles.
Mr. WINN. When we were out to your shop, however, in one of the
briefings I and the chairman well remember that we were reassured
that that tile problem had all been worked out with Lockheed. We
were aware of it, and we slanted some questions in that direction, and
we were assured by your people that yes, that had all been worked out,
that problem is solved. And we haven't solved that problem yet.
Mr. JEFFs. Of course, I was assured that it was worked out to and,
as a matter of fact, a.s you know, Jim Plummer, Chris Kraft, and
George Jeffs became the "ex officio" project engineers on tiles for the
last 6 months in 1978. Lockheed projected continually that they
thought they had a way to get the tiles done for the year, and I think
that they did, if it hadn't been for, obviously, some of the problems
they had gotten into. I think some of the basic problems resulted in
our working together to put teams of people up there to help them
mutually disposition MR problems with the tiles that were holding up
thQ flow process. We also got into t.he position of not accepting a lot
of arrays, for example, which were short of tiles. What I mean is:
There would be a whole array complete except for a couple of missing
tiles and they were holding up delivery of those tiles. So we broke the
log jam and started to get those tiles more rapidly dispositioned into
our shop. But it did cause a delay beyond what we had projected and
what you and the dhairman had heard when you were at Lockheed.
Mr. WINN. Thank you very much. Thank you, Mr. Chairman.
Mr. FTTQUA. Mr. Flippo.
Mr. FLIPPO. Thank you, Mr. Chairman.
I wonder, Mr. Jeffs. You state that more substantial unplanned ef-
fort was added to the Orbiter program in fiscal year 1978.
Would you estimate the amount of unplanned effort which has been
added to the Orbiter program in fiscal year 1979?
Mr. JEFFS. I would defer that to George Merrick.
Mr. MERRIOK. We started the fiscal year with a base understanding
of authorized work for D.D.T. & E. at $379 million, and we're up now
to about $462 million-authorization of $455 million plus reserve for
future charges of $7 million. In the main, you could say that the dif-
ference is the unplanned effort that has come on the program sub-
sequent to the time that we had established what we thought the
planned work was going to be.
Now, we had some estimates in October of what that unplanned
effort was going to be in 1979.
Mr. FLIPPO. Would you tell me a little bit about `the nature of that?
Is that something that NASA ordered, or authorized, or what?
Mr. MERRICK. I think George, in his testimony, tried to describe that
in context. Some of it is directed changes, which are really changes in
requirements. Some are increased efforts above those which had been
originally anticipated such as reactions to test problems a.nd recycling
pieces of hardware.
Mr. FLIPPO. Can you give me some estimate of those directed changes
that were required in total, to the total changes that were required?
Mr. MERRIOK. Like in 1979?
PAGENO="0079"
75
Mr. FLIPPO. Yes.
Mr. MERRIOK. Do you mean an estimate in dollars?
Mr. FLIPP0. Yes, percentages-25 percent, 50 percent.
Mr. MERRIOK. Of the changes from the $379 million to the $462 mil-
lion, it's like $35 million worth of directed changes. So that's about 50
percent.
Mr. JEFFS. Regarding the $462 million, that also includes money
for working the tiles at KSC. That wasn't planned originally.
Mr. FLIPPO. I guess my point is: Are you surprised that NASA was
surprised with the increase in cost estimates? Do you think NASA
should have been surprised with the increase in cost estimates, having
directed a substantial amount of the changes?
Mr. JEFFS. I guess that's my question.
Mr. FLIPPO. Anyone can answer. That's fine.
Mr. JEFF5. I don't think it was that big a surprise myself. There
were discussions that I think you heard earlier regarding how bud-
gets are `handled. ~When someone asks for an additional $50 million
or says it might be needed `for the year, then I think it's very human
to put that aside and say, "That's not very firm. I will consider the
need when required."
The 533 reports show that in May of 1978 our estimates were about
$366 million, of which a significant amount, about $37 million, was
for reserve and potential changes. We feel that's the kind of a base-
line that we started from, the $366 million, and evolved to the $429
million requirement in October. So it was a $50 million change, not
a $100 million change, in our view, and at the same time, I think that
everybody knew there was going to be some increase in cost although
NASA didn't know any more than we did about the detailed cost
breakdown or the effect on 1979 since we were determining it.
So therefore, No. 1, the fact that there was an increase was not a
surprise in anyone's mind, and certainly not ours; and NASA is
close enough to what we do that they shouldn't have been surprised
in that area. They might have been surprised by the magnitude.
Mr. FLIPPO. I'm not really that familiar with the 533. Would you
tell me some of the weaknesses of the 533 and the benefits?
Mr. JEFFS. Since we just got through looking at how we could
improve the 533, as we had stated in the testimony, I'd like to call
upon Mr. Lashbrook behind me to talk about it and answer that
question.
Bob?
Mr. LASHBROOK. The report itself doesn't really have any weak-
nesses with respect to format. If there is a weakness, it's obvious due
to the humans that put the data into the report. The requirements of
the report are clear, and we think that we comply with those require-
ments, and so report.
Mr. PJEFFS. As I said, on the report, we are going to add interim
reporting on activities such `as the type that was referred to with
respect to the poor visibility lead times.
Mr. FLIPPO. Could you tell us about the major differences between
the management of the Orbiter and the management of the main
engine? `
Mr. JEFFS. Let me respond first, and Norm might like to add to that.
I don't think there's any fundamental difference with respect to
PAGENO="0080"
76
the overall process. It's a constrained funding management process.
The informal program manager groups do exist and are most effec-
tive in getting the tasks directed and done in a timely fashion. They
are also most instrumental in working out the costs and trading off
tasks and costs to minimize the effect on the overall program for the
year, with a good view of the total program effects.
So I think that's very positive. The whole concept is to keep all
the horses running with their noses about at the same point on the
track. It's kind of like the same situation as that with handicapping
horses, if you will. You add weight to them so they all run the race
in the same time, and that's the idea of balancing the total program.
Now, it just so happened that the Orbiter was out ahead of the
pack a little bit to begin with, and so money came from the Orbiter
to make up for the horses that were in trouble. One of the horses that
was in trouble early, because of the technical problems associated
with it, was the engine. We needed to put more money on the engines
and NASA agreed. Albeit, there might not have been enough hard-
ware early enough, as we all discussed, but nonetheless when the prob-
lems arose the money went onto the engines.
So it's been more a matter of the problems pulling the money in,
like on the engine, than it has been balancing the programs; if they
have a problem, put money on it and fix it. So they've been more in
that mode than they have in restructuring the elements like the
Orbiter.
Mr. FLIPPO. Are you in a position to make firm cost-and-schedule
est.imates for the. production Orbiters, and, if not, when do you expect
to be able to?
Mr. JEFFS. As you know, and as I've said in the testimony, we have
just negotiated a contract with NASA for increment 3, the so-called
production Orbiters. Of course, they're not really production Orbiters,
in that it is not a production program, as you normally experience or
think about it., since each one is a. little different.
We did se.t firm schedules and we did set with those firm schedules
firm costing schedules-that is, dollar requirements tied to those
schedules.
We are working with NASA right now to try to determine the dis-
tribution of the tasks a.nd the dollars associated with meeting the mid-
summer delivery date of Orbiter 103 in 1983, which is the swing vehicle
in that schedule plan. As you know, we were forced into a new schedule
structure because of the decrease of the first-year dollars. So now it
really is up to NASA to establish the final plan they need. We have
developed various options for them as a funct.ion of the dollars that
they may have available.
Mr. FLIPPO. Would you care to comment on whether or not the
budget amendment of $220 million will get us there?
Mr. JEFFS. As far as the $220 million goes, I don't know what all
is in its makeup. It's not all for the Orbiter. There are other things,
as I mentioned earlier in my testimony.
We feel very bullish about getting the vehicle certainly out of the
Orbiter processing facility by the end of the year. As a matter of fact,
we think we can do better than that. We're trying real hard to do so.
From there on the flow is influenced by many other things that aren't
all Rockwell.
PAGENO="0081"
77
Mr. FLIPP0. This is probably a wild question. But could you tell this
committee something, can you help us in trying to find the way we can
be most helpful to NASA and to the operation to advance the Shuttle?
What's the No. 1 thing holding us back here? Are we trying to do
things on shoestrings, inadequate funding, inadequate scheduling?
What can we do to advance this program?
Mr. JEFFS. First off, I would like to commend the committee for
their continuing support of the space program and of the Space Shut-
tle program. I think that you, Mr. Stevenson, Mr. Schmitt, and others
who have supported the program so ably have made it as facile as it
has been so far to get where we are. I think we are a long way down
the road on this system to making it operational.
I think one of the biggest! problems that we have had is associated
with, I'll call it, the funding "yo-yoing" on the program, because
the dollars are not as important as that of a continuous plan. As
we go up and down, and when we try to move subcontractors, who
represent 50 percent of the effort, up and down, it becomes a hor-
rendous task. The Orbiter or the Shuttle is only a small part of the
subcontractor's total business, whereas it's a very important part of
ours, the biggest part. For some of the subcontractors, it's just some-
thing in their back shop. So it's difficult for them to move as easily as
it is for us.
I would think that continuity of support by the committee, con-
tinuity of funding and understanding the plan, a real-time understand-
ing by the committee, by the NASA management, by Rockwell
management, and everybody else is necessary. All must know where
we are, what the problems are, and they are, and, hopefully, with
enough leadtime to do something about them so that they don't
become surprises.
Mr. FLIrpo. I thank the gentleman for his replies, and I thank
the chairman for the time.
Mr. FUQUA. Thank you, Mr. Flippo.
George, in July and September 1978, there was some cost growth
in the program that I think John Yardley said was $77 million, a
$77 million increase in the last quarter of the 1978 fiscal year.
Then there was a meeting at NASA Headquarters in October of
1978 to discuss these changes in consideration of the fiscal year 1979
supplement of $185 million.
When did you first communicate to NASA the possibility of cost
growths, or cost growth, that might be affected by the request that's
before us now, the $220 million? Were they considered at the same
time, or did they get an indication from you, or did you talk to them
about it, or did your company at some time discuss the need for funds
in addition to the supplemental request that they came in with?
Mr. JEFFS. In addition to the $185 million?
Mr. FUQUA. Yes.
Mr. Ji~rrs. I'll have to referthat to George.
Mr. MERRIOK. They certainly were different considerations, the
$185 million in the summer, and then the $220 million later on. I
would have to say that the $220 million was a reflection of the kinds
of reserves, contingency funding requirements that were being de-
veloped from our growth as it existed in 1978 and 1979, and I would
expect from the other elements of the program also. We didn't have
50-365 0 - 79 - 6
PAGENO="0082"
78
a specific discussion with NASA other than our normal types of re-
views, which we are now doing more often than we were doing a
year ago.
I couldn't point to a specific time when we really had a discussion
about the $220 million amendment.
Mr. FUQUA. Was it in the fall of 1978?
Mr. Ji~s. Let me try to add to that.
The $429 million was the number that was discussed in October,
and we have discussed that. We also heard Mr. Yardley talk about
the ability of the reserve to handle that amount, or the marginal
ability to handle it, and so on.
We didn't get involved in any additional funds beyond the $429
million until we got into the difficulties with the tiles on shipment of
Orbiter 102.
Mr. FtTQUA. When did that occur?
Mr. JEFFS. That came on shipment of Orbiter 102, sir. The shipment
was in March. That's when we got into the problems of having to do
all the work up at Edwards, taking the tiles off and putting the tiles
back on again at Edwards, and then taking the vehicle to the cape.
Mr. FUQUA. That didn't cost $220 million?
Mr. JEFFS. Oh, no, no. The only difference is the increase from $429
to $462 million. That's our portion of the requirement.
Sometimes there are other requirements that cause the dollar in-
crease request. If you look at the Orbiter budget line item, for ex-
ample, not all that's Rockwell Orbiter program. There's IBM in there;
there's other things such as JSC support., support contractors, and
space suits.
So we didn't make a request for additional dollars above and beyond
what is required now to recover at the cape because of those tile prob-
lems, and we all had visibility into that.
Mr. MERRICK. That will have some impact in 1980 on the $220
million.
Mr. FUQtJA. But it's a, I'd say, R registered program.
Mr. MERRICK. That is correct.
Mr. FUQUA. But my point is some time last fall was there any indica-
tion that came through information from your subcontractors or from
your own involvement that it appeared that the budget request for
fiscal year 1980 was, in fact, going to exceed the amount that they had
been talking about, that there was a cost increase on the horizon?
Mr. JEFFS. I think the problem with that is that we don't know how
much, or we only had first order of information as to how much of the
$185 million supplement was to go to Orbiter. So if more money was
required for Orbiter, we did not really know whether that could be
accommodated within the NASA APA or whether it couldn't. But for
the 1980 budget, I don't-
Mr. FUQUA. You may have to go and ask for some of the reserves or
get additional funding, more than possibly had been projected.
Mr. JEFFS. We knew that JSC would have to go and do that.
Mr. FUQUA. When did you find that out approximately?
Mr. JEFFS. Ed, I think you're going to have to help me, because the
only things I can think of are the problems associated with delivery.
What happened was a change in planned delivery. When the $420
million request was submitted to NASA, we had just rescheduled
PAGENO="0083"
79
delivery of the vehicle from December 1978 to March 1979 due to
difficulties with the tiles.
Mr. FUQtrA. The point is NASA had testified before this subcom-
mittee in February that the amount requested by the administration
was adequate, the $185 million was adequate.
We were at Johnson, or we had Chris Kraft testify before us at
White Sands. There was not indication there that there was a severe
problem. We were at the Rockwell facility in California. There
was no indication that there was a real big problem. And then sud-
denly in May, the first part of May, we find out that there is a big
problem, and I'm wondering where the conductor was while the orches-
tra was asleep between February, really the first of March, and the
first of May.
Mr. JEFFS. We didn't change any requirements in that period. In
fact, we were planning to live with the-
Mr. FUQUA. I'm not saying you changed requirements.
Mr. JEFFS. No, sir. But as far as dollars are concerned,, we were
planning to live with the $429.9 million for the year. The only thing
that caused any additional money requirement on our part, was an in-
crease from the $429 million to the $462 million, because of the prob-
lems associated with the vehicle at the cape.
Mr. FUQUA. And that's the only increase over and above?
Mr. JEvrs. That's it.
Mr. FUQIJA. Dr. Frosch was here this morning, and you were here
and you heard what he said, that he didn't feel very comfortable with
the $220 million additional. John Yardley said he felt nervous, I think,
if I'm not misquoting his reaction to that, and since a large part of that
will be spent through Rockwell on the Orbiter, of the $220 million, how
comfortable do you feel with the $220 million? Is that going to be
enough to do the job?
Mr. JEFFS. If the delta in the $220 million covers this requirement on
the Orbiter funding increase to the $462 million level, then I feel very
comfortable that we're going to be able to get that vehicle out of the
OPF before the end of the year with those funds.
Mr. FUQUA. The end of the fiscal year?
Mr. JErrs. The calendar year, out of OPF.
Mr. FUQUA. OK, in the fall.
Mr. JEFFS. What the dollar requirements are after that depends on
what kind of a schedule is finally set to launch the vehicle, and we are
only participants in setting that schedule. NASA is the one that de-
termines the schedule. Now, if they end up with a schedule for
FMOF in June, I think if that's what the $220 million is basically for,
then I'm sure that will eat into what the basic plan is, just as Dr.
Frosch said.
There are other things in development that are still going on that
bother me, and that is the 109-percent thrust level on the engine. We
must proceed with that demonstrating the 109 percent level, and some
of those dollars may well be addressed to continuing support of the
engine for that purpose.
But I don't think the big problem in that regard is the Orbiter,
except for schedule movement relative to any dollar requirements
above that $462 million.
PAGENO="0084"
80
Mr. FUQUA. Noi'm, with the recent tests on the SSME, do you
anticipate any additional problems with that?
Mr. RYKER. Sir, do you mean the completion of our PFC last night
when we ran for 823 seconds?
Mr. FUQUA. Yes.
Mr. RYKER. It looks pretty good. We've completed that PFC se-
quence. We don't see any additional problems. We still have the prob-
lem with the fuel line coming down to the manifold at the end of the
nozzle. That we understand, and we have not yet developed a fix.
We do know that, both from analysis and from tests, that we can
fire a limited number of times without encountering a problem.
I don't foresee any significant problem in meeting FMOF. So I
think the engine is all right, now.
Mr. JEFFS. There is one other thing that I would like to clarify.
And that is that there is an addition of about $20 million that no
doubt is associated in part with that $220 million, and that has to do
with the fact that we are not rolling the vehicle out of the OPF until
December. So there will be some dollars required to complete that
activity on the vehicle in the first part of 1980.
Mr. FUQUA. Thank you very much, George. We appreciate your
testimony and that of the other members of your group.
Mr. JEFFS. Thank you.
Mr. RYKER. Thank you.
Mr. FuQUA. Thank you very much.
Our next witness will be Mr. James M. Stone, the vice president
of Thiokol Corp.
Mr. Stone, we're very pleased to have you here with us, and we'll
be happy to hear your comments.
Mr. STONE. Thank you very much.
Mr. FUQUA. You might want to identify your associates for the
record.
Mr. STONE. Fine. I will.
STATEMENT or JAMES M. STONE, GROUP VICE PRESIDENT, GOV-
ERNMENT SYSTEMS, THIOKOL CORP., ACCOMPANIED BY ANTONIO
L. SAVOCA, VICE PRESIDENT AND GENERAL MANAGER,
WASATCH DIVISION, THIOKOL CORP.; AND EDWARD G. DORSEY,
DIRECTOR, SOLID ROCKET MOTOR PROJECT, THIOKOL CORP.
Mr. STONE. I am Jim Stone, vice president of Government systems
of Thiokol Corp., and I have with me today Mr. Tony Savoca, vice
president and general manager of our Wasatch Division, who is re-
sponsible for the solid rocket motor. I also have Mr. Ed Dorsey, who
is the program manager for the solid rocket motor.
We welcome this opportunity to appear before the subcommittee to
review the status of this project. The solid rocket motor weighs almost
three times more than any other in existence. My statement today ad-
dresses the technical, schedule and cost status of our SRM project.
We are keenly aware of the importance of our part of the program
to the overall success of the Space Shuttle mission, and let me as-
sure you that the solid rocket motor is in a very good technical posi-
PAGENO="0085"
81
tion and we will successfully support the first orbital flight and those
which follow. We have had five out of five successful full-duration,
full-thrust static firings out of the seven which are planned. The total
propulsive energy delivered by the motor exceeds that required by the
contract specification, which contributed to increased payload capa-
bility. In addition, we have tailored the thrust-time characteristics of
the motor to meet vehicle structural requirements, while maintaining
this plus contribution to the payload capability.
Now I would like to expand upon the project's technical and sched-
ule status as a background for the subsequent discussion of the cost
status,
We are near the end of a peak period of development activity. Only
two qualification motors remain to be fired. One of these has already
been loaded with propellant and is entering the final steps of the
manufacturing process. It will be static-fired in September. The last
qualification motor has now entered the initial steps of our manu-
facturing process, and it will complete final assembly and be static-
fired in December of this year.
In addition to the successful test program there were other signifi-
cant accomplishments. A structural test article has `been delivered to
Marshall Space Flight Center. It was delivered in early fiscal year
1978, and testing has confirmed the ability of the motor structure to
withstand design loads. Four other motors were delivered in early
fiscal year 1979. Two were fUlly loaded with inert propellant to simu-
late a lift-off configuration and two were manufactured to simulate a
burn-out configuration. These motors were used in the mated vertical
ground vibration test program at MSFC. After test completion the
two inert loaded motors were shipped to Kennedy Space Center for
assembly there. We think it's important to note that these shipping,
handling, and assembly operations at Thiokol, MSFC and KSC have
verified the design concepts, the equipment for transportation and
handling, and the vehicle interfaces for the solid rocket motor. The
work has provided confidence that shipping and assembly of the flight
motors will proceed well.
I would like to report briefly on the status of the first flight motors.
The eight segments required for the two motors have all been loaded
with propellant. Both nozzles have been manufactured and installed
on the aft segments, which are the first two to be shipped. We are
now installing the system tunnel base plates, the thermal protection
system, and the flight instrumentation. We expect to begin motor
shipments in July and complete them in August. This will support the
first orbital flight at the KenUedy Space Center, whenever it is.
These accomplishments, as you know, have not been entirely free
of technical problems, which in turn have impacted the development
schedule and cost. N'ow I'll single out some particular examples which
have had a significant effect.
* The static firing of the third development motor, which was planned
for June 1978, was not accomplished until October 1978, a 5-month
delay. The delay was caused by a decision to remove the motor from
the static-firing test stand, return the loaded segments to the manu-
facturing area and rework a propellant inhibitor. Although the previ-
ous development motor, No. 2. had been fired successfully, a continuing
PAGENO="0086"
82
detailed examination of the internal insulation found an unexpected
erosion pattern which prompted a design change to the inhibitor.
The motor was reworked, reassembled, and successfully tested. The
design change has been incorporated in all subsequent motors. The
test schedule for the fourth development, motor was delayed from late
1978 until February 1979 by development problems which resulted
in the replacement of two motor segments. One segment was replaced
because of an excessive number of propellant voids. This finding led
to improvements in the casting tooling and the process techniques
which have subsequently produced excellent propellant grains. The
other segment was damaged in December 1978 during a. breakover
operation from a vertical to a horizontal position. As you can imagine,
the handling of 300,000-pound segments is not a simple task and it
requires the use of massive tools and equipment. This incident that
we had resulted in redesign of our breakover tooling and changes in
our operating procedures. In addition, a very detailed review of all our
handling equipment and procedures for critica.l moves was init.iated in
December and was completed this month.
The purpose of the entire development motor test. series, of course,
is to find and correct any design or manufacturing problems' with
l)Otential adverse effect on flight performance. A significant part of
this effort has been what I shall call the "fine-tuning" of the internal
insulation and the nozzle design. Each motor firing produces erosion
data which allows a comparison of the actual to the design safety
factors at any location throughout the motor. The fine-tuning consists
of adjusting the thickness and configuration of the material to achieve
the required safety factor. This work has produced a sound motor
design, but the man-hours required and the material cost have exceeded
our earlier estimates.
The final significant problem which I shall review is a bonding
problem with the nozzle flexible bearing. The bearing consists of
alternate layers of steel shims and rubber pads which are bonded
together. Earlier work produced `a number of bearings which passed
all acceptance tests and were successfully used in static firings. How-
ever, in recent months newly manufactured bearings have, experienced
bond failures during acceptance testing. The cause is now `being in-
vestigated `by a special task force. However, we do have acceptable
bearings for STS-1 and are `confident that we will be able to solve
the problem without impa~t.ing future. flight schedules.
To summarize this portion of my statement, the SRM project has
experienced technical and schedule problems of the type which do
occur in development programs. The majority of these have been
solved, and the few which remain will be resolved, and the solid
rocket motor overall is in a good technical posture. Now I would like
to talk a minute about the cost status.
The development phase began in June 1974, and is presently esti-
mated to be completed in early 1981. Our current estimate for the
cost at `completion of this nearly 7 years is $282 million. To date the
cost growth is $38.95 million and when projected to completion to
account for all these problems we have encountered will be $59.8
million in total cost growth. None of us want to experience cost
growth in a developm~nt program. but unforeseen technical prob-
PAGENO="0087"
83
lems and schedule changes do occur, and these are the principal fac-
tors which lead us to cost growth. The cost elements of our estimated
increase are 67-percent labor, 22-percent materials and subcontractors,
and 11-percent tooling and other direct charges.
Now looking specifically at fiscal year 1979 and fiscal year 1980,
we were estimating $68.2 million cost in fiscal year 1979 and $44.4
million in fiscal year 1980. However, funding limitations make it
necessary to limit our fiscal year 1979 work to approximately $61
million. As that is accomplished, the fiscal year 1980 cost will increase
as the effort moves into that year.
In summary, Mr. Chairman, I want to reemphasize my opening
remark that the solid rocket motor project is on a very sound tech-
nical footing and that this project will successfully support the first
orbital flight. We have made substantial progress and we are nearing
the conclusion of our peak period of development activity. Tecimical
problems have been encountered, but we are confident of solving the
few remaining. My cost status report covered a development span of
nearly 7 years and included our recent estimates for fiscal year 1979
and fiscal year 1980.
Finally, I would like to say that the entire Thiokol Corp., is dedi-
cated to a wholehearted support of the Space Shuttle program, and
we appreciate the opportunity to appear before you.
Mr. F~QUA. Thank you very much, Mr. Stone.
[Biographical sketch on Mr. Stone follows:]
PAGENO="0088"
84
BIOGRAPHICAL DATA SHEET
JAMES M. STONE
GROUP VICE PRESIDENT
GOVERNMENT SYSTEMS
THIOKOL CORPORATION
James M. Stone directs the activities of Thiokol's Government Systems
Group, comprising Propulsion, Ordnance, and Education Operations.
The Propulsion divisions lead the nation in the production of solid
propulsion systems for use in strategic and tactical military applications as
well as for space exploration and research. They are located at Elkton, Mary-
land; Huntsville, Alabama; and Brigham City, Utah.
Ordnance divisions are located at linden, Louisiana and Marshall, Texas.
Education divisions include the Clearfield Job Corps Center at Clearfield,
Utah; the Charleston Job Corps Center, Charleston, West Virginia; the Atlanta Re-
gional Manpower Center, Atlanta, Georgia; and the Turner Job Corps Center, Albany,
Georgia. They provide vocational and technical training programs, career education,
educational systems design and personal development to persons ranging in age from
preschool children to adults.
Stone came to Thiokol in 1960 from the Solar Aircraft Company, where he
was General Manager of the Des Moines Division. He was named General Manager of
the Wasatch Division in 1967, a Vice President of the Corporation in 1969, and be-
came Group Vice President in July 1974.
A native of Virginia, Stone studied law and business administration at
the Dallas, Texas School of Law and Business and at Southern Methodist University.
During World War II, he served with the U.S. Navy. Stone and his wife, Marga~et,
reside in Brigham City and are the parents of two married sons, James Jr. of Utah
and Don of Texas.
In June 1972, Utah State University awarded Stone an honorary degree
(Doctor of Science). In January 1977, Stone was the recipient of a Presidential
Appointment to membership on the National Armed Forces Museum Advisory Board of
the Smithsonian Institution. He is Chairman of the Board of the American Defense
Preparedness Association (AOPA); a member of the Board of Governors, Aerospace
Industries Association; a board member of the First Security Corporation; and
serves on the Advisory Board of First Security Bank, Northern Utah Division. He
has served as a board member of the Utah Safety Council, the Box Elder County
Industrial Cormnission, and the Box Elder Chapter of the American Red Cross.
PAGENO="0089"
85
Mr. FUQUA. Mr. Stone, you indicated that the funds for fiscal year
1979 are going to be reduced to approximately $61 million from $68.2
million.
How much where you estimating for 1979-I'm speaking of fiscal
year-at the beginning of the fiscal year?
Mr. STONE. The $68.2 million.
Mr. FUQUA. That's what you requested?
Mr. STONE. That's what we requested to do the work that was plan-
ned. We run our cost every month. We take the work that we know is
ahead of us, based on the requirements given to us that we know, and
those given to us by NASA, and we estimate that program to its com-
pletion every month and send that to NASA.
Mr. FUQUA. Do you know what your fiscal year 1980 funding is
going to be?
Mr. DORSET. Not yet.
Mr. STONE. No. We don't know yet. We don't know what that will
be. We know what we need in fiscal year 1980.
Mr. FUQ1JA. How much will you need? Or how much are you re-
questing? Let me put it that way.
Mr. STo~. Based on our $68.2 million request, we would have re-
quired $44.4 million in 1980. But now if we don't get that $6.8 million,
that money will move into 1980, and it incidentally may be a little
larger because of that being deferred a year, and inflation, as you
know, when you move it a year it costs you more.
Mr. FUQUA. So it could be about $52 million or $53 million?
Mr. STONE. In that neighborhood, I would say.
Mr. DORSET. Yes, sir. That's right.
Mr. FUQUA. You indicated that you found an unexpected erosion
pattern which promoted a design change to the inhibitor.
What does that mean?
Mr. STONE. I'll ask Mr. Dorsey to answer that, if you would, Ed.
Mr. DORSET. Yes.
Each time before we static fire a motor, depending on the burning
time and the design of that motor, we actually make a prediction of the
amount of rubber insulation that will be eroded in the motor, by lo-
cation in the motor, and then when we go back and make the measure-
ments we compare the actual thickness which remains and the location
of that thickness with the prefiring prediction.
The motor, of course, is 125 feet long and there are hundreds of
square feet of surface area, and we go through first and make a sample
inspection, if you will, at a number of locations, and look for any gross
differences.
When we did that on that development motor, we didn't see any
gross differences from the prediction. Routinely we always go back
then and exnand a number of measurements to a fine grid so that we
look in much more detail. When we did that we found that in one of
the segments of the motor the pattern of erosion showed more rubber
insulation removed than had been predicted, and that prompted us to
look for a reason as to why the actual erosion and the predicted dif-
fered from one another. and in looking at that a scenario which could
have caiused that would be for the propellant to be ignited at the inhibi-
tor location earlier than predicted. which would indicate that the in-
PAGENO="0090"
86
hibitor was thinner than would be desired to resist the erosion at that
area.
In looking at that we realized that. in the next ~notor to be tested,
which was development motor 3, we were making another step toward
the flight configuration, which meant that we had removed some in-
sulation weight, which then gave us concern about the safety factor
if that early ignition were repeated, and for that reason the motor
was disassembled, *the inhibitor was reworked to increase the thick-
ness of the inhibitor and give added protection against early ignition.
As a matter of interest, the firing of that motor and the disassembling
and inspection showed that the rework was completely successful; the
erosion was as predicted.
Mr. F~QtTA. Mr. Stone, how would you characterize the cost growth
of the solid rocket booster'? Is it normal. or abnormal, or how would
you characterize it for a program of this type?
Mr. STONE. I would say it's reasonably normal for a program of this
size, based on `the problems. you see. As I said, this was by far the
largest. solid rocket motor that had ever `been built., in weight. We
were advancing the state of the art. as far as size was concerned, and
handling was a big problem. You've got to remember this is a loaded
300,000-pound segment t.hat we're handling all through the plant. It's
not like, handling 300,000 pounds of steel. So you have to be pretty
careful with it, and we had some learning to do in that process.
Generally. I would say it. would be. fairly average, wouldn't you?
Mr. DORSEY. Yes. It's within the range of experience which you will
see on other solid rocket motor development programs; yes.
Mr. FUQITA. Mr. Flippo.
Mr. FLIPPO. Thank you, Mr. Chairman.
Mr. Stone, I appreciate your testimony. It's refreshing to hear
someone. saying can do and will do.
I wonder, in regards to your follow-on procurement-your present
contract, your contract for the development phase of the Shuttle pro-
gra!rn, ends in early 1981. I believe-do you have any concerns about
being able to meet the requirements for `the follow-on procurement?
Mr. STo~. None whatsoever.
Mr. FLIPPO. What would have happened if you had not detected
those voids that you referred to earlier, if you had not discovered
those? What does that mean? Later you mentioned propellant voids.
What does this mean, and what would have been the consequences if
those had not been discovered?
Mr. STONE. First, I would like to say that tl1ey would have been dis-
covered because we X-ray those motors and we would have discovered
them.
I don't believe, as far as the test firing of that motor, that we would
have hardly noticed them. I'll have to ask the program manager if he
agrees with me on that. But for the safety factors that we wanted to
have in the motor, it was felt by both NASA and ourselves that we
should disassemble that motor and repair those. find out what was
causing it, and, as I say. do the work. As far as the test is concerned,
I would not have expected you to even notice it. Is that right, Ed?
Mr. DoRsET. Yes; I would like to add that the X-ray capability that
we have, which uses, I believe, a. 15-million electron volt?
PAGENO="0091"
87
Mr. SAvocA. That's right; 15 million.
Mr. DORSEY. A 15-million electron volt linear accelerator is so good
that you can find an object no bigger than the end of my pencil in that
300,000 pounds of propellant. You can find an object or a void in there
that's just tiny in nature. So that there's no question in my mind that
any voids would be found, so I don't have any concern about one going
through this undetected.
The second aspect of it as far as, you might say, the pressure capa-
bility in the motor is concerned, the thing you concern yourself with
for propellant voids, are really three things: One would be an increased
pressure in the mo.tor due to an increased burning surface. That's one
thing. The second thing you have to concern yourself with is the early
exposure of the insulation which means you could get more erosion
than expected. That would be No. 2. Then the third thing which you
have to look at is the shape of the pressure time curve which you're
trying to generate to meet the vehicle specifications.
Now, in going over those three potential problems, the pressure
capability wouldn't be the problem a.t all. The Shuttle motor's design
will achieve a safety factor of 1.4 on burst, and, in fact, we've demon-
strated a higher capability than that. So we would not have had a
problem with that.
On the early exposure of the insulation, I would not predict that we
would have a failure on the motor, but I would predict that we would
not meet the design safety factor, and I want to add a statement to
that when I cover No. 3.
The third thing has to do with the shape of the pressure time trace.
I do not believe we would have duplicated the specification requirement
in the shape of the pressure time trace because of a change in the burn-
ing surface.
Then let me talk about those last two together, and that is the early
exposure, and so on, the safety factors, and the pressure time trace.
There are only seven motor firings in the entire solid rocket motor
1)ro~ect before you fly it, seven, and so every single one of those tests
is very important to you, and I think then it's very important to dem-
onstrate the design factor safety and it's very imnortant to reproduce
the pressure time trace because that's a body of data that you've got
to use to commit to flight.
So for those reasons, not really because of a big hazard, but because
of the value of the test., I think it was important to replace that seg-
ment, to be sure that the test results verified the motor design, and
that's really why it was done.
Mr. SAvOCA. I would like to add one thing to that.
The motor that was made with the voids, the excessive voids, in our
opinion, was made that way for a reason, and we had to discover that
reason, and then we had to prove out that that reason was fixed, and
as it turned out it was a change in the casting tooling, basically because
of the size of the motor and the way the propellant mixes in this par-
ticular motor as it's being cast that caused the voids, and it was im-
portant, as Ed said, to determine that we could make good motors
early, and in order to do that we had t.o find the cause, which was the
tooling, and demonstrate that. We could have fired that motor, and it
would have been a good test.
PAGENO="0092"
88
Mr. FLIPPO. Mr. Stone, you've been in this business for sometime.
Is this the first time that you've been exposed to the constrained
budget management techniques of NASA?
Mr. STONE. As far as NASA is concerned, yes, it is our first
experience.
You know, you get a lot of different kinds of techniques of manag-
ing dollars, and they get many names as you move along, and some-
times they pick up a word like "constrained budgeting." It's not much
different than saying, "Hey, hold back those dollars and don't spend
them, and if you need more come back and tell me what's wrong and
I'll give you some more dollars if you can prove to me why you need
it," and so forth.
We've lived under that with Air Force programs, Navy programs
It's just a name, I think. But it is our first experience with that tech-
nique with NASA.
Mr. FLIPP0. My question is in the positive sense. I wonder if you
could tell me what you think that we have learned from this type of
management technique. I guess really what I'm interested in is how
can we improve the way we do business.
Let me just state that we used to have a term called "zero budgeting,"
until I think in some cases people really thought that meant how many
more zeroes do you want to add to last year's budget, which is not
really the kind of thing that I think it was intended to be.
I would like your evaluation of this particular management
technique.
Mr. STONE. I believe that we've got to be realistic when we decide
what it's going to take to do the job. We're a.lways in the habit of
saying, "Well, I don't think the customer or I don't think the Congress
is going to buy that figure because it's too high. So let's try to go
in with a little lower, something that will sell," and we're always
being too optimistic in what we think we can accomplish, particularly
in a development type program. Remember, if you knew what it was
going to cost you could make. a fixed price contract, and the reason
you contract the wa.y you do is because you're advancing, you're explor-
ing new areas and you don't know, and sometimes we tend to make
our estimates based on nothing happening. If everything I plan goes
exactly as I plan it this is what it's going to cost, and we don't put
any contingencies in there. Then, as George Jeffs said, when we get
down to facing the facts things do `happen and they cost more money.
Mr. FLIPPO. I thank you very much for your assessment and for
your testimony.
Thank you, Mr. Chairman.
Mr. FUQUA. Mr. Kramer.
Mr. KRAMER. No questions. Thank you.
Mr. FUQtTA. Mr. Stone, when do you believe that you will have the
definitive results on the flexed nozzle process problem ~
Mr. SAVOCA. We'll be curing another bearing, we'll complete making
another bearing in about another 2 weeks.
Mr. FUQUA. Will that be the final?
Mr. SAVOCA. That will be the final bearing made. But since we ran
into the problem-and you must remember we made a number of
bearings that are good and they've been fired in the program, and
PAGENO="0093"
- 89
some of them have been reused-we ran into the: problem that we
have, and we've had a team of people working on it to identify the
cause, and we believe that we have identified the cause. We'll be mak-
ing another bearing, and will have made another bearing within
another 2 weeks, and we'll test it and we'll know then.
Mr. STONE. I might add that this is not an unusual kind of problem.
When you're bonding the shims together, rubber and metal, if the rub-
ber is not perfect coming from the vendor you do run into these. We've
run into them on other problems. But we have hundreds of these bear-
ings flying on missiles in other programs today, and we've run into
these same kind of problems on those programs but have eventually
been able to solve it all right.
Mr. FUQUA. Do you think that the flight test program for the Shuttle
can be supported with a new flexed nozzle?
Mr. STONE. With a new one
Mr. FUQUA. With a new one, yes.
Mr. STONE. Do you mean the current design, but a newly made one?
Mr. FUQUA. Yes.
Mr. STONE. Yes, I certainly do. Yes, absolutely.
Mr. FUQUA. Thank you very much, Mr. Stone.
Mr. STONE. Thank you.
Mr. FTJQUA. We appreciate your coming here, and we hope that
we haven't detained you too long.
Mr. STONE. No, sir. I'm going to Utah right now.
Mr. FUQUA. Our next witness will be Mr. Kenneth Timmons, the
vice president and general manager of Michoud Operations, Martin
Marietta.
Mr. Timmons, I'm glad to see you again. I want to welcome you. I
think this is the first time you've had an opportunity to appear before
the committee.
Mr. TIMMONS. On this program, that's right.
Mr. FIJQUA. We're very happy to have you.
Mr. TIMMONS. Thank you.
Mr. Chairman, members of the subcommittee and staff, my testi-
inony has been submitted, and I'll summarize It if you agree.
Mr. FUQUA. Yes, sir. Without objection, we will make the submitted
statement in its entirety part of the record and you may summarize.
[The statement of Mr. Kenneth P. Timmons follows:]
PAGENO="0094"
90
- HOLD FOR RELEASE UNTIL
PRESENTED BY WITNESS
STATEMENT OF MR. KENNETH P. TIMMONS
VICE-PRESIDENT-EXTERNAL TANK PROJECT
MARTIN MARIETTA AEROSPACE - DENVER DIVISION
MICHOUD OPERATIONS
FOR THE
SUBCOMMITTEE ON SPACE SCIENCE AND APPLICATIONS OF
THE COMMITTEE ON SCIENCE AND TECHNOLOGY
U. S. HOUSE OF REPRESENTATIVES
MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE
The External Tank is that component of the Space Shuttle
designed to supply liquid propellants to the Orbiter's main
engines during the boost phase of the operation. The tank
also serves as the structural backbone for the Shuttle vehicle,
accepting the variety of loads imposed on it by the Orbiter and
the Solid Rocket Boosters during launch and powered flight.
The External Tank assembly is approximately 155 feet in
length, 28 feet in diameter and consists of a Liquid Oxygen (L02)
tank, an Intertank and a Liquid Hydrogen (LH2) tank. The LO2
section is approximately 55 feet long and, when loaded, contains
1,337,609 pounds (140,800 gallons) of liquid oxygen. The LH2
tank is approximately 100 feet long and contains 226,000 pounds
(382,460 gallons) of liquid hydrogen. The Intertank (22.5 feet
long) is the splicing structure between the L02 and the LH2 tanks
that provides a protective compartment for some of the instru-
mentation components.
PAGENO="0095"
91
The liquid oxygen temperature is nominally -297°F. and the
liquid hydrogen temperature is -423°F. Special thermal protec-
tion is required to prevent boil-off and frost formation.
Portions of the outer surface of the tank are thermally protec-
ted with Super Light Ablator (SLA). Spray-on foam is applied
over the entire tank to minimize ice or frost formation during
pre-launch operations. This protects the Orbiter insulation
from free falling ice during flight.
TEST ARTICLES
One complete External Tank, identified as the Main Propulsion
Test Article (MPTA), was delivered in September 1977. It has
successfully undergone four static firings at the National
Space Technology Laboratories (NSTL) in Bay St. Louis,
Mississippi, proving the integrity of the structure and
propellant system. Assessment of the measurements obtained
indicated no anomalies. There will be nine more static firings
in this series of tests.
The Structural Test Article liquid oxygen tank (STA L02)
was delivered to Marshall Space Flight Center (MSFC), Hunts-
ville, Alabama, in November 1977. All of the planned modal
tests which were performed on the STA L02 to determine
characteristic vibration frequencies, modal shapes and
structural damping and influence coefficient testing are
complete. This article is being readied for some additional
special testing.
PAGENO="0096"
92
The Structural Test Article liquid hydrogen tank (STA LH2)
was delivered to MSFC in March 1978 in a dual delivery, arriving
with another complete External Tank identified as the Ground
Vibration Test Article (GVTA). Both of these test articles
have successfully completed their test programs. The GVTA,
Orbiter 101 and Solid Rocket Boosters were mated during June
and July 1978 for Boost, Launch and Burnout configuration
testing. This series of tests proved the structural integrity
of the Space Transportation System. The GVTA was then trans-
ported by barge to Kennedy Space Center where it is being used
for facility verification to identify problems which could have
been encountered during pre-launch operations of the first
flight article.
In addition to these major tests, there has been an exten-
sive component qualification program which is scheduled for
completion in August 1979. There were a total of 75 electrical
components and 54 propulsion components requiring qualification.
Only seven items are still in test.
PROCUREMENT
The planned expenditure for material and subcontract through
DDT&E phase is $100M. This includes tooling, production and
engineering, materials and subcontract. Expenditures through
May 1979 are $89M with purchase order commitments of $95M.
The geographic distribution of major procurements is
basically the same for both DDT&E and Increment II and is spread
PAGENO="0097"
93
throughout the Unted States. We have made a very determined
effort, since the inception of the El Program, to provide maximum
opportunity for small and minority business firms to participate
in our procurements. For example, a full-time specialist, who
is familiar with the capabilities of the minority business
community, screens each requirement for possible bidding by
minority suppliers. Ihe results have been most gratifying.
Minority opportunities to bid now total $8.5M, and there have
been over 1,500 awards valued at $2.5M.
Our small business program has also established an excellent
record of 78.6% of applicable purchase orders, and 44.3% of the
procurement dollars going to small business. For the last two
years, the dollars exceeded 50%.
Ihe aerospace industry is experiencing a high level of activity
due to various private and government programs. We have been able
to protect our sources for fabricated parts by the use of options
included in the Increment I subcontracts. Ihese options continue
to support fully the current Mission Model of the Shuttle Program.
Extensive effort has been necessary to protect our sources of raw
material for the 27 ship sets covered by Increment hA. One major
material, hard aluminum alloy used on the External lank, has been
on allocation since mid-1978. Of the 8,000,000 pounds required
for the 27 ship sets, 6,500,000 pounds are covered by firm orders
and we are assured that the balance will be made available out of
* allotments for 1981.
50-365 0 - 79 - 7
PAGENO="0098"
94
THERMAL PROTECTION
A Thermal Protection System (TPS) is an essential part of the
External Tank. It maintains acceptable structural temperatures,
minimizes boil-off of the cryogenic propellants, and prevents
ice/frost formation from ambient air. TPS materials applied
directly to the tank surface are either of ablative or low
density foam type. The ablator insulation is applied to
selected areas of the tank. Foam insulation is sprayed
over the entire surface. Application of either material
is an extremely complex process requiring considerable
"customized' handling by factory personnel.
The ablator material (SLA) is applied on 1,100 separate
panels. It is very sensitive to bond line condition - the
tank surface must be carefully cleaned and primed before an
adhesive is applied. Actual attachment of the ablator panel
is accomplished by using a vacuum bag system that applies
pressure for 16 hours, restricting application to 2-4 panels
at one time.
The foam type insulator (SOFI) must be applied under
very carefully controlled ambient air and tank surface con-
ditions. The entire tank surface must be controlled to a
temperature of between 125°F. and 155°F. During application,
PAGENO="0099"
95
a complete propellant tank (L02 br LH2) is mounted vertically on
a turntable and rotated as a spray gun is automatically programmed
to apply foam at a precise rate up the tank.
In addition to this large scale application of insulation,
we also apply protective material (primarily ablative type) to
over 2,000 individual components including externally routed
propellant lines, support brackets, and Orbiter interface hard-
ware. Each of these components is unique in shape and many
require buildup of alternating layers of ablator and foam
materials for which the environmental conditions described
earlier must be maintained. /
In addition to the major area of External Tank cost growth
caused by program changes, we have experienced cost growth in the
development of these thermal protection systems and their complex
processing. We are achieving dramatic learning-curve results
from the development work on ET-1 as evidenced by our experience
on ET-2.
ATTRITION
Attrition of our work force had been at an unacceptable high
rate during the past three to four years. Concentrated management
attention and set goals among our various departments have achieved
good results for 1979.
Extrapolating the figures for the first 24 weeks of 1979, we
are converging on an overall 17% attrition goal for our Michoud
PAGENO="0100"
96
work force. While this figure is still relatively high by national
standards, it is a definite improvement at Michoud. It's the
result of a program which includes increased compensation
benefits, planned working area improvements, and other "hygiene"
considerations. Special emphasis is placed on individual recog-
nition of employee contributions to program success and full par-
ticipation of all employees in program improvements. This is
epitomized in our "Quality Circle" work where the work groups are
furnished statistical data on their own performance, and they
convene to analyze their o~m performance and suggest ways to
improve. This has been extremely successful as a motivational
tool and has had the by-product of product improvement.
We have other formal award and performance recognition
programs, but a more subtle, very successful and mutually
rewarding experience has been the routine and periodic visits
to all work areas by all top management people.
SCHEDULE/FUNDIIiG HISTORY
Early in the program, emphasis was placed on getting the
design complete and building the test articles. The emphasis
then shifted to the delivery and testing of the major ground
articles with the flight article delivery schedules remaining
relatively unchanged. This resulted finally in a realistic
shift in the flight article delivery schedule, and as the
overall shuttle program matured, the flight delivery schedules
were aligned to be compatible with program requirements.
PAGENO="0101"
97
ET-1, the first flight tank, has slipped eight months since
mid-1976, while ET-6, the last of the DDT&E tanks, has moved
out 13 months in the same period. This mid-point change and
the program extension has been a contributor to cost growth.
FUNDING
Since mid-1976, we have accurately predicted our program
operating plan cost two years in advance. The close working
relationships and open interchange between NASA-MSFC ET Project
Office and Martin Marietta Michoud Operations has given a timely
match of funding requirements and funding availability. This
has enabled us to align the work effort to be compatible with
both funding and hardware delivery requirements. We are on a
budget plan which maintains the present level of employment in
our Michoud operation while adhering to the funding constraint
coordinated with the ET Project Office. We are also currently
coordinating our POP 79-2 requirements estimates with MSFC to
continue our deliveries consistent with the Mission Model and to
determine that our fiscal plans are consistent with fiscal fund-
i ng.
ET-1 AND KSC EFFORT
When the ET-1 arrives at KSC, checkout and pre-launch activi-
ties will start. Some hardware will be shipped with the tank.
This hardware, as well as that furnished by the government to KSC,
is planned for installation at KSCon all delivered tanks. The
planned work consists of range safety system ordnance installation
and other items which cannot be installed until ET/SRB mating.
PAGENO="0102"
98
There will be three items of deferred work to KSC. These
are items that must be accomplished with the tank in the vertical
attitude to allow access to the areas of work.
There will be six modifications incorporated into the tank
at KSC. Four of these changes are new requirements, one is a
design improvement, and one as the result of static testing.
Incorporation of these changes at KSC was necessitated by the
unavailability of parts at Michoud prior to delivery of the
tank. Total hours required to incorporate these modifications
are approximately 392 manhours.
Our only concern at KSC is the constraints of ice and debris
prevention requirements for the ET-1. These requirements were
generated to eliminate ice and other debris which could contact
the Orbiter tile and cause damage. This requires the design,
fabrication and installation of varying configurations of low
density (styrofoam) components. These components will be
installed over those protuberances on the tank, such as feed-
line flanges and fairings which are under the Orbiter where
ice or debris is likely to be generated. These insulation
components are to be attached in such a way that they will
separate from the tank at lift-off or prior to the build-up
of high relative air speeds. Our schedule for accomplishing
this activity will support the milestones at KSC for first
* flight.
-9-
PAGENO="0103"
99
PRODUCTION READINESS/PRODUCIBILITY PROGRAM
In order to increase our ability to support Mission Model
build rates at minimum cost, we have initiated a Production
Readiness/Producibility Program. A review of all elements of
the build cycle assures that tooling, facilities and processes
are capable of accomplishing maximum efficiency. Such a
detailed review of all aspects of tank fabrication develops
cost effective methods improvements. This activity has
resulted in the identification, to date, of 311 candidates
which are currently in the screening process. This work
will continue through Increment II to fulfill our commitments
represented by our POP 79-1.
WEIGHT REDUCTION
In order to obtain an overall performance improvement of
the Space Shuttle System, we are in the early design release
and procurement planning phases of an External Tank 6,000
Pound Weight Reduction Program. Our weight reduction work
is definitely counter to our producibility efforts, and an
increase in Cost-Per-Flight will result. The reduction
requirement appears to be a cost effective contribution
to the need for improved performance.
COST-PER-FLIGHT
The development of the Cost-Per-Flight (CPF) Design-to-
Cost targets/status is based upon the overall requirements
of NASA in identifying, monitoring and statusing of the CPF
PAGENO="0104"
100
targets. The current Cost-Per-Flight target is mechanically
computed based on an average of 439 operational vehicles
using discrete estimates for recurring cost on a cumulative
average cost at unit 100 in 1971 dollars. This cost is
currently computed to be $2.462M.
CONCLUSION
Design, procurement, tool fabrication and facility con-
struction are in process to support a build rate of 24 tanks
p~r year. These tools will be functional by the end of 1982.
The additional tools and facilities to accommodate rates above
24 per year as dictated by the 79-1 Mission Model have been
identified and are in the definition and design stages of pro-
curement.
The External Tank Project has already begun the transition
from DDT&E phase to Operations phase. We are currently respond-
ing to the request-for-proposal for 27 flight tanks. We expect
to receive contractual authority to proceed on this operation
phase and begin fabrication of the first operational tank during
1979. We received long lead authority for these tanks in early
1978.
In conjunction with the initiation of the operation phase
(all post-DDT&E tanks), and at the timely and perceptive
direction of the MSFC Program Office, we have revised our
make/buy plan for future tank production. Our aim is to retain
the intent of Michoud as an assembly facility, reduce tank costs,
PAGENO="0105"
101
inhibit the workforce buildup at Michoud, and proceed into the
operations phase with a mature, stable, well-trained, and
experienced workforce.
We are confident that the External Tank will meet perfor-
mance and delivery requirements during Operational Flight Tests,
and we are ready to produce tanks to support ]jy~ the future
operational phases of the program.
Our first flight article, El-i, will be delivered tomorrow.
PAGENO="0106"
102
STATEMENT OP KENNETH P. TIMMONS, VICE PRESIDENT, EXTER-
NAL TANK PROJECT, MICHOUD OPERATIONS, MARTIN MARI-
ETTA AEROSPACE, ACCOMPANIED BY WILLIAM P. EWIG, RE-
SOURCES MANAGER, EXTERNAL TANK PROJECT, MICHOUD
OPERATIONS, MARTIN MARIETTA AEROSPACE
Mr. Tmn~ioxs. My colleague with me today is Bill Ewig, who is the
resources manager of the program at Michoud, business manager, and
he's also going to be explaining some of my visual aids.
The element of the Shuttle that we have is the external tank, and it's
under contract with the Marshall Space Flight Center. Jim Odom at
the Marshall Space Flight Center is the program manager.
I will go through the thermal protection work which is the new
development work that we're doing versus the well-characterized, well-
known work that all aerospace knows how to do and we know how to
do, and that's the mechanical assembly. I'll tell you what we're doing
to keep the cost-per-flight down, and I'll show that we're supporting
fully the Space Shuttle program.
[Viewgraphs shown.]
Mr. Tmn~roNs. The reason for the advertising picture there is that
that best exemplifies, I think, what we call the acreage TPS, or the
thermal protection system, that's applied over the entire vehicle.
What you're loking at is about an inch thick, sprayed on foam
insulation.
Let's go to the next one, please.
[Next viewgraph shown.]
Mr. Tmr~roNs. The elements of the external tank are clearly dis-
played by this breakaway drawing. The forward tank, the liquid
oxygen tank, is about four times the weight of the hydrogen carried
aboard. The hydrogen is about three times the volume of the oxidizer
tank. They are connected together with the intertank structure in
between. This is the type of work that I say that is well characterized
by the industry and well known by us, and we had the added advantage
of having put together the test articles which comprise essentially three
of these three external tanks. These test articles were put together on
the same tooling, the hard tooling that was bought earlier in the pro-
gram, which proved that tooling and gave us additional points on the
learning curve for the all-up flight articles.
There are six flight articles in our D.D.T. & E. contract, as you can
see by that visual aid. The test articles have all been delivered and the
required testing on them has been completed, with the exception of the
propulsion tests at the NSTL facility.
We have gone through the four static firings with no significant
anomalies for the external tank during those static firings.
The test article, the MPTA test article, was fully insulated with a
spray-on foam insulation, but that was the BX-250, or the more dense
foam insulation, which was not found suitable for flight use. We sub-
sequently switched to a lighter weight foam insulation, which has been
sprayed on the first article.
In addition to the main flight articles for the major test program, a
quick summary of the qualification status:
We have five items (two of them are two apiece), a total of seven
units, still in test, to be completed in August. The testing is completed
PAGENO="0107"
103
on 122 of the qualification items within the program for the external
tank.
Flight article status: ET-1 is in final acceptance today at Michoud.
There is a board meeting there attended by Jim Odom, by Rick Davis,
who runs the external tank program at Michoud, and Tom Wirth is
also there. They would have been valuable allies here today, but they
are needed for the board meeting. The tank is being accepted. The
word at noon today is that it will not be delayed. However, we have
one or two additional small items added during the final inspection
and final acceptance.
The second external tank is fully assembled. The thermal protec-
tion system is being applied. The third tank also is fully assembled and
being prepared for the thermal protection system applicatioii. All
subassembly welds are completed on external tank 4. On the last two,
all the major hardware is in and being assembled. On the ET-6, the
last of the D.D.T. & E. vehicles, we're starting now to weld together
over a half-mile of weld which comprises the assembly of that tank.
[Next viewgraph shown.]
Mr. TIMM0NS. I wanted to show by this chart that the procurement
for the D.D.T. & E. phase is well-known, approaching completion,
with only 5 million identified yet to spend for procurement. The full
run-out D.D.T. & E. procurement costs I think are very well-known,
and only a cleanup needs to be done as engineering changes may come
in or as rebuys have to be made.
The one driving effort we have is to try to continue to hold as con-
stant as we can the work force at Michoud, and that is by agreement
with the Marshall Space Flight Center. In conjunction with that we
are trying to reduce the component count. We've gone back over our
"mak~ or buy analysis" and have identified more items that we can buy.
As you can see as is natural during the D.D.T. & E. phase we had to
make some of them, as we were in the development phase and wanted
the project to know how they could be built and how they should be
built.
in increments 2 and 3, which are really the operational phases of
the program, increment 2 is identified as 27 additional vehicles, and
the remainder run-out under increment 3.
We will be, if our make-buy plan is held constant, and if we are able
to find satisfactory vendors for those items that we label buy, we'll
be reducing the component count down to 10 percent make and 90
percent buy. Michoud is supposed to be an assembly facility, and we're
ftying to get it into that mode.
[Next viewgraph shown.]
Mr. TIMMONS. The liquid hydrogen tank, by mistake is labeled in the
work that I gave you as ET-1 liquid hydrogen tank. This is IET-2
liquid hydrogen tank. The distinction is that ET-2 was sprayed with a
different development arrangement that we have made. It was sprayed
with a Binks gun. ET-1 was sprayed with an oscillating gusmer gun.
ET-2 went to completion in one pass from the bottom of the tank to
the top of the tank, and represented a significant development, signif-
icant improvement, and a real step up in producibility. That hydrogen
tank is mounted vertically in the cell. The spray gun was programed
from top to bottom of the tank in one continuous pass, spraying on the
foam insulation to a nominal 1-inch thickness.
PAGENO="0108"
104
On the first tank, ET-1, the spray gun stopped three times on the
way up. On ET-2 the Binks gun, which was jointly developed by us
and by Marshall Space Flight Center, went to completion in one pass.
This was not an accident. We spray earlier passes on a fully Kraft
paper wrapped tank to prove the process, and then take off the insula-
tion and the Kraft paper and then go into the actual assembly process.
It did complete the pass in good time, in 55 minutes to spray the entire
cylindrical portion of the tank.
[Next viewgraph shown.]
Mr. TIMMONS. In addition to what I call the acreage TPS, we have
the components TPS. This is a typical example of the components
TPS, and for added clarity I gave some colored pictures to the.
members of your committee.
The component begins as is shown in the present picture. The next
thing we do is either spray on and/or apply the heavier underlying
thermal protection system, which is a "super light ablator." In this
case it was sprayed on and then machined. "Machined" is a euphemism
for a lot of hand work. There's very little machining that's mechanized
on it. It's hand filing, hand cutting, and for all the cutting we have to
use nonmetalknives because we don't want to damage or cut the sub-
trate by cutting through. So we use fiberglass type knives, fiber-
glass end mills, and fiberglass machining in order properly to finish
that surface, and I'm showing that to emphasize the fact that it is
development work. It's an area in which we nor no one had a lot of
experience in applying that much thermal protection system to that
large a vehicle.
INext viewgraph shown.]
Mr. Tn~r~roNs. This chart shows that one of our objectives, as I said,
was to keep the total people on roll at Michoud down, and by going
through that make-buy reassignment we have, I think, accomplished
significantly a reduction in the increase that we would have had to
have for the rate that we were building had we maintained the same
make-buy ratio of components that we had on the first, D.D.T. & E.
articles. It shows a stable work force going out into the future up until
the early 1990's.
That is a new approach, I think, in New Orleans, where they're
accustomed to having Bell, and then Chrysler, and then Boeing, and
then ending the program, and they were short-term compared to what
we're looking at down there. We have a lot of hope that we can de-
velop a good stable work force in the New Orleans area and make it a
good aerospace environment..
[Next viewgraph shown.]
Mr. TI~r~roNs. In the earlier years, as we built up there1 our attrition
was unacceptably high, and I know that people within NASA at the
outset anticipated that the New Orleans work force is not as trained
as some other sections of the country in the aerospace business. So we
have experienced some reasonably high attrition, and particularly in
the hourly area, as that chart shows, we've had what I consider fully
unacceptably high attrition.
We've taken very discreet, significant steps, in addition to trying to
keep the hiring of manpower down, but to keep that level work force
and make them like their job to the extent they stay on the job.
PAGENO="0109"
105
One of the things that we're doing is a process that was originated
by the Japanese back in the early 1950's. The Japanese decided that
"Made in Japan" should nOt be a bad name, should not a pejorative
term, should be a good thing, and they developed the "quality circle"
concept, as they called it, and within the United States, Motorola and
some aerospace firms have applied this. We are applying it.
What it involves is a group of people who volunteer to participate
in a quality circle, and the group is then furnished statistical data
by us, by our quality area, of those things that we have found in the
way of defects in their area. They then convene themselves into a round
table discussion to discuss among themselves how those defects could
be eliminated. We get primarily participation by the employees, and
the employees feel appreciated, and, as Hertzberg says, it's the highest
order of reward for an employee to feel that he is participating and
being appreciated.
[Next viewgraph shown.]
Mr. TIMMONS. Looking down the cohunns on this one, I am attempt-
ing to show that approximately two program operating plan budget
reviews in advance of the fiscal year, that is three POP cycles really
reflected there, that we are able quite accurately with good coordina-
tion with the Marshall Space Flight Center to anticipate and predict
the fiscal funding requirements.
In 1977, the block that's framed in indicates the year-end final ac-
tuals. Similarly in 1978. Tn 1979 we're on course with an agreed to
approximately $85 million fiscal funding requirement for the D.D.T.
& E. work, plus the weight savings work that's been incorporated into
the D.D.T. & E. contract. The run-out cost as evidenced on that is $437
million at program end.
[Next viewgraph shown.]
Mr. TIMM0Ns. We have a formal design-to-cost and cost-per-flight
model that was established earlier in the program. In fact, it was
established, I believe, before the program was under contract. It's
reflected in 1971 dollars. There is no quick relationship to what it's
going to cost in real year dollars per flight, but it is a good means of
continually tracking what is the effect on the program of changes;
what is the effect on the program of our cost growth within our own
company and how good a jOb are we doing.
It is being converted presently to 1978 dollars so it will bear a little
more reasonable relationship to what the actual cost per flight is, but
it is not to be associated with the cost of x flight out in the future in
real year dollars. It does refleėt the outer circle there as being the cost-
per-flight target, and it shows you in the upper left that the thermal
protection system application is the one where we have to focus most
of our attention because that's the one that's farthest out there on the
cost growth versus what we anticipated it would cost.
The mechanical assembly and structures work is well in hand.
INext viewgraph shown.]
Mr. TDIM0Ns. So to combat that cost ~rowth and to look toward
lower cost per units in the future we have formalized the cost reduction
and nroducibiiitv program with agreement with the Marshall Space
Flight Center. The formal approach is to identify by all means (con-
tributions from the employees on what they think we can do different-
PAGENO="0110"
106
ly, engineering redesign, every foreman and supervisor suggesting
techniques for reducing the cost in the future) entering those into this
procedure, and, as you can see, there are 311 identified cost avoidance
or producibility items in the upper left. Those, then, will be screened
for the obvious acceptance or rejection of things that we can tell with-
out having a trade study that we should or should not do. If accepted,
they will then go into a decision of whether or not development effort
is required or can we go directly to tooling, process changes, proce-
dures changes, or introduce it immediately into the production process
and reduce the overall cost per flight of the vehicle.
[Next viewgraph shown.]
Mr. Tmr~roNs. The final viewgraph that I have indicates the work
that we have coming up a.t the Kennedy Space Center.
Tom Wirth at the Kennedy Space Center reports to me, and Tom
indeed reported to me in 1972 and 1973 when I was at the Kennedy
Space Center with the Skylab program.
John Yardley mentioned this morning that the Kennedy Space
Center anticipates a certain amount of work to be completed on a
vehicle when they get it. I can't quantify that into a.ny amount of work
that they anticipate, but my experience there tells me that the average
work to be completed at the Kennedy `Space Center far outstrips what
we're sending there in the way of unfinished work. We anticipate de-
livering tomorrow a very clean product to the Kennedy Space Center,
based on past standards of products delivered to KSC.
In the left-hand column is the work that has been planned at all times
to be done at the Kennedy Space Center.
The middle column represents program changes that have come
along, and in looking at the schedule for those changes in the nrocure-
ment cycle it was determined that they should be done at the Kennedy
Space Center to avoid any delay in delivery out of Michoud.
The right-hand column is work we actually have deferred. We have
determined that it cannot be finished at Michoud~ things that came
up late in the program. They best can be performed in a vertical posi-
tion. We're in a horizontal position now with our final test and check-
out of ET-1. so that work is being deferred.
Down at the bottom you'll see it's approximately 400 man-hours of
effort in total. To that is added approximately 175 man-hours of effort
that I have determined have been uncovered during the last 2 days of
inspection prior to the shipment with about 40 to 70 NASA people in,
reviewing the paper and actually looking at the flight article. Only
about 175 man-hours of work have been identified. So we're sending a
vehicle to the Kennedy Space Center with a very low amount of add-on
man-hours of work associated with it. The schedule can be accommo-
dated by Tom Wirth at the Kennedy Space Center, who has been
working with us on this review. He knows what his normal check-out
is and this work is added to it. His schedule fully supports the program
reouirements.
In summary, with a mature, stable, and a well trained work force,
with our commitment to cost-per-flight reduction, and with the de-
livery tomorrow of the first flight article we're ready fully to support
the shuttle program.
That completes my formal testimony, Mr. Chairman.
PAGENO="0111"
107
Mr. WINN. Thank you very much, Mr. Timmons. We appreciate
your trading places with Mr. Stone so that we could accommodate
everybody.
You stated in your last summary that there's approximately 392
man-hours of work that must be done at the Cape on the external tank.
We witnessed a rather dramatic growth in the time estimate on the
Orbiter when it arrived at the Cape, and I just wondered if you an-
ticipate a similar growth in your estimate.
Mr. TIMMONS. Our remaining program concern is just that. How-
ever, I don't consider it to be a dramatic growth. We will have to do
additional ice and debris protection work at the Kennedy Space Cen-
ter. That work is not of the precision nor of the complexity of the tile
work that's been going on there.
We do have to apply a very low density, one pound per cubic foot,
insulation to those areas which could form ice and shed that ice during
the early portion of the flight. It's a procedure which will be well
identified in another 30 days, and the amount of work there that we
have to do we have worked off through Jim Odom at the Marshall
Space Flight Center and with our man, Tom Wirth, at the Kennedy
Space Center, and what we see we have to do can be done in support
of the anticipated lift-off date for the Orbiter.
Mr. WINN. Have you experienced any broad fluctuations in man-
power levels during the tank production?
Mr. TIMM0N5. No, we have not. That's one area we work toward, to
maintain a stable work force. We've had no broad fluctuations.
Mr. WINN. Do you keep or have available a peaks and valleys chart
of any type that you might furnish the committee?
Mr. TIMM0Ns. From past performance?
Mr. WINN. Yes.
Mr. TIMMONS. We certainly do have one of those and can furnish it
to you.
Mr. WINN. I don't want you to go to a lot of expense, but however
you keep that. As I remember, we saw some of your earlier past per-
formances on some charts when we were down there.
Mr. TIMMONS. Perhaps yOu did. We do have it. I think in about
1.975 there was a reduction. We have been stable since then. We'll be
happy to furnish that for the record.
Mr. WINN. I would appreciate that.
[The material to be provided is as follows:]
PAGENO="0112"
Mr. WINN. You mentioned the attrition problem. I wonder if you
could clarify that a little more than what you did when you showed
the slide, please?
Mr. Ti~r~roxs. Yes. It's by national standards higher at the outset
than the average for aerospace.
Mr. WINN. It's higher?
Mr. TIM3loNs. Higher. It has been.
Mr. WINN. Why?
Mr. TIMM0Ns. We have difficulty identifying the exact reason. I
think the work force there is being introduced into a new area of
work, and there is high competition. After being trained by us as
welders, or being trained in any specific area, there is a good oppor-
tunity for them to go elsewhere, such as the boat and shipbuilding
industry in the area and the petrochemical industry, all are paying-
Mr. WTINN. Do they pay more money?
Mr. TmrMoNs. They're paying slightly more than we are.
Mr. WINN. Aren't you competitive in salaries?
Mr. TIMMONS. We're low, a little bit lower than some of the present
averages in the area on salary.
Mr. WINN. Have you ever heard that there is a morale problem
down there, or there was a morale problem?
Mr. TIMMONS. No. I had not heard that.
Mr. WINN. It's never gotten back to you?
Mr. Tr~nMoxs. Not that there was a morale problem, no. We felt
that a morale problem could have contributed to the attrition rate
108
wziii~z_r.ii.~~_i [ 1 CHARTHO. ___________
DATE __________________
DIRECT & INDIRECT - PERSONNEL - BY QUARTER SPEAKER -
PAGENO="0113"
109
and that's why we've taken all the steps that we have, shown in some
of the visual aids that I didn't display here, in order to come up with
the employee recognition programs and awards. Also, we have a
requirement now that we all get out on the floor and talk to the people
on the floor routinely to show that we are interested, that we are
working hard to make them a part of our entire team.
Mr. WINN. I think that's very wise because, as you know, I've been
down there several times, as has the Chairman, and we got the idea
that at one time there was a morale problem. That may or may not have
anything to do with the attrition.
Mr. TIMMONS. I invite you to return later and see if that's still your
feeling, Mr. Winn.
Mr. WINN. I missed this~ part, and I apologize. But why do you
think that you have been able to accurately predict your funding
requirements 2 years in advance?
Mr. TIMMONS. I think I said POP cycles in advance. I think it's the
close coordination that we have at the Marshall Space Flight Center
with Jim Odom, where we are in routine constant communication
with him.
Mr. WINN. Do you think that's unique, as far as communication be-
tween the centers is concerned?
Mr. TIMMONS. I can't speak for other centers and other' contractors.
My prior experience is that, it's not unique. I worked with the Mar-
shall Space Flight Center on the Skylab program and found it to be
the same open communication at that time.
Mr. WINN. Have you spotted any problem, I mean any real, substan-
tial problem, as far as communication is concerned with any the cen-
ters, between yourself as the prime contractor and the centers?
Mr. TIMMONS. No. We have very little communication with other
centers or with headquarters, and zero on cost communications. Good
technical interchange, however, at the level 2. The level 2 work is that
work controlled by Bob Thompson at the Johnson Space Center. Good
communications there, good, open interchange, advanced knowledge
of the possibility of changes in the interface requirements, which I
think is a good indication of the interchange.
Mr. WINN. What happens if you see that you are really headed for
some problems somewhere on cost control, something that's getting
out of hand? Whom do you report it to immediately, Marshall?
Mr. TIMMONS. Yes. Jim Odom.
Mr. WINN. And you don't communicate with headquarters
simultaneously?
Mr. TIMMONS. Not at all.
Mr. WINN. Nor with Johnson?
Mr. TIMM0N5. That's right. Not with Johnson either on cost
difficulties.
Mr. WINN. So any information of that type, what we call could be
a flag as far as these cost overruns are concerned, as far as the industry
is concerned, any passing of that along to headquarters would have to
come through the center in your case?
Mr. TIMMONS. That's right.
Mr. WINN. Is that unusual, or is that the way most of the prime
contractors work?
50-365 0 - 79 - 8
PAGENO="0114"
110
Mr. TIMMONS. I'm sorry, I can't answer for most of the prime
contractors.
Mr. WINN. Don't you guys ever sit down and just shoot the bull,
and compare, and lie?
Mir. TuDroNs. No. I had the assumption they all work the same
way. Because of the satisfactory relations we have with Marshall I
assume the others are doing the same thing.
Mr. WINN. I know your main obligation is to Marshall, and I
understand that, and I've always been impressed with that relation-
ship.
We've still been sitting here a lot of hours today, and a few yester-
day, and some more when we come back, and I haven't gotten a lot of
the answers that I've been looking for. I haven't been here all the time,
but we're still trying to figure out when these warnings of some cost
overruns or that somebody was heading into trouble occurred. I know
you've been sitting here all day. We're still trying to figure out why
that word didn't come forth somewhere. We read it in the press is
when we first get it; which always makes us pleased. I don't know.
`We're still looking.
Mr. Flippo.
Mr. FLIPPO. Thank you, Mr. Winn.
Mr. Timmons, I was impressed with the degree of training that
you were involved in for the employees in your shop out there, and
I'm sure they are highly desirable employees to other industries in
New Orleans at this time too. I noticed with great interest that you
mentioned the great learning curve from ET-1 to ET-2.
Could you tell me anything about the reduction in per unit cost
from your original estimates to after that going to ET-2, and what
do you expect for the future?
Mr. TIMMONS. I can't give you a complete estimate of that. We
are following the 82-percent learning curve in the mechanical as-
sembly area, but we're doing dramatically better than that in the
thermal protection system application. I believe we currently are
showing about 40-percent reduction of the effort needed that we had
on ET-1 to apply the thermal. protection system to ET-2. That's
the product producibility work that we have going.
Incidentally, Mr. Flippo, we need to exceed the 82-percent learning
curve on ET-2 to achieve the cost-per-flight target.
Mr. FLIPPO. What are your major concerns with achieving the
6,000-pound weight reduction on the ET-2?
Mr. TIM~roNs. `We feel pretty confident with the 6,000-pound weight
reduction. My major concern is the cost-per-flight impact that it will
have. As I mentioned in my testimony, it runs counter to producibility.
As you all know, weight reduction late in a program is an expensive
item to apply. It will bring the cost-per-flight up.
Mr. FLIPPO. Do you believe that adequate funds are included in
the Martin input to NASA to cover the weight reduction program in
fiscal year 1980 and fiscal year 1981?
Mr. Tmr~IoNs. Yes, fiscal year 1980 and fiscal year 1981. `We have
a nonrecurring estimate in there with Marshall. I don't have an indica-
tion yet what the 1980 and 1981 funds finally will be because we're
just entering into that POP cycle, which will define for us the final
PAGENO="0115"
111
mark on the 1980 and 1981 funds. They know very well the $4~G
million we estimate for nonrecurring costs in the weight reduction
program.
Mr. FLIPPO. Do you have any concerns that NASA's fiscal year
1980 budget and budget amendment contain sufficient allocation of
funds to support your fiscal year 1980program?
Mr. TIMMON5. I don't have enough insight to be, say, worried. We
have started that cycle with Marshall aiid in about another week we
will have finalized our preliminary coordination with Marshall on
the POP `79 2, which will identify our fiscal year 1980 requirements
and their mark against our requirements, which they, of course, will
take to headquart~~rs. 1 believe we'll be all right, Mr~ Flippo.
Mr. FLIPPO. I want to ask you, I guess, a quest.ioii that if I knew a
little bit more about the scientific aspects of it I probably wouldn't
need to ask. But you're spraying a lot of insulation on those ranks
there. Wouldn't it be wonderful if we could do a similar type of tlnng
to the tile problem on the Orbiter? Are we talking about apples and
oranges? Will this technology ever evolve to such an application?
Mr. TIM~roNs. Yes. We have no reentry problem with the tank. The
tank reenters, and we hope it gets consumed, rather than protecting
it against getting consumed. We have applied the insulation to pro-
tect against boil-off, to protect against the formation of ice, but the
insulation we apply then becomes a debris generator. That's why
w-e're having to abandon some of the earlier what we call "close out"
procedures with the 2.5 pounds per cubic foot foam and go to the I
pound per cubic foot foam on those things which might come off after
lift-off.
Mr. FLIPPO. Thank you very much for your testimony. I appreciate
it.
Mr. WINN. Before I call on Mr. Kramer, I went back and was
reviewing the part of your testimony that I missed, and on page 6
you stated that the ma:jor area of cost growth was caused by program
changes.
I think you probably heard me ask Rockwell and some other people
how that comes about, how do you characterize those, and what., if
anything, can be done about those changes?
Mr. TIMM0N5. The program changes have been a significant con-
tributor to the cost growth toward that $437 million figure. In fact.,
directed changes account for, about 41 percent of that, Mr. Winn.
Mr. WINN. 41 percent?
Mr. TIM1~roNs. Yes, of that total figure.
Mr. WINN. I think somebody else said about 50-50.
Mr. TIMM0N5. There may be different ways of expressing it.
Mr. WINN. Yes. Right.
Mr. TIMMONS. I'm thinking of the total figui'e, if you break it into
components, for example, from the original estimate that we had to
do the job, which is about 27 of that total. Unanticipated inflation
gives us about 5 percent, and accounting changes, the Contract Ac-
counting Standards, give about a 2-percent increase in the overall
runout cost of the program;' schedule~ adjustments, about 9 percent
the directed changes, 41 percent; our growth, our overrun, about 6
percent of that final runout cost is our overrun; and the weight
PAGENO="0116"
112
reduction, the nonrecurring weight. reduction effort, is about 10 per-
cent. of the final figure.
Your question, how that could be reduced, I don't know. It is a
development program. When the interface requires a change on one
side or the other our program is far enough advanced and well
enough known and the loads are well enough known and the testing
is essentially complete that we're able to adopt a change to adapt to
the interface, and we've had two recent reasonably significant inter-
face changes in that area, and I would expect that kind of a~ thing
to occur in almost any development program.
Mr. Wixx. Do you look for any major changes in the future?
Mr. TIirMoxs. No, I do not. Flight results I don't think are going
to be significant as they affect the tank, and that would be the next
area of major changes.
Mr. WINN. Mr. Kramer.
Mr. KRAMER. Thank you.
Mr. Timmons, can you tell me at what level your attrition rate had
been running prior to 1979?
Mr. TDn~roxs. Yes. I can tell you specifically.
Mr. KRAMER. I think perhaps you flashed those figures on the
screen, but I missed seeing them.
Mr. Thr~roxs. Overall, in 1977 we had 26.7 percent. attrition. In
1978 it was 24.2. This year. based on what. we have, seen in approxi-
matelv the first 6 months and projecting that rate to the end of the
year. we have that reduced to 18.7. We have. set. a goal overall of 17~~
percent. We're approaching that. goal and I do believe we're going to
make it.
Mr. KRAMER. These are primarily highly skilled people, are they
not?
1~fr. Tmn~roxs. The higher attrition is in the lower wage categories,
or the hourly people. Many are not what I would call highly skilled.
It's in the overall hourly labor force where we get the highest attrition.
Mr. KRAMER. Is there great competition for their services, or are
there difficulties among that segment of the working corps to obtain
employment?
Mr. Tmri~roNs. No. As I mentioned earlier, there are people in the
area who will pay more. We have various things that help us, I think,
to reduce the attrition. We have an air-conditioned facility. In New
Orleans that is a definite asset. In Colorado that's a ho-hum opera-
tion, but it's worthwhile in New Orleans.
But I don't want to leave you with the thought that we have a re-
maining tremendous attrition problem. I think we have taken those
steps which have reduced it. We've set the goals that we are achieving,
and I believe we are winding up with a stable work force. We have
been building up rather significantly over the past. 2 years. Generally a
build-up will engender attrition. Nothing really helps the reduction
of attrition like longevity, where people have a good knowledge of
their job; they have a vested interest in the company. I think those
who have been with us longest will stay longest. It's a self-generating
thing.
Mr. KRAMER. Yes. The bottom line really on attrition, or anything
else I guess, is how it impacts on the project negatively, if at all.
Obviously, it's not a plus, but do you feel that that attrition rate
in any way has impacted adversely on either the problems with stay-
PAGENO="0117"
113
ing within certain cost figures, or on the timing of the completion
of your work, or on the quality at all?
Mr. TIMMONS. I think that particularly on the first and third there
has been an impact. The attrition has been largest with those people
in those areas where we actually apply the thermal protection system.
We have tried to train, and have lost, and had to retrain, and that
did cause some poor performance perhaps on a learning curve basis
on the first article. The second article, as I said, though shows about
a 40 percent reduction in the time to apply the thermal protection
system, indicating that we have retained the best skilled areas of
those people in the hourly areas. They are staying with us, and, as
I say, I don't want to leave you with the feeling that attrition is a
significant problem. It is an area in which we are focused and I think
we are doing a good job of reducing it.
Mr. KRAMER. How many people do you employ there?
Mr. TIMMONS. Around 2,000, a little over 2,000. Directly on the
program though we have about 1,800 people plus 300 and some odd
in overhead, about 325 people in the overhead category and about
1,800 people directly.
Mr. KRAMER. And you're utilizing their services entirely on this
project?
Mr. TIMMONS. Those people in that count that I just gave you, yes,
that is entirely on the external tank. We have some people out of that
number who are at the NSTL facility and some people at Marshall.
Not in that count are the 185 people that I have at the Kennedy Space
Center under a separate contract to the Kennedy Space Center.
Mr. KRAMER. So is it fair to say that this plant-and I don't know
the history, so excuse me-was developed in response to this program?
Mr. TIMMONS. No. This program is at this plant because the plant
was there for a variety of production, dating clear back to World
`~\Tar II, when it was established. It is a large area, 40 acres in a single
building, plus additional buildings. It was used during the Saturn
program for the S-iC and the S-lB stages there.
Mr. KRAMER. Thank you very much.
Mr. FIJQrJA. Thank you, Mr. Kramer.
Mr. Timmons, you mentioned in your statement about a cost growth
caused by program changes.
Could you elaborate on that point?
Mr. TIMMONS. Yes. I was breaking down the overall estimated
complete run-out cost for the D.D.T. & E. program and assigning vari-
ous segments of that estimate of complete cost to those things which
caused the increase in the program as we went along, and I had about
41 percent of the final cost being directed changes in the program.
Mr. FUQtJA. By NASA or by you?
Mr. TIMMONS. No. By directed changes I mean by NASA.
Mr. FUQIJA. And what were some of the specific changes in program?
Mr. TIMMONS. Starting most recently, the relocation of the engine
cutoff sensors would probably be the most recent change that came
through the level 2, or from the Orbiter Project Office area. We had
an interface mismatch with the Orbiter and to adjust the interface
we agreed to, and did, make the change which allowed the interface
to work properly. That was a significant modification to an attach
PAGENO="0118"
114
fitting that we have in the external tank. We took it off, put on a
modified one.
But throughout the program I think the continuing definition of
requirements in the thermal, in the TPS, area have been the biggest
contributor to the changes, the tightened requirements in the TPS
area, Mr. Fuqua.
Mr. FUQUA. Mr. Timmons, thank you very much for being here. I'm
sorry you had to wait all day.
Mr. Tmr~IoNs. My pleasure.
Mr. FUQUA. Thank you very much for your testimony this after-
noon.
Mr. Tmn~roNs. Thank you.
Mr. FUQUA. The subcommittee will stand adjourned.
[Whereupon, at 3:25 p.m., the subcommittee was adjourned.]
PAGENO="0119"
115
APPENDIX
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
SPACE SHUTTLE
QUESTION:
9/78 6/6
Assessment Assessment Difference
Memo dated 6/79
from Code M/Mr. Yardlčy
to Legislative
Affairs** $1165.6M* $l272.9M $107.3M
Previous Current
Assessment Assessment Difference
Budget Amendment
Book $1170.3M* $1250.3M $80.ON
NASA has announced a plan for obtaining $80M for DDT&E by
reallocation of $70M from production and $lOM from the
Teleoperator Retrieval~System. How does NASA plan to get
the balance of $27.3M for Shuttle DDT&E in FY 1979?
*Includes $l85M Supplemental Request
**Subject of Memo is Space Shuttle DDT&E Cost
Traceability
ANSWER:
The current plan, as reflected in Dr. Frosch's statement,
is to utilize $10 million from the TRS and $70 to $90
million from production. The numbers in the cited memo
are estimated `accrued cost" during the year and the
numbers in the Budget Amendment are "obligations" during
the fiscal year. The two numbers are not directly
comparable. The costs will be incurred against the
cumulative obligational authority on the contract.
PAGENO="0120"
116
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #1:
What is the current total cost at completion of the Space
Shuttle development program in FY 1971 budget dollars?
ANSWER:
The total cost and schedule are under review. The current
preliminary DDT&E estimate at completion (in 1971 dollars)
is approximately $5.9-$6.O billion.
PAGENO="0121"
117
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #2:
When compared with the original estimate of $5.15 billion,
what is the percentage cost growth? What part of this
cost growth is overrun?
ANSWER:
The original estimate of $5.15 billion in 1971 dollars
has grown to $5.9 to $6.0 billion -- a total cost growth
of about 15%. Seventy million dollars of this increase
was caused by schedule stretchouts resulting from 0MB
budget limitations. The balance of the increase has
resulted from technical problems encountered during develop-
ment and test. The distinction between cost growth
resulting from contract changes and that from contract
performance is a negotiable item between the contractors
and the government and has not yet been determined.
PAGENO="0122"
118
SPACE SHUTTLE COST, PERFORNANCE, AND SCHEDULE REVIEW
QUESTION #3:
a. What is current estimate (in real year dollars) of the
funding amounts required for the Space Shuttle develop-
ment program for fiscal year 1979, 1980, 1981, 1982?
b. What amount of funding will be required for the Space
Shuttle design, development, test, and evaluation
program for FY 1981 and beyond?
ANSWER:
The current preliminary estimates (in FY 1980 budget dollars)
for Space Shuttle DDT&E are $1250 to $1270 million for
FY 1979 and $831 million for FY 1980. The requirements
for FY 1981 and FY 1982 are still under review, but our
present preliminary estimates indicate that about $500
to $550 million will be required after FY 1980.
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119
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #4:
What is the impact (schedUle and funding) on the production
program of reallocating $70 million from production to
DDT&E in FY 1979?
ANSWER:
Production funding in FY 1979 has been constrained through
the third quarter due to the uncertainty of the FY 1979
supplemental request. This funding constraint, together
with technical problems, has resulted in a delay in the
buildup of activity on the follow-on orbiters, with pre-
liminary schedule impacts estimated at approximately six
to twelve months on Orbiter 099, 103 and 104. Because of
this constrained buildup, it is not possible to productively
use the full $458 million~for production in FY 1979. A
$70 to $90 million reallocation to development would have
no further impact on the production schedule.
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120
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #5:
What would be the impact (schedule and funding) on the
production program of reallocating $220 million from
production to DDT&E in FY 1980?
ANSWER:
If the $220 million were reallocated to development in
FY 1980, there would be further orbiter delivery delays
and significant cost penalties. This delay would be over
and above the production delay attributable to constrained
FY 1979 funding caused by the uncertainty of the approval
of the $185 million supplemental and the need to transfer
$70 to $90 million to development. The additional delay,
caused by a $220 million reallocation from production in
FY 1980, would be six to twelve months for Orbiters 103
and 104, with resultant total cost increases for produc-
tion of the orbiters of up to $500 million.
PAGENO="0125"
121
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #6:
Will the budget amendment of $220 million in FY 1980
be used for DDT&E or for production activities7
ANSWER:
It will be used fo~ DDT&E. The additional $220 million
to the development program in FY 1980 would alleviate the
need to reallocate money from production assuming our
current cost projections are accurate and no additional
unexpected technical problems occur. This would allow the
orbiter production program to proceed at a pace to support
national defense and civilian needs.
PAGENO="0126"
122
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #7:
With the $70 million reallocation in FY 1979 and approval
of the $220 million budget amendment in FY 1980, can NASA
support the requirements of the Department of Defense at
Vandenberg Air Force Base? What is the delivery schedule
and estimated cost of Orbiter 099, 103, and 104 (funding
requirements should be specified by Orbiter and by fiscal
year)?
ANSWER:
With the $70 to $90 million reallocation to development in
FY 1979, the approval of the $185 million FY 1979 supple-
mental and the $220 million additional funding for develop-
ment in FY 1980, plus adequate future year funding availability,
NASA can support the DOD requirements at Vandenberg AFB.
The current preliminary orbiter delivery schedule is as
follows:
Orbiter 099 March 1982
Orbiter 103 Summer 1983
Orbiter 104 Fall 1984
The costs associated with the revised schedule are being
developed as part of the FY 1981 budget formulation process.
PAGENO="0127"
123
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #8:
a. Has NASA considered reprogramming funds from other
programs such as the Space Telescope, Galileo, and
Lands at D?
b. What would be the impact on these programs of any such
reprogramming?
ANSWER:
Yes, NASA did give consideration to reprogramming funds
from other programs to alleviate the Shuttle funding
problem. The conclusion was that reallocation of funds
from sources such as the Space Telescope and Galileo would
not contribute substantially to solution of the Shuttle
funding needs and in fact would severely disrupt the
development progress in these programs, resulting in
increased costs.
Stretchout of the Galileo launch would require complete
restructuring of the Galileo and International Solar
Polar Mission (ISPM) projeįts. Shifting Galileo to 1983
and the Solar Polar Mission to 1984 would require develop-
ment of a new Shuttle Upper Stage capability. A preliminary
estimate is that such a decision could result in a reduction
of $30-40 million in FY 1980 funding requirements, but an
increase in total NASA funding requirements of about
$200 million depending on the upper stage development
requirements.
While the Space Telescope does not have a specific launch
period which must be met, an assessment of the project
budget situation has led to the conclusion that any
significant reduction in FY 1980 funding would have a
major impact on the program. Such a reduction would cause
a serious disruption of a successful and carefully-planned
program and would introduce inherent schedule and cost
risks. At least a three-month effort would be required to
accurately replan the program and identify actual impacts
and effects. However, it is estimated, for example, that
a $20 million reduction in FY 1980 would likely result in
a slip of six months in the launch schedule, with an
overall increase of approximately $50 million in runout
costs due to schedule stretchout.
PAGENO="0128"
124
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #9:
What is the impact of the delay in the first manned orbital
flight on the requirements for Space Flight Operations
funding?
ANSWER:
The seven month delay in the first manned orbital flight
causes a corresponding delay in the first operational
flight. The currently estimated IOC of late summer of 1981
would permit NASA to fly only one mission in FY 1981 and
ten missions in FY 1982. This would reduce the flight rate
from twenty-three to eleven in FY 1981/82. The lower flight
rate would make it possible to reduce FY 1980 funding require-
ments for flight hardware procurement. However, the loss
of reimbursements due to cancellation of reimbursable flights
may offset this reduction. Additionally, it may be cost-
effective to maintain production of external tanks and solid
rocket motors at a certain fixed rate of production notwith-
standing the decrease in FY 1981 planned flights.
PAGENO="0129"
125
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #10:
In February 1979, NASA stated that $27 million would be
needed in FY 1980 to maintain an option for the fifth
Shuttle orbiter. With production program schedule delays,
when would production have to be initiated to provide a
minimum cost production schedule? When would long lead
items be required to maintain the option for the fifth
orbiter? Would any funds be required in FY 1980?
ANSWER:
Considering the new orbiter delivery schedule it would not
be prudent to initiate Orbiter 105 production in FY 1980.
Based on an Orbiter 105 production start in FY 1982, to
assure an efficient manufacturing cycle, long lead activi-
ties should be started in FY 1981.
50-365 0 - 79 - 9
PAGENO="0130"
126
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #11(a):
What is the impact of the first manned orbital flight delay
and the production delivery delays on the Tracking and Data
Relay Satellite Program?
ANSWER:
The launch of TDRS-A will probably be delayed until late
summer of 1981. This schedule change will delay the initia-
tion of loan repayments and will increase contract costs.
The contract cost of the schedule delay will be on the order
of several millions per month with the bulk of the costs
generated by interest on the FFB loan.
A more refined estimate of the impact will require defini-
tion of launch dates beyond the first mission, interaction
with contractor teams to investigate the most economic method
of meeting the revised schedule, and an analysis of the
effects of the delay on planned network station closures.
Delays in station closures are expected to cost an additional
several million dollars per month.
PAGENO="0131"
127
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #ll(b)~
What is the impact of the first manned orbital flight delay
On Expendable Launch Vehicles?
ANSWER:
The delay in the first manned orbital flight and the con-
sequent rescheduling of the first operational flight may
cause some commercial and foreign users to consider an ELV
instead of Shuttle. A recent survey of the early customers,
however, indicates little interest in launching on the more
expensive expendable systems.
NASA has planned for some time to support up to six Delta
and one Atlas/Centaur launch vehicle as potential back-ups
in case the Shuttle is not available for customer mandatory
launch dates. These back-up vehicles may be requested by
the user up to the First~Manned Orbital Flight (FMOF) of
the Shuttle.
PAGENO="0132"
128
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #11(c):
What is the impact of the first manned orbital flight delay
on Department of Defense requirements?
ANSWER:
Since utilization of the Shuttle by DOD does not commence
until late in 1982, DOD flight requirements can be satisfied
in accordance with requested launch dates. Delay of the
first manned orbital flight, therefore, does not have a
significant impact on DOD requirements as far as NASA can
determine.
Requests for more detailed information with regard to DOD
mission requirements should be addressed to the Department
of Defense.
PAGENO="0133"
129
SPACE SHUTTLE COST, PERFORNANCE, AND SCHEDULE REVIEW
QUESTION 11(d):
What is the impact of the first manned orbital flight delay
on other missions?
ANSWER:
The operational date slip caused by the delay in the first
manned orbital flight has generally moved all operational
missions a similar period. NASA is attempting to hold
important missions with mandatory launch dates to their
present schedules at the expense of lower priority, non-
schedule constrained missions. This arrangement affects
primarily NASA missions.
In addition, cargo manifests are being revised to take full
advantage of available cargo bay space and Shuttle weight and
turn-around capabilities. These changes, which are currently
being assessed, will tend to minimize the impact of the
FMOF delay.
PAGENO="0134"
130
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #12:
Has NASA selected the Thrust Augmentation design which will
bring the Space Shuttle up to the original performance speci-
fications? Will the Thrust Augmentation development be
accomplished as part of the Design, Development, Test and
Evaluation Program? What is the impact of a one-year funding
delay for Thrust Augmentation activities?
ANSWER:
NASA is continuing the assessment of two Thrust Augmentation
concepts: strap-on solid motors (SOSM) to the SRB and Titan
engines with modified Titan propellant tanks mounted under
the External Tank, to bring the Space Shuttle up to original
specifications. Either concept will be capable of providing
the required additional performance and each will have some
growth margin beyond that. Their impact on the Shuttle system
is currently being compared.
The Thrust Augmentation study effort is being funded in the
Operation Capability Development budget within the Space
Flight Operations line item.
A one-year delay in the funding of Thrust Augmentation would
impact the analysis to identify changes to other Shuttle
elements which should be incorporated in follow-on orbiters
and the VAFB design, plus probably delay the targeted opera-
tional capability date of mid-1984.
PAGENO="0135"
131
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #13:
What is the impact of the recent test failure of the APU?
Will a redesign of the APU be required? How long will it
take?
ANSWER:
Our current assessment of the Shuttle schedule impact, because
of the recent APU failure, can only be estimated at this
time. It is our feeling that no impact to the actual Shuttle
STS-l launch schedule will exist, but that there will be some
impact on program cost and qualification test schedules.
As of this date, JSC has not received a firm recovery plan
or the additional cost estimate for the APU modifications
from the contractor.
Some minor fuel system redesign also will be necessary to
maintain a maximum fuel pump and propellant control valve
temperature of 200°F or less. Designs for active and
passive cooling are currently underway at the APU contractor.
The total time to make the design and test program changes
and verify them is currently unknown, but are being pursued
vigorously with the expectation that the majority of the
required changes will be completed in early FY 1980.
PAGENO="0136"
132
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #14:
When the staff visited the Kennedy Space Center in May 1979,
there appeared to be some questions with regard to the
division of responsibility between Johnson Space Center
and Kennedy Space Center for completion of the Orbiter manu-
facturing and accomplishment of vehicle checkout activities.
What management changes have been initiated to resolve this
problem?
ANSWER:
The following management changes were implemented subsequent
to the staff visit to Kennedy Space Center (KSC) in May
1979:
(1) The NASA KSC Space Shuttle Projects Manager was
assigned responsibility for, and authority over, all Space
Shuttle work performed by the various KSC Directorates.
(2) The NASA JSC Orbiter Project Office was assigned
responsibility for, and authority over, all orbiter manu-
facturing work in the Orbiter Processing Facility (OPF).
A JSC representative was placed in residence at KSC to
manage this manufacturing effort. He is supported by a
small staff of JSC and appropriate key KSC personnel and
is further responsible for integrating the KSC test and
checkout activities with the manufacturing wOrk until the
orbiter leaves the OPF.
(3) Rockwell International placed a Vice President
from their Downey manufacturing headquarters in residence
at KSC with authority over all the contractor's manufacturing,
test, and checkout activities. His staff includes a manager
for thermal protection system installation, a manager for
other manufacturing work, and a manager for test and check-
out.
In addition to the above management changes, specific work
planning, manpower, training, supervision, logistics, and
administrative support actions have been taken by both NASA
and the contractor to expedite and improve the installation
and checkout work.
PAGENO="0137"
133
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #15:
In a briefing to the Committee staff in May 1979, NASA
stated that the $220 million budget amendment would be
adequate to carry the program until the first manned
orbital flight in March 1980. How does NASA plan to
support the Shuttle DDT&E in FY 1980 if the FMOF is delayed
beyond March 1980?
ANSWER:
If the FMOF occurs beyond March-April 1980, there is concern
as to the adequacy of the $220 million addition to Shuttle
development. We will have a clearer understanding of what
the FMOF is likely to be and the associated funding require-
ments by September 1979, as we finalize our FY 1981 budget
to 0MB.
PAGENO="0138"
134
SPACE SHUTTLE COST, PERFORNANCE, AND SCHEDULE REVIEW
QUESTION #16:
NASA has a three-part analysis of the Space Shuttle
program underway:
1) An overall management assessment by Dr. Lovelace
2) A detailed review of cost and scheduling by Mr. Lilly
3) A technical status review by Dr. Frosch.
When will these reviews be complete?
How and when will the results be made available to the
Committee?
ANSWER:
NASA's ongoing three-part analysis of the Space Shuttle
program is expected to be completed in September. We
are planning to make the results available to the
Committee at that time, at the Committee's convenience.
PAGENO="0139"
135
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #17:
When will NASA have firm schedule and cost estimates for
completion of DDT&E?
ANSWER:
We should have better cost and schedule estimates for the
completion of DDT&E as we finalize the FY 1981 budget to
0MB.
PAGENO="0140"
136
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #18(a):
When will NASA have firm schedule and cost estimates for
the production program?
ANSWER:
The follow-on orbiter cost and delivery schedule projections
are currently being evaluated. The results of this evalua-
tion will be available as part of the FY 1981 budget process
with the 0MB.
PAGENO="0141"
137
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #18 (b):
Contractors and subcontractors do not currently have a firm
plan for production orbiter funding in FY 1979 nor in FY 1980.
How can NASA expect to make realistic cost and schedule
estimates for the productiOn orbiters in FY 1981 and FY 1982
with this situation?
ANSWER:
Our contractors have had funding availability for FY 1979
from the beginning of the fiscal year. We have time-phased
these funds to be concentrated in the final quarter of FY 1979
as a hedge against availability of the $185 supplemental,
and against needing more DDT&E funds. The FY 1980 produc-
tion funds were detailed in the submittal of the FY 1980
budget in January, and still represent our current planning.
Schedules will be adjusted~to compensate for the early
FY 1979 funding constraint.
PAGENO="0142"
138
SPACE SHUTTLE COST, PERFOENANCE, AND SCHEDULE REVIEW
QUESTION #18(c):
Will current estimates by the major contractors and sub-
contractors for FY 1981 and FY 1982 have any validity with
no firm plan for FY 1979 and FY 1980?
ANSWER:
We believe that the major contractors and subcontractors
now have sufficient information upon which to base valid
estimates for FY 1981 and FY 1982.
PAGENO="0143"
139
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #18(d):
It would appear that the changes in plan which have occurred
in the production orbiter program in the past year are
following the same path as the DDT&E program with resulting
increases in funding requirements. Would you comment?
ANSWER:
Although there certainly are developmental program impacts
on the production program (i.e., weight and schedule changes),
the production program basically requires independent plan-
ning. This schedule and cost planning does not involve
the same degree of uncertainty as the development process,
because you are basically building things you have built
before. Of course inflation, workload in the aerospace
industry, necessary flight test changes, incorporation of
new technology where beneficial, schedule slips for whatever
reason, are factors which produce undertainty and require
the planning of appropriate funding contingencies.
PAGENO="0144"
140
SPACE SHUTTLE COST, PERFORMZ~.NCE, AND SCHEDULE REVIEW
QUESTION #19:
What funding is planned for Orbiter 103 in FY 1980?
ANSWER:
With the revised production delivery schedule, the FY 1980
requirements are still under review and firm estimates for
each vehicle will not be completed until September 1979.
PAGENO="0145"
141
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QtJESTION #20:
There have been infusions for funds into the Shuttle DDT&E
program in FY 1977, FY 1978, FY 1979, and FY 1980. Please
provide a table which includes the amounts, rationale for
need, and a brief explanation of how money was applied
across the major program elements.
ANSWER:
In FY 1977, an increase in funds of $55 million was provided
from the following sources:
$25 million -- Economic Stimulus Appropriation Act,
1977
$30 million -- from the Space Flight Operations
budget, including $27 million of
residual Apollo-Soyuz Test Project
funds
The increased funding was applied in the following areas:
Orbiter
o Additional manpower to improve Orbiter 102 schedule;
o Increase subcontract effort in critical development
areas (i.e., Auxiliary Power Unit, Reaction Control
System, Thermal Protection System);
o Technical change~ to on-board General Purpose
Computer to provide increase memory capability
based on OFT requirements and provisions for
reasonable growth;
o Provisioning of timely integration of flight soft-
ware and hardware by upgrading the Avionics
Development Lab at Downey to the Orbiter 102
hardware configuration thus allowing validation
in parallel of ALT and OFT hardware and software.
Main Engine
o Enhance accumulation of engine test time.
Solid Rocket Booster
o Improve Development/Qualification motor deliveries;
o Improve Subsystem areas (i.e., Auxiliary Power Unit,
Integrated Electronics Assembly Structures).
External Tank
o Based on wind tunnel testing, redesign of the ET
was necessary in areas such as the intertank and at
the SEN attach fittings to withstand greater loads
than previously anticipated.
PAGENO="0146"
142
(Question #20, cont'd.)
In FY 1978, $100 million of funds was transferred from
production' to DDT&E to provide for increased effort
resulting from deferrals and delays from FY 1977 to FY 1978,
plus new requirements. The funds were applied to the
following areas:
Orbiter
o Orbiter 102 aft fuselage secondary structure
installation;
o Assembly of 102 modules;
o Extravehicular mobility unit (EMU) and logistics
procurements;
o Buildup for MPT test;
o Subcontractor growth.
Solid Rocket Booster
o Qualification motor testing;
o Increased effort on Thiokol manufacturing manpower
and structures.
External Tank
o Martin growth;
o Rephasing of support requirements.
In FY 1979, additional funds were identified from a reques-
~ ~ed supplemental of $185.0 million, $10.0 million from
the T~leoperator Retrieval System (TRS) project, and a
$70-Se million transfer from production. These funds are
~č~iired in the following areas:
~. Orbiter
o The increase in funding requirements for FY 1979
results from a combination of mandatory design
changes, technical problems in FY 1978 that
increased workload in FY 1979;
o Increased requirements in Orbiter software leading
to a large number of changes;
o Cost increases in the extravehicular mobility units;
o A schedule stretchout of the main propulsion tests
(MPT) due to main engine problems and implementa-
tion of a phased approach to the main propulsion
certification;
o The need for additional funds for the mated
vertical ground vibration tests (MVGVT) due to
hardware delays and the identification of addi-
tional test requiremehts.
PAGENO="0147"
143
(Question #20, cont'd.)
Main Engine
o NASA activated a three engine test stand at
Santa Susana, which was previously unplanned,
and began testing in order to enhance development
progress by establishing an increased capability
to conduct engine system testing;
o Acceleration of follow-on engines to be available
in the event additional test hardware is needed
and the acquisition of additional critical parts;
o Deferral of work from FY 1978 to FY 1979;
o Resolution of engine test problems;
o Increased engine manufacturing and assembly
requirements.
Solid Rocket Booster
o Changes to the structures areas including modif i-
cation of the aft skirt skin forming tools and
changes to the heat skirt attachments;
o Assembly problems of the forward and aft skirts;
o Redesign changes to components being procurred by
the booster assembly contractor and the deferral
of ground support equipment from FY 1978;
o Changes required for integrated electronics,
thrust vector control and the recovery system,
based on test results;
o Component redesign, inhibitor modifications and
tooling redesigns,~ following test motor firings.
External Tank
o Technical design changes;
o Revised aerodynamic loads and a change in the pre-
selected ascent aerothermal environments resulted
in a redesign of the external propulsion lines
and cable;
o Deferral of manufacture and assembly effort into
FY 1979 as result of design changes.
Launch and Landing
o Deferral of effort from FY 1978 of ground support
equipment (GSE) procurement, installation and
checkout; propellant purchases; and launch processing
system equipment; delivery of the first flight
elements;
o Increase in requirements for ground support equip-
ment spares;
o Activation of variąus station sets, such as the
Orbiter processing facility, hypergolic system
maintenance facility, and solid rocket booster
disassembly area.
PAGENO="0148"
144
(Question #20, cont'd.)
In FY 1980, an additional $220 million has been requested
as an amendment to the budget. This funding will be
applied in the following areas:
Orbiter
o Complete manufacturing and assembly work on OV 102;
o Increase development support;
o Increase personnel to complete Mission Kits;
o Additional effort in qualification and certifica-
tion program;
o Subcontractor cost increases.
Main Engine
o Additional engines and parts;
o Engine testing extended;
o Increase in manpower requirements.
External Tank
o Thermal protection system application problems;
o Schedule impact of mandatory changes, such as
bracket interference and liquid oxygen sensor relo-
cation;
o New development effort initiated to improve
productivity.
Launch and Landing
o Launch processing systems installation, applica-
tion software development and verification;
o Manpower increase required for launch operations
for OV 102.
PAGENO="0149"
145
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #21:
Please provide a chronology of the Space Shuttle design,
development, test and evaluation (DDT&E) program, inclu-
ding changes in first manned orbital flight, first opera-
tional flight, total DDT&E~ cost estimates, and rationale
for change.
ANSWER:
See enclosure.
PAGENO="0150"
National Aeronautics and Space Administration
SPACE SHUTTLE DDT&E CHRONOLOGY
Sept. 1978
Announcement
FY 1980 BUDGET
(Jan. 1979
AnnounCement(
FY 1980 BUDGET AMEND-
MENT (May 1979(
TOTAL DDT&E COST
Billions of
1971. $
$5150
CHANGE REASON FOR CHANGE
March 1972 Decision to develop
solid rocket booster configuration.
FY 1974 budget reduced $85M by
0MB; 6-9 month delay in FMOF; no
change in total cost.
+050 0MB reduction of FY 1975 funding for
DDT&E by $89 million and additional
delay of early year build-up; delay
FMOF 6 months; increased total cost
$50 million in l97lS.
+020 Reduced FY 1977 funding ($15M in
DDT&E and $85M in production(; no
delay in FMOF; $20 million increase
in total cost.
Technical and cost problems in
fabrication and test activities.
Cost estimate increased 4% to
incorporate actual experience; no
change in FMOF schedule objective.
Technical problems including engine&
thermal protection; necessary design
changes; additional engine test
stand; and program deferrals result
+224 in 6 month delay in FMOF and an
additional 4% increase in total
Cumulative effects of technical
problems including increased
fabrication and assembly efforts
on the first orbital vehicle;
technical changes to the external
tank; and problems during testing
of the main engine and SRB sub--
systems resulting in a delay of
FMOF. Also, the addition of main
engine hardware to support
development testing.
FY 1973 BUDGET
FY 1974 BUDGET
FY 1975 BUDGET
FY 1976 BUDGET
FY 1977 BUDGET
FY 1978 BUDGET
FY 1979 BUDGET
FMOF* bC55
Mar. 1978 Mar. 1979
Sept-Dec. 1978 Dec. 1979 5.150
Mar-June 1979 June 1980 5.200
Sane Same Same
Sane Same 5.220
Same Aug. 1980 Same
Same Aug. 1980 5.430
Sept-Dec. 1979 Feb-May 1981
Nov-Dec. 1979 Feb-May 1901 5.654
Early 1980 Same
+210
5.9-6.0!! +250-350
1/ Equates to $8.3 to $8.45
- billion in real year dollars.
sFirst Manned Orbital Flight.
**Initial operational Capability.
PAGENO="0151"
147
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #22:
Please provide a breakdown of the original $5.15 billion
commitment by major program element including Orbiter, Main
Engine, External Tank, Solid Rocket Booster, Launch and
Landing, etc. Please provide a breakdown of the current
Space Shuttle estimate at completion by major program ele-
ment in real year dollars and in FY 1971 dollars.
ANSWER:
The original estimate of $5.15 billion (1971 $) commitment
was at the total program level and not in terms of system
elements. The breakdown to element level has been adjusted
to the 1972 Work Breakdown Structure (WBS) after completion
of definition.
DDT&E
Original Estimate Preliminaryb"
1971 dollars Current Estimate 1971 dollars
ThrUFY 1980 Balance to Total
complete
Orbiter $3.5l3 $3.851
SSME .580 .839
SRB .390 .330
ET .331 .353
Launch &
Landing .336 .364 ______
TOTAL $5.150 $5.737 ~ $6.0i~
PreliminaryY
Current Estimate Real Yr. dollars
ThrUFY 1980 Balance to Total
complete
Orbiter $5.235
SSME 1.170
SRB .473
ET .494
Launch &
Landing .555 _____
TOTAL~ $7.927 $ .513 $8.440
These estimates are subject to change as a result
of the current Shuttle reviews.
PAGENO="0152"
148
SPACE SHUTTLE COST, PERFORMANCE, AND SCHEDULE REVIEW
QUESTION #23(a):
Do you believe that the constractors are kept currently
informed as to the amount of funding being allocated to
their part of the program? I am assuming that you do not
inform contractors of any funding reserves (or APA) you
may be holding?
ANSWER:
The contractors are aware on a continuing basis of the
current amounts that are planned for their authorized
contract work. The contractors do not know the amount of
funds held by NASA for changes that nay be authorized and
negotiated.
PAGENO="0153"
149
MANAGEMENT
QUESTION #1:
The 0MB budget cycle is such that the NASA submission is
fixed approximately 4 to 5 months before the budget
submission to Congress. Build up by NASA centers to support
the budget submission must be developed as much as 6 to 9
months before submission to Congress. Would the provision
for a budget update to 0MB after September 15 and prior to
budget submission to Congress improve the acct~racy of
budget estimates?
ANSWER:
The period from submission of the budget request to 0MB
in mid-September to printing of the President's budget
by the first of January is too tight to schedule time
for update revisions by all agencies. The opportunity
always exists for an agency head to reopen budget and
program decisions with 0MB and the President if the agency
head has the facts to support such reconsiderations.
50-365 0 - 79 - 10
PAGENO="0154"
150
MANAGEMENT
QUESTION #2:
To what depth does senior, non-Shuttle NASA management
review the cost and schedule estimates of the Shuttle
program? How can that review be strengthened?
ANSWER:
Non-Shuttle NASA senior management officials review the
cost and schedule estimates to the depth necessary to
assure themselves that the requests are as accurate as
can be reasonably estimated for complex Research and
Development efforts that have never before been done.
NASA's estimates for Research and Development activities
have been as good and in most cases better than any other
organization of which we are aware. We do our best to
anticipate problem areas, but we cannot always make a
precise prediction of each problem or the magnitude of
technical difficulties that may be encountered in
pioneering Research and Development efforts.
PAGENO="0155"
151
MANAGEMENT
QUESTION #3:
Should NASA senior management review of the Shuttle program
be strengthened? Would an executive advisory board for
review assistance to the Administrator of NASA aid in
discharging his responsibilities to review the Shuttle
program?
ANSWER:
The dynamic nature of R&D programs is always a motivating
force for seeking ways of improving all aspects of manage-
ment, including Shuttle program reviews. The Administrator
has requested and used executive advisory assistance on
the Shuttle program on a number of occasions. Recent
examples include the Hawkins Committees review of the
total program and the Covert Committee's review of a
specific area such as the main engine. Currently, we have
a Management Assessment group, headed by the Deputy
Administrator, which will present its final report to the
Administrator in September.
PAGENO="0156"
152
MANAGEMENT
QUESTION 4~4:
Has NASA considered augmenting the management analysis and
control resources of the Associate Administrator, Office
of Space Flight, by contracting for appropriate assistance,
at headquarters level, during the remainder of the Shuttle
development program and transition to operational status?
ANSWER:
Before the initiation of Shuttle development, a number of
management arrangements were considered. At the present
time, a detailed three-part analysis of the Space Shuttle
program including management is underway and will be
reviewed in detail by the Administrator in September.
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MANAGEMENT
QUESTION #5:
The Johnson, Marshall and Kennedy Space Center work force
is heavily devoted, but not exclusively, to the Shuttle
program. Would it be prudent to place these centers under
the direct management of the Associate Administrator, Office
of Space Transportation System, for the remainder of the
Shuttle development program and its transition to opera-
tional status?
ANSWER:
Dr. Lovelace and his group are specifically looking at the
management aspects and organizational arrangements for the
Shuttle program. They should complete their review in
September and the Agency will be reporting to the Committee
at that time.
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MANAGEMENT
QUESTION #6:
Incentive contracting has been used as a management tool
by NASA for many years. Has incentive contracting contributed
to better management of the Shuttle program? If so, what
positive results have been obtained? Can the use of incen-
tive contracting emphasis be changed in a timely manner to
reflect NASA program management emphasis?
ANSWER:
The Shuttle contracts use a type of incentive contract
involving award fees. Award fee contracting has been a
positive management tool used by NASA in the Shuttle program.
For instance, in the Increment I D]DT&E Shuttle Orbiter contract
with Rockwell International, the performance award fee earned
by the contractor ranged from 55% to 86% of the available
award fee. In the Space Shuttle Main Engine contract with
Rocketdyne for the period of April 1972 through September
1976, the percentage of award fee earned ranged from a low
of 20% to a high of 85%.
We think the above examples indicate the use of award fee
contracting as a management tool. As to changing the con-
tracting emphasis, NASA has included in the Shuttle contracts
language which allows NASA to place emphasis on certain
areas of work provided the contractor is notified of these
areas thirty days prior to the start of each evaluation
period.
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MANAGEMENT
QUESTION #7:
It appears from data available to the Committee, the Space
Shuttle Program has been developed under a very tight
fiscal constraint. This was not like Apollo!
-Are we now seeing the consequences of this constraint?
-Did the character of the program change as a result
of this constraint?
-What was the Management approach employed in the
various stages of~ the program?
ANSWER:
NASA has attempted to learn from and apply the considerable
experience gained from the Apollo program. In doing so,
we tried to limit the hardware produced and specify a
tight schedule in order to minimize the cost. It was
fully recognized that this approach involved an increased
schedule risk. Perhaps when the development is complete,
speculations can be made as to whether this approach
enhances cost-effectiveness. Realistically, since the
development was not done in two modes -- constrained and
unconstrained, it is doubtful that a definitive assessment
can be made. The basic fact is that in the executive,
legislative and national environment of the early 1970's
the question was whether Or not the Shuttle development
would be initiated and not a consideration of providing
additional funds.
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MANAGEMENT
QUESTION ~8:
From a technical management viewpoint, how would you
characterize the Shuttle program? What are the iacing
technical problems of the program?
ANSWER:
Although we are not satisfied with the Shuttle program
progress it does compare reasonably well to past aerospace
programs of such a complex nature at the same stage of
their development. Solving technical problems is the
essential part of the development of an advanced capability
such as the Space Shuttle. The two significant pacing
technical problems presently existing are described below.
The Space Shuttle Main Engine
The Space Shuttle Main Engine has been one of the
pacing technical problems in the program for some
time. However, recent test experience indicates
that the engine is gaining substantial maturity.
The initial series of certification tests for STS-l
of 5,200 seconds in 16 tests has been completed.
Eight of these tests were full flight duration at
rated power level or greater accumulating over 4,900
seconds. This engine will begin a repeat of the test
series this month. A second engine now in acceptance
test will also be tested to assist in certification.
A recent failure of a main fuel valve during propulsion
system testing is now being reviewed and its impact
is being assessed.
Two of the STS-l engines have completed acceptance
tests, and have been delivered to KSC for installa-
tion in. Orbiter-l02. The third flight engine will
be delivered to KSC in early August 1979.
Thermal Protection System (TPS)
Another of the primary pacing technical problems is
the physical application of the relatively large number
of tiles required to complete the Orbiter TPS. Included
are a number of instrumented tiles, difficult
installations, and some very complex closeout tiles,
such as, at the interface with the nosecone. This
interface is in an area where tile position is very
critical.
Several areas where large pressure gradients exist,
such as the trailing edges of the control surfaces,
require fillers in the gaps between the tiles.
Installing these fillers is time consuinming.
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MANAGEMENT
QUESTION #8: (Continued)
Completion of the structural analysis of the TPS
has disclosed that some tiles have a negative
strength margin, which may necessitate some rework.
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MANAGEMENT
QUESTION #9:
Prior to the Space Shuttle Program, NASA incorporated a
`lead center" concept in their management of major programs.
How would you summarize this concept. How well is it
working? Do you feel it was a good technique or should
we go back to the old way of doing business?
ANSWER:
The "lead center" concept was selected for management of
the Shuttle program in order to capitalize on the techni-
cal expertise and skilled manpower resources available at
NASA field centers. This is particularly true with respect
to systems engineering and systems integration. Responsi-
bility for these important tasks has been assigned to the
Shuttle program office at the Johnson Space Center. A
part of the rationale was to keep the staff of the Shuttle
Program Office at NASA Headquarters small. We believe that
the effective use of the "lead center" method is somewhat
dependent upon the size of the project as well as the
number and complexity of technical interfaces between
center responsibilities. The effectiveness of the concept
in this case will be one of the subjects reviewed by
Dr. Lovelace's Management Rev iew, and will be reported upon
at a later time.
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MANAGEMENT
QUESTION #10:
What impact, if any, has the lack of travel funds played
in providing proper program visibility of the Shuttle
Program at Headquarters?
ANSWER:
Communications for the program office management occurs
on a daily basis between Headquarters and the Centers
involved with Shuttle work. Individuals are continually
in contact on current problems and, on a weekly and
monthly basis, many engineers and managers hold essential
program teleconferences. In the interest of conserving
travel funds, we are relying heavily on the large NASA
teleconference network and written information. This
method of data collection, while not perfect, has proven
adequate in most instances because of personal interfaces
developed over the years between Headquarters and Center
personnel.
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rYIANAGEMENT
QUESTION #11:
How was the supplemental request figure of $185 million
developed? What is the basis for the additional $220
million request for FY 1980?
ANSWER:
In both the FY 1979 supplemental and FY 1980 budget amend-
ment cases, the additional funding estimates were developed
to allow the continuation of the pace of development, test
and manufacturing activities necessary to meet civil and
military requirements. The specific estimates were a
result of program status evaluations in the late summer of
1978 and spring of 1979, respectively. These program evalua-
tions took into consideration schedule status and the need
for additional resources to compensate for technical
problems, design changes, schedule delays and the under-
estimate of work efforts subsequent to the estimate provided
in the applicable Congressional budgets. The need for addi-
tional funding represented the best judgement at that par-
ticular time of the program requirements, allowing a
minimal reserve for unanticipated changes and growth.
The additional resources amounts were not intended to provide
the program with the funding flexibility to accommodate
major unforeseen problems and growth.
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MANAGEMENT
QUESTION #12:
Is the $220 million budget amendment adequate to support
DDT&E requirements in FY 1980?
ANSWER:
The adequacy of the $220 million budget amendment in
FY 1980 depends on our ability to meet an STS-l date in
the March-April 1980 timeframe. Any significant slippage
beyond that date will probably require some additional
development funds. We will have firmer estimates of the
STS-l schedule and the FY 1980 funding requirements as
we develop our FY 1981 0MB budget in September 1979.
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MANAGEMENT
QUESTION #13:
What alternatives to the budget amendment were considered?
ANSWER:
The primary alternative considered was readjustment of
programs and schedules within the Agency's budget plan
for fiscal year 1980. This consideration included an
assessment of the consequences of adjusting projects such
as Galileo and Space Telescope, as well as adjusting Shuttle
orbiter deliveries and schedules. We concluded that the
only reasonable alternative was to adjust orbiter
deliveries and to reallocate funds to development. After
discussing the alternatives with members of the Executive
Office of the President, a decision was made to request
the additional funds necessary to meet critical defense
and civil needs.
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MANAGEMENT
QUESTION #14:
It would appear that after learning of significant additional
funding requirements in~ the Fall of 1978 that NASA did not
give much consideration to requesting additional funds
from 0MB. In addition, when learning of additional funding
requirements in March, 1979, NASA's first reaction was to
reallocate funds from Production while fully understanding
the excessive cost penalities associated with such a plan.
Thirdly, back in fiscal year 1978 NASA made a decision to
reallocate funds to DDT&E from Production rather than
requesting a supplemental:
a) Now, I do not consider that supplemental requests or
budget amendment shoUld be submitted to Congress at
the drop of a hat, but I wonder if NASA gives proper
consideration to these alternatives?
b) On occasions it appears that NASA is too timid in asking
for the resources which they need?
ANSWER:
As I indicated in my testimony, I think it is appropriate
when we are faced with a problem to try to manage within
the annual funds authorized and appropriated by the
Congress. We then have to assess whether we are damaging
the program by not asking for additional funds. In the~
case of the Shuttle development requirements for fiscal I
year 1980, we discussed the alternatives with members of
the Executive Office of the President and a decision was
made to request a Budget Amendment.
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MANAGEMENT
QUESTION #15:
There have been press reports that NASA is considering a
suborbital flight test of the Shuttle. Would you elaborate
on the status of this concept? What would be the objectives
of such a flight test?
ANSWER:
The concept of a suborbital flight test of the Shuttle is
being studied at the Johnson Space Center. The study
results are scheduled to be reviewed by NASA management
in late August.
The reason for studying a suborbital flight is to determine
if a flight test that would provide data on the Thermal
Protection System tiles under a benign entry thermal
environment is a worthwhile endeavor prior to committing
to an entry from orbit.
The Shuttle program baseline continues to be that STS-l
will be an orbital flight. The suborbital flight study
results will be reviewed to determine whether this baseline
should be changed. There are numerous. significant trade-
of fs involved, many of which are not related to the TPS,
and it is quite possible that there would be an increase
in risk to other elements of the program if we made a
suborbital flight.
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MANAGEMENT
QUESTION #16:
In November 1978, the Shuttle Program conducted a review
of budget forecasting. How has NASA implemented the
recommendations of this review?
ANSWER:
This budget formulation review team was headed by the Deputy
Director of the Space Shuttle Program, and examined our
budget forecasting techniques, among other areas, to iden-
tify factors which influence cost projections.
The team findings and recommendations for corrective actions
were made in December 1978. The recommendations were imple-
mented by letter from the Program Director in early 1979.
In turn, the projects have directed their own offices and
their contractors to implement the corrective actions which
are now in place and which are being used to support our
current FY 1981 budget planning. Some brief examples of
the incorporation of the team's findings are:
1. In-depth monthly cost reviews are conducted
which include projections of increased require-
ments.
2. More direct involvement by prime contractors
in sizing requirements for downstream years
in a timely manner to support NASA fiscal
cycles.
3. Independent cost projections conducted by the
Program Managers' resource analysis staff.
50-365 0 - 79 - :1~1
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RECOGNITION OF THE PROBLEM
QUESTION #1:
Addressing your present cost and schedule problem on the
Space Shuttle Program:
(a) When did you first learn of the problem?
(b) When did you understand the magnitude of
the problem?
(c) What happened after you learned you had a
large problem?
(d) How did you assess the problem?
Ce) After you called in the Shuttle Management
to Washington for a complete scrubbing of
the problem, what happened after that?
Cf) Why did it take from October 1978 to May
1979 to report this problem to the Committee?
(g) When do you expect to have a firm under-
standing of cost and schedule for the first
flight?
ANSWER:
As we stated in our testimony before the Committee in
response to these questions, there was no single problem
or occurrence which clearly indicated the need for request-
ing additional funds. Starting in October 1978, after
submission of our FY 1979 supplemental request and FY 1980
budget to 0MB in September, some forecasts of potential
additional requirements were received from our centers.
Immediate actions were taken to assess both the validity
and magnitude of the forecasted problems. In December,
an additional engine test problem occurred. The status of
our assessments was that we did not have information
sufficient to change our basic budget requests. At that
time, we felt that sufficient program reserves were contained
in our budget requests to cover known problems as well as
some, yet to be identified problems. Our assessments at
the time were reported to Congress -- that is, some techni-
cal difficulties were continuing to occur, our planned
reserves were eroding, but we thought that our budget
requeste were sufficient to carry out our programs.
As Shuttle development activities continued during the first
quarter of 1979, it was becoming more clear that planned
progress on the development was not occurring. The techni-
cal progress assessments by our Centers in March was that
schedules would have to slip and additional funds would be
required. The Administrator initiated an immediate assess-
ment of the problems, outlook, and alternatives. The
results of the detailed assessments of status, schedules,
and funding options were reviewed with the Administrator in
April. The options were immediately discussed with 0MB and
the Executive Office, which resulted in a decision to
initiate a budget amendment request. The Committees and
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(Question #1, cont'd.)
staffs were immediately notified of the Agency's assessment
and the planned actions.
We expect to complete~ our current reviews and report to the
Committee in September 1979.
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RECOGNITION OF THE PROBLEM
QUESTION ~2:
NASA became aware of increases in resource requirements
in September-October, 1978. Was any consideration given
to reopening budget negotiations with 0MB during this time
and prior to the FY 1979 Supplemental and FY 1980 Budget
Submittal to Congress?
ANSWER:
NASA became aware of some potential unanticipated resource
requirements in the September-December 1978 timeframe,
and during this period we were actively engaged in trying
to ascertain the validity of these indications of problems.
Our assessment of the magnitude of the problems at the
time of the "closing up" of the President's FY 1980 Budget
was that we could accommodate the estimated cost increases
within the amounts contained in the budget. Therefore,
we did not contemplate reopening the budget decisions
with the President at that point.
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RECOGNITION OF THE PROBLEM
QUESTION #3:
There is evidence that NASA management was aware of the
likelihood of a need for additional FY 1979 resource
requirements in December, 1978, and I quote from the
first page of the Report of the Budget Forecasting Review
Team `This study was initiated because of a significant
increase in cost projection by Rockwell, the Orbiter
contractor, after the NASA budget for FY-79 and FY-80
had been established. The provision of Level I Allowance
for Program Adjustment normally serves to cushion cost
surprises; the instance at hand may exceed that capability
when combined with other demands on Allowance for Program
Adjustment in FY-79." This statement which was made as
a result of increases in cost projections for other
elements of the Programs would appear to offer ample evidence
of knowledge of a problem by NASA Management.
Would you care to comment?
ANSWER:
As I discussed in my testimony, the Report language quoted
indicates the uncertainty of the total potential require-
ments. The question is this: At what point does one
decide that the potential requirements cannot in fact
be handled by existing reserves? Our assessment at that
time was that there was a reasonable chance that our
reserves would be adequate.
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PROGRAM RESERVES FOR RESEARCH & DEVELOPMENT
Question: Dr. Perry, what size program reserves does the DOD
carry for research and development programs?
Dr. Perry: The DOD Research and Development Program has no
reserve fund as such. In planning individual R&D programs, program
managers do consider contingencies for problems likely to occur
during development. The amount of resources provided for such con-
tingencies varies with each program, depending upon technical risk,
complexity, and schedule. When situations arise where resources
available to individual programs are inadequate, the program must
either be delayed or funds reprogrammed from lower priority programs.
Congressional approval is obtained for reprogramming actions, as
necessary, when the program involved is of particular interest to
one or more of the Congressional Committees.
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Estimating Budget Year Funding Requirements
Question: How does DoD deal with the problem of estimating
budget year funding requirements 12 to 18 months ahead of time?
Dr. Perry: The entire DOD program is projected for a period of
five years in our Five Year Defense Program (FYDP). In our annual
Budget Submission the following year's funding requirements for
authorized items are displayed for the Congress. Admittedly these
amounts are only the best estimates at the time but every attempt
is made to make them as accurate as possible and projected inflation
factors are included for all~major systems.
Question: Does DoD on occasion re-open budget negotiations with
0MB for higher ceilings after the September 15 deadline?
Dr. Perry: The 0MB review of the DoD Budget is, by special
arrangement, a joint review with the Office of the Secretary of
Defense that usually extends~ into late December. The final total for
the DoD Budget is generally determined at that time and there is
seldom any ceiling negotiations after that.
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US Support of Galileo Mission
Question: What is the technical and schedule status of the
Inertial Upper Stage (IuS) with regard to supporting the Galileo
program?
Dr. Perry: As the planning for the Galileo mission has evolved
and the Shuttle performance capabilities have become better defined,
we have been faced with increased performance demands which can be
most economically achieved by modifications to the US. We have
currently identified potential US modifications which could provide
more than 300 lbs. of performance margin above Galileo requirements
if all the changes were implemented. The performance improvement
options being considered primarily involve structural design changes,
i.e., redesign of the airborne support equipment, the equipment
support section, and the interstage structure. Also under considera-
tion is using solid rocket motors in lieu of the reaction control
system thrusters for third stage spin-up, or going to a three axis
stabilized third stage configuration. We are working closely with
NASA to select those IUS changes which will satisfy Galileo require-
ments at the lowest cost. We are confident that the US can provide
the performance required for the Galileo mission scheduled for 1982.
Since the planetary mission requi rements are unique to NASA,
necessary funding must also be provided by NASA. Our current
estimate of the increase in funding is $20-30 million.
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Shuttle Schedule
Question: Have the slips in the Shuttle schedule caused the
DOD to switch to any expendable launch vehicle to meet mission
requirements?
Dr. Perry: We can accommodate to the revised schedule which
NASA now projects for Shuttle development and orbiter deliveries.
This NASA schedule projects that the Shuttle will be operational at
Kennedy Space Center (KSC) in 1981 and Orbiters 099, 103, and lO~
will be available around March 1982, summer of 1983, and late 1984
respectively. This schedule will support our early launches at KSC
and our plan to provide an initial operational capability at Vanden-
berg AFB in December 1983. However, this revised Shuttle schedule
reduces the margin in the original schedule relative to DOD payload
launches on the Shuttle. We, have not switched planned missions
from the Shuttle to expendable launch vehicles at this time.
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Space Shuttle Funding and Schedule Problems
Question: When was DOD first aware of the recently announced
funding problems and schedule slips of the Space Shuttle?
Dr. Perry: Dr. Lovelace advised me on 19 April 1979 that large
Shuttle funding and schedule problems were becoming evident. An Air
Force representative participated in subsequent NASA internal
reviews. On 26 April 1979 Dr. Lovelace met with Dr. Mark and members
of my staff and identified the overall magnitude of the problem. Key
staff members on NASA and Defense Committees of Congress were
immediately alerted to the situation.
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Orbiter Fleet Size
Question: Is the DOD prepared to strongly support NASA in
budget negotiations with 0MB in support of building a 5th Shuttle
Orbiter?
Dr. Perry: We believe, that the four orbiter fleet will be
adequate during the early years of Shuttle operation. However,
during the period when FY lS8l and FY 1982 Shuttle funding decisions
are beingmade and orbiter ~Jelivery dates finalized, we do intend
to work with NASA to be sure that the option for continued production
of a fifth orbiter remains open. At this time we cannot project
when increases in national Shuttle traffic or possibly loss of an
existing orbiter will warrant production~ of a fifth orbiter.
At such time as the need for a fifth orbiter is clearly estab-
lished, DOD will fully support NASA in this funding request.
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Impact of MILCON Funding Delay
Question: What is the impact of a one year funding delay for
construction activities at Vandenberg on the plans for operational
readiness at Vandenberg?
Dr. Perry: Delaying the FY80 Military Construction (MILCON)
funding for the Shuttle by one year would result in severe impacts
on the planned construction program to provide: (1) a Shuttle
launch and landing capability at Vandenberg AFB, (2) modifications
at the Johnson Space Center (JSC) to provide adequate protection for
classified DoD Shuttle missions, and (3) DoD planning for transition
of high priority payloads to the Shuttle.
The funding delay would effect a 9-12 month slip in the planned
December 1983 IOC for the Vandenberg Shuttle capability. This IOC
slip would result in cost increases of between ~80-100 million,
primarily due to the requirement for sustaining the Vandenberg
activation contractor and for adjustments due to inflation. Addition-
ally, the delay would require immediate consideration for procuring
additional Titan III boosters to support prime launch requirements
presently scheduled for the Shuttle. Costs for the additional
boosters could range as high as $180-220 million. Similarly,
several NASA missions would be impacted requiring shifts to expend-
able launch vehicles (ELy) or mission delays. The cost impact to
NASA for these missions is currently unknown but would be consider-
able.
At JSC, the MILCON funding deferral would delay planned modifi-
cations resulting in a 12-18 month slip in our ability to provide
adequate security protection for classified DoD missions. The
funding delay would require that the security modifications be made
at a time when the JSC facility is becoming heavilydedicated to
Shuttle operational support--this impact may not be acceptable to
NASA because the construction modifications would disrupt computer
operations vital to the Space Shuttle flight safety and success.
Implementation of the protective modificatiOns at a later date would
result in increased costs associated with operations work-arounds,
inefficient scheduling, inflation, and could delay launch of classi-
fied DoD payloads from Kennedy Space Center (KSC), the first of
which is planned for December 1981.
The last major impact resulting from delaying the FY80 MILCON
funding is associated with the disruption of our plans to transition
high priority payloads to the Shuttle. Some payloads, currently
scheduled for early Shuttle launch from Vandenberg AFB, would require
redesign for dual launch compatibility (Shuttle and ELy) resulting
in increased costs and reduced mission capabilities.
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QUESTIONS FOR GEORGE W. JEFFS,
PRESIDENT NORTH AMERICAN AEROSPACE GROUP
ROCKWELL INTERNATIONAL
I. NR~ JEFFS, YOU STATED THAT MORE SUBSTANTIAL UNPLANNED EFFORT WAS
ADDED TO THE ORBITER PROGRAM IN FT 1978.
A) WOULD YOU ESTIMATE THE AMOUNT OP UNPLANNED EFFORT WHICH
HAS BEEN ADDED TO THE ORBITER PROGRAM IN Fl 1979?
The amount of unplanned effort added to the
Orbiter program in FT 1979 is $76 million, as
explained in my testimony (p. 116, line 14
through page 117, line 20).
B) WHAT AMOUNT OF DDT&E WAS DEFERRED FROM F! 1978 TO F! 1979?
Approximately $65 million in DDT&E effort was
deferred from F! 1978 to Fl 1979.
C) WHAT AMOUNT OP DDT&E REPORT DO YOU ESTIMATE WOULD HAVE TO BE
DEPED FROM FT 1979 TO FE 1980?.
Approximately $16 million in DDT&E effort probably
will have to be dóf erred from FT 197 to F! 19.80.
2. MR. JEPFS, YOU HAVE STATED THAT THE CONSTRAINED BUDGETING PROCESS HAS
RESULTED IN MINIMUM TOTAL PROGRAM ESPENDITUR.ES BUT ALSO THAT MANAGEMENT
RESERVES ARE ESSENTIAL FOR REAL-TIME CONTIGENCIES AT THE ELEMENT CONTRACT
LEVEL,
A) WHAT PERCENTAGE RESERVES ARE NEEDED IN THIS PEASE FOR THE ORBITER
DDT&E PROGRAM?
We recently completed revieve with the NASA Space
Shuttle Program Office in support of their POP
cycle end with the new June 1980 first flight date.
We indicated a need for reserves of 20 percent and
50 percent of the baseline work for F! 1980 and
1981, reepectiizely. These reserves should provide
funds f or anticipated provisioning, anticipated
changes, and for resolution of anomalies.
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B) VEAT PERCENTAGE CONTINGENCIES ARE NEEDED FOR THE MaIN ENGINE DDT&E
PROGRAM? FOR TEE MAIN ENGINE PRODUCTION PROGRAN?
A reservi of ia percent is recosnded for unforeseen
development problems, spares, and normal change
traffic for Ff 1980 end 1981. A reserve of 15 percent
Ia reca~nded for the production program. These con-
tingencies should be added to the baseline POP cost
data which we have provided to MSPC.
3. MR. JRPTS, DO TOU PEEL TEAT NASA SHOULD HAVE PELT SURPRISED B! THE
COS'~ GROWTHS WElCH HAVE OCCURRED?
This question was answered in my testimony (Page 118, Lines
3-25).
4. MR. .JEFTS, WHAT WERE THE MAJOR REASONT FOR THE COST GROWTHS WHICR
BECANE APPARENT IN TEE JULY-SEPT~2~ER 1978 TINE FRANE AND RESULTED
IN A NEETING AT NASA HEADQUARTERS IN OCTOBER 1978?
As I outlined in the section of my testimony dealing
with 1978 and 1979 program cost visibility (Page 93
Line 12 Cc Page 94 Line 6), the major reasons for
cost growth were unplanned efforts resulting from
the incorporation of changes, additional work re-
quired to complete subcontractor efforts, partic-
ularly in fabricating the TPS tiles and the ONS pods,
and additional efforts made necessary by the develop-
manE end qualification teat results.
WHEN DID ROCKWELL FIRST CO~OE~NICAIE THESE COST GROWTHS TO NASA?
The initial elenent of the cost growth were formally
transmitted to NASA in the May 1978 533Q Report,
(published in July 1978) and them updated re-
quiremente were presented to NASA Headquarters
at & formal briefing on 18 October 1978. We in-
formally expressed our concerns on potential
1979 cost growth to NASA at thi time we were dir-
ected to hold FT 1978 coats at the originally
authorized level, and during the eter of 1978
when we were exercising 1978 and 1979 program
work content and schedules to establish an
initial F! 1979 plan with the NASA Program Office.
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5~ A) WITH REGARD TO THE TPS INSTALLATION ON ORBITER 102 AT ENDED?
SPACE CENTER, WHAT RATES CAN WE REALISTICALLY EXPECT TO ATTAIN?
The current plan to install 466 tiles per week is
based upon an 80 tile per day nominal rate fat a
aix-day week which equates to 480 tiles per week.
This plan allows for some greater-than-expected
efforts for diEt icult installations. Initially,
during the training and learning process with new
personnel added and working in a new facility, the
rate was in the range of 40 to 50 tiles par day.
This rate hag increased to between 50 and 60 per
day with over 100 tiles installed on July 10th.
Lt ~.s expecrea mat a i~ tO 90 daily rate will be
maintained during the major portion of the effort,
reducing to between 50 and 60 tiles daily as the
installation nears completion.
B) WHEN TAKING INTO ACCOUNT THE EXPERIENCE IN PAL1~fl)ALE, WHAT IS BEING
DONE DiFFERENTLY AT KSC?
At NBC we are employing a higher ratio of supervisors-
to-technicians, This change from Paindale was made
necessary by the requirements to manage the installa-
tion of individual tiles at a greater rate as well as
the ~ra eaphieticaced logistics nreded to support
the program at NBC.
6. ROCKWElL IllS MADE A NtTh~ER OF XANAGDAENT STRIJCTtIB.E CHANGES AT KENNEDY
SPACE CENTER. IS ROCKWELL SATISFIED WITH THE NASA INTERFACE AND -THE
DIVISION OF RESPONSIBILITY BETWEEN JOHNSON SPACE CENTER AND KENNEDY
SPACE CENTER?
Yes, the management Structure changee Rockwell
lies made at KSC have improved the interfaces
and as a result1 Rockwell considers them to be
working well. Further, the thangea made by
NASA have clarified responaibilitiea1
7. WHAT IS ROCKWELL'S BEST ESTIMATE FOR CC*IPLETING ACTIVITIES IN THE
ORBITER PROCESSING FACILITY?
Rockwell's best estimate for completing ectivitiea
in the Orbiter Processing Facility (that ia, internal
Orbiter 102 build activities, TI'S installation, and
vehicle check-out) is November 24, 1979. The "in-vehicle"
activity is expected to be finished by the end of September.
TPS installation is planned to be completed by
November 24th.
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8. A) MR. JEFFS, WOUlD YOU ELABOPATE ON TUE TEC~4ICAL AND SCHEDULE
STATUS OF TflF. MAIN ENGINE PROGRAM?
The development of the Space Shuttle Main Engine
is progressing on schedule to support en TUOF of
early 1980. The engine has accumulated over 451
tests and 50,000 a~conds towards the goal of
65,000 seconds prior to PEOF. As planned, approx-
imately 75,000 seconds will be accumulated by the
end of 1979. The formal Preliminary Flight Certi-
fication test was completed on June 27, 1979. The
rest series incloded 3 calibration tests and 13
certification tests for 5,250 seconds. The moat
recent problem caused by a failure of a feed duct
on the nozzle is under investigation and will be
resolved wtth~ut impact to FM)F. Plans are being
analyzed that provide for the start of engine
development for the full power level capability in
September of 1979 and provide for engine certification
at full power level by the end of 1980. The certification
of the engine at full power level by the end of 1980 will
support the present mission plans being developed by NASA.
Flight engine delivery has progressed through the
successful completion of hot fire testing of two
of the three engines. The first engine was de-
livered to ESC on July 11, 1979 and the remaining
two engines of th. three making up the first flight
set will be delivered later this sooth.
Three SSME engines are installed in the Main Propulsion
Test Article and test no. 6 was conducted on July 2, 1979.
The teat reaulted in a premature cut-off at 20 seconds due to
to a failure of a main fuel valve housing. An investigation
of the cause of the failure is underway.
B) HAS THE MAIN ENGINE PROGRAM BEEN SUBJECT~ TO FISCAL YEAR PUNDIN~
CONSTRAINTS SIMILAR TO TUE ORBITER PROGRAM?
As mentioned in the response to Question 2(b), we are
subjectad to and, as a result, rigorously control ex-
penditures to a fiscal year funding constraint. While
we do provide inputs to the NASA Program Operating Plan
(POP) cycle, the th±tial targets established in that
process generally have been less than our projected
requirements and adjuamuents made accordingly.
PAGENO="0185"
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9~ A) WILL THE DDT&E HEPERIENCE MAKE POSSIBLE~ MORE ACCURATE FLTNT)ING
ESTIMATES FOR THE PRODUCTION PROGRAM?
Yea, in fact we have already applied this experience
in preparing the funding estimates for the Increment
3 proposal which formed the basis for the cost esti-
mates used in the negotiated contract. This exper-
lance includes fabrication of Orbiters 101, 102, 099
and the teat articles, subsystems development and
qualification tests, and the Approach and Landing
Teat (ALT) program. The current IFS fabrication and
installation experience has been considered in es-
tablishing criteria for more rigid adherence to the
array installation plan and is forming the basis for
improvements in the total TPS system and as an aid
in more accurate~ forecasts of funding requirements
for follow on Orbiters. The production program still
must be able to accomodate funding changes resulting
from the results of the qualification and orbital
flight test programs.
B) DO YOU FEEL COMFORTABLE WITH THE CURRENT NASA GUIDELINES FOR FISCAL
YEAR FUNDING AND SCHEDULE FOR THE ORBITER PRODUCTION PROGRAM?
We do not yen have firm NASA funding guidelines for
the new foIIov on Orbiter delivery schedule. We are
In the process of eansblishixig requirements for re-
vised delivery dates for the follow on Orbiters and
this effort will be completed by the end of July.
At that time, we will be able to specify firm updated
funding requirements.
10, A) 1~. JEFFS, WHAT CHANGES HAS ROCEWELL MADE IN AN ATTENPT TO BETTER
ESTIMATE BUDGET REQ1JIRDIENTS AND TOTAL ESTIMATES AT COMPLETION?
Rockwell has made several changes in order to improve
our ability to provide earlier visibility of changing
fiscal year and total program estimates. We have in-
creased the emphasis and added personnel to our Program
Change Impact Board. We have reetructed our Material
Organization to provide a closer alignment of our cost
analysis personnel with our buyers. We have also in-
creased the number of our cost analysis personnel. We
have further implemented a subcontract management Budget
Impact Tracking System to provide real time notificatipn
to the program of change board actions upon subcontractors.
50-365 0 - 79 - 12
PAGENO="0186"
182
In addition, we have increased our participation with
NASA by eapanding upon our soothly Performance and
Resources Review arid increased the Rcickwell involvement
in the NASA budget planning cycle.
B) RAVE YOU BEEN ABLE TO TEST OR VERIFY THE EFFECTIVENESS OP THESE
CHANGES?
It will be a little while before we can fully verify
the effectiveness of these changes. I believe that
both NASA and ourselves have already seen beneficial
results from the changes which are being incorporated
into the current Pt 1980 and 1981 budget planning
cycles of both Rockwell and NASA.
11. IS THE 533 QUARTERLY REPORTING ADEQUATE TO StTPPORT TEE DEVELOPMENT OF
BUDGET YEAR REQUIRENENTS?
As I stated in my testimony (Page 103, Lines 5-14) and
in the answer to question 13, the NASA 533Q report, as
modified to include estimates of reserves, is adequate
to support the development of budget year requiremenra
up to the last quarter of the fiscal year. We also have
made improvements by providing additional fiscal year
consolidated funding requirement tables. In addition,
we provide updated funding information in the last quarter
to support NASA's budget cycle planning. Specific updates
to close out the current fiscal year and to verify funding
requirements for the next fiscal year are also provided.
12. *) IS ROCKWELL IN A POSITION TO MARE FIRM COST AND SCHEDULE ESTIMATES
FOR THE PRODUCTION ORBITERS?
3) IF NOT WHEN DO YOU ERPECT TO BE ABLE TO?
On Jsnu.ery 30, 1979, the contract document establishing
a firm cost arid schedule baseline for the production
Orbiters was approved by NASA Keadquarters. Since October
1978, however, we have been working to a lower annual funding
level than was negotiated in the definitive contract. We are
in the process of establishing funding requirements for revised
delivery dates for the follow on Orbiters. This effort will be
co~1eted by the end of July. AT that time, we will be able to
establish firm updated funding requirements.
PAGENO="0187"
183
~ t.u pruvase a c.~.oaer &Lignment or our coSt
analysis personnel with our buyers. We have also in-
creased the number of our cost analysis personnel. We
have further implemented a subcontract management Budget
Impact Tracking System to provide real. time notification
to the program of change board actione upon subcontractors.
initial FT 1979 plan with the NASA Program Office.
in me answer to question ii, toe r4AaF~ ~i.iq report, as
modified to include estimates of reserves, is adequate
to support the development of budget year requirements
up to the last quarter of the fiscal year. We also have
made improvements by providing additional fiscal year
consolidated funding requirement tables. In addition,
we provide updated funding information in the last quarter
to support NASA's budget cycle planning. Specific updates
to close out the current fiscal year and to verify funding
requirements for the next fiscal year are also provided.
12. A) IS ROCKWELL IN A POSITION TO MARE PIRM COST AND SCHEDULE ESTIMATES
FOR THE PRODUCTION ORBITERS?
B) IF NOT WHEN DO IOU EXPECT TO BE ABLE TO?
On .l.anusry 30, 1979, the contract docent establishing
a firm cost and schedule baaaline for the production
Orbiters was approved by NASA Headquarters. Since October
1978, however, we have been working to a lower annual funding
level than was negotiated in the definitive contract. We are
in the process of establishing funding requirements for revised
delivery dates for the follow on Orbiters. This effort will be
completed by the and of July. AT that time, we will be able to
establish firm updated funding requirements.
PAGENO="0188"
184
1.3. TB! 533Q IS CONTRACTUALL? REQUIRED POR FINANCIAL REPOt~TINC. WHAT
MANAG~fENT ROLE HAS THIS DOC1Th~T PLATED IN THE ORBITER PROGRAM?
IS THE 533Q AN ADEQUATE FINANCIAL MANAGIBIENT TOOL?
WHAT IS THE BIGGEST WEAKNESS IN THE 533Q REPORTING SYSTDtS?
The NASA 533Q has been used as the basic financial document
by which Rockwell reports its time-phased estimate at com-
pletion (EJiC) to NASA. It is an adequate financial manage-
ment tool withouc any real weaknesses. We have learned,
however, that the 533Q reports can be more useful by
including additional information, not specifically required
by the contract, which delineates the contractor's recc~ended
fun4ing reserves.
14. HOW LONG DOES IT TAB! ROCKWELL TO ESTIMATE THE COST fl~ACT OP ~
CONTRACT MODiFICATION?
The time to estimate the cost of a contract modification
varies depending upon the sequence of events leading to
th. issuance of a given modification and magnitude of
the modifications.
The majority of the modifications are issued subsequent to
submittal of Budgetary sad Planning (B&P) type estimates
prepared by Rockwell. Such 34.? type estimates in some
cases are assembled in 1 to 5 days while others require 30
to 60 or more dayc to prepare, depending on complexity and
the extent of subcontractor involvsment.
Subsequent to receipt of a contract modification, the pre-
paration of the majority of very detailed firm price proposals
generally takes anywhere from 30 to 120 days and involves re-
ceipt of formal inputs from all affected contractor functions
including definitive work/task statements and required estimating
rationale. Sometimas a portion of this time is taken up by
evolving a more complete Rockwell/NASA technical definition and
understanding of the change. Also the change complexity end
subcontractor involvement have substantial bearing on the time
span for completion of detailed cost estimates.
BOW MANY MODIFICATIONS HAVE BEEN MADE IN THE ORBITER CONTRACT?
There have been a total of 1120 modifications made in 4I~& (Orbif~f DN~
,4,. fl~fte'.' 1)1)T&R t~ōy,trar~t.
HOW MANY OF THESE NODIFICATIONS HAVE BEEN NEGOTIATB!?
7A~ ~4 .1...~.. 4...I....~ ......
747 of these modifications have been negotiated.
PAGENO="0189"
185
SUBCONTRACTS
1. THERE RAVE BEEN MAJOR COST GROWTHS IN THE ORBITER SUBCONTRACTS
HOW MUCH OF THIS COST GROWTH IS RELATED TO CONTRACT CHANCES?
HOW MUCH OF THE GROWTH IS CA13SED BY COST INTERRUPTIONS?
During the period from May 1977 to May 1979, Orbiter Material
& Subcontracta Estimate at Completion (EAC) requirements
have increased by $144.3 million for NASA-directed changes
and ~277.8 million for disruption/schedule shift coats
associated with limited fiscal funding.
2. THE COMPETITION FOR AEROSPACE PRODUCTS SUCH AS THOSE PROVIDED BY TEE
SUBCONTRACTORS IS VEBE EEEN. THE AIRCRAFF INDUSTRY HAS A VERY HIGH
DEMAND FOR MANY OF THE SAME PRODUCTS. HAS THIS COMPETiTION HAD A
SIGNIFICANT EFFECT ON IKE SUBCONTRACTS?
This subject is of great concern to Rockwell. About eix
months ago, we became aware of the growing competition
for aerospace products and its impact on the ability of
both Rockwell and its subcontractors to meet the schedule
of the Space Shuttle production program. As a result, we
took action to ceases a representative sampling of our
major raw material, hardware, and machine shop suppliers.
We found that net only had the lead time between order
and receipt dramatically expanded, but a capacity problem
also will. exiat in the area of general machining during
calendar year 1980. Wa also found that the cost of Cold
and other exotic metals such as titanium, inconel, cobalt,
chromium, and molybdenum, as well as fabric*ticn coats,
have significantly increased during the last year.
As a result, we placed our orders for in-house requirements
early to cope with these capacity and lead-time problems.
This information also has bean dieseminated to all of our
subcontractors on the Shuttle program to ensure that they
have made adequate provieione in their coat and schedule
planning.
PAGENO="0190"
186
L MANY OF ThE SUBCONTRACTS AND EVEN THE PRiME CONTRACTS INCLUDE AN
AWARD FEE THAT IS BASED UPON COST COHTRDL. MAN? OP THESE INDIVIDUAL
CO~ANIES HAVE BAD FISCAL CONSTRAINTS I»=~OS!D UPON ThEN WHICH EVENT-
UALLY CAUSED UNANTICIPATED COST GROWTH. CONSEQUENTLY, THEY HAVE BEEN
PENALIZED E? REDUCING THE AWARD PEE.
DO YOU FOR.ESE! ANY MODIFICATIONS IN THE CONTRACTING Ag~J~GRj~g~S?
No modifications are expected to our existing subcontract
arrangements as a result of fi cccl constraints. Certain -
instances exist where award fee is currently utilized as a
means to provide incentives to our subcontractors to meet or
improve our established fiscal year budget allocations.
However, no award fee penalties have been levied against our
subcontractors for inordinate cost growth resulting from fiscal
year cost limitations. As each subcontractor is evaluated for
coac perfornance, specific consideration is given to funding
constraint impact on forecasted costs.
PAGENO="0191"
187
THIOKOL CORPORATION
1735 JEFFERSON DAVIS HIGH WA )~ SUITE 403 * /
ARLINGTON, VIRGIMA 22202 /GOVERNMENT SYSTEMS
U E GARRISON
17 July 1979
Mr. Darrell R. Branscome
Subcommittee on Space Science
and Applications
U. S. House of Representatives
Washington, D.C. 20515
Dear Mr. Branscome,
In reply to your 6 July request, attached are Thiokol's
replies to the eleven questions suggested to Mr. Stone
during testimony before the Committee on 28 June.
Sincerely,
U. E~riso~
Director of Marketing
Government Systems Group
/bbc
PAGENO="0192"
188
RESPONSE TO QUESTIONS FR~~ SUBCC~iITTEE
ON SPACE SCIENCE AND APPLICATIONS
RELATED TO HEARI}~ ON 28 JUNE 1979
1. Question: Recent history of inhibitor, insulation end propellant casting proble~
(as well as motor segment handling problems) have contributed to cost growth in
the program. To what extent do you believe these problems were associated-with
scaling up to the large motor castings, design flaws or quality control?
Do you believe you fully understand those factors at this time?
The Space Shuttle SEN DDT&E Program includes seven ground test static
firings. These are divided into four development tests and three qualification
tests. The development teste are intended to find and correct any design or
manufacturing problems, including scale-up problems, so that the solution can be
incorporated in the qualification motor - design and manufacture. The solution to
the inhibitor end insulation problems are essentially the normal development
process which takes place for any new solid propellant rocket motor, and the
size factor, although present, was secondary in nature. The opposite is true
for the propellant casting process development. This problem was definitely
related to the scale-up characteristics necessary to cOst approximately 300,000
pounds of propellont into a 146-inch diameter by thirty-one foot long segment.
The problem was solved by changes to the casting tooling;
We all recognize thot development activities are necessary to perfect a product
design and manufacturing techniques. The normal development activities also
include development of inspection methods and tools used for quality control of
that sper.tfic design, These improvements have taken piece on the SI0~. Project as
part of the expected learning experience. We do understand the motor design, the
processing methods and product quality control as evidenced by our successful test
experience, including the teat of Qualification Motor No. 1 in June 1979,
PAGENO="0193"
189
2. Question: What level, of Thiokol personnel are working quality control and quality
assurance at Thiokol? What is the level of government personnel worldng quality
control and qua~ity assurance at Thiokol?
flow do thc~c levels compare with previous solid `rocket motor programs?
Do you believe this level is efficient, cost cfhctive and affective in meeting
SRB program requirements?
Answer: The number of Thiokol personnel workiug the quality control and quality
assurance areas is related to the level of manufacturing and test activity at any
given timeS The number typically may be in the range of 200 to 250 personnel.
This level is comparable to but somewhat higher than experience on previous čolid
rocket motor programs. This seems proper in view of the S~1 use for manned space
flight. We understand'that fifteen government personnel are working these areas
at Thiokol. The overall effort is effectively and efficiently meeting the program
requirements.
PAGENO="0194"
190
3. Question: You inilicate on the builum of page 3, that you were estimating $68.2
million cost in FY 79 and $44.4 million cost in FY 80. Funding limitations now
make it.necessary.to limit F? 79 work to approximately $61 million.
How much cost were you estimating f or F? 79 at the beginning of F! 79 (i.e.,
1 October 1978)?
Did you know, at that time, the funding levels for your part of the program
associated with headquarters mark to Mar8hall Space Plight Center?
Was your F? 79 program plan adjusted accordingly at that time or should it
have been adjusted?
Do you believe that by the start of F? 80, you will know the funding levels
for your part of the F? 80 program associated with the headquarters mark to
MSFC, which is presumably the basis for the F? 80 budget and budget amendment?
Answer: Our cost estimate for Fl 79-as of 1 October 1978 was ~65.6 million. We
did not know a final funding level for the SRN Project at that time, but we did
realize that the overall Space Shuttle Program was in the midst of its development
phase and that funding and program plans might have to be adjusted as the fiscal
year progressed. The NASA program managers on such a large and complex under~:
taking must retain some ability to change resourEe allocation as require4 by
unexpected and previously unknown technical problems. While it would be helpful
for an Individual contractor to know his funding level at the beginning of the
fiscal year, it may not be. in the best interests: of the total program to allocate
all of the resources at that time and to assume Ehat program plans will not change
for the next twelve months~ We did not change o1ir F? 79 program plan as of
1 October 1978, but we did change it in coordination with the NASA program manager
as the fiscal year proceeded. The changes refle~ted the real time assessment- of
technical and schedule progress on the SRM Projeet as comparedto the other
elements of the Space Shuttle Program.
PAGENO="0195"
191
3. (Continued) -
We have been able to meet the defined funding level for the S~1~ Project for each
fiscal year thus far in the development program, and we believe this can be
accomplished again ir~ PT 80 by working closely with NASA. A~ previously described,
the allocation of the PT 80 resources will have to be determined by NASA on a
program-wide basis.
4. Question: Your present contract for the development phase of the Shuttle program
(DDT&E) ends in early 1981. Do you have any conuern~ with being able to meet the
requirements of follow-on procurement?
What actions have been taken to assure that follow-on SRB's will be available
to support the Shuttle operational program?
Answer: We h~v~ no concerns with being able to meet SB~! procurelneot requirements
following the Shuttle development phase provided that production rates and quantities
are defined in time to meet long, lead needs for matetials.and components. We
believe this w-111 ho done; for example, some long lead steel billets for case and
nozzle components have been prącured. An another example, the development SNM's are
being built on "hard" or production type tooling rather than temporary tooling. The
tools in our plant and at our vendor pianto are immediately usable for follow-on
production..
PAGENO="0196"
192
5. ~g~ion: Nr. Stone, Dealing with technical performance issues, you state in your
text thet you "found an unexpected erosion pattern which prompted design change to
the!inhibitor."
What does that mean?
What are the consequences of this had it not been discovered?
Are you confidentyou understand this issUe?
Answer: The rocket motor case in solid propellant motors is protected from the
hot combustion gases by internal insulation which ablates or erodes sway as a
* function of the time of exposure. The total insUlation thickness therefore is
determined by the exposure time, erosion rateunder the gas flow conditiome which
prevail at that location and the design safety factor, The designer can predict
* the amount of insulation that will be-eroded at agiveu location in the motor.
This prediction is available before a motor is static fired and measurementS
are made after static firing to ccnTpArc predictions with actual results, and to
calculate actual safety factors. The Space Shuttle S~1 is very large, being over
twelve feet in diameter and 125 feet long, and there are many hundreds of square
feet of internal insulation surface area. After a firing we go through the motor
end make a sample inspection at a number of locations to look for any major
differences between predicted and actual erosion. When this "quick-look" assess-
ment was made following the static firing of Development Motor No.. 2 we didn't see
any significant differences from the prediction. . As a routine step we aiwayc go back
and. expand the number of measurements to a fine grid *o that we look in much more
detail. This detailed inspecticm found more erosion in one local area of. one
segment than had been predicted. The most probable cause for this was an exposure
time which was greater than expected, and this. could be caused by the burning
propellant surfaces reaching this local area sooner than predicted. Ignition of
PAGENO="0197"
193
5.. (Continued)
the propellant surface in this region. is cnntrolląd by an inert coating called
an inhibitor which ablates away during the couraa.of:a firing. The tise of ignition
therefore is controlled by the inhibitor thickness and the reaults of this static
firing showed that the inhibitor thickness ~hnuld be increased. Thiq was accom~
plisbed on Development Motor No. 3 and all subsequent motorč thereby correcting
the problem..
The coOsequence of this problem had it not been discovered is a decrease i~.the
insulation design safety factor at this location. .~I want to point out that
Developmant Motor No. 2 had no damage to the motor case, and we have confidence
in the corrective action wince all subsequent motor Firings have shown satis-
factory inhibitor performoncc~
PAGENO="0198"
194
6. ~p~~~jon: Later on. in your prepered text you mention "propellant voids."
What does this moan? l4hat are the consequences of this not being discovered?
~A propellant void is a ~`bubble" in an otherwise homogeneous
solid propellant grain. There are three potential areas of concern with
propellant voids. One is increased pressurc.in the rotor due to an
increased burning surface as the flare front roves through a region
containing voids. A second item is earlyexposure of the caae~insulat±on
duc to ~~rOr5 rapid propagation of the flame front through tha voids, and,
finally, the change in grain surface geometry as the propellant burns could
alter the pressure-risc (and throat-time) re~atir.nahip required by the
flight vehicle performance spccificstion.
None of these potential problema have affected the SP~f development program
since x-ray inspection has;been used LU ,isltnL s.ty LLUUL1~.aiOme collection
of voids~ We use a 15-million volt linear accelerator to perform this
insp~ction and the capability is good enough to detect an object no larger
than the end of a pencil. As I mentioned, we replaced one segment of
the fourth development rotor as a remult of x-roy inspection, and ~qC then
changed the casting tooling prior to manufacturing additional segments.
Our changes have produced exceLlent propellant grains as verified by x-ray
inspection.
PAGENO="0199"
195
7. ~uestion: Do you feel confident that all the handling equipment and
procedures are worked out satisfactorily?
Answer: Yes, we believe the detailed review of all handling equipment
and procedures for critical moves which was initiated In December 1978
and recently completed hon worked out problems to a satisfactory degree.
We need to bear in nind the fact that we are still in the program
development phase not the production phase -- and additional experience
could lend to further improvements in handling equipment.
8. Qp~on: On page 3, 2nd paragraph of your prepared text, you talk about
"bond failures." What does this mean? What are the consequences of the
bonding failure?
Answer: Nozzle flexible bearings go through a rigorous series of acceptance
tests which verify their ability to withstand operational loads and
pressures. Among-these tests are tensile "stretch" rests which stress
the adhesive bonds between the alternate layers of steel shims and
rubber pads which are bonded togerhc±r to form a flexible bearing assembly.
We have experienced some-bond failures in recent months during "atretch"
tests. I want to point out that this test is an overtest for powered
flight conditions since the bearing isbasically under a-compressive load
vhile th~ motor [s pressurizedand tensile stresses exist only near the
ec~ges when the nozzle is vectored. Analysis shovsthat a bond failure.
would not lead to a motor failur~ since the bearing is in compression;
however, we know from experience-t~hat bond,~ can be achieved vhi~h will pass
a "stretch" test and we will. solve this ~~ē~eaa development problem.
PAGENO="0200"
196
9. Question: How would you characterize the cost growth associatec' with the
S.B cifort? Normal or abnormal devclopmentprobleTfls? Pleaae elaborate,
Answer:- In my opening statement I pointed out. that the 5PM Project has
experienced some technical problems of the type which do occur in
development programs. If absolutely no problems were expected, and
development tests and design and manufacturing improvements were not
* required, then the motor cąuld be committed to fixed price production and
to flight without any need fordevclopment work and ground testing, This,
of course, is not the case for the Space ShuttleSBM which is three times
the weight and delivers much more performance than any other motor gow
* in existence. Advancements in the state-of-the-art have been required
inthe desifn, manufacture arid test of this motor. I-believe that the
problems which have been found anct successfully corrected are not unusual
when viewed in this context, and the cost is within the range of experience
for development programs.
10. ~p~p~tion: Cart the Subcommittee use a 15% to 20% DDT&E growth factor as the
norm for arty large space program undertaken by NASA?
A space program undertaker' by NASA could involve anything from
a small scientific payload placed in .oybit around the earth to a manned
l~tnding on the Moon or Mars or ton launch vehicle larger than the present
Spa~e Shuttle. I do not believe that one can speak of normal growth
factors seprirata from a consideration of t~i mpgnitude and eaphistication
of the task undertaken.
PAGENO="0201"
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11. Question: Could you summarize on what you think you and we have leari*ed
from this typo of management technique? How can we improve the way we do
business?
Answer: I assume the quection refers to what has been called "the constrained
budget management techn1que~" I don't think that it is necessarily a
bad idea to set out upon an ambitious plan of actir, relative to the funds
available for the-scope of work. People can. be inventive in finding ways
to make significant technical progress with-itisitedidoflarm, and program
plane can be reviewed to get. rid of nice-to--have items and to concentrate
on absolute essentials, The key to success -with this approach, however,
is to be prepared to use additional resources and
schedule adjusterants when required by development problems which simply
could not be foreseen. from our past experience and present best technical
judgment. The: intent, of course, is to. solve these new problems within
the overall framework of the program budget and schedule. This is by
far the besteolutlon, but-there can be times inmajor system development
-when the overall program budget and schedulethemselvea require a revision.
We can improve the way we do business by early recognition of which solution
it required. and by taking the appropriate action.
50-365 0 - 79 - 13
PAGENO="0202"
198
MARTIN MARIETTA AEROSPACE MICHOUD OPERATIONS
POST OFFICE 800 29304
NEW ORLEANS. LOUISIANA 70189
KENNETH P. TIMMONS
VICE PRESIDENT AND GENERAL MANAGER
July 13, 1919
Honooabf..e. Von Fuqu.o., ChaAjuoc.n
&Lbaornnv-t.tee. on Spaca Sc~Lenaa o.nd App! Lao..t~on~
CornmLttea on Sc~Lenae and TeCJCJSO!.~Ogy
U.S. Kowoa o~ RepJLe~5an.ta.twe.~
SuIte 2321 P~aybwLn Howse O~.Lc.e 8u12dLng
Ulaoh.Lngton, V. C. 20515
Ve.ax WL. Chai.'unan:
kt~t.ached ov~e my an~we/~ to the qae~t.Lon~o t~u.bmLt.ted by
Va/vLeLt B'tan~saome on behold o~ yowt Commc.tte~. The~e an.~we/o.6 a.'te
~~nbrn-~-tted ~ the ~eao'Ld a.~ `i.eqaeIted, and I ui.cIt be ILeady to eLait.L~y
them ot an.owee any addltLonol qu.eotLon.~ yowt. CommIttee may have.
S.Lnae/Le.Ly,
Kenne,th P. T.Lmmon~
KPT: bao
Attac.hmen.t
PAGENO="0203"
199
Q. 1. You indicate on page 6 that you achieved dramatic learning curve
results from the development work on ET-1 as evidence by ET-2.
A. At comparable percentages of completion of the total TPS cycle,
the actual production costs were 131,000 hours for ET-1 and
71,000 hours for ET-2. This is an improvement of approximately
45%.
Q. What is your current estimate of unit cost of the External Tank (ET)
during production?
A. Our latest estimates for TPS unit costs during production are in
Increment hA 35,000 hours, in Increment JIB 16,500 hours, and
in Increment III 10,400 hours.
Q. How does this compare with previous estimates?
A. Our 78-2 estimates for TPS unit costs during production were in
Increment IIA 19,000 hours, in Increment JIB 14,300 hours, and
in Increment III 9,000 hours.
(NOTE: All estimates are manufacturing touch labor only.)
PAGENO="0204"
200
Q. 2. Will you be able to complete the work you planned for in FY 79 prior
to the start of RY 80?
A. No. Ice/debris new requirements levied on the ET by Level II
necessitated redesign, fabrication and installation to accommodate
protuberance protection.
Q. What will be the effect of deferrals on your FY 80 work load?
A. The current funding and manpower constraints will impact the ET-2,
scheduled for delivery in December 1979, and subsequent vehicles
by several months.
PAGENO="0205"
201
Q. 3. Does the External Tank delivery schedule you provided accurately
describe the planned ET deliveries?
A. The presentation was based on deliveries which supported
Mission Model 79-1.
/
Q. If not, what is the delivery schedule?
A. We are currently reviewing the new 79-2 Mission Model which
has funding constraints and an attendant schedule impact. Final
data are not available pending the completion of the review.
PAGENO="0206"
202
Q. 4. Why has it taken so long to define the thermal protective requirements
for the External Tank?
A. The thermal protection system (TPS) requirements, namely material
types and coverage, have been evolving since 1973. These require-
ments are primarily derived from the thermal environments
supplied by Rockwell and ice protection considerations from
JSC. To a lesser extent, the requirements are influenced by
TPS materials performance from development/verification tests
and manufacturing experience gained from MPTA, STA and ET-1.
The thermal environments dictate both the type of material
(spray on foam insulation or ablator) and the coverage; these
environments have been maturing as the Rockwell wind tunnel
testing becomes available - the last wind tunnel test data for
for the ET was completed in 3/78 and will be included in 9/79
thermal environment update.
The icing prevention requirements have been recently
modified by new knowledge of the Orbiter's RSI tile impact
sensitivity. The potential SOFI debris is now thought to be
a problem to the RSI tile coating. This requires a new design
approach utilizing materials of lower density.
Q. Do you believe current cost estimates accurately describe the effort
required to complete the thermal protective system installation?
A. The current cost estimates are based on our actual experience
of applying TPS on ET-1. Using this knowledge we have identified,
and in many cases instituted, cost savings ideas so that we can
achieve the learning curves that we used to project our future
costs.
PAGENO="0207"
203
Q. 5. Do you anticipate any differences in reporting, manufacturing
procedures and quality control procedures at KSC as compared to
Michoud Operations which could affect the El-i completion schedule
and manpower loading at KSC?
A. The procedural:techniques for controlling manufacturing and
quality control operations are different at KSC as compared
to Michoud Operations. We have had prior experience with
the KSC systems on Skylab, Viking and currently in the
facility preparation and checkout for the Space Shuttle.
We have used this experience to estimate the El-i completion
schedule and manpower loading at KSC.
PAGENO="0208"
204
Q. 6. What are your major concerns with achieving the 6050 (sic) pound
weight reduction on the El?
A. From a technical viewpoint, the 6000 lb. savings can be
confidently achieved within the existing environmental
requirements.
Q. Do you believe that adequate funds are included in Martin-Marietta
inputs to NASA to cover the weight reduction program in FY 80 and
FY 81?
A. Ihere are enough funds in MMC's inputs for FY 80 and FY 81 so
long as the basis for those estimates do not change dramatically,
namely, environments and delivery schedule requirements.
Q. Do you have any concerns that NASA's FY 80 budget and budget amendment
contains sufficient allocation of funds to support your FY 80 program
plan?
A. Yes, we have concerns, but we are currently coordinating our
FY 80 requirements with the MSFC Program Office. Ihe results
of this coordination cycle will expose or alleviate these
concerns.
PAGENO="0209"
205
Q. 7. On page 2, test articles section of your prepared statement, you speak
of the four static firings to date "proving the integrity of the
structure and propellant system."
- Could you elaborate on this statement?
A. The combination of the MPTA and the structural test
articles have proved the integrity of the ET
structural subsystem design. The MPTA is proving
the integrity of the p oellant 4~!1y~ry~ subsystem
design. To date, 32 of the specific technical
objectives have been achieved during the first four
static firings. These include verification of
LO2/LH2 propellant loading/detanking procedures
and L02,anti-geyser integrated system performance.
- What is the purpose of the other nine more static
firings?
A. Thirty-five technical objectives still remain to be
accomplished by the next nine scheduled firings.
The most significant objectives are: L02/LH2
flight pressurization performance, LH2 stratifi-
cation model validation, LH2 ullage gas thermal
model verification and obtaining propellant residual
model data. Most of these objectives require either
multiple long duration firings or firings to
depletion or 109% thrust levels to gather sufficient
data for our analysis validations. All of these
objectives are related to propellant management
and subsequent vehicle performance predictions.
PAGENO="0210"
206
7. (Cont'd)
- Would you save money and time if you did
only six for example?
A. Our only monies that would be saved by
shortening the MPTA program would be our
off-site support at NSTL. Our current crew
consists of forty engineers and technicians.
The manpower savings by eliminating
scheduled firings must be weighed against
the increased risk associated with a reduced
technical data base.
PAGENO="0211"
207
Q. 8. Under the procurement section of your prepared statement on page
3; I'm not sure what you mean in the DDT&E phase of $100M since you
later state that "expenditures through May 1979 are $89M with purchase
order cormnitnients of $95M."
- Is the DDT&E or $184M for procurements?
A. The total amount of procurement expected for
DDT&E is $100M. The amount placed on order
to date is $95M leaving only $5M to be placed
on order. Of the $95M placed, $89M has been
expended or incurred.
Q. Have you experienced any serious vs. growths (sic)
in Subcontractors cost?
A. When taking into consideration the fact that
Increment I has been the test and development
phase of the External Tank program, the amount
of subcontract cost growth that has been
experienced has primarily been the result of
* program design changes and has not been
considered serious.
PAGENO="0212"
208
Q. 9. On page 5, paragraph 2 of your prepared test, you talk about the
applications of the ablator and its sensitivity to bond line
conditions:
- What procedure do you employ to assure that the bond will hold?
A. We utilize a combination of process control and a final plug
pull' test to verify the integrity of the bond line. The
significant steps in the TPS application process are:
clean water break test cure water break test apply
tank -~ apply -p' primer ~ -~ablator+~
surface primer
cure plug clean water break test apply
ablator -*~ pull -~ SOFI ~ SOFI -~
ablator surfaces
cure plug
SOFI -~----~ pull
SOFI
Numerous materials property and process tests are accomplished
during this cycle but the two most important ones relative to the
bondline integrity are the "water break free" test and the plug
pull test. The water break free test is used to assure that the
surfaces are clean prior to the applications of primer, ablator
and SOFI. The plug pull test is the final confirmation that the
TPS materials and the adhesive bond are within specification.
This is a destructive type test using a special tester that tension
pulls a plug from the applied TPS. Both of these techniques have
been used on previous MMC programs involving TPS (PRIME, X-15,
TITAN).
PAGENO="0213"
209
Q. 10. On page 6, middle paragraph, you speak of "cost growth caused by
program changes,"
- Could you elaborate on this point?
- What are some of the specific cost growth
program changes?
A. Cost g~-owth caused by program changes over
$3M include revised loads, measurement changes,
material substitution, system integration support
changes and range safety system changes.
Q. What are the dramatic learning curve results?
A. See Question One.
PAGENO="0214"
210
Q. 11. Under the funding section of your statement on page 8 you refer to
the Mission Model as a function of cost -
- How sensitive is the External Tank schedule and
cost to variations in the mission model?
A. The External Tank schedule and cost are
directly sensitive to variations in the
Mission Model. Funding and schedule are
tied closely together; when the Mission
Model moves to right, costs go up because
of longer skill retention and inflation.
PAGENO="0215"
211
Q. 12. On page 9, paragraph 2 you talk about the 392 manhours of effort to
incorporate modifications -
- Would you have been able to support a November
launch date if it had not slipped?
A. Yes, a November launch date would have been
supported.
- Do you intend to do this work in parallel with
* vehicle checkout and certification tests?
A. The 392 manhours of effort to incorporate
modifications are intended to be worked both
in series and parallel to the ET checkout and
integration tests.
- Have you submitted the cost of this effort to NASA,
if so, when and by what means?
A. The costs of the 392 manhour effort to incorporate
modifications have been submitted to NASA by
contract letters from January to June 1979. The
costs relating to ice debris modification will be
submitted when they are available.
PAGENO="0216"
212
Q. 13. What is the expected cost per flight growth anticipated as a result
of your weight reduction program you mention on page 10?
A. The cost per flight growth due to the weight reduction program
is expected to be $567,045 in 1978 dollars.
0