Cost Overruns in NASA’s SLS Booster and Engine Project

The NASA Office of Inspector General (OIG) recently released a report that criticizes the space agency’s management of the Space Launch System (SLS) booster and engine project.

*Engine No. 2059 arrives at the A-1 Test Stand at Stennis Space Center on Nov. 4, 2015, ahead of the first test of an RS-25 Flight Engine for the SLS Launch Vehicle. Credits: NASA*

The report reveals that the conversion of shuttle-era solid rocket boosters and engines for use on the SLS has incurred significant cost overruns and delays.

In fact, contracts related to the project, which date back more than 15 years to the Constellation program, have experienced approximately $6 billion in cost increases and more than six years of delays due to changes in contract scope and technical challenges.

How did we get here?

Development and production of the SLS boosters were assigned to Northrop Grumman, while Aerojet Rocketdyne was tasked with adapting the Space Shuttle Main Engines (RS-25) for the SLS core stage.

Initially valued at $7 billion over 14 years, the contracts have now ballooned to at least $13.1 billion over 25 years, with $8.6 billion already spent. Consequently, the increased costs have raised the price of a single SLS mission through Artemis 4 by $144 million, reaching a total of $4.2 billion per mission.

NASA’s Space Launch System rocket carrying the Orion spacecraft launches on the Artemis I flight test, Wednesday, Nov. 16, 2022, from Launch Complex 39B at NASA’s Kennedy Space Center in Florida. NASA’s Artemis I mission is the first integrated flight test of the agency’s deep space exploration systems: the Orion spacecraft, Space Launch System (SLS) rocket, and ground systems. SLS and Orion launched at 1:47 a.m. EST, from Launch Pad 39B at the Kennedy Space Center. Photo Credit: (NASA/Joel Kowsky) — *Fireblast of all RS-25s engines and SRBs during Artemis I Mission. Credits: NASA*

The inspector general’s report highlights a crucial factor behind the overruns: the underestimation of the challenges associated with adapting shuttle-era hardware for the SLS.

RS-25 Adaptation Problems

Despite the RS-25 being a well-established system, numerous technical upgrades were required before it could be integrated into the SLS due to the rocket’s enhanced technical complexity. These upgrades included addressing increased heat issues, necessitating additional information, and making modifications to propellant flow systems to accommodate the engines.

*A Test at NASA’s Stennis Space Center: engineers fire the RS-25 engine for almost eight-and-a-half minutes and up to the 113% power level during the test. Credits: NASA*

Aerojet Rocketdyne also faced challenges in designing a new engine controller unit for the RS-25, as the original parts were no longer available. Unfortunately, the report found that the company’s plans for the unit lacked a comprehensive understanding of controller design requirements and a clearly defined scope of work. As a result, significant technical issues emerged, leading to increased costs and extended schedules.

Solid Rocket Boosters Issues

The solid rocket booster (SRBs), another critical component of the SLS, also experienced significant cost overruns, primarily related to its propellant liner and insulation.

To replace the asbestos-based insulation used in the shuttle-era boosters, Northrop Grumman initially signed a $4.4 million contract modification in 2011. However, the final cost billed to NASA amounted to $253 million, including $28.5 million in award fees.

The final Qualification Motor (QM-2) Test for the Space Launch System’s booster on June 28, 2016, at Orbital ATK (now Northrop Grumman) Propulsion Systems test facilities in Promontory, Utah. Credits: NASA/Bill Ingalls

Interestingly, NASA contracting officers opposed paying the award fee and rejected two requests from Northrop Grumman. However, agency officials circumvented standard procedures by convening an “independent assessment team” comprised of former NASA employees, who ultimately recommended paying the award fee.

The inspector general’s report criticizes this move as a “significant and continuous disregard for Agency regulations and official processes”. Eventually, NASA agreed to pay Northrop Grumman $24.5 million.

Other Shortcomings

The report also highlights several procurement shortcomings, including the limited number of employees working on the booster and engine contracts with minimal supervisory review.

Additionally, one booster contract took nearly 500 days to finalize, well beyond the recommended timeframe of 180 days. Remarkably, procurement lawyers were given only six hours to review a lengthy 1,500-page contract, which likely contributed to oversight of required clauses and a lack of fully defined scope of work.

Former Acting NASA Administrator Robert Lightfoot in front of an RS-25 Engine in 2018 at NASA's Marshall Space Flight Center in Huntsville, Alabama. Credits: NASA/Bill Ingalls — *Former Acting NASA Administrator Robert Lightfoot in front of an RS-25 Engine in 2018 at NASA’s Marshall Space Flight Center in Huntsville, Alabama. Credits: NASA/Bill Ingalls*

While NASA is actively attempting to reduce costs for future SLS Boosters and the restart of RS-25 engine production, the inspector general’s report cautions that these efforts may fall short.

The complexity of upgrading and integrating heritage components, along with the challenges associated with restarting engine production lines, will likely impede the expected savings.

Recomentations and NASA Response

As a result of the findings, the OIG offers eight recommendations to NASA to address the issues with booster and engine contracts.

One significant recommendation is the shift to fixed-price contracts for new RS-25 engines. NASA has accepted, either partially or completely, all of the recommendations. However, the agency disagrees with the inspector general’s assessment, stating that the report lacks context and does not accurately represent the program’s decision-making process.

RS-25 flight engine E2063 is delivered and lifted into place onto the A-1 Test Stand at Stennis Space Center on Sept. 27, 2017 in preparation for an hotfire test. Credits: NASA/SSC

In response, the OIG defends its findings, expressing disappointment in NASA’s failure to specify the facts in the report with which it disagrees.

Despite the difference in interpretation, the report highlights important challenges that NASA must address to ensure the successful and cost-effective completion of the SLS Booster and Engine project.