Report of the

Space Shuttle Management

Independent Review Team
February 1995
PRF!"
The #pace #huttle i# recogni$ed throughout the world%# technical community a# the
con#ummate vehicle for #pace tran#portation& It# performance in placing human# and
payload# in orbit and returning product# and #atellite# to arth i# unmatched& Since the
vehicle wa# declared operational in the mid'19()#* however* it ha# been #everely critici$ed
for the high co#t of operation& In addition* many of the promi#e# made for the #huttle have
never been reali$ed for a number of rea#on#& For e+ample, 1- the number of flight# per
year that were foreca#t never materiali$ed. /- the "hallenger accident temporarily ca#t
doubt on #huttle reliability. 0- the number of payload# by other 1& S& 2overnment agencie#
3particularly the 4epartment of 4efen#e- wa# overe#timated* with many tran#ferred to
other launch vehicle#. 5- policy 3e&g&* 6ational Space Policy- and #tatutory change# were
made to di#courage the u#e of the #huttle a# a launch vehicle e+cept for mi##ion# that
re7uire human pre#ence or other uni7ue #huttle capabilitie#. 5- 6!S! continued to operate
the #huttle in a 7ua#i're#earch and development mode. thi# wa# e+acerbated by the
"hallenger accident&
The 6!S! !dmini#trator ha# attempted by variou# mean#* and with rea#onable #ucce##*
to reduce the total co#t of operating the #huttle& In recent year#* 6!S! ha# reduced the
#huttle%# direct operating co#t# by appro+imately /5 percent'a valiant effort con#idering the
#crutiny the #huttle receive# by the government and the pre##& !# more budget pre##ure#
are brought to bear and 6!S! #earche# for fund# to u#e in pur#uit of future program#*
however* it became obviou# to the !dmini#trator that he #hould #ee8 po##ible change# in
the #huttle management #tructure& !# a re#ult of di#cu##ion# with a number of advi#or# in
the government* the aero#pace indu#try* and former 6!S! leader#* the !dmini#trator
decided to form a team compo#ed of #ome of the#e people to review the pre#ent #huttle
operation management and to propo#e innovative approache# to #ignificantly decrea#e
total operating co#t# while maintaining #y#tem# #afety&
If 6!S! i# #ucce##ful in bringing about a new approach to #paceflight operation#* it will
add to 6!S!%# credibility a# an agency on the forefront of reinventing government and
provide a model for the management of future program# and their tran#ition to the private
#ector&
!"96:;<42M6TS
The team chairman wi#he# to ac8nowledge the wor8 of the official team member#* the
advi#or#* and the 6!S! team member#& The team member# all #erved in the be#t intere#t
of the country%# #pace program and tho#e who read thi# report mu#t recogni$e that the
team did it# utmo#t to provide candid and u#eful input# to the future conduct of #paceflight&
The team wi#he# to compliment the people both in 6!S! and the aero#pace indu#try for
their lucid and fran8 pre#entation# and di#cu##ion# on the many facet# of the Space
Shuttle Program& !# i# the u#ual ca#e* many of the idea# pre#ented herein came from
the#e dedicated and competent people&
=eff >antle and "liff Farmer provided a great deal of effort to bring the written word to
paper and are typical of the fine young people that re#ide in 6!S!& They are all an+iou# to
continue a productive and e+citing #pace program* which will provo8e new 8nowledge and
technology&
Christopher C. Kraft
":6T6TS
PRF!"&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&iii
!"96:;<42M6TS &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&iv
?"1TI@ S1MM!RA&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&vii
I6TR:41"TI:6 &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& 1
"harter&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&1
:bBective#* Scope* and Methodology &&&&&&&&&&&&&&&&&&&&&&&&&&&&&1
:>SR@!TI:6S &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&0
Re7uirement# 4riven Sy#tem &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&0
"ontract Proliferation and :verlap &&&&&&&&&&&&&&&&&&&&&&&&&&&&&5
Payload Proce##ing &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&5
Relation#hip >etween Program and "enter Management &&&&&&&&&&&&&C
Safety nvironment &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&C
"ontract Management "ulture &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&D
6!S!'"ontractor Structure &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&(
R":MM64!TI:6S &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&9
Space Shuttle Program 2oal# &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&9
Space Shuttle Program Management Structure &&&&&&&&&&&&&&&&&&&&1)
"ondition# Re7uired to Pur#ue 2oal#
;ithin 6ew Management Structure &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&15
TR!6SITI:6 P<!6 &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&19
!PP64I? ! ' S1MM!RA :F R":MM64!TI:6S &&&&&&&&&&&&&&&&&&&&&&!'1
!PP64I? > ' T!M !"TI@ITIS &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&>'1
9ennedy Space "enter Review &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&>'1
Mar#hall Space Flight "enter Review &&&&&&&&&&&&&&&&&&&&&&&&&&>'/
=ohn#on Space "enter Review &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&>'0
"hief +ecutive :fficer 4i#cu##ion# &&&&&&&&&&&&&&&&&&&&&&&&& >'5
!PP64I? " ' SP!" SE1TT< PR:2R!M M!=:R ":6TR!"T:RS &&&&&&&&&"'1
9ennedy Space "enter &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&"'1
Mar#hall Space Flight "enter Review &&&&&&&&&&&&&&&&&&&&&&&&&&"'1
=ohn#on Space "enter &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&"'/
!PP64I? 4 ' T"E6I"!< !4@IS:RS !64 S1PP:RT ST!FF &&&&&&&&&&&&4'1
Appendices B-D are not reproduced here, as they do not add substantively to the report,
and are of a format that is ill-suited to online reproduction
?"1TI@ S1MM!RA
!t the re7ue#t of the 6!S! !dmini#trator a team wa# formed to review the Space Shuttle
Program and propo#e a new management #y#tem that could #ignificantly reduce operating
co#t#& "ompo#ed of a group of people with broad and e+ten#ive e+perience in #paceflight
and related area#* the team received briefing# from the 6!S! organi$ation# and mo#t of
the #upporting contractor# involved in the Shuttle Program& In addition* a number of chief
e+ecutive# from the #upporting contractor# provided advice and #ugge#tion#&
The team found that the pre#ent management #y#tem ha# functioned rea#onably well
de#pite it# diffu#e #tructure& The team al#o determined that the #huttle ha# become a
mature and reliable #y#tem* and'in term# of a manned roc8et'propelled #pace launch
#y#tem'i# about a# #afe a# today%# technology will provide& In addition* 6!S! ha# reduced
#huttle operating co#t# by about /5 percent over the pa#t 0 year#&
The program* however* remain# in a 7ua#i'development mode and yearly co#t# remain
higher than re7uired& 2iven the current 6!S!'contractor #tructure and incentive#* it i#
difficult to e#tabli#h co#t reduction a# a primary goal and implement change# to achieve
efficiencie#& !# a re#ult* the team #ought to create a management #tructure and
a##ociated environment that enable# and motivate# the Program to further reduce
operational co#t#&
!ccordingly* the review team concluded that the 6!S! Space Shuttle Program #hould
31- #tabli#h a clear #et of program goal#* placing a greater empha#i# on co#t'efficient
operation# and u#er'friendly payload integration&
3/- Redefine the management #tructure* #eparating development and operation# and
di#engaging 6!S! from the daily operation of the #pace #huttle&
30- Provide the nece##ary environment and condition# within the program to pur#ue the#e
goal#&
;ith over C5 #ucce##ful launche#* operation# have become 7uite reliable& !t thi# #tage in
the Shuttle Program* co#t'efficient operation# and u#er'friendly payload integration #hould
be pur#ued along with #afe and #ucce##ful flight#& If the Program i# to meet the challenge
of reducing co#t# and #treamlining payload integration* it will re7uire a maBor change in
how the Program operate#&
2iven the maturity of the vehicle* a change to a new mode of management with
con#iderably le## 6!S! over#ight i# po##ible at thi# time& In addition* the bureaucracy that
ha# developed over the program%# lifetime '' and particularly #ince the "hallenger accident
'' will be difficult to overcome and the optimum operational effectivene## of the #y#tem will
be difficult to achieve unle## a new management #y#tem i# provided&
The team con#idered a number of new management approache#& The#e included to
31- Stay with the pre#ent #y#tem and continue to decrea#e co#t# in the incremental fa#hion
u#ed to date&
3/- Implement a multi'node #y#tem* con#olidating contract# in each of the maBor
geographical area# 3i&e&* the 9ennedy Space "enter in Florida* Mar#hall Space Flight
"enter in !labama* and =ohn#on Space "enter in Te+a#-* each managed by a prime
contractor with continued 6!S! program management&
30- "on#olidate operation# under a #ingle'bu#ine## entity&
The team concluded that con#olidating operation# under a #ingle'bu#ine## entity wa# the
mo#t advantageou#& Thi# #ingle'bu#ine## approach i# a change from the pre#ent one of
government control with indu#try re#pon#e to that of government direction with indu#try
operation&
The multi'node approach po##e##e# #ome of the #ame feature# that cau#e the pre#ent
#y#tem to be cumber#ome and e+pen#ive& >oth option# 31 and /- do not provide the
centrali$ation of control nece##ary to eliminate duplication* the di#engaging of 6!S! from
day'to'day direction nece##ary to reduce re7uirement#* and the incentive# nece##ary to
motivate co#t reduction& :ne of the critical deficiencie# in today%# program management*
and one that the multi'node approach al#o #uffer# from* i# the lac8 of a #ingle re#pon#ible
agent among all of the contractor# #upporting the program& !# a re#ult* no one entity feel#
the total re#pon#ibility for the #huttle operation* therefore* no advocate e+i#t# for overall
co#t reduction& Thi# deficiency i# the maBor fault with both the current program #tructure
and the multi'node concept&
Several different #ingle'bu#ine## approache# were di#cu##ed with the prime contractor
option con#idered the mo#t achievable and practical& :ther concept#* including a bu#ine##
con#ortium* Boint venture* and government owned'contractor operated 32:":-
arrangement* involve comple+itie# that are difficult to overcome in any rea#onable period
of time& In addition* #electing a prime contractor from among the current contractor#* a#
oppo#ed to an open competition* could accompli#h all of the obBective# in a le## di#ruptive
and more e+peditiou# manner* reali$ing potential co#t reduction# more 7uic8ly&
The propo#ed #ingle'bu#ine## management #y#tem will re7uire a #teadfa#t commitment
from both 6!S! and the aero#pace indu#try to en#ure #ucce##& 6!S! mu#t be willing to
define clear #huttle operating re7uirement# with limited over#ight& The prime contractor
mu#t be willing to a##ume re#pon#ibility for #afe and productive operation#& Thi# re7uire#
the a##ignment of competent and e+perienced people at all level# and the direct attention
of top management& For it# commitment* the contractor mu#t be rewarded with appropriate
incentive fee#& The government in'turn mu#t provide #imilar talent in program management
and a guarantee that the contractor will not be encumbered with burden#ome and
unnece##ary over#ight&
The new management approach will re7uire the following immediate action#,
31- Free$e the current vehicle configuration* minimi$ing future modification#* with #uch
modification# delivered in bloc update#& Future bloc update# #hould implement
modification# re7uired to ma8e the vehicle more re'u#able and operational&
3/- Perform a re7uirement# review* top down* with the goal of #ignificantly reducing
chec8out and other re7uirement# ba#ed upon operation# e+perience&
30- "on#olidate and reduce program and proBect element#* limiting 6!S! involvement in
operation# and minimi$ing 6!S!'contractor interface#&
35- Re#tructure and reduce the overall Safety Reliability and Fuality !##urance 3SRGF!-
element#'without reducing #afety&
35- Streamline payload proce##ing and integration* minimi$ing co#t# and reducing the
length of time re7uired to integrate a payload aboard the #pace #huttle&
3C- Structure operational contract# to provide real incentive to reduce co#t# while
accompli#hing #afe and #ucce##ful mi##ion#&
3D- !llow the hiring of 6!S! per#onnel by the prime and #ubcontractor# to en#ure proper
e+perti#e and talent# e+i#t to continue with #afe and #ucce##ful operation#&
:ne of the maBor #tipulation# to achieve co#t reduction i# to free$e the pre#ent #huttle
configuration and perform only tho#e change# re7uired to carry out the individual flight#&
"urrently* change and update are continual and perva#ive at all level# of the program and
#ei$e a #ignificant amount of attention* focu#* and re#ource#& To become an operational
program* the #huttle configuration mu#t be more #table& To aid in the tran#ition proce##*
the pre#ent 6!S! management #y#tem would complete the development of pre#ently
approved change# and then be pha#ed out&
!dditionally* turnaround* launch* and mi##ion re7uirement# #hould be dimini#hed ba#ed on
operational e+perience& "urrently* for the orbiter alone* appro+imately 15) hardware
pac8age changeout# are performed between each flight. yet an average of only 1) in'flight
anomalie#* mo#t of which are incon#e7uential* occur during each mi##ion& Maturation of
the vehicle chec8out re7uirement# ha#* clearly* not 8ept pace with the vehicle hardware*
and redundant #ub#y#tem# are not being u#ed to provide operational fle+ibility&
:nce the new management #tructure i# in place* efficiencie# can be reali$ed through the
con#olidation* reduction* and elimination of function#& Thi# will be a challenging ta#8
con#idering the diffu#e #tate of the current 6!S!'contractor #tructure& 4uplication and
overlap have developed throughout the program&
:ne of the mo#t apparent e+ample# in thi# regard i# the area of SRGF!& !# a re#ult of the
"hallenger incident* a H#afety #hieldH philo#ophy ha# evolved creating a difficult
management #ituation& Manager#* engineer#* and bu#ine## people are reluctant to ma8e
deci#ion# that involve ri#8 becau#e of the fear of per#ecution& !# a re#ult* a parallel and
independent SRGF! element ha# grown to large proportion#& Thi# i# not only #ignificant
with re#pect to direct co#t#* but ha# an even greater impact when #upporting effort# are
included& Re#tructuring and #treamlining SRGF! throughout the Shuttle Program*
maintaining only the nece##ary chec8# and balance#* mu#t be accompli#hed to achieve
#ignificant co#t reduction&
!# the Shuttle Program tran#ition# to an operational program* payload proce##ing mu#t be
#treamlined* with an a##ociated reduction in co#t and length of time re7uired to integrate a
payload& !# thi# ta8e# place* payload operation# mu#t change from Hdefen#iveH to more
cu#tomer'oriented& Toward thi# end* payload operation# would become an integral part of
mi##ion and launch operation# with attendant #treamlining of organi$ation#* people* and
procedure#&
To a##ume greater operational re#pon#ibility and ri#8* it will be nece##ary to provide the
contractor with the opportunity to reali$e a profit& Proper contract incentive# will be needed
to en#ure the contractor team perform# the nece##ary #tep# to reduce co#t& 2reater and
longer term #haring of co#t #aving#* along with appropriate penaltie# for marginal
performance* will be re7uired to provide the contractor with the motivation to #ignificantly
reduce co#t# while maintaining #afe and #ucce##ful operation#&
Finally* en#uring the 6!S!'contractor team ha# the e+perti#e re7uired to operate the
#huttle i# of #ignificant concern& In the pre#ent aero#pace indu#try* it may be difficult to
a##emble all of the nece##ary talent and re#ource# to a##ume the re#pon#ibility for #huttle
operation#& Therefore* initially* thi# will re7uire private indu#try to hire 6!S! per#onnel
andIor utili$e #pecific government engineering organi$ation# with critical #8ill# until the#e
#8ill# can be developed from within& It i# al#o important when con#tructing the contractor
team to recogni$e current e+perti#e that ha# already been developed& !n e+ample of thi#
i# in the area# of orbiter ob#ole#cence and #u#taining engineering where #pecific e+perti#e
and e+perience i# nece##ary to continue to operate the vehicle& >uilding the 6!S!'
contractor team will re7uire #pecial attention to the#e type# of i##ue#&
The tran#ition proce## will entail the development of a program office by the #elected
prime contractor& The pre#ent 6!S! program and proBect office# would be u#ed to aid the
prime contractor through the initial development of thi# new operating concept& !# the
contractor#% #8ill# mature* they would continually a##ume greater re#pon#ibility& The team
believe# thi# tran#ition #hould be e+pedited with the overall tran#ition time dependent on
the #pecific #huttle element* the techni7ue# employed by 6!S! to rearrange the
contractual re#pon#ibility* and the commitment by all partie# to bring about the#e
#ignificant change#&
I6TR:41"TI:6
"harter
In 6ovember 1995* the 6!S! !dmini#trator a#8ed 4r& "hri#topher "& 9raft to form a team
of individual# e+ternal to the agency to evaluate the re#ource# being e+pended on the
Space Shuttle Program& The team wa# chartered to apprai#e the current #et of proce##e#
u#ed in performing #huttle operation# at the =ohn#on* 9ennedy* Mar#hall* and Stenni#
#pace center#* and to recommend alternative operational concept# that could #ignificantly
reduce operating co#t#& !dditionally* the team wa# a#8ed to develop an approach that
would aid in the tran#ition of agency function# to any new organi$ational andIor
management #tructure# propo#ed&
The Shuttle Management Review Team formed by 4r& 9raft compri#ed aero#pace
e+ecutive#* bu#ine## leader#* and former 6!S! official#&
They were,
4r& "hri#topher 9raft* Team "hairman*
Former 4irector of the =ohn#on Space "enter
"ol& Fran8 >orman*
Former a#tern !irline# chief e+ecutive officer and retired a#tronaut
2eorge =eff#*
Former pre#ident of Roc8well International%# 6orth !merican !ero#pace :peration#
Robert <ind#trom*
Former #enior vice pre#ident and general manager for Space :peration# at Thio8ol
"orporation and retired manager of the Space Shuttle ProBect# :ffice at Mar#hall Space
Flight "enter
Thoma# Mault#by*
@ice pre#ident of 2eneral Re#earch "orporation and former #enior 4epartment of 4efen#e
repre#entative to 6!S! Eead7uarter#
I#om Rigell*
Former vice pre#ident* Florida :peration# for 1nited Space >oo#ter#* Inc&* and retired
director* #huttle payload# and former director* launch vehicle operation# at the 9ennedy
Space "enter
:bBective#* Scope* and Methodology
The focu# of the team wa# to
31- 4etermine how the #huttle operation# budget i# being utili$ed&
3/- 4etermine the maBor co#t driver# to the principal function# within the Shuttle Program&
30- 4evelop a new model or concept for #huttle operation# with the potential for
#ignificantly reducing operating co#t#& 35- 4efine a tran#ition approach to move the agency
to the new operation# concept&
The team limited it# #cope to the Shuttle Program* con#idering the International Space
Station Program only when it wa# driving #huttle re7uirement#&
To meet the #tated obBective#* the team
31- Eeld review# with each of the organi$ation# performing a maBor function within the
Shuttle Program at =ohn#on* 9ennedy* and Mar#hall #pace center#&
3/- Tal8ed with 6!S! and contractor per#onnel directly involved in performing or
managing #huttle operation#&
30- Met with the chief e+ecutive officer* or hi# repre#entative* of each of the maBor Shuttle
Program contractor# to di#cu## idea# for the new #huttle operation# concept&
35- Reviewed a #ummary of the finding# of the Space Shuttle Functional ;or8force
Review* =ohn#on Space "enter Team# for <evel I@ :rbiterIMi##ion :peration#
4irectorateIngineering 4irectorate&
The team%# detailed activitie# and proceeding# are included a# !ppendi+ >&
:>SR@!TI:6S
Throughout the review* the Space Shuttle Program wa# found to be #ucce##ful* operating
a mature and reliable vehicle& The Shuttle Program ha# performed more than C5
#ucce##ful flight#* delivering it# varied complement of payload# to orbit and accompli#hing
nearly all of it# mi##ion obBective#& The performance of the machine a# a #pace
tran#portation #y#tem ha# been remar8able given the difficult operating condition# and
management environment& The preflight operational part# of the program are e+cellent in
delivering* preparing* a##embling* and readying the vehicle for flight& :ptimal flight de#ign#
and plan# are developed and e+ecuted for diver#e and comple+ payload operation#& "rew
and flight controller readine## for both nominal and contingency operation# are
unmatched& :ver the la#t #everal year#* while performing #even to eight flight# per year*
the Shuttle Program ha# continued it# #ucce##ful performance while incrementally
reducing operating co#t# by appro+imately /5 percent&
Aet* with all of it# accompli#hment#* the program remain# in a 7ua#i'development mode
with the a##ociated overhead and e+pen#e#& It continue# to operate with large program
and #upport function# #upported by a bevy of contractor#& <arge maintenance and
operation# effort# are re7uired to #upport the proce##ing and operation# facilitie# at the
variou# center#& The continuou# review proce## u#ed to bring about reduction# in
operating co#t# ha# had a material effect on morale and cau#ed management fru#tration#
becau#e of a lac8 of an overall plan* clearly defined goal#* and ri#8 ta8ing fle+ibility
delegated to manager#& Significant re#ource# are e+pended on managing and
coordinating many element# and their a##ociated contract#* each being driven and
influenced by diver#e factor#&
The current #tructure ma8e# it difficult to implement change# to achieve the potential
operational efficiency and minimum co#t of the #y#tem& Thi# ha# re#ulted in over'e+ten#ive
re7uirement#* overlapping engineering #upport* and comple+ payload proce##ing& Further
problem# are evident in the #afety environment* contract management culture* and 6!S!'
contractor #tructure&
Re7uirement# 4riven Sy#tem
The large number of vehicle proce##ing and turnaround re7uirement# remain# driven by
the philo#ophy* #tructure* and focu# typical of a development organi$ation& ;hile
numerou# efficiencie# have been reali$ed* proce##ing re7uirement# and labor hour#
remain 7uite high& In the pa#t 5 year#* operational maintenance re7uirement# and
#pecification# have decrea#ed from appro+imately 11*))) to (*)))* while labor hour# per
vehicle proce##ing have decrea#ed from about 1*)))*))) to D5)*)))& >oth advancement#
are #ignificant& The program* however* remain# encumbered by thi# cyclical proce## of
re7uirement #tipulation and e+ecution& !t the core of thi# large number of re7uirement#
e+i#t# the inherent developmental re7uirement# philo#ophy of the program* the continual
te#ting and analy#i# re7uirement#* and the ever'changing vehicle hardware and #oftware&
The #y#tem# redundancy and turnaround re7uirement# philo#ophy for operating the
#huttle ha# changed little #ince the beginning of the program& The #huttle wa# de#igned
with two* three* and #ometime# even four level# of #ub#y#tem redundancy& ;hile in the
early #tage# of the program thi# redundancy wa# u#ed for #afety& it wa# intended that a#
operational e+perience wa# attained that #ub#y#tem redundancy would al#o be u#ed for
operational fle+ibility& It i# clear thi# progre##ion ha# not occurred #ince launch con#traint#
#till re7uire that the #huttle launch with very few anomalie# and ground te#ting i# routinely
performed on much of the hardware* even if it performed flawle##ly on it# previou#
mi##ion& !# a re#ult* each redundant element continue# to be verified every time a vehicle
i# prepared for flight* re#ulting in a large and inva#ive #et of turnaround re7uirement#& In
addition* the current practice of adding non'mandatory chec8out re7uirement# by piggy'
bac8ing on other wor8 further burden# and complicate# the turnaround proce## and
#ubBect# the hardware to additional and unnece##ary operation& !# a re#ult of thi# proce##
appro+imately 15) hardware pac8age changeout# are performed each time the orbiter i#
prepared for another flight. yet an average of only 1) in'flight anomalie#* mo#t of which are
incon#e7uential* occur each mi##ion& "learly& the program%# re7uirement#'ba#ed
philo#ophy ha# not matured with the vehicle hardware and the maBority of hardware
lifetime i# unnece##arily being e+pended on ground te#ting and chec8out&
!dditionally* the ba#eline chec8out re7uirement# are #upplemented by numerou# te#ting
and analy#i# re7ue#ted by the large engineering pre#ence in the #y#tem& Rather than
being dealt with in a return'to'print fa#hion* too many di#crepancie# re#ult in detailed
analy#i# and te#ting throughout the program and by the vendor& ;hile thi# i# appropriate
for developmental hardware* a demon#trated hardware capability re7uire# thi# type of
te#ting and analy#i# much le## fre7uently& Aet with the over'abundance of engineer#
di#tributed throughout the program* there i# a tendency for their function to become #elf'
fulfilling* routinely creating an inordinate amount of analy#i#* te#ting* replacement* and
tear'down re7uirement#&
Finally* many re7uirement# re#ult from a fre7uently changing vehicle configuration* both
hardware and #oftware& @ehicle hardware change# are being implemented in a continuou#
and piecemeal fa#hion with #oftware change# delivered in the form of yearly operational
increment#& !# an e+ample* more than /) different vehicle modification# are currently in
wor8 to gain 10*))) lb& of additional performance to #upport #pace #tation mi##ion#& Many
of the#e performance enhancement# have a##ociated modification# to both hardware and
#oftware& Eardware and #oftware change# have a ca#cading impact on the entire program*
including turnaround re7uirement#* operating procedure#* #upport documentation* crew
training* and ground #y#tem change#& "hange and update are continual and perva#ive at
all level# of the program and re7uire #ignificant attention& focu#& and re#ource#&
!ll of the#e condition# are typical of a re#earch and development program with an
immature vehicle configuration& Aet after C5 #ucce##ful launche# and over a year of in'
flight time* mo#t #huttle #y#tem# have demon#trated out#tanding performance* certainly
worthy of reducing the abundance of routine re7uirement#& ! #ignificant reduction in
operational co#t cannot occur without addre##ing the numerou# re7uirement# and the
many faction# which drive them&
"ontract Proliferation and :verlap
There are a va#t number of #upport* engineering* proce##ing* and production contract# of
varying #i$e# and comple+itie# within the Shuttle Program& Table# li#ting #ome of the
larger contract# and their a##ociated contractor# and co#t# acro## the program i#
pre#ented in !ppendi+ "& The#e table# demon#trate the #cope of what mu#t be dealt with
in con#olidating and reducing the total number of contractor#& Many of the larger contract#
have team member# a# well a# prime contractor#* and #ome of the production contract#
have numerou# maBor #ubcontractor# and directed #ubcontractor#& "on#olidation or
elimination of overlapping contract# and function# acro## contract# mu#t be con#idered if
6!S! i# to further reduce co#t#&
From thi# comple+ contractor #tructure* multiple and overlapping engineering analy#i#
organi$ation# have evolved& The#e organi$ation# e+i#t at the three maBor center# a# well
a# within the program and proBect office#& For e+ample* the =ohn#on Space "enter ha# a
large engineering* te#t* and analy#i# contract within the ngineering 4irectorate that
#upport# cargo integration. payload #afety engineering. flight'to'flight guidance* navigation*
and control. and analy#i# of integrated flight #y#tem# and performance upgrade# to the
vehicle& <i8ewi#e* the #upport contractor to the Sy#tem# and "argo ngineering :ffice in
the Shuttle Program :ffice i# re#pon#ible for managing the payload and integrated
#y#tem# #afety proce## and the integrated vehicle a#cent de#ign criteria and defining and
managing the integration of new capabilitie# and performance enhancement development
to #upport the Space Station&
!t the 9ennedy Space "enter* numerou# organi$ation# perform engineering analy#i# on
the orbiter* e+ternal tan8* #olid roc8et boo#ter* #olid roc8et motor* and main engine#& The
proBect office# contain group# of engineering effort# that trac8 the progre## of their
re#pective element# through the proce##ing flow and monitor the integration effort of the
#huttle proce##ing contract& Problem# that ari#e during proce##ing or a mi##ion on any one
of the #huttle element# bring# an inordinate amount of attention from the engineering
faction# within the proBect office* Shuttle Proce##ing "ontract and de#ign center
organi$ation#&
Payload Proce##ing
!lthough the #huttle i# attractive to potential cu#tomer# becau#e of it# reliability and
mi##ion #ucce## record* 6!S!%# philo#ophy regarding payload proce##ing can be
de#cribed a# nearly an aver#ion to carrying payload#& !# a re#ult& the Shuttle Program ha#
developed a philo#ophy of compliance ver#u# one of advocation'a philo#ophy that i# not
cu#tomer oriented& >ecau#e of thi# philo#ophy* a myriad of #afety re7uirement# i# levied
on cu#tomer# in the area# of electrical* pyro#* propellant#* data #y#tem#* vibration#*
acou#tical* #tructural* thermal* MI* contamination* etc& The#e e+ten#ive and infle+ible
re7uirement# have a #ignificant impact on the de#ign and integration of onboard payload#*
including the a##ociated development* te#ting* and analy#i#&
!dditionally* payload# are currently re7uired to be introduced into the flow well over a year
prior to launch& ;hile thi# i# a #ignificant improvement over #everal year# ago* the
integration template remain# diffu#e and comple+ with many interdependencie# between
the function# of cargo engineering* flight de#ign* #imulation development* and #afety
evaluation& "ontinuing to #implify* compact* and tailor the integration template will be
re7uired to ma8e the program more efficient in proce##ing payload# and more attractive to
cu#tomer#&
Relation#hip >etween Program and "enter Management
Program management in 6!S! ha# undergone a number of change# over the pa#t /5
year#'change# that have evolved into i#olation from center management& arly in the
Mercury Program* the number of 6!S! people wa# relatively #mall and the de#ignation of
re#pon#ibility wa# ea#y and #traightforward& !# the program# grew* however* the addition
of larger organi$ation#* functional group#* diver#e re#pon#ibilitie#* and multiple program
#upport were re7uired& The center# involved adopted the traditional matri+ management
#tyle prevalent in the aero#pace indu#try& Thi# allowed both 6!S! and it# contractor# to
function together with a complete under#tanding of each other%# way of doing bu#ine##*
and in particular* the deci#ion'ma8ing proce##& 6!S! Eead7uarter# e#tabli#hed a wor8ing
relation#hip with the center# ba#ed on thi# organi$ational #tyle* and it functioned e+tremely
well throughout the !pollo and early Space Shuttle Program#&
The po#t'"hallenger organi$ation modified thi#* and the advent of the Space Station
re#ulted in further change# that have generated confu#ion within and among 6!S!
Eead7uarter#* the center#* and the contractor# a# to re#pon#ibility and deci#ion ma8ing& It
i# now increa#ingly difficult for center management to provide the cla##ical technical input#
to program management and to provide the cu#tomary chec8# and balance# that were
e##ential in previou# program#& In addition* the lac8 of a #trong and effective interface
between program and center management can lead to duplication of re#ource#* #ince the
program may develop a capability or technical e+perti#e that already e+i#t# within the
center&
Fortunately* the pre'"hallenger tradition# of the Shuttle Program :ffice have continued to
allow rea#onable center input# and rational deci#ion ma8ing. however* the clo#e wor8ing
relation#hip# of the pa#t between center and program management are in decline and
need rebuilding& :f greate#t concern in thi# area i# the Space Station Program& ;hile the
team did not loo8 at thi# program in any depth* the #ituation de#cribed* almo#t univer#ally
by the engineering #taff* wa# that the management #tyle and #tructure of the Space
Station Program wa# creating problem# and fru#tration& Specifically* they found it difficult
to provide engineering input# and to ma8e #ugge#tion# relative to de#ign* operation#* co#t
#aving#* or le##on# learned& Thi# trend toward i#olation of program management from
center management i# of concern to the review team& Recently* the 6!S! !dmini#trator
ha# ta8en #ome #tep# to rectify thi# #ituation* but the re#ult# of the management #tyle
followed in the la#t 1) year# will ta8e time to change and the programmatic effect# have to
be re#olved&
Safety nvironment
The "hallenger incident created a #afety environment in 6!S! that i# duplicative and
e+pen#ive& !fter the accident in 19(C* #ignificant growth of the SRGF! element too8
place& ! corre#ponding increa#e in over#ight throughout the entire program followed&
Recent #tudie# have #hown that the number of people a##ociated with the SRGF! effort
may be a# great a# 5))) and co#t in e+ce## of J05) million& The H#afety #hieldH that ha#
been built ha# created a difficult management #ituation& Manager#* engineer#* and
bu#ine## people are reluctant to ma8e deci#ion# that involve ri#8 becau#e of the fear of
per#ecution& Safety i# one of tho#e term# that can be u#ed to hide behind and prevent
nece##ary change and innovation&
Thi# i# not to #ay that #afety and reliability are to be ignored& Euman #paceflight i# an
inherently ri#8y bu#ine##. yet the#e ri#8# can be managed effectively& The Shuttle Program
ha# been #ucce##ful becau#e the live# of the a#tronaut# are in the mind of every wor8er in
the program& The environment created by thi# attitude i# what ha# produced the marvelou#
hardware and #oftware #y#tem# that fly in #pace today& Thi# #ucce## i# not the re#ult of an
inordinate amount of over#ight nor a paper world that ha# been #et up to provide an
illu#ory #en#e of #ecurity& Indeed* the #y#tem u#ed today may ma8e the vehicle le## #afe
becau#e of the lac8 of individual re#pon#ibility it bring# about&
The management change# propo#ed in thi# report will mo#t certainly be critici$ed by the
#tatu# 7uo a# a threat to #afety& Many people who are accu#tomed to the pre#ent
cumber#ome techni7ue# that have developed in the #huttle era will hide behind the H#afety
#hield&H The challenge lie# in re7uiring 6!S! and it# contractor# to totally revamp the#e
e+pen#ive habit# and #till operate a #afe and reliable vehicle&
"ontract Management "ulture
The heritage of 6!S! by way of 6!"! i# ba#ed on technical competence* invention and
8nowhow& There i# no airplane flying or #pace vehicle orbiting that doe# not po##e## #ome
7uality or form that wa# provided by the ingenuity of 6!"!I6!S!& The early day# of
aviation* li8e the early day# of #paceflight* benefitted immea#urably by the unerring
re#earch and development capabilitie# of an organi$ation dedicated to e+cellence&
Former Senator Pro+mire* in a #peech on the Senate floor* once #aid that even though he
didn%t agree with #pending the ta+payer#% money on #ome thing# that 6!S! wanted to do*
he recogni$ed that 6!S! wa# the be#t run agency in the government& The reputation and
integrity of an in#titution #uch a# 6!S! i# a commodity that #hould be pre#erved&
;hen 6!S! wa# e#tabli#hed by government charter in 195(* 6!"! wa# the nucleu#
around which the new #pace agency wa# built& 6!S!%# new a##ignment# at that time
re7uired hiring a large number of new people& >ecau#e of the demand for e+perienced
engineer# and #cienti#t#* 6!S! found it nece##ary to contract for #ome of the#e people
from the aero#pace indu#try The 6!S!'indu#try team that re#ulted wa# re#pon#ible for
building the new hardware and producing the vehicle# nece##ary to begin the e+ploration
of #pace& !# in any maturing organi$ation* the u#e of thi# contract proce## a# an e+pedient
ha# flouri#hed and become a part of the normal way of doing bu#ine## at 6!S!* even at
the #o called re#earch center#&
;ith the pa##ing of 0)'plu# year#* 6!S! ha# become more and more a contract
management agency and le## and le## an agency who#e people are noted for their
technical prowe##& Thi# #tatement i# not a new revelation and ha# been #po8en and
written by a number of pa#t 6!S! !dmini#trator# and leader#& :ne highly regarded 6!S!
#cienti#t recently put it thi# way, HPeople u#ed to come to 6!S! for information* now they
come for a contract&H Thi# i# pointed out not to lamba#te 6!S!* but to empha#i$e the need
to re#tore that internal technical e+perti#e* continuing the tradition# 6!S! ha# been
recogni$ed for and allowing the aero#pace indu#try to do the #ame&
6!S!'"ontractor Structure
Many inefficiencie# and difficultie# in the current Shuttle Program can be attributed to the
diffu#e and fragmented 6!S! and contractor #tructure& 6umerou# contractor# e+i#t
#upporting variou# program element#* re#ulting in ambiguou# line# of communication and
diffu#ed re#pon#ibility& Thi# type of fragmented #tructure and contract management
provide# little promi#e for #ignificant co#t reduction#& !# a re#ult* budget reduction# tend to
be directed from above in#tead of co#t #aving# identified from below&
In #uch an organi$ation* neither 6!S! nor the contractor# are provided the environment or
motivation to ma8e #ignificant change# to reduce co#t& :n the contrary* 6!S! and it#
contractor# are both internally driven to increa#e re#pon#ibilitie#* create new function#* and
ac7uire larger budget#& Thi# lend# it#elf to the creation of overlapping ta#8# and the
development of redundant capabilitie#& The Shuttle Program mu#t devote a #ignificant
amount of time and re#ource# to contract management and contractor integration*
arbitration* and conciliation& "oordinating between the 6!S! organi$ation# and
contractor# Bu#t to accompli#h daily operation# become# a #ignificant ta#8& Introducing
change to eliminate inefficiencie# tend# to be fru#trating and reBected by many partie#&
ven though many of the contract# are #tructured with award fee#* mo#t contract# fail to
motivate the contractor to #ignificantly reduce co#t#& >a#e and award fee# tend to be
relatively high with little inve#tment made or ri#8 ta8en by the contractor& ;hile co#t
reduction# might a##ure a onetime award fee* they reduce the contract ba#e on which the
fee for all future year# i# determined& Thi# i# different from private indu#try where profit and
co#t directly motivate the proce##* with co#t #aving# rewarded every year they are
reali$ed&
To ma8e #ignificant reduction# in co#t* the e+perti#e of identifying and implementing
#pecific idea# mu#t come from 6!S! and the contractor& In#tead of ma8ing detailed
#pecific co#t #aving recommendation#* the review team provide# in the remainder of thi#
report a 6!S!'contractor program #tructure and a##ociated environment that will enable
and motivate the Shuttle Program to apply it# e+perti#e and identify and implement #uch
efficiencie#&
R":MM64!TI:6S
2iven the current #tructure and condition of the Space Shuttle Program* it i# the
conclu#ion of thi# independent review team that #ignificant additional reduction# in co#t will
be difficult without a new and innovative approach& Thi# new approach mu#t tran#ition the
current program to a more operational program and introduce co#t'effective operation# a#
a primary goal& To achieve thi# goal* a new 6!S! and contractor management #tructure
will be re7uired& Thi# new #tructure mu#t provide greater contractor re#pon#ibility for
#tandard and daily operation#* enabling 6!S! to pur#ue new opportunitie# in #pace
e+ploration& In addition* a number of condition# will be re7uired to enable thi# new
#tructure to overcome many of the impediment# of the current program and reali$e
numerou# efficiencie#&
Therefore* it i# the conclu#ion of thi# independent review team that the Shuttle Program
#hould
31- #tabli#h a clear #et of program goal#* placing a greater empha#i# on efficient
operation# and payload integration&
3/- Redefine the management #tructure* #eparating development and operation#* and
di#engaging 6!S! from the routine operation of the #pace #huttle&
30- Provide the nece##ary environment and condition# within the program to pur#ue the#e
goal#&
>a#ed upon the maturity of the #huttle #y#tem* now i# an opportune time for a change in
management #tructure& The review team ha# found a #table* high performing wor8 force*
including the contractor ba#e& "ontractor performance rating# indicate their proficiency at
performing the re7uired ta#8#& The #huttle ha# flown over C5 flight# in the la#t 10 year#
accumulating more than a year of flight time while e#tabli#hing a large databa#e and
reducing hardware problem#& Flight anomalie# have declined to a near in#ignificant level&
Te#t and proce##ing procedure# have #tabili$ed& !# a re#ult of the#e favorable condition#*
the opportunity to #ignificantly reduce co#t# by tran#itioning to an operational program with
reduced 6!S! involvement can and #hould be e+erci#ed at thi# time&
Space Shuttle Program 2oal#
Recommendation 1, #tabli#h a more balanced #et of goal# for the Shuttle Program* with
a greater empha#i# on reducing operational co#t# and ma8ing payload integration more
u#er friendly& The following goal# provide a better balance between operation# and #afety*
and addre## the overall 6!S! obBective of reducing the co#t of acce## to #pace&
1& Perform #afe #pace #huttle operation# while accompli#hing mi##ion obBective#&
/& Reduce the co#t of #pace #huttle operation#&
0& Provide u#er'friendly payload integration&
The Shuttle Program ha# #ucce##fully maintained flight #afety while accompli#hing mi##ion
obBective#. however* #treamlined #pacecraft operation# and u#er'friendly payload
integration need# to be pur#ued more vigorou#ly& ! more balanced approach in pur#uing
the above goal# will re7uire the program to ma8e co#tIri#8 evaluation#& "areful
con#ideration will need to be given to all change# and their down#tream ramification# to
overall operation of the #huttle& Future change# to the #huttle #hould not only be made to
enhance operation#* but al#o* a# re7uired* to te#t future technologie#& !ll level# of the
program need to pur#ue co#t'efficient operation# and u#er'friendly payload integration with
the #ame vigor a# #afe and #ucce##ful flight#&
Space Shuttle Program Management Structure
Recommendation /, Modify the program%# management #tructure* #eparating development
from operation# and relin7ui#h the maBority of the operational re#pon#ibility to a prime
contractor&
To be#t meet the program goal#* a new innovative management #tructure* #eparating
development from operation#* and tran#itioning the maBority of operation# re#pon#ibility to
indu#try mu#t be made& 6!S! interface# on the daily repetitive operation# of the #pace
#huttle can be minimi$ed and the contractor* given the proper incentive* will have the
opportunity to eliminate non'e##ential effort&
Management Structure :ption# "on#idered
! number of 6!S!'contractor management concept#* including the current #tructure* were
e+amined&
:ption 1, Maintain the current program #tructure continuing the incremental reduction
empha#i#&
:ption /, Implement a multi'node #y#tem that brea8# the program into #everal 3two or
three- part#* each managed by a prime contractor with continued 6!S! program
management&
:ption 0, "on#olidate operation# under a #ingle'bu#ine## entity&
The review team identified the #ingle'bu#ine## entity approach a# the mo#t advantageou#&
:ption 1 would allow 6!S! to continue to pur#ue con#olidation and elimination of
function# and thereby decrea#e the many 6!S!'to'contractor interface#& 6!S! would
need to #ignificantly reduce the e+ce##ive #afety element& Thi# would be followed by
reducing re7uirement# ba#ed on the vehicle%# reliable and redundant capabilitie# for
operational fle+ibility&
The review team determined that while conceptually thi# approach may be po##ible* in
practical term# the motivational and management difficultie# could not be fully re#olved&
;ith thi# type of #tructure* the combined 6!S!'contractor organi$ation i# not uniformly or
directly motivated to #ub#tantially reduce co#t#& "o#t reduction# will become increa#ingly
more difficult to accompli#h within the civil #ervice #ince further co#t efficiencie# will
primarily come from human re#ource#* and people are generally not motivated to eliminate
their own Bob#& Similarly* contractor# have #uperficial incentive to reduce co#t#* in that it i#
more to their advantage to maintain a# large a ba#e a# po##ible rather than ma8ing
#ignificant cut# to reali$e a #hort'lived award fee& Thi# type of overall #tructure* which
promote# numerou# interface# between 6!S! and the contractor* re7uire# #ignificant
overhead& Identification and elimination of overlapping and unnece##ary function#
become# controver#ial and difficult for 6!S! to re#olve&
Finally* the review team believe# that an underlying goal of 6!S!%# #hould be one of
technology development followed by the tran#fer of thi# technology to private indu#try& Thi#
allow# 6!S! to move on to future technology development and other #pace e+ploration
venture#& 2iven #uch a charter* and the current maturity of the vehicle* the approach for
the Shuttle Program #hould be to permit di#engagement of 6!S! from daily operation#&
:ption / would create two or three di#tinct primary contractor#& Several different multi'
node approache# were con#idered* including a divi#ion #imilar to the Mar#hall* 9ennedy*
and =ohn#on function# of today& In a dual'node approach* one contractor node would be
re#pon#ible for launch operation#* including receiving* a##embling and preparing all
hardware& The other node would be re#pon#ible for mi##ion and crew operation#* along
with payload integration&
:ne of the critical deficiencie# in today%# program management* and one that the multi'
node approach al#o #uffer# from* i# the lac8 of a #ingle re#pon#ible agent among all of the
contractor# #upporting the program& !# a re#ult* no one entity feel# the total re#pon#ibility
for the #huttle operation. therefore* no advocate e+i#t# for overall co#t reduction& Thi#
deficiency i# the maBor fault with the two node concept& That i#* thi# concept re7uire#
6!S! to maintain the co#tly interface management at all level# of the program and
preclude# the large co#t #aving# the team believe# will be achieved by integrating the
myriad of activitie# that #pan all of the #upport contract#&
;hile 6!S!'to'contractor interface# could be reduced in thi# approach and co#t
efficiencie# reali$ed within each node* 6!S! would #till be re7uired to perform a #ignificant
integration and mediation function between the node#& Thi# would ma8e it difficult to
reali$e efficiencie# acro## the node#'a 8ey area where overlap e+i#t# today and i# li8ely to
endure& In addition* thi# option would fo#ter an adver#arial relation#hip between center#
and their re#pective contractor organi$ation#&
!ttempting to u#e thi# concept a# an intermediate #tep to a #ingle'bu#ine## approach
would elongate the tran#ition time* providing a greater potential for not achieving the final
re#ult and unnece##arily delaying many co#t reduction#&
:ption 0 con#olidate# all program operation# under a #ingle'bu#ine## entity* #uch a# a
prime contractor& Thi# option lay# the groundwor8 for increa#ing the contractor# role and
re#pon#ibility in the Shuttle Program* allow# the contractor to focu# on #huttle operation#*
and provide# for a more direct introduction of profit motive and co#t reduction& ;hile thi#
approach i# the greate#t departure from the pre#ent #y#tem* if properly #tructured and
#taffed* it hold# the greate#t potential for cutting co#t# by con#olidating* minimi$ing
government'contractor interface#* and giving the contractor the incentive and authority to
reali$e efficiencie#& In addition* thi# approach #upplie# the advantage of providing a #ingle
#trong indu#try advocate for the Shuttle Program&
The challenge# of thi# option lie in continuing #afe and #ucce##ful operation# during the
tran#ition period and the initial #tage# of delegating much of the re#pon#ibilitie# to the
#ingle'bu#ine## entity& The fundamental premi#e# of thi# option are
31 - Separation of the operation# function# from the development activitie# within the
program&
3/- levation of the 6!S!'contractor interface to the program level to di#engage 6!S!
from daily operation# activitie# and empower the contractor to a##ume thi# re#pon#ibility&
30- 4evelopment of a contract #tructure to incentivi$e the contractor to reduce operation#
co#t while maintaining #afety of flight and mi##ion #ucce##&
Several different #ingle'bu#ine## approache# were con#idered with the prime contractor
option con#idered mo#t attractive& :ther concept# included a bu#ine## con#ortium* Boint
venture* and government owned'contractor operated 32:":- arrangement& It became
evident that the con#truction of a Boint venture or bu#ine## con#ortium would be difficult to
achieve in any rea#onable length of time* if it could be achieved at all&
>ecau#e the prime contractor approach doe# not #uffer from the#e detriment#* the team
concluded that it wa# the mo#t achievable and practical approach& In addition* #electing a
prime contractor from among the current contractor#* a# oppo#ed to an open competition*
could accompli#h all of the obBective# in a le## di#ruptive and more e+peditiou# manner*
reali$ing potential co#t reduction# earlier&
Prime "ontractor "oncept
The ba#ic feature of thi# new program #tructure #eparate# development from operation#
and ultimately ha# mo#t of the 6!S!'to'contractor interface at the program office level&
Mo#t of the operation# will be the re#pon#ibility of the prime contractor with minimal 6!S!
involvement and interface&
"urrent hardware and #oftware development would continue to be a 6!S! function with
future developmental modification# con#idered and evaluated to improve operation#*
provide additional capabilitie# a# needed* or te#t and develop new technologie# to be
integrated into the program& The deputy program manager will utili$e center re#ource#*
including #mall proBect office# and center ngineering and 4evelopment* to perform and
manage the bloc update# to the #huttle& !# 6!S! complete# the currently planned
developmental modification# to increa#e #huttle performance* further change mu#t be
minimi$ed& !t #ome future point* it i# envi#ioned that 6!S! might even be pha#ed out of
#huttle development and any further modification#* if re7uired* would then be identified and
implemented by the prime contractor&
To facilitate an under#tanding of the effect# of thi# option* the review team developed the
following conceptual diagram #howing what thi# organi$ation might loo8 li8e after
implementation& Thi# diagram i# u#eful in under#tanding the concept& but i# not intended to
provide definitive detail& The review team believe# that the detail# of the organi$ational
#tructure #hould be left to 6!S!&
SSP :ffice
6!S!
Space Shuttle
Program :ffice
"ontractor
K
K
4evelopment K :peration# Production
&&&&&&&&&&&&&&&&&&&&&&&K'''''''''''''''''''''''''
4eputy SSP Mgr K K
for 4evelopment Program :peration# Flight Production
'6!S! K K K
K K :rbiter K SR> G SRM
<aunch :peration# '''''' Mi##ion :p# K T K SSM
Space Shuttle Program "onceptual 4iagram
! down#i$ed and centrali$ed 6!S! program office and a contractor program office mu#t
be given the proper authority and top'level 6!S! #upport for thi# #tructure to be
#ucce##ful& >oth program manager# will need to be advocate# of thi# approach and have
e+perience in program management& The 6!S! Program Manager mu#t be empowered
with budget* procurement* and deci#ion'ma8ing authority and focu# on approving
reduction# in operational re7uirement#* developing regulation#* and monitoring
modification# to the vehicle hardware and #oftware& The contractor Program Manager
#hould report to the "hief +ecutive :fficer and will focu# on program operation# and flight
hardware production& The a##ociated #upport #taff# mu#t be 8nowledgeable of #pace
#huttle operation# and multi'talented to facilitate change# which improve efficiency while
maintaining #afe and reliable mi##ion#&
The operation# and production branche# were primarily viewed a# contractor function#&
Flight production compri#e# the manufacturing of the hardware element# that ma8e up the
Shuttle vehicle& Program operation# were defined a# the activitie# a##ociated with the
vehicle and payload preparation* launch operation#* mi##ion operation#* and landing
operation#& The flight production organi$ation would provide the orbiter* e+ternal tan8#*
Solid Roc8et MotorISolid Roc8et >oo#ter 3SRMISR>-* and Space Shuttle Main ngine
3SSM- to the Program :peration# organi$ation for proce##ing& @ehicle and payload
proce##ing nece##ary to deliver an integrated vehicle to the pad will be performed under
the Program :peration# organi$ation& The logi#tic# and #u#taining engineering function#
re#ide within Program :peration# a# well&
The production branch of the organi$ation would #upply flight hardware to the operation
branch for launch proce##ing& Thi# interface mu#t be contractually #tructured to allow the
prime contractor to implement efficiencie# in proce##ing the hardware while precluding the
unnece##ary #tac8ing of fee#& The SSM will re7uire #pecial con#ideration in the
production branch due to it# criticality and continued developmental nature& 6!S!
involvement in the SSM proBect will probably be nece##ary for a period of time until
modification# are implemented that ma8e it more reu#able and operational& It i# al#o
recogni$ed that e+perti#e may need to be enhanced within the contractor organi$ation
prior to 6!S! withdrawing from the SSM proBect&
Thi# concept call# for minimal 6!S! involvement below the program office level on the
operation# #ide& Eowever* it i# recogni$ed that* at lea#t initially* maintaining #ome 8ey
6!S! function# critical to the future of the agency may be appropriate& !# a re#ult* mi##ion
and crew operation# are viewed a# 6!S! in#titutional capabilitie#* #upporting multiple
program#& Maintaining the#e capabilitie# within 6!S! i# important for the development of
e+perti#e* e+perience and leader#hip for future 6!S! program#& Support to the#e
in#titutional function# in the area# of flight #oftware* facilitie# #upport* flight de#ign* mi##ion
product#* and training will be provided by the contractor& Similarly* it may be beneficial for
6!S! to retain #ome 8ey launch operation# function# a# well& In e#tabli#hing 6!S!
function# on the operation# #ide* however* it mu#t be recogni$ed that a 8ey element in
reducing overall co#t i# #everely limiting the number of 6!S!'to'contractor interface#&
"ondition# Re7uired to Pur#ue 2oal# ;ithin 6ew Management Structure
! number of condition# will be re7uired to en#ure the pur#uit of co#t'effective operation#&
They can be grouped into the area# of minimi$ing vehicle modification#. con#olidating*
reducing* and #treamlining 6!S! over#ight and involvement. #treamlining payload
proce##ing. and e#tabli#hing proper contract incentive# and fle+ibility&
Minimi$e @ehicle Modification#
Recommendation 0, Minimi$e vehicle modification#& Free$e the current vehicle hardware
and #oftware configuration& Implement future modification# u#ing a bloc update concept&
The#e bloc update# #hould be Bu#tified and only made to improve #afety* reduce operating
co#t#* ma8e the vehicle more reu#able* or te#t new technologie#&
The continuou# hardware and #oftware modification# typical of a developmental program
are co#tly to implement& "hange# permeate the entire program including vehicle chec8out
and te#ting* operational procedure#* and crew training& !##ociated facility change#*
including proce##ing facilitie# and #imulator#* to #upport configuration update# tend to be
co#tly& Free$ing the current vehicle configuration* hardware and #oftware* will #tabili$e the
program and allow reduction# in co#t& @ehicle te#ting and turnaround re7uirement# will
dimini#h* facility and #imulator configuration# will #tabili$e* and few update# to crew
procedure# and training will be re7uired& Thi# fro$en configuration could be labeled the
bloc I configuration* and all a##ociated operation# would #tabili$e with additional co#t
efficiencie# reali$ed&
Future change# #hould be minimi$ed and concentrate on ma8ing the vehicle more
reu#able and operational& ! goal to fly the vehicle #ome number of time# 3for e+ample*
five- with minimal te#ting and chec8out #hould be e#tabli#hed and pur#ued& ! budget for
operational improvement# #hould be e#tabli#hed with change# implemented through the
bloc update concept& Modification# to further increa#e payload performance #hould be
carefully #crutini$ed and accompli#hed only when ab#olutely re7uired& It i# important to
maintain thi# development activity #eparate from the operation#* allowing the proper focu#
on effective and efficient operation#* and delivering the#e future change# a# bloc update#&
Thi# change in culture mu#t be adhered to in order to achieve the goal# pre#cribed&
Recommendation 5, Initiate a re7uirement# review* top level down* with the goal of
#ignificantly reducing re7uirement# ba#ed on operation# e+perience& Thi# type of review
could #ignificantly reduce vehicle turnaround and chec8out re7uirement# ba#ed upon
hardware reliability* criticality* and redundancy&
The Shuttle Program i# burdened with re7uirement# typical of a developmental vehicle& !#
change# to the hardware and #oftware configuration are minimi$ed and the vehicle i#
tran#itioned to an operational vehicle* an adBu#tment in the re7uirement#* ta8ing advantage
of ac7uired operational e+perience* i# appropriate& The vehicle wa# de#igned with a
#ignificant amount of redundancy which could be utili$ed not only for #afety* but al#o for
operational fle+ibility& ;ith an unchanging vehicle configuration* the ability to reduce
vehicle turnaround and chec8out re7uirement# i# further enhanced& Mo#t anomalie# could
be handled& in a return'to'print fa#hion& :verall operation# will become more routine and
be more conducive to greater contractor re#pon#ibility& Such a #table configuration will
help to en#ure continued #afe operation during further tran#ition&
Recommendation 5, n#ure future performance upgrade# to #upport International Space
Station !lpha 3ISS!- or other payload# are e#tabli#hed through a #y#tem# engineering
proce## to determine the mo#t advantageou# and co#t'effective approach&
! large number of performance upgrade# are in wor8 in the Shuttle Program re#ulting from
payload lift re7uirement# levied by the ISS!& The#e performance upgrade#* which include
modification# to the SR>* +ternal Tan8* and SSM* have a goal of obtaining
appro+imately 10*))) lb& of additional performance margin and re#ult in the certification of
5 different vehicle configuration# over the ne+t 0 year#&
The review committee i# e#pecially concerned with the modification# to reduce the weight
of the SR> by appro+imately 1/*))) lb& to obtain 1/)) lb& additional performance&
!dditionally* the committee i# concerned with the Super <ight ;eight Tan8 3S<;T- and
SSM improvement#& Specifically* the new alloy* aluminum'lithium* being u#ed in the
S<;T to reduce it# weight by ())) lb& ha# the potential for problem# during development
and manufacturing& In addition* the committee e+pre##ed concern over the potential of
utili$ing the SSM improvement# for increa#ed thru#t capability in#tead of increa#ed
operational margin& 2iven the criticality and magnitude of change# to the #huttle element#
involved* the#e modification# were met with concern by the review team& In the future* all
other alternative# #hould be pur#ued prior to change# of thi# impact and magnitude& Thi#
would include* in the ca#e of the ISS! performance upgrade#* to evaluate alternative
option#* #uch a# adBu#ting pac8aging and a##embly* modifying payload #upport
e7uipment* reducing the number of crew member#* and lowering orbit inclination&
"on#olidation and Reduction of 6!S! Involvement and :ver#igh
Recommendation C, Reduce 6!S! involvement and over#ight in the operation of the
#pace #huttle* tran#ferring re#pon#ibility of daily operation# to the contractor& Space
Shuttle Program and ProBect element# #hould be con#olidated and reduced with 6!S!'
contractor interface# minimi$ed&
;ith the tran#ition to an operational program and a more #table vehicle hardware and
#oftware configuration* the need for e+ten#ive 6!S! involvement in operation# would no
longer be re7uired& !# the vehicle configuration become# increa#ingly more #table and
operation# #treamlined* increa#ing reliance can be placed on the contractor& 6!S! #hould
then remove it#elf from day'to'day operation#* allowing the prime contractor to meet the
re7uirement# in the mo#t efficient manner&
!l#o* it follow# that 6!S! Space Shuttle Program and ProBect element# can be
con#olidated and reduced& 6!S! per#onnel can be tran#ferred to centerIline organi$ation#
to maintain and utili$e their e+perti#e acro## 6!S! program#& 6!S! involvement in the
Shuttle Program can be concentrated in developing and integrating the bloc update#*
developing the overall operational re7uirement#* and monitoring and evaluating contractor
performance& "on#olidation of the 6!S! element# will enable corre#ponding con#olidation
of contractor element#* minimi$e 6!S! contractor interface#* and reduce operating co#t#&
Recommendation D, Re#tructure and reduce the overall SRGF! element& ! large and
comple+ SRGF! element doe# not nece##arily in#ure the total #afety of the #huttle&
Indeed* #uch numerou# layer# of chec8# and balance# tend to dilute re#pon#ibility and
generate unnece##ary wor8& Spaceflight remain# an inherently ri#8y venture. yet the#e
ri#8# can be managed effectively& ;hen operating a #table and proven vehicle
configuration with a##ociated reduced turnaround and te#ting procedure#* the need for an
over'abundance of 6!S! over#ight in the SRGF! area i# greatly dimini#hed&
Re#tructuring SRGF! to minimi$e paralleli#m and delegate greater re#pon#ibility to the
contractor will help to e#tabli#h clear line# of re#pon#ibility with only the nece##ary chec8#
and balance# in place& ;hile the "hallenger accident wa# a terrible tragedy* it i# not
Bu#tification to ignore the total #pace #huttle flight e+perience nor conclude that the
program cannot be made more productive and le## co#tly to operate while #till maintaining
the nece##ary chec8# and balance# of a #afe program& Re#tructuring and #treamlining the
SRGF! element pre#ent# a tremendou# challenge to 6!S! and it# contractor#& but mu#t
occur if #ignificant progre## in co#t reduction i# to be achieved&
Payload Proce##ing
Recommendation (, Streamline Payload proce##ing and integration* minimi$ing co#t# and
reducing the length of time re7uired to integrate a payload aboard the #pace #huttle&
The de#ign and e+ecution of #pace #huttle mi##ion obBective# remain# #ucce##ful and the
time re7uired to proce## and integrate payload# ha# been reduced in the la#t #everal
year#. yet the payload integration template remain# comple+ and #till re7uire# payload
a##ignment well over a year prior to flight& Payload and cargo integration wa# found to be
a long* tediou# and comple+ operation involving many organi$ation#& "on#olidation of the
organi$ation# with clearly defined re#pon#ibilitie# will be re7uired to #implify thi# operation&
!t the root of thi# comple+ operation e+i#t# the ba#ic philo#ophy of compliance ver#u# one
of advocacy& The organi$ation #hould continuou#ly loo8 for creative way# to reduce the
re7uirement# levied on the cu#tomer and #implify the overall integration template&
!lternative #tandard# and method# for integration need to be pur#ued& Payload de#ign
guideline# #hould be provided to potential cu#tomer# that reduce te#ting and analy#i#&
1ntil the payload proce##ing organi$ation i# provided the motivation to become an
advocate for payload integration* the #y#tem will remain one of compliance&
"ontract and Related "ondition#
Recommendation 9, Structure operational contract# to provide real incentive to accompli#h
#afe and #ucce##ful mi##ion#& The contractor mu#t be allowed to ma8e a profit with
contract# #tructured to provide incentive# to reduce co#t# and at the #ame time maintain
#afe and #ucce##ful flight operation#& Thi# would include long'term #aving# #haring and
appropriate reward# and penaltie# ba#ed upon #chedule and in'flight performance&
!dditionally* the prime contractor%# financial arrangement# with #ubcontractor# mu#t be
#tructured #o that they preclude co#tly fee #tac8ing including general and admini#trative
co#t# and material proce##ing control co#t#&
Recommendation 1), 6!S! mu#t pur#ue innovative approache# in a##embling and
#upporting the prime contractor team& Thi# could include the hiring of 6!S! civil #ervant#
by the contractor and initially allowing the contractor to u#e #pecific government
capabilitie#&
It i# recogni$ed that the contractor3#- may not currently po##e## all of the nece##ary
per#onnel with the talent# e+perti#e& or e+perience to a##ume re#pon#ibility for daily
#huttle operation#& :ne re#ource for obtaining tho#e per#onnel i# within 6!S!& Therefore*
it i# vital that 6!S! and the contractor# pur#ue the nece##ary #tep# to not only allow* but
encourage* the tran#fer of per#onnel to a##ume 8ey role# and re#pon#ibilitie# in the
propo#ed new contractor organi$ation& Similarly* it may be advantageou# to allow the
prime andIor it# #ubcontractor# to initially utili$e* by #ome mean# of under#tanding*
#pecific government organi$ational element# with critical #8ill# that cannot be obtained
el#ewhere 3e&g& a cooperative agreement-& Integration and down#i$ing of the 6!S!
organi$ation would occur gradually over time a# the contractor organi$ation developed it#
own in'hou#e #8ill ba#e or the ta#8 wa# completed or pha#ed out&
<i8ewi#e* it will be nece##ary to reali$e that* in #ome ca#e#* #pecific e+perti#e e+i#t# only
in particular contractor#& For e+ample* in the area of orbiter ob#ole#cence and #u#taining
engineering a #pecific e+perti#e will be re7uired to a##ure the continued operation of the
vehicle& !ttention to the#e #peciali$ed #8ill# will be re7uired a# the 6!S!'contractor team
i# con#tructed&
Future "on#ideration#
Recommendation 11, !ll artificial barrier# which preclude the #huttle from carrying certain
type# of payload# #hould be removed& Thi# would re7uire policy and #tatutory change#
which currently di#courage the #huttle from carrying commercial payload#& It i# po##ible
that a #ignificant reduction in #pace #huttle operation# co#t# may #timulate the #pace
economy& In order to ma+imi$e the potential economic ba#e for the #pace #huttle* artificial
barrier# including policy 3e&g& 6ational Space Policy- and #tatutory re7uirement#* limiting
the type# of payload# which may be carried #hould be removed& Thi# will ma+imi$e the
po##ibility of generating revenue# in the future&
Recommendation 1/, !# the prime contractor management approach develop# and
mature#* 6!S! #hould con#ider further indu#try involvement and progre##ion toward the
privati$ation of the #pace #huttle&
Increa#ing indu#try involvement in the operation of the #pace #huttle can be viewed a# one
of the fir#t #tep# toward the commerciali$ation of #pace flight& !##uming indu#try were
willing to inve#t capital and accept financial ri#8# of #elling flight #ervice#* privati$ation of
the #huttle may become fea#ible& The propo#ed con#olidation of operation# under a #ingle
prime contractor offer# an opportunity to te#t thi# concept& Future launch #y#tem# could be
envi#ioned a# following thi# pattern and* thereby* encourage capital inve#tment by the
#pace entrepreneur# of the ne+t century&
6!S! promotion and encouragement of progre##ion toward greater indu#try participation
i# both appropriate and vital for it to #ucceed& In the #pace #huttle* 6!S! po##e##e# the
only reu#able vehicle capable of flying human# to and from #pace& :ther than paper
de#ign# no other vehicle approache# the capability* reliability* or proven #ucce## of the
#pace #huttle& The future challenge of the Space Shuttle Program i# to progre## to
operational #tatu# and then determine the economic viability and contribution capacity of
it# #pace technology& Thi# i# a nece##ary #tep in the progre##ion to commercial #pace
flight and will allow 6!S! and private indu#try to ma8e rea#onable compari#on# in
economy between the #huttle and propo#ed reu#able launch vehicle# in the future&
TR!6SITI:6 P<!6
The review team recogni$e# that the tran#ition from the current Space Shuttle Program
#tructure to that recommended could be #omewhat di#ruptive to current operation#* could
cau#e concern among the 6!S! and contractor communitie#* and cannot be completed
overnight& Eowever* completing the tran#ition a# #oon a# po##ible will be in the be#t
intere#t of the Shuttle Program and the agency& Further* the team determined that they did
not po##e## the detailed 8nowledge or time re7uired to develop a #tep'by'#tep tran#ition
plan for 6!S!& In#tead* the team outlined an approach and recogni$ed that the detailed
tran#ition plan mu#t be developed by the implementing team&
The tran#ition wa# envi#ioned to occur in three maBor #tep#,
31- Selection of a prime contractor&
3/- Implementation of the organi$ational #tructure within 6!S! and the prime contractor&
30- Tran#fer of activitie# and function# to the prime and #ub'contractor#&
The detail# of the tran#ition #hould be developed by the agency and it# contractor# to
minimi$e the perturbation# to ongoing operation#& !bove all* the team ac8nowledged that
the 8ey to a #ucce##ful tran#ition i# #taunch #upport from #enior'level 6!S! management
and the empowerment of 6!S! and contractor #huttle manager#&
! competition ba#ed on a 6!S! Re7ue#t for Propo#al would re#ult in lo#t #aving# during
the time re7uired to conduct #uch a competition and po##ibly unacceptable di#ruption to
the 6!S! flight #chedule& To avoid the#e difficultie#* a prime contractor could be #elected
by the agency from the pre#ent contractor#&
6!S! and the prime contractor would begin implementation of the new program #tructure
by e#tabli#hing the 6!S! Shuttle Program :ffice along with the prime contractor Program
:ffice& "oncurrently* the agency would begin the development of the ba#ic #cope for the
prime contract* a# well a# the definition of the re#pon#ibility* accountability* budget and
procurement authority each Program :ffice will hold& !ctivitie# and ta#8# would tran#ition
in a #tep'by'#tep proce## from the 6!S! Program :ffice to the contractor Program :ffice&
!# the#e function# and per#onnel are tran#itioned* all office# e#tabli#hed to manage thi#
activity would be di##olved& 6!S! would continue it# management of the current
performance enhancement development activitie# allowing the contractor to focu# on the
mi##ion and launch operation#& Thi# proce## would allow for a proper tran#ition of the
indu#try team and a tran#ition of the 6!S! per#onnel to other program# and proBect# at
the appropriate time&
4uring thi# time* #eriou# attention #hould al#o be given to con#olidation and integration of
the multitude of #upport contract# that e+i#t at =ohn#on* 9ennedy* and Mar#hall& Reliance
on many government facilitie# for product# and proce##ing will nece##itate the negotiation
of memorandum# of agreement or other #imilar arrangement#&
Tho#e function# that are to remain in#titutional and which will be performed by 6!S! mu#t
be identified by the agency& Function# #uch a# mi##ion operation# and flight crew
operation# were recogni$ed by the team a# being in thi# category* but other# may e+i#t in
the area of launch operation#&
The #pecific timing of tran#itioning the day'to'day operation from 6!S! to the contractor
will of cour#e vary becau#e of many factor#& !# an e+ample* it i# recogni$ed that the
SSM will remain the mo#t critical of all the hardware piece# for a con#iderable time& The
continued development of pump#* engine #tructure* throat modification#* etc& will re7uire
6!S! to remain involved with the engine contractor& !l#o* the team reali$e# that much of
the engine 8nowledge re#ide# at Mar#hall and #hould be given #pecial con#ideration&
To ma8e thi# tran#ition a# e+peditiou#ly a# po##ible* a #trong commitment to the approach
from 6!S! and the pre#ent contractor# i# re7uired& :ppo#ition to the change# propo#ed in
thi# report will come from within and out#ide 6!S!* but the#e mu#t be overcome if the
goal# of thi# report are to be met&
Finally* to en#ure the rapid progre## of the tran#ition* the admini#trator may choo#e to
e#tabli#h an over#ight panel to periodically monitor the progre## of the agency and
contractor ba#e in moving to the propo#ed Shuttle Program #tructure&
!PP64I? ! ' S1MM!RA :F R":MM64!TI:6S
Recommendation 1, #tabli#h a more balanced #et of goal# for the Shuttle Program* with
a greater empha#i# on reducing operational co#t# and ma8ing payload integration more
u#er friendly& The following goal# provide a better balance between operation# and #afety*
and addre## the overall 6!S! obBective of reducing the co#t of acce## to #pace& 31-
Perform #afe #pace #huttle operation# while accompli#hing mi##ion obBective#& 3/- Reduce
the co#t of #pace #huttle operation#& 30- Provide u#er'friendly payload integration&
Recommendation /, Modify the program%# management #tructure* #eparating development
from operation# and relin7ui#h the maBority of the operational re#pon#ibility to a prime
contractor&
Recommendation 0, Minimi$e vehicle modification#& Free$e the current vehicle hardware
and #oftware configuration& Implement future modification# u#ing a bloc update concept&
The#e bloc update# #hould be Bu#tified and only made to improve #afety* reduce operating
co#t#* ma8e the vehicle more reu#able* or te#t new technologie#&
Recommendation 5, Initiate a re7uirement# review* top level down* with the goal of
#ignificantly reducing re7uirement# ba#ed on operation# e+perience& Thi# type of review
could #ignificantly reduce vehicle turnaround and chec8out re7uirement# ba#ed upon
hardware reliability* criticality* and redundancy&
Recommendation 5, n#ure future performance upgrade# to #upport International Space
Station !lpha 3ISS!- or other payload# are e#tabli#hed through a #y#tem# engineering
proce## to determine the mo#t advantageou# and co#t'effective approach&
Recommendation C, Reduce 6!S! involvement and over#ight in the operation of the
#pace #huttle* tran#ferring re#pon#ibility of daily operation# to the contractor& Space
Shuttle Program and ProBect element# #hould be con#olidated and reduced with 6!S!'
contractor interface# minimi$ed
Recommendation D, Re#tructure and reduce the overall SRGF! element&
Recommendation (, Streamline Payload proce##ing and integration* minimi$ing co#t# and
reducing the length of time re7uired to integrate a payload aboard the #pace #huttle&
Recommendation 9, Structure operational contract# to provide real incentive to accompli#h
#afe and #ucce##ful mi##ion#&
Recommendation 1), 6!S! mu#t pur#ue innovative approache# in a##embling and
#upporting the prime contractor team& Thi# could include the hiring of 6!S! civil #ervant#
by the contractor and initially allowing the contractor to u#e #pecific government
capabilitie#
Recommendation 11, !ll artificial barrier# which preclude the #huttle from carrying certain
type# of payload# #hould be removed& Thi# would re7uire policy and #tatutory change#
which currently di#courage the #huttle from carrying commercial payload#&
Recommendation 1/, !# the prime contractor management approach develop# and
mature#* 6!S! #hould con#ider further indu#try involvement and progre##ion toward the
privati$ation of the #pace #huttle&