Synopsis
The report examines NASA’s plans to transition production and operations of the Space Launch System (SLS) rocket to a commercial services contract called Exploration Production and Operations Contract (EPOC). The key points are:
- NASA hopes to achieve 50% cost savings on SLS launches under EPOC, but this goal is unrealistic based on current projections. The OIG estimates each SLS launch will cost over $2 billion even with some workforce and efficiency improvements.
- EPOC would consolidate multiple existing SLS contracts into a single contract with Boeing and Northrop Grumman’s joint venture called Deep Space Transport (DST). This has the potential to reduce costs long-term but NASA has yet to determine how much will use fixed-price versus cost-plus contracts.
- Lack of competition and NASA allowing contractors to restrict data rights has limited other companies from competing to build SLS. This makes it harder to reduce costs.
- While SLS is currently the only rocket meeting NASA’s deep space needs, cheaper commercial alternatives may become available in 3-5 years. NASA should consider incorporating these in mid- to long-term Artemis plans.
- The OIG made several recommendations for establishing realistic savings metrics, increasing use of fixed-price contracts, retaining more data rights, adding flexibility for other commercial options, and maintaining oversight during the transition period.
In summary, the report is skeptical of NASA achieving significant SLS cost reductions under EPOC due to lack of competition, unrealistic goals, and contractual issues. But it sees potential benefits from consolidating contracts if implemented carefully over a transition period.