Synopsis
This document is a final report from the NASA Office of Inspector General, titled “NASA’s Management of the Mobile Launcher 2 Contract,” dated June 9, 2022. The report examines the extent to which NASA is meeting cost, schedule, and performance goals for the Mobile Launcher 2 (ML-2) contract, which was awarded to Bechtel National, Inc. (Bechtel) in 2019 for $383 million to design, build, test, and commission a second mobile launcher to support larger variants of the Space Launch System (SLS) beginning with Artemis IV.
The report found that NASA is estimated to spend approximately a billion dollars or at least 2.5 times more than initially planned for the ML-2 contract, with final delivery of the launcher expected to take at least 2.5 years longer than initially planned. The ML-2’s substantial cost increases and schedule delays can be attributed primarily to Bechtel’s poor performance on the contract, with more than 70 percent ($421.1 million) of the contract’s cost increases and over 1.5 years of delays related to its performance. Additionally, NASA’s management practices contributed to the project’s cost increases and schedule delays.
The report provides several recommendations to improve NASA’s management of the ML-2 contract and Bechtel’s performance, including evaluating Bechtel’s support for the updated estimate of cost and schedule at project completion, updating the Joint Cost and Schedule Confidence Level (JCL) analysis, ensuring the Critical Design Review has been completed before converting to a fixed-price contract, and minimizing the availability of award fees when contract modifications and value increases are the result of shortcomings in contractor performance.
