ES, IG-00-011, Spare Parts Quality Assurance for the Space Shuttle

SPARE PARTS QUALITY ASSURANCE
FOR THE SPACE SHUTTLE
IG-00-011

Executive Summary

Background

The Space Shuttle Program (SSP) Manager, located at the Lyndon B. Johnson Space Center (Johnson), is responsible for quality assurance of the Space Shuttle Program. The Shuttle is composed of five elements: orbiter vehicles, main engines, solid rocket boosters and motors, and external tanks. NASA has awarded contracts for each of the five Shuttle elements. For example, on September 26, 1996, NASA entered into the Space Flight Operations Contract (SFOC) with the United Space Alliance (USA)⁽¹⁾ for Shuttle operations including acquiring, building, and repairing spare parts for the orbiter vehicle. Johnson administers the SFOC, however, USA's procurement and logistics responsibilities are carried out primarily by personnel at the John F. Kennedy Space Center (Kennedy) or the NASA Shuttle Logistics Depot at Cape Canaveral, Florida. USA maintains about 200,000 spare parts for the orbiter fleet at the Depot. From October 1998 through June 1999, NASA paid USA about $36 million for procured or built spare parts and $48 million for repaired spare parts.
The Office of Management and Budget (OMB) directs Federal agencies to develop and use quality assurance surveillance plans in contract administration. The Federal Acquisition Regulation (FAR), Part 46, "Quality Assurance," requires that NASA perform Government quality assurance functions for all Space Shuttle flight hardware to ensure compliance with contract requirements. The SSP Manager relies on NASA quality assurance personnel and the Defense Contract Management Command (DCMC)⁽²⁾ to perform this function.

Objectives

Our overall objective was to determine whether the quality assurance processes for Space Shuttle spare parts were effective and efficient. Specifically, we determined whether NASA had:

utilized quality assurance information in the acquisition of spare parts,
established and implemented adequate policies for quality assurance of spare parts, and
ensured effective performance of acceptance testing.

We limited our review of the Space Shuttle to orbiter vehicle spare parts due to the complexity and size of the five Space Shuttle elements. We will address whether NASA has taken appropriate actions with regard to quality deficiencies under a separate audit.
Details on the objectives, scope, and methodology for this audit are in Appendix A.

Results of Audit

Quality assurance processes for the orbiter vehicles were effective but not always efficient. USA appropriately considered quality assurance requirements in the selection of orbiter vehicle flight hardware suppliers. In keeping with Government downsizing and the advent of the performance-based⁽³⁾ SFOC, the SSP Manager and NASA safety and mission assurance officials reduced Government Mandatory Inspection Points (inspection points)⁽⁴⁾ for Shuttle processing and vehicle manufacturing and took significant steps to ensure the safety of Shuttle operations. (Appendix B provides details on those steps.) However, the SSP Manager has not updated or streamlined criteria for eliminating unnecessary inspection points at spare parts suppliers and has not consolidated quality assurance requirements using a program-level approach. As a result, NASA has redundant Government quality assurance resources at some locations that could be used more efficiently to perform other quality assurance functions.

Recommendations

NASA management should establish policies and procedures to improve the efficiency of quality assurance at the supplier level. In particular, management should:

Establish inspection point criteria at the supplier level consistent with streamlined criteria established for Shuttle processing and vehicle manufacturing to ensure efficient quality assurance processes at supplier sites.
Consolidate use of Government quality personnel for the Space Shuttle Program.

Management's Response

Management concurred with the finding that Government quality assurance resources were effective. However, the SSP plans to assess the Broad Area Review (BAR)⁽⁵⁾ findings and the applicability of the Kennedy processing criteria by October 2000 to determine whether a change in Government surveillance is advisable at this time. Further, by October 2000, the SSP plans to review the utilization of quality assurance personnel on a program-level approach based on multiple contracts and space flight centers. The complete text of the response is in Appendix D.

Evaluation of Management's Response

Management's planned actions are nonresponsive to the recommendations. Specifically, management did not state whether it concurred with the recommendations or indicate whether the recommended, corrective actions would be taken. We agree that an assessment of the BAR findings may be warranted to determine which criteria are appropriate. However, management should establish formal, written criteria for flight hardware suppliers regardless of whether Government surveillance is changed. Further, because the SSP has multiple contracts and space flight centers, we maintain that a consolidation of Government quality assurance resources is cost beneficial and warranted. Therefore, we request that management further review its position on these matters and provide additional comments.

FOOTNOTES

1. USA, headquartered in Houston, Texas, is a Boeing/Lockheed Martin joint venture formed to conduct space flight operations for NASA.

2. NASA relies on DCMC, a division of the Defense Logistics Agency, Department of Defense, to provide Government contract administration services.

3. Performance-based contracting means structuring all aspects of an acquisition around the purpose of the work to be performed as opposed to either the manner by which the work is to be performed or broad and imprecise statements of work.

4. An inspection point is the point at which a Government representative has required an inspection to ensure that products and services meet quality and contract specification as required by FAR, Part 46, Quality Assurance.

5. In May 1999, the Chief of Staff of the Air Force directed that a team be established to examine recent expendable launch vehicle failures and provide a report that identifies causes of the failures and recommendations for changes in practices, procedures, and operations to prevent future failures. Members of the team included senior active or retired Government officials with a wide range of expertise in space launch planning and operations representing national security, civil, and commercial sectors of the space community. The BAR Report was issued in November 1999.

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Background	The Space Shuttle Program (SSP) Manager, located at the Lyndon B. Johnson Space Center (Johnson), is responsible for quality assurance of the Space Shuttle Program. The Shuttle is composed of five elements: orbiter vehicles, main engines, solid rocket boosters and motors, and external tanks. NASA has awarded contracts for each of the five Shuttle elements. For example, on September 26, 1996, NASA entered into the Space Flight Operations Contract (SFOC) with the United Space Alliance (USA)⁽¹⁾ for Shuttle operations including acquiring, building, and repairing spare parts for the orbiter vehicle. Johnson administers the SFOC, however, USA's procurement and logistics responsibilities are carried out primarily by personnel at the John F. Kennedy Space Center (Kennedy) or the NASA Shuttle Logistics Depot at Cape Canaveral, Florida. USA maintains about 200,000 spare parts for the orbiter fleet at the Depot. From October 1998 through June 1999, NASA paid USA about $36 million for procured or built spare parts and $48 million for repaired spare parts. The Office of Management and Budget (OMB) directs Federal agencies to develop and use quality assurance surveillance plans in contract administration. The Federal Acquisition Regulation (FAR), Part 46, "Quality Assurance," requires that NASA perform Government quality assurance functions for all Space Shuttle flight hardware to ensure compliance with contract requirements. The SSP Manager relies on NASA quality assurance personnel and the Defense Contract Management Command (DCMC)⁽²⁾ to perform this function.
Objectives	Our overall objective was to determine whether the quality assurance processes for Space Shuttle spare parts were effective and efficient. Specifically, we determined whether NASA had: utilized quality assurance information in the acquisition of spare parts, established and implemented adequate policies for quality assurance of spare parts, and ensured effective performance of acceptance testing. We limited our review of the Space Shuttle to orbiter vehicle spare parts due to the complexity and size of the five Space Shuttle elements. We will address whether NASA has taken appropriate actions with regard to quality deficiencies under a separate audit. Details on the objectives, scope, and methodology for this audit are in Appendix A.
Results of Audit	Quality assurance processes for the orbiter vehicles were effective but not always efficient. USA appropriately considered quality assurance requirements in the selection of orbiter vehicle flight hardware suppliers. In keeping with Government downsizing and the advent of the performance-based⁽³⁾ SFOC, the SSP Manager and NASA safety and mission assurance officials reduced Government Mandatory Inspection Points (inspection points)⁽⁴⁾ for Shuttle processing and vehicle manufacturing and took significant steps to ensure the safety of Shuttle operations. (Appendix B provides details on those steps.) However, the SSP Manager has not updated or streamlined criteria for eliminating unnecessary inspection points at spare parts suppliers and has not consolidated quality assurance requirements using a program-level approach. As a result, NASA has redundant Government quality assurance resources at some locations that could be used more efficiently to perform other quality assurance functions.
Recommendations	NASA management should establish policies and procedures to improve the efficiency of quality assurance at the supplier level. In particular, management should: Establish inspection point criteria at the supplier level consistent with streamlined criteria established for Shuttle processing and vehicle manufacturing to ensure efficient quality assurance processes at supplier sites. Consolidate use of Government quality personnel for the Space Shuttle Program.
Management's Response	Management concurred with the finding that Government quality assurance resources were effective. However, the SSP plans to assess the Broad Area Review (BAR)⁽⁵⁾ findings and the applicability of the Kennedy processing criteria by October 2000 to determine whether a change in Government surveillance is advisable at this time. Further, by October 2000, the SSP plans to review the utilization of quality assurance personnel on a program-level approach based on multiple contracts and space flight centers. The complete text of the response is in Appendix D.
Evaluation of Management's Response	Management's planned actions are nonresponsive to the recommendations. Specifically, management did not state whether it concurred with the recommendations or indicate whether the recommended, corrective actions would be taken. We agree that an assessment of the BAR findings may be warranted to determine which criteria are appropriate. However, management should establish formal, written criteria for flight hardware suppliers regardless of whether Government surveillance is changed. Further, because the SSP has multiple contracts and space flight centers, we maintain that a consolidation of Government quality assurance resources is cost beneficial and warranted. Therefore, we request that management further review its position on these matters and provide additional comments.