NASA audit reveals significant cost overruns on mobile launch platform SLS

(ORDO NEWS) — The new mobile launch platform Bechtel is building for NASA will cost four times as much as originally planned and could push back the first launch of an upgraded version of the Space Launch System to the late 2020s, NASA’s audit concluded.

The audit, conducted by NASA’s Office of the Inspector General and released on June 9, lambasted Bechtel and, to a lesser extent, NASA for cost overruns and delays in work on the Mobile Launch Vehicle (ML) 2, which will be used for launches of the SLS version.

Block 1B since the Artemis 4 mission. The larger version of Block 1B cannot be placed on the existing mobile launch platform for SLS.

In June 2019, NASA awarded Bechtel a $383 million contract to design and build the ML-2 for delivery to NASA in March 2023. By March, the contract amount had risen to $460.3 million due to “changes caused by government actions,” which also pushed back the delivery of the platform to January 2024.

However, the project has since experienced significant cost overruns and delays as identified during the audit. As of February, the cost estimate has increased to $960.1 million, 2.5 times the contract’s original value.

According to this estimate, ML-2 will be completed in October 2025, after which more than a year of testing and other preparatory work is expected before it is ready to launch Artemis 4.

However, the audit noted that a joint analysis of the level of confidence that NASA uses to assess the likelihood of completing a project at a given cost and schedule showed that the probability of completing ML-2 at a revised budget and schedule is only 3.9%.

Using a 70% confidence level, which is NASA’s standard for evaluating designs, an independent panel of experts commissioned by the Kennedy Space Center concluded that the ML-2 would cost nearly $1.5 billion and not be delivered until November 2027. This will push back the launch of Artemis 4, tentatively scheduled for 2027, to no earlier than late 2028.

The audit placed much of the blame for the cost overruns on Bechtel. Over 70% of cost increases and 60% of schedule delays are “caused by poor contractor performance”

“According to NASA and Bechtel management, at the start of the project, Bechtel underestimated the overall volume and complexity of the design and construction of the ML-2,” the report says, “significantly underestimating the cost of equipment and materials, as well as labor costs.

Bechtel also faced a problem with the weight of the ML -2: As of January, the originally planned weight of 5,400 tons was exceeded by more than 400 tons

NASA Administrator Bill Nelson expressed his disappointment with the ML-2 at a Senate hearing on May 3. “Because Bechtel underpriced the contract in order to, as it turned out, get it, – he said, – but they could not fulfill it. And NASA is stuck.”

Nelson said at the hearing that while he met with the Bechtel executive, there was little the agency could do about the costs due to the cost-plus nature of the contract. “Under the contract, because it’s a cost-plus contract, there’s nothing we can do but eat it,” he said. “And that’s wrong.”

“At this stage, it is too early to say what impact these efforts will have on the cost and schedule of the ML-2 project,” the audit report says.

“In particular, while moving part of the ML-2 contract to a fixed price would reduce NASA’s risk and increase transparency, it is unclear whether Bechtel would agree to such an approach, and it is unclear whether NASA can afford the high costs associated with such a contract structure.”

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