NASA Major Projects: Portfolio Is at Risk for Continued Cost Growth and Schedule Delays

GAO designated NASA's acquisition management as a high-risk area in 1990 after a history of persistent cost growth and schedule slippage in many of NASA's major projects. In more recent years, GAO found that NASA had taken some steps to improve its management, and, in May 2017, GAO found that projects were continuing a generally positive trend of limiting cost and schedule growth. But at the same time, GAO noted that many of these projects, including some of the most expensive ones, were approaching the phase in their life cycles when cost and schedule growth is most likely.

This statement summarizes GAO's 2018 findings from its 10th annual snapshot of how well NASA is planning and executing its major acquisition projects, and describes (1) the cost and schedule performance of NASA's portfolio of major projects and (2) the extent to which NASA faces risks for further cost increases and schedule delays. To conduct its review for the 2018 report, GAO-18-280SP , GAO analyzed cost, schedule, and other data for NASA's 26 major projects, each with a life-cycle cost of over $250 million; reviewed monthly project status reports; and interviewed NASA officials.

The cost and schedule performance of the National Aeronautics and Space Administration's (NASA) portfolio of major projects has deteriorated, but the extent of cost performance deterioration is unknown. NASA expects cost growth for the Orion crew capsule—one of the largest projects in the portfolio—but does not have a current cost estimate. In addition, the average launch delay for the portfolio was 12 months, the highest delay GAO has reported in its 10 years of assessing major NASA projects (see figure below).

The deterioration in portfolio performance was the result of 9 of the 17 projects in development experiencing cost or schedule growth.

Four projects encountered technical issues that were compounded by risky program management decisions. For example, the Space Launch System and Exploration Ground Systems programs are large-scale, technically complex human spaceflight programs, and NASA managed them to aggressive schedules and with insufficient levels of cost and schedule reserves. This made it more difficult for the programs to operate within their committed baseline cost and schedule estimates.

Two projects ran into technical challenges that resulted in delays in the integration and test phase. For example, in December 2017, GAO found that the James Webb Space Telescope project encountered delays primarily due to the integration of the various spacecraft elements taking longer than expected, as well as the need to resolve technical issues during testing. GAO has previously found that integration and testing is when projects are most at risk of incurring cost and schedule growth.

Three projects experienced cost growth or schedule delays due to factors outside of the projects' control, such as delays related to their launch vehicles.

NASA continues to face increased risk of cost and schedule growth in future years due to new, large and complex projects that will enter the portfolio and expensive projects remaining in the portfolio longer than expected.

GAO is not making any new recommendations in this statement. GAO has made recommendations in prior reports to strengthen NASA's acquisition management of its major projects. NASA generally agreed with these recommendations, but has not fully addressed some of them. GAO continues to believe they should be fully addressed.

Thank you for inviting me to discuss the cost and schedule performance  of the National Aeronautics and Space Administration’s (NASA) portfolio  of major acquisition projects. NASA’s major projects are the key enablers  for the agency to achieve its vision and its mission. They include NASA’s  Space Launch System (SLS) and Orion Multi-Purpose Crew Vehicle  (Orion), which are the centerpieces of NASA’s human exploration plans;  Mars 2020 and Europa Clipper, which will further our understanding of the  habitability of other planets; and the Ice, Cloud, and Land Elevation  Satellite-2 (ICESat-2), which will provide better data on changes in the  Earth. In its fiscal year 2019 budget request, NASA requested $19.9  billion, which included about $4.5 billion for its deep space exploration  programs and research and about $6 billion for science programs and  research. As these projects are complex and specialized, and often push  the state of the art in space technology, NASA manages a portfolio that  will always have inherent technical, design, and integration risks.

We have been assessing the cost and schedule performance of NASA’s  major projects—those that have a life-cycle cost over $250 million— annually for 10 years. Over this time, we have seen NASA make progress  in reducing acquisition risks, such as by improving cost and schedule  estimating tools, and establishing design metrics and tracking projects  against the metrics. But our most recent assessment in May 2018 found  that the cost and schedule performance of the portfolio deteriorated after  several years of following a generally positive trend of limiting cost and  schedule growth.

My statement today is based primarily upon our May 2018 report.  Specifically, I will discuss (1) the cost and schedule performance of  NASA’s portfolio of major projects and (2) the extent to which NASA faces  risks for continued cost increases and schedule delays. To conduct this  work, we collected cost and schedule information from NASA’s major  projects using a data collection instrument, analyzed projects’ monthly  status reports, interviewed NASA project and headquarters officials, and  reviewed project documentation. At the time of our review, there were 26  major projects in total, but the information available depended on where a  project was in its life cycle. For the 17 projects that were in the  implementation phase, we compared current cost and schedule estimates  to their original cost and schedule baselines. We reviewed historical data  on cost and schedule performance for major projects from our prior  reports and compared them to the performance of NASA’s current  portfolio of major projects. More detailed information on our objectives,  scope, and methodology for that work can be found in our May 2018  report. In addition, we requested and received an update from NASA in  early June 2018 on whether the agency had completed a new life-cycle  cost estimate for the Orion program. We also updated the actual launch  date for the Gravity Recovery and Climate Experiment Follow-On  (GRACE-FO) project and updated information on the launch date for the  Ionospheric Connection Explorer (ICON) project.

We conducted the work on which this statement is based in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives.

NASA Acquisition Life Cycle for Space Flight Projects

The life cycle for NASA space flight projects consists of two phases— formulation, which takes a project from concept to preliminary design, and  implementation, which includes building, launching, and operating the  system, among other activities. NASA further divides formulation and  implementation into phases, phase A through phase F. Major projects  must get approval from senior NASA officials at key decision points  before they can enter each new phase. Formulation culminates in a  review at key decision point C, known as project confirmation, where cost  and schedule baselines are established and documented in a decision  memorandum. Figure 1 depicts NASA’s life cycle for space flight projects.

At the time of our review in May 2018, NASA had a portfolio of 26 major  projects (see table 1). See appendix I for a brief description of each  project.

NASA Acquisition Management as a High- Risk Area

NASA acquisition management is an area that we monitor on our high- risk list. Our high-risk series is a biennial report that keeps focused  attention on government operations with greater vulnerabilities to fraud,  waste, abuse, and mismanagement or that are in need of transformation  to address economy, efficiency, or effectiveness challenges. In 1990, we  first designated the area as high risk because there was little emphasis  on end results, product performance, and cost control; the acquisition  process itself was cumbersome and time-consuming; and NASA found  itself procuring expensive hardware that did not work properly. For  example, in April 1990, NASA deployed the $1.5 billion Hubble Space  Telescope and soon after, the agency discovered that the primary mirror  had been manufactured in the wrong shape, severely degrading some of  the telescope’s scientific capabilities.

Subsequently, we and other organizations, including the National  Academy of Sciences and NASA’s Office of the Inspector General, found  that NASA’s cost estimates were overly optimistic. Our reviews also  found that NASA continued to experience significant cost and schedule  growth due, in part, to not having a disciplined cost estimating process.

In 1992, we reviewed the cost and schedule performance of 29 NASA  programs and found that 25 of those programs experienced cost  growth that ranged from 14 to 426 percent above their initial  estimates. Further, the median estimate change for all programs was  an increase of 77 percent. General reasons that NASA provided for  the cost growth included insufficient definition studies, program and  funding instability, overly optimistic assumptions by program officials,  and unrealistic contractor estimates. The more specific reasons for  the cost growth we found included program redesigns, technical  complexities, budget constraints, and incomplete cost estimates.

In 2004, we reviewed the cost and schedule performance of 27 NASA  programs and found that 17 of the programs experienced cost  growth. Cost growth for 10 of the 17 programs was over 25 percent.

We found that considerable change in NASA’s program cost  estimates—both increases and decreases—indicated that NASA  lacked a clear understanding of how much its programs cost and how  long they will take to achieve their objectives. Further, we found that  NASA’s basic cost-estimating processes—an important tool for  managing programs—lacked the discipline needed to ensure that  program estimates are reasonable.

In more recent years we have found that NASA’s leadership was focused  on improving acquisition outcomes and had taken some steps to improve  its management.

In 2006, NASA established a management review process to enable  NASA’s senior management to more effectively monitor a project’s  performance, including cost, schedule, and cross-cutting technical  and nontechnical issues.

In 2009, NASA began requiring that NASA major programs and  projects develop a joint cost and schedule confidence level (JCL) prior  to project confirmation in order to ensure that cost and schedule  estimates were realistic and projects thoroughly planned for  anticipated risks. The JCL is a point-in-time estimate that, among  other things, includes all cost and schedule elements, incorporates  and quantifies known risks, assesses the impacts of cost and  schedule to date, and addresses available annual resources. NASA  policy generally requires that projects be baselined and budgeted at  the 70 percent confidence level.

In 2012, the agency established metrics to more consistently measure  a project’s design progress and, in 2014, we found that most major  projects in the portfolio were tracking and reporting those metrics. In  addition, experts with whom we met confirmed that NASA’s metrics  are valid measures to assess design maturity in space systems.

Since 2015, we have observed a positive trend of higher numbers of  projects maturing technologies prior to preliminary design review.  Demonstrating that technologies will work as intended in a relevant  environment serves as a fundamental element of a sound business  case, and projects falling short of this standard often experience  subsequent technical problems. Our best practices work has shown  that maturing technologies prior to preliminary design review can  minimize risks for projects entering development, which lowers the  risk of subsequent cost growth and schedule delays.

We believe that many of these steps NASA has taken contributed to the  largely positive trend of cost and schedule performance for NASA’s  portfolio of major projects between 2013 and 2017. In our May 2017  assessment of major projects, we found that out of 16 projects in  development, 5 experienced cost growth and 4 experienced schedule  delays over their development cost and schedule baselines. Both of  these measures were at or near the lowest levels we have reported since  we began our annual assessments in 2009.

However, we also found in our February 2017 high risk update that NASA  needed to do more with respect to anticipating and mitigating risks— especially with regard to large programs, estimating and forecasting costs  for its largest projects, and implementing management tools. We  highlighted several actions that would be critical to improving NASA’s  acquisition outcomes, including the following:

Ensuring that NASA conducted adequate and ongoing assessments  of risks for larger programs because the impacts of any potential  miscalculations will be felt across NASA’s portfolio.

Ensuring that NASA understood long-term human exploration  program costs. While the three major human exploration programs— Orion, SLS, and the Exploration Ground Systems (EGS)—have been  baselined, none of the three programs has a baseline that covers  activities beyond the second planned flight. Long-term estimates,  which could be revised as potential mission paths are narrowed and  selected, would provide decision makers with a more informed  understanding of costs and schedules associated with potential  agency development paths.

Ensuring that program offices regularly and consistently updated their  JCL across the portfolio. As a project reaches the later stages of  development, especially integration and testing, its risk posture may  change. An updated project JCL would provide both project and  agency management with data on relevant risks that can guide project  decisions.

Ensuring that NASA continued its efforts to build capacity in areas  such as cost and schedule estimating and measuring contractor  performance.

Further, in our 2016 and 2017 assessments of major projects, we found  that while the cost and schedule performance of NASA’s portfolio was  improving, a number of large, complex projects were in or would soon be  entering the integration and test phase—the phase in development that  often reveals unforeseen challenges that can lead to cost and schedule  growth. In May 2017, projects in this phase included all three human  spaceflight programs and the James Webb Space Telescope (JWST).  Subsequently, we found that these programs experienced delays during  this phase of development. For example, in December 2017, NASA  announced a 13- to 19-month delay for the first integrated mission of  Orion, SLS, and EGS. This mission is referred to as Exploration Mission 1  (EM-1) and will not have crew. In addition, in December 2017, we found  that the JWST project continued to make progress towards launch, but  the program was encountering technical challenges that required both  time and money to fix and may lead to additional delays. Subsequently,  the JWST project delayed its launch readiness date by at least 19 months  from October 2018 to May 2020.

Portfolio Cost and Schedule Deteriorated but Extent of Cost Growth Is Unknown

The cost and schedule performance of NASA’s portfolio of major projects  deteriorated between May 2017 and May 2018, but the extent of cost  growth is unknown. NASA lacks a current cost estimate for its Orion crew  capsule—one of the largest programs in the portfolio—but expects the  program will exceed its cost baseline when NASA updates the program’s  life-cycle cost estimate. Because the Orion program accounts for about  22 percent of all development costs, even a small percentage of cost  growth for the Orion program could significantly affect portfolio cost  performance. The known negative cost and schedule performance is  largely driven by the cost and schedule growth of four projects—SLS,  EGS, Space Network Ground Segment Sustainment (SGSS) and Mars  2020—that experienced technical problems compounded by  programmatic challenges. Together, these projects experienced $638  million in cost growth and 59 months in aggregate schedule delays. Two  projects—JWST and ICESat-2—experienced schedule delays due to  technical challenges identified during integration and test. Another 3  projects—NASA Indian Space Research Organisation Synthetic Aperture  Radar (NISAR), ICON, and GRACE-FO—experienced cost growth or  delays largely due to factors outside of the projects’ control, such as  launch vehicle delays.

Portfolio Average Launch Delays Increased, but NASA Lacks a Current Orion Program Cost Estimate to Determine Extent of Cost Growth

The average launch delay increased from 7 months in our May 2017  report to 12 months in our May 2018 report—the highest schedule delay  we have reported to date. We were not able to determine the extent of  portfolio cost growth this year because NASA does not have a current  cost estimate for the Orion program—one of the largest programs in its  portfolio—and officials expect the cost to increase. As of June 2017, the  Orion program’s development cost was about $6.6 billion; based on that  estimate, it accounts for 22 percent of the portfolio’s estimated $30.1  billion of development costs. As a result, a small percentage of cost  growth for the Orion program could significantly affect cost performance.  Even without including Orion cost growth, the overall development cost  growth for the portfolio of 17 development projects increased to 18.8  percent, up from 15.6 percent in 2017 (see figure 2).

Senior-level NASA officials told us they expect that the Human  Exploration and Operations Mission Directorate and the Orion program  will complete an updated life-cycle cost estimate in June 2018. This would  be approximately 10 months after the program raised to senior-level  officials’ attention that the program expects cost growth over its cost  baseline during an August 2017 briefing concerning potential cost  increases related to the launch delay for EM-1. In early June 2018,  NASA officials said that they had not yet completed the updated life-cycle  cost estimate.

In our May 2018 report, we found that 7 of 17 NASA major projects had  stayed within cost and schedule estimates since our 2017 annual  assessment of major projects, but 9 projects experienced cost growth or  schedule delays and cost growth is expected for the Orion program.  Table 2 provides data on the cost and schedule performance between our  May 2017 and 2018 reports for the 17 major projects in development that  have cost and schedule baselines.

The deteriorating cost and schedule performance of the portfolio in 2018  is the result of  four projects—SLS, EGS, SGSS, and Mars 2020—addressing  technical challenges that were compounded by risky programmatic  decisions;  two projects—JWST and ICESat-2—experiencing delays due to  technical challenges identified during integration and test; and  three projects—NISAR, ICON, and GRACE-FO—experiencing cost  growth or delays largely due to factors outside of the projects’ control.

We elaborate on these three scenarios below.

Technical challenges compounded by risky programmatic  decisions. Together, SLS, EGS, SGSS, and Mars 2020 experienced  $638 million in cost growth and 59 months in aggregate schedule delays  due to technical problems that were compounded by programmatic  challenges since our May 2017 report. The SLS and EGS programs  experienced cost growth and schedule delays associated with EM-1, their  first combined mission along with the Orion program. We have found for  several years that the human spaceflight programs—Orion, SLS, and  EGS—are making progress maturing designs and building hardware, but  also are experiencing some significant engineering and manufacturing  challenges. For example, the SLS program ran into numerous challenges  completing the welding of its core stage element in 2017. The program  stopped welding on the core stage for months to identify and resolve low  weld strength in the liquid oxygen and liquid hydrogen tanks due to low  weld strength measurements found in the liquid oxygen tanks caused by  a program and contractor decision to change the weld tool configuration  during fabrication. The EGS program also experienced technical  challenges, including with the design and installation of the ground  support equipment and the 10 umbilicals that connect SLS and Orion to  the Mobile Launcher—which supports the assembly, testing, and  servicing of SLS and provides the platform on which SLS and Orion will  launch.

Finally, although the Orion program has not yet reported cost growth, it  also experienced technical challenges. These challenges included  software and hardware delays, and at least 14 months of delays with the  European Service Module—which provides air, water, power, and  propulsion to Orion during in-space flight—since the element’s critical  design review in June 2016. In April 2017, we found that, according to  program officials, the delays with the service module were largely due to  NASA, the European Space Agency, and the European Space Agency  contractor underestimating the time and effort necessary to address  design issues for the first production service module and the availability of  parts from suppliers and subcontractors. NASA expects the Orion  program to experience cost growth over its cost baseline to the second  combined mission, Exploration Mission 2 (EM-2). However, the extent of  the growth is unknown because, as noted above, NASA is currently  revising the program’s life-cycle cost estimate.

Technical challenges such as these are not unusual for large-scale  programs, especially human exploration programs that are inherently  complex and difficult. However, we have found that NASA has made  programmatic decisions—including establishing low cost and schedule  reserves, managing to aggressive schedules, and not following best  practices for earned value management or creating reliable cost and  schedule baselines—that have compounded the technical challenges  (see table 3). As a result, the three human spaceflight programs have  been at risk of cost and schedule growth since NASA approved their  baselines.

In December 2017, NASA announced the new internal launch readiness  date for EM-1 is now December 2019, and has allocated 6 months of  schedule reserve available to extend the date to June 2020 for possible  manufacturing and production schedule risks. This represents a delay of  13-19 months for EM-1. It is too soon to know if NASA has addressed the  programmatic challenges identified above. We will continue to follow up  through future reviews.

Similarly, the SGSS project experienced new cost growth of $59.5 million  and delayed its completion by 21 months. Project officials attributed the  cost growth and delays to the contractor’s incomplete understanding of its  requirements, which led to poor contractor plans and late design  changes. But project management has been a challenge as well. The  project has historically struggled to manage contractor performance and  has faced both contractor and project staffing shortfalls, as we found in  our prior reports starting in 2013. For example, NASA managers noted  concerns with contractor plans and staffing estimates in 2013 during  project confirmation. In March 2015, we found that the project was being  rebaselined due to the contractor’s poor cost and schedule performance  and in order to conform with limitations that NASA placed on the funding  available to the contractor in fiscal years 2014 and 2015. The contractor  was also operating with a limited number of staff at that time. In May  2017, we found that the project continued to experience contractor  performance problems and had experienced cost growth and schedule  delays over the 2015 rebaseline even as the project decreased its scope.  In addition, the project experienced staff shortfalls in key areas, such as  systems engineering and business management.

The Mars 2020 project experienced $12.9 million in development cost  growth, but no schedule delays. The cost growth was primarily due to  technical challenges on a technology demonstration instrument and  higher than anticipated integration costs for an entry, descent, and  landing instrument. Both instruments are funded by the Human  Exploration and Operations and Space Technology Mission Directorates.  NASA officials attributed the cost growth of the technology demonstration  instrument—which is designed to convert carbon dioxide to oxygen—to the complexity of the technology development for the effort. At the  project’s preliminary design review in February 2016, a critical technology  for the technology demonstration instrument did not meet the  recommended level of maturity, which we have found can increase risk  for systems entering product development. The project had matured the  technology to this recommended level by its critical design review in  February 2017. However, as a result of the focus on maturing this  particular technology, other components of the instrument fell behind the  planned schedule. Project costs for Mars 2020 also increased for an  entry, descent, and landing instrument, due, in part, to cost increases for  integration and to add additional staff to the instrument team to maintain  schedule.

Finally, the Radiation Budget Instrument project would have likely  exceeded its cost baseline if NASA had not decided to cancel the project  in January 2018. According to NASA’s cancellation memorandum, the  project was canceled because of continued cost growth, technical issues,  and poor contractor performance. In 2017, we found that the project was  working to an aggressive schedule, and the prime contractor continued to  experience cost overruns even after NASA added a deputy project  manager and increased site visits and meetings with the contractor.  Subsequently, the project—which was developing an instrument to be  hosted on a National Oceanic and Atmospheric Administration satellite— determined that it would not be able to meet its delivery date for  integration with the satellite without requiring additional funding in excess  of the project’s cost baseline if other technical issues arose. In its  cancellation memorandum, NASA stated continuing to fund the project  from within the Earth Science Division budget would slow other important  activities.

Technical challenges identified during integration and test. The  JWST and ICESat-2 projects experienced technical challenges during  integration and test that delayed their schedules. Both projects were  previously rebaselined before entering system-level integration and  testing, and the current schedule delays are beyond the new schedules  that NASA set for the projects in 2011 for JWST and in 2014 for ICESat- 2.

The JWST project delayed its launch readiness date by at least 19  months from October 2018 to May 2020. NASA announced two  delays for the project since our portfolio-wide review in May 2017.  First, as we found in February 2018, the project delayed its launch  readiness date by up to 8 months primarily due to the integration of  the various spacecraft elements taking longer than expected.  Specifically, execution of spacecraft integration and test tasks, due to  complexity of work and cautious handling given the sensitivity of flight  hardware, was slower than planned. In addition, before the delay, the  project used all of its schedule reserves to its prior launch readiness  date. This was the result of various contractor workmanship errors,  particularly with respect to the spacecraft propulsion systems, as well  as the resolution of various technical issues, including a test anomaly  on the telescope and sunshield hardware challenges. Second, in  March 2018, NASA announced that it had delayed the project’s  launch readiness date by an additional 11 months to approximately  May 2020 and planned to establish an external independent review  board to analyze the project’s organizational and technical issues to  inform a more specific launch time frame.

The announcement also stated that after a new launch date is  established, NASA would provide a new cost estimate that may  exceed the $8 billion congressional cost cap that was established in  2011. NASA plans to finalize the project’s cost and schedule estimate  by the end of June 2018. Because the additional delays were  announced while a draft of our May 2018 report was with NASA for  comment, we plan to follow up on the reasons for the additional  delays and the results of the analysis in a future review.

In our prior assessments of JWST, we have made recommendations  with regard to improving cost and schedule estimating, updating risk  assessments, and strengthening management oversight. NASA has  generally agreed and taken steps to implement a number of our  recommendations. For example, in December 2015, we  recommended that the JWST project require contractors to identify,  explain, and document anomalies in contractor-delivered monthly  earned value management reports. NASA concurred with this  recommendation and, in February 2016, directed the contractors to  implement the actions stated in the recommendation. However, NASA  did not implement some recommendations, which if implemented,  may have provided insight into the challenges it now faces. For  example, in December 2012, we recommended the JWST project  update its JCL. Although NASA concurred with this  recommendation, it did not take steps to implement it. An updated  JCL may have portended the current schedule delays, which could  have been proactively addressed by the project.

The ICESat-2 project delayed its launch readiness date by 4 months  from June to October 2018 due to technical issues with its only  instrument, the Advanced Topographic Laser Altimeter System. A key  part in the instrument’s lasers failed during instrument environmental  testing, which delayed the project’s system integration review—the  start of system-level integration and test. The manufacturer  determined the primary cause of the anomaly was a flaw in the design  of the mount that ensures a component of the optical module remains  in a specific, precise position. The spare flight laser encountered the  same problem during earlier testing, which indicated a systemic  problem. The project redesigned and repaired the lasers and is  proceeding through integration and test.

External factors. External factors—including responding to requests for  additional data collection and delays due to launch-vehicle related  issues—contributed to cost increases or schedule delays for the NISAR,  ICON, and GRACE-FO projects.

The NISAR project experienced cost growth as the result of an  increase in the scope of data collection in response to additional data  needs being identified by an interagency working group. The  additional data include soil moisture and natural hazard data that  would be of value for other federal agencies and the science  community. NASA officials said the additional funding for development  would be used to upgrade the ground stations so that they can  receive the additional data at a higher downlink data rate and volume.

The ICON project missed its committed launch readiness date  because of an accident involving its launch vehicle. In January 2017,  two of the Pegasus launch vehicle’s three stages were involved in a  transport accident. The stages were subsequently returned to the  launch vehicle contractor facility for inspection and testing, and no  damage was found. The project had been on track to launch early.  Subsequently, in September 2017, an anomaly found in testing of the  launch vehicle bolt cutter assemblies resulted in additional delays.  NASA had planned to launch ICON in mid-June 2018, but recently  announced a delay after off-nominal data was observed from the  rocket during transit to the launch site. NASA announced a new  launch date would be determined at a later date.

The GRACE-FO project delayed its launch readiness date from  February to May 2018 due to issues with its planned launch vehicle  and launch site. The launch vehicle is the responsibility of NASA’s  partner on the project—German Research Centre for Geosciences  (GFZ). GRACE-FO had planned to launch at a Russian launch site. In  February 2016, GFZ reported that it was notified by the Russian  Federal Space Agency that the Dnepr launch vehicle was no longer  available for GRACE-FO. GFZ, in June 2016, arranged to launch the  two GRACE-FO spacecraft, along with commercial satellites, on a  SpaceX Falcon 9. On May 22, 2018, GRACE-FO launched from  Vandenberg Air Force Base in California.

In addition, the Commercial Crew Program also experienced delays,  which are not included above because the program does not have a  schedule baseline. Since the award of the current Commercial Crew  contracts in September 2014, the program, Boeing, SpaceX, and multiple  independent review bodies have all identified the contractors’ delivery  schedules as aggressive. In February 2017, we found that Boeing and  SpaceX had determined that neither could meet their original 2017 dates  for NASA to certify their systems for human spaceflight. In January  2018, we found that both contractors had notified NASA that final  certification dates have slipped again and are now in the first quarter of  calendar year 2019. The Commercial Crew Program’s schedule  analysis indicates that certification may be further delayed to December  2019 for SpaceX and February 2020 for Boeing.

NASA Is Likely to Encounter Additional Cost Growth and Schedule Delays

The composition of the portfolio in the coming years is expected to  include large and complex projects, putting NASA at risk of continued  cost increases and schedule delays. Specifically, NASA plans to have  complex projects enter the development portfolio in the next few years as  it holds confirmation reviews and set cost and schedule baselines. This  includes the Europa Clipper project and potentially the Wide-Field  Infrared Survey Telescope (WFIRST) project. In February 2018, the  President’s 2019 Budget Request proposed canceling the WFIRST  project due to the project’s significant costs and higher priorities in the  agency. However, the project may continue if funding is received.  Together, preliminary estimates indicate that these two projects could  cost as much as $7.8 billion. In addition, NASA expects to begin other  large, complex projects like the Lunar Orbital Platform-Gateway— currently being discussed as a space station or outpost in lunar orbit— and a Europa Lander project in the coming years. A December 2017  space policy directive also instructed NASA to return astronauts to the  moon for long-term exploration and to pursue human exploration of Mars  and the broader solar system.

To its credit, NASA recently took steps to put a process in place to control  the costs of two projects while in formulation, which may prove useful if  properly executed.

The Europa Clipper project implemented a process whereby cost  growth threats would be offset by descoping instruments in whole or  in part. For example, if an instrument exceeds its development cost by  20 percent, the project would propose a descope option to NASA that  brings instrument cost below that threshold. NASA had not descoped  any instruments as of our May 2018 report.

The WFIRST project is responding to findings from an independent  review that was conducted to ensure the mission’s scope and  required resources are well understood and executable. The review  found that the mission scope is understood, but not aligned with the  resources provided and concluded that the mission is not executable  without adjustments and/or additional resources. For example, the  study team found that NASA’s current forecasted funding profile for  the WFIRST project would require the project to slow down activities  starting in fiscal year 2020, which would result in an increase in  development cost and schedule. NASA agreed with the study team’s  results and directed the project to reduce the cost and complexity of  the design in order to maintain costs within the $3.2 billion preliminary  cost target.

But even with these efforts, NASA’s cost and schedule performance may  be further tested in upcoming years as some expensive, complex projects  linger in the portfolio longer than expected.

As previously discussed, the Orion program expects cost growth and  faces other schedule and technical risks as it moves through the  integration and test phase for EM-1 into at least 2019 and then  through 2023 for EM-2. As of August 2017, NASA officials expected  that new hardware and addressing development challenges would be  the factors contributing to increased cost for the program. For  example, there was a cost impact when the program moved from a  single-piece, or monolithic, heatshield design to one that employs  blocks in order to improve its structural strength. Program officials  said they are also assessing schedule delays for EM-2, and noted that  the EM-2 launch date depends on the outcome of the EM-1 launch  date.

The SLS and EGS programs continue to face cost, schedule, and  technical risks as they move through the integration and test phase  into at least 2019. For example, SLS will have to complete a “green  run” test which requires multiple first-time efforts. Specifically, the test  is the culmination of the development effort and includes the core  stage integration with its four main engines, fully fueling with  cryogenic hydrogen and oxygen, and then firing all four engines for  about 500 seconds. NASA currently has no schedule reserve to its  target December 2019 launch readiness date for two key areas in the  core stage schedule. First, there is no reserve between the end of  core stage production and the delivery of the core stage to the test  facility. Second, there is no reserve between the end of the testing  and delivery to Kennedy Space Center for final integration and testing  prior to launch.

As previously discussed, the JWST project is at risk of exceeding its  congressional cost cap, and faces schedule risks as it completes its  remaining integration and test work. These activities have taken  considerably longer than planned due to a variety of challenges,  including reach and access limitations on the flight hardware.  Additionally, the project faces significant work ahead. For example,  the project must complete integration of spacecraft element hardware  and conduct deployment and environmental tests of the integrated  sunshield and spacecraft. Further, it must integrate the telescope  element with the spacecraft element to form the JWST observatory,  and complete another set of challenging environmental tests on the  full integrated observatory. At the same time, the project will need to  mitigate dozens of remaining hardware and software risks to  acceptable levels and address the project’s many potential single  point failures to the extent possible.

The SGSS project expects to experience additional cost growth  through the final acceptance review because the full scope of the  effort has not been included in the cost. NASA only approved its new  cost estimate through the initial operational readiness review,  currently planned for September 2019. A project official said NASA  headquarters asked the project to determine if there are ways to  reduce the cost between the operational readiness review and the  final acceptance review. NASA plans to conduct an independent  review of the project in mid-2018 to inform a decision on whether to  continue the project past the operational readiness review. If NASA  decides to continue the project past this review, additional cost growth  is expected for SGSS when NASA revisits project costs through future  budget cycles.

In closing, NASA continues to make improvements to the acquisition  management of its portfolio of major projects. However, the deterioration  of the cost and schedule performance of NASA’s portfolio this year and  the likelihood of additional cost growth and schedule delays demonstrate  the need for NASA to continue to take actions to further reduce  acquisition risk as we and others have recommended. Continuing to  improve cost and schedule estimating tools and practices—such as by  providing projects with sufficient cost and schedule reserves to address  risks and unforeseen technical challenges and ensuring that program  offices regularly and consistently update their JCLs across the portfolio— could help to better position NASA for improved outcomes. We look  forward to continuing to work with NASA and this subcommittee in  addressing these issues.

Chairman Babin, Ranking Member Bera, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please  contact Cristina T. Chaplain, Director, Contracting and National Security  Acquisitions at (202) 512-4841 or chaplainc@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this statement. GAO staff who made key contributions  to this statement include Molly Traci, Assistant Director; Laura Greifner;  Erin Kennedy; Miranda Riemer; Roxanna T. Sun; and Alyssa Weir.

Appendix I: Descriptions of National Aeronautics and Space Administration Major Projects Reviewed in GAO’s 2018 Assessment

Appendix I: Descriptions of National   Aeronautics and Space Administration Major  Projects Reviewed in GAO’s 2018 Assessment Project description  The Commercial Crew Program facilitates and oversees the development of safe, reliable,  and cost-effective crew transportation systems by commercial companies to carry NASA  astronauts to and from the International Space Station. The program is a multi-phase effort  that started in 2010. During the current phase, the program is working with two contractors— Boeing and SpaceX—that will design, develop, test, and operate the crew transportation  systems. Once NASA determines the systems meet its standards for human spaceflight—a  process called certification—the companies will fly up to six crewed missions to the space  station.

The DART project plans to travel to the near-Earth asteroid Didymos, a binary system, and  impact the smaller of the two bodies. NASA will assess the deflection result of the impact for  potential future use on other potentially hazardous near-Earth objects. The project responds  to near-Earth object guidance by the Office of Science and Technology Policy to better  understand our impact mitigation posture, and to recommendations by the National Research  Council Committee to conduct a test of a kinetic impactor. The DART mission is part of the  Asteroid Impact and Deflection Assessment, which is an international collaboration with the  European Space Agency.

The Europa Clipper mission aims to investigate whether the Jupiter moon could harbor  conditions suitable for life. The project plans to launch a spacecraft in the 2020s, place it in  orbit around Jupiter, and conduct a series of investigatory flybys of Europa. The mission’s  planned objectives include characterizing Europa’s ice shell and any subsurface water,  analyzing the composition and chemistry of its surface and ionosphere, understanding the  formation of its surface features, and surveying sites for a potential landed mission.

The EGS program is modernizing and upgrading infrastructure at the Kennedy Space Center  and developing software needed to integrate, process, and launch the Space Launch System  (SLS) and Orion Multi-Purpose Crew Vehicle (Orion). The EGS program consists of several  major construction and facilities projects including the Mobile Launcher, Crawler Transporter,  Vehicle Assembly Building, and launch pad, all of which need to be complete before the first  uncrewed exploration mission using the SLS and Orion vehicles.

The GRACE-FO mission will continue and expand upon the 2002 GRACE mission, which  ended science operations in October 2017. The system, which consists of two spacecraft  working together to obtain scientific measurements, will provide high-resolution models of  Earth’s gravity field and insight into water movement on and beneath the Earth’s surface for  up to 5 years. These models will provide rates of ground water depletion and polar ice melt  and enable improved planning for droughts and floods. GRACE-FO is a collaborative effort  with the German Research Centre for Geosciences.

The ICESat-2 mission is a follow-on mission to ICESat that will measure changes in polar  ice-sheet mass and elevation. The measurements will provide researchers a better  understanding of the mechanisms that drive polar ice changes and their effect on global sea  level. ICESat-2’s upgraded laser instrument will allow the satellite to make more frequent  measurements and provide better elevation estimates over certain types of terrain than  ICESat.

InSight is a Mars lander with two primary objectives. It is intended to further understanding of  the formation and evolution of terrestrial planets by determining Mars’s size, its composition,  and the physical state of the core; the thickness of the crust; and the composition and  structure of the mantle, as well as the thermal state of the interior. It will also determine the  present level of tectonic activity and the meteorite impact rate on Mars. InSight is based on  the Phoenix lander design. Phoenix successfully landed on Mars in 2008.

Project description  The ICON observatory will orbit Earth to explore its ionosphere—the boundary region  between Earth and space where ionized plasma and neutral gas collide and react. Its four  instruments will make direct measurements and use remote sensing to further researchers’  understanding of Earth’s upper atmosphere, the Earth-Sun connection, and the ways in  which Earth weather drives space weather.

JWST is a large, infrared-optimized space telescope designed to help understand the origin  and destiny of the universe, the creation and evolution of the first stars and galaxies, and the  formation of stars and planetary systems. It will also help further the search for Earth-like  planets. JWST will have a large primary mirror composed of 18 smaller mirrors and a  sunshield the size of a tennis court. Both the mirror and sunshield are folded for launch and  open once JWST is in space. JWST will reside in an orbit about 1 million miles from the  Earth.

Landsat 9 is the next satellite in the Landsat series Program, which provides a continuous  space-based record of land surface observations to study, predict, and understand the  consequences of land surface dynamics, such as deforestation. The program is a  collaborative, joint mission between NASA and the U.S. Geological Survey. The Landsat data  archive constitutes the longest continuous moderate-resolution record of the global land  surface as viewed from space and is used by many fields, such as agriculture, mapping,  forestry, and geology.

LCRD is a technology demonstration mission with the goal of advancing optical  communication technology for use in deep space and near-Earth systems. LCRD will  demonstrate bidirectional laser communications between a satellite and ground stations,  develop operational procedures, and transfer the technology to industry for future use on  commercial and government satellites. NASA anticipates using the technology as a next  generation Earth relay as well as to support near-Earth and deep space science, such as the  International Space Station and human spaceflight missions. The project is a mission partner  and will be a payload on a U.S. Air Force Space Test Program satellite.

Low Boom Flight Demonstrator (LBFD)  LBFD is a flight demonstration project planned to demonstrate that noise from supersonic  flight—sonic boom—can be reduced to acceptable levels, allowing for eventual commercial  use of overland supersonic flight paths. Plans include multiple flights beyond fiscal year 2022  to gather community responses to the flights and to create a database to support  development of international noise rules for supersonic flight.

Lucy will be the first mission to investigate the Trojans, which are a population of never- explored asteroids orbiting in tandem with Jupiter. The project aims to understand the  formation and evolution of planetary systems by conducting flybys of these remnants of giant  planet formation. The Lucy spacecraft will first encounter a main belt asteroid—located  between the orbits of Mars and Jupiter—and then will travel to the outer solar system where  the spacecraft will encounter six Trojans over an 11-year mission. The mission’s planned  measurements include asteroid surface color and composition, interior composition, and  surface geology.

Mars 2020 is part of the Mars Exploration Program, which seeks to further understand  whether Mars was, is, or can be a habitable planet. Its rover and science instruments will  explore Mars and conduct geological assessments, search for signs of ancient life, determine  potential environmental habitability, and prepare soil and rock samples for potential future  return to Earth. The rover will include a technology demonstration instrument designed to  convert carbon dioxide into oxygen. Mars 2020 is based heavily on the Mars Science  Laboratory, or Curiosity, which landed on Mars in 2012 and remains in operation.

Project description  NISAR is a joint project between NASA and Indian Space Research Organisation (ISRO) that  will study the solid Earth, ice masses, and ecosystems. It aims to address questions related  to global environmental change, Earth’s carbon cycle, and natural hazards, such as  earthquakes and volcanoes. The project will include the first dual frequency synthetic  aperture radar instrument, which will use advanced radar imaging to construct large-scale  data sets of the Earth’s movements. NISAR represents the first major aerospace science  partnership between NASA and ISRO.

Orion is being developed to transport and support astronauts beyond low-Earth orbit,  including traveling to Mars or an asteroid. The Orion program is continuing to advance  development of the human safety features, designs, and systems started under the  Constellation program, which was canceled in 2010. Orion is planned to launch atop NASA’s  Space Launch System. The current design of Orion consists of a crew module, service  module, and launch abort system.

PSP will be the first NASA mission to visit a star. Using the gravity of Venus, the spacecraft  will orbit the Sun 24 times and gather information to increase knowledge about the solar  wind, including its origin, acceleration, and how it is heated. PSP instruments will observe the  generation and flow of solar winds from very close range and sample and take  measurements of the Sun’s outer atmosphere, where solar particles are energized. To  achieve its mission, parts of the spacecraft must be able to withstand temperatures  exceeding 2,500 degrees Fahrenheit and endure blasts of extreme radiation. The project was  formerly named Solar Probe Plus, or SPP, and was renamed in May 2017.

PACE is a polar-orbiting mission that will use advanced global remote sensing instruments to  improve scientists’ understanding of ocean biology, biogeochemistry, ecology, aerosols, and  cloud properties. PACE will extend climate-related observations begun under earlier NASA  missions, which will enable researchers to study long-term trends on Earth’s oceans and  atmosphere, and ocean-atmosphere interactions. PACE will also enable assessments of air  and coastal water quality, such as the locations of harmful algae blooms.

Psyche will be the first mission to visit a metal asteroid and aims to understand a previously  unexplored component of the early building blocks of planets: iron cores. The project plans to  orbit the Psyche asteroid to determine if it is a planetary core, characterize its topography,  assess the elemental composition, and determine the relative ages of its surface regions.

RBI is a scanning radiometer that NASA planned to launch on the National Oceanic and  Atmospheric Administration’s (NOAA) Joint Polar Satellite System 2. RBI’s planned mission  was to support global climate monitoring by continuing measurements of the Earth’s reflected  sunlight and emitted thermal radiation made by NASA and NOAA satellites over the past 30  years. This data was intended to represent one of two key sets of measurements needed to  determine whether the Earth is warming or cooling.

The Restore-L project will demonstrate the capability to refuel on-orbit satellites for eventual  use by commercial entities. Specifically, Restore-L plans to autonomously rendezvous with,  inspect, capture, refuel, adjust the orbit of, safely release, and depart from the U.S.  Geological Survey’s Landsat 7 satellite.  Landsat 7 can extend operations if successfully  refueled, but it is planned for retirement if the technology demonstration is unsuccessful.

SLS is intended to be NASA’s first human-rated heavy-lift launch vehicle since the Saturn V  was developed for the Apollo program. SLS is planned to launch NASA’s Orion spacecraft  and other systems on missions between the Earth and Moon and to enable deep space  missions, including Mars. NASA is designing SLS to provide an initial lift capacity of 70 metric  tons to low-Earth orbit, and be evolvable to 130 metric tons, enabling deep space missions.  The 70-metric-ton capability will include a core stage, powered by four RS-25 engines, and  two five-segment boosters. The 130-metric-ton capability will use a new upper stage and  evolved boosters.

Project description  The SGSS project plans to develop and deliver a new ground system for one Space Network  site. The Space Network provides essential communications and tracking services to NASA  and non-NASA missions. Existing systems, based on 1980s technology, are increasingly  obsolete and unsustainable. The new ground system will include updated systems, software,  and equipment that will allow the Space Network to continue to provide critical  communications services for the next several decades. The Space Network is managed by  the Space Communication and Navigation program.

The SWOT mission will use its wide-swath radar altimetry technology to take repeated high- resolution measurements of the world’s oceans and freshwater bodies to develop a global  survey. This survey will make it possible to estimate water discharge into rivers more  accurately, and help improve flood prediction. It will also provide global measurements of  ocean surface topography and variations in ocean currents, which will help improve weather  and climate predictions. SWOT is a joint project between NASA and the French Space  Agency—the Centre National d’Etudes Spatiales.

TESS will use four identical, wide field-of-view cameras to conduct the first extensive survey  of the sky from space for transiting exoplanets—or planets in other solar systems. The  mission’s goal is to discover these exoplanets during transit, the time when the planet’s orbit  carries it in front of its star as viewed from Earth. The project plans to discover rocky and  potentially habitable Earth-sized and super-Earth planets orbiting nearby bright stars for  further evaluation through ground- and space-based observations by other missions, such as  JWST.

WFIRST is an observatory designed to perform wide-field imaging and survey of the near- infrared sky to answer questions about the structure and evolution of the universe, and  expand our knowledge of planets beyond our solar system. The project will use a telescope  that was originally built and qualified by another federal agency. The project plans to launch  WFIRST in the mid-2020s to an orbit about 1 million miles from the Earth. The project is also  planning a guest observer program, in which the project may provide observation time to  academic and other institutions.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

This testimony highlights our 10th annual Quick Look report on the status of NASA's major projects. Many of them experienced significant cost and schedule growth in the past year.

NASA is likely to keep seeing cost and schedule growth because complex new projects are starting up, and other expensive projects are taking longer to launch than expected.

The full extent of cost growth was unknown because NASA didn't have a cost estimate for the Orion crew vehicle, one of its most expensive projects.

The average launch delay was 12 months in this review—the most we've ever reported.


Defense Health Care: TRICARE Surveys Indicate Nonenrolled Beneficiaries' Access to Care Has Generally Improved

DOD provides health care, including mental health care, to eligible beneficiaries through TRICARE. Beneficiaries who use TRICARE Prime, a managed care option, must enroll to receive care. Prior to Jan. 1, 2018, beneficiaries did not need to enroll for TRICARE Standard, a fee-for-service option, or TRICARE Extra, a preferred provider organization option (referred to as nonenrolled beneficiaries). Although the TRICARE Standard and Extra options were terminated effective Jan. 1, 2018, the new TRICARE Select option has similar benefits for obtaining care from network and nonnetwork providers.

The National Defense Authorization Act (NDAA) for Fiscal Year 2008 directed DOD to conduct surveys of nonenrolled beneficiaries and civilian providers about access to care under the TRICARE Standard and Extra options. It also directed GAO to review the surveys' results. Additionally, the NDAA for Fiscal Year 2017 included a provision for GAO to review access to care under TRICARE Extra. This report addresses both provisions.

GAO analyzed DOD's surveys to determine (1) nonenrolled beneficiaries' access to care, (2) nonenrolled beneficiaries' ratings of TRICARE, (3) civilian providers' awareness and acceptance of TRICARE, and (4) nonenrolled beneficiaries' access by individual geographic area. GAO interviewed agency officials, analyzed the 2012-2015 surveys, and compared them to DOD's 2008-2011 surveys and to surveys of Medicare and Medicaid beneficiaries. In commenting on a draft of this report, DOD concurred with GAO's findings.

The Department of Defense's (DOD) most recent surveys of TRICARE beneficiaries and civilian health care providers show that access to care has generally improved for nonenrolled beneficiaries who used the TRICARE Standard and Extra options. Specifically, GAO found the following:

Nonenrolled beneficiaries reported improved access to care in the most recent 4-year survey (2012-2015), compared to the prior survey (2008-2011). For example, a lower percentage of nonenrolled beneficiaries reported that they experienced problems finding a civilian provider in the most recent survey (29 percent) than those in the prior survey (31 percent). In addition, a higher percentage of nonenrolled beneficiaries (90 percent) reported that they were usually or always able to obtain a non-urgent appointment as soon as they thought they needed compared to the prior survey (87 percent).

The percentage of nonenrolled beneficiaries who reported positive experience ratings of TRICARE ranged from 71 to 83 percent over five categories, including ratings of primary, specialty, and mental health care providers. These ratings were generally higher than the prior survey. When compared to other federal health plans, nonenrolled TRICARE beneficiaries' positive experience ratings of primary and specialty care providers were lower than those of Medicare fee-for service beneficiaries, but higher than those of Medicaid beneficiaries.

The percentage of civilian providers who were aware of TRICARE increased from 82 percent in the prior survey to 84 percent. However, the percentage who accepted new TRICARE patients decreased from 58 percent to 55 percent. According to GAO's analysis of survey data, this overall decrease was mainly attributable to a decrease in mental health care providers' acceptance rates, as the acceptance rates for primary and specialty care providers remained unchanged. Network providers reported both higher awareness and acceptance of TRICARE than providers not in the network (referred to as nonnetwork providers). The biggest gap in both awareness and acceptance between network and nonnetwork providers was for mental health care providers:

About 96 percent of network mental health care providers reported awareness of TRICARE compared to 72 percent of nonnetwork mental health care providers.

About 79 percent of network mental health care providers reported accepting new TRICARE patients compared to 30 percent of nonnetwork mental health care providers.

GAO's analysis of both the beneficiary and provider surveys identified locations in New York, Washington, Texas, and Washington, D.C. where access to providers may be particularly problematic. Specifically, in these locations, beneficiaries reported more problems finding providers who accepted TRICARE and providers reported lower acceptance of TRICARE, compared to national averages.

In fiscal year 2016, the Department of Defense (DOD) offered health care  services, including mental health care, to more than 9 million eligible  beneficiaries in the United States and abroad through TRICARE, DOD’s  regionally structured health care program. Under TRICARE,  beneficiaries may obtain care either from military hospitals and clinics,  referred to collectively as military treatment facilities, or from civilian  providers. However, since TRICARE’s inception in 1995, beneficiaries in  some locations—particularly those who did not enroll in TRICARE’s  managed care option—have raised concerns about difficulties finding  civilian providers who will accept them as patients.

The number and type of civilian providers available to serve TRICARE  beneficiaries can vary depending on a beneficiary’s location and choice of  coverage—which prior to January 1, 2018, consisted of TRICARE’s three  basic plans: Prime, Extra, and Standard. Beneficiaries who used  TRICARE Prime, a managed care option, had to enroll and could obtain  care through military treatment facilities or TRICARE’s network of civilian  providers. DOD uses contractors, called managed care support  contractors, to develop networks of civilian providers (network providers)  to ensure adequate access to care for all TRICARE beneficiaries in  geographic areas called Prime Service Areas (PSA). Although some  network providers may be located outside of PSAs, contractors are not  required to develop networks in these areas (which we refer to as non- PSAs).

Beneficiaries did not need to enroll to receive care under TRICARE  Standard, a fee-for-service option, or TRICARE Extra, a preferred  provider organization option. These beneficiaries—referred to as  nonenrolled beneficiaries—could choose to receive care either through  TRICARE Standard when they saw nonnetwork civilian providers or  through TRICARE Extra when they saw network civilian providers. The  National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017)  terminated both the TRICARE Standard and Extra options and  established a self-managed preferred provider option called TRICARE  Select beginning January 1, 2018.

In response to nonenrolled beneficiaries’ concerns about access to care,  the National Defense Authorization Act for Fiscal Year 2008 (NDAA 2008)  directed DOD to conduct a multi-year survey (2008-2011) of nonenrolled  beneficiaries and a multi-year survey (2008-2011) of civilian providers to  determine the adequacy of access to health care providers, including  mental health care providers, for nonenrolled beneficiaries. The National  Defense Authorization Act for Fiscal Year 2012 (NDAA 2012) directed  DOD to continue both of these surveys for an additional 4-year period  (2012-2015).

The NDAA 2008 also included a recurring provision for us to review a  series of issues related to the adequacy of access to care for nonenrolled  TRICARE beneficiaries, including information gleaned from the  beneficiary and civilian provider surveys, and to report on these issues on  a biannual basis. We have issued a series of reports in response to this  provision, including two reports that focused on DOD’s beneficiary and  civilian provider surveys. In addition, the NDAA 2017 directed us to  conduct a review of the network of civilian providers that provide care to  nonenrolled beneficiaries under the TRICARE Extra option.

This report addresses provisions in both the NDAA 2008, as amended,  and the NDAA 2017 for us to report on the adequacy of access to care for  nonenrolled TRICARE beneficiaries. Specifically, it describes  1.  what the results of the most recent 4-year beneficiary survey indicate  about access to care for nonenrolled beneficiaries;  2.  what the results of the most recent 4-year beneficiary survey indicate  about nonenrolled beneficiaries’ ratings of their experience with  TRICARE;  3.  what the results of the most recent 4-year civilian provider survey  indicate about civilian providers’ awareness and acceptance of  TRICARE; and  4.  what the collective results of the most recent 4-year beneficiary and  civilian provider surveys indicate about access to care for nonenrolled  beneficiaries by geographic area.

To determine what the results of the most recent 4-year beneficiary  survey indicate about access to care for nonenrolled beneficiaries, we  obtained and analyzed survey data from DOD’s TRICARE Standard  Surveys of Beneficiaries for 2012-2015. Specifically, we analyzed these  data to determine whether nonenrolled beneficiaries were able to obtain  an appointment as soon as they wanted, how quickly they were able to  get an appointment to see a provider, and if they had a problem finding a  provider that would accept TRICARE. We compared these data across  location types, provider types, and providers’ network status, where  applicable. We also compared these results to DOD’s 2008-2011 survey  results to identify any changes in beneficiaries’ access over time.

To determine what the results of the most recent 4-year beneficiary  survey indicate about nonenrolled beneficiaries’ ratings of their  experience with TRICARE, we obtained and analyzed the 2012-2015  nonenrolled beneficiary survey data that indicated beneficiaries’ ratings of  certain aspects of their TRICARE experiences, such as their ratings of  health care, health plan, and primary, specialty, and mental health care  providers. We compared these data by providers’ network status, where  applicable. We also obtained and analyzed data from the Department of  Health and Human Services’ (HHS) Consumer Assessment of Healthcare  Providers and Systems (CAHPS) surveys for the 2013-2015 time period  to compare nonenrolled TRICARE beneficiaries’ ratings to those of  Medicare fee-for-service and Medicaid beneficiaries. Additionally, we  compared the results of DOD’s 2012-2015 beneficiary surveys to DOD’s  2008-2011 survey results to identify any changes in beneficiaries’ ratings  of experiences over time.

To determine what the results of the most recent 4-year civilian provider  surveys indicate about civilian providers’ awareness and acceptance of  TRICARE, we obtained and analyzed survey data from DOD’s TRICARE  Standard Surveys of Providers for 2012-2015. We compared these data  by location type, provider type, and providers’ network status, where  applicable. We compared these results to the results from DOD’s 2008- 2011 surveys to identify any changes in provider awareness and  acceptance over time.

To determine what the collective results of the most recent 4-year  beneficiary and civilian provider surveys indicate about access to care for  nonenrolled beneficiaries, we compared the results of our analyses of the  2012-2015 beneficiary and provider survey data by specific geographic  regions, where possible, in order to identify locations with high  percentages of nonenrolled beneficiaries who experienced problems  finding civilian providers and low percentages of civilian providers who  were accepting new TRICARE patients. We conducted this analysis by  individual location type and provider type.

For each objective, we assessed the reliability of the data from the  surveysincluding DOD’s 2012-2015 nonenrolled beneficiary and civilian  provider surveys and HHS’s CAHPS surveyby speaking with  knowledgeable officials and reviewing relevant documentation. DOD  calculated the response rates for its 2012-2015 nonenrolled beneficiary  surveys and civilian provider surveys to be about 25 percent and 39  percent, respectively. We verified that the surveys’ results were  representative of the areas surveyed by reviewing DOD’s nonresponse  analyses for these surveys and by interviewing DOD officials. We  determined that all data used in this report were sufficiently reliable for  our purposes. However, our analyses have some limitations. In our  collective analyses of DOD’s beneficiary and provider surveys, we were  not able to compare survey results among all of the individual geographic  locations due to low numbers of respondents in some areas. Specifically,  we excluded individual locations that had less than 30 respondents to the  beneficiary survey or less than 50 respondents to the provider survey,  depending on the survey questions we analyzed. Due to the low numbers  of respondents who indicated that they needed mental health care, we  were unable to identify specific geographic locations in which nonenrolled  beneficiaries experienced problems finding mental health providers.

We conducted this performance audit from March 2017 to March 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Composition of TRICARE’s Nonenrolled Beneficiary Population

In fiscal year 2016, DOD identified about 2.2 million nonenrolled  TRICARE beneficiaries who fell into four categories: (1) retired  servicemembers and their dependents, (2) inactive guard/reserve  servicemembers and their dependents, (3) dependents of active duty, or  of guard/reserve on active duty status, and (4) other beneficiaries, such  as dependent survivors of deceased servicemembers. Retired  servicemembers and their dependents made up the majority of  nonenrolled beneficiaries at the end of fiscal year 2016 (approximately 60  percent). (See fig. 1.)

Prior to January 1, 2018, TRICARE provided benefits through three basic  options for its non-Medicare-eligible beneficiary population—TRICARE  Prime, Standard, and Extra. These options varied by enrollment  requirements, choices in civilian and military treatment facility providers,  and the amount beneficiaries must contribute toward the cost of their  care. (See table 1.)

The NDAA 2017 made specific changes to the TRICARE program that  became effective on January 1, 2018. These changes included  terminating the TRICARE Standard and Extra options, establishing a new  option called TRICARE Select, and ensuring that 85 percent of TRICARE  Select beneficiaries are covered by the network of civilian providers.

TRICARE Select has similar benefits to TRICARE Standard and Extra for  obtaining care from nonnetwork and network providers, but unlike these  options, TRICARE Select requires enrollment.

Under TRICARE, DOD uses managed care support contractors to  develop networks of civilian providers to serve all TRICARE beneficiaries  in PSAs, which are typically within an approximate 40-mile radius of a  military outpatient or inpatient treatment facility or Base Realignment and  Closure sites. Although some network providers may be located in non- PSAs, contractors are not required to develop networks in these areas.  Previously, contractors had the option of developing additional PSAs (and  civilian provider networks) in areas that were not located near military  treatment facilities or Base Realignment and Closure sites. However, on  October 1, 2013, DOD eliminated these additional PSAs, referred to in  the survey analyses as “former PSAs,” and as a result, the managed care  support contractors were no longer required to develop and maintain  networks of civilian providers in these areas.

In fiscal year 2016, approximately 65 percent of the 2.2 million  nonenrolled beneficiaries that were eligible for TRICARE Standard and  Extra (1.47 million) lived in PSAs. Of the remaining nonenrolled  beneficiaries (775,000), about 19 percent lived in former PSAs and about  16 percent lived in non-PSAs. (See fig. 2.) Nonenrolled beneficiaries who  live in former PSAs and non-PSAs may still have access to network  providers, even though contractors are not required to develop networks  in these areas. About 57 percent of these beneficiaries (445,000) filed at  least one TRICARE claim with a network civilian provider during fiscal  year 2016.

DOD’s Implementation of Mandated Beneficiary and Civilian Provider Survey Requirements

The NDAA 2008 directed DOD to survey nonenrolled beneficiaries and  civilian providers in at least 20 PSAs in each of four fiscal years, 2008  through 2011, as well as 20 non-PSAs. To do this, DOD divided the  country into 80 distinct PSAs and 80 distinct non-PSAs and surveyed 20  PSAs and 20 non-PSAs each year. At the end of the 4-year period, each  year’s survey results were combined and weighted to develop estimates  of access to health care, including mental health care, at the service area,  state, and national levels. Additionally, the NDAA 2008 required DOD to  consult with representatives of TRICARE beneficiaries and providers of  health care, including mental health care, to identify locations where  nonenrolled beneficiaries have experienced significant access-to-care  problems and to survey both beneficiaries and health care providers,  including mental health care providers, in these areas. Based on these  consultations, DOD designated certain Hospital Service Areas (HSA) to  include in its beneficiary and provider surveys.

DOD used a similar methodology for determining its locations in the 2012- 2015 surveys. However, as a result of DOD’s changes to PSAs on  October 1, 2013, 28 of the 80 non-PSAs surveyed were former PSAs.  DOD also surveyed both nonenrolled beneficiaries and civilian providers  in a total of 30 HSAs. As a result, DOD collectively surveyed 190  geographic locations over the 4-year period. Furthermore, we previously  reported that DOD’s implementation of its 2008-2011 nonenrolled  beneficiary and civilian provider surveys generally addressed the  requirements outlined in the NDAA 2008. DOD made several minor  revisions to the methodologies of the 2012-2015 surveys, but we  determined that none of those changes altered DOD’s compliance with  the NDAA 2008, as amended.

Nonenrolled TRICARE Beneficiaries Reported Generally Experiencing Fewer Problems Accessing Care, and More Reported Obtaining Care when Desired

Nonenrolled TRICARE Beneficiaries Reported Generally Experiencing Fewer Problems Accessing Care than in the Prior Survey

Nonenrolled beneficiary survey results over time. Nationwide, a lower  percentage of nonenrolled beneficiaries reported that they experienced  problems finding any type of provider in the 2012-2015 survey (29  percent) when compared to the prior 2008-2011 survey (31 percent).  Specifically, fewer nonenrolled beneficiaries reported that they  experienced problems finding a primary care provider than in the prior  survey (22 percent in 2012-2015 compared to 25 percent in 2008-2011).  However, there was no significant statistical difference over time in the  percentage of beneficiaries who reported experiencing problems finding a  specialty care or mental health care provider. (See fig. 3.)

Nonenrolled beneficiary survey results by type of location.  Nonenrolled beneficiaries in non-PSAs reported experiencing fewer  problems finding primary and specialty providers than those in PSAs,  which is similar to what we reported for the prior survey. For example,  about 20 percent of beneficiaries in non-PSAs reported that they had  problems finding specialty care providers compared to 24 percent in  PSAs. Regarding beneficiaries in former PSAs, the only statistically  significant difference among the three provider types was for problems  finding a primary care provider. Specifically, fewer (about 19 percent)  nonenrolled beneficiaries in non-PSAs reported experiencing problems  finding a primary care provider to accept TRICARE, compared to 24  percent in former PSAs. (See fig. 4.) DOD officials told us that they were  unsure of the exact reasons for the difference between PSAs and non- PSAs. However, they explained that PSAs are often located in more  populated areas, where TRICARE beneficiaries may not make up a large  market share for local civilian providers, who may have a wide array of  patients with other health plans.

Nonenrolled beneficiary survey results by network status.  Nonenrolled beneficiaries with network providers reported experiencing  fewer problems finding civilian providers, compared to nonenrolled  beneficiaries with nonnetwork providers. For example, 20 percent of the  nonenrolled beneficiaries who used a network civilian primary care  provider reported that they had a problem finding a primary care provider  that would accept TRICARE compared with the 44 percent of nonenrolled  beneficiaries who used a nonnetwork civilian primary care provider.  (See fig. 5.)

In addition, when compared with the results of the last survey (2008- 2011), the percentages of nonenrolled beneficiaries who reported that  they experienced problems finding a specialty care or mental health care  provider increased in the most recent survey (2012-2015) for  beneficiaries who used nonnetwork providers, but there were no changes  over time if their specialty care or mental health care providers were in  the network. (See fig. 6.)

More Nonenrolled TRICARE Beneficiaries Reported Obtaining Appointments as Soon as Desired

Compared to the prior survey, a higher percentage of nonenrolled  beneficiaries reported that they were able to obtain appointments as soon  as they desired. Specifically, the percentage of nonenrolled beneficiaries  who made non-urgent appointments for health care and reported that  they were able to usually or always obtain an appointment as soon as  they thought they needed increased from 87 percent in the 2008-2011  survey to 90 percent in the 2012-2015 survey. However, the most  commonly reported length of time they waited between making an  appointment and actually seeing a provider did not change from the 2008- 2011 surveys—most respondents in both surveys reported they were able  to get appointments within 3 days (about 54 percent for both years’  surveys).

The 2012-2015 survey also asked specific questions about how easy it  was to get an appointment with specialty care providers and mental  health care providers:

Of those nonenrolled beneficiaries who tried to make an appointment  with a civilian specialty care provider, 84 percent reported it was  “usually easy,” or “always easy,” to get appointments. These results  also varied by network status, as a higher percentage of those who  used a network specialty care provider reported that they found it  “usually easy” or “always easy” to get appointments (85 percent)  compared to those that used a nonnetwork specialty care provider (74  percent).

Of those nonenrolled beneficiaries that received treatment or  counseling from a civilian mental health care provider, 73 percent  reported that when they needed treatment or counseling right away,  they usually or always saw someone as soon as they wanted. We  found that this result did not change since the prior survey, nor did we  find any statistically significant differences between beneficiaries’  responses for seeing a network versus a nonnetwork mental health  provider.

Nonenrolled Beneficiaries’ Positive Ratings of TRICARE Have Generally Increased over Time and Vary Compared to Other Federal Health Plans

Ratings of TRICARE over time. Nonenrolled beneficiaries’ positive  ratings of TRICARE have generally increased since the previous survey.  Specifically, over time, nonenrolled beneficiaries’ positive ratings of five  different categories related to TRICARE have either increased (primary  care rating, specialty care rating, and health plan rating) or remained the  same (mental health care rating and health care rating). (See fig. 7.)  Furthermore, nonenrolled beneficiaries’ positive ratings of their mental  health care providers were lower than their ratings for their primary and  specialty care providers. We also found that there were no significant  differences at the 95 percent confidence level for nonenrolled  beneficiaries’ ratings of primary care, specialty care, or mental health care  providers based on their network status.

Ratings of TRICARE compared to other federal health plans. When  we compared these results to those of the 2013-2015 CAHPS surveys,  we found that nonenrolled TRICARE beneficiaries’ positive experience  ratings for primary care providers and specialty care providers were lower  than those of Medicare fee-for-service beneficiaries and higher than those  of Medicaid beneficiaries, which is similar to what we found for the  previous survey. We also found that TRICARE beneficiaries’ positive  experience ratings for their health care were higher than that of both  Medicare fee-for-service beneficiaries and Medicaid beneficiaries, but  TRICARE beneficiaries’ positive experience ratings for their health plan  were lower than both of these groups. (See fig.8.)

Civilian Providers’ Reported Awareness of TRICARE Has Generally Increased over Time, While Mental Health Providers’ Acceptance of New TRICARE Patients Has Decreased

Civilian Providers’ Awareness of TRICARE Has Generally Increased over Time, with Network Providers Reporting Higher Awareness than Nonnetwork Providers

Provider awareness over time, by provider type and by location  type. Nationwide, a higher percentage of civilian providers reported that  they were aware of TRICARE in the 2012-2015 civilian provider survey  (84 percent) than those from the 2008-2011 civilian provider survey (82  percent). Specifically, since the previous survey, we found that  awareness increased for specialty care providers (from 92 to 94 percent)  and mental health care providers (from 68 to 74 percent).

In addition, when we analyzed these results by location type, we found  that civilian providers in both PSAs and non-PSAs reported higher  awareness of TRICARE since the previous survey (from 79 to 82 percent  in PSAs and from 87 to 89 percent in non-PSAs). Awareness among civilian providers in locations now designated as former PSAs remained  statistically unchanged at the 95 percent confidence level (89 percent in  2012-2015). However, despite some increases in awareness, civilian  providers in PSAs reported lower awareness than those in non-PSAs and  former PSAs in the 2012-2015 surveys.

Provider awareness by network status. Providers within the TRICARE  network reported higher awareness of TRICARE than nonnetwork  providers, regardless of individual provider type. (See fig. 9.) Among  individual provider types, the biggest difference in awareness between  network and nonnetwork providers was for mental health care providers,  with 96 percent of network mental health care providers reporting  awareness of TRICARE compared with 72 percent of nonnetwork mental  health care providers.

Civilian Mental Health Care Providers’ Acceptance of New TRICARE Patients Has Decreased; Network Providers Reported Higher Acceptance than Nonnetwork Providers

Provider acceptance over time, by provider type and location type.  Nationwide, we found an overall decrease reported in civilian providers’  acceptance of new TRICARE patients in the 2012-2015 civilian provider  survey (55 percent) compared to the 2008-2011 civilian provider survey  (58 percent).  However, when we analyzed acceptance by provider  type, we found that the overall decrease was mainly attributable to a  decrease in mental health care providers’ acceptance rates, as primary  and specialty care providers’ acceptance rates remained unchanged.  Specifically, mental health care providers’ TRICARE acceptance rate  decreased from 39 to 36 percent. However, this low acceptance rate  may not be an issue unique to TRICARE, as we have previously reported  that there is a nationwide shortage of mental health professionals.

In addition, when we analyzed results for all civilian providers by location  type, we found that civilian providers in PSAs and non-PSAs reported  lower acceptance rates of new TRICARE patients since the previous  survey (from 55 to 53 percent in PSAs, and from 66 to 62 percent in non- PSAs). Acceptance among civilian providers in locations now  designated as former PSAs remained statistically unchanged at the 95  percent confidence level (60 percent in 2012-2015). Similar to our  findings on providers’ awareness, we found that civilian providers in PSAs  reported lower acceptance rates than those in non-PSAs and former  PSAs. miscellaneous, and

A Department of Defense official told us that  some examples of “miscellaneous” are “in a  private practice”, and “not a preferred  provider.”

Provider acceptance by network status. When we analyzed civilian  providers’ acceptance of new TRICARE patients by providers’ network  status, we found that network providers reported higher acceptance of  new TRICARE patients than nonnetwork providers, regardless of provider  type. (See fig. 10.) Among individual provider types, the biggest  difference in acceptance between network and nonnetwork providers was  for mental health care providers with 79 percent of network mental health  care providers reporting acceptance of new TRICARE patients compared  with 30 percent of nonnetwork mental health care providers. Of those  mental health care providers that were not accepting new TRICARE  patients, one of the top reasons reported by those not in the network was  a lack of awareness of TRICARE. Due to the relatively small number of  network mental health providers who provided reasons for not accepting  new TRICARE patients, it was not possible to identify one primary  reason; however, some of the reasons they cited include reimbursement,  not accepting new patients, and specialty was not covered.

DOD’s Surveys of Nonenrolled Beneficiaries and Civilian Providers Collectively Indicate That Specific Geographic Locations May Have Access Problems

Our analysis of the 2012-2015 nonenrolled beneficiary and civilian  provider surveys indicated that beneficiaries may have difficulty accessing  a primary care provider, a specialty care provider, or both in 6 out of the  190 specific geographic locations that were surveyed. For the 6 locations  we identified, beneficiaries reported higher levels of problems finding  providers, and providers reported lower rates of accepting TRICARE  patients.

Primary care. We identified two locations where access to primary  care providers may be particularly problematic. (See table 2.) In these  two locations, the percent of beneficiaries who reported that they had  problems finding a primary care provider was at or above the 2012- 2015 beneficiary survey’s national average of 22 percent, and also  where the percent of primary care providers who reported that they  were accepting new TRICARE patients was at or below the 2012- 2015 civilian provider survey’s national average of 68 percent.

Specialty care. We identified five locations where access to specialty  care providers may be particularly problematic. (See table 2.) In these  five locations, the percent of beneficiaries who reported that they had  problems finding a specialty care provider was at or above the 2012- 2015 beneficiary surveys’ national average of 23 percent, and also  where the percent of specialty care providers who reported that they  were accepting new TRICARE patients was at or below the 2012- 2015 civilian provider surveys’ national average of 78 percent.

When we compared this analysis to our analysis of the 2008-2011  beneficiary and provider surveys, the “Dallas/Fort Worth, Texas” HSA  was identified in both results. Using data from the prior survey, our  analysis identified it as being potentially problematic for primary care, but  using data from the more recent survey, we identified specialty care  access as being potentially problematic. DOD officials told us that their  past analysis of beneficiaries’ complaints in this location centered on  appointment wait times exceeding beneficiaries’ preferences and on drive  times to providers’ offices. Officials explained that although there was a  wide range of network specialty care providers in this location, TRICARE  beneficiaries were a very small percentage of the overall population.  Furthermore, this location is home to a number of large corporations that  have health care plans that reimburse providers more than TRICARE.  DOD officials added that due to these factors, providers in this location do  not give preference to TRICARE beneficiaries, and drive times in this  location are often long due to the traffic patterns and overall congestion of  a large urban area.

In reviewing a draft of this report, DOD concurred with our overall  findings. DOD’s written response is reprinted in appendix I.

We are sending copies of this report to the Secretary of Defense and  appropriate congressional committees. The report is also available at no  charge on GAO’s website at http://www.gao.gov.

If you or your staff has any questions regarding this report, please contact  Debra A. Draper at (202) 512-7114 or draperd@gao.gov. Contact points  for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this report. GAO staff who made key  contributions to this report are listed in appendix II.

Appendix I: Comments from the Department of Defense

Appendix II: GAO Contact and Staff Acknowledgments

Debra A. Draper at (202) 512-7114 or draperd@gao.gov.

In addition to the contacts named above, Bonnie Anderson, Assistant  Director; Jeff Mayhew, Analyst-in-Charge; Amy Andresen; and Jennie  Apter made key contributions to this report. Also contributing were Zhi  Boon, Jacquelyn Hamilton, Vikki Porter, and Eric Wedum.

The Department of Defense offers health coverage to military servicemembers and retirees through TRICARE. Some beneficiaries—particularly those not enrolled in TRICARE’s managed care option—have raised concerns about finding doctors who accept their health coverage.

We reviewed DOD's most recent survey of TRICARE beneficiaries who were not enrolled in the managed care option and found that their access to care improved since the last survey. Specifically, these beneficiaries reported that it was easier to find doctors who accept TRICARE and get timely appointments with them.