NASA's problems with management. Tales of waste and fraud mask larger issue of honest budgets

Disclosures that NASA, like the Pentagon, has suffered from waste, fraud, mismanagement, and massive project cost overruns further damages the already tarnished image of America's space agency. It also raises the larger question of what is wrong structurally with federal management of large, complex research and development (R&D) programs that make them subject to such abuse.

That is the underlying issue, says analyst Richard DalBello of the Congressional Office of Technology Assessment (OTA). He points out that the National Aeronautics and Space Administration is as much a victim of this larger problem as it is guilty of mismanagement in specific programs.

Mr. DalBello was commenting on a major article in Wednesday's New York Times that detailed a long history of waste and auditing abuses. It reported that studies by auditors and inspectors show total waste running to $3.5 billion. It recounted instances where NASA management failed to respond to inspectors' warnings.

Unlike the Pentagon, whose budget and procurement often receives sharp congressional scrutiny, NASA has tended to be trusted. Before the Challenger accident, it was perceived as being one of the best-run federal organizations, DalBello observes.

``I don't think anyone would have believed you a year ago if you told them such a front-page report would appear,'' he says. But with the Rogers Commission investigating the Challenger accident and charging NASA with ``flawed'' management and now with these latest disclosures, he adds, ``perception of NASA is changing rapidly.''

Taken item by item, there is little new in the auditing disclosures. But, DalBello says, ``when you put it all together, it sure does change the way you look at it.''

John Logsdon of George Washington University, another veteran NASA watcher, agrees. He notes that anybody who has been close to the agency knows it was in trouble with procurement. But, when it's put together as a total picture, ``it's a bomb.''

The waste and mismanagement, as detailed by official auditing and inspection reports, range over many NASA programs, from the space shuttle to planetary exploration. Along with instances of contractor overcharging are larger, strategic issues of unrealistic cost/benefit projections. These include, for example, projections that the shuttle would deliver payloads to low-Earth orbit for $100 a pound compared to actual costs of $2,849 a pound, even when the shuttle development cost is written off.

There is the clear implication that NASA doctored its cost estimates to obtain support for big-ticket items, such as the shuttle, which it considered important for the country to have. NASA is far from alone in this practice, Mr. DalBello and Mr. Logsdon note.

They explain that all federal agencies have to operate in an atmosphere where there is no premium on telling the truth about a project's costs. On the contrary, there is a premium on minimizing costs and maximizing benefits when approaching a Congress or an Office of Management and Budget that is eager to cut costs.

DalBello notes that such lack of candor is just as evident in projections for the Strategic Defense Initiative and NASA's space station project as it ever was for the shuttle. He claims that nobody believes the space station can be put on orbit for $8 billion, as advertised, yet that is the official figure.

``The real issue is how do we establish an atmosphere in which we stop kidding each other and can be honest about what projects are going to cost,'' DalBello says. The NASA disclosures are really ``an indictment of the system,'' observes Logsdon.

The two men also note that the Times story seems timed to put particular heat on NASA. Confirmation hearings for James Fletcher, President Reagan's choice for NASA administrator, were scheduled for the same day the article appeared. Dr. Fletcher was previously NASA administrator when what he now calls ``overly optimistic'' cost projections were made for the shuttle.

The timing ``is no accident,'' DalBello says. Logsdon calls it ``real hard-ball'' politics. The overriding issue, they say, is how to change the system in Washington so that it encourages truth in budget requests.

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