Ray Castillo Headquarters, Washington, DC (Phone: 202/358-4555) Brian Welch Headquarters, Washington, DC (Phone: 202/358

-1600) RELEASE: 95-27

March 15, 1995

SHUTTLE MANAGEMENT REVIEW TEAM ISSUES FINAL REPORT A team of aerospace executives headed by former Johnson Space Center Director Christopher Kraft has recommended that NASA modify the Space Shuttle program's management structure. The report to NASA Administrator Daniel S. Goldin recommends separating developmental activities from flight operations and suggests that NASA should "relinquish the majority of the operational responsibility to a prime contractor." The team was formed by Goldin in November 1994 to provide independent recommendations to supplement a comprehensive internal review of the Space Shuttle program. Goldin asked Kraft's team to focus on innovative approaches to significantly decrease total operational costs while maintaining safety and reliability. Recommendations from the report will be consolidated with NASA's ongoing Office of Space Flight Review and forwarded to Administrator Goldin in mid-May. Bryan O'Connor, Deputy Associate Administrator for Space Shuttle, said, "The Kraft report's themes of reducing the role of civil service employees, increasing contractor accountability, and reducing the number of government-to-contractor interfaces are all consistent with Administrator Goldin's guidelines for restructuring the Shuttle program." O'Connor said some of the recommendations from the Kraft report already are being implemented. "For example, we agree with Dr. Kraft's team that a review of program requirements is appropriate after more than a decade of experience operating

this system," he said. "Our goal is to significantly reduce the number of normal maintenance and launch processing steps required before each flight, based on that wealth of experience." -more-2The Kraft report also recommended minimizing modifications to the Shuttle fleet. Changes in hardware and software should only be made "to improve safety, reduce operating costs, make the vehicle more reusable, or test new technologies," the report concluded. O'Connor said, "We are minimizing changes to the fleet consistent with the priorities laid out by the Kraft committee. We agree with this recommendation." The Kraft team's report also recommended the Space Shuttle program should: * Establish a clear set of program goals, placing a greater emphasis on cost-efficient operations and user-friendly payload integration. * Redefine the management structure, separating development and operations and reduce NASA's role in the daily operation of the Space Shuttle. * Provide the necessary environment and conditions within the program to pursue these goals. "The Shuttle is a very mature space vehicle, with over 65 successful launches," Kraft said. "The team felt the Shuttle program is being managed about as well as it can be, given the present management structure. We commend them on what they've accomplished to date, about a 25 percent reduction in their operations costs over the past three years. "But if NASA wants to make more substantive gains in terms of efficiency, cost savings and better service to its customers, we think it's imperative they act on these recommendations and make a commitment to this proposed management structure," Kraft said. "And we believe these savings are real, achievable, and can be accomplished with no

impact to the safe and successful operation of the Shuttle system." The report stated, "Given the maturity of the vehicle, a change to a new mode of management with considerably less NASA oversight is possible at this time." Of the management options the team considered, the structure preferred was to consolidate operations under a single business entity, such as a prime contractor. This option increases the contractors' role and responsibility in the Shuttle program, allows the contractor to focus on Shuttle operations and provides for a more direct introduction of profit motives and cost reduction. -more-3The team also concluded the prime contractor option would be the most achievable and practical. By selecting from among the current contractors, as opposed to an open competition, the team said NASA "could accomplish all the objectives in a less disruptive and more expeditious manner, realizing potential cost reductions more quickly." The team recommended seven steps to ensure the success of the new management structure: * Freeze the current vehicle configuration and minimize future modifications. Modifications which are made should concentrate on improving safety and reducing operating costs. * Conduct a comprehensive requirements review with the goal of significantly reducing procedures between flights based upon experience gained during almost 70 flights to date. * Consolidate and reduce program and project elements, limiting NASA invovlement in operations and minimizing NASAcontractor interfaces. * Restructure and reduce the overall Safety Reliability and Quality Assurance (SR&QA) elements -- without reducing safety. * Streamline payload processing and integration,

minimizing costs and reducing the length of time required to place a payload aboard the Space Shuttle. * Structure operational contracts to provide real incentive to reduce costs while accomplishing safe and successful missions. * Allow the hiring of NASA personnel by the prime and subcontractors to ensure proper expertise and talents exist to continue with safe and successful operations. The Shuttle Management Review Team consisted of aerospace executives, business leaders, and former NASA officials. They were: * * Dr. Christopher C. Kraft Jr., Team Chairman Former Director, Johnson Space Center

Col. Frank Borman, USAF (Ret.) Former Eastern Airlines Chief Executive Officer and retired astronaut * George Jeffs Former President, Rockwell International North American Aerospace Operations -more-4* Robert Lindstrom Former Senior Vice President and General Manager for Space Operations, Thiokol Corporation, and retired manager of the Space Shuttle Projects Office, Marshall Space Flight Center, Huntsville, AL * Thomas Maultsby Vice President, General Research Corporation, and former senior Department of Defense representative to NASA Headquarters, Washington, DC * Isom Rigell Former Vice President, Florida Operations, United Space Boosters, Inc., and retired Director, Shuttle Payloads and former Director, Launch Vehicle Operations, Kennedy Space Center, FL

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