Three years ago, NASA awarded engineering firm Bechtel a cost-plus contract to design and build a large, mobile launch tower. The 118-meter tower will support the refueling and launch of a larger and more powerful version of NASA’s Space Launch System rocket, which could make its debut in the second half of this decade.
When Bechtel received the order for this mobile launcher, dubbed ML-2, it was expected to cost $383 million. But according to a damning new report from NASA’s inspector general, the project is already years behind schedule, the launch vehicle weighs too much, and the whole thing is hundreds of millions of dollars over budget. The new cost estimate for the project is US$960 million.
“We have determined that Bechtel’s poor performance is the primary reason for the significant projected cost increases,” said the report, signed by Inspector General Paul Martin. The report finds that Bechtel underestimated the scope and complexity of the project. Bechtel officials, in turn, tried to attribute some of the project’s cost increases to the COVID-19 pandemic.
By spring of this year, NASA had already pledged $435.6 million to the project. Despite this ample funding, the construction work for the massive launch tower was still incomplete in May, reports Martin. In fact, Bechtel now expects construction to start at the end of the 2022 calendar year at the earliest.
The report cites a litany of mistakes made by contractor Bechtel, but does not spare NASA criticism. For example, Martin said that NASA awarded the contract to Bechtel before specifications for the upper stage of the Space Launch System rocket were finalized. (The rocket’s major upgrade will come via a more powerful second stage known as the Exploration Upper Stage, or EUS). This lack of definitive requirements to accommodate the EUS hampered the design of the mobile launch tower, which must power and refuel the rocket on the ground.
NASA’s explanation for this is that it had no choice but to move forward with the design and construction of the tower in order to meet a schedule for its lunar missions. The first three flights of the Artemis program, culminating in a manned lunar module in 2025 at the earliest, are to fly with the first variant of the Space Launch System rocket (which has its own, separate mobile launch tower). However, starting with the Artemis IV mission, NASA plans to launch lunar missions with the more powerful, upgraded version of the SLS rocket, which will require the new mobile launch tower.
Nominally, this mission is scheduled for 2026, but realistically it will not fly until 2027 or 2028 due to delays in the previous Artemis flights. Still, NASA pushed for construction of this second mobile launch tower to be complete by 2026, and requested that design work be done on the tower before the rocket’s final requirements were known. This will likely result in additional costs and drive the price of the second mobile launch tower to over $1 billion.
“We anticipate even greater cost increases as NASA anticipates the potential for additional changes due to finalization of EUS requirements and engineering challenges once construction of ML-2 begins,” the new report reads. “In light of these issues, NASA is re-evaluating the ML-2 project budget and schedule estimates to provide a more accurate representation of projected increases.”
Plague of Cost Plus
Still, Martin attributes most of the problems with the project’s costs and delays to Bechtel. It has gotten so bad that NASA has taken the extraordinary step of removing work from Bechtel’s plate without reducing its payments to the contractor. To allow Bechtel to better focus on the core project, NASA and Bechtel agreed in early 2022 to remove umbilical cord development from the contract. NASA will use another contractor for these cables and hoses and make them available to Bechtel for integration into the tower.
Faced with rising costs, NASA sought to shift the remaining work on the mobile launch vehicle contract from a cost-plus contract mechanism, in which the government is responsible for overruns, to a fixed-price contract, in which the private contractor assumes the financial risks . However, according to the report, no such agreement has yet been reached.
The development difficulties of the mobile launch tower and the forthcoming release of Martin’s report are a growing concern among senior NASA officials worried about a backlash from Congress.
In early May, during a hearing before the US Congress, NASA Administrator Bill Nelson reflected on the immense cost of the launch tower when he aimed for cost-plus contracts. Citing the merits of fixed-price contracts, Nelson said: “You get it cheaper, and that allows us to move away from what has plagued us in the past, a cost-plus contract, and switch to an existing contract price.” .”
Listing image by NASA/David Zeiters