Ray Castillo

Headquarters, Washington, DC March 15, 1995

(Phone: 202/358-4555)

Brian Welch
Headquarters, Washington, DC
(Phone: 202/358-1600)

RELEASE: 95-27

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."

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The 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.

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The 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 NASA-
contractor 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

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* 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
 -end-

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