WASHINGTON — NASA’s internal oversight board has sharply criticized Boeing’s work on the next version of the Space Launch System, finding serious quality control deficiencies.

In a report released on August 8, NASA’s Office of Inspector General (OIG) said there were significant problems with Boeing’s work on the Block 1B version of the SLS, which is being carried out at the Michoud Assembly Facility in New Orleans. The agency attributed this to the lack of an acceptable quality management system and trained workers.

NASA hired the Defense Contract Management Agency (DCMA) to oversee Boeing’s work on the SLS core and upper stages at Michoud. “According to DCMA officials, Boeing’s process for dealing with contract violations was ineffective, and the company generally did not respond with corrective actions when the same quality control problems reoccurred,” the OIG report said.

The report found that between September 2021 and September 2023, the DCMA issued 71 corrective action requests (CARs) regarding Boeing’s SLS work at Michoud. A CAR identifies a specific contract deviation regarding the work. Of the 71 requests, 24 were Level 2 CARs, a more severe version used for issues that cannot be immediately corrected or affect critical safety hardware.

This number of CARs, the DCMA said, was unusually high for a space program at this stage of development. There were so many CARs of one type – inspections of work called “stamped warranties” – that NASA recommended that the DCMA create a Level 3 CAR, reserved for severe deviations. That CAR was never issued because NASA opted to use “alternative corrective actions,” which the report referred to as additional reviews.

The report attributed the high number of quality problems to a shortage of trained workers. “Michoud officials stated that it has been difficult to recruit and retain contract workers with experience in the aerospace industry, due in part to Michoud’s geographic location in New Orleans, Louisiana, and lower employee compensation compared to other competitors in the aerospace industry,” it said.

The OIG noted in the report that it had firsthand evidence of a problem caused by inadequately trained workers. During a site visit in April 2023, OIG staff saw a section of a liquid oxygen tank intended for use in the SLS core stage for Artemis 3 that was “segregated and awaiting disposal” due to welds that did not meet specifications. NASA officials told the OIG that “the welding problems arose due to Boeing’s inexperienced technicians and inadequate planning and monitoring of work orders.”

The report also criticized the management of the key part of the Block 1B SLS, the Exploration Upper Stage (EUS), which will replace the interim cryogenic upper stage of the original Block 1 SLS. The EUS accounts for more than half of the $5.7 billion development costs for Block 1B, which have increased by $700 million since the agency made a commitment to baseline costs and schedule last December.

While NASA expects EUS spending to decrease as Boeing moves employees away from the project, “we forecast annual Block 1B costs to remain at 2023 levels through at least 2026 before declining in subsequent years,” the report concludes. NASA’s budget projections do not include the additional funding needed for EUS work through 2027. This risks delays for the Artemis 4 launch, which is scheduled for late 2028.

Boeing, meanwhile, uses a software tool called Earned Value Management System (EVMS), which measures progress using technical, cost and other data and which the Department of Defense has been banned from using since 2020 due to several deficiencies. “According to NASA contracting officials, Boeing cannot provide a realistic baseline delivery date for the EUS due to ongoing deficiencies in its EVMS,” the OIG report said.

“Given Boeing’s quality management and related human resource challenges, we are concerned that these factors have the potential to impact the safety of the SLS and Orion spacecraft, including their crew and cargo,” the report concluded. It included four recommendations, including an improved quality management program, a cost overrun analysis and coordination with DCMA on EVMS compliance, which NASA accepted in its response.

However, the agency rejected a fourth recommendation that would have imposed financial penalties for Boeing’s failure to comply with quality controls. “NASA interprets this recommendation as directing NASA to impose penalties outside of contractual limits,” wrote Cathy Koerner, NASA’s deputy director for exploration systems development, in her response to the report.

She argued that there are other mechanisms, such as bonus provisions in the contract, that could be used to address the quality problems. “Introducing financial penalties outside the contractual limits undermines the control process of the contract,” she concluded.

“Our recommendation was written to provide the agency with flexibility to use the most appropriate mechanisms to impose financial penalties on Boeing for failure to meet required quality control standards,” the OIG responded in the report, considering the recommendation “unresolved pending further discussions with the agency.”

Related