NASA also “struggled to motivate and improve Bechtel’s performance using the award fee structure,” giving Bechtel nearly half of the $16.8 million in award fees it was eligible for through September 2021 despite problems with ML-2’s development.īechtel took issue with the audit’s conclusions. A lack of finalized requirements for the Exploration Upper Stage, used by the SLS Block 1B, contributed to some of the initial cost growth. NASA also contributed to a lesser extent, the audit found. Bechtel also struggled with the weight of ML-2, with the original target weight of about 5.4 million kilograms exceeded by more than 400,000 kilograms as of January. “According to both NASA and Bechtel management, Bechtel underestimated the overall scope and complexity of designing and building the ML-2 at the onset of the project,” the report stated, significantly underestimating costs for equipment and supplies as well as labor hours. More than 70% of the cost increase and 60% of the schedule delay “is related to poor contractor performance,” the audit stated. The audit placed much of the blame for the overruns on Bechtel. That would push the launch of Artemis 4, tentatively projected for 2027, to no earlier than the end of 2028. Using the 70% confidence level that is the NASA standard for project estimates, an independent review team commissioned by the Kennedy Space Center concluded ML-2 would cost nearly $1.5 billion and not be delivered until November 2027. However, the audit noted that a joint confidence level analysis, which NASA uses to estimate the probability of completing a project at a set cost and schedule, projected only a 3.9% chance of completing ML-2 at the revised budget and schedule.
That estimate projects completing ML-2 in October 2025, after which more than a year of testing and other preparations is expected before it is ready for the Artemis 4 launch. As of February, Bechtel’s estimate of the cost at completion of ML-2 has increased to $960.1 million, or 2.5 times the original contract value. The project has since suffered significant overruns and delays, though, revealed in the audit.