Summary: This report (1) reviews the usefulness of cooperative agreements as a National Aeronautics and Space Administration (NASA) contractual mechanism, (2) the reasons behind NASA's aggressive and rapid-style management of the X-33 and X-34 programs, (3) the timeliness of NASA's plans to generate adequate program cost estimates for gauging management reserves in the 15-20 percent range, and (4) the influence of the Young report on NASA's management style regarding the restructured X-34 Program. GAO found that the X-33 cooperative agreement limited NASA's exposure to cost growth and allowed industry to embark on such a program at relatively modest investment. To meet the goal set in 1994 by the White House Space Policy, NASA implemented the Reusable Launch Vehicle Program, incorporating a "fast-track" management approach and "new ways of doing business." NASA did not conduct cost estimates before awarding several contracts, thereby increasing the risk that the management reserves might not be sufficient to cover additional contract costs. NASA restructured the plan for the X-34 Program in response to both X-34 Program technical reviews and other internal assessments of NASA programs, including reports on the failed Mars missions, the shuttle wiring problems, as well as an assessment of NASA's approach to executing its "Faster, Better, Cheaper" projects.
