October 10, 2018 / 11:42 PM / in 2 months

UPDATE 1-Boeing rocket for NASA over budget, could further delay launch -audit

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By Joey Roulette

ORLANDO, Fla., Oct 10 (Reuters) - Boeing Co is building the largest rocket in NASA's history but the aerospace giant's "poor performance" has resulted in an $8.9 billion price tag that is double the initial budget and could further delay the launch, the U.S. space agency's watchdog office said on Wednesday.

The first test launch of the Space Launch System rocket, which is supposed to send humans to the moon and ultimately allow deep space exploration, was most recently slated for mid-2020 with a crew launch to follow in 2022. The launches have been delayed at least three times.

NASA's Inspector General said in an audit that "management, technical and infrastructure issues driven by Boeing's poor performance" had led to delays and cost overruns, raising questions about the future launch timetable. Delivery of the program's first core stage has already slipped two-and-a-half years to December 2019, the report said.

NASA spokeswoman Kathryn Hambleton said the agency was restructuring its contract with Boeing, but still planning for the same timetable.

"The agency continues to plan for the launch of Exploration Mission-1 in 2020, but there are still technical and schedule risks," she said in an email.

Boeing spokeswoman Patricia Soloveichik said in an email that the audit did not accurately describe the current state of the program and the company had already implemented some of the watchdog's recommendations. She also blamed "internal NASA issues."

Boeing, which was selected as the main contractor for the NASA program in 2012, has faced delays with other federal contracts.

The company has missed several deadlines for delivering its KC-46 aerial refueling tanker to the U.S. Air Force. It has amassed roughly $3 billion in costs on the program, a derivative of its 767 commercial aircraft, and is more than two years behind schedule.

In the case of the NASA program, Boeing will exhaust the contract's entire $6.2 billion budget three years before it is scheduled to end and ultimately spend $8.9 billion through 2021 without delivering the rocket's core stage or its upper stage, the report said. The audit blamed insufficient staffing and improper assembly of factory tools for the delays.

The larger figure is double the contract's initial budget. (Reporting by Joey Roulette in Orlando, Florida, Editing by Ben Klayman and Rosalba O'Brien)

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