The Nimrod Review - Official Documents

The Nimrod Review
(2) ‘Torrent of changes’ and organisational ‘turmoil’
17.11
17.12
450
The White House appointed a new NASA Administrator in 1992 who was to remain in post until November
2001. He was an “agent of change” favouring “administrative transformation”. He set in train “not one or
two policy changes, but a torrent of changes. This was not evolutionary change, but radical or discontinuous
change. His tenure at NASA was one of continuous turmoil.”
The decade 1998-2008 has been one of continual administrative turmoil in the MOD resulting in ‘changefatigue’.
(3) Imposition of ‘business’ principles
17.13
17.14
12 Business management principles were imposed on NASA during this period. These included that headquarters
should not attempt to exert bureaucratic control over a complex organisation but simply set strategic direction
and provide operating units with the authority and resources needed to pursue those directions; checks and
balances should be removed; and those carrying out the work should bear primary responsibility for its quality.
The CAIB said: “It is arguable whether these business principles can be readily applied to a government agency
operating under civil service rules and in a politicised environment.” 13
The ‘McKinsey effect’ and the 1998 Strategic Defence Review (SDR) led to the imposition of business language
and methodology on large swathes of the MOD.
(4) Cuts in resources and manpower
17.15 The end of the Cold War meant an end to defence budget increases. NASA was expected to become “more
efficient” and to do “more at less cost”. There was “schedule pressure”. NASA was “an agency trying to do too
much with too little”. 14 NASA’s motto in the 1990s became “faster, better, cheaper”. Between 1991 and 1994,
there was a reduction of 21% in operating costs. There were substantial reductions in the manpower and a
decrease in the involvement of NASA’s engineering workforce with the Space Shuttle program. This all caused
uncertainty, tension and distraction.
17.16 During the period 1998-2008, the MOD and the Services have been repeatedly told to “do more with less”, and
have been subject to round-upon-round of ‘salami’ cuts in funding and manpower.
(5) Dangers of outsourcing to contractors
17.17 The search for cost reductions led NASA leaders “to down size the shuttle work force, outsource various shuttle
program responsibilities - including safety oversight - and to consider the eventual privatisation.” 15 NASA staff
reductions had led to important technical areas being left ‘one-deep’. The Shuttle Independent Assessment Team
(SIAT) 16 had given a stern warning about the quality of NASA’s Safety and mission assurance efforts and noted
that the shuttle programme had gone through a massive change in structure and was transitioning to a “slimmed
down, contractor run operation”. 17 The SIAT said that workforce augmentation must be realised principally with
NASA personnel rather than with contractor personnel. NASA had grown dependent on contractors for technical
support, contract monitoring requirements increased and NASA positions were subsequently staffed by less
experienced engineers who were placed in management roles. The CAIB said: “Collectively this eroded NASA’s
in-house engineering and technical capabilities and increased the agency’s reliance on the [main contractor]
and its subcontractors to identify, track and resolve problems. The contract also involved substantial transfers of
safety responsibility from the government to the private sector.”
12 The management approach advocated by Edwards Demin and used in Japan in the 1980s.
13 CAIB Report, page 106.
14 CAIB Report, page 102.
15 CAIB Report, page 102.
16 Shuttle Independent Assessment Team (SIAT) reported in 2000.
17 CAIB Report, page 179.