NASA WASTED BILLIONS, FEDERAL AUDITS DISCLOSE (Published 1986) (2024)

The space agency and its contractors have wasted billions of dollars on the shuttle and other space programs despite warning after warning by Government inspectors that such heavy losses were occurring through bad management, Federal audits show.

The problems that come to light now in the National Aeronautics and Space Administration reflect a far different picture from the one widely held in the years before the Challenger catastrophe: that NASA was essentially a smoothly run, trouble-free agency.

And the audits, many made available under the Freedom of Information Act, hold special significance not only in showing how NASA was operated in the years before the Challenger explosion of Jan. 28. The documents also take on added importance because the Government is facing key decisions about the future of the American space program, including who should direct it, and, some experts contend, about the future of NASA itself. Criticism of NASA Chief

Dr. James C. Fletcher, who headed the agency in the 1970's and whom President Reagan has nominated to lead it out of the post-accident era, is said by the Federal auditors to have misled Congress and the public in the 1970's about essential costs of the shuttle program. Dr. Fletcher's confirmation hearings open in Congress today.

In an interview, one of a series with past and present NASA officials, Dr. Fletcher conceded he was ''over-optimistic,'' but he denied he attempted in any way to mislead Congress.

The pattern of management problems, as well as broken promises on costs, schedules and performance, emerges from a review by The New York Times of more than 500 audits, other Government documents and economic reports by outside experts and from interviews with American space experts.

In the last 15 years, bad administration and spending abuses have been found in virtually every aspect of the NASA operations, from running the shuttle to developing planetary probes, from satellites to construction of buildings, from space experiments to employee overtime, from headquarters to field centers, according to the documents.

Experts inside and outside Government say such faulty administration procedures have severely hurt the American space program and are impossible to separate from the safety problems that culminated in the Challenger explosion and the death of its seven astronauts. At Least $3.5 Billion Lost

The waste amounts to at least $3.5 billion, according to amounts cited in the audits. But in many cases the audits did not give dollar figures for instances of significant waste, and Francis P. LaRocca, the attorney for the NASA Inspector General's office, said, ''We always assume we have only seen the tip of the iceberg - there is probably much more out there.''

NASA officials say that, in general, the audits have been fair and accurate. They concede that their agency was slow to correct financial and management problems, taking several years in some cases to do so. But they insist that their flaws have been strictly administrative, not technical, and they deny that the flaws led to problems with shuttle safety.

Among other key findings, most of them new to the general public, that these documents and interviews disclose are these:

* The NASA Inspector General's office reported only last month in an internal document that the Marshall Space Flight Center at Huntsville, Ala., did not properly monitor what happened to defective equipment. Marshall was in charge of the booster rocket whose seal problems are considered the probable cause of the shuttle explosion. And last November, just two months before the disaster, Congressional auditors repeated previous findings that Marshall was weak in keeping track of and handling shuttle equipment.

* Millions of dollars in NASA equipment has simply disappeared, either stolen or lost.

* Hundreds of millions of dollars has been lost through failure to enforce contracts in a wide variety of projects. Contract failures included paying NASA or contractor employees for vastly inflated expenses.

* NASA spent as much as $1 billion more than it needed to for the new Tracking and Data Relay Satellite System.

* Hundreds of relatively small contracts resulted in the waste, overall, of hundreds of millions of dollars. In one, for example, the Government agreed to pay $3.6 million in rent for a building that it had just sold for $300,000.

The audits, by NASA's Inspector General's office, Congress's General Accounting Office and the Pentagon's Defense Contract Audit Agency, allege thousands of NASA or contractor violations of Federal law or regulation. And they portray the staff of the agency, which had a serene, always-in-control reputation, as constantly arguing behind closed doors with Government inspectors, and often ignoring criticism. Patterns Of Management Typical of the problems the audits disclose is the case of the shuttle's external fuel tank, the huge vessel for hydrogen and oxygen that forms the backbone of the vehicle and, in the Challenger disaster, caused most of the destruction when it broke apart. NASA officials have said they believe the tank was pierced by the booster rocket whose seal is believed to have failed.

The NASA Inspector General's office found in 1982 that the costs of developing and making the tank had more than tripled, to $502 million, from its original figure. Auditors attributed the increase to the lack of competitive bidding, unrealistic schedules, design changes in the middle of construction, failure to set prices before work began and allowing parts to be built before their design and testing were finished.

The auditors documented 2,714 changes on the tank by 1980. NASA officials changed some key components as many as five times as parts were bought and work was done, stopped, ripped out and redone.

They said the ''current external tank management is not cost effective and, in our opinion, is a microcosm of the overall shuttle program management difficulties.'' The tank project was managed by the Marshall Space Flight Center, which also managed the production of the booster rocket faulted in the shuttle explosion. Auditors said many of the problems resulted more from Marshall's management than from budget constraints. Disagreement With Findings Marshall officials told auditors that they disagreed with many of the 1982 findings and declined to follow major recommendations, including one that Marshall do more equipment testing and better document its reasons for cost changes, as required by law.

The Federal inspectors replied that Marshall officials ''do not have the arbitrary authority to act in contravention to the NASA procurement regulation.''

One of NASA's biggest mistakes was cited by its Inspector General's office in reports from 1981 to 1984 dealing with the Tracking and Data Relay Satellite System, an orbital communications system to replace ground stations that track space vehicles. The second unit of the system, a $100 million satellite, was aboard the Challenger when it exploded.

The Inspector General concluded in 1981 that the agency had wasted up to $1 billion, or nearly half of the $2.1 billion cost of the system, through a ''questionable'' leasing arrangement. Because NASA did not have the money to buy the satellites, it guaranteed a Government loan from the Federal Finance Bank to a contractor, Spacecom, a Western Union unit, to buy the system and lease it back.

But the auditors said NASA then failed to adequately monitor the contractor, letting it withdraw millions of dollars in advances for work not yet done, for expenses expressly disallowed and for payments on other contracts.

There were many delays and ''excessive'' cost increases, but auditors said NASA managers at the Goddard Space Flight Center in Greenbelt, Md., had agreed to pay for all delays, regardless of who caused them. And NASA agreed, ''in direct contravention of law,'' to repay the Government bank all money that Spacecom withdrew, even if the contract were to be terminated for any failure of Spacecom to furnish required services, auditors said. They called these agreements a kind of predetermined ''confession of judgment against NASA.''

The result, in part, has been a program that is still not operational, is more than six years late and is costing taxpayers $200 million a year instead of the $50 million anticipated, the auditors said.

As such, it has failed to fulfill the promise of being a cost-effective replacement for the $70 million-a-year ground-tracking stations. Auditors have urged NASA management to consider liquidating the contract and ''take timely and effective management actions'' to put the system ''on a prudent business basis.'' The agency did not liquidate the contract; the project's total cost has since risen to $2.8 billion.

James Elliot, a Goddard spokesman, declined to comment on the problems.

More broadly, in May 1984 the General Accounting Office said NASA's systems to track and correct financial, equipment, property and management problems were ''generally ineffective.'' It said 10 of the 37 management problems that existed in 1981 persisted until May 1984.

Only last November, the G.A.O. auditors repeated those conclusions and said the failures to detect and correct problems were still widespread. Auditors wrote of ''attitude'' and ''general leadership'' problems that prevented correction of persistent abuses. The report singled out the Marshall center, which just two months later gave the order to launch the Challenger without informing higher management of problems with the booster rocket's joints that had existed for at least six months.

The auditors made no specific mention of the booster rocket but repeated a 1984 criticism that there were ''problems with the entire logistics spares program'' for space shuttle engines at Marshall, including control over equipment both in purchasing and after it was bought.

The report of last November went on to say that NASA was telling the President and Congress that it had no significant internal weakness at the same time that its own auditors were telling agency management of significant system weaknesses.

On March 27, two months after the explosion, officials at Marshall were cited by the agency's auditors for violating various NASA rules in the handling of hardware that did not meet specifications.

The audit said Marshall personnel ''cannot determine the final disposition of nonconforming items.'' That is, if a part was broken or had some other manufacturing defect, Marshall people could not tell whether it was fixed or not before use.

It has not been disclosed whether or not the booster rocket seal faulted in the Challenger explosion was defective or installed improperly, but it is now generally acknowledged that the seal design itself was faulty.

Dr. William R. Lucas has been the Marshall director since 1974 and was its deputy director from 1971 to 1974. He joined the facility in 1952 when it was the Redstone rocket research unit. He testified before the Presidential commission on the Challenger explosion that he was aware the night before the launching of contractor engineers' concerns about the booster rocket seals but did not inform officials at Kennedy. He said he had been aware for some time of the problems but ''never considered the seals as a safety-of-flight issue.''

A spokesman for Marshall, told of the various audit findings on Marshall management during Dr. Lucas's tenure, said Dr. Lucas was not available for comment.

NASA officials contend that most of the problems have been corrected. But the audits show that many persisted for years, causing serious cost increases, schedule delays and ultimately damage to agency programs. And the same types of problems continue to crop up while agencywide weaknesses persist, the audits show.

NASA's general response is made by C. Robert Nysmith, associate administrator for management. He said in an interview that the Government audits had been ''relatively fair and relatively accurate'' over time. Keeping track of equipment and keeping information flowing properly is ''not a high priority'' with NASA, he said, but one that needs ''more attention.''

''Getting the agency to identify weaknesses is not a natural culture,'' Mr. Nysmith added, but he insisted that ''the system is improving every year'' and he denied that the administrative failures had led to systemic failures in shuttle safety.

But a debate has been raging since the Challenger disaster on whether money and other pressures compromised safety, and the faulty practices disclosed in the audits seem sure to refuel the debate. Implications Emerge From Audits One of the immediate consequences of the newly revealed audits may well be the additional spotlight they place on Dr. Fletcher as Mr. Reagan's nominee to head NASA.

Dr. Fletcher was the agency's Administrator from 1971 to 1977, when many of its major cost and management procedures and abuses originated, according to the audits. And it was essentially Dr. Fletcher who sold Congress on the shuttle by saying it would provide inexpensive and routine access to space through frequent commercial missions.

Government records now make clear that he and his aides were wrong by wide margins in virtually all their economic projections, projections on which Congressional approval of the shuttle was justified and voted.

In 1972, Dr. Fletcher predicted, in news releases and Congressional testimony, a cost of $10.45 million for each shuttle launching. The General Accounting Office said then that the figure was ''misleading'' and ''overly optimistic,'' since it accounted only for operating costs, not construction, and did not reflect considerable technical uncertainties.

Today the costs are $279 million for each launching, including construction and operations, and $151 million each time just for operations, according to Congressional Budget Office figures. Even after allowing for inflation, today's operations alone for each launching cost five times more than the original projections. The NASA projections said the shuttle would be uneconomical if launching costs rose more than 75 percent.

Dr. Fletcher predicted, too, that the cost of lifting shuttle cargo into orbit would be $100 a pound. The cost now is $5,264 a pound calculated on total costs and $2,849 for operations alone. Allowing for inflation the corresponding rise is ninefold to nineteenfold, the Congressional Budget Office figures showed.

In letters to Congressional auditors, Dr. Fletcher and his deputies consistently refused to correct many of the problems cited by the inspectors, including management errors, spending abuses, delays in hardware testing, lax monitoring of contractors and optimistic estimates of costs and technical problems.

On April 6, 1977, Dr. Fletcher wrote to the General Accounting Office: ''Cost effectiveness was a central feature in the initial approval for the shuttle, and remains so. On a payload cost basis, the shuttle is the most economical space transportation system.'' The previous year, he cited the ''past excellent NASA record for on-time within cost program accomplishment on major manned missions.''

Dr. Fletcher, now a professor of engineering at the University of Pittsburgh, said in a recent interview: ''In retrospect, maybe we were optimistic. The cost per flight rose way beyond what we anticipated. We're all disappointed it didn't come out the way we calculated.''

But he said that ''the running battle with G.A.O. was real,'' adding that in the mid-1970's there were 10 to 15 auditors scrutinizing the shuttle program full time at the NASA centers of Marshall in Alabama, Kennedy in Florida and Johnson in Texas. He said that what needed correction was a matter of judgment, his against the auditors. He also contended that the shuttle has still provided valuable scientific and military capabilities to the United States.

Dr. Fletcher said it was not possible to comment more specifically on events so many years ago. But he added that NASA was then under severe budget constraints and asserted that most of the problems with the shuttle occurred after he left the agency.

He agreed, however, that the agency now needed critical review, saying, ''The structure of NASA should be examined.''

NASA now has no Administrator. James M. Beggs, who was appointed in 1982 and recently resigned, is under indictment on fraud charges relating to his previous employment at the General Dynamics Corporation. Mr. Beggs said in an interview that he could not comment on the auditors' criticisms because ''my lawyers have put strict restrictions on me.''

Even before the Challenger disaster and the re-examination it has brought, it was clear that key decisions for the 21st century must be made now: Should the United States begin building its next generation of spaceships now or simply remodel the present craft? Will it proceed with the construction of a space station? Will it begin interplanetary exploration with a manned trip to Mars in the 1990's, as many in the space community are urging?

The audits show a wide gap between past promise and future reality in space-related construction as well as shuttle operation.

NASA has proposed building a shuttle to replace the Challenger. The estimated cost of $2.2 billion is more than three times the 1972 projection, and 75 percent more than the 1982 figure, even taking inflation into account. In nearly all major NASA projects since 1970, costs have significantly exceeded projections, so there is no guarantee the $2.2 billion estimate would be close to the final cost, some shuttle experts say.

Some space economic experts, noting that expendable rockets have been taking an increasing role in the plans of both NASA and private companies, say it may not make sense to build another shuttle. They also point out that the shuttle is now 10-year-old technology and that new reusable space vehicles are on the drawing boards.

NASA originally predicted that it could complete 48 flights a year with three shuttles, the number it now has left. The agency now projects a maximum of only 24 flights a year, with four orbiters. Some senior astronauts are now saying publicly what they warned privately, that anything more than nine is dangerous because of the time needed between flights for maintenance and preparation.

In fact, according to the audits, NASA takes almost eight times longer to prepare the manned vehicles for launching than it promised Congress when the shuttle program was proposed.

The management problems also raise the immediate question in some minds as to whether NASA should continue to exist in its present form. Should a separate organization manage the shuttle? Should NASA's decentralized space empire, with a Washington headquarters and 11 centers around the country, be consolidated? Almost all outside observers urge that the shuttle program not resume before systematic management improvement occurs.

''The management has simply been poor,'' one of these observers, Alex Roland, says. Mr. Roland, who was a historian and contract monitor for NASA from 1973 to 1981, is now a specialist in the history of technology at Duke University. ''A handful of new people in key positions could turn the agency around,'' he says. ''But the organization is going to have to start holding people more accountable for their actions.'' 'The Most Difficult Agency' Most of the management problems that are essentially new to the general public and vast in scope show up in audits done by NASA's Office of Inspector General and a related agency that often works with it, the Defense Contract Audit Agency.

The NASA Inspector General's office, which has a staff of about 100, is chartered by Congress to examine the agency's management and its spending practices. It is a separate entity not beholden to the Administrator, an arrangement similar to the one between the Pentagon and its Contract Audit Agency. Their recommendations to agency heads are not binding. Nor are they normally released to the public.

Figures are not available on NASA's cost management compared with that of other agencies. But some audits indicate that practices at NASA, so long regarded by outsiders as well-run, were on occasion worse than at the Pentagon, considered by many the worst for cost overruns.

The General Accounting Office, an investigative arm of Congress, has generally found the same kinds of management problems at the space agency as the NASA and Pentagon auditors have. In 1977, the G.A.O said NASA, unlike the Pentagon, had not determined for Congress what cost increases resulted from inflation, what came from changes in the size of a project or what came from technical problems. And while the Air Force was able to reduce contractors' prices through negotiation an average of 15 percent, the Marshall center's average reduction was 3.4 percent, NASA auditors said in 1984.

The G.A.O. inspectors say they have prepared more than 10,000 audits of Government agencies since 1970, including 335 audits of NASA.

J. Klein Spencer, a G.A.O. official who has audited the space agency for 10 years, said NASA was slow to provide material needed for audits and sometimes never provided all the information required by law.

He said ''NASA has been the most difficult agency'' in terms of obtaining information. ''We have problems with other agencies,'' he said, but adding that NASA consistently posed problems ''on every job.''

''It's just their management philosophy over there,'' he said. ''They want to provide a minimum of information, and it takes a great deal of effort to get the records we need.''

Mr. Nysmith of NASA says the agency's current policy is ''to provide them with any information they need - we have a turnaround time in 30 days.''

But Mr. Spencer said, ''There has been no change.'' Monitoring Contractors Among the themes that run through the audits reviewed by The Times is NASA's inability to manage or monitor the work of thousands of contractors paid billions of dollars for everything from manufacturing and maintaining the shuttles to painting buildings. More than 85 percent of NASA's $7.5 billion annual budget is spent through contractors.

Often, NASA has allowed contractors to start and sometimes finish projects before costs were determined. This has left the contractor virtually free to determine how much a job would cost, a 1981 audit said. Yet NASA's own procurement regulations specify that pricing must be done before work starts.

On the shuttle, the Rockwell International Corporation, the main contractor, spent $20 million on a propulsion system in the two years between receiving a work order and agreeing on a price settlement. NASA had expected a $3.2 million price but wound up paying Rockwell $19.2 million.

At times, more than $750 million in work was being done without price agreements, the auditors found, adding, ''The budget and planning cost estimates prepared by Rockwell International Corporation are often inaccurate and unreliable.'' Some of Rockwell's payment claims were submitted five years after work was started.

George W. Jeffs, who has been president of Rockwell's space division since 1976, says it is difficult to submit the required paperwork because of the tight schedule.

''When you have a change in the middle of a development program,'' he said, ''often the teams don't have time to prepare the proposal that goes to the Government. Oftentimes they get the job done first.'' The dollars go up as time goes on, he said, because ''changes are being made to the changes.''

It seems clear that one of the problems may have been the close associations that have developed between NASA personnel and its contractors' employees over the years. Mr. Roland, the Duke historian, says the Rockwell shuttle history illustrates ''the cozy relationship between agency officials and contractors.''

''They live in the same area, their kids go to the same schools; they even sound the same,'' he said. ''The only way you can tell the difference is by their badges.''

Another instance of the mismanagement of NASA contractors, one of the few such cases that was well-publicized, occurred in 1979. It involved what the Defense Contract Audit Agency later called ''unnecessary and unreasonable travel costs'' of $1.8 million. The billings included drives in rental or private cars by hundreds of workers from Rockwell's California headquarters to Florida to make major thermal tile repairs on a shuttle orbiter, as well as salaries during the cross-country trip and rental of beach quarters in Florida. The cross-country drives cost far more than airfare. Rockwell had also billed the Government for a trip abroad by four people to support publicity for the James Bond film ''Moonraker,'' which featured the shuttle.

Ultimately, NASA managers disallowed $252,000 of the charges.

Mr. Jeffs asserted that ''this was an emergency situation'' and the company's actions were ''extremely reasonable'' under the circ*mstances. The Perpetual Costly Circle What has happened has in a sense been circular and self-perpetuating. NASA's inability to monitor contractors properly was attributed in part to cuts in staff, made necessary because of shortages in funds caused in many cases by excessive contract spending.

In the Apollo program to put man on the moon, NASA had 28 contract monitors at the Johnson Space Center; in 1979 and 1980, it had two. There was one person to monitor the 44,700 purchase orders Rockwell issued in 1981, the auditors found.

At the Marshall center in Alabama, officials authorized Rockwell to purchase $1.6 million in spare parts that were not needed, a 1984 NASA audit said. At $730 million, procurement for more than 120,000 spare parts was the largest single Marshall contract, but the auditors noted that the cost proposals are reviewed by one full-time analyst with some part-time help. The auditors said 78 percent of the reviews were ''cursory,'' violating Marshall's own procurement requirements. Marshall approved fully 99 percent of the requests for spares submitted by Rockwell, the auditors said.

Whether because of inadequate staff monitoring or for other reasons, audits show that for years, instead of buying parts directly, NASA paid Rockwell or its subsidiaries for parts that had been bought from vendors, contrary to NASA policy. Markups sometimes exceeded 1,000 percent. At one point, Rockwell sold an electronic cooling fan to NASA for $159,000. It had cost the Rockwell subcontractor $5,215.

As late as September 1984, the NASA Inspector General's office said Marshall had ''not adequately considered or evaluated the monetary advantages which could be realized'' by buying spares directly from vendors. The auditors put the potential cost of this practice over five years at $10 million.

The shuttle contract for the extravehicular mobility unit, which enables astronauts to manuever around outside the shuttle, grew from $24.1 million to $71.8 million in part because of NASA's ''lack of timely review and consideration of significant changes,'' according to internal inspection reports. Instances Of Fraud Not all the extra cost to the shuttle and other space programs occurred simply because of sloppy procedures or staffing problems.

In many causes outright fraud occurred.

The space agency, as one audit put it, ''lacks essential internal controls to prevent fraud.''

In February 1985, Dr. Herman E. Thomason, deputy director of science and engineering at Marshall, pleaded guilty in Federal court to charges that he ''directed, recommended and approved'' the NASA purchase of millions of dollars in computer equipment from a company in which he had a substantial personal financial interest.

Dr. Thomason, who had been honored in 1979 for ''exemplary leadership,'' left the agency, paid a $50,000 fine and spent 60 days in jail for violating NASA regulations and ''knowingly making false and fraudulent statements'' about his outside financial interest, court papers said. Dr. Thomason's department evaluates space data, including that from the shuttle.

Many other instances of fraud also involved NASA employees. One space scientist at agency headquarters in Washington got a $3,000 finder's fee for helping a company to gain an agency contract. The director of NASA's Lewis Research Center in Cleveland was convicted of fraud for submitting more than $6,800 in phony travel vouchers. In 1981, 21 NASA employees at Langley Research Center were found by auditors to have improperly overcharged on their time and attendance, and the auditors said ''management had failed to correct the abuses.''

Other instances of fraud involved private contractors. Two officials of the Mayfair Construction Company of Cocoa Beach, Fla., were sentenced to three years in prison each for mischarges and false statements pertaining to construction contracts worth more than $20 million at Kennedy Space Center. But millions of dollars in wasted funds and lost time went unrecovered, auditors said.

Other cases of fraud, generally detected not by NASA's administrators but by the agency's Inspector General and Defense Department auditors, included false claims for overtime submitted by contractors and their employees as well as contract overcharges.

One contractor, for example, charged $12,000 each for parts he had agreed to supply for $5,000 and which were available on the open market for $2,000. In 1980 the Boeing Computer Services Company in Seattle paid $2.4 million to settle a $10 million overcharge it had made against the Government, the auditors said.

The audits cite numerous cases in which cost overruns on fixed-price contracts with such agencies as the Army Corps of Engineers, the Air Force and the Agriculture Department were charged to contracts with NASA. In 1985, for example, General Electric agreed to pay a $1.1 million settlement for improperly charging NASA and other agencies an estimated $3.1 million in cost overruns that the contractor could not collect on a fixed-price Air Force contract, auditors said.

Rockwell was discovered to have overcharged the agency for ''massive numbers of labor hours'' on a fixed-price contract with the Air Force for a satellite. The company agreed to pay $1.5 million in 1983. But two years later, on Oct. 31, 1985, auditors reported Rockwell had tried to get back $541,000 from NASA in legal fees from the case through a general claim for legal expenses. The claim was disallowed. Repeated Code Violations Cited Time and again the auditors cited violations of Federal cost and management regulations.

A significant category of these allegations, perhaps one of the most frustrating to the cost-conscious investigators, has been NASA's practice of buying large quantities of goods already owned by the Government.

In January 1984 Marshall said there were no ''off the shelf,'' or standard, items for the shuttle's main engines. NASA auditors arranged an independent search, which found 1,587 matches from Government sources.

From 1975 to 1981 NASA, in violation of its own contract and Federal codes, allowed Rockwell to buy parts on the open market when millions of dollars of identical parts were available much cheaper from Federal sources, the auditors said. In a case reviewed in newspaper accounts shortly after the Challenger explosion, NASA was found to have paid Rockwell's Rocketdyne division $120 each for bolt assemblies available from Government sources for $3.28 and $315 each for 3-cent metal loops available in Government supplies. A $1 washer cost $80, a $2 clamp cost $86 and a $78 bolt cost $1,621, the audit found.

In another contract violation, a NASA official hired his son and other novices for a painting job at the Goddard center, according to a 1979 audit. The $106,000 bill was said to be more than twice the standard amount because the NASA official estimated 3.8 million square feet to paint when the actual figure was 472,500.

At Kennedy Space Center, executives of EG&G Florida, the base operations contractor, were allowed to take $51,000 in Government money, buy oak office furniture and retain ownership, in violation of Government codes, according to a March 1985 NASA audit. Lost Time In Operations NASA's poor control over contractors caused the agency to pay for large amounts of idle worker time, records show. Many of the losses are said to have occurred for years before the audits and in some cases continued afterward. Often they were documented by the Defense Contract Audit Agency.

Repeat audits of Rockwell in 1979 and 1980 found the company had a 34 percent rate of idle time, costing NASA $3.7 million annually. The Johnson Space Center had been asked for more than a year to ''improve supervisory monitoring of employee work.'' In 1981 auditors found that $650,000 was being wasted because Rockwell employees at Kennedy Space Center were taking extended breaks, leaving work early and putting in excess overtime.

In 1983 auditors found NASA wasting $28 million a year because Rockwell engineers were idle more than 30 percent of the time. Auditors found NASA wasting $6.7 million a year because of a 20 percent rate of ''excessive nonproductivity'' at General Dynamics in San Diego.

NASA auditors found that $1.7 million a year was being wasted at the Langley Research Center in Hampton, Va., because the center's management ''had not sufficiently emphasized cost control'' over a maintenance contractor. Workers took nearly two hours to do an hour's work, engaged in ''cruising'' around the center in vehicles ''without an apparent reason'' and were not properly equipped with tools and materials, the auditors said.

The audits also show that employees of both NASA and contractors were using narcotics, marijuana, cocaine and other illegal drugs, and marijuana was actually found growing at one NASA facility.

In April 1984, auditors of the Johnson Space Center, whose Mission Control directs space flights after launchings from Cape Canaveral, said management must improve its controls over the use of narcotics at the center. Theft and Other Property Troubles The audits show that NASA had problems controlling its basic resource, more than $12 billion in property and equipment.

An audit by the General Accounting Office concluded that officials at the Johnson center consistently accepted the loss, presumably through theft, of tens of thousands of dollars of equipment each year in numerous small contracts. The officials told auditors that there was ''a general attitude that small dollar-value contracts are not worthy of attention.''

The audits document many specific instances of theft: Copper cable, aluminum, tools, $26,000 of gold that had been salvaged from rocket engines, rare metal used in the shuttle's solid-fuel booster rockets were stolen. At least $100,000 of silver engine-ring seals were taken, as was $450,000 of gold used in making shuttle thermal tiles.

As early as 1970, the Congressional auditors noted that the Kennedy Space Center had not accounted for more than $320 million of equipment for as long as four years. Marshall officials had been asked to account for their equipment in 1970, but at least $250 million was not tabulated by 1974. At Goddard, Johnson and Marshall, 3,779 items valued at $3.1 million were missing by 1974. Auditors said it was often unclear how much was stolen and how much simply lost because of poor accounting.

At the Ames Research Center in Mountain View, Calif., nearly $1 million in property was lost from 1977 to 1982 because required inventories were not done, losses were not investigated and center officials declined to penalize responsible officials, NASA auditors said in September 1982.

Ames promised to correct its control procedures but the next year, the auditors found that another $2.4 million, in computer equipment, had disappeared.

At the Langley Research Center, there was said to be ''no control'' over gold, silver, platinum and other precious metals used in laboratory experiments in 1981. Platinum was found stored in a brown grocery bag, and some $71,000 in silver ran down drains each year for three years because a reclamation filter had not been changed. Two years later auditors found some procedures still unchanged.

The Marshall center allowed Morton Thiokol Inc., the prime contractor on the booster rockets, to rent a building for $3.6 million over 13 years and charge the Government for the rent, although the Government itself had recently owned the building and sold it for $300,000, NASA auditors said.

Thiokol also rented three other buildings for rocket storage, assembly or manufacturing, although eight nearby buildings owned by the Government could have been used, auditors said.

In 1976, an audit by the General Accounting Office found that the Marshall center had fully 14 warehouses of equipment that had been ordered by NASA employees who had since left the agency or ''who had since died.'' Most of it was gathering dust.

And last year, two audits at Kennedy determined that more than $25 million was being wasted because two contractors were each warehousing and managing 25,800 identical pieces of equipment. The Lockheed Space Operations Company, which prepares the shuttle for launching, was allowed to spend $5.9 million for new warehouse space to store another 44,600 other items that were not needed, the audits showed.

John D. Williams, a spokesman for Lockheed, which assumed its duties on Oct. 29, 1983, said, ''We will continue to work on the problem areas cited in the audit.''

On the other hand, contractors at Kennedy were not stocking enough spares and had failed to order $55 million in requested equipment, a 1985 audit found. Auditors said lack of spares had delayed a number of shuttle launchings.

One result was that parts needed to replace balky items on an orbiter waiting to take off were taken from other orbiters. ''The cannibalizing just horrified me,'' said Albert J. Kelley, a vice president of Arthur D. Little Inc., a former NASA project manager who later was a management consultant in technical fields. ''Every time you open a clamp, break a seal, damage a fitting to take out a part, you are looking for trouble.''

Tomorrow: Safety and other implications.