KSC’s canceled Artemis launch tower would have cost $2 billion, NASA audit says

NASA’s recent cancellations of four Artemis programs — including the mobile launcher 2 tower that was constructed at Kennedy Space Center — were projected to cost the agency billions more if they had been allowed to continue, according to the NASA Office of Inspector General.

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A memo released Wednesday detailed current cost and schedule estimates for the mobile launcher (ML2) as well as the Exploration Upper Stage (EUS) and Universal Stage Adapter (USA), all designed for a larger version of the Space Launch System rocket used on Artemis launches from KSC. The memo also detailed costs and delays for the Habitation and Logistics Outpost (HALO), which was going to be part of the Gateway lunar space station.

The projects were canceled when NASA Administrator Jared Isaacman announced the remaining Artemis missions would all be flown on a standardized version of the SLS rocket, called the Block 1, and that instead of an orbiting lunar outpost, NASA would instead pursue a ground-based moon base.

The ML2, which took shape adjacent the Vehicle Assembly Building at KSC over the last two years, was near completion by prime contractor Bechtel National Inc., which had said it was targeting delivery by May this year. The company had added the last modular block to the tower last summer, bringing it to a height of 377 feet.

NASA halted work in February, though, and announced parts of the ML2 would be harvested to support the agency’s mobile launcher 1. ML1 had been used on both the Artemis I and II missions that used the SLS rocket, and is parked inside the VAB awaiting stacking of the SLS rocket for next year’s planned Artemis III flight.

ML2’s purpose was based on NASA using the EUS, which would have made the SLS rocket a little taller, and have required different propellant line connections than could be handled by ML1.

The original $383 million contract issued in 2019 called for the ML2 to be delivered by March 2023. NASA’s OIG had signaled problems with its timeline and costs over the years because of management issues on both the contractor and NASA sides that were exacerbated by the COVID outbreak and supply chain challenges.

The most recent projection had the ML2 costs near $1.6 billion, but NASA said those were forecast to grow to $2 billion by the time Bechtel handed it off to NASA.

“If Bechtel was to continue the ML2 to completion, in our judgment, the overall contract costs would have been significantly higher and the delivery schedule would have been further delayed,” the audit memo states. “Based on trends in Bechtel’s monthly financial management reports over the past 3 years since construction began, we project the ML2 contract’s cost could have climbed to $2 billion (5 times more than planned), and over $140 million higher than Bechtel’s latest estimate at completion in February 2026.”

The memo also noted that it didn’t expect Bechtel to hand off the ML2 to NASA until December 2026, which was more than 3 1/2 years later than originally planned.

“Notably, NASA would still need to perform verification and validation testing after delivery to ensure the launcher operated as expected prior to using it for any Artemis launches. This process could take 1 to 2 years, meaning the ML-2 would likely not have been operational until at least 2028,” the memo reads.

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The other canceled programs had their own major delays and cost overruns.

The EUS contract was added in 2017 to an existing SLS contract that had been awarded to Boeing, with an added value of $962 million for delivery in 2021. NASA canceled the EUS work in March 2026 at which time its cost had climbed to $2 billion.

The memo stated it projected EUS costs would climb to $3.7 billion and not be available until November 2028, which is about 7 1/2 years later than originally planned.

The USA contract given to Dynetics in 2017 was originally for $131 million, but had climbed to $353 million when NASA halted work in March 2026. The memo states the forecast cost would have climbed to $497 million and not available until May 2030, or about nine years behind schedule.

Both Boeing and Dynetics received “unsatisfactory” ratings on their project progress by NASA before their contract cancellations.

The the HALO project, NASA awarded Northrop Grumman an initial design contract in 2019 for $187 million and then a full contract in 2021 worth $1.3 billion for delivery of the module by May 2025.

Work stopped in April 2026 with costs having already increased to $1.9 billion, although NASA was still evaluating whether the module could be repurposed to become part of the ground-based lunar base.

The memo states it estimated delivery of HALO would not have been made until July 2031, a six-year delay, and would not have been operational because of integration with another facet of Gateway until at least 2032. NASA could not project the overall forecast cost total because of limited availability of contractor monthly financial management reports.

In total, the four projects had initial contract values of $2.8 billion when awarded, but those had already grown to a combined $5.9 billion with all missing original target delivery dates. Had they been allowed to continue, the costs were projected to increase to at least $8.1 billion, not including expected further cost increases for the HALO module.

The details will be included in a final audit from NASA’s OIG that will address the program cancellations’ effects on NASA’s workforce, its  contractors and international partners.

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