Case #851.0

Contracting to Replace the Challenger: Risks, Responsibilities, and Incentives

Publication Date: January 01, 1988
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This case details the contractual negotiations surrounding a replacement for NASA's Challenger, which had exploded in 1986, killing all seven crew members. Despite government-wide budget cuts, as per the 1985 and 1987 Balanced Budget Act, NASA was eventually given $2.1 billion in funding. The allocation of funds represented a vote of confidence, despite backlash after the Challenger disaster, and the use of "up-front" funding as a means of reducing total program costs.

Learning Objective:
The case allows for discussion on the allocation of federal funds, particularly in light of a well-publicized scientific tragedy.

Other Details

Case Author:
Mary Schumacher
Faculty Lead:
Mary Schumacher
Pages (incl. exhibits):
United States
Funding Source:
Pew Charitable Trusts