Abstract:
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.