Could a contracting change jeopardize commercial crew?

NASA’s Commercial Crew Development, or CCDev, program has so far been using a relatively unusual contracting mechanism that has provided both the agency and participating companies with greater flexibility to make progress on those systems. However, NASA officials indicated Wednesday that in future CCDev rounds they may shift to a somewhat more traditional contract, a move that has alarmed industry.

The first and second rounds of CCDev, as well as the earlier Commercial Orbital Transportation Services (COTS) cargo program, have been run as Space Act Agreements (SAA), a form of contracting known in bureaucratic lingo as other transactional authority (OTA). SAAs do not have the same contracting overhead as a traditional contract, be it fixed-price or cost-plus. The COTS and CCDev SAAs have been milestone-based, meaning that NASA provides payments to participating companies based on the progress they make—which also means that NASA doesn’t pay up if companies don’t achieve their stated milestones, and can cancel those agreements if necessary, as happened with Rocketplane Kistler in the original COTS round.

At a commercial crew forum held by NASA at the Kennedy Space Center yesterday, CCDev program officials talked about their plans for the next phase of the program, which would come next year. The “Integrated Design” phase would last two years and bring participating companies up through the critical design review on their systems, the last step before starting actual construction. This two-year phase would be followed by a Development, Test, Evaluation, and Certification (DTEC) phase, which would also include the initial flights to the International Space Station.

NASA’s original intent, according to Brent Jett, a former astronaut serving as deputy program manager for NASA’s commercial crew program, was to use an SAA again for the Integrated Design phase. “As the team dug a little bit further into the Space Act Agreement, we did find several key limitations,” he said. The biggest one, he said, is that NASA cannot mandate requirements under an SAA, including for crew safety, but only provide them as a reference for industry. “Even if industry chose to design to those requirements, NASA is not allowed to tie any of the milestones in an SAA to compliance with those requirements,” he said. “That means NASA cannot accept the verification of those requirements and certify the system the way we need to for commercial crew under a Space Act Agreement.”

Jett noted that, under COTS, NASA was able to exploit something of a loophole in those rules, which allow the agency to levy safety requirements when a NASA facility—the ISS—was involved. NASA could do the same for CCDev, but only for operations at the ISS. “We would not be able to levy any requirements concerning ascent, entry” or any other portions of the flight not directly dealing with approaching and docking with the ISS.

NASA’s proposed approach for the next CCDev round, according to commercial crew program manager Ed Mango, “combines the best elements of an SAA with the features of a contract that wil allow NASA to approve the tailoring of requirements and the certification of a vehicle.” This “non-traditional contract” would continue to use milestone-based payments and also exempt companies from the cost accounting standards of the Federal Acquisition Regulations (FAR). “We believe that we are much closer to an SAA in our approach than we are to a traditional contract,” he said.

Representatives of industry present at the forum strongly objected to this proposed approach, though, largely out of concerns that, even with the cost accounting exception, adhering to the FAR would be very expensive. “Instead of taking an American flag to the station, we should have taken the FAR to the station and left it up there,” said Mike Gold of Bigelow Aerospace, referring to an American flag flown on the first shuttle mission that was left behind by the last shuttle crew, to be retrieved by the first commercial crew vehicle to visit the station. “You can’t take a traditional approach and expect anything but the traditional results, which has been broken budgets and not fielding any flight hardware.”

Others challenged the NASA conclusion that an SAA could not be used for commercial crew. Bobby Block of SpaceX noted that his company had an option on its COTS award—not exercised by NASA—to develop a crew capability as part of an SAA. Brett Alexander, former president of the Commercial Spaceflight Federation, said NASA should provide more documentation to support its conclusion that an SAA would not work for CCDev, given that past analyses, by both NASA’s Inspector General and the Government Accountability Office, have concluded that SAAs are suitable for this. “[NASA’s Office of the] General Counsel has not divulged what its legal reasoning is,” he said, “and I think they need to do that—not a couple charts, not things that you brief, but a legal brief that says, ‘here’s why,’ so that we can have that discussion.”

Mango and Jett said they were open to suggestions and feedback from industry on their proposed strategy for the next CCDev round. At the same time, NASA released yesterday a “Sources Sought Synopsis”, required under the FAR as the first step in the next phase of the CCDev program if they proceed under their proposed contract strategy. “I don’t want people to think that we’re locked in to this idea of a contract,” he said, but “we need to work in parallel so that we can continue to move forward.”

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