CCDev contracting and funding concerns

Last week NASA officials raised alarm in some corners of the space industry about its proposal to shift from a pure Space Act Agreement (SAA) for the next Commercial Crew Development (CCDev) round towards a hybrid approach that incorporates elements of both an SAA and a traditional contract. Not surprisingly, this topic came up again Thursday at the NewSpace 2011 Conference, although some made it clear contracting mechanisms were the lesser of their concerns about the future of CCDev.

Brent Jett, deputy manager of the Commercial Crew Program at NASA, told attendees during one panel session of the conference that he was aware of the concerns industry has raised since he and program manager Ed Mango outlined their proposed approach last week. “I know there’s a lot of angst in the community about the direction of the Commercial Crew Program,” he said. “There’s a group of people out there who strongly feel that Space Act Agreements is the only way to do it, the only way a program can be successful. There’s another group of people out there—not in this room, but within the government, within NASA—who strongly feel that to ensure crew safety, a cost-plus contract is the only way to it. So it’s almost like the debate in Washington over the debt ceiling.”

Companies have made clear their concerns about shifting from the SAA structure of previous CCDev rounds to this hybrid approach, which would incorporate many more elements of Federal Acquisition Regulations (FARs). But beyond general worries about an increase in paperwork associated with the FAR, what are the specific problems with NASA’s proposed approach?

Mark Sirangelo, head of Sierra Nevada Corporation’s space systems division, said he didn’t absolutely reject NASA’s approach request. “From our company’s perspective, we don’t really have a concern, one way or another,” he said. However, the hybrid approach NASA is proposing could have some sticking point, he said, such as how to account in a FAR-based contract for the coinvestment companies are supposed to make in their systems, as well as how to account for the cost and schedule impacts of any changes imposed by NASA. “It’s not that these are things that can’t be overcome, but it’s an unusual set of circumstances, and I think that’s why many people are looking at one more round of Space Act Agreements leading to a FAR contract.”

Garrett Reisman, the former astronaut who is managing SpaceX’s CCDev-2 work, said his company wanted to stick to the fixed-price milestone-based approach used in CCDev and COTS. A FAR-based approach would require SpaceX to hire “a whole bunch more accountants” to deal with the overhead imposed by the FAR, he said. “In addition, it’s a big corporate culture change,” he said, noting that SpaceX engineers don’t fill out timecards. “It’s all an overhead burden we don’t currently have.”

How to handle the contract for the next round of CCDev might be overshadowed by a bigger concern: how much funding, if any, that will be available for it in the next round of the program. The House version of the FY12 appropriations bill that funds NASA would give CCDev $312 million, the same as for FY11 but well below the administration’s request of $850 million.

“What we really need is money, and support from Congress and the executive branch,” Jett said. Support from the executive branch is there, but Congress, given what it’s proposed so far in FY12, is lagging. He noted the CCDev budget is about one tenth the budget of the Space Launch System (SLS) and Multi-Purpose Crew Vehicle (MPCV), which combined would get just over $3 billion in FY12 in the House bill.

“I can tell you that if that number holds for the next year, it’s going to be very challenging for us to maintain multiple partners, to maintain the type of progress we’ve made, and meet a goal to fly folks in the mid part of the decade,” Jett said. “At some point we’re going to have to spend more than a couple hundred million dollars a year.”

Company officials agreed with that concern. “The bigger issue [than contracting mechanisms] is making sure we have the proper funding for this program and making sure all of us make our milestones and go forward,” Sirangelo said.

“These are the things that keep me up at night,” Reisman said. “Worrying about how we can possibly succeed with the budgets cut way down.”

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