Commercial Crew Program backs away from Space Act Agreement

[Cog_in_the_machine]

The new contracting mechanism in the works isn't a SAA, but it's not a traditional FAR either. Key things I took away:

- still has fixed price, milestone based approach.
- contractor has IP rights to what they develop under the contract.
- they've had input from industry on the parts of the FAR that drive up their costs needlessly and are looking into ways to avoid that.
- they won't mess with requirements below level two.

Incidentally, does anyone know what a level two requirement is?

[OpsAnalyst]

Incidentally, does anyone know what a level two requirement is?

NASA's WBS's (Work Breakdown Structures) define three levels of organization that NASA controls.  Short and sweet:

Level 1 - the entire program (for example, Constellation)
Level 2 - specific projects (for example, Orion, Ares, etc.)
Level 3 - systems

There are additional levels - systems, subsystems, etc - usually managed by the contractors.

[OpsAnalyst]

September 16th 2011, another dark day for American spaceflight.

Does anyone think it was a coincidence that ULA and ATK both entered into unfunded SAA’s once NASA changed the CCP rules?

The CCP is now on track to follow in the footsteps of all previous NASA manned space programs, massively over budget and months, if not years, late. Innovation will be buried under tons of paperwork and “requirements” from the last century. Affordability and flexibility will take a backseat to purported safety while the usual suspects feed at the NASA trough.

Based on these changes I am pretty sure who is going to win the “competition” for a “commercial” crew contract. The fix is in and I was naive to ever believe that the leopard could change its spots.

Maybe in another fifty years…

First, ULA's unfunded SAA is a continuation of an existing SAA.  ULA did not complete work within the timeframe of the first SAA so an unfunded SAA was put in place to enable completion.  In principle this is no different than an unfunded extension on a standard contract.

Second, ATK's unfunded SAA is an agreement for ATK to spend ATK's money but to work with NASA in developing capabilities for "commercial" crew.  So what is your point there?

Third, when the original discussions re: CRS and CCT were in play it was pointed out by NASA's own lawyers that the use of the SAA's was questionable, since in fact specs were going to have to enter into this somewhere and secondly, the existing mechanisms to enable contracting already existed and SAA's are used when those mechanisms don't cover something NASA wants to do in relation to some other entity. 

OMB pressed and we ended up with the SAA's.  OK, fine.  That was two years ago, folks.  Those of us following the bouncing ball knew this day was coming; it's about contracting mechanisms and the legal boundaries of same, period.  It has nothing to do with NASA wanting to kill anything.  All this dark conspiratorial stuff is misplaced.

[BeanEstimator]

Incidentally, does anyone know what a level two requirement is?

NASA's WBS's (Work Breakdown Structures) define three levels of organization that NASA controls.  Short and sweet:

Level 1 - the entire program (for example, Constellation)
Level 2 - specific projects (for example, Orion, Ares, etc.)
Level 3 - systems

There are additional levels - systems, subsystems, etc - usually managed by the contractors.

You are correct when discussing org structures, and in general, the WBS 

Level 2 requirements are slightly different, imho.

For example, "level zeros" (level 0 reqts) are basically the outcome of your vision or goals.  They are as broad as can be.  Borderline ambiguous.  Think soundbytes. 

That tends to feed even more goals/objectives/needs.  They are just slightly more specific.  You start to get concepts.  Typically at the concept and rationale stage you're talking Level 1 requirements.  Still very high level.

Level 2 are system level requirements.  IIRC correctly, level 2's are typically defined and approved somewhere around SRR. 

The best cut/paste I can give is this:

Level 0 – Top Level Agency Requirements controlled by the Administrator and Associate Administrators
Level 1 Requirements - Mission Drivers controlled by a NASA Mission Directorate and serve as the basis for mission assessment during development. These are NASA requirements and standards - latest versions apply
Level 2 Requirements - System/Segment (Mission Requirements Document– to be baselined at System Requirements Review)
Level 3 Requirements - Element (Instruments, Spacecraft, etc.)
Level 4 Requirements - Subsystem (Instrument Subsystem, Spacecraft Subsystem, etc.)
Level 5 Requirements - Component (Instrument Component, Spacecraft Component,
etc.)

I  used to have some decent flow charts and diagrams but I can't find em so that'll have to do.  Maybe google it...

IMHO, stopping at level 2 is nice but I can tell you right now that will have NASA significantly "more involved" in what the contractors are doing than was done under the SAA.  Which, as I understand it, is what we are going for in the first place (to be more involved in setting requirements).  Whether that's a good thing or bad thing, well that's yet to be seen and basically opinion anyway.

FWIW, those of us who know, expected this day to come for quite awhile.  And to be honest, I kind of side with OV on this. (although I see his post as removed, grammar and such aside, he was going in the right direction) 

As I have always said, and will say again for no particular reason - it is the acquisition strategy that matters.  That acq strat will be the way you save money, not "going commercial".  We've always been commercial.  What was new was the SAA acq strat.  Now that it's run out and we're back to the FAR, the only thing we can do is try to tailor it.  But we have many forces working against that - lack of clearly defined goals, visions, etc.  Not to mention the politics. 

I'll wait to see what the industry says, but from my cost knot-hole I can tell you this is an estimate upper.  Some of that benefit you had with the SAA is now gone.  Period.  End of debate.  How much can you still salvage is now the question.  And at least there they are trying. 

And yes, when doing an estimate, a good analyst should be considering the acq strategy.  For the most part, we (the estimating community) had actually come up with considerably new methodologies for dealing with SAA's, particularly down at KSC.  Bottom-line, acq strat matters just as much, if not more so, then tech (mass, power, data rate, etc.)  Since I can feed the same tech into two different acq strats and get two entirely diff costs out... 

[peter-b]

Thanks, that was very informative! 

IMHO, stopping at level 2 is nice but I can tell you right now that will have NASA significantly "more involved" in what the contractors are doing than was done under the SAA.  Which, as I understand it, is what we are going for in the first place (to be more involved in setting requirements).  Whether that's a good thing or bad thing, well that's yet to be seen and basically opinion anyway.

Can you comment on the extent to which the fixed requirements/fixed milestones approach will be continued? As someone who has worked as an engineering contractor, I've found that even small change requests can wreak havoc with a project schedule and costs.

I would be surprised if, given this change, the next step of CCDEV can be competed as leanly and efficiently. I know that I give very preferential rates to clients who are willing to finalize & sign off on job specifications before I begin work. 

[BeanEstimator]

Thanks, that was very informative! 

IMHO, stopping at level 2 is nice but I can tell you right now that will have NASA significantly "more involved" in what the contractors are doing than was done under the SAA.  Which, as I understand it, is what we are going for in the first place (to be more involved in setting requirements).  Whether that's a good thing or bad thing, well that's yet to be seen and basically opinion anyway.

Can you comment on the extent to which the fixed requirements/fixed milestones approach will be continued? As someone who has worked as an engineering contractor, I've found that even small change requests can wreak havoc with a project schedule and costs.

well...from talking to and listening to phil & co. "as much as possible".

that being said, i expect you will see solid fixed milestones (easy to lay down imho).

you will not see solid requirements.  thats why we want more involvement.  typically requirements are developed in what some might call a "joint" fashion between the gov and the ctr.  what you will have, imho, is nasa jointly developing system level reqts (if i interpret their video and level 2 info correctly).  that will add time, overhead, people, and processes into the equation.  I will not comment on the good/bad/indifferent of this.  but it doesn't take a genius to see this is what nasa wants/thinks it needs - more involvement in requirements setting and development. 

will they try to fix the requirements, yup.  'as much as possible' 

when you have the gov/nasa in at least to level 2 on the reqts, you essentially have gov/nasa in on design.  read into that what you will. 

is the sky falling?  no.  is this ideal for cutting costs?  no.  does it seem like nasa is trying to split the difference? yes.  will nasa be more involved in requirement setting and levying on the contractors? you betcha.

[erioladastra]

Thanks, that was very informative! 

IMHO, stopping at level 2 is nice but I can tell you right now that will have NASA significantly "more involved" in what the contractors are doing than was done under the SAA.  Which, as I understand it, is what we are going for in the first place (to be more involved in setting requirements).  Whether that's a good thing or bad thing, well that's yet to be seen and basically opinion anyway.

Can you comment on the extent to which the fixed requirements/fixed milestones approach will be continued? As someone who has worked as an engineering contractor, I've found that even small change requests can wreak havoc with a project schedule and costs.

well...from talking to and listening to phil & co. "as much as possible".

that being said, i expect you will see solid fixed milestones (easy to lay down imho).

you will not see solid requirements.  thats why we want more involvement.  typically requirements are developed in what some might call a "joint" fashion between the gov and the ctr.  what you will have, imho, is nasa jointly developing system level reqts (if i interpret their video and level 2 info correctly).  that will add time, overhead, people, and processes into the equation.  I will not comment on the good/bad/indifferent of this.  but it doesn't take a genius to see this is what nasa wants/thinks it needs - more involvement in requirements setting and development. 

will they try to fix the requirements, yup.  'as much as possible' 

when you have the gov/nasa in at least to level 2 on the reqts, you essentially have gov/nasa in on design.  read into that what you will. 

is the sky falling?  no.  is this ideal for cutting costs?  no.  does it seem like nasa is trying to split the difference? yes.  will nasa be more involved in requirement setting and levying on the contractors? you betcha.

Yes, there will be a few intyegrated milestones that all are required but then generally it will be milestones that depends on teh maturity of the project and what is needed.

You will see solid requirements.  The 1100 series of requirements were released today as well in draft form.  The intent is to have them less restrictive than say Orion (ok, not ahrd there) but detailed enough to provide NASA assurances for their crews.  I won't defend or debate if the right balance is there.  The partners are then expected to meet these rquirements as best they can.  NASA will deepen insight from CDev2 most likely but not in a huge difference that would be noticed by most people - I predict.  It will be a little more like the Russian saying "trust but verify". 

[peter-b]

The 1100 series of requirements were released today as well in draft form.

Can they be downloaded from somewhere? 

[joek]

The 1100 series of requirements were released today as well in draft form.

Can they be downloaded from somewhere? 

Unfortunately the most recent are behind a firewall.  For the last publicly accessible doc's, see this thread

[Norm Hartnett]

Who do you think will win???  Boeing???

Oh yes, Lockheed/Boeing. (or ULA/Boeing if you prefer)

Not sure what you're getting at with respect to ULA and ATK?  Are you suggesting that NASA will change the acquisition process to allow separate bidding/acquisition of launch vehicles and spacecraft?  (Everything NASA has said argues against that, but I guess we'll see.)

There are drivers to the possibility of NASA changing the acquisition process, the need for a quick backup for the Soyuz being the primary, NASA's foredoomed BFR being another. However, more likely NASA will continue to push requirements that preclude any serious innovation while creating an unfavorable investment environment for new startups. When the regulatory environment is susceptible to changes of the magnitude of the change we are discussing here how many venture capitalists are going to be willing to provide funding?

Does anyone think it was a coincidence that ULA and ATK both entered into unfunded SAA’s once NASA changed the CCP rules?

Yes it is a coincidence - the unfunded SAA's were in the works for many months even before the decision on how to administer the next round.

Nope, it is not. McAlister and Jett both stated during their July 16th presentation that NASA had been considering changes to the CCP for many months (15?). Further the date the OIG changed the Space Act Agreement Guide was June 2011 and the draft was issued in May 2011, no doubt those changes were in work for many months. So the development of ULA’s and ATK’s unfunded SAAs paralleled the changing regulations and, once enacted, was acted upon by both. Was it a conspiracy? No. Was it business as usual? Yes. Was it a coincidence? Not a chance.

Look I don’t think this is a deep, dark conspiracy, I do think this was another NASA cultural failure. NASA had a chance to really change the way they do business and achieve some real changes in how we get to LEO (with multiple providers). Instead we will end up with one provider at a high cost both to the taxpayer and to America’s spaceflight capabilities.

Mr. Musk once estimated that NASA overhead had added about 25% to the cost of the Falcon 9. How much is the overhead from this change going to add to the cost of development of the CCT? What do we get for all that added cost?

[BeanEstimator]

The 1100 series of requirements were released today as well in draft form.

Can they be downloaded from somewhere? 

Unfortunately the most recent are behind a firewall.  For the last publicly accessible doc's, see this thread

Those are not Level 2 requirements.  From a cursory read, those appear to be Level 1 at best.

"This document defines the evaluation processes for investment performance, Crew Transportation System (CTS) certification, and CTS Flight Readiness and works in conjunction with supporting documents that address the top-level CTS requirements and standards (reference Figure 1 1)."

emphasis mine.

IMHO, you will not see fixed Level 2 requirements, which is how I was trying to respond to the poster who asked the question of fixed reqts/fixed milestones. 

There will be a process where NASA/Gov is involved with the contractor(s) in developing, defining and levying the level 2 requirements.  Which again,  is what we (NASA) seem to want - more involvement in the requirement definition and assignment role. 

[erioladastra]

Who do you think will win???  Boeing???

Oh yes, Lockheed/Boeing. (or ULA/Boeing if you prefer)

Not sure what you're getting at with respect to ULA and ATK?  Are you suggesting that NASA will change the acquisition process to allow separate bidding/acquisition of launch vehicles and spacecraft?  (Everything NASA has said argues against that, but I guess we'll see.)

There are drivers to the possibility of NASA changing the acquisition process, the need for a quick backup for the Soyuz being the primary, NASA's foredoomed BFR being another. However, more likely NASA will continue to push requirements that preclude any serious innovation while creating an unfavorable investment environment for new startups. When the regulatory environment is susceptible to changes of the magnitude of the change we are discussing here how many venture capitalists are going to be willing to provide funding?

Does anyone think it was a coincidence that ULA and ATK both entered into unfunded SAA’s once NASA changed the CCP rules?

Yes it is a coincidence - the unfunded SAA's were in the works for many months even before the decision on how to administer the next round.

Nope, it is not. McAlister and Jett both stated during their July 16th presentation that NASA had been considering changes to the CCP for many months (15?). Further the date the OIG changed the Space Act Agreement Guide was June 2011 and the draft was issued in May 2011, no doubt those changes were in work for many months. So the development of ULA’s and ATK’s unfunded SAAs paralleled the changing regulations and, once enacted, was acted upon by both. Was it a conspiracy? No. Was it business as usual? Yes. Was it a coincidence? Not a chance.

Look I don’t think this is a deep, dark conspiracy, I do think this was another NASA cultural failure. NASA had a chance to really change the way they do business and achieve some real changes in how we get to LEO (with multiple providers). Instead we will end up with one provider at a high cost both to the taxpayer and to America’s spaceflight capabilities.

Mr. Musk once estimated that NASA overhead had added about 25% to the cost of the Falcon 9. How much is the overhead from this change going to add to the cost of development of the CCT? What do we get for all that added cost?

Believe what you want but you are completely incorrect.  First of all, I like how you just make up "15".  based on what data? The other points you debate in this thread may or may not be true (not my area and I don't try to contribute opinion, leave that to you guys) but having been involved in the SAAs, there is no tie.

[Jim]

Look I don’t think this is a deep, dark conspiracy, I do think this was another NASA cultural failure. NASA had a chance to really change the way they do business and achieve some real changes in how we get to LEO (with multiple providers). Instead we will end up with one provider at a high cost both to the taxpayer and to America’s spaceflight capabilities.

It isn't that.  NASA has constraints it must live within and it just can't give money away willynilly. 

It was silly for people to think otherwise

[yg1968]

The following documents explain why NASA is moving away from Space Act agreements for commercial crew:
See slides 4 to 9:
http://www.nasa.gov/pdf/580729main_6%20-McAlister_COTS%20CRSNAC_508.pdf
See page 11:
http://www.nasa.gov/pdf/582570main_NACEXP-SpaceopsminutesAugust2-32011_508.pdf

[Namechange User]

Look I don’t think this is a deep, dark conspiracy, I do think this was another NASA cultural failure. NASA had a chance to really change the way they do business and achieve some real changes in how we get to LEO (with multiple providers). Instead we will end up with one provider at a high cost both to the taxpayer and to America’s spaceflight capabilities.

It isn't that.  NASA has constraints it must live within and it just can't give money away willynilly. 

It was silly for people to think otherwise

While I absolutely agree that NASA cannot just give away money (although too many on here think that's how it should be with respect to "commercial") Norm's basic point is valid I believe. 

Nobody can really argue that the goal posts have not shifted from how this was originally advertised.  I believe it was done so in a way to give the impression that "commercial" was here and operational and it was NASA and specifically the shuttle program that was standing in the way.  Those who sold it that way I believe did so intentionally to make others fall into the trap, and too many did so with absolute brilliance, thinking everyone would be able to buy tickets as if it was Southwest Airlines in just a few years time. 

Some can call that a deep, dark conspiracy if they wish but there are several other things relative to NASA as a whole and circumstantial evidence that when added together and looked at objectively from the bigger picture begin to paint a certain picture itself. 

For me relative to commercial crew it is the fact that everything is terribly inconsistent.

So NASA didn't realize the SAA was limited?  We've been discussing commercial crew for 4 to 5 years now.  Nobody figured that out until now?

Is there or is there not a business case?  NASA does not really seem to think so and even suggests that themselves in the link that yg references but then you have the CSF suggesting it is an absolute.

COTS is fine for SAA but not commercial crew.  There excuse seems to try to suggest there are no NASA-levied requirements for CRS flights but at the same time suggest it was done this way to create a market that NASA can take advantage of.  Was that not the goal for commercial crew too?

NASA suggests it is because commercial crew requires "deep verification" and somehow uses the authorization act as rationale for this but according to the NASA administrator commercial companies have built every NASA spacecraft to date.  So does industry have the experience or does it require NASA looking over their shoulder doing "deep verification" of requirements. 

The list could go on.  But the real problem is NASA has not done anything to really stimulate the market (other than words backed up by inconsistent action) and some have suggested how that could have been done much better so that companies really can begin to see a market emerge and then be willing to place more of their capital into the project. 

In playing politics with all of this, ("10,000 jobs will be created!") NASA set expectations so high that if and whatever comes to operation it will look like a failure compared to original expectations and I believe you are seeing that in Norm's post.  The reason is because the one, maybe two, that do emerge from "commercial" will be government financed under a government FAR contract.   

[oldAtlas_Eguy]

It seemingly boils down to NASA not trusting the FAA to produce the regulations for commercial HSF that includes all of the certification for flight requirements that NASA wants. NASA wants to be the regulating authority for commercial HSF but by law it is not a regulating authority. So the only option is to do it through a FAR FFP contract. That’s the legal issue.

Plus since NASA is providing funds for completion of milestones this problem with not being a regulating authority also stops them from determining fulfillment of NASA certification requirements related to the milestones. NASA is a public spaceflight developer not a spaceflight regulator. NASA itself should be regulated by the same FAA regulations that commercial has to follow. One set of regulations for all.

Then there is the IP issue which for commercial if the ownership is not NASA 0% and provider 100% they may not accept the contract. If you are using your own money then you don’t want someone later coming along and using the IP you developed to low bid you. It’s a commercial competitive thing that NASA doesn’t seem to understand. Of the four Boeing will probably be the least touchy about ownership, but that is not saying that they would accept significant IP ownership by NASA.

[yg1968]

Concerning the regulations aspects of things, I believe that Ed Mango said that they were working jointly with the FAA in order to have common regulations. Apparently the FAA division that is in charge of this and the NASA commercial crew program share office space in order to be able to work together in order to provide a common approach.

Also the presentation that I linked says that the IP will be negotiable in a non-traditional FAR contract. The minutes to the NAC meeting also say the following on the ownership of IP:

The proposed strategy is a firm fixed price contract instrument based on milestones. This will maximize industry retention of intellectual property rights.

[oldAtlas_Eguy]

Concerning the regulations aspects of things, I believe that Ed Mango said that they were working jointly with the FAA in order to have common regulations. Apparently the FAA division that is in charge of this and the NASA commercial crew program share office space in order to be able to work together in order to provide a common approach.

Also the presentation that I linked says that the IP will be negotiable in a non-traditional FAR contract. The minutes to the NAC meeting also say the following on the ownership of IP:

The proposed strategy is a firm fixed price contract instrument based on milestones. This will maximize industry retention of intellectual property rights.

The closer ties with the FAA is a good sign.

The IP issue, if NASA didn't want any ownership of IP they would have said so. The IP negotiable sounds as if NASA is atempting to retain some sort of IP ownership as a result of being funded. The more funds the more NASA ownership. For NASA this would be good because it can be a risk reducer for the program overall, but for a specific provider trying to close his business case commercially it would be bad.

[clongton]

I thought that NASA could not "own" any IP?

[erioladastra]

I thought that NASA could not "own" any IP?

Normally the government owns anything produced for it.  However, for CCP, NASA is only exerting limited data rights.  Essentially (as I understand it - not a lawyer) that the companies will retain IP unless they can't meet the contract by a certain time limit or if NASA declares a critical need (but then there is a process to try to work it with the company) sort of like eminent domain (but not easy to invoke).  So for practical purposes the companies will retain IP.