Author Topic: Value of CRS Milestones? (Read 3700 times)

mgfitter · « **on:** 08/30/2011 05:49 pm »

I'm trying to find the milestone details and values for the $1.6bn Space-X and $1.9bn Orbital CRS contracts.

There is a very useful GAO report that details the COTS and COTS risk reduction milestones, but so far I can't find anything about the CRS contracts.

The info must be available, so I'm hoping someone here can provide the details of how they are actually structured.

Thanks, MG.

Jim · « **Reply #1 on:** 08/30/2011 07:38 pm »

Quote from: mgfitter on 08/30/2011 05:49 pm

I'm trying to find the milestone details and values for the $1.6bn Space-X and $1.9bn Orbital CRS contracts.

There is a very useful GAO report that details the COTS and COTS risk reduction milestones, but so far I can't find anything about the CRS contracts.

The info must be available, so I'm hoping someone here can provide the details of how they are actually structured.

Thanks, MG.

The values are not available, they are contract specific.

yg1968 · « **Reply #2 on:** 08/31/2011 04:43 pm »

Here is the redacted CRS contract for Orbital:
http://www.nasa.gov/centers/johnson/news/contracts/NNJ09GA02B/NNJ09GA02B.html

Here is the redacted CRS contract for SpaceX:
http://www.nasa.gov/centers/johnson/news/contracts/NNJ09GA04B/NNJ09GA04B.html

The value of the milestones have been redacted. The table of content gives you a bit of information on what has otherwise been redacted.

mgfitter · « **Reply #3 on:** 09/01/2011 03:59 am »

Thanks for those links, it helps a bit, but it still doesn't clarify whether the contracts include any up-front monies or if it is more of "here is what you get for each delivery" contract. I'm just trying to figure if they are paying anything to Orbital/Space-X now, or only once actual deliveries start.

Thanks, MG

Jim · « **Reply #4 on:** 09/01/2011 04:07 am »

Quote from: mgfitter on 09/01/2011 03:59 am

Thanks for those links, it helps a bit, but it still doesn't clarify whether the contracts include any up-front monies or if it is more of "here is what you get for each delivery" contract. I'm just trying to figure if they are paying anything to Orbital/Space-X now, or only once actual deliveries start.

Thanks, MG

They are paying a lot to them now. They get paid for completing integration milestones, in addition to the actual delivery of hardware.

Jim · « **Reply #5 on:** 09/01/2011 04:11 am »

II.A.6 RESUPPLY MISSION PAYMENTS, MILESTONE EVENTS AND
COMPLETION CRITERIA
6.1 Resupply missionpaymentswill be based upon successful completionof approved
milestone schedule and accomplishment criteria per the NASA-approved Work Plan
(DRD C1-8). NASA has up to 30 working days to determine whether the
accomplishment of the milestone satisfies the approved criteria. After written
verification of the accomplishment of the Milestone by NASA's Contracting Officer
Technical Representative (COTR), and approval by the Contracting Officer, the invoices
will be forwarded to the payment office within fifteen (15) calendar days of receipt of the
invoices at NASA.
6.2 These interim payments are contract financing payments that are not payment for
accepted items. Commercial interim payments are fully recoverable, in the same manner
as progress payments, in the event of termination for cause. Commercial interim
payments are contract financing payments and, therefore, are not subject to the interestpenalty
provisions of prompt payment. However, these payments shall be made in
accordance with the Agency's policy for prompt payment of contract financing payments.
In accordance with 42 U.S.C 2465d,NASA shall not take title to launch vehicles or
orbital vehicles under contract for resupply services.
6.3 The Contractor shall propose mission milestones, associated payment amounts, and
accomplishment criteria that correspond to key production and required deliverable
schedules in accordance with the NASA-approved Work Plan (DRD C1-8). The date for
completion of ISS integration shall be included in the milestones. Table II.A.6-1
identifies the minimum milestones the Contractor shall propose.The following constraints apply:
(A)Mission milestone payments made for resupply missions prior to completion of lSS
integration, shall not exceed 30% of the cost of that mission.
(B)The final milestone payment must equal at least 20% of the cost of each mission.
(C)After successful completion of ISS integration, the total of milestone payments prior to (and including) the MIR shall not exceed 50% of the total cost of the mission.

121-8:WORK PLAN
DESCRIPTION/PURPOSE:
The Work Plan will establish the schedule milestones, payment milestones and completion
criteria for each mission.
DATA REQUIREMENTS:
For each mission scheduled to deliver cargo to ISS, the Contractor shall submit a work plan that
contains:
a) Milestone events, by name and description of the milestone event, corresponding to the
payment number
b) Number of months before (L-) launch
c) An accomplishment criteria narrative (i.e., describe accomplishments and progress in terms
of activities completed prior to the payment event).

joek · « **Reply #6 on:** 09/01/2011 04:49 am »

Quote from: mgfitter on 09/01/2011 03:59 am

Thanks for those links, it helps a bit, but it still doesn't clarify whether the contracts include any up-front monies or if it is more of "here is what you get for each delivery" contract. I'm just trying to figure if they are paying anything to Orbital/Space-X now, or only once actual deliveries start.

To expand on Jim's post...

There are typically progress payments starting some months/years prior to the scheduled delivery, with final payment "on delivery". So yes, there are likely CRS progress payments being made to SpaceX and OSC. Exactly what those payments are or their schedule is redacted and unknown.

Note that CRS are IDIQ contracts (indefinite delivery indefinite quantity). That means the provider has committed to deliver X in year Y with a not-to-exceed price of $Z--BUT with no guarantee that any order will be placed. NASA is under no obligation to order or pay for those services (that's the "indefinite" part).

When NASA places an actual order (e.g., deliver X kG of cargo on date Y, or a "task order"), money typically starts to change hands. The price (and payments) are based on a negotiated schedule (redacted). E.g., If you order in year X, the delivery price is what we (the provider) stated for year X+2, and it's 10% at milestone X, 30% at milestone Y, 20% at milestone Z, etc.

However, again, IDIQ contracts do not obligate NASA to order/pay anything until a firm order is placed, order/pay for any given quantity of services in a give year, or order/pay for any given quantity of services over the life of the contract. If ISS splashed tomorrow and there was no need for CRS, SpaceX and OSC would essentially get zero.

As someone else put it (on one of these threads I believe), IDIQ is analogous to going to your gas station and asking for a not-to-exceed price/gal for gas for each year in the next X years, with no guarantee that you'll actually buy anything. This is not an aberration unique to CRS; it is the way launch services are procured by NASA and DoD.

mgfitter · « **Reply #7 on:** 09/01/2011 05:09 am »

Thank-you Jim & Joek, for highlighting the pertinent sections and explaining them for me.

Unless GAO reveals the actual numbers like with the COTS milestones (we can but hope) we probably aren't going to see the exact figures, but these sections do narrow down the parameters quite a bit and allow some useful ballpark numbers to be extracted.

Thanks, MG.

PS -- USAF did an IDIQ with Space-X back in '07 for fast-turn-around Falcon-1 flights. The contract had a potential $100m value. Do either of you know if any money actually changed hands? I heard they may have paid about $10m so far, but can't get any confirmation.

Jim · « **Reply #8 on:** 09/01/2011 12:36 pm »

Quote from: mgfitter on 09/01/2011 05:09 am

PS -- USAF did an IDIQ with Space-X back in '07 for fast-turn-around Falcon-1 flights. The contract had a potential $100m value. Do either of you know if any money actually changed hands? I heard they may have paid about $10m so far, but can't get any confirmation.

No missions were bought.