Commercial Crew Contenders Seek Hybrid Contracting Approach

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LONG BEACH, Calif. — Companies involved in NASA’s Commercial Crew Program and other supporters of the effort said last week they believe the most effective way for NASA to continue the program is keep as much of the design and development work as possible under current Space Act Agreements versus more conventional contracts.

Three companies, Boeing, Sierra Nevada Corp. and Space Exploration Technologies Corp. (SpaceX), currently have funded agreements under NASA’s Commercial Crew Integrated Capability (CCiCap) program. The agreements, announced last August, include both a series of baseline milestones funded under those awards as well as optional, as yet unfunded additional milestones.

Speaking at the Space Tech Expo here May 21, Michael Lopez-Alegria, president of the Commercial Spaceflight Federation, said NASA’s Commercial Crew Program is hampered by tight budget and schedule constraints, the latter being a 2017 goal to bring the vehicles into service. 

“The way to solve that problem is to spend the money you have in the most efficient way you can,” he said. “I think a way to do that would be to exercise optional milestones that were submitted as part of the companies’ CCiCap bids.”

Executives of the three CCiCap companies speaking at the conference also endorsed what some called a “hybrid” approach that uses Space Act Agreements for vehicle development work and more traditional contracts under Federal Acquisition Regulations (FAR) for NASA certification of the vehicles. 

“If we can keep the [NASA] oversight period really focused on certification, and allow the design, development, and test to continue with the decision speed that’s possible in private industry, that’s how we can get the most out of the taxpayers’ money,” said Garrett Reisman, the program manager of SpaceX’s commercial crew effort.

Reisman noted SpaceX’s optional milestones include a crewed test flight in mid-2015. “If we’re operating under a different set of conditions under the next procurement, that number might not hold,” he said.

“I think the approach we have right now is an interesting approach,” said Mark Sirangelo, head of Sierra Nevada’s Space Systems unit. “A potential approach that NASA could take is to expand the certification contract to allow for a more in-depth look at companies and their certification, while continuing to allow development to continue under the existing contract.”

Use of optional milestones, particularly for crewed test flights, has raised safety concerns. In its 2012 annual report, the Aerospace Safety Advisory Panel raised several safety questions about any crewed test flight performed under the CCiCap agreement versus a FAR-based contract. “NASA should be looking for ways to maximize its insight into what will most likely be a short flight-test program, regardless of how it is contracted, incentivized, or facilitated,” the NASA-charted safety panel stated in the report.

To date, NASA has not indicated any plans to exercise any optional milestones on the companies’ CCiCap awards, and is instead working on the next phase of commercial crew procurement, Phase 2 of the Certification Products Contract. In a recorded presentation at the conference, Kathy Lueders, deputy program manager for the Commercial Crew Program at NASA, said a draft request for proposals for Phase 2 should be released this summer, with the final solicitation to be released in early fall. NASA will award the contract in July 2014.

Lueders did not state how many awards NASA planned to make under Phase 2 of the Certification Products Contract, and most observers assume this will be a function of the amount of funding available. 

“I think NASA, with good reason, wants to maintain competition through the next round. I think that would be healthy as long as you have the budget to allow that competition in the next round and still fly in 2017,” said John Mulholland, vice president and program manager of commercial programs at Boeing. 

At current funding levels, he said, NASA could likely afford a single provider, but the increase sought by NASA in its 2014 budget proposal “would allow them to preserve competition into the next round.”

In his conference presentation, Reisman identified several key principles of the Commercial Crew Program, including the use of pay-for-performance milestones, a pace and flexibility of development similar to other commercial programs, and streamlined NASA oversight. 

“What we’re a little bit concerned about is that, as we go into certification, that we go to a more traditional approach and start compromising some of these key principles,” he said. “And that, in my opinion, is the biggest threat to the success of this program.”