Cost, Personnel, Were Key Factors in Ares 1 Avionics Win

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WASHINGTON — Boeing Co. clinched a $265 million contract in December to build the avionics ring for NASA’s planned Ares 1 crew launch vehicle by underbidding its opponent on the development and early production phases of the program and proposing a weight-saving technical approach.

The win could be worth as much as $800 million to Boeing through 2016 if NASA exercises all options spelled out under the so-called Instrument Unit Avionics contract.

A NASA source selection document obtained by Space News shows that Boeing Space Exploration of Houston also scored points with NASA by putting two seasoned veterans at the helm of the project.

Ball Aerospace and Technologies Corp. – Boeing’s lone rival during the final phase of the competition – lost points with NASA for lacking the in-house experience to back up one of the key strengths of its proposal, a cost-cutting manufacturing approach the Boulder, Colo.-based company borrowed from the commercial aircraft industry.

Past performance on four unnamed programs also was held against Ball, raising questions in NASA’s mind about the company’s ability to control costs and maintain schedule.

NASA spokeswoman Beth Dickey declined to name the four programs, noting that the past performance information Ball was required to submit to the agency as part of its proposal is considered proprietary.

In the past few years, at least two NASA programs on which Ball served as the lead contractor, Deep Impact and the Kepler space telescope, came close to being canceled due to cost growth and delays.

But price was the more-decisive factor in NASA’s selection, as it was when Boeing beat Alliant Techsystems in August to win its first major piece of NASA’s astronaut launcher system, a $515 million contract to build the Ares 1 upper stage.

In the case of the avionics ring, Boeing’s bid came in 3 percent below Ball’s for the base contract, which includes six flight units for Ares 1 missions planned between 2014 and 2016. For an optional production run of up to 12 more avionics rings during that time frame, both companies projected reduced per-unit costs, but Ball came in the lowest, according to the selection statement.

While NASA found both bids for the base contract equally credible, the agency put less stock in either company’s projected cost-savings for the optional production work.

“For both offerors, the proposed option unit costs were significantly lower than the per unit production costs for the basic contract and neither offerors [sic] provided adequate justification for those significant reductions,” the source selection statement says.

But Doug Cooke, NASA’s deputy associate administrator for exploration systems and the source selection official, determined that Ball was the slightly riskier choice on cost since much of the savings the company promised over the long haul depended on successful implementation of an innovative manufacturing approach that the company has yet to apply in the human spaceflight systems realm, according to the statement.

Ball’s proposed Streamlined Avionics Framework, according to company officials, draws upon established practices in the commercial aircraft industry to reduce parts costs and achieve economies of scale. “Hamilton Sundstrand was a key there,” a Ball official said, referring to the company’s Windsor Locks, Conn.-based teammate on the avionics ring bid. To Cooke, Hamilton Sundstrand’s aviation avionics background helped mitigate Ball’s own lack of experience with a central feature of its proposal, but not enough.

“Finally I was aware that a Ball teammate would have a key role in implementing [the Streamlined Avionics Framework], which mitigated some of the concern associated with Ball’s past performance,” Cooke wrote in the selection statement. “It was a matter of concern to me, however, that Ball did not have strong in-house expertise for a key aspect of its proposal concerning which the prime contractor will need to provide strong leadership.

“On the other hand, the Boeing approach involved reducing costs by leveraging mature products, industry competition, and prime contractor buying power,” Cooke continued. “Although this approach was not as innovative as [Ball’s], there was a high likelihood of success associated with the Boeing approach. Boeing also had an in-depth technical approach with several design innovations that offer verifiable reduction in launch weight. I was also impressed with Boeing’s key personnel particularly in the positions of Program Manager and Engineering Manager – positions I found to be critical to the success of the program.”

Boeing’s Instrument Unit Avionics program manager, Dwight Potter, has worked on the international space station and B-52 programs and most recently served as the director of mission integration for the U.S. Missile Defense Agency’s Ground-based Midcourse Defense program. Potter’s engineering manager, Larry McWorter, has 41 years of experience in human spaceflight leadership, including duty as NASA deputy of the international space station’s avionics and software office, according to Boeing spokesman Ed Memi.

“Boeing’s proposal was also noteworthy because of the collective strength of its proposed key personnel. Ball also proposed a strong set of key personnel, but I found that Boeing had an advantage in this regard,” Cooke wrote.

Ball was formally debriefed on NASA’s selection Dec. 18, according to Dickey. Ball did not challenge the award before the government’s deadline for filing such protests passed.