Lockheed Must Relinquish Michoud Operations Contract in 2008

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WASHINGTON — Wary of a potential conflict of interest, NASA intends to replace Lockheed Martin Space Systems as the primary support contractor at its Michoud Assembly Facility in New Orleans by 2008, according to agency officials.

The NASA-owned plant has been operated and maintained since 1983 by Denver-based Lockheed Martin Space Systems, which uses the sprawling facility to build the space shuttle external tank.

While NASA says it has no complaints about the way Lockheed Martin has managed Michoud, the company will not be permitted to bid on the Michoud operations and support contract the agency intends to award no later than October 2008.

“It has nothing whatsoever to do with their performance. It’s just because of the potential conflict of interest,” said Sheila Cloud, the Michoud Assembly Facility transition director at NASA’s Marshall Space Flight Center in Huntsville, Ala.

Currently, the external tank program is the only major NASA activity taking advantage of Michoud’s 17 hectares of manufacturing space. But that is about to change.

Nearly every major space-hardware system NASA needs to go back to the Moon will be built at least in part at Michoud. NASA’s working assumption, said Cloud, is that Michoud will be a multiple-contractor facility in fairly short order provided Lockheed Martin, which won the Orion Crew Exploration Vehicle prime contract in 2006, does not win every remaining piece of Project Constellation due to be built there. Constellation encompasses Orion, its launcher and the giant cargo-carrying rocket that NASA needs for its planned lunar return.

“The law of probability will tell you that chances are pretty good that [the upcoming Constellation contract competitions] will result in multiple aerospace contractors or combinations of contactors winning those procurements as opposed to a single one winning them all,” Cloud said.

To avoid potential conflict-of-interest complaints, NASA plans to select a new contractor to run Michoud that is not building, or intending to build, hardware for NASA at the site.

“If you are seeking to be the site operator, you would not be allowed to bid on a hardware contract and vice versa,” Cloud said, adding that the exclusion extends to any subsidiaries a potential contractor might have.

NASA’s intent, Cloud said, is “to take the facility back to an Apollo-like management model whereby there was a mission-independent operator who operated the facility for a number of aerospace contractors’ utilization of it.”

NASA released a request for information in early April seeking input from companies interested in operating and maintaining the port-side facility. A draft request for proposals is due around February, according to Cloud.

Lockheed Martin has approximately 2,600 people working at Michoud, doing everything from mowing the grass and providing security to building external tank hardware, according to Marion LaNasa, a spokesman for Lockheed Martin Michoud Operations.

While some jobs, including janitorial and food services, are subcontracted out, LaNasa said the number of facility maintenance and operations duties performed by Lockheed Martin employees has grown since Hurricane Katrina struck New Orleans in 2005, creating, among many other problems, a worker shortage.

LaNasa could not say how many Michoud employees would be directly affected by NASA’s transition to a new operations and maintenance contractor next year since much depends on how NASA structures the contract.

A key factor will be determining many of Lockheed Martin’s Michoud workers are critical to the manufacture of external tanks and how many are doing jobs that should be absorbed by the new maintenance and operations contract.

That is no easy task since the company’s two Michoud roles have become increasingly intertwined over the years.

Lockheed Martin’s external tank contract, last renewed in 2002, covered at least part of the company’s Michoud maintenance and operations duties. That contract, which runs through September 2009, according to Marshall spokeswoman June Malone, has been worth roughly $250 million a year.

On top of that, Lockheed Martin holds a separate Michoud facility contract, worth approximately $30 million a year, that Marshall spokeswoman Kim Newton said covers “payment of utilities, procurement of equipment, and contracting for construction of facilities.” The facility contract, she said, expires December 2008.

LaNasa deferred to NASA on questions concerning Lockheed Martin’s Michoud contracts. However, he said the majority of Lockheed’s Michoud employees directly support the external tank project, estimating that only “several hundred” of the company’s 2,600 on-site employees have operations and maintenance jobs not directly tied to building external tanks.

The Michoud employees, LaNasa said, have questions about their future employment; prospects that the company, at present, cannot answer. “We’re just trying to be as open as possible with them and sharing information as it becomes available,” he said.

Cloud, meanwhile, said that regardless of which contractor or contractors end up running Michoud, most if not all of the facility’s existing work force would remain the same.

“That is our intent,” she said. “It is pretty clear we intend to preserve to the extent we need to and can these very good employees who have served the space program and served it very well for 30 years. It’s a trained workforce that we believe is critical to our future success.”