NASA Looking at Putting JPL Under New Management

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SAN FRANCISCO — After relying on the California Institute of Technology (Caltech) to run the Jet Propulsion Laboratory (JPL) for more than 50 years, NASA asked May 24 for information from other organizations interested in managing the federally funded research and development center in Pasadena, Calif.

Any organization interested in taking over the management responsibilities at JPL will be required to submit by June 8 a statement of 25 pages or less describing its capabilities to a contracting officer at the Goddard Space Flight Center in Greenbelt, Md., according to the announcement NASA published on the Federal Business Opportunities website. Although NASA observers do not recall any previous efforts by the space agency to look for other groups interested in managing JPL, the move “does not in any way reflect on the quality of work performed by Caltech or JPL,” according to NASA spokesman Steve Cole.

The request for information is simply an exercise being undertaken by NASA’s new leadership “to manage the agency’s assets and infrastructure,” Cole wrote in an e-mail. “This activity is consistent with the administration’s commitment to openness and transparency.”

Caltech has a long history with JPL. The private research university was an integral part of the laboratory’s formation. In 1936, Caltech students began conducting rocket testing in the area that later became JPL, and the first JPL director was a Caltech professor. JPL’s early work designing rockets was financed by the U.S. Army Air Corps. Once NASA was established in 1958, the space agency took over JPL, relying on Caltech to oversee operations.

Pasadena politicians and business leaders say it is unlikely that another organization will take over Caltech’s role at JPL. “Folks around here don’t expect there to be any reasonable competition,” said Paul Little, president of the Pasadena Chamber of Commerce. “By nature of the activity, the pool of qualified applicants is going to be pretty small. There is no one else out here with the experience and expertise you will find at Caltech.”

Rep. Adam Schiff, a Democrat whose congressional district includes Pasadena, added, “Caltech has a unique reservoir of talent and extraordinary experience in running JPL. It is very difficult for me to imagine anyone but Caltech doing that job.”

NASA currently pays Caltech approximately $1.5 billion a year to manage JPL under a five-year cost plus award fee contract that took effect Oct. 1, 2003. That contract, which reimburses the university for expenses incurred and includes incentive payments for good performance, has been extended several times. The most recent contract extension awarded on May 12 allows Caltech to continue managing the laboratory through March 31, 2012. During the performance review conducted before the latest extension was awarded, NASA officials rated Caltech’s work as “excellent,” according to JPL spokeswoman Veronica McGregor.

Nevertheless, government and industry officials say they are not surprised that NASA would solicit information from groups interested in taking over JPL’s management. “The federal government is doing what any business does: making sure they have the most qualified vendor at the best price,” Little said.

Schiff agreed that the request for information was a normal part of the federal acquisition process. “NASA is making sure that they dot every ‘i’ and cross every ‘t’,” he said.

U.S. federal acquisition regulations require government agencies to conduct a thorough review of “the use and need” for all federally funded research and development centers every five years. That review should include an analysis of other possible vendors for goods and services, according a report released Sept. 25 by NASA’s Office of the Inspector General. “Without a comprehensive review or assessment of viable competitors that could provide services for the operation of JPL, NASA cannot have assurance that it is obtaining the best value for the taxpayer,” the report added.

While it is unclear how many organizations will respond to NASA’s solicitation of interest in managing JPL, Caltech will provide the information requested. “We understand that NASA has decided to undertake a process to solicit information,” said Caltech spokesman Jon Weiner. “We plan to participate in this process. Caltech is very proud of its 50-year history of managing JPL. During this time, JPL has become the world’s premiere center for the exploration of the solar system and beyond. The Caltech relationship with NASA has produced — and continues to produce — extraordinary results for the public, for science and the American taxpayer.”

The recent NASA inspector general report cited JPL’s significant achievements in technology, astrophysics, Earth sciences and solar system exploration. However, the report also pointed out serious problems with JPL’s current marquee program, the Mars Science Laboratory (MSL). That $2.5 billion effort to send a rover equipped with a suite of scientific instruments to explore the red planet has been plagued by cost overruns and technical and engineering problems, prompting NASA to postpone its launch by two years to October 2011.

Specifically, the report criticized NASA officials for failing to accurately evaluate Caltech’s performance because they did not consider the size of the JPL programs under review when they calculated overall performance scores. “Without establishing weighted criteria to reflect significance or cost, NASA had no assurance that it was accurately evaluating Caltech’s performance,” according to the report.

The Mars Science Laboratory accounted for 75 percent of the Mars Exploration Program’s $477 million budget in 2007. However, the rating given to that program by NASA auditors, which was not revealed in the report released publicly, was given the same significance as the rating for the much smaller effort to build the Mars Reconnaissance Orbiter (MRO), which accounted for 9 percent of the Mars Exploration Program’s 2007 budget. “This process and calculation method essentially conceals poor performance because a small project with a high rating, such as the MRO project, carries the same weight as a more significant project that costs more, such as the MSL project,” the report said.

Due in part to that failure to accurately report Caltech’s overall performance, NASA overpaid Caltech at least $16 million in incentive fees during the original five-year contract and extended that contract by 27 months longer than it should have, according to the NASA inspector general report. In addition, the report charged NASA officials with failing to conduct an evaluation, which was required by federal regulations, of cost-cutting efforts at JPL.

The request for information NASA released May 24 says the agency “is soliciting information from a university or consortium of universities, a not-for-profit or nonprofit organization, or an industrial firm, as an autonomous not-for-profit or nonprofit organization or as an identifiable separate not-for-profit or nonprofit operating unit of a parent organization to operate and manage NASA’s Federally-Funded Research and Development Center at the Jet Propulsion Laboratory.”