In today’s issue of The Space Review a couple authors take different tacks on reforming how NASA procures hardware and services. In one piece, Derek Webber advocates moving from cost-plus to fixed-price contracts for the space agency. Such a switch would avoid cost overruns and allow for milestones to monitor whether the contractor is making progress. As for space being “different” somehow and thus not fit for fixed-price contracts, Webber, the former director of procurement for Inmarsat, responds:
Don’t tell me that you cannot use fixed-price contracting for space technology because it is so special, or so difficult, that nobody would take the risk of competing and winning, and then possibly losing money on the deal. Well, welcome to the real world! That’s the normal commercial risk that well-managed companies face all the time in deciding whether to bid or not, and at what price, for new equipment or services. We build bridges and buildings that way. And, ever since the early 1970s, communications satellites have been designed, built, and launched entirely on the basis of fixed-price contracts. Nevertheless, each new generation has pushed the technology envelope to its limits in order to meet the needs of the satellite services industry.
Meanwhile, Taylor Dinerman is concerned about the growing use of contract protests for government procurements, primarily in the defense sector but increasingly in the space arena, given PlanetSpace’s announcement that it is protesting the ISS Commercial Resupply Services contract awards made last month. “It now seems that once a contract has been awarded its fulfillment relies on the goodwill or a calculated decision by the loser not to contest,” he writes. “This effective veto power will eventually strangle the entire system and force through a set of reforms—possibly on an emergency basis—and the results will not be pretty.”