Congress, NASA

The latest round in the antideficiency battle

Few people would have predicted about four months ago, when the White House released its FY2011 budget proposal, that a major battle about the future of Constellation would revolve around a fairly obscure contracting provision. Yet that’s what has taken place as NASA and Congress have sparred about contract termination liability and the Antideficiency Act, legislation that prohibits expenditures in excess of appropriated funds. NASA has argued that the law requires contractors to withhold funds to cover contract termination costs, while Constellation supporters in Congress, perceiving this as a way to get around a provision in the FY2010 appropriations act that prevents NASA from terminating any element of Constellation, have argued against efforts by the agency to force withholding of such costs.

The latest round in this battle came late Wednesday, when Space News and the Orlando Sentinel reported that NASA administrator Charles Bolden notified Congress in a letter that the agency estimates a shortfall of $991 million in the current fiscal year once contract termination liability costs are taken into account. “Given this estimated shortfall, the Constellation program cannot continue all of its planned FY 2010 program activities within the resources available,” Bolden stated in the letter to Rep. Bart Gordon (D-TN) and Sen. Bill Nelson (D-FL). NASA, Bolden continued, “has no choice but to correct this situation”, and would do so by stopping funding on the Ares 1 first stage and descoping other contracts. That could result in the loss of 2,500 to 5,000 contractor jobs for the remainder of the fiscal year.

According to the Sentinel, ATK would be the hardest-hit company, with $500 million in contract termination costs it must reserve, followed by Lockheed Martin at $350 million. The Orion capsule, which the administration announced in April would be preserved as an ISS lifeboat, “would essentially remain in limbo” according to Space News. Over the weekend NASASpaceFlight.com reported that Lockheed Martin had moved 600 engineers off the project “due to fears relating to termination liability”.

18 comments to The latest round in the antideficiency battle

  • Ben Russell-Gough

    Frankly, it looks like those who want to continue PoR as-is have run out of time. In fact, any kind of BEO development (at least in terms of actual operational human spacecraft) prior to 2015 is on the edge of being ruled out.

    So, here’s the memo to Shelby, Griffith, Hutchinson and all their allies: The time for talk has ended. If you want PoR, write an appropriations bill that gives the required amount. If you want SDLV or an EELV-derived archetecture, write an appropriations bill that specifies this. Do not assume because you want it to be cheaper, demanding Ares-I and not committing the tens of billions that it needs will magically make it cheaper.

    If you cannot do any of these things, then kindly stand aside and let FY2011 pass as-is because there really isn’t any other game in town any more.

  • Ben Russell-Gough wrote:

    So, here’s the memo to Shelby, Griffith, Hutchinson and all their allies: The time for talk has ended. If you want PoR, write an appropriations bill that gives the required amount.

    Exactly.

    This is a point I’ve made many times. Even the most fervent Constellation supporters in Congress have failed to propose adding one penny to its budget so it can catch up for lost time and bloated spending. But they don’t. It’s all because Constellation is no more than a jobs program for their district. It’s not a Moon program and they couldn’t care less if it ever leaves the ground.

  • Mark R. Whittington

    This sort of back door gambit to kill Constellation in spite of what Congress thinks is hardly going to endear Congress to Obamaspace.

  • This sort of back door gambit to kill Constellation in spite of what Congress thinks is hardly going to endear Congress to Obamaspace

    Senator Shelby sneakily adding a rider to a larger appropriations bill in the very last minutes before the bigger bill was passed (making sure that many members of Congress didn’t even know that the rider had been added until they had finished voting on the larger bill) did nothing to endear Constellation to a lot of members of Congress. That recently enacted rider is the law pro-Constellation supporters like to say would be violated if the administration shut down Constellation. Using the Deficiency Act is a perfectly legal end run around a law that (despite what its proponents say) was NOT the will of Congress as a whole, but of a few politicians such as Shelby with Constellation pork in their states.

  • CharlesTheSpaceGuy

    We have the worst possible situation right now – a program that Congress has forbidden NASA from shutting down, but a program that is on the fast track to shutting down. So we must have the program but there will be no money to do anything and no people there either.

    The contractor force is moving off of the program, and the civil service is moving to try to create some fiction of a Flagship Technology program.

    So Ares and Orion will exist as paper programs that make no progress from month to month.

    How low we have sunk!!!

  • G Clark

    Actually, it’s not the law. The Constellation part was in the report language, which Presidents have been ignoring with relative impunity since..I wanna say Ike (probably before)?

  • G Clark

    Okay, the Anti-Deficieny Act is 120 years old, so definitely before Ike.

  • Mark R. Whittington

    This is a game of high stakes poker in which the administration is going all in to try to kill Constellation before Congress can find a way to save it. It is breath taking in its audacity. But I foresee other shoes dropping in quick order.

  • “This is a game of high stakes poker in which the administration is going all in to try to kill Constellation before Congress can find a way to save it.

    Mark, thoroughly read my above post. Given the facts I state in that previous post, your post should more accurately read,
    “This is a game of high stakes poker in which the administration is going all in to try to kill Constellation before some members of Congress can find a way to save it.

    Again, you Constellation huggers are OK with any legal subtleties used to defend your pet project, but cry “foul!” when the other side comes up with its own LEGAL end run. As the old saying goes, “What’s good for the goose is good for the gander.”

  • Mark R. Whittington

    Mr. Boozer, I suspect that Congress as a whole will defer to the Senators and Reps from space states in this matter, especially when the prerogatives of the Congress are under asault. This would set an ugly precedent that could be applied to other agencies. It also may constitute an illegal impoundment of funds.

  • Mr. Whittington, I would remind you that there is some question as to the constitutionality of the law in question.

  • Major Tom

    I’m cutting and pasting from NASAWatch comments Jim Muncy’s good explanation of what’s happening with respect to the Constellation Program, Shelby’s report language, and the Anti-Deficiency Act. It’s worth reading if you need a clear understanding.

    “And as someone who has worked in the Executive Office of the President AND on the Hill, I would like to point out a few painful realities to those who honestly believe NASA is bound by law to continue Constellation as if nothing were going to change.

    First of all, Congress did not forbid any changes in the Program of Record. The actual appropriations LAW, as opposed to the report language, forbade total cancellation of any projects during FY2010, unless Congress spoke again. The Executive Branch, as a matter of precdent, has never accepted that they are bound by ‘report language’ as opposed to explicit provisions of law.

    Now, note that this doesn’t mean that programs can’t be ‘slowed down’.

    Furthermore, federal contractors are usually entitled to some amount of funds for cancellation penalties if a program is terminated. Those usually pass thru to subcontractors also. But prime contractors have the choice as to whether to believe the government will eventually pay them from a future appropriation, or to keep enough money in escrow to pay these costs.

    This Administration has decided that Lockheed and ATK are responsible for those costs, and must not spend remaining FY2010 funds on actual work, but hold on to them for termination costs.

    Therefore, in effect, work on Constellation is stopping…

    There is a difference between cancellation of the program, and slowing down spending on the program in preparation for shut down on October 1st, the beginning of FY2011. The former, if carried out in FY2010, would violate the letter of the law. The latter does not.

    More importantly, if there is not enough money left in FY2010 to carry out the original plan to continue spending on the Constellation projects AND keep a reserve for paying cancellation costs, then spending can stop. I realize this is a terrible way to run the program, but it’s also a requirement of existing laws.

    It would have been much better if Congress hadn’t posited in the FY2010 appropriation that the Augustine report didn’t exist and there was no reason to change direction until FY2011. If Congress had wanted to explicitly say in law don’t make any changes, don’t slow down, ignore termination and antideficiency requirements… then they could have. They didn’t.

    Instead, they said ‘don’t cancel’. So the Administration isn’t canceling the programs. They are simply honoring ALL of the laws they must, while trying to move to a sustainable and affordable program in FY2011 that can survive future budget problems, which we already see coming up with the new proposed 5% reduction in discretionary spending.

    … Cx management at JSC has been trying to get around this direction, and continue spending money on actual Constellation progress. This may indeed be in keeping with the intent of Senator Shelby and others in Congress, but it is not what the explicit letter of the law says.

    The Antideficiency Act, and various procurement laws, also bind NASA to do certain things, including retaining funds for contract cancellation.

    The Constellation contractors hate this, since they want their projects to continue. So do the folks who have been loyally trying to make Constellation work, like the new Cx lead guy.

    The painful reality that nobody, especially several Members of Congress from MY affiliated party (GOP), want to acknowledge, is that the money simply does not exist to make Constellation successful… This is what Augustine said. Constellation is not executable inside the current budget. You don’t have to like it or even agree, but you cannot prove that it is executable…

    … If folks want to say that this direction is unlawful, then they should say so publicly and possibly resign. But ultimately the question of legality is between the White House and Congress… it is not a question for GS-14s or even SESes at JSC to decide.”

    FWIW…

  • SpaceMan

    I love this strategy. Very smart moves.

  • Mark R. Whittington

    With respect to Jim Muncy, he is not a lawyer and is speaking from a particular point of view of support for Obamaspace and opposition to Constellation. If Obamaspace koolaid drinkers were smart, they would oppose this gambit. It is likely to backfire in ways that are as yet unpredictable.

  • Robert G. Oler

    Mark R. Whittington wrote @ June 10th, 2010 at 12:15 pm

    Brother Muncy has a reasonable amount of legislative experience. I have talked to a person who has been the Chief of Staff to a TExas Senator, who you met, and he more or less says Muncy is right on track.

    He made another point as well.

    This move by the Administration will likely flesh out what support or lack of it there is for continuing Constellation. If, as I suspect there is no serious reaction from any of the “non space” represenatives, if the only people who howl are those whose pork is being gored…

    well the show is mostly over for Constellation.

    His guess (and he lobbies now) is that there is little support for the program if for no other reason then it cost (to use his words) “so much fracken money”.

    He also reflects my surprise that the Constellation folks have not moved very quickly to come up with or embrace some alternate form of a program, one that is affordable. The sticking point here is ATK…what the Save Constellation folks have come down to is not “save the Moon” it is save the Ares booster…and that program is so “fracked up” that it is just not doable. AS Gunner noted “if it was about the Moon, they would be hugging Atlas and Delta as hard as they can go”.

    The sad thing is that ISS has almost become like WW1…it has just about bleed the government space agencies white.

    Robert G. Oler

  • Major Tom wrote:

    The painful reality that nobody, especially several Members of Congress from MY affiliated party (GOP), want to acknowledge, is that the money simply does not exist to make Constellation successful… This is what Augustine said. Constellation is not executable inside the current budget. You don’t have to like it or even agree, but you cannot prove that it is executable…

    And amend to that the fact that not one of them has offered to increase Constellation’s budget one penny to help finish the project.

  • common sense

    @ Stephen C. Smith wrote @ June 10th, 2010 at 4:37 pm

    “And amend to that the fact that not one of them has offered to increase Constellation’s budget one penny to help finish the project.”

    Which should have been a major clue to those on Constellation management hoping for a Congress bailout do to speak! Anyway…

  • common sense

    Edit: for a Congress bailout so to speak!

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