Congress, NASA

House bill would free up termination liability funds for NASA programs

The House Science Committee is scheduled to mark up several bills in a session this morning, including HR 3625. That bill, formally introduced on Monday by Rep. Mo Brooks (R-AL), would direct NASA not to reserve funds for ongoing programs, in particular the Space Launch System (SLS) rocket and Orion spacecraft, to cover termination liability costs should those programs be cancelled. “It is the intent of Congress that funds authorized to be appropriated for covered programs be applied in meeting established technical goals and schedule milestones,” the legislation states. It would also prevent NASA from terminating for convenience any prime contract for “covered programs” in the bill unless authorized by a future law. (The only program beyond SLS and Orion covered by the bill is the International Space Station.)

The issue of termination liability costs has been an issue for some time for Brooks, whose district includes NASA’s Marshall Space Flight Center. “Withholding scarce funds for termination liability slows development and hence increases the total cost of a project,” he said in a press release Wednesday about the bill. He cited NASA reports that more than $500 million is being withheld among those three programs to cover termination liability costs, funds he says “would otherwise be used to timely complete these scientific efforts.”

This is not the first time that the House has attempted to address this issue in recent months. The NASA authorization bill the committee approved in July, HR 2687, included a section almost identical to the current bill forbidding NASA to withhold funds for termination liability for SLS, Orion, and ISS. The fact that the committee is willing to take up this provision as a standalone bill suggests diminishing prospects for passage of an overall NASA authorization bill any time soon.

29 comments to House bill would free up termination liability funds for NASA programs

  • Egad

    “Scientific efforts” is a curious term to apply to SLS and Orion.

    • James

      Well, SLS and Orion are scientific experiments, in the sense that it is an interesting science experiment to see how long they can suck up funds for no purpose before enough American citizens catch on to the folly of their existence. It’s a costly science experiment for sure, but I”m sure its fun to play for dole-ING out the pork and repeating the benefits (Votes!)

      • Explorer08

        You said: “…before enough American citizens catch on to the folly….”

        Are you kidding me? American citizens aren’t even paying attention. They could not care less than they do now.

  • Dark Blue Nine

    Per Space News (http://www.spacenews.com/article/civil-space/38501brooks-wants-sls-orion-contractors-to-spend-termination-liability-reserves):

    “Brooks’ bill would void the termination liability provisions in existing SLS and Orion contracts and make clear that Congress would appropriate funds for termination costs if NASA does indeed cancel the programs.”

    This bill is illegal under the Antideficiency Act (http://en.wikipedia.org/wiki/Antideficiency_Act). Congress can’t incur obligations that are in excess of already appropriated funds.

    A promise in a non-appropriations bill by today’s congress that a future congress will provide the necessary funds in future appropriations is meaningless. It’s Wimpy promising to pay Popeye on Tuesday for a burger today.

    Either Brooks and his staff are ignorant and unqualified for their positions with no understanding of how federal budgeting works. Or Brooks knows his bill is useless and DOA and is just grandstanding for votes back home.

    • MECO

      DBN, You make an interesting point that the bill may be meaningless in that it promises to provide necessary funds in the future. But it seems like the indemnification bill does a similar thing–promises a future payout for something not yet appropriated. I know that one Congress cannot bind future Congresses. I also don’t understand why you make a distinction between appropriations bills and non-appropriations bills.

      Also, I’m not sure I agree with your comment that it is illegal under the Antideficiency Act. The obligation to pay the termination does not occur until the program is canceled, right?

      I believe termination liability is determined/negotiated on a case-by-case basis on each contract. If so, I’m not sure why this legislation is needed at all. NASA and the contractors could agree to carry zero reserve. I also have been told that NASA looks at it from a “portfolio” perspective, in that it (or the contractor) hold enough in reserve for termination across a portfolio programs, ie it assumes that not all programs will get cancelled at once.

      • Dark Blue Nine

        “But it seems like the indemnification bill does a similar thing”

        It doesn’t. Agencies and the Treasury set aside funding for indemnification, whether for LVs or other things. For example, this OMB Memorandum warns agencies against entering into agreements (for social media, of all things) that would incur indemnification in excess of the agency appropriations:

        http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-10.pdf

        “Also, I’m not sure I agree with your comment that it is illegal under the Antideficiency Act… I know that one Congress cannot bind future Congresses.”

        You answered your own question.

        “The obligation to pay the termination does not occur until the program is canceled, right?”

        Yes, but that obligation binds a future Congress to appropriate funds in the event of program termination. Today’s congress (and the executive branch) cannot bind a future congress to a future obligation, even on a contingency basis. That’s why this bill is a non-starter under ADA. Congress would have to repeal ADA for Brooks’ bill to pass or be enforceable, and that’s not going to happen.

        “I also don’t understand why you make a distinction between appropriations bills and non-appropriations bills.”

        Because appropriators don’t like to be told what to do by non-appropriators. And, more importantly, because only appropriations bills can provide funding.

        “I believe termination liability is determined/negotiated on a case-by-case basis on each contract. If so, I’m not sure why this legislation is needed at all. NASA and the contractors could agree to carry zero reserve.”

        The contracts would have to include clauses waiving the rights of the contractors to sue for termination costs. If you believe ATK, Boeing, and LockMart are going to agree to that, I’ve got some property on the Moon that you might be interested in purchasing.

        If the contractors are behind this language, they’re (clumsily) trying to have their cake and eat it, too. But I’ve never met an industry lobbyist stupid enough to waste time proposing such patently unenforceable legislation. I think this is just a wild hair for Brooks or someone on his staff or bread-and-circus for ignorant constituents back home. The bill was tabled today, and I doubt we’ll see it again (at least until next year):

        http://nasawatch.com/archives/2013/12/turning-sls-and.html

        • MECO

          DBN, I think the concept that a Congress cannot bind a future Congress means that no Congress can preclude a future Congress from changing its mind, not that a Congress cannot set laws and policies that have effects in future Congresses. For example, funding levels in a 5 year authorization bill are still valid law unless/until a future Congress changes it. Congress can appropriate advanced appropriations for future years and it’s still valid, unless its later changed. Entitlements create obligations in future Congresses that are valid, unless Congress later decides to change it. Right?

          • Dark Blue Nine

            “DBN, I think the concept that a Congress cannot bind a future Congress means that no Congress can preclude a future Congress from changing its mind…”

            Not exactly. It means that a congress today can’t force a future congress to take a certain course of action in the future.

            Brooks’ bill would force a future congress to appropriate funds to cover termination costs if SLS and/or MPCV were terminated, i.e., Brooks’ bill forces a future congress to vote a certain way. That’s highly undemocratic on principle, and under ADA, Brooks’ bill can’t do it, regardless. Either Brooks’ bill goes nowhere or ADA is modified/repealed and fundamental changes are made to our system of governance.

            “For example, funding levels in a 5 year authorization bill are still valid law unless/until a future Congress changes it.”

            Authorizations are advice/guidelines for appropriations. Authorizers can’t bind appropriators, and appropriations almost always ignore/never match authorized funding levels.

            “Congress can appropriate advanced appropriations for future years and it’s still valid, unless its later changed. Entitlements create obligations in future Congresses that are valid, unless Congress later decides to change it. Right?”

            You’re right that advance appropriations and entitlement create obligations in future fiscal years. But they don’t require a future congress to pass a new appropriations bill to meet those obligations, i.e., they don’t force a future congress to take a certain course of action and vote a certain way like Brooks’ bill does. (Of course, a future congress could reduce/eliminate or enhance/accelerate these obligations by amending an entitlement law or changing old advance appropriations in a new appropriations bill.)

  • Coastal Ron

    It would also prevent NASA from terminating for convenience any prime contract for “covered programs” in the bill unless authorized by a future law.

    In other words, if the SLS and MPCV were not porky enough, this will make VERY clear that these are pork programs that we don’t want anyone to touch, and that we’ll suspend common sense rules of business to do so.

    • Ben Russell-Gough

      Better still, that they will make it functionally illegal and impossible to cancel them, no matter how much a horrendous failure they may turn out to be. Just imagine: A rocket that cannot fly and has no missions but must continue to be procured by Congressional fiat!

    • reader

      http://www.spacenews.com/article/launch-report/38065sls-budget-%E2%80%98reasonable%E2%80%99-atk-boss-assures-investors

      “SLS Budget ‘Reasonable,’ ATK Boss Assures Investors”
      “The SLS program is very well supported with bipartisan support and a reasonable budget level,” he said. The Arlington, Va., company, whose Magna, Utah-based Aerospace Group saw year-to-year operating profits rise 9.4 percent to $40.6 million on nearly flat sales of $319 million for the three-month period ended Sept. 29, is the prime contractor for the heavy-lift launcher’s twin solid-rocket boosters.

      This all right on the heels of all the news about NASA completely gutting its planetary science, prematurely shutting down Cassini, Bolden saying “no more flagship missions” etc.

      Who do you call ? cagw.org ?

      • Dark Blue Nine

        “SLS Budget ‘Reasonable,’ ATK Boss Assures Investors”

        This is a good point. If the contractors are satisfied with SLS/MPCV funding levels, there’s no need to tap termination liability funds and further expose the taxpayer on these programs.

      • James

        If Bolden is saying ‘No More Flagships’, and is using $1B as a Flag Ship cap, then this doesn’t square with his support of the WFIRST Dark Energy Exoplanet NRO Mirror Mission he supports, which is somewhere near $1.6B.

        But lets say he is firm on this $1B cap.

        Then SMD will have no use for SLS. You don’t plop Discovery, Explorer, or New Frontier missions (all <$1B excluding LV) on top of an SLS. You don't plop anything under $1B on the SLS.

        And NASA HSF doesn't have any use for it either.

        So what the frack (To quote Starbuck from Battlestar Gallactica), what the frack is it going to be used for ? And since no SMD payloads will ever fly on it, how often will it be used?

        Bolden's loyalty to Obama ( he hasn't resigned in protest yet over this folly) is ruining his reputation, and killing the Agency. Where is Grunsfeld on this? Anyone at NASA HQ demanding that sanity prevail?

        Well, sigh. I guess the Curiosity and JWST, along with Cx, and now SLS, chickens (w/o their heads) are coming home to roost.

        Where is 60 Minutes when you need them!

        • reader

          They have a 2020 Mars rover already in the works budgeted at 1.5B. Its supposedly “cheap” because it’s supposed to reuse lander design from MSL.

          No more flagships – apart from “special” ones, and SLS will launch one million cubesats at a time.

        • Hiram

          “If Bolden is saying ‘No More Flagships’…”

          I don’t think he quite said that. I believe what he meant was that SMD had to stop emphasizing (and fantasizing routinely about) flagships. It was Marcia Smith who read that as “forget about flagship missions”. Not quite the same. As to WFIRST/NRO, that mission won’t get a new start until after JWST is off the pad — a matter that AD officials have sworn to. 2019 at the earliest. Looking ahead to a $1.6B mission that might get STARTED in 6 years (and maybe launched five years later) doesn’t count as “emphasizing”.

          But that’s precisely right about SLS. SMD will never be a significant user of it. There has been a lot of drooling and fantasizing at SMD about exotic, enormous, do-all flagship science missions that would be enabled by an SLS/AresV. That drooling and fantasizing is probably over. NASA won’t invest in any more such concept studies. Those were the days. Of course, Bolden’s depressing comment is partly because money is tight, but it’s also just expected fallout from the JWST fiscal debacle.

  • Well, let’s see if this joke of a bill makes it through the Senate.

  • josh

    naked crony capitalism. disgusting.

  • Mark R. Whittington

    What an interesting outside the box idea. Start a project and not halt it midway through. And if, for some reason, it has to be stopped, Congress gets to decide. I can see why people are getting irate.

    • Dark Blue Nine

      What a lame, stupid, inside-the-Beltway scam. Defraud future congresses and voters of their right to determine their own civil space future in order to lock in expensive, duplicative, poorly performing pork. And if, for some reason, they do manage to cancel these programs, hit the taxpayers twice for termination costs.

    • josh

      fyi congress decided to cancel constellation. also, your water carrying for crony capitalists is getting pretty damn pathetic.

    • Malmesbury

      Think about all the programs you don’t like – the ones you want to elect new representatives to get them shut down. Think of a future where a change of government won’t change a thing.

      If this is done once, it will spread like wildfire. *Everything* will be uncancelable.

  • Andrew Swallow

    Congress can still cancel the SLS and Orion; it just does not pay any compensation (termination liability cost).

  • Hiram

    Let me get this straight. This $500M that is being withheld for termination liability is not $500M/yr, but $500M total. That is, that $500M doesn’t disappear at the end of the year. It’s money that isn’t used if the contract isn’t terminated. It’s obligated but not expended. What happens to that appropriated money if the project is not terminated? It would seem that on the scale of the total life cycle budget for development of SLS and Orion, $500M is chump change. If that’s the case, the real purpose of this bill isn’t to provide significant extra funding to these projects (as the bill claims), but just to strongly discourage termination.

    FWIW, I believe the GAO is right now in the process of assessing termination liability funding in DOD projects, where the issue is whether the DOD contractors are coming up with the right numbers for that liability that would be due to them, and the extent to which that liability is really a factor in decisions about termination. First results suggest that it probably is a factor. This study was mandated by the 2013 Defense Authorization Act. Rep. Brooks is on the Armed Services Committee that drafted that legislation, so his office was probably well attuned to termination liability issues for major projects, and its power in discouraging termination. He’s just being creative in applying that to NASA.

    • Coastal Ron

      Hiram said:

      What happens to that appropriated money if the project is not terminated?

      Not sure about this contract, but I’ve seen where contract reserves are held until near the end, and then either used when the risk of cancellation has passed (i.e. the project is close to be completed) or (and this hardly ever happens) the funds are not spent and returned to the general fund.

      He’s just being creative in applying that to NASA.

      These things can be cyclical as the new people in charge have no institutional memory for the value of why things are being done today.

      And maybe there isn’t a need anymore, for a variety of reasons, but I think the situation here is an attempt to funnel as much money as possible, as soon as possible, into certain political districts.

      • Andrew Swallow

        And maybe there isn’t a need anymore, for a variety of reasons, but I think the situation here is an attempt to funnel as much money as possible, as soon as possible, into certain political districts.

        Which Senators are coming up for re-election in 2014 and 2016?

    • Vladislaw

      They are supposed to hang on to it as a reserve. Traditionally, if the project/program has a broad support they use the money right away, The Contractors for the constellation spent the money and they had to be bailed out. Bolden had said very early in his appointment that contractors would no longer be bailed out for termination costs if they failed to save them.

      • Hiram

        The question was where the money goes if they don’t use it. Can contractors “keep it in the bank” for another year? In which case, termination liability is largely a one-time appropriation. Or does the obligation simply expire, such that the amount has to be re-appropriated each year. If the latter, then that’s money in the NASA budget allocation that never gets spent. That’s an interesting concept, if a very significant fraction of agency appropriations doesn’t get spent.

  • Hiram

    “Not sure about this contract, but I’ve seen where contract reserves are held until near the end …”

    No, I meant the funds that are appropriated to cover termination liability. Contract reserves that are held in case of budget overruns just flow into the project if they aren’t used for budget overruns. They’re appropriated to the project. But where does termination liability money go when it isn’t used for project termination? The project is gone. The money can’t just drop into the agency as discretionary funds. It wasn’t appropriated for that. If it simply doesn’t get spent, then that means that the amount of money NASA spends is actually significantly less than the amount appropriated for the agency. That’s an interesting concept. Now, if that money doesn’t end up in NASA’s hands, it means that NASA has no particular disincentive for termination. That termination money doesn’t come out of their hide.

    • Coastal Ron

      Hiram said:

      But where does termination liability money go when it isn’t used for project termination?

      My understanding is that it’s part of the overall reserve fund, with some of it held for overruns, and some for project termination.

      But we do need someone with specific knowledge to weigh in on this.

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