Congress, NASA

Shelby reiterates his support for commercial crew pricing language as Nelson seeks changes to it

As debate on the Senate floor started—slowly—Wednesday on several appropriations bills, including the Commerce, Justice, and Science (CJS) bill that funds NASA, one senator defended language in the report accompanying the bill about commercial crew cost data while another senator hinted he would seek to change that language before the bill becomes law.

At issue is a provision in the report regarding the commercial crew program that requires “certified cost and pricing data” from companies that receive commercial cargo and crew contracts. That language was inserted by Sen. Richard Shelby (R-AL), ranking member of the Senate Appropriations Committee, on the argument that it provides needed “transparency” to ensure taxpayers’ money is being spent wisely.

“Those efforts must continue in a transparent way, I believe, to ensure that the government is not saddled with mounting bills and no recourse,” Shelby said on the Senate floor Wednesday morning, referring to NASA’s commercial crew program. He said the requirement for certified cost data, usually applied to cost-plus contracts, was not an attempt to change NASA’s plans to use fixed-price contracts for the program’s next phase.

“The goal of the language is not to upend a fixed-price contract. Rather, the goal is to make certain that the price NASA has agreed to pay for vehicle development matches actual development expenditures,” he said. “NASA and its contractors have a history of cost overruns and schedule delays, whether the contract has a fixed price or not. With no other US-based options to get to the space station, I believe we cannot find ourselves at the 11th hour with an overburdened program that requires a bailout to succeed.”

That provision has been criticized by many commercial space advocates and others, from the White House’s Office of Management and Budget to the conservative editorial page of the Washington Times. In his own comments on the Senate floor later Tuesday, Sen. Bill Nelson (D-FL) suggested he would seek to change the report language at some point before the bill becomes law.

“But we’re going to need to continue to work, and I would like to, with Sen. Shelby and Sen. [Barbara] Mikulski, as the bill goes to the conference committee, to make sure we have the right mix of oversight and innovation in how NASA contracts for this competition with the competitors,” he said. He didn’t elaborate on those comments, but the language strongly suggests he was referring to the “certified cost and pricing data language” in the report.

Nelson made those comments while also praising Sens. Mikulski and Shelby for funding commercial crew at close to the administration’s request: $805 million versus the $848 million requested. “This bill gets it close,” he said. “I can’t overstate the importance of commercial crew in the long-term viability of the space station.”

73 comments to Shelby reiterates his support for commercial crew pricing language as Nelson seeks changes to it

  • James

    “Those efforts must continue in a transparent way, I believe, to ensure that the government is not saddled with mounting bills and no recourse,”

    There is lots of transparency in the development of JWST, and I do believe NASA has been saddled with mounting bills and no recourse.

    Ditto MSL

    Ditto : The list goes on!

  • Email your Senators everybody. Encourage all your your friends to harass their Senators. They all will vote in ignorance if we don’t.

  • I can’t overstate the importance of commercial crew in the long-term viability of the space station.

    It seems to me you can and you have. It has not been almost 10 years. Three companies continue their slow walk of development, and there is no firm launch date. Commercial crew has been a fiscal black hole. Senator Shelby is right to demand an accounting.

    Encourage all your your friends to harass their Senators.

    Oh, I do that routinely, although maybe not in the way you would like.

    • Dark Blue Nine

      “It has not been almost 10 years. Three companies continue their slow walk of development”

      An asinine lie. Commercial crew development started in 2010. That’s four years and change of development, not ten.

      If you want to whine about a project wasting a decade in befuddled development, start with Orion. With the project getting stood up in 2005, Orion is nearly ten years old now.

      “Commercial crew has been a fiscal black hole. Senator Shelby is right to demand an accounting.”

      All commercial crew awards to date have totaled less than $1.5 billion ($1,492 million to be exact) for flights in the 2015-17 timeframe. That’s as much as SLS flushed down the J-2X toilet before it was shelved.

      Orion, by contrast, blew $7.4 billion before it became MPCV. And it will spend at least another $9-10 billion before its first crewed flight in 2021 (if it ever gets there). That’s $16-17 billion for a manned space capsule, more than ten times the amount spent to date on commercial crew.

      If you want to whine about “fiscal black holes”, start with Orion and SLS.

        • Coastal Ron

          amightywind said:

          Orion flies this year.

          What you call “Orion” that flies this year is just an engineering test unit that only demonstrates limited functionality since it lacks a functional Service Module and other required systems to allow humans to survive. It’s kind of like walking into an auto parts store and pointing to parts stacked on the shelves and saying “look, a car!”

          At most the “Orion” EFT-1 test it would be akin to the test flight Sierra Nevada did recently with their Dream Chaser, and in reality it will have far less functionality than what the SpaceX Dragon had on it’s first COTS demo flight back in 2010. And all these commercial vehicles have cost $Billions less…

          • John Malkin

            EFT-1 reminds me a lot of Ares I-X which used several spare parts not directly related to the final system. I feel it’s more to give the appearance of progress.

            Just like Ares I-X there will be some useful data but I think if they would have waited for one of the 5 segment SRB to be ready instead of only ground testing a bunch of them.

            It just feels like busy work at the taxpayer’s expense.

          • Didn’t Musk just have a press event with a mock up of a new spacecraft that will eventually carry crew, making obsolete Dragon V1? Yeah, so all of these craft are under development. I’m just glad the post shuttle recovery can now resume. Ares I-X was the first step in that long path, but Obama sabotaged that branch.

            • Coastal Ron

              amightywind said:

              Didn’t Musk just have a press event with a mock up of a new spacecraft that will eventually carry crew, making obsolete Dragon V1?

              Not a “mockup”, a fully functional vehicle that is going to space and back, and likely back up again – as opposed to the semi-functional Orion & single-use heat shield testbed vehicle (i.e. no interior, no ECLSS, no Service Module, etc.).

              For someone that pretends to be “in the know” you sure don’t keep up with what’s going on very well… ;-)

            • Vladislaw

              Ya President got all those republicans to voted against funding the CONstellation program. THIS President has been extemely successful in getting republicans to vote his way. I mean this President has the least filibusters of all Presidents in history. And the house republicans .. I mean what can I say.. the house republicans voted in lockstep for everything this President proposed…

              So ya windasovich … Obama ordered the republicans to vote the way they did.

        • Dark Blue Nine

          “Orion flies this year.”

          Yay! After $10+ billion of taxpayer money wasted, nine years of schedule blown, and multiple test failures, we might get an unmanned capsule into orbit! It’s not like another organization besides NASA and LockMart could get that done in five years for a few hundred million dollars, right? Let’s pat ourselves on the back! We are excellence in engineering!

          And that’s if they maintain the schedule. EFT-1 already slipped to December and typical launch pad setbacks will almost certainly push EFT-1 into next year. And if the heat shield continues to have cracking and delivery issues, then it’s sayanora, schedule.

          And they’ve only been able to maintain that pathetic schedule by slipping Orion’s altitude abort test by four years, pushing off life support system development, and ignoring Orion’s massive weight issues.

          • Coastal Ron

            And even if this Orion flight goes off as planned, the next flight (EM-1), which was originally planned for 2017, is going to slip to at least 2018 because ESA can’t deliver the first Service Module before that. That is also supposed to be the first flight of the SLS, so the SLS development schedule will feel the impact of that one year slip too. This just keeps getting uglier and uglier…

        • Commercial cargo has been flying a lot more often than Orion ever will. With three radically different approaches under development, there is every reason to believe that commercial crew will be just as successful. If not, than we can agree that you were correct, but there is every reason to give this new model a try to completion — especially since it is so (relatively) cheap.

          It’s worth reading AvWeek’s article about the SpaceX capsule. It turns out to be a radically new design, which, if it works (admittedly, a big if) will be far beyond any capability Orion will have in LEO. If it doesn’t work given the same decade that Orion has consumed failing to produce a conventional, Apollo-like capsule, than you were correct and it will be time to pull the plub. But, if it _does_ work, and human spaceflight becomes relatively cheap, this nation could become the preeminant spacefaring power for the foreseeable future. That promise, surely, is worth setting aside less than a third of what Orion / SLS are spending failing to produce anything useful to try something new.

        • Vladislaw

          Orion is going to start flying people this year?

    • josh

      commercial crew will fly people in 2017, probably earlier. orion *might* have its first manned mission in 2022 (at ten times the cost). that’s five years later. your bullshitting isn’t getting you anywhere, windy. it just makes you look stupid and out of touch, as usual.

  • Malmesbury

    4 years since commercial crew actually started. Unless you count COTS-D – an option that was strictly forbidden to be exercised.

    The rockets to launch all the CC competitors exist. Flight hardware for all three main vehicles is ahead of Orion at this point. All vehicles are within their weight margins and are gaining capabilities, rather than throwing them overboard to reduce weight R101 style….

  • Dark Blue Nine

    OMB (and Nelson now) is screwing this up. Shelby’s provision was lousy report language. Unlike the FAR, it does not have the force of law. Instead of fighting Shelby on this, the Administration should have just ignored Shelby’s report language. If Shelby raised a fuss later, NASA could have told him that their hands are tied by the FAR. OMB is picking a SAP fight and Nelson is getting clumsily involved over something the Administration could have conveniently ignored.

    I’m all for commercial space advocates raising a stink and shining a light on Shelby’s actions, but the responsible PAD at OMB played his hand totally wrong on this one. The commercial crew program will now get stuck with some goofy, costly, schedule-blowing Shelby/Nelson compromise that OMB has no control over and that NASA and the White House will no longer be able to ignore.

    Dumb, dumb, dumb, dumb, dumb…

    • Henry Vanderbilt

      The heart of the actual report language is

      “..the Committee directs NASA to maintain FAR 15.403–4, related to certified cost and pricing data for prime contractors, for any contracts entered into to support the development of a commercial crew vehicle.”

      I agree that it seems ambiguously drafted. It could be interpreted as, enforce 15.403-4 accounting provisions on contractors DESPITE the exceptions provided for there, or, enforce 15.403-4 as usual – which would allow those exceptions.

      The former is clearly what Senator Shelby intended from his various statements. The latter seems much closer to the actual wording (at least to this non-lawyer.)

      Given the clear intent of the man who is second in command of the full Senate Appropriations Committee (and a better-than-even bet to be the Chair next January) I think it would have been an error to rely on the ambiguous wording and the non-law status of Report language.

      This is a power struggle far more than it is a legal struggle, and NASA just ignoring the Report provision would have led to retaliation – would have had to, unless the top Appropriators wanted to see their power diminished.

      I do see the potential problem you’re pointing out: That fighting this could end up trading fatal Report language that CCrew *might* have ignored for merely bad compromise language in actual law that they’d have been forced to observe.

      Nelson’s actual statement, though, was “But we’re going to need to continue to work, and I would like to, with Sen. Shelby and Sen. [Barbara] Mikulski, as the bill goes to the conference committee, to make sure we have the right mix of oversight and innovation in how NASA contracts for this competition with the competitors.”

      This doesn’t necessarily indicate we’re going to see actual wording in the final Appropriation regarding this. My best guess at this point is some sort of behind-the-scenes nod-to-transparency compromise, likely as not notable mainly by the absence of explicit wording anywhere.

      We’ll see.

      • Dark Blue Nine

        “I agree that it seems ambiguously drafted. It could be interpreted as, enforce 15.403-4 accounting provisions on contractors DESPITE the exceptions provided for there, or, enforce 15.403-4 as usual – which would allow those exceptions.”

        I was assuming the former — that the report language is an unambiguous attempt to force onerous FAR accounting on commercial crew. And even with unambiguous report language, the Administration should have just ignored it. It’s report language, and the FAR with its exceptions take precedence. One Senator’s report insert does not overturn a law passed by the whole of Congress. If Shelby tried to call NASA or the White House on this sometime next year when the accounting wasn’t implemented, the Administration would have been well within its rights to point out that it is obliged to follow the law, not Shelby’s report insert. (But we’re happy to give you this special accounting transparency report, Mr. Senator…) Assuming commercial crew appropriations come out well and NASA can downselect to more than one provider later this year, Shelby’s options for retaliation, short of blowing up the program and potentially ISS, would be very limited by the time this came to a head next year, if it ever did.

        Your point, that the report language is ambiguous, would have opened up another excuse for the Administration to ignore the report language. If the report language is ambiguous, then that’s even more reason for the Administration to go about business as usual rather than raising objections in a SAP and picking a fight now. If called on it later, the Administration could legitimately claim that it is carrying out the letter of the report language. And if Shelby pressed for his interpretation of the report language, the Administration could then fall back on law taking precedence over report language.

        After your post, I think more than ever that the Administration should not have picked this fight. OMB almost never objects to report language, and there’s little reason to do so at this time here. It’s up to individual congressmen to prove that their report language states what they think it means and that it trumps law. With this SAP objection, OMB has acknowledged that Shelby’s ambiguous language means what he thinks it does and that it trumps the FAR, when neither is true. They conceded the fight before it began. That’s stupid.

        Worse, now Nelson the bungler is involved on behalf of the Administration. And we’ve all seen what a stellar job he did in picking the current Administrator and with the “monster rocket”. I certainly hope this turns out better than those episodes, but I have no precedent to point to.

        And, again, folks like you should be shouting from the mountaintops about Shelby’s actions here. I’m not objecting to that. But OMB has to think through political, legislative, and programmatic strategy, and they clearly did not here. There must be some newbie staffer or second-term political appointee at OMB now covering NASA’s accounts.

        • Henry Vanderbilt

          RE possible retaliation, one thing to keep in mind is that “blowing up the [Commercial Crew] program, and possibly ISS” may not be as inconceivable as you assume, given that doing exactly that is an increasingly overt part of the SLS mafia’s agenda (in order to provide enough funding to at least pretend to start putting together an SLS-based exploration program.)

          On a bit of a tangent, one thing that still puzzles me is why Senator Shelby would have telegraphed this move by putting out a press release? Typically this sort of thing works best if allowed a chance to pass under everyone’s radar. Shelby tied a corner-reflector to it.

          Then again, it’s easy to overthink these things. Most apparent incredibly devious schemes resolve into a whole series of “it seemed like a good idea at the time” decisions when you zoom in on them enough.

          • Michael Kent

            “On a bit of a tangent, one thing that still puzzles me is why Senator Shelby would have telegraphed this move by putting out a press release? Typically this sort of thing works best if allowed a chance to pass under everyone’s radar. Shelby tied a corner-reflector to it.”

            I suspect he doesn’t really expect the provision to become law. He’s dropping NASA a hint — a bright neon hint — that he wants Boeing for commercial crew. This is also almost certainly the reason behind the Congressionally mandated switch from cost to safety as the primary selection criterion for the downselect.

            Congress is saying that if NASA drops Boeing out, there’s going to be a fight.

            That’s my take on it, anyway.

            I’m still holding out hope that NASA will choose Boeing and SpaceX for full awards during the coming downselect.

            • Hiram

              “I suspect he doesn’t really expect the provision to become law.”

              I agree. That being the case, he just wants to make noise, and for Boeing (and NASA as well) to hear that noise. That way, when it comes to fundraising, Boeing says, “Ah, Shelby, his heart is in the right place”. If he didn’t make noise, and his provision was dropped, that wouldn’t be a “win” in his book. Remember, this is more about getting a “win” than about changing the FAR. A political win is something that can be claimed with no real accomplishment.

        • Henry Vanderbilt

          All that aside, the chances of this resulting in a compromise embedded in the actual Appropriation just dropped markedly – Reid and McConnell yesterday butted heads over how relatively open to amendment (or otherwise) the “minibus” 3-Approriations-bills package should be, and the whole thing is now on hold.

          Interesting times…

  • Tom Villars

    amightywind (aka Alabama Fart):

    To suggest this is anything but pork barrel politics shows how insecure Shelby and his supporters really are. What would normally be buried in the paperwork mountain that is the Congressional Record has suddenly become visible. Let’s see how Shelby does when someone is actually pay attention.

    Go SpaceX!

  • E.P. Grondine

    While Musk’s ramblings about manned flight to Mars play well with the usual manned Mars flight enthusiasts, they do not play so well with DoD procurement officials.

    My guess is that while Musk’s computer systems are undoubtedly adequate for easily implementing the reporting requirements, it is the biases of the accountants that are of concern to him, as well as their examination of cross project funding and likely objections.

    Musk has Texas, Florida, and California lined up, along with the other major players.

    ULA has all the years of grief of the ATK albatross tied around its neck.

    If Musk thinks he’s going to get all or even some of the DoD launches, my guess is that instead he’ll find himself competing with Orbital/ATK for them.

    I myself believe that we need a liquid fueled B team working on a fly back booster until VTOL is proved operationally.

    • Coastal Ron

      E.P. Grondine said:

      My guess is that while Musk’s computer systems are undoubtedly adequate for easily implementing the reporting requirements…

      The current time tracking system SpaceX uses is NO time tracking, so it would be a significant change for their company to start tracking time charges – both software wise and culturally.

    • Jim Nobles

      My guess is that while Musk’s computer systems are undoubtedly adequate for easily implementing the reporting requirements, it is the biases of the accountants that are of concern to him, as well as their examination of cross project funding and likely objections.

      There’s also the matter of every other business that sells stuff to the government. Do we want this Shelby thing to set the precedent for the small company that, for example, sells pencils or paper or wheelbarrows to the government. This Shelby idea is just a bad idea for American business, not just newspace.

  • Gary Warburton

    On second thought, I think that maybe it would have been wiser for Elon to ignore the air force launches and let them come to him. Just apply for certification and leave it up to them. Eventually, someone in government would have noticed that they`re paying a a heck of a lot for air force launches when full reusability is established and making huge savings for everyone else.

    • What is so odious about making SpaceX play by the same big boy rules as Lockmart and Boeing?

      • Coastal Ron

        amightywind said:

        What is so odious about making SpaceX play by the same big boy rules as Lockmart and Boeing?

        What Shelby is trying to put in place is not making everyone use the same rules, since everyone is already using different contracting methods that have different long standing reporting requirements.

        This is about Senator Shelby implementing new rules ONLY for Commercial Crew, not everyone that uses the same contracting methods. It’s a punitive measure to slow down any perceived competition to the contracts that flow through Alabama.

      • Jim Nobles

        What is so odious about making SpaceX play by the same big boy rules as Lockmart and Boeing?

        I will try to answer this. Not for windy, I’m sure he already knows the answer but is just using this as an opportunity to talk bad about SpaceX with whom he has rather severe emotional problems. I’ll try to answer it for those people who may be reading this but who do not really understand the issues and aren’t that familiar with windy’s attitudes and might misjudge the validity of his remarks.

        Some contracts are known as “cost plus” and that’s the types of government contracts that Lockmart and Boeing are familiar with. Those types of contracts pay the vendors all their costs on a project plus a percentage for ‘profit’. Thus it is in the company’s interest to jack up their ‘costs’ as much as possible and then present the bill to the government. The kinds of ‘transparency’ measures Sen. Shelby is talking about are meant to make it harder for companies to fake those ‘costs’ and cheat the taxpayers by charging too much. The government makes the companies maintain documentation and a paper trail for everything they claimed as a ‘cost’. It adds more cost itself to the project but the idea is to keep the companies honest by making it more difficult for them to just make stuff up.

        The “fixed price” contracts that the newspace people are getting are a different animal. For example, in a fixed price contract a company or vendor might say, “We’ll build this thing for you for $10 million dollars.” If the government agrees then a contract is written. When the thing is delivered the company gets the money. It doesn’t matter what their profit is. That’s nobody’s business (except maybe the IRS) and if the customer is happy and the company is happy then everyone is happy. Those ‘Transparency’ measures aren’t really applicable in this case. Any ‘transparency’ or other such measures should have been part of the due diligence the government should have done before accepting the deal. And I should point out that with the current situation we have with ‘newspace’ government is the one usually offering the deals to start with.

        What Sen. Shelby is attempting to do is force ‘newspace’ companies to have to pay for ‘cost plus’ type accounting on ‘fixed cost’ type contracts. This is completely inappropriate and most people believe it’s an attempt to force these companies into spending much more money and thus driving their costs up in order to make the companies less able to compete against the big companies that the politician is working for. Those big companies often already have the people and resources for the transparency accounting due to their involvement with ‘cost plus’ contracts.

        That’s it as I understand it. There’s more of course and others may want to amend, add to, or correct my remarks.

        • Dick Eagleson

          You pretty much nailed it.

        • Robert G. Oler

          You nailed it…along with your excellent words I would add this

          there is a mindset involved…a cost plus contract is really a “develop it as you go” contract whereas the fixed price is “buy a product” (as you mention) or buy a service.

          by definition a cost plus has no real commercial value…a fixed price just the opposite

          Nice comments on your part RGO

        • Ad Astra

          Elon is the one continually whining about a level playing field. Every bid, regardless of contract structure requires presentation of typical costs incurred on programs of similar scale. Allowing SpaceX to bid with their shoddy accounting, timekeeping, and audit structure as cost bases for BOEs while LM, Boeing, SNC, and ULA by law have to include full top to bottom transparency in their rates is inherently unfair.

          As Elon is discovering, EVERYTHING takes longer, has more hoops to jump through, and ultimately costs more when providing space launch services both manned and unmanned to the government. That’s why folks at ULA chuckle when he quotes a mere 50% cost increase for national security launches. A multiplier of 2 to 3 is more realistic when engineering, program management, accounting, and even arcane aspects like percentage of subcontractors that are minority or women owned businesses need to be reported and audited by the customer, third parties (OE Aerospace), the space vehicle manufacturer, etc.

          • Dick Eagleson

            Yeah, poor put-upon LockMart, Boeing and ULA, suffering cruelly under the weight of all that barnacle-tastic federal procurement bravo sierra. How unsporting of SpaceX to dodge it all by perfidiously agreeing to work for fixed-price milestones. The brass-plated gall of some people!

            The legacy metal-benders can get out from under most of this any time they’re ready to abandon cost-plus contracting. They won’t because cost-plus contracting is largely their own invention. They get paid for “effort” rather than results and it scares away little, quick-moving mammals who might otherwise juke and jive in between their slow-moving toes and eat their eggs. Having designed their own ecological niche to suit their own limitations, they’re going to stick with it to the bitter end. That bitter end may finally be in sight. They’ve encountered a quick little mammal with unusually large teeth and it’s biting them in a lot of sensitive places.

          • Hiram

            “Allowing SpaceX to bid with their shoddy accounting, timekeeping, and audit structure as cost bases for BOEs while LM, Boeing, SNC, and ULA by law have to include full top to bottom transparency in their rates is inherently unfair.”

            Geez, read the FAR, would ya? The “R” is for “regulations”. The required accounting regulation for a firm fixed price contract is simply different than for cost-plus contracts. Firm fixed price imposes risks on the vendor, and Musk is willing to bite on those risks. Boeing isn’t. Nothing “shoddy” about following regulations precisely, as SpaceX is doing. Space X is stamping a price tag on the deal. But Boeing is saying “We’ll do our best, and we’ll let you know when it’s done how much it cost”, and that FAR simply insists that they aren’t doing their best to cheat the taxpayer. The FAR says that the taxpayer would like some reassurance that, as you bill them for your additional costs, those costs are justified. Otherwise, it’s a “Take our word for it” deal. That’s not the SpaceX arrangement, which is, you pay the agreed upon price, and we supply the product. Period. Shelby is complaining about those regulations. If the agency contract managers that formalized those regulations agree with him, they can change them, but that’s what’s on the books right now.

            Yep, EVERYTHING takes longer, has more hoops to jump through, and ultimately costs more when providing space launch services both manned and unmanned to the government doing cost plus. Holy moley.

            So you take your car in and have them work on it. How would you like to do that in a cost-plus procurement? As the bills rack up, and you still don’t have your car back, you might like some visibility into where those new costs came from, no? Yes, you could just take their word for it. Those new bills didn’t have anything to do with their staff retreat in Bermuda. Because they said so.

            The idea that Shelby is worried about the taxpayer being cheated is pretty hilarious. In terms of space policy, his SLS is perhaps the most flagrant cheat around, costing the taxpayer a bundle for performance that we’re unlikely to see.

            • Michael Kent

              “The required accounting regulation for a firm fixed price contract is simply different than for cost-plus contracts.”

              The issue is certified cost & pricing data. It has nothing to do with whether a contract is cost-plus or firm, fixed-price.

              “Firm fixed price imposes risks on the vendor, and Musk is willing to bite on those risks.Boeing isn’t.”

              Do you even follow the industry? Boeing’s CCiCap contract is firm, fixed-price, just like SpaceX’s. Boeing’s bid under CCtCap is firm, fixed-price, just like SpaceX’s.

              In fact, most of Boeing’s big government contracts are firm, fixed-price.

              • pathfinder_01

                True, but what is the point of cost plus accounting on an firm fixed price contract? What benefit to the government besides more paper work and driving up costs on the vendor.

              • Hiram

                The issue is very much cost-plus versus fixed price. In fact, that’s the whole issue.

                Yes, for commercial crew, Boeing is willing to bite on these risks, but for most of their federal contracts, they hide behind a cost-plus arrangement. The point is that in doing so, they are required to certify these extra costs, and they are administratively set up to do that.

                Boeing could also compete to deliver newspapers to federal sites with a firm fixed price. Why don’t we ask them to certify those costs as well? After all, they’re all set up to do it! That puts “Joe’s Delivery” at somewhat of a disadvantage, don’t you think? Joe would do the job, and get one check to get it done. But his “shoddy accounting” is unable to prove that he doesn’t go to Starbucks on each delivery trip. His price seems really good, and his reputation depends on getting the job done for that price.

                If Joe is padding his costs, market forces will kill him, as “Ken’s Delivery” will underbid him next time around. Sorry, sez Ken to his staff, no Starbucks for us!

                What fixed-price contracting has done for space transport is saying that this isn’t really rocket science any more. Lift is getting well understood, and we, the contractor, don’t need the protection for what could otherwise be considered a technological hurdle.

              • Michael Kent

                “The issue is very much cost-plus versus fixed price. In fact, that’s the whole issue.”

                No, it is not. The issue is certified cost and pricing data. It has nothing to do with either fixed-price or cost-plus contracting. Please stop confusing things.

                CCtCap will be a fixed-price contract. Shelby’s ammendment doesn’t change that. He even says so right there in the original article:

                “The goal of the language is not to upend a fixed-price contract.”

                “Yes, for commercial crew, Boeing is willing to bite on these risks, but for most of their federal contracts, they hide behind a cost-plus arrangement.”

                No, they don’t. Most of Boeing’s big government contracts are firm, fixed price. F/A-18 Super Hornet — firm, fixed price. EA-18 Growler — firm, fixed price. CH-47 Chinook & KC-46 Pegasus — both firm, fixed price. JDAM, SDB, A-10 Wing — all firm, fixed price. I believe that the AH-64 Block III Apache and Wideband Gapfiller Satellites are also firm, fixed price but am not sure.

                Boeing offered the Air Force a firm, fixed price of $152 million each on their last domestic C-17 contract, but the Air Force, under pressure from John McCain, turned them down. They preferred a cost-plus contract that ended up around $175 million each. But that was the Air Force’s preference, not Boeing’s.

          • Robert G Oler

            Astra. Ok say you are correct…say SpaceX bids just making up numbers. 120 million on a DOD launch expecting to make 8 million of profit…but they are wrong and satisfying all the g stuff means they only make 1 million or 1 dollar or loss money. Not for sure why you should care as long as the government gets its service. No one cares how much my company actually makes in terms of providing type ratings…if I make nothing they dont care as long as they get the service.

            I dont thin you understand free enterprise. RGO

    • Some of the top brass in DoD hierarchy have already noticed:

      No less than U.S. Director of National Intelligence James Clapper lamented the lack of competition among DoD launchers and how that short changes his agencies mission.
      ““I do want to give a shout out to SpaceX,” May 22nd

      Unnecessarily high costs, such as Shelby defends, does a disservice to national security.

      • Robert G. Oler

        Michael Kent
        June 21, 2014 at 5:36 pm

        “The issue is very much cost-plus versus fixed price. In fact, that’s the whole issue.”

        No, it is not. The issue is certified cost and pricing data. It has nothing to do with either fixed-price or cost-plus contracting.>>

        none of the things you mentioned are a service…they are a product but SpaceX is providng a service…think Boeing supplying 737 Maxs to SWA RGO

  • josh

    “The goal of the language is not to upend a fixed-price contract. Rather, the goal is to make certain that the price NASA has agreed to pay for vehicle development matches actual development expenditures,”

    shelby is obviously confused about the meaning of “fixed price”. no wait, he is just willing to say anything to protect his home state’s pork, i.e. white collar welfare for people like windy.

    • Michael Kent

      “shelby is obviously confused about the meaning of ‘fixed price’.”

      He’s demanding certified cost & pricing data. That has nothing to do with whether a contract is cost-plus or firm, fixed-price.

      • Andrew Swallow

        Half true. On competitive bids companies have to minimise costs to minimise the price. “Certified cost and pricing data” is one of the first unneeded costs to go.

        This information gathering is government waste rather than effective management.

        On cost plus contracts the cost can be padded by too many documents, too many meetings, too many people present at each meeting, too many design changes, too many uncompleted tasks and too many parts. Providing the workers can point to a standards manual requiring the document and the meeting the system will certify the cost as valid.

  • MrEarl

    This could also be Shellby’s last ditch attempt to keep Boeing in the game.

  • Malmesbuy

    “The goal of the language is not to upend a fixed-price contract. Rather, the goal is to make certain that the price NASA has agreed to pay for vehicle development matches actual development expenditures,”

    True words – in a way. Apparently there is concern inside the beltway that certain competitors are taking government money and putting too much of it into development instead of stock holder compensation. This is unfair, apparently.

  • Malmesbuy: Apparently there is concern inside the beltway that certain competitors are taking government money and putting too much of it into development instead of stock holder compensation. This is unfair, apparently.
    ..

    Damned Right. As a shareholder in OSC, I wish they’d stop all this pesky development nonesense and just pay me. That’s right, dividends, now and more! After all, the crew of the ISS doesn’t really need to eat and, anyway, I’m nearing retirement and I’m hungry too.

    Fortunately, a future for humanity on the high frontier (that’s what we’re all here for, no?) is more important to me than joining the ranks of the obese, and I am really glad that OSC spent a part of my lunch money developing the means to deliver cargo to the ISS. I hope they spend more now developing a domestic first stage and engines. (He says, cinching in his belt another notch. . . .)

    – Donald

  • John Malkin

    Cost Analyst for Commercial Cargo & Crew
    $ => System Improvements (R&D)
    $$ => Private Shareholders
    $$$ => Richard Shelby Campaign Fund
    $$$ => Shelby’s Friends
    $$ => Cost of equipment
    $$ => Cost of service
    $$ => Cost of copies
    $$ => Cost of government works to review copies
    $$ => Cost of time spent in front of hearings
    $$ => General money for doing business with government

  • Art

    Senator Shelby is an idiot. He makes the kids in special education look like geniuses. He already knows that NASA is giving the Commercial Crew companies hell. He is out to shut down the new space age in favor of 1960′s style super government contracts to the big Aerospace Companies, maintaining the status quo of canceling programs for the next 40 years. He should have kept his big stupid mouth shut. If he wanted to do something useful, he should have put in language mandating 3 commercial crew vehicles. It’s time for idiots to retire from the Senate.

  • The other political tactic is to take the Shelby addenda to the US House to defeat it.

    GOP picked a new majority leader in McCarthy who is very friendly to SpaceX…

    His 2011 quote off podium directly to Musk “You’re the Wright Brothers of the next generation.” bodes well for the future!

    If only he can brought up to speed fast enough!

    • Gary Anderson

      I have already contacted Rep. Kevin McCarthy’s office as of last night after his selection to Majority Leader. Reiterating if the Shelby language survives the full Senate, the House GOP is the last line of defense of innovation and a ‘Republican success story’. Bit of a stretch but you play with the players on their turf.

      Gary

      PS many of us have contacted our individual Senators from both parties and all have contacted Nelson’s office. Nelson gets political cover from the right with the Washington Times and TPiS. (We don’t sit idle when it comes to space policy. We are here to stay.)

  • Bennett In Vermont

    Here is what Senator Leahy sent back in respose to my several letters about the Shelby language:

    Dear Mr. Bennett,

    Thank you for contacting me about funding for NASA in the Senate Commerce, Justice, and Science Appropriations bill. While I am pleased that $805 million was recommended by the Senate Appropriations Committee to support commercial spaceflight activities, I share your concern at some of the qualifications placed on these funds.

    The specific issue you referenced, the requirement that NASA use a Federal Acquisition Regulation (FAR) based contract for the development of a domestic crew capability, was a decision made based on the risks associated with human flight, and to ensure transparency related to cost and pricing data. Although this provision requires a company to have experience with federal contracting procedure, NASA has waived significant portions of the standard FAR-based contract, in order to ensure competition. This will allow for a more open and competitive process.

    Thank you again for contacting me, and I will be sure to follow this issue as the appropriations process moves forward.

    Sincerely,

    PATRICK LEAHY
    United States Senator

    .
    Oh well…

    • Henry Vanderbilt

      Think of this as an opportunity to educate Leahy’s office.

      That answer sounds exactly like Leahy’s staffer checked with Shelby’s office then passed along their reply verbatim.

      Write them back and say so, then – politely – explain step by step why it’s wrong.

      Otherwise, they’ll assume Shelby’s answer satisfied you.

    • Henry Vanderbilt

      Oh, and make sure to mention that Senator Nelson isn’t satisfied with that answer either, so Leahy’s staffer will have someone to check with aside from Shelby’s staff.

      • Bennett In Vermont

        My thoughts exactly. Thank you for the confirmation.

        • Henry Vanderbilt

          Given Leahy’s party, it might be good to mention White House OMB’s criticism too.

          • Bennett In Vermont

            I had sent that information earlier in the week when the OMB paper was released. It was a good opportunity to contact them again with new information.

            At least they were kinda sorta close to the issue this time. Every time I write to them about commercial crew I seem to get the same “We are active in our support of a great HSF program with… SLS/Orion”

    • Neil

      Yep. Another clueless politician. As you say, oh well :(

    • Robert G. Oler

      Yeah what Henry said. RGO

  • Robert G. Oler

    KC at NASAWATCH and I frequently “dust up” over almost anything :) but his piece about SpaceX cancelling its web feed is right on and its hard to improve on his words so I’ll just repost them with all credit to him

    ” This lack of visibility is rather unusual for SpaceX – a company that has gone out of its way to use social media and traditional media – with great success – to get word about its products and services to the widest audience possible. Indeed, just a week or so ago there was a large reception for the Dragon V2 in Washington DC and the news media was all over it. Flash forward. SpaceX explained this absence of a webcast yesterday as being due to the fact that these launches were becoming routine and that the webcasts are no longer needed. This was a little odd given that they had a webcast for the Friday launch attempt. Yes, they are a private company and this is a commercial activity, so they have every right to do this. But that does not mean its the smart thing to do.”

    It is a dumb thing to do and thats from me Robert G. Oler

  • SpaceX problem so far is that they dont know how to handle failure.

    I agree. Every time there is a failure, they seem to compound it by shooting themselves in the public relations foot. Much as I admire Elon, it is my opinion that this stupidity comes from the top.

    BTW, there was a Twitter campaign to get SpaceX to reconsider. I wonder if that had an influence in the quick reversal of course. . . .

    – Donald

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