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Oct 03 2014

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Dammit dammit dammit dammit dammit

NASA orders Stop Work on CCtCAP contract due to SNC protest. This is what I was afraid of. Now things can get really messy.

{editor’s note: Before you click on the link, the author has a real hard-on for Sierra Nevada and clearly is biased in their direction, so be warned.}

Here’s the primary reason for the protest:

Boeing was given the highest value award worth $4.2 Billion to build the CST-100. SpaceX was awarded a lesser secondary amount valued at $2.6 Billion to build the Dragon V2.

Therefore from the description from SNC’s protest filing with the GAO, SNC’s rejected ‘space taxi’ bid was approximately $3.3 Billion, or $900 million less than Boeing. NASA thus chose to award the commercial crew contracts to the highest and lowest bidders, for as yet undisclosed reasons.

Furthermore SNC states that its proposal had “near equivalent technical and past performance scores.”

“SNC’s proposal also achieved mission suitability scores comparable to the other two proposals. The highest ranked and lowest ranked offerors were separated by a minor amount of total points and other factors were equally comparable,” notes SNC.

 

Unfortunately, I’m a bit of an expert on protests, having been on the losing side of a couple of big ones. Fortunately for my readers, I’m a bit of an expert on protests, so here’s my read on the situation:

We can be sure of two things based on the quote above:

  • SNC’s bid was indeed lower than Boeing’s
  • SNC’s technical score was the lowest of the three — we know this because 1st and 3rd place “were separated by a minor amount of total points”. If SNC wasn’t in last place in the technical evaluation, they wouldn’t be more specific in details like they were in price.

If SNC is correct and NASA’s primary consideration was price, then why didn’t they get one of the two contracts? Well, that’s certainly the $900 million question.

I touched on the possible politics involved in my CCtCAP prediction post here. Suffice to say that Boeing is well connected with NASA and I would guess that that had at least a little bit of bearing. Leaving that aside though, I can think of two reasons why NASA may have dismissed SNC’s bid:

  • True, their cost may have been lower than Boeing’s, but it may not have been realistic. In this case, SNC may have low-balled their bid in the hopes of getting the contract award, only to turn around and ask for more money during contract execution due to “unforeseen costs”. It happens ALL the time in government contracting.
  • SNC’s technical scores weren’t as close to SpaceX and Boeing’s as they’re leading us to believe. NASA contracts clearly had some formula to weigh technical scores vs. bid cost, and perhaps SNC’s technical scores were so low that they negated SNC’s price advantage

Or option 3, a little bit of both.

So what happens now?

Here’s where it can get messy. The GAO has 100 days from the protest to make its ruling. We therefore won’t know a thing until 5 Jan 2015. No party involved (NASA, GAO, or the three bidders) can comment on the protest until GAO comes out in its report. In some cases, contractual work can continue through the protest, but in this case NASA not-surprisingly put a Stop Work order on SpaceX and Boeing. That means CCtCAP work sits idle until the GAO report is published.

The GAO can recommend different results:

  • It can uphold NASA’s decision. SNC would have to then decide if they’d take NASA and the GAO to court. If they decide to do that, then buckle up. The first thing the judge would have to decide is whether CCtCAP could continue during legal proceedings. If he decides “no”, then CCtCAP could be ensnared in the courts for months if not years, and the Russians will be laughing at us all the way to the bank.
  • It can decide that NASA awarded in error and instead award Boeing’s contract to SNC. Boeing would no doubt protest that decision, and we’d wait months if not years for that to get resolved, and the Russians will be laughing at us all the way to the bank.
  • It can determine that CCtCAP was completely mishandled and basically order a “do over” where all three competitors got to rebid. In the best possible scenario, that would mean that a new CCtCAP award would be announced in the summer of 2015 (assuming NASA moves lightning fast, which it would certainly try to do). And of course, that new award could be protested again, starting the GAO process all over again. I believe this scenario is very, very unlikely, though (I hope and pray). If this scenario did happen, the Russians will be laughing at us all the way to the bank dressed as the Monopoly Man.

“Ick”, I say. To all you SNC acolytes out there (and I’m looking squarely at you, AmericaSpace.com), your bubbas may be putting NASA’s manned space program back by years. I hope it’s worth it.

Here’s the silver lining in this shitstorm (well, for everyone but Boeing)
“Stop Work” just means that NASA will not pay for any CCtCAP work while the protest is being resolved. That doesn’t mean that bidders can’t continue work, only that if they continue work they’ll have to eat the costs incurred during the protest.

You know Elon Musk isn’t going to let the protest slow SpaceX’s momentum developing the Dragon V2. Sierra Nevada has also said that they will continue work on Dream Chaser, though they did lay of 10% of their staff, so development will necessarily slow somewhat. Boeing’s work, though, on the CST-100 will likely grind to a slow crawl if not a full stop.

So SpaceX will be the first private American company to launch crew to the ISS.

Permanent link to this article: http://www.newspaceraces.com/2014/10/03/dammit-dammit-dammit-dammit-dammit/

1 ping

  1. Good news for CCtCAP | Off to the Space Races

    […] is very good news, as there will likely be little or no schedule slip in development. As I stated here, with the previous “stop work” order, Boeing was the real loser as far as schedule […]

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