Sep 19 2015

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NASA missed opportunity to save some dough

NASA IG: NASA Missed Opportunity to Save Up to $84 Million After Antares Failure. CRS is a fixed-price contract, but that doesn’t mean that NASA couldn’t have lowered its overall price tag for the Orbital ATK part:

The CRS contract is fixed price and NASA will not pay more, but the OIG report says that it could have reduced its costs by up to $84 million in two ways. First, NASA “did not invoke a contract provision allowing for an adjustment to the mission pricing worth as much as $21 million, but instead received other nonmonetary considerations with an assessed value of $2 million.” The report says NASA explained that invoking the provision might have led to a reopening of pricing negotiations and ultimately lead to higher costs. The OIG replied that negotiations were already underway because of schedule delays, and NASA should have at least tried.

Second, when Orbital ATK decided to combine the remaining tonnage into four instead of five flights, it “did not use the per-kilogram pricing in the original contract and instead divided the price for the cancelled eighth mission by its contractual upmass requirement to arrive at a revised price-per-kilogram.” Consequently, NASA is spending $65 million more than if the original pricing plan was used, according to the OIG. In exchange, Orbital ATK offered NASA several “considerations,” such as flying 600 kilograms (kg) of cargo at no cost to NASA. The OIG questioned the value of those services, however. For example, 400 kg of that amount was flown on an Antares demonstration flight in 2013 and “we question whether this is something NASA would have been required to pay.”

Hmmmm…another criticism of the IG is that NASA pays for flights too far in the future — for example, Orbital ATK has already received 80% of its CRS funding, even though only 2 of 10 flights have been made so far. That seems like a valid point, but most of that cost is R&D of Cygnus, so it’s a bit misleading in this case. If there were a handful of viable cargo haulers to the ISS, then I’m sure NASA would just bid each launch separately, and not bundled up with R&D projects.

The IG is also concerned about the Antares return to operation. It was supposed to be ready in December with a test firing, and then a launch in March, but now the March Cygnus mission is aboard a ULA Atlas V instead.

The OIG report found that the return-to-flight plan may be difficult to execute on schedule. Among its concerns is that Orbital ATK does not plan a test launch with the new RD-181 engines and NASA has not conducted detailed technical assessments of the new system.

Hard to argue with that.

Permanent link to this article: http://www.newspaceraces.com/2015/09/19/nasa-missed-opportunity-to-save-some-dough/

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