A paper of mine was published last week in the New Space Journal, “Ingredients and Anticipated Results for Characterizing and Assessing NASA and U.S. Department of Defense Partnerships and Commercial Programs.”
Yes, that’s a mouthful.
I often write about what’s next for NASA, the commercial space sector, and how these must move ahead together. My favoritism for graphs and data shows, but these are a means to an end. My enjoyment is writing about the meaning and possibilities behind the numbers. This paper is about the latter, qualities, not quantities. The “New Space” journal is where I ask what best describes our “new space” projects?
In a nutshell, certain ingredients characterize NASA and U.S. Department of Defense partnerships and commercial space programs. The ingredients are obvious features, if not easy to pin down.
For partnerships during development, a “checklist”:
- Is the government committed to buying the product/service once available?
- Does the government invest in many partners in very early development phases?
- Does the government invest in moving at least two partners toward operational capability?
- Did the private partner invest significant dollars in the project?
- Does the government payout funds only at tangible milestones for results (not activity)?
- Will the private sector retain ownership of the product/service?
- Does the private sector partner demonstrate a commitment to a non-government market for the same product/service?
- Is the government management office relatively small?
- Has the government enlisted a standing, outside advisory group?
Once a project development finishes (if it does), the word “commercial” applies. (Though outside of contracts and formalities, the words “partnership” and “commercial” are used interchangeably.) So again, a checklist can tell us a lot.
- Will there be at least two providers (and more competition along the way)?
- Is the government buying at a “firm fixed price”?
- Is the partner attracting non-government business?
There are reasons all these ingredients get baked in the pie (the “anticipated results” for all this.) One is how traditional “cost-plus” contracting is more often than not “heads I win, tails you lose,” from the private sector’s point of view. But there is a lot of rhyme and reason here to these ingredients.
So rather than “contractors,” we move to “partners,” and NASA, the DOD, and the private sector sink or swim – together. An anticipated result is, yes, more results. We move away from paying to cut the grass by the hour, which goes slowly. Very. Slowly.
But what does this checklist mean, and what use is it? When you look at these ingredients vs. projects, you see patterns. We can look back to SpaceHab, X-33, EELV (now NSSL), Commercial Cargo and Crew to ISS, and XSP. NASA’s Commercial Cargo program had a lot going on, from rockets to spacecraft.
The more these ingredients you can check off, the more likely your project will succeed. Not getting canceled, success. Meeting many of your initial goals, success. Wildly exceeding goals? You probably checked off the whole list.
Looking forward, what does this mean for commercial programs in progress? We have CLPS, a crewed lander, spacesuits, private stations, a Gateway, and launching cargo (again, now to deep space.) Read your ingredients list, and you’d be surprised at what you see. What does the checklist say about the prospects for these partnerships and commercial programs? At the least, the “checklist” tells you where to pay attention and ask questions. It also says where to be concerned or where things seem on track.
Not everything is about numbers, as I point out in the paper. I dive deep into numbers elsewhere and often. This is a different tack, like the saying, because not everything that counts can be counted.
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Edgar-
Good piece- tho I wish I had access to New Space Journal as well. (Damn; why can’t they have a Retiree rate?!).
Two thoughts:
1. One point of yours that should be highlighted in some way is: Does the private sector partner demonstrate a commitment to a non-government market for the same product/service?
The reason being that the history of private companies actually doing this in space is, well, poor. (The sterling example of one company that succeeded wildly- and changed the world in doing so: SpaceX). But in winning government ‘contracts’- even if called ‘space act agreements’, OTA/Other Transactional Authority, or $$ by whatever means- is that companies will always use words to check off a box like that….even if they have no serious intent to follow through on them. Well, that’s when you look at their actual history, you say? That can also be problematic; since in many cases, the government is using partnerships to jump-start whole new industries- and there may or may not be a suitable historical example on which to make a judgement on. An example is SpaceX’s competitor for COTS/CRS, Orbital Science/ATK/now Northrop Grumman: they ‘promised’ to look for other customers…for launching Antares from Virginia with Russian engines. But one could tell from listening to their Quarterly Conference Calls that they never – ever- were putting an emphasis on it; and pretty soon, they stopped mentioning it at all. Considering that Orb/ATK/NG always had national security as a primary customer for their products, a key clue that they never had any intention of expanding the customer base came when they were forced to stop using the Russian rocket engine they had been using, and moved to replace it with…another Russian rocket engine…which automatically nixed any chance of their primary other customer possibility, natsec, even considering them. In short, they were never serious; expanding the customer base was a government requirement, and, well, they lied. The only way I can think for the government to improve its score on this important criteria going forward is to make real, provable efforts at expanding markets one of the criteria for future ‘milestone payments’, which NASA didn’t do with COTS/CRS.
That’s the backward looking lesson. A Forward-looking one:
2. Your ‘after development/commercial’ checklist is valid; the problem is when a government agency simply ignores the subject, & hopes no one notices and locks-in uncompetitive, sole-source contracts. NASA is currently attempting to do that with un-competitive contracts for SLS for the long-term; declaring that only SLS is SLS, therefore sole, non-compete is the only way to go. That is misleading to the point of, well, ‘lying’. What the government must do, going forward past SLS development/demonstration phase, is, if they need that level of capability, to put out a competitive call for that capability, and see what competitive responses they’ll get. I’m sure at the very least SpaceX and Blue Origin would respond; maybe others. So the main issue with the second checklist is not the checklist; it’s with an agency ignoring the subject all together to go long-term, sole-source, and hoping no one notices. That needs to be stopped for SLS, because it is NOT in the national interest. I’m also guessing it’s also technically illegal, since SLS clearly is not the only vehicle that potentially can provide the stated capabilities.
Cheers,
Dave Huntsman
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All so true Dave. I will remember these, with other feedback I received, as I consider an “update” of sorts (maybe a blog, maybe a paper) for the work in this paper. (I’ll get you a copy.)
I find your first point has especially been on my mind. As a spectrum, the “more” items checked off the ingredients list for partnerships/commercial relationships, the “more” success. So yes, a lower price (relative to other options) is a win, but not the “most” success, in the Antares/Cygnus data point.
There’s a related issue here, creating an environment encouraging the reverse of the “low-balling” in the cost-plus world.
Here, companies seeing the possibility of losing money on a firm-fixed-price contract decide to “high-ball” the figure. This may seem a significant risk, but if the government wants a “backup” capability then the probability is a pretty good technical bid, but high cost, like almost everyone else high cost, still gets selected. Take as an example of this the surprisingly multi-billion dollar price tag on Spacesuits as a service.
In this view, the second mouse gets the cheese. Of course, it’s counter-productive long term. It’s related to your point about a company’s commitment to non-government markets. This is the same as saying a company’s commitment to lower prices than ever seen previously. Winning one of two service contracts can’t be the end goal, but some partners may go this route of thinking.
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