A Step Towards the Future

“In life and business, there are two cardinal sins. The first is to act precipitously without thought and the second is to not act at all.”
–Carl Icahn

Earlier this week NASA announced an agreement with a petroleum training services company to use the pool at the Neutral Buoyancy Laboratory. (And no, it’s not quite “Armageddon”.) I call this a “step towards the future.” Why? To explain let me share with you a bit of how we got to this point, and where this might lead.

About three years ago I was tasked with leading a team to devise a procurement strategy for the operations at the Neutral Buoyancy Laboratory and its sister facility, the Space Vehicle Mockup Facility, at the Johnson Space Center in Houston, Texas. At that time, we had three major human spaceflight programs: the Shuttle Program was still underway with a couple of years of flight remaining, the International Space Station Program was working towards completion of assembly of the orbital laboratory, and the Constellation Program to return us to the Moon and go to Mars was ramping up. We knew that retirement of the shuttle was coming soon, ISS would be transitioning from assembly to operations, and Constellation did not have a big demand for the resources of the aforementioned facilities, except for some mockups and limited training needs. In essence we were looking at a future with only one “anchor tenant” – the ISS – and a distinct possibility of underutilized facilities with fixed costs that would have to be carried by one program versus two. We needed to do something.

The leadership in mission operations gave me a clear charter – find a way to reduce the “O&M” (operations and maintenance) cost of the two facilities to the human spaceflight programs by bringing in external customers who might be able to take advantage of the unique capabilities offered by these facilities, while maintaining the superb safety record at the facilities. The team and I made this a central item of our procurement strategy – how to devise an operations contract that would have as one of its components an approach to identifying markets, recruiting potential customers, and getting them inside the facilities for reimbursable business that would offset the O&M charges to NASA’s human spaceflight programs.

We faced some clear challenges. How do we attract reimbursable business into a Government-owned facility? How do we navigate the byzantine Government regulations without overburdening commercial businesses? How do we find a balance between Government and commercial needs? Any of these could be insurmountable problems, if we let them be.

Instead, the team chose to focus on the solution, not the problem. We saw that we could structure a competitive procurement for the operations of the facilities and use that as the means to navigate these problems while keeping the end goal of reducing O&M costs in sight. The competitive procurement had as one of its central strategies a solicitation for a plan for identifying, vetting, and clearing a prospective commercial customer to use one or both facilities. Additionally, we tied a percentage of the “award fee” to be paid to the contractor based on its performance relative to its proposed commercialization plan. In the background, we worked with safety, medical, and legal personnel to streamline and simplify regulations. Finally, we secured agreements that would assure commercial customer access while maintaining our commitments to our human spaceflight program customers. A number of people worked hard behind the scenes to bring all of the above to fruition, and when we proposed our strategy to executives at the Johnson Space Center and at NASA Headquarters in Washington, DC, they gave us the approval to proceed. It’s in no small part due to the efforts of all involved that the strategy was approved and put into place.

This week’s announcement demonstrates that it is possible to utilize a world-class Government facility with a highly skilled and unique workforce in a way that is attractive to commercial businesses. Understand that this is no small matter. In many instances, Government facilities and services tend to be unnatural monopolies and thus are susceptible to inefficiencies that can be exposed by the commercial market. Here, we’ve demonstrated that it is possible to iron out those inefficiencies in a way that brings value to the commercial market.

Where might this lead? Where I’ve been focusing my time since the above was completed is in other areas of mission operations where we have world-class facilities with highly skilled and unique workforces that might bring value to the commercial market. Imagine if the emerging commercial space transportation market might see value in a similar approach. Obviously, an emerging commercial space company might see its bottom line better served by having everything vertically integrated in house, such as the approach being taken by SpaceX. However, others might see it differently and could envision value being created by seeking public-private partnerships with the Government for facilities and services that the Government might offer at attractive market rates. I’m working on other contract strategies that keep this possibility in mind, to ensure that those future contracts are enablers rather than obstacles to creating and realizing this value.

I hope this gives you a glimpse behind the scenes in a way that shows that the Government is not just an entrenched bureaucracy only interested in protecting the status quo. There are others like me who are working behind the scenes to get the best bang out of your tax dollars, often in ways that challenge the standard way of doing business, yet does so in a way that both creates value as well as to move us ahead in human space exploration.


Text Copyright © 2011, Joe Williams
Photo credit: NASA
A Step Towards the Future