NBL/SVMF Operations Contract (NSOC) Commercialization Overview

Transcription

1 National Contract Management Association 2012 Fall Training Conference NBL/SVMF Operations Contract (NSOC) Commercialization Overview New Contracting Techniques for Space Exploration & Utilization Partnering Success & Lessons-Learned in Utilizing Space Act Agreements

2 NSOC Commercialization Overview After Shuttle Retirement and Station Assembly-Complete: Excess Capacity Created NBL down from Dual-Ops to <50% Capacity Utilization and removal of Shuttle mockup Removal of SSP Mockups and Shuttle Training in the SVMF Reduction of Manufacturing in LMF with ISS completion Need to Retain the Facility as a National Asset for Future Space Development Need to Retain Capabilities within Workforce and Facility (State of Readiness) NBL/SVMF Operations Contract (NSOC) requires development and integration of External Customers into the NASA facilities for utilization of excess capacity without compromising safety, process integrity, or infrastructure resources. Facility access via RTSC Umbrella Space Act Agreement or directly with NASA Cost savings to the government accomplished thru Cost Offsets, Reimbursements, and In-Kind Contributions Unique facilities and/or resources utilized to the maximum extent practicable Assists in retaining critical skills for supporting future NASA Programs Provides an expedient avenue for industry access to unique facilities/resources 10/11/12 2

3 NSOC Commercialization Overview Excess capacity is enabled through the use of NON-GOVERNMENT USE OF PLANT EQUIPMENT/FACILITIES (NGU) clause in the initial RFP Clause H.17 Non-Government Use of NSOC Facilities: The Government may allow nonexclusive, non-government use of NSOC facilities by the contractor under this contract. If found appropriate by the Government through the Contracting Officer, the contractor and Government shall enter into a Facility Reimbursable Agreement (FRA) which will outline the benefit the Government will derive from the contractor s nongovernment use of designated property through rental receipts along with the terms and conditions related to the use of this equipment. An External Customers Plan defines the responsibilities of the contractor and the Government Under the authority of an umbrella Space Act Agreement (SAA) the prime contractor enters with NASA to allow it to enter into agreements with external customers on behalf of NASA Terms and conditions are identified in the SAA Approved requests are documented as Annexes to the SAA 10/11/12 3

4 NSOC Commercialization Overview Commercialization Approach Integrated Civil Servant/Contractor team Co-Developed Processes and Procedures Defined Gate Review and Approval Process (Risk & Safety Assessment, Requirements Definition, Customer vetting) Competitive Financial Reimbursement Models NBL, LMF, SVMF Market Assessment and Strategy Assess External Customer type/activity against key business drivers Prioritize potential market segments/projects based on assessment Mitigate risk while balancing business opportunity, with least restrictive environment possible, at minimum cost or schedule impact to the external customer First line of defense is doing business with reputable companies Verify safety of the interfaces for our facilities, systems, and personnel Verify operational safety for external customers activities Review customers overall design approach and safety analysis as part of a TRR Customer is responsible for their own systems and personnel 10/11/12 4

5 NSOC Commercialization Overview Due diligence: We verify operational and interface safety, external customers demonstrate good safety and institutional process control and self-verify compliance with their own industry standards We verify operational and interface safety for customer activities in our facility Customer demonstrates OSHA compliance with a good safety record Insurance coverage, financial strength Self-verification / self-certification required on part of external customer (with objective evidence ) Rationale: We do not presume to have the expertise to ensure compliance with customer industry standards Industry qualification, certification to standards - International (ISO, IMCA, ADC, etc.); U.S. National Consensus Standards (ASME, NEC, IEC, ANSI, etc) We do not verify or validate that compliance; we do not have that expertise We do not require customers to read and understand NASA-specific requirements documents We do not require customers to document to NASA formats, standards, or content 10/11/12 5

6 External Customer Review and Approval Process RTSC proposes viable commercial customer Commercial customer signs with RTSC Execution of activity Continual interface between NASA and NSOC verifying documenting special terms and conditions as required NASA Approval A B SAA Annex PCM SR TRR Project Concept Review * Technical Strategy * Customer Concerns Addressed *Risks and Stakeholders Identified * Risks Strategy Special T s and C s (outside the FRA) Separate Contract or IDIQ All requirements for successful completion of activity are documented and factored into subsequent reviews Project Risk Review * Risk Plan & Assessment * Project Assumptions * Man Loading/Schedule Denotes Decision/ Approval Preliminary Configuration Meeting Safety Review Test Readiness Review Normal Facility Reviews as Required by Gate B 10/11/12 6

7 NSOC External Customers LMF manufacturing Off-shore Safety & Survival Training Underwater Systems: AUVs, ROVs, ADSs Underwater Testing: Systems Tests, Integration Tests Commercial Space: Mockup Support, Ground Tests Orion Recovery Training 10/11/12 7

8 Helicopter Underwater Escape Training (HUET) at the NBL s HI-CON Training Center 10/11/12 Video 8

9 Atmospheric Dive System (ADS) Offshore Systems Integration Test (SIT) Video 10/11/12 9

10 Working Class Remotely Operated Vehicle (ROV) Video 10/11/12 10

11 NCMA 2012 Fall Training Conference New Contracting Techniques for Space Exploration and Utilization Lessons-Learned from External Customer Neutral Buoyancy Lab (NBL) Utilization Commercialization Counter-Culture: Turning Your Brain Inside-Out For those of us who have lived and worked within the government contracting framework for most of our careers, we have to learn to think differently: NASA might not be the customer, but instead the supplier. The contractor may not be the supplier, but rather the buyer, (i.e. NASA s customer ). The external customer may be either NASA s or the contractor s customer, and they themselves may be serving a higher-level customer. e.g. For the offshore repair task, NASA was a facility and resource provider to Raytheon, Raytheon s customer was Rothe, and Rothe s customer was OceanWorks. OceanWorks was working for Technip, and Technip was working for PetroBras. Contract agreements move in the opposite direction than those to which we re accustomed. Cash flows move in the opposite direction as well. Those prime contractors accustomed to getting paid by the government, Or those subcontractors accustomed to getting paid by the prime, Are instead paying their otherwise customer as a supplier! Those accustomed to bidding to, are rather getting bids from. 10/11/12 11

12 NCMA 2012 Fall Training Conference New Contracting Techniques for Space Exploration and Utilization Not all our business practices are comparable or compatible with the commercial sector, but the facilities capabilities and the leverage of the Federal Government drive those practices toward commercial acceptance, even when reluctant: Terms and Conditions may be unilateral in the government s favor, whereas many commercial practices drive bi-lateral agreements (e.g. liability coverage requirements, indemnity agreements, etc.). The government requires advanced payment, whereas commercial practices utilize payment in arrears. The Business Risk picture is non-traditional, as well. The contractor bringing in external customer work bears the performance risk (e.g. overruns in a Firm Fixed Price (FFP) effort are unforgiving), the reward for which is potential profit. NASA is paid for actual resource utilization, regardless of the contractors performance success or failure. NASA, by the way, does not get involved in the contractor s business case formulation or their bids to external customers, other than determining a component of cost: Facility and Resource Reimbursement 10/11/12 12

13 NCMA 2012 Fall Training Conference New Contracting Techniques for Space Exploration and Utilization We don t often see RFP s among most of our external customers. We listen to the customer s needs We discuss our capabilities and capacities We identify areas where our capabilities and capacities can help support a customer s needs Then we create an unsolicited proposal to help fill the needs. If the customer really wants it, they buy, but we have to have a compelling value proposition We don t often have much time to respond Industry moves quickly; responsiveness is key Oftentimes the first-to-market wins the work, as time is money, and a quicker, though higher-priced provider -- all else being equal (i.e. product or service quality) -- will win Once in execution, responsiveness drives growth and customer satisfaction, enabling future work We don t often see long-term contracts with a defined period of performance. Industry seems to like FFP agreements for products and services (less risk to the buyer; more risk to the seller) Or, they like limited T&M forms, such as day rates, or specific resource rates, with limits (not-to-exceed numbers). If performance is lacking, the work just stops coming. 10/11/12 13

14 NCMA 2012 Fall Training Conference New Contracting Techniques for Space Exploration and Utilization NASA, which traditionally has not had to present itself as a supplier of technology and services (though in reality it is a supplier of these, and of inspiration, to the country and the world), must place itself in that role. Though NASA is constrained from advertising, it certainly must market its capabilities often through its contractors -- to achieve external customer goals. NASA, in tandem with its contractors and business partners, must create the value proposition to be able to sell capabilities to the market. NASA Capabilities Pricing has to be realistic, quickly provided, and competitive to market alternatives. NASA is not used to being an open-market supplier, so pricing center capabilities is a new, uncomfortable endeavor for both Contractors and Civil Servants. An organization can price capabilities at whatever level it wants, but if the value proposition does not create a compelling case, customers will not come to the table. In developing pricing, NASA can t use traditional accounting tools, such as depreciation, or depending on the space act agreement form lease rates, etc. NASA can t legally make a profit, though it s important to realize revenue. So, creativity enters the picture in trying to strike the balance between reasonable prices and offsetting existing costs (labor, facilities, assets, maintenance and operations, consumables, center support), etc. 10/11/12 14

15 NCMA 2012 Fall Training Conference New Contracting Techniques for Space Exploration and Utilization And, these approaches have to meet the litmus test of NASA Legal, Finance, Contracts, Management, and the rest of the stakeholder community, including NASA s internal thirdparty providers, such as Safety and Mission Assurance, Environmental, Medical Operations, Associate Contractors, etc. How do they price their services? Are they offering competitive pricing? Are the served directorates or divisions captive to that pricing, or do they have a choice? What happens if the services are priced too highly, and the division or contractor loses business as a result? Do the third parties have a vested interest in making external customer work succeed? Do higher levels of NASA Management have a vested interest in assuring so? Can these entities work together to preserve the intended value proposition, holistically? How are business efficiencies driven into these cross-discipline operations? And, finally, won t the government benefit from these considerations in the long-run? Can success in this area preserve, or even enhance, capabilities and capacities? Can success improve efficiencies? Can cost performance be improved? Can the pace of progress be increased? And, if the risk to the government is managed toward the low-end of the scale, aren t the benefits worth it? 10/11/12 15