Fred.ouellette

Orion Crew Exploration VehicleA Complex Contract

December 11, 2008

PM Challenge 2010NASA - Fred Ouellette

NASA – Jose GarciaFebruary 2010

Managing the Contract in a Complex Project

Project Orion Background

December 11, 2008

Orion Crew Exploration Vehicle Expanded View

Launch Abort Systememergency escape during launch

Crew Modulecrew and cargo transport

Service Modulepropulsion, electrical power,

fluids storage

Spacecraft Adapterstructural transition to Ares launch vehicle

Orion Contract, NNJ06TA25C

• Schedule A (DDTE) Contract Features– Prime Contractor: Lockheed Martin (LM) Space Systems– Key Subcontractors:

• LM Mission Systems and LM Michoud Assembly Facility • Orbital (Launch Abort System)• United Space Alliance (operations and software)• Honeywell (avionics)• Aerojet (propulsion• Hamilton Sundstrand (environmental control)

– Many minor subcontractors– Period of Performance: 9/8/2006-12/31/2014– Contract Type: Cost plus Award Fee

• End item award fee using period of performance and milestone based evaluation periods

• Each award fee payment is interim until final payment – Contract Value: $6.3B

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Orion Contract Structure and Scope

• Orion is structured into three contract schedules:– Schedule A- Design, Development, Test and Evaluation (DDT&E)– Schedule B- Production (option, ~ 2011 - 2019)– Schedule C- Sustaining Engineering and Operations (option)

• Each schedule is uniquely structured to accomplish distinct goals, providing NASA with maximum flexibility to achieve successful Project requirements at the given point of time during the Project

• Schedule A (DDT&E)– For DDT&E and production of the first actual flight module of the

ISS Variant and DDT&E for lunar variant – Incorporates both completion form and indefinite

delivery/indefinite quantity (IDIQ)• Completion Form for DDT&E• IDIQ for special studies, operations support and initial flight spares

– Schedule A ends upon delivery and flight of the first crewed flight to ISS

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Orion Government Project Team

Dryden• Lead Abort Flight Test

Integ/Ops• Abort Test Booster

procurement• Flight Test Article

Devt/Integ

Ames• Lead Thermal Protection

System ADP• Aero-Aerothermal

database• Software and GN&C

support

JPL• Thermal Protection

System support

Johnson• Lead Crew Module integration• Orion Spacecraft Integration• GFE projects management• Flight Test Program

Kennedy• Ground processing• Launch operations• Recovery operations

Marshall• LAS and SM SE&I Support

Glenn• Lead Service Module and Spacecraft

Adapter integration• Flight Test Article “Pathfinder” fabrication• SE&I Support

Orion Project Office

Langley• Lead Launch Abort System

integration• Lead landing system ADP• SE&I Support

Goddard• Communications

Support

Yuma Proving Grounds (U.S. Army)• Parachute Testing

White Sands Missile Range (U.S. Army)• Abort System Flight Test

Plum Brook Station• Environmental

Qualification test

White Sands• Lead for WSMR facility

design and construction management

Orion Lockheed Martin Industry Team

December 11, 2008 GAO Overview Briefing

KSC• Final Assembly• Checkout• Acceptance Test• Sustaining Engineering• Spacecraft Refurbishment

LM LaRC• LAS Liaison Office

• Launch Abort System• Safety & Mission

Assurance

• Systems & Design Engineering Support

• Program Management• Systems Integration• Crew Module Development• Service Module Development• Qualification Test• Software Development

Michoud • CM and SM

Structures

LM GRC• SM Liaison Office

• Avionics• Integrated System

Health Management• Crew Interface• Mission Ground Ops Support

• Propulsion

• Operator Interfaces• Ground Processing• Mission Flight Planning• Software Development

• Environmental Control & Life Support• Active Thermal Control• System Power Management

Orion Contract Changes Since Award

• Realignment Modification, 4/2007, CV $384M– Aligned the CEV contract with current Constellation Program (CxP)

and CEV Project Office (CEVPO) plans, involving the following: • Incorporation of a revised Flight Test Schedule• Moving the First Human Launch (FHL) from 2011 to 2013• Deletion of the first Pressurized Cargo (PC-1) variant production

hardware • Updates to CxP and CEV requirements documentation

• CEV to ISS Docking Adapter, 9/2007, CV $59M– Contract change necessary to incorporate the Constellation

Program’s decision to use an APAS to LIDS adapter which would be flown on two Orion flights

• Contractor required to integrate GFE docking adapter which caused a change in the configuration of the launch abort system

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• CEV to ISS Common Communication Adapter, 3/2008, CV $63M– Due to the incompatibility of the ISS and CEV S-band systems, an

adapter is required which was not part of the original Orion contract

– Orion communication hardware designed to and for use on ISS

• Requirements Realignment, signed 5/2009, CV $1901M– Significant update of Orion and Constellation requirements,

• Interface Definitions• Updated environmental conditions• Improved architecture design and crew safety enhancements• Associated safety and reliability features• Change to a nominal water landing• Implementation of the emergency return capability

– Extends DDT&E from 2013 to 2014

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• IDIQ Task Orders– Task Orders are issued to direct the contractor to perform tasks

under SOW paragraphs which are defined as IDIQ. Examples follow:

• 1.8 Special Studies• Portions of 2.7.2 Ground Operations Integration • Portions of 2.7.2.(a) Facilities and Facility Systems• 2.7.3.(b) Flight Operations Execution• 2.7.5 Training Systems• 10.6.5 Flight Test Operations DDT&E• 10.6.8 Flight Test Operations• 11 Education and Public Outreach

– Flight Spares will also be bought under IDIQ task orders.

• Many other smaller modifications for funding, below threshold modifications, no cost changes, etc…

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In Work Contract Modifications

• Communication and Tracking Architecture Change

• CDR requirement updates

• Flight Test and CDR Schedule Adjustment

• Addition of Ascent Abort 3 to schedule A manifest

• Starting to look at procurement activities for production

Orion Master Summary Schedule

CY-2008 CY-2009 CY-2010J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

CY-2011J F M A M J J A S O N D




LS Ops

LS Ops

CAIL B/U & Test

EEST B/U & Test

CAIL RIG 2 (FEU) Proc / Fab

Long Lead Hardware

HITL Testing

Component Qual Testing

SM / SACM Test

AI&TAI&T

ATP

AI&P

Mate

AI&PMate

AI&PMate

SM / SA

CM

SM / SA

CM

SM / SA

CM

1 Flt Qualification

ATP

C&T Phased Array Procurements (ref)

AI&TCM Test GTA PTR 3

CAIL RIG 1 (EDU) Proc / Fab

DD250

DD250

Orion-2

Orion-1

Systems Qualification

Structural Test Article (STA)

Ground Test Article (GTA)

Component Qualification

Facilities/Labs Acoustics Vibe Data to CDR

Deliver GTAfor IVGVT

GO Need


Integrated Vehicle Ground Vibration Test (IVGVT)

Orion

CDR NET 2/8

MajorMilestones

AA-3

AA-2 Ascent Abort

PA-2 Pad Abort

AA 1

DAC 2 DAC 3EDU Procurements

7/11

PA-1NET 7/21

AA-1 Ascent Abort

VAC 1 VAC 2 VAC 3 VAC 4 VAC 5

Instr LO

CM ATP LO AI&P

CM ATP LO AI&P

Spiral 2 Spiral 3 Spiral 4 Spiral 5 Spiral 6Flt Rel 2

Spiral 11 Spiral 13 (+) O&M/ DR/ Test Spt.Spiral 10 Spiral 12Flt Rel 1Eng Rel 3 Eng Rel 2Eng Rel 1 Eng Rel 4

Spiral 7

AA 2 PA 2

11/1

Orion-2Orion-1AA3

3/19/13/1Blk 1 DCR7/18

VAC6 VAC7 VAC8

CM ATP LO AI&P

Flight Software

Reqmnts/Design/Analysis

PA-1 Pad Abort

1/12

Spiral 8 Spiral 9

PDR 8/21

Orion 2 Orion 1 Sys Qual

Procurement /Sub Assy Estimated Timelines

Friction Stir Weld Efforts

Sys Qual Long Leads

“Legend”

DAC 4 DAC 5

TestInstrSR

CM LO

PMR09 Submit

Project Orion Procurement Team and Oversight

December 11, 2008

Procurement Office (JSC)

Contracting OfficerContract Specialist

Price Analysts

NASA Orion Procurement Team

COTRACOTR

Crew Module

TMR

DCMA Orion

Launch Abort System (LaRC)

TMR

Service Module (GRC)

TMR

Test & Verification (JSC)

TMR

Vehicle Integration & Design (JSC)

TMR

Safety & Mission Assurance

TMR

Production Operations (KSC & MAF)

TMR

Flight Test (JSC)

TMR

Project Planning & Control Office (JSC)

TMR

Integrated Procurement Team

• Procurement activities jointly led by COTR and Contracting officer– Procurement Team comprised of the following:

• COTR/ACOTR• Procurement personnel (Officers, specialists, estimators, etc…)• Technical management representatives

– Make sure there is a TMR in all relative organization authority

• Integrate procurement personnel into Project activities– To often there is a wall between procurement and technical

activities– An integrated team between COTR, TMR’s and CO allows better

coordination and added strength in implementation of the contract– Make sure at least your TMR’s understand the details of the

contract and the team understands what “oversight” means (good luck trying to get managers to understand the contract)

– Allocate aspects of the contract and the deliverables to an OPR

PDR8/31/09

12/08 3/09 6/09 9/09 12/09 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11

CDR2/8/2011

Definitized:

May 15

UCA Issued: July 6C&T (UCA) NTE

Request

PDR RID Closure & Reqts Updates

NTE Update Request:

Nov 1

CDR Requirements UCA Revision 1• SRD Rev D change 1, AA-3, DFI, udpated CxP docs

UCA Issued Feb 1

Definitized

July 1

Definitized:

Mar 1

Orion Contract Changes Red = UCA Change I Green = RFP Change

C&T Task Order

DAC 3 Task Order

CCO 24 (UCA)

9/08

UCA Issued:

Oct 1

CDR Requirements (DAC 4) (UCA)

• CxP Requirement Document Updates

• CEV SRD Rev D Updates

• 120 Volt

• Loads

NTE Request:

Aug 1

-Current DAC 3 POD Task Order Expires September 30

AugustineReport

8/09 Baseline ReviewJan 09

Schedule B Update

CDR DACs (2)

Other Activities• Cost Share Contract Changes• Security Requirement RFP• 6 to 4 Crew Size Stop Work• ATLAS Stop Work• Stimulus Reporting

Baseline Review Update11/10 (TBD)

UCA Issued: Oct 1PMR 09 Schedule

(UCA)NTE

Request

Definitized:

Mar 30Risks• NASA and LM manpower for all these

parallel activities

PDR NARAPMC

Site VisitKDP-C

Orion 1 PO Orion 2 PO

DAC 4 Task Order (SRD rev D change 1

Under Review

Proposal Receipt 9/30

Orion Oversight Description

• Provide the overall Project Management Role• Provide joint leadership and flight equipment when NASA is the

leading authority on development and execution of that hardware– Crew Module Parachute System– Aero databases– Co-lead of Guidance Navigation and Control– Flight Test activities

• Provide oversight of contractor activities– Oversee the implementation of NASA requirements– Validate correct interpretation of the requirement– Review and comment on contract deliverables and actions– Participate in the review of contract hardware/software deliverable

prior to acceptance– Participate in team activities, meetings and reviews

NASA Oversight- Penetration Levels

• Level 0 - No Penetration– Accept contractor performed tasks at face value

• Level 1 - Low Penetration– Participate in reviews and Technical Interchange Meetings and

assess only the data presented– Perform periodic audits on pre-defined process(es)– Chair board or serve as board member, or RID writer, at a formal

review• Level 2 - Intermediate Penetration

– Includes low penetration with addition of:• Daily or weekly involvement to identify and resolve issues

• Level 3 - In-depth Penetration– Includes intermediate penetration with addition of:

• Methodical review of details• Independent models to check and compare vendor data, as required

• Level 4 - Total Penetration – Perform a complete and independent evaluation of each task

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Full in-depth participation and

significant amount of

independent verification

Increasing technical penetration

Review of Processes

Review of Implementation

Level 0 Level 1 Level 2 Level 3 Level 4No Penetration Total Penetration

Level of insight contingent on defining an acceptable risk:• Technical risk levels• Amount of trust in contractor’s abilities (previous performance)• How well processes are defined• Level at which NASA is performing Task Agreements for the program• Man rating of vehicle• Program visibility and impact of failure• Design complexity• Value of asset

NASA Oversight- Penetration Levels

Frequent Participation .

Frequent participation and small amounts of independent verifications

Review of deliverables and at

major reviews.

Orion Insight Continuum

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Level 0 Level 1 Level 2 Level 3 Level 4

Current CEV Insight

Mechanisms

Suit/EVA

Habitation

Crew Health Systems

M&P

Human Engineering

GN&C

Software

ACM

TPS

ECLSS

Avionics

C&DH

C&T

Structures

Prop

Power

Radiation

Passive Thermal

Best Estimate by CEV CE based on PPBE activity and level of engagement seen between the government and contractor to date

Project Orion Contract Award Fee

December 11, 2008

Award Fee

• All Orion award fee periods are interim until the last period– Allows the last period to “look back” and adjust overall fee based

on first manned flight performance– Keeps pressure on contractor to perform because all fee at risk– Schedule A fee generally a set value– Schedule A2 fee (task orders and spares), typically negotiable

• Originally built around milestone dates– Pad Abort – 1, PDR, etc…– Due to constant schedule changes typical of large programs,

award fee period constantly stretched out (period 2 18 months)

• Recent contract modification implemented a two tier award fee accrual system– Baseline 12 month periods– Fee accrual also tied to milestones when completed with a period

Award Fee

• Period of Performance Award Fee Pool Fee Distribution– 12 month periods from - 5/1/09 through 12/31/14

• Performance Milestones Award Fee Pool– PA-1 LAS 3/15/2010 – PDR 8/21/2009 – CDR 6/01/2010– AA-2 8/11/2011 – PA-2 9/07/2012– Orion DCR 1/18/2014 – Orion 1 (unmanned) 12/2/2013 – Orion 2 (manned) 6/02/2014

Project Orion Contract ProcurementLessons Learned

December 11, 2008

Lessons Learned

• Applicable Documents– Scrutinize applicable documents for value –added requirements– Identify clearly in the contract version and date– Provide flexibility to contractor to suggest alternative documents

“After contract award, the Contractor may request use of alternate applicable documents instead of the ones specified in this list, provided the change is in the best interests of the Government. NASA approval is required for a change in applicable documents after review of the contractor’s rationale“

– Offer three types of documents:• Applicable – requirements requiring a verification trace to the

document• Guidance – opportunity for the contractor to demonstrate their

“command media” meets or exceeds and requirements traced only to the contractor command media

• Informational – there for information and no requirement to trace 25December 29, 2009

Lessons Learned

• The CEV phase I activity was beneficial to getting insight into each vendors activities– Day-to-day interface and operation– Insight into their technical activities and architecture– Delivery of specific DRD’s to review performance– Allowed quick contract additions to study alternative design

options– Small cost for this benefit ($3M a month)– Past performance input into phase II awarded contract

• Maybe consider this competitive environment up through SRR for other projects (if budgets allow)

• Phase I did require significant overhead– Competitive environment required rules of engagement – NASA couldn’t really comment on contractor designs due to the

competitive environment

26December 29, 2009

Lessons Learned

• SOW needs to be written with an assumption that some of the significant activities will be performed below the prime– Example – Launch Abort System Complex Contract structure

• SOW written to LM• LM “pass through” to Orbital as prime for LAS• Orbital then subs a majority of the components to additional subs• Oversight is difficult 2 levels below LM’s contract with NASA

– Recognize that the prime will flow requirements to their major subs identical as they are flowed to the prime

– Consider the need to update SOW post award to take into account contract structure

• Clearly identify the level of government oversight contractor should assume– There are oversight differences between DOD and NASA– Also clearly identify overhead from other elements– Require insight into their approach of dealing with the Government

in their competitive proposal to ensure they fully understand how the two parties will interact

27December 29, 2009

Lessons Learned

• Minimize GFE in-line with prime development effort– Since GFE manages the implementation and as the design

matures, prime has to adjust for these changes and can get compensation

• If there is GFE, identify up front all the possible GFE projects– You never get back out of the prime what you paid at award– If you want to move a GFE to CFE, that will also be expensive– Direct contractor to bid assuming no GFE (products/facilities)

provided• Provides a better end-to-end price and no “hidden” assumptions• Easier to descope aspects of project than to move from GFE to CFE

later

• Contract award structure needs to assume multiple center participation– Contractor needs to understand this and the associated overhead

and differences in culture– NASA team needs to clearly identify authority and approval paths

through project with multiple centers– Also critical to define prior to procurement anticipated technical

authority paths for project 28December 29, 2009

Lessons Learned

• Government furnished facilities (GFF)– Project costs for providing GFF is TBD until after award and details

worked– If provided facility does not meet Prime requirements, government

potentially liable for an equitable adjustment to contractor– Make sure you understand the technical requirements of using a

GFF and the costs in your budget

• Contractor should price all costs to perform activities– If bid assumes externally funded activities (States), risk with this

funding until approved after award– Prime should price costs to support all requirements without any

government facilities, equipment or external funding sources– In some cases, it could be more expensive for the government to

provide for some requirements– Add a clause that allows NASA after award to negotiate

government provided facilities and hardware once the details are worked.

29December 29, 2009

Lessons Learned

• For projects where requirements could change considerably after award– Consider using an IDIQ contract structure with award fee through

PDR• Provides contract flexibility for changes in requirements• Allows teams to adjust to latest approved requirements without

having to wait for contract direction• Still holds the contractor accountable for their products including the

design– Cost Plus structure at long lead procurement (pre-PDR) through

schedule A– Include a clause that states all changes up to PDR (or CDR) are

non-fee/limited fee bearing since this period will be a dynamic period.

• Offerors can take this into consideration in proposing their Fee rate.

30December 29, 2009

Lessons Learned

• Ensure that the contract takes into consideration a reasonable amount of under threshold changes in their proposed fee rate– Reduces strain between government and contractor on the below

threshold clause– Provides a quicker way to add content to the contract with less

formality– Does require government and prime to work together to not

severely under run or overrun the pool

• Tie schedule options to milestones, not years– A dynamic project with schedule adjustments will shift milestones– If exercising of an option is tied to a FY, requires renegotiation

even if project schedule already moved out

31December 29, 2009

Lessons Learned

• Make use of all the contract tools you have to work changes:– COTR technical direction; limited, but can be used for clarification

of requirements to focus contractor implementation– Contractor can notify the government of activities that they are

going out at risk based on recent project changes– Below threshold modification (Orion is less than $1M, but when

you take into account proposal prep savings, sometimes it is more cost and time effective)

– “Stop Work” or removal of government provided products or facilities which allows the contractor to submit a request for equitable adjustment

– If time allows, use the standard request for proposal (RFP) process– If time doesn’t allow, use the Undefinitzed Contract Action (UCA)

Process– Build in an broadly defined IDIQ section on the contract to allow

“span-the-gap” authorization until baseline contract is updated though one of the above methods

Summary

• Procurement activities have to be flexible, within the laws, in supporting large dynamic projects

• Contract structures need to have the flexibility to accommodate changes

• Make use of all the procurement processes available to you

• Integrate your procurement personnel into your technical team

• Use your procurement team to work through the tough and emotional contract issues instead of at lower technical team levels

Fred.ouellette

Technology

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