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  1. 1. Orion Crew Exploration Vehicle Managing the Contract in a Complex Project A Complex Contract PM Challenge 2010 NASA - Fred Ouellette NASA – Jose Garcia February 2010December 11, 2008
  2. 2. Project Orion BackgroundDecember 11, 2008
  3. 3. Orion Crew Exploration Vehicle Expanded View Crew Module crew and cargo transport Launch Abort SystemSpacecraft Adapterstructural transition to emergency escape during launchAres launch vehicle Service Module propulsion, electrical power, fluids storage
  4. 4. 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 4
  5. 5. 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 5
  6. 6. Orion Government Project Team Yuma Proving Grounds (U.S. Army) Plum Brook Station • Parachute Testing • EnvironmentalAmes Glenn• Lead Thermal Protection White Sands Missile Range Qualification test • Lead Service Module and Spacecraft System ADP (U.S. Army) Adapter integration• Aero-Aerothermal • Abort System Flight Test • Flight Test Article “Pathfinder” fabrication database • SE&I Support• Software and GN&C support Goddard • CommunicationsDryden Orion Project Support• Lead Abort Flight Test Integ/Ops Office• Abort Test Booster procurement Langley• Flight Test Article Devt/Integ • Lead Launch Abort System integration White Sands • Lead landing system ADP • Lead for WSMR facility • SE&I Support design and construction JPL management • Thermal Protection System support Kennedy • Ground processing Johnson Marshall • Launch operations • Lead Crew Module integration • LAS and SM SE&I Support • Recovery operations • Orion Spacecraft Integration • GFE projects management • Flight Test Program
  7. 7. Orion Lockheed Martin Industry Team • Environmental Control & Life Support • Active Thermal Control • Systems & Design Engineering Support • System Power Management LM GRC • SM Liaison Office • Propulsion • Launch Abort System • Safety & Mission Assurance • Avionics LM LaRC • Integrated System • LAS Liaison Office Health Management • Crew Interface • Mission Ground Ops Support KSC • Final Assembly • Checkout • Acceptance Test • Sustaining Engineering • Spacecraft Refurbishment• Program Management• Systems Integration• Crew Module Development• Service Module Development Michoud• Qualification Test • CM and SM• Software Development • Operator Interfaces • Ground Processing Structures December 11, 2008 GAO Overview Briefing • Mission Flight Planning • Software Development
  8. 8. 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 8
  9. 9. Orion Contract Changes Since Award• 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 9
  10. 10. Orion Contract Changes Since Award• 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… 10
  11. 11. 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
  12. 12. Orion Master Summary Schedule PMR09 Submit Orion CY-2008 CY-2009 CY-2010 CY-2011 CY-2012 CY-2013 CY-2014 CY-2015 J F M A M J J A S O N D J F MA M J J A S O N D J F M A M J J A S O N D J F MA MJ J A S O N D J F M A M J J A S O N D J F MA M J J A S O N D J F MA MJ J A S O N D J F MA MJ J A S O N D PA-1 AA 1 AA 2 PA 2 AA3 Orion-1 Orion-2 NET 7/21 Major Milestones PDR CDR 7/11 1/12 11/1 3/1 9/1 3/1 Blk 1 DCR 8/21 NET 2/8 7/18 Reqmnts/ DAC 2 DAC 3 DAC 4 DAC 5 VAC 1 VAC 2 VAC 3 VAC 4 VAC 5 VAC6 VAC7 VAC8 Design/ EDU Procurements Analysis PA-1 Pad Abort Instr LO “Legend” CM Instr Test LO Sys Qual Long Leads AA-1 Ascent Abort SR Procurement /Sub Assy Estimated Timelines AA-2 Ascent Abort CM ATP LO Friction Stir Weld Efforts AI&P PA-2 Pad Abort CM ATP LO AI&P AA-3 CM ATP LO AI&PFlight Software Spiral 2 Spiral 3 Spiral 4 Spiral 5 Spiral 6 Spiral 7 Spiral 8 Spiral 9 Spiral 10 Spiral 11 Spiral 12 Spiral 13 (+) O&M/ DR/ Test Spt. Eng Rel 1 Eng Rel 2 Eng Rel 3 Eng Rel 4 Flt Rel 1 Flt Rel 2 Sys Qual Orion 1 Orion 2Facilities/Labs Acoustics Vibe CAIL B/U & Test DD250 Data to CDR EEST B/U & Test DD250 GTA PTR 3 Deliver GTAGround Test Article (GTA) CM AI&T Test for IVGVT Integrated Vehicle Ground Vibration Test (IVGVT)Structural Test Article (STA) CM SM / SA AI&T AI&T TestComponent Qualification Component Qual Testing Long Lead Hardware Mate CMSystems Qualification CAIL RIG 1 (EDU) Proc / Fab AI&P 1 Flt Qualification HITL Testing SM / SA C&T Phased Array Procurements (ref) CAIL RIG 2 (FEU) Proc / Fab CM Mate GO NeedOrion-1 SM / SA AI&P ATP LS Ops CM Mate AI&P ATP LS OpsOrion-2 SM / SA
  13. 13. Project Orion Procurement Team and OversightDecember 11, 2008
  14. 14. NASA Orion Procurement Team COTR DCMA Orion ACOTR Project Planning & Vehicle Integration & Design (JSC)Procurement Office (JSC) Control Office (JSC) TMRContracting Officer TMRContract Specialist Price Analysts Safety & Mission Production Operations Assurance (KSC & MAF) TMR TMRCrew Module Service Module Launch Abort System Test & Verification Flight Test (JSC) (GRC) (LaRC) (JSC) TMR TMR TMR TMR TMR
  15. 15. 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
  16. 16. Orion Contract Changes Red = UCA Change I Green = RFP Change 9/08 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 Augustine Report PDR Baseline Review Baseline Review Update CDR 8/09 8/31/09 Jan 09 11/10 (TBD) 2/8/2011 PDR RID Closure & CDR DACs (2) Reqts Updates APMC KDP-C PDR NAR Site Visit Under ReviewCCO 24 (UCA) Definitized: May 15 Schedule B Update Orion 1 PO Orion 2 PO UCA Issued: Definitized:C&T (UCA) NTE July 6 Mar 1 Request C&T Task Order Proposal Receipt 9/30 UCA Issued: Definitized: RisksPMR 09 Schedule NTE Oct 1 Mar 30 • NASA and LM manpower for all these(UCA) Request parallel activitiesCDR Requirements (DAC 4) (UCA) -Current DAC 3 POD Task Order Expires September 30 UCA Issued:• CxP Requirement Document Updates Oct 1 NTE Request:• CEV SRD Rev D Updates Other Activities Aug 1 • 120 Volt • Cost Share Contract Changes DAC 3 Task Order • Loads DAC 4 Task Order • Security Requirement RFP (SRD rev D change 1 • 6 to 4 Crew Size Stop Work Definitized UCA Issued • ATLAS Stop WorkCDR Requirements UCA Revision 1 NTE Update Feb 1 July 1 • Stimulus Reporting• SRD Rev D change 1, AA-3, DFI, udpated CxP docs Request: Nov 1
  17. 17. 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
  18. 18. 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 18
  19. 19. NASA Oversight- Penetration LevelsNo Penetration Total Penetration Level 0 Level 1 Level 2 Level 3 Level 4 Review of Review of Processes Implementation Increasing technical penetration Review of Frequent Frequent Full in-depth deliverables and at Participation . participation and participation and major reviews. small amounts significant of independent amount of verifications independent verification 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 19
  20. 20. Orion Insight Continuum Current CEV InsightLevel 0 Level 1 Level 2 Level 3 Level 4 Mechanisms Suit/EVA Structures Habitation Prop Crew Health Power Systems Radiation ECLSS M&P Passive Avionics GN&C Human Thermal C&DH Software Engineering C&T ACM TPS Best Estimate by CEV CE based on PPBE activity and level of engagement seen between the government and contractor to date 20
  21. 21. Project Orion Contract Award FeeDecember 11, 2008
  22. 22. 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
  23. 23. 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
  24. 24. Project Orion Contract Procurement Lessons LearnedDecember 11, 2008
  25. 25. 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 December 29, 2009 25
  26. 26. 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 December 29, 2009 26
  27. 27. 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 December 29, 2009 27
  28. 28. 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 December 29, 2009 28
  29. 29. 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. December 29, 2009 29
  30. 30. 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. December 29, 2009 30
  31. 31. 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 December 29, 2009 31
  32. 32. 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
  33. 33. 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