The Orion contract is a complex project involving Lockheed Martin as the prime contractor and many subcontractors. The contract is structured into three schedules for design, development, testing, production, and operations. Since the initial award, the contract has undergone several changes totaling over $2 billion to realign requirements and accommodate changes to the Constellation program. These changes ensured Orion's design supported its mission of transporting crew to the International Space Station.

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 2010
December 11, 2008

2. Project Orion Background
December 11, 2008

3. Orion Crew Exploration Vehicle
Expanded View
Crew Module
crew and cargo transport
Launch Abort System
Spacecraft Adapter
structural transition to emergency escape during launch
Ares launch vehicle
Service Module
propulsion, electrical power,
fluids storage

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. 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. Orion Government Project Team
Yuma Proving Grounds (U.S. Army)
Plum Brook Station
• Parachute Testing • Environmental
Ames 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
• Communications
Dryden 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. 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. 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. 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. 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. 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. 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&P
Flight 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 2
Facilities/Labs Acoustics Vibe
CAIL B/U & Test
DD250
Data to CDR EEST B/U & Test
DD250
GTA PTR 3 Deliver GTA
Ground 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
Test
Component Qualification Component Qual Testing
Long Lead Hardware
Mate
CM
Systems 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 Need
Orion-1 SM / SA
AI&P ATP LS Ops
CM Mate
AI&P ATP LS Ops
Orion-2 SM / SA

13. Project Orion Procurement Team and Oversight
December 11, 2008

14. NASA Orion Procurement Team
COTR
DCMA Orion
ACOTR
Project Planning & Vehicle Integration & Design (JSC)
Procurement Office
(JSC) Control Office (JSC)
TMR
Contracting Officer TMR
Contract Specialist
Price Analysts
Safety & Mission Production Operations
Assurance (KSC & MAF)
TMR
TMR
Crew Module Service Module Launch Abort System Test & Verification Flight Test (JSC)
(GRC) (LaRC) (JSC)
TMR TMR
TMR TMR TMR

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. 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 Review
CCO 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:
Risks
PMR 09 Schedule NTE
Oct 1 Mar 30
• NASA and LM manpower for all these
(UCA) Request parallel activities
CDR 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 Work
CDR 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. 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. 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. NASA Oversight- Penetration Levels
No 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. Orion Insight Continuum
Current CEV Insight
Level 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. Project Orion Contract Award Fee
December 11, 2008

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. 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. Project Orion Contract Procurement
Lessons Learned
December 11, 2008

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. 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. 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. 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. 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. 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. 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. 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. 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