SPACE FLIGHT OPERATIONS CONTRACT

¶The Space Flight Operations Contract has two major areas of innovation:

It replaced the previous "cost-plus" contracts (in which a firm was paid for the costs of its activity plus a negotiat- ed profit) with a complex contract structure that included performance-based and cost reduction incentives. Performance measures include safety, launch readiness,

on-time launch, Solid Rocket Booster recovery, proper orbital insertion, and successful landing.

It gave additional responsibilities for Shuttle operation, including safety and other inspections and integration of the various elements of the Shuttle system, to United Space Alliance. Many of those responsibilities were previously within the purview of NASA employees.

¶Under the Space Flight Operations Contract, United Space Alliance had overall responsibility for processing selected Shuttle hardware, including:

Inspecting and modifying the Orbiters
Installing the Space Shuttle Main Engines on the Orbiters
Assembling the sections that make up the Solid Rocket Boosters
Attaching the External Tank to the Solid Rocket Boosters, and then the Orbiter to the External Tank
Recovering expended Solid Rocket boosters

¶In addition to processing Shuttle hardware, United Space Alliance is responsible for mission design and planning, astronaut and flight controller training, design and integration of flight software, payload integration, flight operations, launch and recovery operations, vehicle-sustaining engineering, flight crew equipment processing, and operation and maintenance of Shuttle-specific facilities such as the Vehicle Assembly Building, the Orbiter Processing

¶Facility, and the launch pads. United Space Alliance also provides spare parts for the Orbiters, maintains Shuttle flight simulators, and provides tools and supplies, including consumables such as food, for Shuttle missions.

¶Under the Space Flight Operations Contract, NASA has the following responsibilities and roles:

Maintaining ownership of the Shuttles and all other assets of the Shuttle program
Providing to United Space Alliance the Space Shuttle Main Engines, the External Tanks, and the Redesigned Solid Rocket Motor segments for assembly into the Solid Rocket Boosters
Managing the overall process of ensuring Shuttle safety
Developing requirements for major upgrades to all assets
Participating in the planning of Shuttle missions, the directing of launches, and the execution of flights
Performing surveillance and audits and obtaining technical insight into contractor activities
Deciding if and when to "commit to flight" for each mis-

¶privatization, when all remaining Shuttle operations would be transferred from NASA. Phase 2, scheduled for 1998- 2000, called for the transfer of Johnson Space Center-managed flight software and flight crew equipment contracts and the Marshall Space Center-managed contracts for the External Tank, Space Shuttle Main Engine, Reusable Solid Rocket Motor, and Solid Rocket Booster.

¶However, Marshall and its contractors, with the concurrence of the Space Shuttle Program Office at Johnson Space Center, successfully resisted the transfer of its contracts. Therefore, the Space Flight Operations Contractʼs initial efficiency and integrated management goals have not been achieved.

¶The major annual savings resulting from the Space Flight Operations Contract, which in 1996 were touted to be some $500 million to $1 billion per year by the early 2000s, have not materialized. These projections assumed that by 2002, NASA would have put all Shuttle contracts under the auspices of United Space Alliance, and would be moving toward Shuttle privatization. Although the Space Flight Operations Contract has not been as successful in achieving cost efficiencies as its proponents hoped, it has reduced some Shuttle operating costs and other expenses. By one estimate, in its first six years the contract has saved NASA a total of more than $1 billion.47

¶Privatizing the Space Shuttle

¶To its proponents, the Space Flight Operations Contract was only a beginning. In October 1997, United Space Alliance submitted to the Space Shuttle Program Office a contractually required plan for privatizing the Shuttle, which the program did not accept. But the notion of Shuttle privatization lingered at NASA Headquarters and in Congress, where some members advocated a greater private sector role in the space program. Congress passed the Commercial Space Act of 1998, which directed the NASA Administrator to "plan for the eventual privatization of the Space Shuttle Program."48

¶By August 2001, NASA Headquarters prepared for White House consideration a "Privatization White Paper" that called for transferring all Shuttle hardware, pilot and commander astronauts, and launch and operations teams to a private operator.49 In September 2001, Space Shuttle Program Manager Ron Dittemore released his report on a "Concept of Privatization of the Space Shuttle Program,"50 which argued that for the Space Shuttle "to remain safe and viable, it is necessary to merge the required NASA and contractor skill bases" into a single private organization that would manage human space flight. This perspective reflected Dittemoreʼs belief that the split of responsibilities between NASA and United Space Alliance was not optimal, and that it was unlikely that NASA would ever recapture the Shuttle responsibilities that were transferred in the Space Flight Operations Contract.

¶Dittemoreʼs plan recommended transferring 700 to 900 NASA employees to the private organization, including:

sion46 • Astronauts, including the flight crew members who operate the Shuttle

110

Program and project management, including Space 26,000

¶Shuttle Main Engine, External Tank, Redesigned Solid

¶Rocket Booster, and Extravehicular Activity

Mission operations, including flight directors and flight controllers
Ground operations and processing, including launch director, process engineering, and flow management

¶• Responsibility for safety and mission assurance

¶After such a shift occurred, according to the Dittemore plan, "the primary role for NASA in Space Shuttle operations … will be to provide an SMA [Safety and Mission Assurance] independent assessment … utilizing audit and surveillance techniques."51

¶With a change in NASA Administrators at the end of 2001 and the new Bush Administrationʼs emphasis on "competitive sourcing" of government operations, the notion of wholesale privatization of the Space Shuttle was replaced with an examination of the feasibility of both public- and private-sector Program management. This competitive sourcing was under examination at the time of the Columbia accident.

¶Workforce Transformation and the End of Downsizing

¶Workforce reductions instituted by Administrator Goldin as he attempted to redefine the agencyʼs mission and its overall organization also added to the turbulence of his reign. In the 1990s, the overall NASA workforce was reduced by 25 percent through normal attrition, early retirements, and buyouts – cash bonuses for leaving NASA employment. NASA operated under a hiring freeze for most of the decade, making it difficult to bring in new or younger people. Figure 5.4-2 shows the downsizing of the overall NASA workforce during this period as well as the associated shrinkage in NASAʼs technical workforce.

¶NASA Headquarters was particularly affected by workforce reductions. More than half its employees left or were transferred in parallel with the 1996 transfer of program management responsibilities back to the NASA centers. The Space Shuttle Program bore more than its share of Headquarters personnel cuts. Headquarters civil service staff working on the Space Shuttle Program went from 120 in 1993 to 12 in 2003.

¶While the overall workforce at the NASA Centers involved in human space flight was not as radically reduced, the combination of the general workforce reduction and the introduction of the Space Flight Operations Contract significantly impacted the Centersʼ Space Shuttle Program civil service staff. Johnson Space Center went from 1,330 in 1993 to 738 in 2002; Marshall Space Flight Center, from 874 to 337; and Kennedy Space Center from 1,373 to 615. Kennedy Director Roy Bridges argued that personnel cuts were too deep, and threatened to resign unless the downsizing of his civil service workforce, particularly those involved with safety issues, was reversed.52

¶By the end of the decade, NASA realized that staff reductions had gone too far. By early 2000, internal and external

¶24,000

¶Full Time Persons Employment

22,000 Total Workforce 20,000

¶18,000

¶16,000

¶14,000

¶13,000

12,000 Technical Workforce 11,000

¶10,000

¶9,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 — 2003

¶igure 5.4-2. Downsizing of the overall NASA workforce and the ASA technical workforce.

¶studies convinced NASA leaders that the workforce needed to be revitalized. These studies noted that "five years of buyouts and downsizing have led to serious skill imbal- ances and an overtaxed core workforce. As more employees have departed, the workload and stress [on those] remaining have increased, with a corresponding increase in the potential for impacts to operational capacity and safety."⁵³⁵³ The quotes are taken from NASA-submitted material appended to on Science, United States House of Representatives, 107th Congress, 1st the statement of NASA Administrator Daniel Goldin to the Senate Sess., November, 2001, p. 28. Subcommittee on Science, Technology and Space, March 22, 2000, p. 76 Thomas Young, IMCE Chair, "International Space Station (ISS) 7. Management and Cost Evaluation (IMCE) Task Force Status Report toShow full note NASA announced that NASA workforce downsizing would stop short of the 17,500 target, and that its human space flight centers would immediately hire several hundred workers.