Background
Successful commercial contractors (e.g., Boeing, Lockheed
Martin, Space Systems/Loral) build lots of very good commercial
communication systems satellites, and that happens to
be the class of satellite we're using in the Geostationary
Operational Environmental Satellite (GOES) Program. These
contractors typically warranty their satellites to customers
for 10, 12, 15 years. With that kind of reliability, you've
got to figure they must be doing something right.
Commercial contractors don't do everything according
to the NASA way, but I felt if we could accept some
of their commercial ways -- and at first I didn't know
exactly what that meant -- I thought we could probably
save money, and that was something I could sell to NASA
management.
I asked two of our regular contractors to tell us
what doing business in the commercial world is like.
They talked about fixed-price contracts, and how this
was the way to go to hold down your overall costs. But
with a fixed-price contract, I asked, how do you get
what you want (or need) without modifying the contract?
Because inevitably you will find something you want
that is not in the contract. This is not something intentionally
left out or something you knew you would want at a later
time. With today's technology, where there is a great
deal of uncertainty, things change all the time during
a project. Priorities shift, new needs arise. Also,
as you learn more about commercial practices you may
want some things changed. That's when they told me about
horse trading.
In a horse trade, one party says to the other, "You
give us this and we'll give you that." I have to emphasize
that this sort of thing only works if mutual trust has
already been established between the two parties. Both
parties keep a folder of things they want. When the
folder begins to feel full, one approaches the other
to see if it's ready to trade. If they had to do a formal
proposal for each one of these trades, it would tie
up a lot of people with writing, negotiating, etc. This
all takes time, which very often we don't have. Moreover,
additional time may amount to significant indirect costs.
You use the horse trading so as not to undercut the
financial rewards of the fixed-price contract.
Procedure
- Everyone on the project is conscious that this is
a tool to get the job done, so everyone is keeping
an eye out for high-priority changes.
- The Project Manager oversees a folder of all desired
changes. He approaches the contractor with what he
wants and prepares a configuration change request
(CCR) as the mechanism for defining the change.
- Usually they discuss the changes first. Many key
people are often out at the contractor's site to do
this too. Key people are the Observatory Manager (COTR),
Contracting Officer, Financial Analyst, and Systems
Manager. They might set aside an hour or two there,
or it is something that can be done over the phone.
- Once the negotiating team puts together the package,
they take it to the Configuration Control Board. Any
changes to the contract require signature by NASA
and by the contractor. The contractor has a Configuration
Control Board, and the trade has to pass its board,
too.
- A formal agreement is drawn up that defines the
changes in detail. The contracting officer identifies
it as a done deal. The changes are then incorporated
into the contract.
Example
We need a new Interface Control Document (ICD) for the
ground support equipment from our instruments. The original
contract does not stipulate that such a document will
be provided, but we learned that it's necessary. There
are 6 or 8 things we're getting as part of the horse trade,
and the ICD is just one. Some trades have 6 things bundled,
some 12 to 15. Boeing, our contractor on GOES-N, gets
an equivalent value bundle. In this case, one involves
a proto-flight solar array panel that has to be fully
qualified under qualification temperature. We agree to
allow a test panel to be qualified. We feel it will still
give us a good measure of the qualification of the technique
and the materials they're using. This will reduce the
time and effort involved for Boeing, which saves them
money.
Search by lesson to find more on:
 Marty
Davis is the Program Manager of the Geostationary
Operational Environmental Satellite (GOES) at the
NASA Goddard Space Flight Center in Greenbelt, Maryland.
Mr. Davis is the recipient of many honors, including
Goddard's highest award, the Award of Merit in 1989,
and NASA's highest award, the Distinguished Service
Medal, in 1995. In addition, he received the NASA
Outstanding Leadership Medal in 1991 and the NASA
Exceptional Service Medal in 1979. |
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