Breakout Session #1505 Bradley Niese, Contracting Officer Exploration Systems Procurement Office

2. Project Orion: An Acquisition Overview of NASA’s Next Human Spacecraft, the Crew Exploration Vehicle Breakout Session #1505 Bradley Niese, Contracting Officer Exploration Systems Procurement Office NASA Johnson Space Center Jose Garcia, Manager Exploration Systems Procurement Office NASA Johnson Space Center April 15, 2008 2:10 – 3:10 pm

3. Agenda • Introduction • Project Overview • Project Objectives & Goals • Acquisition Strategy • Progressive Competition Down-Selection Process • Contract Structure Formulation • Rewarding Performance Incentives • Technical Resources Information • Cost & Price Information • Other Acquisition Innovations • Lessons Learned & Best Practices • Questions

4. Introduction A Bold Vision for Space Exploration • Complete the International Space Station • Safely fly the Space Shuttle until 2010 • Develop and fly the Orion Crew Exploration Vehicle no later than 2014 • Return to the Moon no later than 2020 • Extend human presence across the solar system and beyond • Implement a sustained and affordable human and robotic program • Develop supporting innovative technologies, knowledge, and infrastructures • Promote international and commercial participation in exploration

5. Introduction • Orion development is a joint effort involving every NASA Center, and is led by the Orion Project Office at Johnson Space Center (JSC) • The Orion Project Reports to the Constellation Program Office, also at JSC • The Constellation Program is a key program in NASA’s Exploration Systems Mission Directorate (ESMD) in Washington, DC • ESMD is responsible for managing and integrating the programs and projects necessary to accomplish the VSE

6. Introduction

7. Project Overview

8. Project Overview • The Orion Crew Exploration Vehicle (CEV) is America’s next generation human spacecraft • Will provide human and cargo transportation to Low Earth Orbit, the Moon and beyond • Lockheed Martin is NASA’s prime contractor for design, development, testing and construction of Orion • Diverse Government and Industry project management team

9. Project Overview NASA’s Next Human Spacecraft: Orion (CEV) Ares I (CLV)

10. Project Overview Orion consists of four functional modules

11. Project Overview Orion Project Life Cycle - We Are Here

12. Project Overview Each test has its own Project Life Cycle within the overall Orion Project Life Cycle

13. Project Objectives & Goals

14. Project Objectives & Goals • Incorporate lessons learned from previous NASA development programs • Definitive end to the Design, Development, Test and Evaluation (DDT&E) phase of the contract • Isolate and track recurring cost of production • Maximize use of existing technology • Utilize effective incentives during each stage of the project life cycle • Minimize life cycle cost • Structure the contract to accommodate ability to evolve throughout the project life cycle.

15. Acquisition Strategy

16. Acquisition Strategy • Orion was a Phased Acquisition Using Progressive Competition (NASA FAR Supplement 1852.217-72) • Progressive Competition Background: • Down-selection strategy for phased acquisitions • Single solicitation is issued for all phases of the program • Initial phase contracts are awarded • Contractors for subsequent phases are chosen through a down-selection process from the preceding phase contractors • Progressively fewer contracts are awarded in each phase until a single contractor is chosen for the final phase

17. Acquisition Strategy • NASA’s Planning for the Phased Acquisition • Decision to use down-selection strategy must be made prior to release of initial solicitation • Rationale documented in acquisition plan must address all phases of the acquisition • When using down-selection, both the initial and all subsequent phase(s) are considered full and open competition • Down-selection should not be used if a direct link cannot be made between successful performance in the preceding phase and successful performance in a subsequent phase

18. Acquisition Strategy • NASA’s Implementation of the Phased Acquisition: • Utilized two-phases • Considered to be a diligent and cost effective investment • Phase 1 contracts awarded to Northrop Grumman and Lockheed Martin • Phase 2 down-select was awarded to Lockheed Martin for DDT&E of initial CEV with options for production and sustaining engineering of future CEVs

19. Acquisition Strategy • NASA’s Results from the Phased Acquisition: • Great amount of insight gained through the “learning curve” inherent with this approach • Provided insight into successful Phase 1 offerors, how they were organized, technical approaches, business practices, etc., streamlining and speeding the Phase 2 evaluation process • Source Selection Authority gained unique insight into performance as a result of Phase 1, and it served as a notable element of the Past Performance Evaluation in Phase 2 • Captured lessons learned from Phase 1 specifically those pertinent to source selection procedures

20. Acquisition Strategy • Phase 2 Contract Structure Formulation • Started with project goals and objectives in mind which drove to the resultant contract structure • Contract built around three unique contract schedules • Schedule A- DDT&E • Schedule B- Production • Schedule C- Sustaining Engineering and Operations Support • Each schedule was uniquely structured to accomplish the project goals • Goal to provide NASA with maximum flexibility to achieve successful project requirements during each unique phase of the project life cycle

21. Acquisition Strategy • Schedule A- DDT&E • DDT&E and initial production • Cost Plus Award Fee • Performance Based • Incorporates both completion form and indefinite delivery / indefinite quantity (IDIQ) • Completion Form for DDT&E • IDIQ for operations support and initial flight spares • Schedule A ends upon delivery and flight of the initial production variant Orion • Provides for a definitive end to DDT&E • End item award fee using milestone based evaluation periods • Schedule A contains option for Schedules B & C (Production and Sustaining Engineering)

22. Acquisition Strategy • Schedule B- Production • Future production and refurbishment of Orion • IDIQ Cost Plus Incentive Fee leading to Fixed Price Incentive Delivery Orders • IDIQ arrangement permits: • Negotiating prices for vehicles as knowledge base continuously matures (e.g. capturing learning efficiencies, economies of scale, etc.) • Flexibility to deal with changes in manifest and program direction • Incentivizing each delivery order uniquely based on current needs of the program (i.e. schedule, cost, etc.) • Permits isolation of recurring cost of production

23. Acquisition Strategy • Schedule C- Sustaining Engineering and Operations Support • Sustaining engineering and operations to support each variant produced under Schedule B • Concurrent with Schedule B • Covers the scope of any non-recurring costs during production and operations support • IDIQ Cost Plus Award Fee Task Orders • IDIQ arrangement permits NASA flexibility to control effort as needed depending on manifest, budget, etc.

24. Acquisition Strategy • Focus on Rewarding Performance Incentives • Maximize return on investment for the Government and contractor • Milestone based that incentivize successful outcomes • Contract Incentives: • Schedule A DDT&E is end-item based, milestone driven award fee • Schedule B Production is incentive fee per delivery order • Schedule C Sustaining Engineering is award fee per task order

25. Acquisition Strategy • Schedule A- End Item Award Fee • Interim evaluation periods based on scheduled project milestones (e.g. SDR, PDR, CDR, test flights, first human launch, etc.) • Milestones established to incentivize schedule performance • All award fee determinations are considered interim except for the last award fee determination, which is final • Schedule B- Incentive Fee • IDIQ arrangement permits NASA to incentivize each delivery order uniquely based on current needs of the program (i.e. schedule, cost, etc.) • Based on completion of each delivery order • Schedule C- Award Fee • Follows traditional NASA standard award fee structure for services • Based on completion of Task Orders • Evaluations occur every 6 months

26. Acquisition Strategy • Technical Resources Volume • Contained all proposed resources and the basis of estimate • Labor and Non-labor • Bridges the cost volume with the technical and management volumes • Emphasis placed on understanding of the requirements, efficiencies proposed, and a comprehensive basis of estimate • Facilitated the cost realism analysis • Organized by Work Breakdown Structure (WBS) which allowed proposal evaluators to focus in on their pertinent areas of expertise • Positive feedback from both offerors on this approach Technical Resources Volume Technical & Management Volumes Cost Volume

27. Acquisition Strategy • Cost & Price Information • Obtained two cost models: Government Provided (standardized) & Offeror Provided (customizable) • RFP defined standard labor categories to which offerors mapped their internal labor categories • Hours priced out in cost model were converted from Full Time Equivalents (FTE) proposed in the Technical Resources Volume • Cost and resources data requested at the highest level possible to keep evaluators focused but still permit a comprehensive evaluation

28. Acquisition Strategy • Other Acquisition Innovations • External Review Teams and Independent Consultants • Early release of Draft Statement of Work and Draft Data Deliverable Documents • Industry Day and Pre-proposal Conferences • Electronic based Bidders Library • Utilized a web-based management information system to share non-source selection sensitive information with the offerors and coordinate reviews across the Agency • Engaging and interactive approach at Oral and Written Discussions

29. Lessons Learned & Best Practices

30. Lessons Learned & Best Practices • Refined Requirements • Requirements definition speeds every aspect of source selection • Requirements must “earn their way” into contract: Number of Data Deliverables, Project Reviews, etc. • Focus on performance outcomes and allow Industry to determine best way to achieve desired outcome • Allow and encourage industry to suggest alternatives • Use commercial practices if it’s available and better • Allow adequate time for meaningful discussions • Technical Resources Volume facilitates traceability from technical and management volumes to the cost volume

31. Summary

32. Summary • Through innovative acquisition planning and source selection techniques, NASA has a contract that provides the coverage and flexibility needed for a spacecraft development, production, and sustaining effort.

33. Questions & Backup

34. Components of the Constellation Program Earth Departure Stage Orion - Crew Exploration Vehicle Ares V- Heavy Launch Vehicle Altair- Lunar Lander Ares I- Crew Launch Vehicle

35. Building on a Foundation of Proven Technologies Crew Lunar Lander Lander Earth Departure Stage (EDS) (1 J-2X) Upper Stage (1 J-2X) S-IVB (1 J-2 engine) S-II (5 J-2 engines) 5-Segment Reusable Solid Rocket Booster (RSRB) Core Stage (5 RS-68 Engines) S-IC (5 F-1) 5-Segment 2 RSRB’s Ares I Ares V Saturn V Space Shuttle

36. Orion Lunar Mission – Getting There • Orion mates with Earth Departure Stage (EDS) placed in LEO on prior launch • EDS stack boosted to lunar trajectory • EDS • Altair Lunar Lander • Orion: up to 4 crew

37. Orion Lunar Mission – Arriving There • Orion and Altair enter lunar orbit • Altair descends to lunar surface for up to 7 day sortie • Orion is uninhabited during lunar surface operations • Altair ascent stage returns to Orion in lunar orbit

38. Orion Lunar Mission – Coming Home • Orion provides Earth return trajectory and attitude control during coast phase • CM capsule reenters atmosphere • Parachute descent • Landing in water or on land for recovery operations

39. Orion will deliver crew and cargo to ISS Up to 6 crew members on Orion 210 day stay time ISS crew rotation Emergency lifeboat for entire ISS crew