NASA alters IT outsourcing strategy

Space Mission Communications and Data Services Acquisition information

Five years after awarding Lockheed Martin Corp. a landmark 10-year, $3.4 billion contract to manage the technology supporting space operations, NASA has decided to cut short the deal and find another approach.

At the time of award, the Consolidated Space Operations Contract (CSOC), which had a five-year base and a five-year extension, was one of the most comprehensive — and valuable — outsourcing programs undertaken by a civilian agency. Lockheed Martin has provided all essential information and network services for NASA centers supporting space flight and science programs.

But NASA has found CSOC too unwieldy and inflexible and will terminate it at the end of this year when it reaches the end of its base period, officials said. The agency is breaking up the work into five smaller contracts.

The original contract is managed from Johnson Space Center in Houston. The new set of contracts, collectively called the Space Mission Communications and Data Services acquisition, will divide the contract's functions across three of NASA's centers. The contracts pertain to communications, networking and information technology operations.

Proposals for the new contracts are due May 27, said Chris Jedrey, NASA's special assistant to the director for headquarters operations in Washington, D.C. "We want to try to make awards as early as possible in order to allow for transition time," he said. "We've been bombarded with [interest from] industry."

Lockheed Martin Space Operations is the prime contractor for the original contract. The new contracts will collectively be worth about $400 million a year, roughly equal to the old contract's value. But NASA intends to award, manage and determine the specifics of each contract separately, said James Costrell, manager of NASA's ground tracking operations program.

The new contracts mark a reversal for NASA, Costrell said. When the original contract was put together and awarded in 1998, the agency was looking to consolidate operations and save money, he said.

"It was a new concept to NASA," he said. "The theory was that spacecom [space communications] is spacecom, that it's all the same. So NASA charged ahead with the idea that a consolidated contract would result in efficiencies."

It didn't work well in practice, however. With the contract managed from Houston, NASA personnel in other locations found that Lockheed Martin and its subcontractors could not respond to their needs rapidly.

The contract has other weaknesses too, Costrell said. Among the most onerous is that NASA has to renegotiate prices with Lockheed whenever conditions change. If the agency ends a mission, closes a tracking station or takes any action that alters the work needed from the contractors — which is a common occurrence — agency and company managers have to agree on cost revisions.

"What the agency finally came to grips with is that there are some fundamental differences between the various communications activities," Costrell said.

"The management is the key thing that's going to be different," he said. "The contracts will be managed by the field centers. If company X wins a contract at Goddard and a contract at Marshall, the option will not be there for the company to consolidate those into one contract."

If a company wins more than one contract, the company will be allowed to submit crosscutting proposals to consolidate some functions. However, NASA is determined to maintain the independence of each contract's core requirements.

"What we did in the acquisition strategy was we asked each of the centers to take what they've learned from all their experiences and develop performance-based work statements to capture efficiencies through consolidation and incorporate lessons learned from past contracts," Jedrey said.

The new contracts' structure also reflects growing concern about contract bundling, the NASA officials said. Two of the new contracts will be small- business set-asides. By unbundling one contract into five vehicles, NASA expects more small companies to be involved, the officials said.

Lockheed Martin spokesman Ron Meder said the company intends to vie for the new contracts. He declined to discuss the company's experience under the original contract.

Costrell said there have been no performance issues with Lockheed.

Warren Suss, president of Suss Consulting Inc., said the new set of contracts heralds new attitudes at the space agency.

"I think they're following a philosophy that was strongly promoted by [former acting chief information officer Paul] Strassman, which is that IT services should be provided as a utility," he said.

"NASA is basically requiring the contractor to deal with the individual circuits, the detailed engineering. This is [also] a recognition by NASA that one size does not fit all."

"I think anything they want to do that would provide them with flexibility is a good thing," said Paul Brubaker, co-founder of consulting firm ICG Government LLC. "It's [making use of] lessons learned, it's what the process is supposed to be."

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Divide and conquer

The five contracts that make up the Space Mission Communications and Data Services acquisition are:

* Mission Operation and Mission Support, Goddard Space Flight Center. Includes mission operations support for Goddard.

* Near Earth Networks Services, Goddard Space Flight Center. Involves tracking and data acquisition for near-Earth missions.

* Kennedy Integrated Communications Services, Kennedy Space Center. Involves communication services to support the space shuttle and other space operations.

* Unified NASA Information Technology Services, Marshall Space Flight Center. Involves development, implementation and management of information technology services.

* Huntsville Operations Support Center, Marshall Space Flight Center. Involves providing voice, video and data telemetry services in support of simulations, near real-time and real-time flight mission support.