NASA jettisons 2nd major IT contract, again cites costs

NASA continues to look for ways to tighten its financial ship, and a second large systems contract has paid the price.

The space agency decided last month not to renew its option on a multibillion-dollar contract for operating its spaceflight computers and communications systems. Space agency officials said they will let the Consolidated Space Operations Contract end when the current option expires next December because CSOC has not generated the savings NASA expected. The agency will search for other savings through new contracts.

The decision not to pick up the contract's second five-year option follows the recent cancellation of the Checkout and Launch Control System contract, a shuttle systems project that went millions over budget.

NASA spokesman Bob Jacobs said the agency has carried out several program reviews in recent months. 'We are working to implement the President's Management Agenda,' he said. 'NASA administrator Sean O'Keefe has asked program managers to look at programs and see which ones could be done more efficiently.'

Jacobs said the cancellation of CLCS was not related to the decision not to renew CSOC.

Paul Strassmann, NASA's acting CIO, is reviewing the agency's IT infrastructure. 'He plans to implement significant changes,' Jacobs said.

Strassmann already has outlined some of those changes, including the creation of two mission control centers to oversee NASA systems. Strassmann did not respond to repeated requests for comment on the CLCS and CSOC decisions.

Jacobs said NASA officials responsible for spaceflight programs made their decisions about CLCS and CSOC independent of Strassmann's program review.

Bob Spearing, assistant associate administrator for space communications, said NASA selected Lockheed Martin as the CSOC contractor in 1998 on the basis of projected savings from merging pre-existing contracts for spaceflight systems.

'The estimate was $1.4 billion in savings over 10 years, based on the contractor's proposal compared with NASA's in-house estimate,' Spearing said. 'The savings were to come from efficiencies of consolidating the work and creating an integrated operations architecture, among other sources.'

But the expected savings have not materialized. NASA said it has achieved actual savings of only $365 million.

Spearing said one reason the savings did not materialize is that NASA's mission model for spaceflight operations changed over the life of the contract. 'It was not necessarily scaled back, but some missions predicted to be ending lasted longer, some missions were delayed and others replaced,' he said.

'At this time we decided to take lessons learned from the initial period of CSOC and prepare a new solicitation that is more in line with the work as we see it,' Spearing said.

He said one of the most important lessons learned was the need to incorporate a more dynamic mission model into the contracts.

Smaller deals

CSOC probably will be replaced by an undetermined number of smaller, more flexible deals, Spearing said.

In the first phase of CSOC, NASA made a number of contract changes. 'A large amount of change traffic indicates a contract is not very stable,' Spearing said. 'Using the appropriate contracting vehicles, we should be able to minimize the number of contract changes.'

NASA does not expect dramatic savings by ending the CSOC contract, Spearing said. The costs of operating the agency's communications and computer infrastructure for spaceflight operations likely will remain at about $400 million annually, he said.

The work involves operating control centers and data processing systems for satellites, running tracking systems, and providing support for the agency's ground and deep-space networks.

'I'm not against large contracts,' Spearing said. 'I think they have to be focused on homogeneous work.'

Lockheed Martin will be eligible to bid on the contracts that will pick up where the first phase of CSOC leaves off, he said.

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