Saturday, January 31, 2009

Contract protests: a growing cancer on the space industry

As mentioned here January 16, the contracting review process has stopped the innovative award to SpaceX and Orbital Sciences Corporation of 20 cargo supply missions to the ISS right in its tracks. "PlanetSpace," a collaborative subcontracting spin off of two aerospace giants are game to use their experience working the halls of Congress and the Pentagon to game the system in their favor.

Demonstrating why it is essential to keep up with the sober voices of The Space Review, Taylor Dinerman wrote a great backgrounder on this situation three days later. We wanted to flag it now as essential reading.

Last week’s announcement by PlanetSpace that it plans to protest the ISS Commercial Resupply Services (CRS) awards made last month to SpaceX and Orbital Sciences is bad news for the space industry. Over at the Defense Department these protests have become a way of life, and are slowly but surely wrecking the defense industry, turing it from an collection of firms whose purpose was to build hardware into a giant jobs program for contract lawyers, litigators, and lobbyists.

A NASA technical analysis reportedly gave PlanetSpace’s proposal a higher mark than that of Orbital Sciences. However, based on their experience and on the record of firms that rely too heavily on subcontractors, the leadership at the space agency choose to go with Orbital: a pragmatic decision derived from the history of the space industry rather than from the legalistic details of the federal contracting process.

As Dan Quayle once said, “There’s something wrong with an economy that employs 70 percent of the world’s lawyers.” Our government procurement system is so big and so complex that, for a program such as CRS, not to mention a larger one, any competent team of lawyers can find flaws in the tens of thousands of documents, emails, and other evidence. It now seems that once a contract has been awarded its fulfillment relies on the goodwill or a calculated decision by the loser not to contest. This effective veto power will eventually strangle the entire system and force through a set of reforms—possibly on an emergency basis—and the results will not be pretty.

Read and comment on the entire story HERE.

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