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Wednesday, February 23, 2011

USAF Space Chief Wants More Contractor Accountability

ORLANDO, Fla. — The U.S. Air Force is not seeking funding to push the technological edge in military space projects, setting the stage for potentially more fixed-price contracts with companies already struggling to make money in this business.
By reducing the inherent risk in development projects, according to one senior Air Force official, there is an opportunity to hold contractors more responsible for missing development targets. “We are not going to be pushing technology nearly as hard as we’ve done in the past,” says Gen. William Shelton, who now oversees Air Force Space Command.
During the past decade, the Air Force has not been able to deploy any space systems on time and on budget. As a result, the service appears to be suppressing its appetite for leap-ahead technology in an attempt to get back to basics and begin delivering on its promises. “We are not going to be taking a lot of risk,” Shelton says. He made his remarks during a press roundtable at the annual Air Force Association conference in Orlando, Fla .
Fixed-price contracting has been sought by Pentagon acquisition czar Ashton Carter, but some in industry suggest this is not an appropriate contract strategy for space projects because of the inherent risk in developing satellites and rockets. “I’m not particularly concerned about” these views from industry, Shelton says.
Shelton says he is concerned that contracts written during the past decade, which set the parameters for companies delivering the next generation of space capability, limit his ability to reward or punish industry for its work. Thus, he hopes any new contracts will have more clear guidance on how much risk the government and industry bears for projects.
He says he is frustrated that he is unable, for example, to financially punish a company for an on-orbit failure owing to contract language. Furthermore, Lockheed Martin’s liability for the introduction of foreign object debris into a propulsion system line of the first Advanced Extremely High Frequency Satellite (AEHF), prompting the failure of its liquid apogee engine and at least a 10-month delay in service, is unclear based on the existing AEHF development contract. Shelton says the financial risk-sharing must still be negotiated.
Also unclear is who will pay for the “exoneration” exercises Lockheed has undertaken to ensure that other A2100-based satellites don’t experience the same problem in orbit.

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