Turning SLS and Orion into Entitlements (Update: Webb Too)

Keith's note: According to a release issued today: "The Science, Space, and Technology Committee today approved three bills with bipartisan support. ... Prior to debate on a fourth bill [H.R. 3625] offered by Rep. Mo Brooks (R-Ala.), the Committee recessed subject to the call of the Chair. Chairman Smith indicated that he expects the Committee to reconvene to consider the bill next week."

Full Bill information (note the cosponsors).

Rep. Donna Edwards (D-MD) is going to join the party and will introduce an amendment to give the Webb Space Telescope the same protection against cancellation as SLS and Orion would get under this bill. Think of all the large contracts that will soon be voided and what this means for the way in which NASA engages in contracting for future programs - to say nothing of the contingencies that won't be in place in case a program runs into trouble - and the decreased flexibility the agency will have to manage its finances.

Rep. Brooks is submitting an amendment that says "Page 5, line 6, insert "If the Administration terminates a covered program for the convenience of the Government, then the Administration is responsible for payment of all termination liability costs." after "such prime contracts." In other words, the government accepts all the responsibility and lets the SLS and Orion prime contractors off the hook when it comes to termination costs. This bill only affects the prime contractors. None of the subcontractors get anything out of it i.e. ATK, Aerojet etc. Indeed, they are left holding the bag as far as their potential termination costs are concerned. I have to wonder what CBO will say when it scores this bill and what the Budget Committee might have to say. This bill sets a precedent that could spread across the government.

If passed into law, H.R. 3625 would make it exceptionally difficult to ever halt SLS, Orion, or Webb or to adjust funds internally by treating them in a way that is utterly different than other NASA programs. Indeed it would make these programs into Zombies that can never be killed. Here's an excerpt:


"(2) While the Space Launch System and the Orion programs, currently under development, have made significant progress, they have not been funded at levels authorized, and as a result congressionally authorized milestones will be delayed by several years.

(3) In addition, contractors are currently holding program funding, estimated to be in the hundreds of millions of dollars, to cover the potential termination liability should the Government choose to terminate a program for convenience. As a result, hundreds of millions of taxpayer dollars are unavailable for meaningful work on these programs.

(a) GENERAL RULE. Termination liability costs for a covered program shall be provided only pursuant to this section.

(b) PROHIBITION ON RESERVING FUNDS. The Administrator may not reserve funds from amounts appropriated for a covered program, and shall direct prime contractors not to reserve funds, for potential termination liability costs with respect to a covered program.

(c) INTENT OF CONGRESS. It is the intent of Congress that funds authorized to be appropriated for covered programs be applied in meeting established technical goals and schedule milestones.

(d) VOID CONTRACTUAL PROVISIONS. Any provision in a prime contract entered into before the date of enactment of this Act that provides for the payment of termination liability costs through any means other than as provided in this section is hereby declared to be void and unenforceable.

(1) TERMINATION FOR CONVENIENCE. The Administrator may not initiate termination for the convenience of the Government of a prime contract on a covered program unless such program termination is authorized or required by a law enacted after the date of enactment of this Act."

Full text of HR 3265

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This page contains a single entry by Keith Cowing published on December 5, 2013 4:00 PM.

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