McCain Questions USAF EELV Procurement

1. McCain poses some good questions, and appears to be quite familiar with the technical issues. No side comments on climate change denial from him! Also, this is the same John McCain who said in no uncertain terms that Constellation was not affordable when it was first proposed by a president from his own party. Although I am not a member of his party, I believe his technical competence and integrity in this matter deserve our appreciation.

2. It’s a wonder things get to this point, as Senators, among others, call for more competition in a transportation service that everyone generally agrees has to improve it’s costs. I often wonder about the “foxhole” mentality that gets government procurement and leadership defending lack of competition. As if both the government personnel and the contractors feel they are both in the same foxhole, trying to survive, together. McCain, or any outsider for that matter, become nuisances, calling for improvement – improvements perceived by those in the foxhole as merely more “change”, more “incoming”.

   It doesn’t help that if you work to avoid drama with a contractor you’re more likely assured a place one day in a new VP slot, or just consulting, or anywhere in the contractor market. You’re the “straight-shooter”. Whereas if you have a reputation for making waves, or seeing cost as something to improve, you better be ready after your 30 years to never see that cushy little bit of side work over in company X. You’re reputation as a “bean-counter”, or “trouble-maker”, will precede you.

   When did costs become a nuisance? When did improvements that include costs stop being a virtuous goal?

   1. In major contracts the customer doesn’t want to take on the complexity of dealing with a new contractor. In small contracts the challenger always underbids the incumbent, usually wins, and then provides inadequate services until the government agrees to an expensive list of contract changes.

      BTW if you start out as a contractor and stay a contractor, you have no retirement plan except a 401-k you can’t afford to contribute to, and you never get offered that cushy work. You just work till you drop.

      1. Government acquisition and management avoiding “taking on the complexity of dealing with a new contractor” is a bit of that together-in-the-foxhole mentality, no? Change should be welcomed by the customer if it improves their outcomes…that is unless you don’t see costs as an outcome you “own”. I suppose if it’s business as usual to fight for budgets, and that’s perceived as easier than tackling “changes”, then the complexity of anything new becomes a reason not to do it.

         This will get decided, perhaps, by forces and events external to the customer. I’ve seen this same kind of discussion many times, the difference between a government manager who sees some long term mandate (like enabling more routine, more affordable transportation to and from space) and those that go the pragmatic route of only seeing a specific contract in the here and now.

         Of late I’d say the pragmatists have been winning, specifically, gaining control of the contracts and offices. Longer term? Well, forces and events will likely show these are the kind of management skills and pragmatism that is least likely to react well to forces and events, making for poor situations turning into really untenable positions. (Long winded way of saying you can embrace changes and work to have them benefit long term outcomes, or you can fight change, to the detriment of long term outcomes).

         1. I’m not sure why the procuring organization would _want_ to reduce cost. As long as you can justify the budget and spend it on time, the more money you spend, the more you are rewarded.

            1. Exactly…not the right kind of incentives. Reward should be elsewhere, according to other measures of success. Poor incentives are how such systems eventually decline into irrecoverable situations.

   2. Company X??

      I would Think McCain could find cushy work at company Space X. Maybe he will be the guy that helps get right kind of government help that helps build the Inner Solar System Highway.

      I recall seeing a clip where Robert Zubrin made his case to McCain for a Mars mission where he scolded McCain which I felt was a bad approach. Anyway it appeared to me that McCain’s seemed interested in getting us off this Rock.

      Maybe some of you guys should put an open source reasonable Space/Leo/moon/ mars plan together???

      Oh question

      With Musk about have many reusable Boosters lieing around. How could he cheaply start sending fuel to Space. Shouldn’t that be a first step. Could you have an rp-1 depot now which you convert to methane later???

3. Wow. I encourage everyone to read Sen. McCain’s letter to Inspector General Jon Rymer. In particular, Sen. McCain has raised a very pointed question in regards to the reduction of the number of EELV cores open for competitive bid (FY 2015 thru 2017) from fourteen to seven…and the USAF’s reported justification for this decision.

   The real zinger, here, is Sen. McCain’s question #2 of his closing summary “Investigative Issues”. Here is a direct quote:

   “2. The Air Force has cited three reasons for pushing those seven launches out of competition and, in some cases, awarding them on a sole-source basis: (1) decreased demand for replacement GPS satellites; (2) weight-growth in one payload; and (3) “honor[ing] the long-term commitment buy that [the Air Force has] with ULA.” But, regarding the first and third reasons cited, by the time the Air Force agreed to the 36 rocket block-buy with the contractor in December 2013, the Air Force’s own documents indicate that it had been well aware of the decreased demand for GPS satellite replacements. If the Air Force knew about the likelihood of reduced launch demand, why did it structure its procurement so that the competitive portion of the program bore all the burden of potential launch reductions while the sole-source portion had a guaranteed number of launches? Why did the Air Force fail to take those considerations into account when it committed to 36 sole-source launches and outlined plans for 14 competitive launches?”

   Also noted in Sen. McCain’s letter, it that the USAF has not identified what portion of the 36 cores/launches are reserved, as necessary, for “heavy launch” requirements (which are typically National Security assets, such as NRO satellites).

   What this all boils down to, is the very questionable decision by the USAF to award (in Dec. 2013) a sole-source “requirements-like” contract for 36 EELV cores with ULA, while cutting the competitive bid portion of the EELV cores in half. Furthermore, the contract stipulates: “if overall launch demand decreased, the difference would be satisfied by drawing from cores/launches originally designated for competition.” Well isn’t that damn convenient for ULA. Especially, given the fact (as McCain’s letter’s attest) that the USAF was well aware that “launch demand had decreased” in July 2013, five months before the contract award. In fact reduction in launch demand was foreseen as far back as 2010, due to longer than expected longevity of GPS satellites.

   So, the reduction in launch demand is borne solely by the “competitive bid” portion…while the initial 36 cores are safely guaranteed to ULA —> DESPITE the likelihood that only a fraction of these cores will actually be designated for “heavy launch” NRO/national security assets (e.g. requiring a Delta IV Heavy).

   I applaud Sen. McCain’s request for investigation…and I am with SpaceX all the way, on this. Something smells in Denmark.

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