Fwd: NASA IG questions payments to Orbital

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From: "Gary Johnson" <gjohnson144@comcast.net>
Date: June 14, 2013 10:41:00 AM GMT-06:00
To: "Gary Johnson" <gjohnson144@comcast.net>
Subject: FW: NASA IG questions payments to Orbital

 

IG Report at:

 

http://oig.nasa.gov/audits/reports/FY13/IG-13-016.pdf    

 

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      Jun. 14, 2013 1:13 AM 

NASA inspector general questions payments to Orbital

Test flight: Antares rocket launch: Orbital Sciences Corporation launched its Antares rocket Sunday on a test flight, the first of two under a NASA program helping to develop new commercial systems to resupply the ISS. The launch took place from Wallops Island, Va. NASA-TV 4/21/13

Written by
Ledyard King
Gannett Washington Bureau

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A full demonstration mission of Orbital's Antares rocket won't happen until at least August, the report said.

WASHINGTON — NASA's top watchdog said the agency should slow down payments to Orbital Sciences Corp. until the company demonstrates it can successfully fly cargo to the International Space Station.

A statement from the Virginia-based aerospace firm calls the findings "flawed." It says its arrangement with NASA has been efficient, and expects to deliver supplies to the station by the end of the year.

The space agency has paid Orbital $910 million for spacecraft development and resupply contracts through Sept. 30, 2012, as part of its Commercial Orbital Transportation Services, or COTS, program, according to a report issued Thursday by NASA Inspector General Paul Martin.

The program aims to help U.S. companies develop vehicles to transport materials and supplies to the orbiting lab now that the space shuttle has been retired.

Orbital completed a maiden test flight of its Antares rocket in April, but the full demonstration mission that NASA requires won't happen until at least August, the report said.

The other company in the program — California-based SpaceX — has received $858 million and has flown a final demonstration flight and two resupply missions to the space station.

Orbital's contract calls for NASA to pay the company $1.9 billion for eight resupply missions.

Under the existing payment schedule, the company will receive up to 70 percent of the funds associated with six of those missions prior to flying a demonstration flight. In particular, Martin said, NASA should have deferred about $150 million it paid Orbital for costs associated with the company's fourth and fifth resupply missions.

Martin said the advanced payments pose "too much financial risk" for NASA, and future payments should be tied more to performance.

"The possibility remains that the demonstration flight could expose issues that require costly rework and redesign, resulting in major adjustments to the current launch schedule," the inspector general's report says.

NASA officials deny they've exposed the agency to any additional risk and say "payment cap" protections and other contractual provisions align payments with technical achievements, according to a letter Associate Administrator William Gerstenmaier sent to Martin. The letter was included in the report.

Gerstenmaiet wrote that there would have been "substantially greater" risk in failing to have the companies on board working toward developing a way to resupply the space station.

 

But he also pledged that NASA will review and update work schedules as necessary to make sure pay and performance are properly aligned.

 

The response from Orbital Sciences Corp. was harsher. The company rejected Martin's conclusions and said his report "missed the forest for the trees."

 

Orbital's statement said:

 

• Japanese and European delivery systems serving the space station took far longer and were more expensive to develop than the COTS structure.

 

• The Antares rocket will be launched three times and will deliver cargo to the space station with the Cygnus spacecraft twice by the end of the year — only five years from the signing of the resupply contract with NASA.

 

• To date, Orbital has spent more than twice what NASA has in the COTS development program, and has expended far more on the re-supply program than it has been paid by NASA.

 

"So it is clear Orbital has significant 'skin in the game' and we are highly incentivized to successfully carry out the eight missions currently under contract," the company said. "This schedule will be among the fastest and most cost efficient NASA has ever supported."

 

SpaceX has a $1.6 billion contract for 12 missions, two of which are already completed.

 

 

Contact Ledyard King 

at lking@gannett.com

 

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