Innovative Business Agreements and Resulting Cost & Pricing Methods at NASA in Support of New Commercial Programs
On April 15, 2010 President Obama delivered a speech at Kennedy Space Center in which he outlined his new vision for the U.S. space program. Emphasis was placed on enabling the exploration of Space by Commercial entities instead of by the Government. Since that time, NASA’s role has changed in many instances from being a program manager – overseeing development of space launch hardware and conducting space exploration missions – to one of support and a provider of space-related facilities and infrastructure.
At the 2011 ISPA/SCEA National Conference, during a time in which NASA was struggling with change to some of its old methods of doing business, the authors presented a discussion of the pricing methods available under the various legislative and legal authorities that allow NASA to enter into Agreements, and related cost estimating considerations. Since that time, NASA has updated and redefined some of its policies and procedures on pricing, as well as its methods of estimating costs of conducting business under these new Commercial Agreements.
This paper and presentation, focusing on Kennedy Space Center, will discuss changes and new methods of pricing and estimating the costs of NASA facilities and services to be provided to outside entities for use in new Commercial Space endeavors. It will also give an overview of new NASA regulations and documents that establish policy and guidance for entering into Agreements and how they are priced under the various types of Agreement currently being used at NASA. (These include Space Act Agreements, Commercial Space Launch Act Agreements, Use Permits, Enhanced-Use Leases, Memorandum of Agreements, etc. and include full-cost, actual cost recovery, direct cost-only, and market based pricing.) The presentation will also provide some insight into the decisions and cost/pricing problems that NASA has faced in making available its facilities, equipment and services under these various Agreements.
This discussion will also work through some actual examples of Agreement pricing and related cost estimating exercises. The presentation will hopefully, provide some valuable insight into current activities and changes at NASA, as well as how costs and pricing policies are being impacted and developed to support this “new way of doing business” for NASA.
NASA Kennedy Space Center
Jim Roberts is a Senior Cost Analyst with NASA Kennedy Space Center and currently serving as President of the Central Florida ICEAA Chapter. He holds a B.S. degree in Physics and Math from the University of Georgia and a M.B.A. in Economics from Georgia State University in Atlanta. Jim began his career as a computer analyst where he has worked for Merrill Lynch, Coca Cola and Boeing Computer Services. Jim began his involvement in cost estimating in 1984 while working for Control Data Corporation (where he worked with Frank Freiman in marketing and training for the FAST Parametric Models).
Mr. Roberts began his career with NASA at Langley Research Center in 1987, where he performed parametric cost estimates of spacecraft instruments and proposed launch vehicle concepts. He also served on a NASA-wide Advanced Missions Working Group. Mr. Roberts has also worked in Langley’s Programs & Resources, and in Procurement doing contract pricing. Jim transferred to Kennedy Space Center in 2001 to work in an Independent Program Assessment group where he has developed and reviewed project cost estimates as well as cost estimating policy. In addition, he has served on several large KSC Source Evaluation Boards. Jim is currently in the KSC CFO Office where he reviews cost estimates and works on policy and pricing of Commercial Agreements. Jim currently holds the CCEA-P certification.
NASA Kennedy Space Center
Terry Lambing is currently a Cost Estimating/Analysis Officer with the National Aeronautics & Space Administration (NASA) at the Kennedy Space Center in the CFO’s Business & Cost Assessment Office. He holds a BA degree in Business Administration Management from the University of Houston. Terry has (30) years of government work experience and currently serves as the Business Policy Manager.
Terry began his involvement in cost estimating in 1988 while working at NASA Johnson Space Center on numerous flight hardware projects. He currently Administers, Prices, & Reviews, cost estimates and reimbursable policy on Government & Commercial Space Act Agreements, Enhanced Use Leases, Commercial Space Launch Agreements and other commercialization efforts. He authored and implemented the current Market Based Pricing Guide at KSC that is used by government and commercial aerospace companies in the Central Florida Area. He is a NASA Certified Cost Estimating & Analysis Expert and Board Member of the International Cost Estimating & Analysis Association (ICEAA) Central Florida Chapter.