4 ms·

The current NASA administrator, a bureaucrat who grew up during the Bush Cost+ era, is actually opposed to fixed-price contracts because they only save a lot of

The current NASA administrator, a bureaucrat who grew up during the Bush Cost+ era, is actually opposed to fixed-price contracts because they only save a lot of taxpayer money and might not actually help us get deliverables faster.

OrvalWintermute 3y ago
There is a different perspective on that from large acquisitions around firm fixed price contracts. If you're doing some low risk building, say a 10 mile road on flat ground with known soil, replacing a previous road, that is well-known to current specs with set-in-stone requirements (no pun intended) it is easy to pitch that firm fixed price because the contractor will know exactly what to do, and there are 20 road building companies that could do the work. Now, building an advanced spacecraft with a host of uncertainties in a vastly more complex environment that may require novel technologies development and a great deal of engineering is very different if you want to pitch that firm fixed price because the contractor perspective is that is very risky, and there are likely going to be changing requirements. The contractors will want to make the Govt pay for that risk, since they are on the hook for it. All risk is on the contractor. The contractor will also fight for $ for every changing requirement. By comparison, in a time & materials contract, the risk is on the government, and changing requirements don't matter much, if you change them, risk is still on the government. This explains why firm-fixed price is not always the best approach, and sometimes time & materials contracts may make for a more economical acquisition approach - because risk and changing reqs can translate into dollars.
- hinkley 3y ago
  You can't even get your plumber to tell you how much it's going to cost to get your toilet working smoothly again. And you want to get to the moon on a fixed budget? (Which will also require a toilet). Software has the same problems. An unreasonable expectation of being able to predict the future (except the bits they don't want you to know about), and a lot of whining when we run into unexpected issues.
  - FreshStart 3y ago
    It's fixed price as long as it is fixed price territory. Extras are billable by the hour..
  - somewhat_drunk 3y ago
    >(Which will also require a toilet). Haha, nice.
  - ta1243 3y ago
    > And you want to get to the moon on a fixed budget? (Which will also require a toilet). Didn't last time https://www.nbcnews.com/sciencemain/poop-space-revisited-apollo-10s-floating-turds-pop-44-years-1C9284102 https://www.nbcnews.com/sciencemain/poop-space-revisited-apo...
    - hinkley 3y ago
      That's an article about why having a toilet on a space ship is a very, very good idea.
- panick21_ 3y ago
  Those poor defense contractors. For once not able have the governemnt pay for their incompetence. My heart bleeds for the poor souls.
SOLAR_FIELDS 3y ago
Boeing has its own incentive to deliver quickly though in this case. The incentive is that SpaceX is absolutely eating their lunch at this game
arijun 3y ago
My brief search indicates that is wrong: https://arstechnica.com/science/2022/05/nasa-chief-says-cost-plus-contracts-are-a-plague-on-the-space-agency/ https://arstechnica.com/science/2022/05/nasa-chief-says-cost...
- OrvalWintermute 3y ago
  Uncapped cost plus contracts (Time and Materiels contracts) are a plague, but not for the same reason, just like a Firm-Fixed Price contract that moves all risk to the contractor are a plague too, because if the contractor is carrying all the risk, they're going to make the government pay for all that risk (and aerospace engineering is risky). Any contract type where the political leadership can't terminate a contract for cause due to excessive political pressure, or is forced into paying through the nose, is untenable. The solution for that is not Firm Fixed Price or T&M contracts - but instead larger budgets and also multiple award contracts where you have simultaneous efforts competing against each other. When there are 5 options, all having company skin in the game, all as viable paths forward, and 1 option loses out, terminating for cause, enriching the other 4, no harm no foul.
pavon 3y ago
That wasn't the NASA Administrator, Bill Nelson. It was Jim Free, Associate Administrator for Exploration Systems Development[1]. Nelson has been a surprisingly strong supporter of fixed-price contracts, given his background. [1] https://arstechnica.com/space/2023/06/weirdly-a-nasa-official-says-fixed-price-contracts-do-the-agency-no-good/ https://arstechnica.com/space/2023/06/weirdly-a-nasa-officia...

OrvalWintermute 3y ago

There is a different perspective on that from large acquisitions around firm fixed price contracts. If you're doing some low risk building, say a 10 mile road on flat ground with known soil, replacing a previous road, that is well-known to current specs with set-in-stone requirements (no pun intended) it is easy to pitch that firm fixed price because the contractor will know exactly what to do, and there are 20 road building companies that could do the work. Now, building an advanced spacecraft with a host of uncertainties in a vastly more complex environment that may require novel technologies development and a great deal of engineering is very different if you want to pitch that firm fixed price because the contractor perspective is that is very risky, and there are likely going to be changing requirements. The contractors will want to make the Govt pay for that risk, since they are on the hook for it. All risk is on the contractor. The contractor will also fight for $ for every changing requirement. By comparison, in a time & materials contract, the risk is on the government, and changing requirements don't matter much, if you change them, risk is still on the government. This explains why firm-fixed price is not always the best approach, and sometimes time & materials contracts may make for a more economical acquisition approach - because risk and changing reqs can translate into dollars.

hinkley 3y ago
You can't even get your plumber to tell you how much it's going to cost to get your toilet working smoothly again. And you want to get to the moon on a fixed budget? (Which will also require a toilet). Software has the same problems. An unreasonable expectation of being able to predict the future (except the bits they don't want you to know about), and a lot of whining when we run into unexpected issues.
- FreshStart 3y ago
  It's fixed price as long as it is fixed price territory. Extras are billable by the hour..
- somewhat_drunk 3y ago
  >(Which will also require a toilet). Haha, nice.
- ta1243 3y ago
  > And you want to get to the moon on a fixed budget? (Which will also require a toilet). Didn't last time https://www.nbcnews.com/sciencemain/poop-space-revisited-apollo-10s-floating-turds-pop-44-years-1C9284102 https://www.nbcnews.com/sciencemain/poop-space-revisited-apo...
  - hinkley 3y ago
    That's an article about why having a toilet on a space ship is a very, very good idea.
panick21_ 3y ago
Those poor defense contractors. For once not able have the governemnt pay for their incompetence. My heart bleeds for the poor souls.

SOLAR_FIELDS 3y ago

Boeing has its own incentive to deliver quickly though in this case. The incentive is that SpaceX is absolutely eating their lunch at this game

arijun 3y ago

My brief search indicates that is wrong: https://arstechnica.com/science/2022/05/nasa-chief-says-cost-plus-contracts-are-a-plague-on-the-space-agency/ https://arstechnica.com/science/2022/05/nasa-chief-says-cost...

OrvalWintermute 3y ago
Uncapped cost plus contracts (Time and Materiels contracts) are a plague, but not for the same reason, just like a Firm-Fixed Price contract that moves all risk to the contractor are a plague too, because if the contractor is carrying all the risk, they're going to make the government pay for all that risk (and aerospace engineering is risky). Any contract type where the political leadership can't terminate a contract for cause due to excessive political pressure, or is forced into paying through the nose, is untenable. The solution for that is not Firm Fixed Price or T&M contracts - but instead larger budgets and also multiple award contracts where you have simultaneous efforts competing against each other. When there are 5 options, all having company skin in the game, all as viable paths forward, and 1 option loses out, terminating for cause, enriching the other 4, no harm no foul.

pavon 3y ago

That wasn't the NASA Administrator, Bill Nelson. It was Jim Free, Associate Administrator for Exploration Systems Development[1]. Nelson has been a surprisingly strong supporter of fixed-price contracts, given his background. [1] https://arstechnica.com/space/2023/06/weirdly-a-nasa-official-says-fixed-price-contracts-do-the-agency-no-good/ https://arstechnica.com/space/2023/06/weirdly-a-nasa-officia...