NASA to Clarify Regulations on Entering into Anchor Tenancy Agreements

In a potential boost for commercial space, NASA is proposing changing its federal acquisition regulations to allow it to enter multi-year anchor tenancy contracts for commercial space goods and services.

The notice in the Federal Register states:

Anchor Tenancy is defined as “an arrangement in which the United States Government agrees to procure sufficient quantities of a commercial space product or service needed to meet Government mission requirements so that a commercial venture is made viable.”

NASA’s FAR Supplement currently includes an incorrect statement that anchor tenancy contracts are not permitted. This proposed rule removes that statement, consistent with NASA’s authority under Section 401 of the Commercial Space Competitiveness Act (CSCA) of 1992 (15 U.S.C. 5806) which provides authorization for NASA to enter into multi-year anchor tenancy contracts for commercial space goods or services.

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. In accordance with Executive Order 13563, Improving Regulation and Regulatory Review, dated January 18, 2011, NASA determined that this rule is not excessively burdensome to the public, and is consistent with the administrative nature of rule. This is not a major rule under 5 U.S.C. 804.

This proposed rule is not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. because it does not impose any new requirements on small entities.

Under the Commercial Space Competitiveness Act, anchor tenancy contracts can be approved in NASA’s Administrator determines that:

(1) The good or service meets the mission requirements of the National Aeronautics and Space Administration;

(2) The commercially procured good or service is cost effective;

(3) The good or service is procured through a competitive process;

(4) Existing or potential customers for the good or service other than the United States Government have been specifically identified;

(5) The long-term viability of the venture is not dependent upon a continued Government market or other nonreimbursable Government support; and

(6) Private capital is at risk in the venture.

The act also requires that “such contracts shall provide for delivery of the good or service on a firm, fixed price basis.”

  • Dave Huntsman

    This is a clear step forward; too often working within the agency I’ve had my hand figuratively slapped for suggesting various ‘anchor tenancy’ scenarios that would help in the creation of new, competitive, American-led, job-creating commercial space industries.

    There is an additional re-interpretation that needs to be made, which I’m afraid may require inclusion in a future NASA Authorization Bill. Currently, the law requires that anchor tenancy requires:
    “(1) The good or service meets the mission requirements of the National Aeronautics and Space Administration;”

    What has become clear to me is that the Agency continues to interpret this requirement in this way: that some INTERNAL, NASA-owned space mission; such as for a particular spacecraft program (e.g., ISS), must have requirements that are met, or else NASA can’t do the anchor tenancy. The Agency chooses to NOT consider that one of NASA’s missions, as a US government agency, is to assist in the creation of new US industries; something supported by last year’s NASA Authorization bill. In other words, unless you can attach said agreement solely to a specific NASA spacecraft program requirement, just being the right thing to do for the country’s efforts in and its competitiveness in space is not good enough.

    That is not the correct interpretation – in my opinion; but it is the current NASA interpretation: NASA can’t do something like this to help jump start a new US space industry unless a NASA-owned space mission requires it. This is in violation of the National Space Policy and law – in my view – and the next step should be for NASA to re-interpret their interpretation (!). If the agency continues to refuse to do so – continues to refuse to accept that helping to jump-start new US-dominated space economies, and the jobs that come with them, is one of its ‘missions’ in life – then the next Congressional Authorization should make it clear for the agency.