Palazzo Vision: SLS and Orion…Now and Forever More

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Continuing our look at the House’s spending plan for NASA, this edition of “Palazzo Vision: $3 Billion is Not Enough” examines provisions that would prevent NASA from ever canceling the Space Launch System (SLS) and Orion without prior Congressional approval while immediately freeing up hundreds of millions of dollars more to spend on the two programs.

The NASA budget bill marked up by the House Subcommittee on Space on Wednesday would accomplish these goals through changes in terminal liability funding provisions. This funding is set aside in reserve by prime contractors to cover costs should the government decide to cancel a program in the future.

“Contractors are currently holding program funding, estimated to be in the hundreds of millions of dollars, to cover the potential termination liability should the Government choose to terminate a program for convenience,” the bill reads. “As a result, hundreds of millions of taxpayer dollars are unavailable for meaningful work on these programs.”

With the House deeming SLS, Orion and the International Space Station too crucial to NASA’s deep space exploration to ever be canceled, it has mandated the following actions:

  • declaring void provisions relating to termination funding in any existing prime contracts;
  • prohibiting NASA from including termination liability provisions in any future prime contracts;
  • preventing NASA from terminating programs for convenience without Congress first passing a law approving the action.
  • requiring that the NASA Administrator “notify the Committee on Science, Space, and Technology of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate before initiating termination for cause of a prime contract.”

If sufficient funding is not available to cover termination costs on a program, Congress would have to authorize additional appropriations.

This is a significant shift of power away from the Executive branch toward Congress. And it would pretty much prevent the Obama Administration — and any of his successors — from canceling these programs in the future.

The House believes freeing up funds is essential because the SLS and Orion aren’t making sufficient progress on the $3 billion dollars plus construction funding they receive every year.

“While the Space Launch System and the Orion programs, currently under development, have made significant progress, they have not been funded at levels authorized, and as a result congressionally authorized milestones will be delayed by several years,” the bill reads.

And, in any event, NASA doesn’t terminate very many contracts.

“According to the Government Accountability Office, the Administration procures most of its goods and services through contracts, and it terminates very few of them,” according to the bill. “In fiscal year 2010, the Administration terminated 28 of 16,343 active contracts and orders—a termination rate of about 0.17 percent.”

In 2009, the Obama Administration canceled NASA Constellation program — which included Orion and the Ares I and Ares V launch vehicles — citing severe cost overruns, significant schedule delays, and insufficient budgets to sustain them.

The Administration and Congress later compromised, canceling the smaller Ares I rocket but saving Orion. The heavy-lift Ares V has morphed into SLS.

Editor’s Note: Article updated at 12:30 pm PDT to reflect the inclusion of ISS among the programs covered by the provisions. Also added additional text to distinguish between the cancellation of programs for convenience and for cause.

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