February 21, 2018
Dr.Mary Lynne Dittmar, President & CEO, Coalition for Deep Space Exploration.
Testimony before the National Space Council, NASA Kennedy Space Center
Mr. Vice President, members of the National Space Council, Executive Secretary Pace, thank you for inviting me to speak on “Entrepreneurship and Economic Expansion on the Next Frontier”. Entrepreneurial risk-taking and innovation are without doubt engines for economic development in space, beginning in low Earth orbit and expanding toward the Moon. At the same time, government programs such as the Space Launch System, the crew vehicle Orion, and the ground systems necessary to support both government and industry provide much-needed infrastructure for future economic development. Even more importantly they maintain national constancy of purpose as a signal to other governments of the U.S.commitment to leadership in space.
As has already been discussed the nature of the policy and regulatory frameworks guiding our collective efforts is crucial. I would like address the “third rail” – acquisition reform. The fiscal, programmatic, reporting and management burdens associated with the often-glacial pace of traditional contracting can hardly be overstated. Of more importance – even alarm – the slow nature of government procurements creates barriers to technological advancement, posing a threat to our national security and leadership.
This is not to say traditional contracting should be abandoned. For example, costplus contracts for managing large-scale development programs provide stability, reduce industry risk and ensure sustainment of the U.S. industrial base over years or decades often required for these programs. That said the means to leave the starting gate with far more agility than currently exists, as well as renewed mechanisms for accountability and constraints on schedule and cost growth, are of primary interest in reform.
Other Transactional Agreements represent a different approach not subject to the oversight required of federal contracts. OTAs provide flexibility but also increased risk of reduced accountability and transparency. For this reason the vast majority are of relatively low value. Notable exceptions include the Commercial Orbital Transportation System or COTS, and the Commercial Crew Development program. During COTS, the government invested a substantial portion of the costs and left development in the hands of private enterprise. The resulting systems were
developed at much less cost to the government than a traditional cost-plus contract would have achieved. The story is less clear with crewed systems, however, wherein the balance between contractor discretion, government insight, and the risk to human lives continues to be debated.
I turn next to Public Private Partnerships or “P3s”, which have advanced both the “A” and “S” in NASA, Aeronautics and Space. P3’s take many forms: Subsidies, government-backed loans, government-owned contractor-operated entities, repurposing of public assets – just to name a few. The success of P3s hinges on informed allocation of risk to each side of the partnership, a realistic business case – an indispensable requirement – and the means to incentivize business to align private objectives with the public interest. As a path forward into deep space, P3s
carry much promise, but as on Earth they require a carefully thought out set of requirements, processes, and objectives.
Each of these models attempts to balance risk, discretion, cost, incentives, and mission objectives in different ways. I cannot say this strongly enough: Decisions regarding which approach is best for a given objective cannot be driven by ideology – whether political or philosophical in nature. Rather, an acquisition framework that drives successful program development and execution, encourages private investment and market-driven solutions, and maintains the ability to adapt to always-changing external realities, should be our collective goal.