WASHINGTON Alliant Techsystems (ATK) says NASA is selectively applying a rarely used contracting rule in an effort to halt work on key elements of the agency's Constellation program, a 5-year-old effort to replace the space shuttle with new hardware optimized for lunar missions that the White House has proposed canceling next year.
NASA asserts the Constellation program is facing a potential $1 billion funding shortfall in the remaining four months of the current budget year because contractors have not accurately accounted for termination liability costs they could incur as a result of having to cancel orders, vacate leases and pink-slip employees if the program is shut down. But Magna, Utah-based ATK Aerospace, prime contractor on the first stage of the Ares 1 rocket ? a key Constellation program element says that historically, termination liability funds have not been included in contractor costs.
"NASA has chosen to create this funding shortfall by changing its decades-long management practice with respect to termination liability," Brian Wagner, ATK director of congressional relations, said in a June 10 e-mail to lawmakers and staff. "ATK was specifically instructed on numerous occasions throughout the history of both Shuttle and Ares contracts not to account for termination liability costs in any accounting we have made for NASA on these contracts."
ATK builds the giant solid-rocket motors for the soon-to-be-retired space shuttle, and variants of these motors would boost the Ares 1 and larger Ares 5 rockets.
Wagner's e-mail came one day after NASA Administrator Charles Bolden told Congress in a letter that slowing down work on Constellation to cover the looming cash shortfall could result in "contractor workforce reductions estimated at 30-60 percent of the current population, or 2,500-5,000, for the balance of the year."
But ATK, which has roughly 1,500 employees assigned to Constellation, asserts the funding shortfall is contrived.
"If NASA had continued to operate for the remainder of [fiscal year 2010] under the same practices it has used for decades, instead of suddenly and drastically changing their approach to termination liability with only four months remaining in the fiscal year, there would be no funding shortfall at all, and it would be completely compliant with Congressional direction," Wagner wrote in the e-mail.
Moreover, the e-mail claims, "there would be a $3 million surplus by NASA's own estimates, for the Constellation work planned" during the year.
Bolden's letter said NASA is confronting an estimated $994 million in potential costs associated with ending Constellation, which in addition to the Ares rockets includes the Orion crew capsule and other systems needed to replace the space shuttle and eventually return astronauts to the Moon. Orion is being developed by Denver-based Lockheed Martin Space Systems.
"Once these termination liability estimates are accounted for, the overall Constellation program is confronting a total estimated shortfall of $991 million for continued program effort for the balance of the year, compared with the revised FY 2010 plan," said Bolden's letter, which was sent to key House and Senate lawmakers including Rep. Bart Gordon (D-Tenn.), chairman of the House Science and Technology Committee, and Sen. Bill Nelson (D-Fla.), who chairs the Senate Commerce science and space subcommittee. "Under the Anti-Deficiency Act, NASA has no choice but to correct this situation."
NASA officials say contractors are bound by a boilerplate clause included in most agency contracts to set aside current-year program funds to cover potential termination liabilities.
"NASA funds contracts and the prime contractors manage that funding, which include potential termination liability," NASA spokesman Bob Jacobs said in a June 11 e-mail. "This is not a new practice. We simply cannot dedicate funds to contractor costs above and beyond the amount legally allotted to those agreements. We have no option but to take steps that put us in alignment with appropriations law."
In his letter, Bolden told lawmakers that given the estimated funding shortfall, "the Constellation program cannot continue all of its planned FY 2010 program activities within the resources available."
Bolden said NASA would "generally provide no additional funding" for development of Ares 1's first stage, and would "descope remaining contracts, and reduce support contractor levels."
In contrast, the letter said Orion, originally designed to launch atop the Ares 1, would get top priority for available funding as NASA determines how best to develop a slimmed-down version of the capsule for use as an emergency lifeboat at the international space station. Privately, NASA officials have said that development effort could cost $5 billion to $7 billion.
The letter said secondary priority would be assigned to continuing work on the J-2X, an engine designed by Canoga Park, Calif.-based Pratt & Whitney Rocketdyne to power the second stage of the Ares 1 and heavy-lift Ares 5 rockets. NASA recently was tasked by the White House to settle on an alternative heavy-lift rocket design by 2015, and several of the options being studied would utilize the J-2X in some capacity, according to briefing charts that NASA exploration chief Doug Cooke presented to congressional staff members in May.
In addition to the slowdown for Ares 1, the letter said $89 million for Constellation ground operations would be cut, reducing "support contractor levels, task order scope and, operating cost. Effort will be made to preserve work to enable flight test strategy but with schedule impact."
Other areas to be scaled back include the work on Constellation's extravehicular activity suit and on program integration, according to the letter.
Several influential lawmakers oppose the White House's plan to cancel Constellation, and Congress last year passed appropriations legislation barring NASA from doing so until a replacement program is approved by Capitol Hill. Bolden's letter sparked outrage among some lawmakers, notably Sen. Richard Shelby (R-Ala.), who said NASA is ignoring that legislation.
"NASA's leadership has taken another step to cede America's leadership in space exploration," Shelby, whose state stands to lose jobs if the Ares rockets are canceled, said in a June 10 e-mail to Space News. "NASA is reprioritizing funding based on a future budget that has not been supported, or approved, by Congress."
Sen. Kay Bailey Hutchison (R-Texas) also accused the agency of skirting the 2010 law.
"For months, NASA's leadership has claimed they are not working to subvert Constellation, despite information to the contrary," she said in a statement issued by her office June 10.
Meanwhile, Gordon and other top lawmakers on the House Science and Technology Committee have given NASA until June 16 to flesh out cost and schedule estimates for a slimmed-down version of Orion.
Jacobs, the NASA spokesman, said the agency is working to give the committee the information it seeks on the Orion lifeboat's cost and schedule as well as whether the agency would modify Lockheed Martin's Orion prime contractor put the project out for bid.
"We will work to provide the requested budgetary information as requested by the Committee leadership," Jacobs said June 10. "There is an internal team within Exploration Systems making the Orion assessments."
The House Science and Technology Committee's request, made June 10 in a letter to Bolden, comes as the oversight committee drafts legislation authorizing NASA programs and spending levels for at least the year ahead.
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