NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
ACCOMPANYING REPORT OF
THE NATIONAL PERFORMANCE REVIEW
OFFICE OF THE VICE PRESIDENT
Washington, DC
September 1993
Executive Summary..........................................1
Recommendations and Actions
NASA01: Improve NASA Contracting Practices.................5
NASA02: Increase NASA Technology Transfer Efforts
and Eliminate Barriers to Technology Development..11
NASA03: Increase NASA Coordination of Programs with
the U.S. Civil Aviation Industry..................17
NASA04: Strengthen and Restructure NASA Management........19
NASA05: Clarify the Objectives of the Mission to
Planet Earth Program..............................25
Agency Reinvention Activities.............................29
Summary of Fiscal Impact..................................37
Appendix
Accompanying Reports of the National Performance Review...41
Abbreviations
ADP Automated Data Processing
AO Announcement of Opportunity
CPAF Cost Plus Award Fee
CRA Cooperative Research Agreement
DOD Department of Defense
DOE Department of Energy
DTC State Department Office of Defense Trade
Controls
EOS Earth Observing System
EOSDIS Earth Observation System Data and
Information System
FMFIA Federal Managers' Financial Integrity Act
FOIA Freedom of Information Act
FTE Full-Time Equivalent
GCDIS Global Change Data and Information System
GSA General Services Administration
ITAR International Traffic in Arms Regulations
KSC Kennedy Space Center
LAB Laboratory
MTPE Mission to Planet Earth Program
MSFC Marshall Space Flight Center
NACA National Advisory Committee for Aeronautics
NASA National Aeronautics and Space Administration
NMI NASA Management Instruction
NOAA National Oceanic and Atmospheric Administration
NPR National Performance Review
NSDD National Security Decision Directive
OMB Office of Management and Budget
PL Public Law
PMC Program Management Council
R&D Research and Development
RPV Remotely Piloted Vehicle
RTOP Research and Technology Objectives and Plans
TOMS Total Ozone Mapping Spectrometer
TQM Total Quality Management
USGCRP U.S. Global Change Research Program
VMV Vision-Mission-Values Statement
The National Aeronautics and Space Administration (NASA) was established in 1958 in response to the Soviet challenge in space. However, the realities of the Cold War that shaped NASA's mission no longer exist. Today, NASA and many other federal agencies are reconfiguring themselves to meet the realities of the 1990s. Both NASA's missions and its methods are changing in response to increasing global competition in the high technology arena and decreasing federal resources.
Today, NASA and other government agencies struggle to be constructive players in an era of new national and global challenges and corresponding political imperatives. Increasing congressional oversight, annual or biannual budget cycles, and centralized administrative controls all impose frequent accountability and political mediation on already overburdened government agencies.
Until now, a compelling and encompassing purpose for NASA comparable to that which challenged the agency in the early 1960s has been elusive. NASA needs to develop a mandate much like that of the 1960s to draw NASA scientists and engineers again toward a single purpose. NASA's commitment to fulfill Mission to Planet Earth represents an important aspect of NASA's broad commitment to enhance the quality of all human life through scientific endeavors. To prepare for the challenges of the 21st century, NASA is also committed to staying at the forefront of technology development through its pursuit of the humans in space program, aeronautical science, cutting-edge technologies, transfers of those technologies to industry, and the search for commercial applications of its programs wherever possible.
The National Performance Review (NPR) has worked closely with NASA to explore innovative ways for the agency to clarify its missions and strengthen its management. Ultimately, NPR and NASA found ways to reduce bureaucracy, cut costs, and improve efficiency. The NPR has identified five issues for discussion in this report, and made recommendations for further action. These issues and recommendations highlight fundamental concerns facing the agency, as well as key reinvention principles.
To get the best possible return on the taxpayer's dollar and to overcome the red tape that seriously inhibits NASA from effectively competing in a fastpaced technological arena, the NPR encourages NASA to use performance-based contracts, to contract wherever possible for data instead of hardware, and to use cooperative research agreements to effectively exploit high-performance computing technologies. These recommendations should allow NASA to benefit from market dynamics by becoming a more viable competitor.
In the face of legal and administrative obstacles that often discourage industry from working with government to develop technologies, the NPR recommends: (1) temporary protection for certain data collected from joint NASA-industry research and development (R&D) activities; (2) faster reviews of technology export applications; and (3) expanded technology transfer activities that encourage, instead of discourage, R&D partnerships. NPR also supports NASA in its initiatives to develop a stronger relationship with the U.S. civil aviation industry to maintain U.S. leadership in the global aeronautics arena.
The NPR also recommends that NASA apply the management principles developed for the redesigned space station program agencywide. Therefore, the NPR encourages NASA in its efforts to restructure program management to reflect the agency's strategic plan, to identify facilities actually needed, and to initiate staff reductions. Since the Mission to Planet Earth Program (MTPE) represents a major investment in a long-term research program, NASA must take steps to ensure that the program is properly managed to provide the greatest possible benefit to this country and the international community.
NASA has an ongoing program to restructure itself. These efforts have taken on a greater impetus with the advent of the NPR. The NASA reinvention labs initiated reforms in management, procurement, the MTPE program, and shuttle and payload processing at the Kennedy Space Center.
The post-Cold War highly competitive technological era provides NASA with a compelling opportunity to combine the strengths that led to the dramatic technological advances of a decade ago with the wisdom required to maintain this nation's leadership in the global arena. Through MTPE, one of NASA's highest priority programs, the agency will take the lead in greatly expanding human understanding of the earth's environment using the unique perspective of space and high-altitude atmospheric vehicles. NASA, restructured for the 1990s and beyond, will stay on the forefront of a continual commitment to humans in space, pursue aeronautical science and cutting-edge technologies, contribute new knowledge and tools to enhance the nation's society and economy, and achieve these goals effectively and efficiently.
NASA01:
Improve NASA Contracting Practices
BACKGROUND
The National Aeronautics and Space Administration
(NASA) was established to advance scientific and
technological knowledge in the areas of aeronautics
and space. NASA relies heavily on contracting with
U.S. industry to achieve these objectives. Like other
federal government agencies, NASA operates under
federal acquisition laws and regulations. Unlike many
other federal agencies, however, NASA routinely
contracts for large, highly sophisticated items which
push the state of the art. Contracting in an
environment of global competition where contractors
are to perform at the cutting edge of technology has
proven to be problematic.
President Clinton and Vice President Gore are encouraging agencies to "use performance-based contracting strategies that give contractors the design freedom and financial incentive to be innovative and efficient."[Endnot 1] In response, NASA is revising its procurement procedures to acquire new technologies in a more timely manner and to get the best value for taxpayers' money. Contractors must be motivated to submit workable and affordable solutions to NASA's requirements instead of attractive promises that cannot be kept.
For each procurement, NASA should ensure the selection of the appropriate contract type and the negotiation of the appropriate terms and conditions, and follow through with vigorous post-award program and contract management. Three specific areas where NASA has opportunities to implement innovative acquisition approaches are: (1) more effective use of award fee contracts with positive and negative incentives; (2) contracting for data instead of hardware; and (3) using cooperative research agreements to exploit more quickly high-performance computing techniques.
NASA spends approximately 76 percent of its procurement budget ($13.4 billion in fiscal year 1992) on cost-plus-award-fee (CPAF) contracts. While CPAF contracts can be a useful method for meeting the agency's needs, they require large amounts of NASA administrative resources to manage. The CPAF contracts have generally placed too little emphasis on cost control or reduction, and they have sometimes resulted in high fees relative to actual performance. Finally, they have been used when other types of contracts would have been more appropriate.
CPAF contracts at NASA do not provide sufficient
incentives for contractors to deliver quality
products or services on time and within budget. In
addition, award fee evaluations have not always been
tied closely to contractor performance, including
performance of hardware after acceptance by NASA. As
a result, performance was not considered and NASA
assumed all the risk associated with delivery of
products or services, including any cost overruns.
According to NASA, in the past some CPAF contracts
guaranteed a substantial fee payment, called a base
fee, regardless of how the contractor performed.
Since payment is not linked to contractor
performance, this approach removes much of the
leverage that NASA has to ensure that
performance.[Endnote 2] More recently, NASA and other
agencies have successfully negotiated a number of
contracts without base fees.[Endnote 3]
Changes to the current award-fee contracting methods are being developed by NASA. These changes fall into two categories: (1) selection of contract type; and (2) improvements in how CPAF contracts are structured and managed once they are determined to be the proper type of contract to use.
In the acquisition process, one of the key decisions that has to be made is the selection of the type of contract to be used. Both the allocation of risk and the degree of government involvement in the performance of the contract are determined by the type of contract. Therefore, the first change in the new NASA award fee policy should be to re-emphasize the importance of the selection of contract type and to restrict the use of CPAF contracts to those situations where they are the most appropriate type of contract to be used.
If it is determined that a CPAF is the most appropriate type of contract, then the following changes in the process should be made: (1) evaluation and payment of award fee should be based on overall contractor performance (not on an interim activity as most current award-fee contracts are); (2) greater importance should be placed on cost control in determining the overall contractor award fee earned; (3) more accurate evaluations of actual contractor performance should be made; (4) use of base fee should be limited; (5) no payment of any fee should be made under an award-fee contract when the contractor's overall performance is unsatisfactory; and (6) positive and negative performance incentives on hardware contracts should be used to provide payments of additional fees to contractors for superior performance of an item in use by NASA, and refund fees earned where the actual performance of the item is substandard.
Currently, in cost-reimbursement research and development (R&D) contracts, the government assumes all risk of failure or substandard performance, except for that due to the fraud or willful misconduct of senior company officials. If the contractor damages an item or produces a defective item through poor workmanship, the government (not the contractor) pays to fix it. NASA published a concept paper in the Federal Register in March 1993 which outlined concerns about this allocation of risk, and ideas for sharing risks between NASA and its contractors on a more equitable basis. Public comments have been reviewed and a draft policy on contractor liability is ready for publication.
Performance-based contracting essentially focuses the contract on what the government needs, not on how the contractor meets the need. While this concept is an integral part of the award-fee improvements discussed above, it can be more fully implemented by considering the use of other types of contracts. The Office of Management and Budget (OMB) is generally encouraging NASA to move as much as feasible toward contracts that allow full implementation of performance-based approaches.[Endnote 4]
One possible application of performance-based contracting at NASA is the acquisition of data instead of the hardware needed to produce the data. NASA is hopeful that this will prove to be a more cost-effective approach to acquiring some types of data. When acquiring data, NASA can act more like a commercial customer. The contractor can be left to design, build, launch, and operate a satellite with little government oversight, thus saving both parties money. NASA can specify the types of data it wants more easily than it specifies the hardware needed to produce the data, thus simplifying the contract and associated negotiations.
The contractor assumes more risk under an arrangement of this sort and, therefore, would demand more profit. However, the total cost should be less as a result of efficiencies and innovations stemming from competition and financial incentives. In addition, there may be significant commercial opportunities offering potential economies of scale and incentives for the contractor to assume more risk.
Given the fast pace of high-performance computing technologies and the global ramifications for technological competitiveness, innovative approaches should be available to federal agencies to foster the enhancement of U.S. industrial competitiveness in these key technology areas. However, traditional contracting processes for government agencies are often not quick enough to acquire these state-of-theart technologies in a timely manner.
To deal with this problem, NASA has developed a new solicitation instrument, the Cooperative Research Announcement (CRA). This approach awards cooperative agreements after competition among educational institutions, nonprofit organizations and for-profit companies. This marks the first time that NASA has used a solicitation of this type for cooperative agreements and the first time NASA has extended the use of cooperative agreements to for-profit companies.
Through CRAs, NASA can promote collaborative efforts
on high-performance computer systems, and stimulate
alliances that would foster the movement of research
results into the marketplace in such a manner that
U.S. competitiveness is enhanced. The use of CRAs can
also promote test beds with high levels of expertise
in computational aerospace. These test beds would
provide opportunities for feedback among highperformance
computing systems and applications
designers, developers, and users. Finally, expanded
use of CRAs will increase technology sharing between
government and industry.
ACTIONS
This performance-based contract policy ensures that the contractor would receive interim payments that are provisional until the end of the contract, when the contractor's performance as a whole can be evaluated, and the amount of fee the contractor is paid can be determined by its overall performance. Performance-based contracts would be used when a definitive product, such as hardware, is to be delivered under the contract. Contractors would be rewarded for a product's superior demonstrated performance, but would pay the government back a predetermined fee if the demonstrated performance fails to meet contract requirements. This policy would generally eliminate base fees in contracts. NASA would be assured of receiving high-quality products for its dollars, would place more risk with contractors, and would use contractors' performance to determine award fees.
2. NASA and other government agencies should consider contracting out for data instead of hardware.
Agencies requiring straightforward data sets can significantly cut costs and save considerable time by purchasing data instead of the hardware to produce the data. Although such data purchases do not fit all data requirements, they do represent an approach that should be more widely explored by the scientific and technical community.
3. NASA should extend the use of its CRA solicitation instrument to for-profit, as well as nonprofit and educational organizations to exploit new highperformance computing technology more quickly.
The new competitive solicitation process to fund cooperative research programs in high-performance computing should help ensure the continued leadership and competitiveness of the United States in this field. Consistent with the High-Performance Computing Act of 1991, the objective of the CRA would be to hasten the development of high-performance computing systems capable of performing computational research on "Grand Challenge" problems--those fundamental problems in science and engineering that require the applications of high-performance computing to solve (e.g., modeling global weather systems).[Endnote 5] By stimulating research on software technology, the development of software applications, and increased collaboration with government, industry, and university institutions, the CRA would promote the earliest access to leading-edge technology and encourage continued U.S. leadership in highperformance computing.
IMPLICATIONS
The use of performance incentives for award-fee
contracts does not require changes to any law. The
Schumer Amendment to the fiscal year 1993 NASA
Authorization Act directed the NASA administrator to
assess the allocation of risk between NASA and its
contractors, and to identify options for increasing
contractors' share of risk, including the use of
positive and negative fee incentives. The performance
incentives included in the award-fee policy implement
current administration policy on performance-based
contracting and are designed to address congressional
concerns.
Industry feels that performance-based incentives are inappropriate in a cost-reimbursement environment where a lot of cost and technical uncertainty exists. However, NASA expects few, if any, contractors to not bid as a result of negative incentives and, based on past experience, no reduction in bidders has resulted from the elimination of base fees. NASA points out that the contractor's performance determines whether or not it earns a performance incentive. In addition, on R&D contracts, the contractor is guaranteed to receive full cost recovery but may have to forfeit the award fee.[Endnote 6] Negative contracting incentives are outweighed by the opportunities that the positive incentives offer for substantial awards.
NASA will work closely with contractors to implement these policies. It is anticipated that when all participants understand the details of implementation, contractors' performance will be positively influenced.
In appropriate circumstances, the purchase of data instead of hardware used to produce data can reduce the costs and the time spent by the agency. It would generally be necessary for NASA to negotiate a schedule of cancellation payments that would be made to the contractor to cover its investment in case the government prematurely cancels the contract. [Endnote 7] This is a risk the contractor cannot manage. In addition, the contractor may seek to negotiate for substantial prepayments before, for example, a satellite is even launched. In that case, should the project not be completed or should the equipment fail to provide the type or quantity of the data promised, the government may have difficulty seeking return of those payments. However, NASA can make it clear in the solicitation that offerors will not receive prepayments and that the contractor will have to privately finance design, construction, and launch--i.e., until data that meets contract requirements are delivered.
In a traditional situation where NASA awards a costreimbursement contract for design and construction of a satellite, the contractor is guaranteed reimbursement of costs, and NASA makes periodic payments as the work is performed. Therefore, NASA does not have the option of not paying costs if the system does not produce the data required. Of course, in a traditional situation, NASA relies primarily on oversight to ensure mission success.
When expanding the use of CRAs to include for-profit organizations, larger sums of money are involved and more is at stake. Such agreements will have to be written to ensure accountability to the taxpayer. As these agreements become more common, there may be a tendency to add regulatory constraints that would slow down the process. Should CRA objectives begin to reflect the agency's mission, critics may argue that NASA should make awards applying all the protections that accompany a procurement contract.
It is important to note that, in accordance with the Federal Grants and Cooperative Agreements Act, CRAs may only be used to "carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring property or services for the direct benefit or use of the United States Government . . ."[Endnote 8] These recommendations will control program costs, streamline bureaucratically encumbered processes, and promote the interests of U.S. industry during this crucial period of intense international competition.
FISCAL IMPACT
Savings for these recommendations are difficult to
quantify. In fact, the benefit from streamlining the
procurement process and revising contract structure
is most likely to be cost avoidance in the future. A
new award fee structure is being implemented which
will emphasize cost and technical performance through
the use of improved award fee procedures. All
hardware contracts with estimated values over $25
million will include both positive and negative
performance incentives. Superior performance in
meeting cost and performance specifications will be
rewarded. However, if the product fails to perform
according to contractual requirements, the contractor
will have to reimburse the government up to the total
amount of available award fee. That amount would vary
from contract to contract and cannot be quantified.
Increase NASA Technology Transfer Efforts and Eliminate Barriers to Technology Development
BACKGROUND
The government's ability to transfer technology
effectively to the private sector and promote
technology development for the benefit of both
government and commercial users is hampered by
various administrative, legal, and other obstacles.
Though the government maintains invaluable resources,
both physical and intellectual, that can be of
considerable benefit to industry and the general
public, these resources are not being used to their
fullest potential. Existing impediments provide
disincentives for the private sector to invest in
technology development, either independently or in
conjunction with government researchers.
For example, the protection of commercially sensitive information and the preservation of intellectual property have been raised in many areas as an obstacle to industries' pursuit of cooperative research and development (R&D) with the government. For the National Aeronautics and Space Administration (NASA), the protection of these forms of property has been dealt with through the use of an untested contract clause which provides limited exclusive rights to private companies that work with NASA on specific technology projects.
Attorneys in NASA's Office of the General Counsel recognize that the protection under this clause may be subject to legal challenge. Consequently, some private companies have been hesitant to initiate agreements for fear of Freedom of Information Act (FOIA) requests for the information from outside groups, including foreign and domestic competitors. In private industry, compromising the results of R&D can have disastrous effects because those results often form the basis of a company's future plans. Other agencies, such as the Departments of Defense and Commerce, are granted the authority through their enabling legislation or the use of other statutes to withhold commercially sensitive information received during joint R&D with industry. NASA currently does not have such authority, but should.
Long delays and uncertainties in obtaining export licenses are considered two of the leading complaints of U.S. high-technology firms. This concerns NASA as it seeks to expand international cooperation in aeronautics and space. In high-tech international competition, the ability of the United States to compete effectively is directly related to its ability to export new technologies in a timely way. Currently, these complaints are directed at the State Department. In the past, similar complaints were lodged against the Commerce Department's Bureau of Export Administration. However, the implementation of National Security Decision Directive (NSDD)-53, which required Commerce to review technology export requests within a specific time period, streamlined that process and significantly reduced such criticism against Commerce. However, the State Department is not covered under NSDD-53, and it has been criticized by many groups for long delays in approving technology exports.[Endnote 1]
Since NASA's creation in 1958, its R&D efforts have resulted in innumerable technical spinoffs to the commercial sector in areas such as computer technology, health and medicine, and public safety. [Endnote 2] However, NASA's efforts to perform technology transfer activities have been hindered by funding restrictions, as well as an agency culture which results in disincentives for its own laboratories and contractors to consider such opportunities. This reluctance has been based, in part, on concern that NASA might implicitly develop a form of industrial policy that could be perceived as selecting winners and losers in a commercially competitive arena. The result has been the institutionalization of a research and development program at NASA which does not focus on commercial applications. In fact, NASA's official mission statement and Research and Technology Objectives Plan offer no commitment to working cooperatively with industry or conducting specific technology transfer activities. NASA also has few metrics (performance measures) by which to assess the success or failure of its technology transfer efforts.
In response to administration priorities, NASA has taken steps towards working more closely with industry. However, to solidify these activities as a necessary component of its mission, institutional changes are necessary to consider and pursue aggressively technology transfer opportunities.
NASA has planned $137.5 million in fiscal year 1994 for a New Technology Investments Program for the purpose of strengthening technology development for the U.S. space and aeronautics fields. In order to ensure that these funds are spent in the most efficient manner ensuring sufficient industry participation and direction, NASA will need to streamline its administration of this program through the use of new, innovative management practices.
Based on the above discussion, key findings include: (1) the private sector is inhibited from working cooperatively with government due to fears concerning the safety of intellectual property; (2) the State Department's review of technology export requests is unnecessarily lengthy; and (3) NASA's technology transfer mission should be clarified and the necessary incentives adopted, to pursue aggressively technology transfer opportunities.
ACTIONS
NASA should develop a more permanent resolution to this issue based on the similar exemption currently afforded the Department of Defense (DOD). Under 10 U.S.C. 130, DOD is granted authority to withhold specific kinds of data from FOIA requests. NASA should develop a legislative proposal to amend its authorizing legislation in a manner which would allow for the temporary (five years) denial of FOIA requests for certain types of technical data. This proposal will strengthen NASA's ability to protect technical data generated in the performance of experimental, developmental, or research activities conducted in whole or in part by NASA. It is expected that industry may take increased interest in working cooperatively with NASA once they know that data developed during joint research efforts will not be subject to immediate disclosure to any interested party under FOIA. The legislative proposal drafted by NASA should be reviewed by the Justice Department, the Commerce Department's Patent and Trademark Office, and the Office of the United States Trade Representative prior to submission to Congress.
2. The State Department should publish a notice in the Federal Register to establish its goals for expediting the processing of export license applications.
Space and aeronautics are no longer a domestic concern confined to a few countries. If the United States is to advance its position in these areas, it should normalize its international trade in the associated technologies.
The Department of State should issue a notice in the Federal Register by December 30, 1993, to establish a policy to review all export applications within a fixed period. The review period should be set according to the various categories of applications. For applications not requiring review beyond the State Department's Office of Defense Trade Controls (DTC), the goal for a decision should be 10 days. For reviews requiring interagency review, the goal for a decision by DTC will be a total of 40 working days, beginning with the date the application is received in DTC.
If interagency resolution cannot be reached within a 40-day time period, the issue should be referred to the State Department's Deputy Assistant Secretary for Export Controls for prompt resolution. Agencies would have five working days to register an appeal to the Deputy Assistant Secretary's decision. Such a written appeal would be directed to the Assistant Secretary of State for Political Military Affairs. He/she should make a decision within 10 working days after receipt of the appeal. However, in keeping with the established government review process, the Assistant Secretary's decision could be appealed further and reviewed at an interagency meeting chaired by the Under Secretary of State for International Security Affairs. In the event that an interagency consensus still could not be reached, the Secretary of State would chair a cabinet-level meeting on the issue. The Secretary of State would make the final decision in accordance with Executive Order 11850, unless the President would decide to do so personally.
3. NASA's technology transfer activities should be expanded through implementation of the following measures:
--NASA centers should provide technology transfer training for all employees. This should include information regarding effective outreach to potential customers, partnership techniques and the construction of agreements, legal aspects, employee rights and responsibilities, and rewards and incentives.
--NASA should devote 10 to 20 percent of its budget to R&D partnerships with industry. This would require NASA to work cooperatively with trade associations, professional societies, and other organizations to identify opportunities and influence NASA's technology investment strategies.
--NASA's Research and Technology Objectives and Plans (RTOPs) should be modified to include a statement requesting that NASA centers give strong consideration to partnership arrangements with the commercial sector in conducting the NASA R&D program. These partnerships should result in commercial applications of the resulting R&D, creating new products, processes, and services.
--NASA should grant its centers and center directors and/or project managers more flexibility in funding technology transfer opportunities. One percent of each center's R&D project budget should be set aside by the center director to be used solely for technology transfer opportunities emanating from such projects or for funding activities leading to the commercial application of other technologies developed at the center. Alternatively, the center directors could use existing flexibility in reprogramming resources within or across their technology development programs, such as RTOPs, to achieve the same results, provided the overall level of technology transfer activity thus funded is commensurate with the 1 percent set aside.
--NASA should establish clear and sensible metrics to measure its technology transfer performance. They should focus on results, not just levels of activity, including new product sales, market penetration, new jobs, and other metrics to be defined by NASA.
--All NASA contracts should require clearly defined technology transfer plans for the commercial application of technologies developed for NASA missions. Appropriate procedures should be developed to evaluate and reward such contractor efforts to transfer these technologies to the broader economy.
--NASA programs offered through the
Announcement of Opportunity (AO) process should state
that mission objectives also include technology
advancement and infusion into the private sector and
that grant proposals should be evaluated on the basis
of how such objectives would be achieved.
--NASA should significantly increase its efforts to secure alliances with state and local governments and provide small businesses with opportunities to spur technology transfer. A major goal should be to stimulate and accelerate the creation and competitiveness of small businesses, particularly through existing mechanisms such as the national and regional technology transfer centers. Another goal should be to make NASA facilities and expertise available to U.S. industry, especially its small and disadvantaged constituents.
--NASA's Vision-Mission-Values (VMV) document should be amended to state that technology transfer is a major mission objective of the agency.
4. NASA should implement its New Technology Investments Program through the use of industry-led efforts that will create and apply new technology to NASA programs as well as to the commercial marketplace.
These new programs should be implemented using designated NASA program managers with minimal staffs and in overall coordination with the Administrator's office. These offices should be charged with ensuring that projects initiated under this program are commercially relevant and that NASA funds expended on these programs are complemented by significant material commitments from industry. Furthermore, the success of each program will be measured through specific program metrics, and full and open competition will be used, where appropriate, during the NASA selection process.
IMPLICATIONS
Implementation of the above recommendations should
enhance the public, private, and joint public-private
efforts to pursue technology development and transfer
and should increase U.S. global competitiveness.
FISCAL IMPACT
The fiscal impact cannot be estimated. However, the
recommended actions should result in increased
technology transfer and development in both the
public and private sectors, thereby strengthening the
economy and increasing efficiency.
Increase NASA Coordination of Programs with the U.S. Civil Aviation Industry
BACKGROUND
Aeronautics is a major contributor to the U.S.
economy. It is the single largest positive industrial
contributor to the international trade balance and
provides significant benefits to the United States in
terms of economic prosperity, transportation,
employment, advanced technology products, and
commercial spinoffs. The U.S. aircraft industry
recorded more than $139 billion in sales in 1991,
contributing $29.5 billion to our balance of trade
and employing hundreds of thousands of people in
high-quality jobs.[Endnote 1] Long range prospects for
the industry are good, with analysts projecting a
global civil aircraft market to be worth more than
$328 billion through 2000 and approximately $815
billion through 2010.[Endnote 2]
The National Aeronautics and Space Act of 1958 mandates the National Aeronautics and Space Administration (NASA) to pursue "the improvement of the usefulness, performance, speed, safety, and efficiency of aeronautical and space vehicles," as well as "the preservation of the role of the United States as a leader in aeronautical and space science and technology and the application thereof . . ." [Endnote 3] The growth of the U.S. industry has benefited from this mandate and a strong partnership with NASA and other government agencies. However, the environment in which the U.S. aeronautics industry exists has changed dramatically over the past 20 years due to increased foreign competition, the divergence of civil and military technologies, and the end of the Cold War. Furthermore, aeronautics is now a global industry with a global infrastructure. These changes have created significant challenges that must be recognized and addressed through increased government-industry cooperation if the U.S. civil aircraft industry is to remain not only viable but a world leader.
Both Europe and the Pacific Rim nations have recognized the benefit of a strong civil aeronautics industry. Europe's Airbus has been an economic success due, in part, to the direct support of European governments. Through 1969, the United States maintained 91 percent of the world market share for transport aircraft.[Endnote 4] By 1991, U.S. market share had dropped to 67 percent, with Airbus capturing over 30 percent of the global market.[Endnote 5] Japan, though having less experience and infrastructure in civil aeronautics, has been steadily building up its experience base and has targeted this industry for growth.
The United States, both government and industry, has failed to address adequately these challenges or adjust to the significant changes that have occurred in this global industry. NASA development programs have not kept pace with the demand for technologies with commercial benefit to the U.S. aeronautics industry. Conversely, industry must strengthen its partnership with government, including making the appropriate private investments, to ensure that the highest-payoff research activities are pursued.
In recognition of the need to protect and increase U.S. competitiveness in civil aeronautics, NASA has begun planning an expanded aeronautics program. It includes augmentation of its subsonic research program to focus on highest-payoff technologies, such as aircraft efficiency and environmental concerns, as well as upgrading current facilities and infrastructure needs. The program stresses a strong commitment to dual-use technology programs conducted in cooperation with the Department of Defense and research in high-speed civil transport technologies. However, NASA must do more to meet the challenges facing the U.S. aerospace industry today if the United States is to remain competitive in the global market.
ACTION
NASA should develop a closer relationship with the
U.S. civil aviation industry and government partners
to ensure that industry needs are addressed early and
throughout the technology development process and to
maximize investment through fast and efficient
technology transfer activities. In pursuing this
objective, NASA should:
--ensure that promising technologies are fully developed, through validation where necessary, to reduce the risk to industry of commercialization efforts;
--increase industry participation and involvement in all phases of the research and development process, from planning to implementation as well as in the evaluation of results; and
--improve its responsiveness to specific industry needs through increased flexibility of services and resources (facilities and people) and programmatic objectives. In pursuing the above recommendations, NASA will need to increase its efforts to effectively communicate with industry through contacts with trade associations and professional organizations. However, NASA must also increase its dialogue with industry at the laboratory level where the most significant technology transfer activities often occur. NASA should also consider increasing the number of symposia and workshops it conducts to ensure it has an adequate understanding of industry concerns and current market forces.
IMPLICATIONS
Greater industry involvement in the development and
implementation of NASA research projects will ensure
more focused agency programs and research objectives.
This should result in a more integrated NASA
aeronautics program among government agencies,
industry, and academia. Increased attention should
also be given to the protection of critical
technologies to ensure a strong U.S. industry
position in international leadership and partnering.
FISCAL IMPACT
This recommendation will have no significant fiscal
impact. Only NASA program and research priorities may
change as a result of increased coordination and
cooperation with industry.
Strengthen and Restructure NASA Management
BACKGROUND
The National Aeronautics and Space Administration
(NASA) achieved spectacular success in a number of
its early undertakings. With President Kennedy's firm
direction, the agency moved rapidly to catch up in
the space race. NASA helped secure the United States'
position in the forefront of technology, and in the
span of less than two decades advanced human
enterprise beyond the planet Earth.
Recent struggles--marked by the Challenger space shuttle accident and by continuing cost overruns and delays--require an assessment of whether NASA has a mission worthy of national support or a management tradition worthy of renovation. This debate has centered most recently on the purpose and costs of the proposed space station.
On March 9, 1993, President Clinton asked NASA to undertake a 90-day effort to redesign the space station program in order to reduce costs. The Vice President, in turn, appointed an advisory committee to review this study and make recommendations to the President. The committee did so.
On June 17, 1993, the President announced his administration's position based on the advisory committee's findings: "At a time when our long-term economic strength depends on our technological leadership and our ability to reduce the deficit, we must invest in technology but invest wisely." The President stated his support for continuing the space station program but insisted that this must include a "redesign of NASA itself" in order to "cut costs, reduce bureaucracy and improve efficiency."[Endnote 1]
NASA leadership has recognized the need for an agency reinvention and management overhaul. This includes improvements in the agency's direct operations and in its contracts with private firms. (Contractor spending constitutes over 90 percent of the agency's budget.) The NASA administrator acknowledges that agency management across multiple field installations is poorly conducted, resulting in multi-loop review and reporting.[Endnote 2] The organizational structure ddiffuses accountability and results in too many people doing overlapping work. Poor coordinatioN sharpened the turf conflicts among offices.
Regarding the space station program specifically, both the advisory committee and the internal NASA review team found serious inefficiencies in NASA's management. The NASA team developed alternative management scenarios which were accepted and reemphasized in the advisory committee's report.[Endnote 3]
Based on the President's decision and the advisory committee's recommendations, NASA has initiated a process to transform its management structure to a more streamlined, efficient organization. This new management design will produce significant NASA staff reductions and modifications to its existing contracts. The number of contractors working on the new design may be significantly reduced. These changes represent a major shift in traditional NASA program management.
These changes must be extended beyond the space station program. Further study indicates that NASA's existing management contributes to a number of problems:
--NASA has an inadequate system for
developing critical project definitions for either
new or existing projects;
--NASA has few means to prioritize projects within and across its many program offices;
--NASA has no established conditions under which projects should be reviewed for potential termination;
--NASA has no consistent process for
providing independent cost estimates for new or
ongoing projects;
--NASA has insufficient performance measures, or metrics, by which to assess project success and effectiveness at all levels;
--NASA has no implemented strategic plan, including an up-to-date assessment of which facilities it needs; and
--NASA program, project, and other managers lack sufficient accountability.
Specifically, NASA programs and budgets have suffered from uncontrolled operational costs that have not been carefully managed during the definition, development, and implementation phases of programs.[Endnote 4] Excessive costs in individual programs often lead to less available funding for other programs still in the development stage. These cost overruns occur primarily as a result of poor cost estimating. Although many operational needs are difficult to assess prior to a project's implementation, NASA acknowledges that significant improvements can be made to better estimate the operational costs of new projects to avoid unforeseen problems and increased costs.
NASA has been able to achieve significant cost savings from programs currently in the operational phase, such as the space shuttle. This has derived from pressure to reduce funding levels. In response, the space shuttle program recently identified savings of $8.4 billion from fiscal year 1992 to 1998. NASA management has acknowledged that substantial savings can be obtained from other programs currently in the operational phase if an aggressive effort is made to review these programs for reductions in operational costs.
To match mission and strategic resources, a NASA strategic plan would help identify actual facilities needed, including those that support commercial aeronautics. The U.S. aerospace industry has been subject to increasing challenge by advances in aerospace technology that affect its ability to remain competitive in the global marketplace. Of course, these advances correlate with the operation of modern, highly productive research and development facilities. Currently, an overlap exists in government facilities in the aeronautics and space fields which reduces overall efficiency of operations and the effective use of increasingly scarce resources.
In November 1992, the NASA administrator initiated the development of a comprehensive and integrated long-term plan for future aerospace facilities in coordination with the Departments of Defense (DOD), Energy, Transportation, Commerce and the National Science Foundation. Since that time, working groups involving all agencies have initiated a review to catalogue existing U.S. government and industry facilities that support aeronautics and astronautics research, development, testing, and operations. International facilities will also be examined to determine their potential to supplement U.S. facility shortfalls. The completed plan will consider current and future government and commercial needs as well as NASA and DOD mission requirements for the next 30 years. The plan is scheduled to identify overall facility shortfalls, new facility requirements, upgrades, consolidation, and the closure of existing facilities.
Reforms in agency management can reduce inefficiencies across the board, as well as produce significant savings in federal personnel. In addition, NASA headquarters must establish the means for terminating projects which fail to meet planned objectives or which incur significant cost overruns and delays. The NASA Centers must focus on an agencywide vision of success versus individual center priorities.
ACTIONS
--NASA should reduce the number of total contractor and civil service staff by approximately 30 percent; and
--NASA should specifically reduce the number of government employees working on the space station program to approximately 1,000 (a reduction of 1,300 employees over the current program). In turn, efforts should be made to make other, appropriate assignments for affected space station personnel.
2. NASA should implement the management principles developed for the redesigned space station program across the agency in all areas of program and institutional management, including the following:
--authorize the NASA administrator to apply lean management practices and assign appropriately skilled personnel to current tasks at hand;
--establish clear lines of authority and responsibility, including the management conducted by outside contractors (ensure implementation of OMB Circular A-109 Major System Acquisition);
--reduce management layers and assign program authority to the program manager, as appropriate;
--define the role of the NASA center director as that of providing personnel, facilities and other field resources to support the program, rather than managing the overall program itself, as appropriate;
--eliminate unnecessary overlap between the centers, with a comprehensive review of all centers and the identification of opportunities to share functions, both developmental and operational, and facilities with other federal agencies and international organizations;
--reduce total civil service and contractor employees; and
--reduce NASA support contractors over the next five years in order to achieve cost savings. This will be applied in a way to avoid undue effect on small and disadvantaged businesses. In general, this should allow for 85 percent of the NASA budget to continue to go to outside contractors.
3. NASA should aggressively reposition its staff to meet the agency's new challenges, including the following personnel actions:
--accelerate the Presidentially mandated NASA personnel reduction by one year, so that approximately 1,000 full-time equivalent (FTE) positions will be eliminated from fiscal year 1994 to fiscal year 1995;
--establish measures that will allow this reduction to occur through attrition by early-out and buyout authorities, such as those granted to the Department of Defense and the Central Intelligence Agency;
--emphasize reduction of management
positions, both at headquarters and at the centers,
to consolidate all functional management at NASA
headquarters (only one official will be responsible
for developing agency policy in each functional area
and overseeing its implementation at all field
centers);
--improve communications between supervisors and employees and expand the performance evaluation system to establish clear performance expectations;
--establish agencywide education and training programs to ensure readiness for assignment and to provide hands-on training for future program managers;
--ensure a selection process for managers that stresses technical and management excellence, interpersonal skills, and work force diversity; and
--in particular, NASA should improve its management policies and processes in order to make all NASA managers accountable for their performance.
4. NASA should restructure its internal management processes for program formulation and implementation by formally instituting its Program Management Council (PMC) to be chaired by the deputy administrator and charged with performing the following functions:
--ensure the development of sound project definitions for all NASA projects. This would include clearly stated program objectives consistent with the proposed strategic plan, proper definition and understanding of all project requirements, and welldefined management roles and responsibilities with an emphasis on accountability. It would also require full sets of documentation governing non-advocate reviews, cost control, and performance commitments;
--implement its Independent Cost Estimation Process agencywide for all new and existing projects for which this activity has not been done;
--recommend an acquisition strategy
consistent with program-specific objectives, risks,
and constraints;
--ensure that every project in the design and development stage has life-cycle cost estimates for development and operations;
--require each project and program to identify tradeoffs among up-front hardware investments, annualized operation costs, and schedules;
--require project managers to identify potential opportunities to reduce operational costs through project modification or other means during the course of the annual budget process;
--provide NASA's ongoing programs with specific percentage targets for operational cost reductions, where appropriate;
--establish project cost-overrun thresholds that will trigger PMC recommendations to the administrator for project termination for existing NASA projects;
--identify program termination candidates during each budget cycle beginning in fiscal year 1995;
--oversee implementation of its proposed NASA Strategic Plan and revised NASA Management Instruction (NMI); and
--assign performance metrics for all programs and projects. The development of these metrics will be done by the appropriate program and project offices with the approval of the PMC.
5. NASA should work aggressively with its interagency counterparts to complete a summary report to the administration, by June 1994, identifying federal aerospace facility shortfalls, new facility requirements, consolidation opportunities, and recommendations for closing.
The report will also include estimates of cost impacts (savings and investments) as well as an assessment of other considerations which affect the report's recommendations, such as national security concerns, commercial competitiveness, technology transfer, and proprietary data rights.
Implementation of the foregoing recommendations should begin by January 1, 1994, and a report detailing the success of their implementation should be prepared by the administrator and submitted to the administration no later than June 1, 1994. (Note: The restructuring of space station program management will occur over a faster time period than the other NASA management changes. It may be appropriate to refer to the status and effects of the space station program changes in the administrator's report.)
IMPLICATIONS
Reforms in agency management can reduce
inefficiencies across the board, as well as produce
significant savings in federal personnel. NASA
headquarters can establish the means for terminating
projects which fail to meet planned objectives or
which incur significant cost overruns and delays.
NASA centers can focus on an agencywide vision of
success versus individual center priorities.
These recommendations will help to ensure that NASA program and project management does not focus solely on project development costs while ignoring long-term operational costs. This should enhance overall program management and help to avoid the prevalence of unanticipated operations cost overruns. This should also help prevent NASA management from becoming burdened by substantial operational budgets that may affect its ability to implement new technology or conduct new science programs.
Implementation of the facilities study should lead to a more efficient array of federal aeronautics and space facilities that address both agency and industrial needs. This should also strengthen the competitiveness of U.S. aerospace industry, particularly those aeronautics and propulsion companies involved in commercial transport aircraft design and development.
These recommendations should significantly affect the way NASA does business and affect the roles and missions of the NASA center as it drastically changes the roles of the center director and headquarters program managers. They should establish clear lines of authority and accountability and eliminate duplication of effort. This should significantly improve agency performance.
FISCAL IMPACT
Already in the fiscal year 1994 budget process, NASA
has made significant reductions through fiscal year
1998. Reductions in personnel and administrative
expenses include $1.6 billion, including Civil
Service reductions that eliminate 1 percent of the
work force in fiscal year 1993 and an additional 1.5
percent in fiscal years 1994 and 1995. Other
reductions will total $1.982 billion through fiscal
year 1999 achieved by reducing support services
contractors, restructuring the space station program,
and other program reforms.
NASA should realize additional cost savings following the implementation of the above recommendations. The reductions associated with the space station redesign will be extended to all NASA programs. Furthermore, the final report on facilities review will include cost savings to be realized by facility consolidations, mothballing, and closures due to overlapping technical capabilities.
Budget Authority (BA) and Outlays
(Dollars in Millions)
Fiscal Year
1994 1995 1996 1997 1998 1999 Total
BA
n/a -396.0 -396.0 -396.0 -397.0 397.0 -1,982.0
Outlays
n/a -282.0 -372.0 -390.0 -397.0 -397.0 -1,838.0
Change in FTEs*
n/a -723 -723 -723 -723 -723 -723
Clarify the Objectives of the Mission to Planet Earth Program
BACKGROUND
NASA considers its Mission to Planet Earth (MTPE) to
be one of its highest-priority programs. The MTPE is
designed to describe, over a long period of time, the
earth's environment, as well as ongoing natural and
human-induced global change, through the use of
satellites, aircraft, and associated technologies.
Using the unique perspective of space and highaltitude
atmospheric vehicles, NASA will contribute
essential data to national and international
assessments of the future of our environment on both
global and regional scales. These assessments will
provide the strongest scientific basis for the
formulation of government policy regarding
sustainable development and environmental management.
NASA will do this in partnership with other federal
agencies of the U.S. Global Change Research Program
(USGCRP) as well as the international participants in
the Committee on Earth Observing Satellites.
The core element of MTPE is NASA's Earth Observing System (EOS) which will produce a series of five low Earth orbit spacecraft beginning in 1998. In addition, MTPE includes a phased process, from the launch of the Upper Atmosphere Research Satellite (UARS) in 1991, through a series of smaller, more focused missions carried out through the end of the decade. These early missions, such as the Earth Probes series and the Ocean Topography Experiment (TOPEX/Poseidon), along with high-altitude remotely piloted vehicles (RPVs), will be integrated with NASA's ongoing ground-based research programs. Such programs will focus on observing, understanding, and modelling radiation, dynamics, and hydrology as well as ecosystem dynamics and biochemical cycles, atmospheric chemistry, and solid Earth science.
Of course, the most critical element of MTPE will be the collection, storage and dissemination of the data collected. The Earth Observation System Data and Information System (EOSDIS) is NASA's planned data archive and distribution system to support MTPE efforts. EOSDIS is designed to assimilate remote sensing data acquired from the space components of MTPE. It will also generate, archive, catalog, and make available a consistent, long-term database of measurements needed for global change research to a broad range of users. When the EOSDIS is fully developed, it will be the largest civilian data system ever built. The development of this system should be a catalyst for maintaining the position of the U.S. industry as a leader in the world market for database management and computer network technologies. Furthermore, EOSDIS will be the primary element of the Global Change Data and Information System (GCDIS) currently under development by the federal government to combine environmental data sets from space platforms and other sources across agencies.
The MTPE represents a major national investment in a long-term program of sustained research. The results of this program should permit a better understanding of the global environment and lead to the development of informed public policy and advancements in new technologies. Because of the importance of MTPE, NASA must take steps to ensure that the program is properly planned and operated to provide the greatest benefit to the United States and the international community.
ACTIONS
Tight cost control on MTPE system development should be maintained by using new ground prototype systems, as well as products and services developed in other programs. NASA should also fully use its new contract reform initiatives throughout MTPE.
2. NASA should ensure that the development of MTPE is consistent with high-priority national and international science objectives relating to global change research.
The priorities embodied in the recommendations of the USGCRP should guide program development of the MTPE. Furthermore, for the purposes of climate change research, the recommendations of the International Panel on Climate Changes should serve as the top priority for the program.
3. NASA should give emphasis to policymakers in the implementation of MTPE.
The success of the MTPE will be based on the accessibility of timely, useful information to both scientists and policymakers. The EOSDIS system will also be user-friendly and accessible at low cost. The objective of the system will be to provide easy access to data relevant to policymakers in a readily usable form. Based on this format, the EOSDIS has the goal to provide the basis for the broader GCDIS activity for the federal government as well as to encourage the participation of state governments in its use. The EOSDIS development program should also provide flexibility to incorporate the results of non-traditional data sets into the archive. Finally, the EOSDIS format should be compatible with the requirements and expectations of international researchers.
4. NASA should employ innovative development approaches to the EOSDIS program which emphasize evolutionary growth, technology infusion, and direct customer participation.
The design of the EOSDIS should incorporate the
latest open system approaches and be vendorindependent.
The design should also allow for the
replacement and addition of new functional components
(hardware and/or software) within its overall
structure as the system evolves. The program should
demonstrate the proper balance between detailed
functional specifications and implementation
flexibility by using a "build a little, test a
little" approach that will take full advantage of
prototyping, user demonstrations, and customer
feedback. Finally, the system should permit the rapid
acquisition and integration of the latest technology.
5. NASA should encourage the educational benefits of the EOSDIS.
Since EOSDIS is designed to be easily accessible in a readily usable form and at low cost, NASA should ensure that potential educational contributions are maximized. Consideration of student and general public access to EOSDIS should be incorporated into the design of the system. NASA should encourage mentoring relationships using EOSDIS to leverage the excitement of space exploration, the capabilities of digital information systems, and the need to better understand the processes that affect the earth's environment.
6. NASA should assist in ongoing efforts to converge U.S. operational weather satellites, given the benefits of streamlining the collection of weather data across the government.
By considering MTPE research activities in context with operational weather satellite programs, cost savings are possible through convergence of the current operational satellite fleets. Convergence of the National Oceanic and Atmospheric Administration (NOAA) Polar Metsat and NASA's EOS-PM (Earth Observing System--Afternoon Crossing [Descending] Mission) will eliminate redundancy of measurements, enhance the capability of NOAA's data set and potentially result in cost savings. In pursuing the above policy, NASA should preserve the capability for new research and technology development in a more streamlined program.
IMPLICATIONS
The implementation of these recommendations should
enhance the capabilities of MTPE and ensure its
usefulness to both researchers and policymakers.
Management techniques using new, more powerful
development test beds and data purchases, where
appropriate, should ensure the maximum benefit
received from the program. New procurement mechanisms
which emphasize performance should also increase
program efficiency. By maintaining close attention to
the requirements of the policymaking community, MTPE
should provide a solid scientific foundation for
future policy development. Finally, by emphasizing
user-friendly designs and low operational costs, the
EOSDIS will increase accessibility of data to all
users.
FISCAL IMPACT
Savings from the implementation of these
recommendations cannot be determined at this time.
However, the combination of a constrained development
budget through the year 2000 and a clear NASA
commitment to reduce operational costs over the
lifetime of MTPE could result in reduced life-cycle
costs for the program.
Getting Started and Motivating Participation
Immediately upon assuming his duties in May 1992, NASA administrator Daniel S. Goldin initiated a number of innovations aimed at making the agency more efficient within a set of mission objectives. This exercise took the form of an internal review. The aims of the review were consistent with those of the National Performance Review (NPR) initiative, and helped to determine NASA's greatest potential efficiencies. This early initiative, called the Blue and Red team review, had the effect of giving NASA a head start in identifying ways to make NASA processes better, faster, and cheaper.
The Blue teams reviewed NASA programs to look for significant savings, while Red teams acted as devil's advocates to ensure all possible options were examined. A separate Program/Project Planning team reviewed the agency's activities and procedures to recommend improvements to reduce costs and technical risks in the future. At the same time, NASA undertook a series of procurement initiatives targeted at streamlining acquisitions, reforming incentive contracting, assessing contractor liability requirements, and improving contract management and grant processes.
Similarly, the Red, Blue, and institutional teams identified a number of weaknesses in existing program management and procurement procedures which contributed to unexpected cost growth in the past. The teams developed remedies that provide the basis for management and procurement reforms upon which NASA has embarked.
In a parallel exercise, an internal Vision team was commissioned, and a series of town meetings were held to make NASA's aeronautics and space research more relevant to people's daily lives. More than 4,500 people attended, and thousands more watched via satellite broadcast--a unique opportunity for public input. Based on the information from these meetings, representatives from across the agency convened to develop a new vision statement. The statement describes what NASA does, why, and how, and redefines agency priorities and mission objectives for the 1990s and beyond. A strategic planning exercise in April 1993 coincided with the beginning of the NPR. The hallmark of this effort was a proposed strategic organization--the Senior Management Group--with the charter to develop strategies for managing institutional change within NASA.
A number of procurement and management reforms are presently underway as a result of the Red and Blue team exercises. These reforms will be tested and evaluated. Accordingly, many have been initiated as pilot tests to assess their effectiveness for acrossthe -board implementation. Improvements presently under review include management and procurement reforms in both processes and policies.
NASA was searching for ways to improve and measure management effectiveness, program efficiency, and mission accomplishment. At NASA's request, the Inspector General conducted a study of NASA's functional management review process. The study indicated that the agency often lacked effective measurement practices. In addition, there was limited authority to affect improvements. Based on these results, the administrator directed an initiative to develop a joint partnership process for ensuring excellence in agency management. To motivate participation in this initiative, an agencywide task team was formed. The team focused on empowerment, joint partnership, agreement, and measuring results to ensure continual improvement.
The team, chaired by NASA's associate deputy administrator, includes representatives from headquarters functional managers and program offices, eight field installations, the Internal Control Coordinator's staff, and the Inspector General. The team's joint partnership approach has led to new methods for evaluating management effectiveness, program efficiency, and mission accomplishments for NASA's administrative and management programs. An added benefit from this initiative is improved implementation of the Federal Managers' Financial Integrity Act (FMFIA).
NASA has five reinvention laboratories involving improvements in management, procurement, Mission to Planet Earth (MTPE), and Space Shuttle processing at Kennedy Space Center (KSC). Of the two MTPE laboratories, one involves developing a model Earth science data system that will provide a strong scientific base to enhance understanding of natural and human-induced changes in the environment. The federal government, in turn, will draw upon this scientific base to formulate policy and make decisions concerning the quality of life on Earth in the face of global changes. The second involves developing and using the most efficient processes to manage the many parallel activities involved in acquiring MTPE data from space.
In 1989, the need for reduced Space Shuttle processing time was recognized when demonstrated flight rate capability was three per year and flight rate projections were increasing rapidly to 12 per year by 1991. It was clear that the way the Space Shuttle was processed had to change and change quickly. It would be necessary to reduce shuttle processing times from a 79 day average to less than 45 days--a reduction of nearly 50 percent.
Following the Challenger accident in 1986, initial processing activities at Kennedy Space Center were overly conservative in order to maintain safety. The challenge, then, was to maintain safety while reducing processing time. The solution was to initiate a systematic approach with strong management commitment. Teams were formed throughout the agency and were authorized to initiate changes within the scope of their responsibilities. The agency's efforts to reinvent itself have taken on a greater motivation with the advent of the NPR. Moreover, the President's decision in June 1993 to support a redesigned space station program offers a very significant case in point for application of these ideas. More than just a redesign of one program, the President has called for NASA to reinvent itself and to adopt new methods for meeting its goals in the future and for the NPR to work with NASA in this effort. NASA has already significantly reduced costs in the Space Station program and is moving toward the removal of an entire level of management in its major programs.
Functional Management Reinvention Lab
NASA has used a centralized oversight approach, involving varying techniques to identify and correct administrative and management problems. New approaches are needed to measure effectiveness, lead to innovative improvements, and foster commitment to correct and improve programs.
The Functional Management Reinvention Lab shifts accountability for assessing the adequacy of administrative and management programs, including compliance with established policy and regulations, from headquarters to responsible line managers. The role of headquarters becomes one of policy development, guidance, and implementation oversight and of conducting spot checks as needed or as requested.
This new self-assessment process will eliminate duplicate audit activity. The existing process has been separate and distinct from the internal control review and reporting requirements established by the FMFIA. The agency FMFIA vulnerability assessment questionnaires have been a compliance requirement for line managers rather than an effective management tool. NASA is attempting to move away from the focus on complying with rules to providing guiding principles and authorizing line managers to conduct self-assessments for evaluating the adequacy of these programs.
By using a joint approach to develop and administer a self-assessment program, managers take ownership of their processes and improve communications. This should encourage managers to share good ideas. In an atmosphere of trust and non-retribution, NASA anticipates line managers will be more comfortable identifying high-risk issues for immediate correction.
Procurement Reinvention Lab
The objective of the procurement reinvention lab is to develop a model procurement process that can be duplicated, as appropriate, at all NASA centers and eventually at other federal agencies. This lab will study all aspects of the acquisition process to identify and create more efficient systems and processes to accomplish procurement. The lab consists of 52 employees in the Grants, Small Purchases, Acquisitions and Review Branches within the Office of Procurement at NASA headquarters.
The Office of Procurement is responsible for procuring goods and services for headquarters organizations. In fiscal year 1992, the Headquarters Acquisition Division obligated $808 million in contracts, grants, and interagency transfers. This represents 6 percent of total NASA acquisitions. This organization is in an excellent position to conduct a procurement reinvention lab without the typical bureaucratic burdens that hamper the process today.
The Procurement Reinvention Lab considered three
approaches. The first was to develop a process
independent of any federal laws and regulations
affecting procurement. This approach would clearly
require the authority to waive public laws affecting
competition, socio-economic preference programs,
annual funding restraints, disputes, and protest
rights. In addition, some agency authorities, such as
General Services Administration's (GSA) authority for
automated data processing (ADP) and
telecommunications, would need to be waived. However,
NASA must still maintain accountability to the
taxpayer. The second, a more moderate approach, would
accept some of the laws that currently exist, such as
the Competition in Contracting Act and the Small
Business Act. This model would involve more emphasis
on streamlining internal procedures. The third would
use the existing procurement system, as authorized by
federal laws and regulations, and reinvent how NASA
internally implements the existing regulations.
As guidance from the NPR was provided, it became apparent that the most radical approach was not feasible without specific authorizing legislation that would allow exemptions to specific laws. Although such authorizing language may be developed as a result of some of the initiatives of the NPR, such enabling legislation will not initially be available to use on this project. The model selected for NASA is a combination of the latter two options. It is NASA's intent to change the way it has been doing business at headquarters by revising internal procedures and seeking waivers from other agencies when they impede or add no value to NASA's procurement system. NASA will not rule out seeking specific legislative changes when it is determined to be in the public interest to do so.
NASA Lab to Enhance the Accessibility of Earth Science Data
The objective of the MTPE data accessibility reinvention laboratory is to develop a model Earth science data system that will be easily accessed by federal government policymakers and other international partners. MTPE data concerns natural and human-induced changes in global and regional environments and should provide a strong scientific basis from which policy is formulated and decisions are made relating to the future of human life on Earth. The system's operation costs will be sufficiently low to encourage widespread domestic and international use.
The Earth Observation System Data and Information system (EOSDIS) is the data archive and distribution system NASA is building to support MTPE. EOSDIS will assimilate remote sensing data acquired from space and will generate, archive, catalog, and make available a database of measurements needed for global change research. When fully developed, EOSDIS will be the largest civilian data system ever built and will be the core of the Global Change Data and Information System (GCDIS) developed by the federal government.
The EOSDIS Core System (ECS) contract will provide for the development of the essential elements of the EOSDIS system, including support for the Distributed Active Archive Centers, the customer interface of EOSDIS. The ECS is being procured under the GSA Trail Boss Program and is the largest such program approval yet provided to NASA. This streamlined approach to procurement of information resources and services vests greater implementation authority in NASA based on intensive procurement training and certification provided in advance to the NASA project management team.
The contract requires system refreshment and technology infusion as the MTPE matures. Through the use of prototype systems (the first of which will be in place next year, about four years prior to the first launch of an EOS spacecraft), the program can adjust direction to take best advantage of technical developments in the industry, as well as to adapt to the needs of the policy-making and scientific communities as human understanding of the factors of global change improve.
The contract emphasizes performance through inclusion of a Total Systems Performance Responsibility clause. Under this provision, the contractor cannot earn additional fees for overruns of estimated cost agreed to at the beginning of the contract. The EOSDIS program is entering the implementation stage, so it is premature to assess the final value of these measures. However, the NASA administrator expects that these steps will enhance the responsiveness of the program to the user communities and will provide a stronger foundation for ensuring the development program is carried out within budget and in accordance with contract requirements. In addition, the commitment to maintaining reasonable operational costs over the life of the system will be a significant encouragement for research use.
NASA expects that as the system matures and the results of early-phase prototyping become evident, additional changes will be made in managing the program to build on the things which work best. The NASA administrator expects that the "build a little, test a little" approach will result in an EOSDIS which is responsive, flexible, and within budget.
Lab to Improve Instrument Integration for Mission to Planet Earth
The objective of the MTPE instrument integration reinvention laboratory is to develop a model set of processes for improving the efficiency of the instrument development process for Earth science-- getting the right sensor onto the observation platform quickly, and in a manner which provides maximum benefit to the user. Traditionally, this has been the critical path in operational programs. The project will explore innovative management techniques and cooperation with outside partners to enhance the effectiveness of this process.
NASA's Mission to Planet Earth is among its highest priority programs. MTPE is being performed to characterize the global environment over an extended period of time. It will depict ongoing natural and human-induced global change through the use of satellites, aircraft, and associated technologies. Using the unique perspective of space and high altitude atmospheric vehicles, NASA will provide essential contributions to national and international assessments of the future of the environment, both on global and regional scales. These assessments will be sufficiently reliable to provide the strongest scientific basis for government policies designed to sustain development and manage the environment. This will be accomplished in partnership with the other federal agencies of the U.S. Global Change Research Program, as well as the international participants in the Committee on Earth Observing Satellites.
The implementation of MTPE will take place over an extended period of time. It began with the launch of the Upper Atmosphere Research Satellite and METEOR/Total Ozone Mapping Spectrometer in 1991 and TOPEX/Poseidon in 1992, and will continue into the next century . With the scope this program and the urgency of these national requirements, the instrument complement must be developed in the most effective manner possible.
The instrument pre-development reviews for the approved MTPE missions have been extensive, incorporating contributions of a wide range of scientists and industry sources, as well as NASA expertise. To take advantage of new capabilities in the small satellite arena and to draw upon the experience which is developing in this arena in industry and in other federal agencies, the project is developing a comprehensive database of small satellite capabilities. This database could support specific, focused missions with very short development timelines to augment the existing MTPE program.
Finally, the management of MTPE has been consolidated, both at headquarters and at the lead NASA Center, the Goddard Space Flight Center in Maryland. Headquarters has established an Advanced Technology Development Office. This office is charged with ensuring the incorporation of the latest technology developments into the various MTPE missions as they are planned.
The MTPE program is entering the implementation stage, so it is premature to assess the final value of these measures. However, the prospects are good that the development program is more efficient and the way in which the various parallel support activities are managed is considerably improved. A number of these innovations have already been initiated. As the program for development of subsequent MTPE spacecraft matures, NASA expects to see further enhancements.
NASA Shuttle and Payload Processing Lab at Kennedy Space Center
This reinvention activity involved developing more efficient launch site operations, reducing required resources, lowering energy consumption, decreasing environmental impacts, and developing long-term operations plans. Under this initiative, a plan was established to schedule eight Shuttle missions per year and to do it with a 25 percent reduction in cost. More than 200 facility energy surveys were completed resulting in a 10 percent energy reduction with a goal of 20 percent by the year 2000. Thirtytwo conservation projects were begun which have resulted in exceeding a self-imposed 30 percent goal of hazardous waste reduction.
Payload processing initiatives have resulted in significant reductions in processing time and manpower while increasing customer satisfaction. Schedule time was reduced 21 percent, manpower was reduced 33 percent, and the number of problems were reduced 31 percent over three comparable Spacelab module missions. These reductions were attributed to improved planning and coordination between Kennedy Space Center (KSC) and Marshall Space Flight Center (MSFC). Requirements were defined early. The KSC and MSFC agreed on delivery schedules for hardware, software, and drawings. Over 100 processing changes recommended by the Spacelab Process Action teams for activities such as hardware staging, Spacelab integration and testing, and work authorization development were implemented. Initiatives to improve payload customer satisfaction have resulted in improving NASA's understanding of customer needs and the customer's understanding of the payload processes.
Looking Ahead
The NASA Functional Management and Procurement Reinvention Lab efforts are just getting started and changes have just begun. However, brainstorming sessions have already resulted in worthwhile suggestions in the planning stage of the project. Within three years, self-assessments will have been conducted at all locations, and an evaluation of first year results will be conducted at the end of fiscal year 1994. Refinements to the process will be continual to ensure intended results are achieved. This initiative shifts roles and responsibilities, but requires no additional resources.
The NASA Procurement Reinvention Lab is developing preliminary plans to revise the internal processes to effect shorter lead times by eliminating non-valueadded steps and reviews. NASA is exploring with other agencies the possibility of waivers to their internal procedures that impact on NASA processes. NASA anticipates being able to share lessons learned with the other agency procuring offices and hopes to make some far-reaching recommendations to the federal acquisition process.
The agency intends to begin implementing improvements to the procurement system as they are identified. Efforts have begun in-house to delegate review and authorities to lower levels. NASA's next step is to pursue changes external to its own organization. Contacts have already been made at the Small Business Administration (SBA) and have resulted in a positive response. NASA is optimistic that this project will reveal a better way to do business.
The efforts to improve the efficiency of the complex Space Shuttle and payload processing task involve cultural changes that require demonstrated management commitment. Over 11,000 employees have been trained in the principles of continual improvement and over 900 teams have been formed to analyze each stage of the Space Shuttle process at KSC. Over 700 potential enhancements have been documented and tracked with over 500 specific improvements already implemented and the remainder under assessment.
Top management at KSC personally communicated the vision, set the priorities, committed the resources, and authorized the work force to initiate change. The successes NASA has made to date have been possible because the outyear goals have been clearly established and understood for five years, and the government/contractor team has been in place and undisturbed over this entire period.
In reducing the Space Shuttle processing time, productivity gains and customer satisfaction are compatible goals with the KSC team and the payload customer working together as partners in continual improvement. Improvements in processing are a result of a commitment by both NASA and contractor employees to provide quality processing services to the customer at reduced costs.
Many of the management and procurement challenges which face NASA are confronted governmentwide. Reforms may involve regulatory changes and perhaps statutory measures. NASA has pledged to be vigilant in the application of these reforms and is confident that its recent initiatives combined with the NPR objectives will result in improved and more costeffective operations and better customer service.
Change in Budget Authority by Fiscal Year
(Dollars in Millions)
Recommendation
1994 1995 1996 1997 1998 1999 Total Change
in FTEs
NASA01: Improve NASA Contracting Practices* cbe cbe cbe cbe cbe cbe cbe cbe
NASA02: Increase NASA Technology Transfer Efforts and Eliminate Barriers to Technology Development n/a n/a n/a n/a n/a n/a n/a n/a
NASA03: Increase NASA Coordination of Programs with
the U.S. Civil Aviation Industry
n/a n/a n/a n/a n/a n/a n/a n/a
NASA04: Strengthen and Restructure NASA
Management**
n/a -396 -396 -396 -397 -397 -1,982 -723
NASA05: Clarify the Objectives of the Mission to
Planet Earth Program
n/a n/a n/a n/a n/a n/a n/a n/a
Total NASA
0.0 -396 -396 -396 -397 -397 -1,982 -723
*Benefits from streamlining the procurement process and revisions to contract structure are mainly in the area of future cost avoidance. The amount would vary from contract to contract and cannot be presently quantified.
**Benefits associated with the space station redesign have already been incorporated into the President's budget so are not reflected separately here. Also, personnel reductions include only those additional FTE reductions associated with the NPR recommendations and do not include staffing cuts already mandated by the President.
cbe = Cannot be estimated (due to data limitations or uncertainties about implementation timelines).
n/a = Not applicable (recommendation improves efficiency or redirects resources but does not directly reduce budget authority).
Change in Outlays by Fiscal Year
(Dollars in Millions)
Recommendation
1994 1995 1996 1997 1998 1999 Total
NASA01: Improve NASA Contracting Practices* cbe cbe cbe cbe cbe cbe cbe
NASA02: Increase NASA Technology Transfer Efforts
and Eliminate Barriers to Technology
Development
n/a n/a n/a n/a n/a n/a n/a
NASA03: Increase NASA Coordination of Programs with
the U.S. Civil Aviation Industry
n/a n/a n/a n/a n/a n/a n/a
NASA04: Strengthen and Restructure NASA Management** n/a -282 -372 -390 -397 -397 -1,838.0
NASA05: Clarify the Objectives of the Mission to
Planet Earth Program
n/a n/a n/a n/a n/a n/a n/a
Total NASA
n/a -282 -372 -390 -397 -397 -1,838.0
*Benefits from streamlining the procurement process and revisions to contract structure are mainly in the area of future cost avoidance. The amount would vary from contract to contract and cannot be presently quantified.
**Benefits associated with the space station redesign have already been incorporated into the President's budget so are not reflected separately here. Also, personnel reductions include only those additional FTE reductions associated with the NPR recommendations and do not include staffing cuts already mandated by the President.
cbe = Cannot be estimated (due to data limitations or uncertainties about implementation timelines).
n/a = Not applicable (recommendation improves efficiency or redirects resources but does not directly reduce outlays).
Accompanying Reports of the National Performance Review
Governmental Systems..........................Abbr.
Changing Internal Culture
Creating Quality Leadership and Management....QUAL
Streamlining Management Control................SMC Transforming Organizational Structures.........ORG Improving Customer Service.....................ICS
Reinventing Processes and Systems
Mission-Driven, Results-Oriented Budgeting.....BGT Improving Financial Management..................FM Reinventing Human Resource Management..........HRM Reinventing Federal Procurement...............PROC Reinventing Support Services...................SUP Reengineering Through Information Technology....IT Rethinking Program Design......................DES
Restructuring the Federal Role
Strengthening the Partnership in
Intergovernmental Service Delivery.............FSL Reinventing Environmental Management...........ENV Improving Regulatory Systems...................REG
Agencies and Departments
Agency for International Development...........AID Department of Agriculture.....................USDA Department of Commerce.........................DOC Department of Defense..........................DOD Department of Education.........................ED Department of Energy...........................DOE Environmental Protection Agency................EPA Executive Office of the President..............EOP Federal Emergency Management Agency...........FEMA General Services Administration................GSA Department of Health and Human Services........HHS Department of Housing and Urban Development....HUD Intelligence Community.......................INTEL Department of the Interior.....................DOI Department of Justice..........................DOJ Department of Labor............................DOL
National Aeronautics and Space Administration.NASA National Science Foundation/Office of Science
and Technology Policy..........................NSF Office of Personnel Management.................OPM Small Business Administration..................SBA Department of State/ U.S. Information Agency...DOS Department of Transportation...................DOT Department of the Treasury/ Resolution Trust Corporation..............................TRE Department of Veterans Affairs.................DVA