NASA's outsourcing gamble a winner
- By Paula Shaki Trimble
- Feb 20, 2000
NASA's intention to get out of the operations business and invest in cutting-edge
technology is evident throughout the agency's 2001 budget proposal.
In a request that's $435 million greater than NASA's 2000 budget, major
increases will go to R&D for technologies that will stimulate scientific
One of the first steps in getting more money for that mission
came in October 1998, when responsibility was awarded to a single contractor
to consolidate and commercialize NASA's ground and space communications
networks. In January 1999, Lockheed Martin Corp. and a team of subcontractors
started on that 10-year, $3.4 billion contract — $1.4 billion less than
what the space agency would have spent to run those operations itself. The
plan is to apply the savings to scientific research and space exploration.
Now, one year later, the Consolidated Space Operations Contract (CSOC)
includes 11 previously distinct spacecraft operations and communications
system contracts. The cost savings so far are estimated at $50 million,
and CSOC is setting the trend for other agencies. The Air Force, for example,
is looking to outsource its spacecraft communications, and the Navy is looking
to do the same for a consolidated network to serve all Navy and Marine Corps
Any agency with geographically distributed units that use common processes
could benefit from NASA's CSOC model, said Kimberly Gavaletz, deputy program
manager for CSOC at Lockheed Martin Space Operations in Houston. For the
first time, NASA can look at equipment lists, vendor agreements and data
systems in a common way agencywide and achieve economies of scale, she said.
"A lot of people are looking to see how we're doing with CSOC," said
Stan Newberry, NASA's director of space operations. Newberry's organization,
the Space Operations Management Office at Johnson Space Center in Houston,
is responsible for managing the agency's telecommunications, data processing,
mission operations and mission planning services, as well as administering
With CSOC, a big payoff area for NASA has been streamlining management
and procurement costs through the consolidation and renegotiation of vendor
agreements and software licenses at NASA's 10 centers, said Doug Tighe,
Lockheed's CSOC program manager.
"We need to look at the common features that we can do in a common way
at different centers to save money," said Rich Schell, director of systems
engineering for CSOC at Lockheed. Some 70,000 pieces of NASA equipment have
been shifted to CSOC control.
Lockheed's CSOC plan is based on creating an integrated operations architecture.
A cornerstone of that effort is an integrated mission operations center
that would consolidate spacecraft ground communications and data processing
for multiple missions. NASA wants the contractor to provide those communications
as a service, rather than just operating the networks. The more capabilities
and savings Lockheed provides, the more it will win in award fees, Newberry
"The agency is supportive of the performance-based approach, and CSOC
is a good example of that," Newberry said. "[The challenge is] making sure
from a competitive standpoint that the government continues to get the best
Sharp focus on customer needs is another critical factor in the success
of a CSOC-style contract, Lockheed officials said. For example, Lockheed
has created a services catalog that enables mission managers to choose specific
services that fit their needs. The catalog and price list should be available
online by March, said Dan Brandenstein, vice president of customer service
for CSOC at Lockheed.
Meeting CSOC's aggressive cost targets always will be a challenge, Newberry
said. NASA failed to achieve savings planned for 1999 because of delays
in awarding the contract.
NASA's work force is about 15 percent smaller than it was before CSOC,
Tighe said. In the coming year, it will decrease from 3,000 spacecraft operators
to 2,000. To avoid layoffs, Lockheed has tried to transfer the employees
to the companies involved with CSOC or to other NASA and non-NASA contracts,