constellation replan overview (6!9!10)

8/9/2019 Constellation Replan Overview (6!9!10)

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Constellation Replan

Overview

June 9,2010


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Summary

NASA has explicitly directed Constellation program (CxP) that the Agency willfully comply with provisions of FY 2010 Consolidated Appropriations Act withrespect to prohibitions of termination of CxP projects/activities.

provisions of their contracts with respect to termination liability. Allotted funding in FY10 includes all costs under the contract, for performance and for

any contingent liabilities, such as potential termination costs. It is the responsibility ofthe contractor, not the Government, to manage all costs within the estimated cost ofthe contract.

The current CxP FY10 Operating Plan does not account for retaining sufficientobli ation authorit for coverin the Potential Termination Liabilit PTL

estimates on prime contracts.

NASA has released nearly all FY 2010 funds to Constellation contractors

NASA has no choice but to initiate a plan to rescope work in FY10 if it is not to

be anti deficient The CxP now has enough information to initiate discussionswith contractors in order to determine content for remainder of the fiscal year.

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Termination Liability Estimates for Prime Contracts

Contractor Contract TerminationLiabilityEstimateAs of DataDate Data Source

A1

oe ng pper age ro uc on oe ng

Boeing Upper Stage Instrument Unit Avionics $27M 3/5/2010 Boeing

PWR J-2X $48M 3/19/2010 PWR

ATK First Stage $500M 6/4/2010 ATK

nOron

Lockheed Martin Orion $350M 5/3/2010LockheedMartin

C Oceaneering Constellation Space Suit System (CSSS) $15M 3/5/2010 Oceaneeringp

GruOp

N/A EGLS ContractN/A

RFP Cancelled2/12/2010 N/A

Total Estimate $994M

Termination liability estimates can vary over time, depending on current contract activity (status oflong-lead items, active subcontractors and suppliers, facility/lease costs, etc.). Provided above are

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contractor estimates of termination liability received on the "As of Data Date". These amounts arecontractor estimates that NASA is continuing to evaluate. In the event of an actual contract

termination, the settlement amount that NASA will pay will be determined through audit andnegotiation of a detailed contractor termination settlement proposal.


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Funds Remaining after Potential Termination Liability

urrent on t ons Total Cost Authority (PY10 and Prior) : $4,073M Cost to date through May 2010: $(2,289)M Remaining available to Cost: $1,784M Estimated Encumbered Uncosted Carry forward to FY11: $(279)M

Available to cost for June Sept: $1,505M

Less Current PTL re uired for Prime Contracts: -$994M ATK: $500M LM: $350M

PWR: $48M Oceaneering:$15M

Less Current PTL required for Non Prime: -$66M

un s rema n ng or costs n ast mont s : $445M This reflects a shortfall of $990M from 1,435M plan for remainder of the year FY10 cost rate to date averaging approximately $300M a month Unknown variable to consider is ATK response and action against $500M

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Path to Resolution

NASA will prioritize activity on Constellation contracts but, because muchof the fiscal year has elapsed, there is little flexibility.

ons e a on program as een g ven e au or y o procee

immediately to assign preliminary adjustments and funding reductions byproject and contract, including Ares, Orion, Ground Operations, MissionOperations, EVA, and Program Integration.

Many of these reductions will be implemented via reductions inworkforce. A sizeable portion of those actions will be subject to WARN

Act procedures, under which actual separations would not occur until 60.

WARN Act will begin immediately.

This reprioritization of funding within the Constellation replan will have animpact on planned program content and workforce

Expected reduction is about 1/3rd of approximately 7,500 WYEs or 2,500. Worstcase scenario assumes ATK does not go at risk and WYE level would double at5,000

Primarily affecting Texas, Alabama, Colorado, Utah, and Florida. Furtherquantification of regional effects will not be available for several weeks.

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Re Plan Guidance

With the information received from the contractors now in hand, theConstellation program is formulating a funding plan for the rest of the year to

allocate funding according to the following principles:

technology development. Protect advanced development work that could transfer to planned programs as

reflected in the FY 2011 budget request.

Enable -- to the extent possible -- a robust transition to work associated with a CrewEscape Vehicle (as announced in the Presidents speech of April 15, 2010) as thehighest funding priority; and enable work to continue on J2X, as the second fundingpriority.

Place the lowest priority on expenditures for hardware that can solely be used for theprogram of record and are not applicable to programs as reflected in the FY 2011budget request.

In so doin if ossible:

Re-plan ARRA funds towards the priorities above;

Avoid actions that would require op plan changes; and

Avoid NASA directed terminations.

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Effects by Project Preliminary AnalysisActions Required to Accommodate $990M Reduction from Plan

Ares: The program will provide no additional funding to ATK beyond planned FY10 performance(not place $500M on ATK for PTL); and descope the following contracts: Pratt Whitney Rocketdynematerials, $15M; Boeing materials, $25M; and Ares support contractors, $23M; and $80M inadditional reductions (tasks at Stennis Space Center, MSFC, reduce uncosted, etc) .

Orion: Lockheed Martin will initiate $30M prime content work adjustments and has already halted$50M of planned procurements. In addition, the project will institute $38M in non-prime deferralsand reductions and will determine an $82M additional reduction in the coming weeks.

Ground Ops: The project scope will be reduced by $89M. The project will initiate supportcontractor reductions in support contractor activities, reductions in task order scope, and

reductions in operating costs, and will attempt to preserve work to enable flight test strategy but.

Mission Ops: The project scope will be reduced by $12M, which requires immediate reduction ofFY10 content.

EVA: The program will delay in PDR for the prime suit, and reduce prime and non-prime content (tobe determined).

,66 percent in current support contractor WYE.

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constellation replan overview (6!9!10)

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