CCtCap on HOLD

Due to the appeal by Sierra Nevada Corporation (SNC) of the CCtCap awards to Boeing and SpaceX both companies have been told to stop any work until the appeal process has been completed.

SNC filed a complaint on 26th Sept 2014 with the Government Accountability Office (GAO), while full details of the complaint are not currently available the general summary appears to be related to irregularities with the selection process and the fact that their bid was $900m less than Boeing’s.  The GAO has 100 days to review and rule on the appeal, at present there is no way to know what they could decide, at the minimum they could rule there is no basis in the complaint at worse they could rule that the contracts are invalid and require the process to be done again.

So what impact does this have on the Commercial Crew program for NASA.  Depending on the GAO’s decision it could either result in a slight delay or at worse could push Commercial Crew into 2018 or beyond.  This would almost certainly mean that NASA would also have to negotiate more seats on Soyuz to cover the delay which based on the last cost increase could run at more than $80m a seat.

What if GAO rules one of the contracts is invalid?  Well that would almost certainly guarantee an appeal by whoever’s contract is invalidated which could drag out the process even further.

The Irony in all this is clearly based on the SNC/Stratolaunch System’s announcement made just yesterday SNC has no plans to abandon the Dream Chaser program and while we are sure having $3.3b would go a long way to complete this they most likely could have found funding elsewhere.

The same goes for SpaceX they clearly have plans that go well beyond just providing Dragon V2 for NASA and again the $2.6b will help realize these goals faster then if they had to fund the development themselves.

Finally Boeing did indicate that if they didn’t get the award they would be laying off workers, whether they would abandon CST-100 is really unknown as there have been indications that they might have or still might consider competing for the CRS2 Cargo contracts which was announced recently.

It seems to us that the only people who will lose out in the mess is NASA and the Taxpayer, NASA because they will potentially be reliant on Russia for longer and Taxpayer because we will have to foot the bill of the appeal process and any changes to the contracts resulting form the appeal.

 

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