When NASA decided not to use Morton Thiokol's Utah plant to make advanced space shuttle boosters, it said using a new government-owned plant instead would "establish and maintain competition" among aerospace contractors.
But a recent report from the Government Accounting Office says a similar government-owned facility used to build the shuttle's external fuel tank (the large tank between booster rockets) apparently did not bring such hoped-for competition.In fact, the GAO study for the House Committee on Government Operations criticized the National Aeronautics and Space Administration for continuing to give Martin Marietta contracts to build the tanks without taking competitive bids. It said NASA did not follow steps required by law to justify such sole-source procurement.
For Morton Thiokol Inc., the report underscores what the rocket maker has maintained ever since the proposal for a government-owned, contractor-operated advanced solid rocket motor facility was announced.
"It's been our position all along that a government-owned facility is counter to the trends of the last 10 or 15 years in government contracting," Rocky Raab, Morton Thiokol spokesman, said.
Morton Thiokol decided not to compete for the contract for the next generation of heavy-lift capability boosters for the space program.
The firm said it was better business to put money and energy into the solid rocket redesign project undertaken after the January 1986 Challenger disaster. The redesigned boosters have been hailed as the safest ever flown in the history of solid rocket motors.
Despite the GAO report, Jerry Berg, spokesman for NASA's Marshall Space Flight Center in Alabama, said the arrangement with Martin Marietta "preserves the ability to re-compete a contract if necessary. That gives built-in incentives for contractors to do their best and control costs, because they know it wouldn't be that hard to replace them."
Martin Marietta was chosen through competitive bids in 1973 to develop and build six external shuttle tanks at the government's Michoud facility, just outside New Orleans.
In 1978, it was given a non-competitive follow-up contract for 54 more tanks.
NASA was preparing to give it another follow-up non-competitive contract in 1986, saying it was the only contractor that could provide tanks fast enough to meet NASA schedules.
But the Challenger disaster slowed down NASA's schedule. GAO said that could have allowed competition on the manufacture of tanks without hurting the schedule.
But NASA continued to give Martin Marietta contracts, saying only it could meet NASA's timetables - even though the timetables had changed.
GAO also said, "We have been advised by contracting officials that a decision had been made within NASA not to re-compete the external tank or its components. According to these officials, this decision was based on Martin Marietta's excellent performance. . . . However this is not a proper basis . . . for continuing to use other than competitive procedures."
The recent report questioning the benefits of facilities owned by the United States and run by a contractor echoes the sentiments of many who do business with the government.
The government-owned plant was proposed after the shuttle explosion in an attempt to have a tighter reign on what is produced for the National Aeronautics and Space Administration.
Proponents maintain NASA could more easily switch from a contractor that failed to meet expectations in the advanced solid rocket motor production if the government holds the pink slip on the plant. The national space agency is expected to announce the winner of the contract in April. Hercules Aerospace has teamed up with Atlantic Research to try to win the contract.
But industry officials say the support for the estimated $1 billion advanced solid rocket motor plant to be built in Yellow Creek, Miss., is waning since the redesigned boosters successfully have flown on two shuttle missions and Congress is looking for ways to cut the federal budget.
And the industry maintains that having contractors own and run plants is primarily a stimulus to technology, said Raab.
"When you have industry-owned companies and facilities, they have to compete and be very clever about competing to win contracts. That means they have to be more innovative in their designs and technology and have the lowest cost in the designs and technology," he said.
In a government-owned, contractor-operated facility, Raab said the federal agency runs the show. The only discriminator for the contractor is then cost. So there's much less of an impetus to increase the competitive quality because those standards are set for them."