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Some things are harder to kill than others. A simplistic myth abounds among the usual suspects, that the simple act of killing a government program ends it, cuts spending and thus the deficit. Like so many beliefs, this one is far from accurate. The government can terminate a contract for two reasons: the exceedingly rare case of breach of contract that can be proven in court, or convenience, when Congress or other officials pull the plug. Lately that's usually for fiscal-hawk reasons. But when a big government contract is chugging along, there are costs associated with shutting it down rarely taken into account by those poor souls suffering from late stage Deficit Obsession Syndrome. Bills already owed, fixed costs that cannot always be easily unwound, sometimes layoffs and severance benefits ahead. So, in many cases, the government requires a pile of money to be set aside to cover what's generally referred to as termination liability.

There are lots of ways to do this. The money can be folded into the cost or bid by a contractor, it can be set aside by the government or the company itself, or a combo of both in some cases, it might be waived in special situations. It should come as no surprise that that kind of ambiguity is fertile ground for lawmakers to meddle around in, as they muscle for advantage over one another in the endless, exhausting battle for taxpayer dollars flowing to their districts. It can affect any program theoretically. Right now it's affecting one agency in my blogging bailiwick of science and science policy: Specifically, NASA.

Follow me below through a few of the dark twists and turns of government-contractor termination protocol, and uncover a possible, latent right-wing power grab that could potentially be enlisted by Congress to micromanage every program in the US.

What's important to understand is that "The Government" sends a ton of dough to the private sector for all kinds of services and products. In the case of NASA, former  Deputy Administrator Lori Garver spelled it out. "Historically, NASA has spent roughly 80 percent of its funding on private contractors. That was true during the Mercury and Apollo days and it continued during my tenure under Director Charles Bolden." But exactly how that money gets chopped up into the legislative sausage is another matter. Termination liability is one of those chopped bits.

It's aptly named: it's a liability for sure. Money out of commission, set aside in the event a vehicle or system is cancelled. So ... one way to throw an anvil to a particular firm or sector would be to ease it for one firm or firms and not others:

These programs are in fact the most expensive in NASA’s portfolio: the international space station; the James Webb Space Telescope; the Orion Multi-Purpose Crew Vehicle; and the Space Launch System (SLS) heavy-lift rocket. The bill, H.R. 3625, was approved by the House Science Committee in December and now awaits a vote by the full House. Mo Brooks (R-GA), whose district includes NASA’s Marshall Space Flight Center, the lead SLS integrator, says funds allocated each year for programs ought to be put to work on development rather than held in reserve to cover the theoretical cost of shutting down a canceled program.

It is entirely possible, perhaps even likely, that Mr. Brooks and others were motivated in part by concerns that NASA headquarters might be using termination reserve requirements to hobble progress on programs that the White House — from which it takes its cues — does not fully support. 

That might be a bit confusing and that's part of the problem: this can get real complicated, real fast. But one facet we can all understand easily enough is that there are bills in play using term liability that end up decreeing those four NASA programs cannot ever be cut, not by the President, not by the public, not even by NASA itself. The only people who can ever change that would be, guess who, the majority party in the House. Imagine if they tried that with other programs in other departments, and succeeded, imagine the fine control that would give the House over, well, everything really. That's the most chilling possibility, should it work here, where no one is paying much attention.

We could talk more about the concerns of industry experts who spoke on background that termination liability is being used like a test run to essentially wrest control of funding away from the usual administrators and civil servants and hand it off quietly to the GOP dominated House, who knows what denizens might be found lurking in the shadows there, ALEC, the Brothers Koch? Whole posts could be dedicated to the angle that the richest companies are said by some to be getting off free and those that can least withstand the burden of term liability are bearing the full cost. What a surprise, huh?  Or we could outline the convoluted, arcane process—some might say sheer dumbassery—by which OMB may be counting some of the whopping $500 million already set aside for term liability against NASA's budget even though the agency and their receiving contractors cannot spend it. Any of which quickly unfolds into multi-layered intrigue worthy of a coven of scheming, spice-up space witches right out the classic sci-fi novel Dune. But let's take a conceptual step back.

NASA is a peaceful government agency that drives innovation in almost every field of science and industry like no other, not the least of which is aerospace, one of the few remaining domestic manufacturing sectors where the US still leads. In a saner world, America's space agency would be funded like the Pentagon, it would be nonpartisan, noncontroversial in any way, free to attract the best and brightest to develop the technology needed to explore and harvest the infinite bounty of our exquisite cosmos.

On a planet where resources are increasingly finite and population growth seems to know no bounds, a sane species would be piling cash into space faster than old Europe bled men and treasure into the New World centuries ago and for the same reasons. While we're at it, given the stakes, in a saner world zillionaires with a track record of spending money in space and on science for all humankind rather than sheltering it in offshore accounts for their own benefit, would be held up as the Edisons of our time, a role model for young people to admire and a challenge for fellow billionaires to match.

Alas, we all know that's not the blue marble we live on. In this era of selective penny-pinching, where elected clowns blow trillions cushioning Wall Street's latest fall from grace or fueling tragic wars, where many billions more are wasted on government shutdowns and other useless stunts, for some reason a few lawmakers suddenly get all hot and bothered about a miniscule fraction of that when it comes to science and progress. Playing games with termination liability is yet another, fantastic way to sap our potential and plow through scarce dollars at time when the riches of space are just beginning to come into reach.

The House must pass a fair, no special-interest strings attached version of term liability to insure shutdown costs from cancelled programs are paid in a timely manner as originally intended. Considering that every firm involved could best serve their investors, their employees, and the public by spending every possible dollar on stuff made right here in the good ole USA, efforts should be made to waive it whenever and where ever possible. Lastly, fair warning to Congress in an election year: we're aware of this now. Rest assured, my colleagues and I will be writing about this and related issues through the 2014 mid-terms and beyond.

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Comment Preferences

    •  Hardest of all to kill is ignorance (2+ / 0-)
      Recommended by:
      belinda ridgewood, starduster

      when it has a fresh, daily supply of manure from Fox Noise and their ilk.

      “When it comes to this, I shall prefer emigrating to some country where they make no pretense of loving liberty—to Russia, for instance, where despotism can be taken pure and without the base alloy of hypocrisy.” —Abraham Lincoln

      by Pragmatus on Sun Feb 02, 2014 at 09:04:40 AM PST

      [ Parent ]

  •  "In a saner world...." (11+ / 0-)

    "...America's space agency would be funded like the Pentagon."

    Be careful what you wish for.

    •  This is how (3+ / 0-)
      Recommended by:
      palantir, Most Awesome Nana, dinotrac

      we got the space shuttle. It was a military project to control Low Earth Orbit.

      Hairy Larry

      Please join the Protest Music Group where we sing truth to power.

      by hairylarry on Sun Feb 02, 2014 at 08:30:34 AM PST

      [ Parent ]

      •  While the Shuttle shares some heritage (3+ / 0-)
        Recommended by:
        palantir, Most Awesome Nana, dinotrac

        with some DoD funded testbeds, and while it did play a role in military spacelift, it almost certainly was not conceived as part of some "project" to control the orbitals.

        •  And the original Space Shuttle concept didn't (0+ / 0-)

          look much like the astronaut-killing, high maintenance "truck" that actually flew.

          Gotta love politics, especially when it "improves" on science and engineering.

          LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

          by dinotrac on Sun Feb 02, 2014 at 09:31:15 AM PST

          [ Parent ]

          •  Thing about concepts... (0+ / 0-)

            ...they don't fly except in our imagination.  

            I don't think you can attach too much blame to politics where it concerns to the Shuttle.  It's been almost half a century since anyone started seriously investing in RLVs, and no one has much of anything to show for it.  It might still happen--perhaps Dreamchaser will break the cycle--but if it's because designing reusable vehicles that hit atmo at 8 klicks per second is a very, very tough engineering problem.

            •  I'm aware of all that, but it doesn't help when (0+ / 0-)

              they start heaping additional missions onto your plate.  Makes the engineers' job miserable.

              Don't recall -- did the original shuttle concept include solid boosters?

              LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

              by dinotrac on Sun Feb 02, 2014 at 09:49:35 AM PST

              [ Parent ]

              •  Can't really pinpoint a single "original" concept (2+ / 0-)
                Recommended by:
                dinotrac, henlesloop

                Hell, can't even pinpoint a single original vision for operation that spawned the Space Shuttle; the 1969 NASC recommendations both inflated and descoped over the life of what eventually became the Shuttle's design phase.  And you had several competing proposals for the engines--some solid fuel and other liquid.  Solid won out at the time because it was perceived to have a stronger industrial heritage that might reduce costs.  Not sure if that was the right call to make in the 1970s, but it's not entirely a political or even accounting decision.

            •  Space exploration is analgous to computers: (0+ / 0-)

              A better Babbage difference engine or a half-room-sized ENIAC using punch-cards isn't going to cut it if we want to do anything other than launch a few probes and a bunch of sattelites.

              We need a jump in technology; transitors would do and the go on to silicon chips.

              I ride the wild horse .

              by BelgianBastard on Sun Feb 02, 2014 at 09:53:18 AM PST

              [ Parent ]

          •  If anyone had any sense... (1+ / 0-)
            Recommended by:

            There would be serious investment - in Europe as well as the U.S. - in long-term research into 'space-lifts' and 'superguns'. Rockets will always remain expensive. They are the vacuum tube of space exploration.

            I ride the wild horse .

            by BelgianBastard on Sun Feb 02, 2014 at 09:37:08 AM PST

            [ Parent ]

    •  Shucks. I was amazed by that line that I (1+ / 0-)
      Recommended by:

      commented before scrolling down.

      Sorry I can only offer one rec.

      LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

      by dinotrac on Sun Feb 02, 2014 at 09:29:40 AM PST

      [ Parent ]

  •  if only the MIC could be so ethical (7+ / 0-)

    remember that the space race was also a race to improve our ballistic missile capability and not about Tang or Teflon. Our satellite capability improves both telecoms and surveillance

    NASA is a peaceful government agency that drives innovation in almost every field of science and industry like no other, not the least of which is aerospace, one of the few remaining domestic manufacturing sectors where the US still leads. In a saner world, America's space agency would be funded like the Pentagon, it would be nonpartisan, noncontroversial in any way, free to attract the best and brightest to develop the technology needed to explore and harvest the infinite bounty of our exquisite cosmos.

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Sun Feb 02, 2014 at 08:21:47 AM PST

  •  Great article! (2+ / 0-)
    Recommended by:
    starduster, pimutant

    I've been a DOD contractor since I retired from the USAF in '05. I thought fiscal fraud, waste, and abuse was rampant when I was in the service. But, it pales in comparison to the money wasted on government contracts. Through my career, I've tried to raise awareness up the chain of command. No one cares. Everyone is over-paid, under-worked, (me included), and there is no interest in seeing it change.
    It's not about "defense", it's clearly about keeping the spigot of money flowing into the MIC, and they own more of your government than the collective "we the people" do.

  •  First time I've ever heard of Pentagon funding as (1+ / 0-)
    Recommended by:

    the saner, least controversial model.

    DEA burning a big bust down there in Austin?

    Although, if Pentagon funding really is more rational than NASA's, it's pretty amazing they can ever execute a turn.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Sun Feb 02, 2014 at 09:28:54 AM PST

  •  Pfff... Remember the Gubmint shutdown? (1+ / 0-)
    Recommended by:
    Dancing Frog

    Well, some scientists had to ruin years of medical research because they had to 'destroy' laboratory mice because there was no money to keep them alive. For what? Almost all of three weeks? Yeah real cost effective.

    I ride the wild horse .

    by BelgianBastard on Sun Feb 02, 2014 at 09:30:28 AM PST

  •  how cool to see my tattoo! (0+ / 0-)

    i have the album cover tattooed on my arm, along with 3 little symbols depicting my sons.
    plus, i recognize the importance of the post. and i will forward it if allowed.

  •  Space Is Not the Final Frontier (0+ / 0-)

    Well, at least not in terms of human population.

    Let's say you wanted to hold the population we've got (too many) steady over the next century by shipping all the excess humans into space (where, presumably, they'd be pioneers or settlers). We're expecting population to grow from around 7 billion now to a minimum of about 9 billion, where it's supposed to peak.

    Let's say each of these humans, when you wanted to lift them, averaged around 150 pounds. Let's say lift costs drop to $100 per pound (an absurdly low price, given that the current costs are around ten times that, but I'll give you a quantity discount). That would be to low earth orbit. They're on their own once they get there.

    So that's 2,000,000,000 people weighing 150 pounds a piece (average) at $100, or about $30 trillion, just to get the humans into space.

    Then, you'd have to provision them.

    The current world GDP is around $45 trillion a year.

    You see where I'm going with this? It isn't into space.

    •  Spread it out over a century (1+ / 0-)
      Recommended by:
      Liberal Thinking

      And you've got basically twice NASA's budget.

      In other words, you're not going to move 2 billion people in a single a year any more than you're going to add 2 billion to the world's population in the same time frame.

      Also, $100/lb isn't absurd if we get RLVs.  In fact, the objective is to get it down to the price of a plane ticket--or around $10/lb.  That's the price point you need to encourage happy path immigration.  Also, still not out of the realm of RLVs, provided that you can get the flight rates up.

      Ultimately, space is the destination.  All of our stuff is there.

      •  Let's Take a For-Instance (0+ / 0-)

        The SpaceX Falcon 9 Heavy.

        Here we have a cost of $135 million to LEO that would deliver about 53,000 kg. So, we are looking at a cost of around $2,500/kg.

        The challenge is to cut that cost. How would you do that? Well, maybe if you throw out the development cost and if you had two guys with one cigar do the entire launch (and another guy, without a cigar, refurbish the craft after you got it back, which presumes it lands in your yard), you could maybe cut that cost significantly.

        I can think of ways you could cut the costs to maybe $100/lb or less, but all of those are pipe dreams right now.

        BTW, I don't think $30 trillion (trillion with a T) is twice NASA's budget.

      •  That Is (0+ / 0-)

        I see what you mean, if you spread the $30 trillion over a hundred years, it would be a lot less per year. But we are still only talking about the humans, and not their provisions, and we're presuming costs will go down radically.

        I'm not sure where we'd put them once we got them there, either. 2 billion humans is probably above the carrying capacity of Mars, even if we terraformed it. Which, in itself, would probably take more than a century.

        I don't think space is the answer to overpopulation, especially since we really need fewer humans than we have now, if the books are ever going to balance. I would be shocked if space citizens represented any significant fraction of the human population any time in the next century.

        Much as I'd love to think otherwise!

        •  Mars isn't the only location in this solar system (1+ / 0-)
          Recommended by:
          Liberal Thinking

          and whose to say we'll be stuck in only one solar system.  

          Besides, its not really just about overpopulation - its also about resource depletion.  

          •  That's More What I Think (1+ / 0-)
            Recommended by:

            I don't think there's much space will do about overpopulation, but I do think it might help supply some critical resources, or even just different materials that can be developed there more cheaply than on earth (even with transport costs).

            I'm a huge proponent of space travel and developing our capabilities to get there. I just don't think it will relieve population pressure. The costs of transporting people to space, even with the most technologically advanced systems, is simply too high for it to be much of a factor.

            And, I might point out, that the nearest start is over 4 light-years from here. People think traveling around is like traveling on the oceans--inconvenient but doable. It's more like an impenetrable barrier that you need some magic to overcome. I'm hoping for magic to be developed, but I'm not expecting it in making my plans.

    •  Forgive me (1+ / 0-)
      Recommended by:
      Liberal Thinking

      Five centuries.

    •  Why assume that there is a price floor? (2+ / 0-)
      Recommended by:
      RiveroftheWest, Liberal Thinking

      Yes, there are the high costs associated with going to space these days.  But way assume that there is a price floor, such that it'll still be hundreds of thousands to send people into space?  And why assume that space development can't help society?

      •  A Good Question (0+ / 0-)

        And I'll tell you why. The reason is because most of the cost is the fuel. That's because most of the rocket launched is fuel by weight at launch. And that's because for every inch you go up you have to lift all the fuel you are going to use above that inch to keep going. Most of the fuel goes into the energy to lift fuel, not to lift payload.

        If you made a rocket entirely out of fuel and used the most powerful fuel you could, it would still probably cost $100/lb to get to orbit.

        We could, of course, think outside the rocket, and think of other ways to get to space. Arthur C. Clarke posited a space elevator, for instance.

        But, as far as I know, no one has proved any alternative to rockets is a viable means to get us to space.

        •  Except, thats not true (1+ / 0-)
          Recommended by:
          Liberal Thinking

          most of the cost to orbit is NOT fuel.  It never has been.  If you assume a dollar per pound of propellant (need to include both fuel and oxidizer, and a dollar per pound is actually pretty expensive for propellant), the total amount of propellant needed for Delta IV heavy (the largest rocket currently flying) prices out to less than a million dollars.  

          But the ticket price for a Delta IV is well over $100 Million.  

          Its not fuel that is the high price driver

          •  It's Still a Limiting Factor (0+ / 0-)

            Even if you assume that the price of fuel for the Delta IV heavy is around a $1 million, that means it's one 1/100th the cost of the launch. So, if the cost of the Falcon Heavy comes out at $2,500/kg (see my other comment), and you divide by 100, you are still at $25/kg. And that's just the fuel. It says nothing of the other costs of managing a space fleet, which is why it costs $100 million and not $1 million to use the Delta IV to get to orbit. And this is on the order of the dollar/pound I put in the original comment as a reasonable guess at what we could get to.

            This puts a lower bound on the cost of lifting all these people. And, it doesn't even account for all the material they would need from here to get started in space.

            I suspect that over some number of centuries we could push a significant part of humanity into space. I'm hoping we have the chance. There are many other good reasons to go there. But relieving population pressures is, IMO, not a reasonable expectation in the timeframe needed, which is between now and about 2060. It's kind of a nice side benefit that might be useful in the long run.

  •  Seems Like (0+ / 0-)

    There ought to be a standard multiplier for termination costs. That is, if you grant a billion dollars to a contractor to do something, the default ought to be, say, 10% for termination costs. That would be the automatic term in the contract, meaning, if the agency terminates the contract before it completes, the contractor would get that $100 million to shut down their involvement.

    If it were going to be more or less than the standard percentage, then that would be something I'd expect to have to come before the appropriate appropriations committees in Congress (where it would be visible to the public) and a reason given for it, and the committees should have to vote to approve the change.

    Or, is that the way it currently works?

    There are some things that are always going to be a temptation for corruption. The right policy is to make those things subject to maximum oversight and maximum exposure to public view. Seems like this is one of those things.

  •  a coven of scheming, spice-up space witches? (0+ / 0-)

    a little harsh considering their central place in the entire Dune series.

    Perhaps people would support funding NASA if any of NASA's schemes might result in regular people getting a chance to visit or colonize space.

    Or even funding finding a way of folding space...

    Yes, I'm the real Lia Whirlwind. Do you hear anybody else screaming?

    by Lia Whirlwind on Sun Feb 02, 2014 at 01:57:19 PM PST

  •  Is there a point here? (0+ / 0-)

    Do liberal progressive things. We're not sure what or how or why or what criteria you'd use but by all means vaguely do something about something.

    That's the kind of razor sharp thinking we liberals are renowned for.

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