NASA Picks Rockwell to Manage Operations for the Space Shuttle
Rockwell International Corp. won an estimated $5.5 billion of future space business Thursday when it was selected by the National Aeronautics and Space Administration to manage space shuttle operations at the Johnson Space Center in Houston.
The selection ranks among the largest awards ever in the U.S. space program and represents a key expansion to Rockwell’s North American Space Operations, based in El Segundo.
The award culminates more than a year of competition between Rockwell and the losing bidders--Lockheed, Ford Aerospace & Communications and Grumman, which are facing the loss of service contracts that they have held at Johnson.
Under the NASA contract, Rockwell will consolidate space shuttle support functions now provided by 16 contractors at Johnson for so-called space transportation, which is the system that includes the space shuttle.
Training of Astronauts
Among Rockwell’s duties at the Johnson Space Center will be the training of astronauts, preparations for space flights and management of the space shuttle mission control center.
“This is very important, and we are extremely proud and excited for our team,” Rockwell President Donald Beall said in a telephone interview. “It is a recognition of the accumulated experience our people have had in working in space operations.”
Rockwell was the leading member of a team that bid for the NASA contract.
The team includes System Development Corp. of Camarillo, Omniplan Corp. of Santa Monica, Bendix Field Engineering Corp., RMS Technology and System Management Corp.
Since the NASA contract involves only management and services, Rockwell is gaining a politically low-risk program that has a very high and longstanding priority within NASA.
“It is low risk in the sense that it is a stable program,” Beall acknowledged.
He declined to discuss the program’s potential profitability because Rockwell has not yet negotiated the contract. But the NASA contract will include both an award fee and incentive fee provisions that will tie Rockwell’s profit to its cost management and its performance.
Will Cover Four Years
The initial NASA contract, valued at $685 million, will begin Jan. 1 and cover four years. Follow-on awards, however, are expected to extend the contract for a total of 15 years and ultimately generate contract revenue of $5.5 billion, Rockwell officials said they were told by NASA.
NASA currently spends $250 million to $300 million annually among the 16 contractors at Johnson for the work that Rockwell will take over. Johnson officials expect the consolidation to yield a 10% to 15% savings.
The 16 contractors who now provide the NASA services and management at Johnson employ about 4,000 workers, according to Beall. Some of those people will be hired by Rockwell, but Beall said the plan is to shrink the work force to cut costs. He said it is not yet clear how many will be hired by Rockwell.
Its big win Thursday goes a long way toward healing the major wound that the firm was dealt two years ago when NASA ousted it as the principal provider of space shuttle ground servicing at Kennedy Space Center, where the shuttle is launched.
Rockwell had been expected to win that $6-billion award. THe firm built the fleet of four space shuttles and has won the majority of large manned space contracts for the past several decades.
But NASA selected Lockheed for the Kennedy Center contract in 1983, which is expected to ultimately generate contract revenue of $6 billion over a 15-year period.
“We would have liked to have had both of these contracts,” Beall said. “This contract is more at the center of mission planning, operations and training.”
