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International Procurements Contracting Team Lyndon B. Johnson Space Center NCMA Fall Conference November 20, 2013 Roger Roberts Aneesah Vaughn Slide 2 2 International Space Station Aneesah Vaughn Cornerstone of human space exploration International partnership of 15 countries Crew of six, 209 different people have visited Length of a football field, size of 5 bedroom house 170 space walks, almost 1,000 hours Speed: 17,500 mph Mass: 925,000 lbs 135 launches to ISS Slide 3 3 Today, 220 miles above us, astronauts are working aboard the International Space Station 1550 experiments to date in Biology and Biotechnology, Earth and Space Science, Physical Sciences, Human Research, and more involving more than 1500 scientists and 67 countries1550 experiments to date in Biology and Biotechnology, Earth and Space Science, Physical Sciences, Human Research, and more involving more than 1500 scientists and 67 countries Enables scientific discoveries that benefit us on Earth and provides a test bed for technologies to support future deep space explorationEnables scientific discoveries that benefit us on Earth and provides a test bed for technologies to support future deep space exploration NASA 2010 Authorization Act states that It shall be the policy of the United States, in consultation with its international partners in the ISS program, to support full and complete utilization of the ISS through at least 2020.NASA 2010 Authorization Act states that It shall be the policy of the United States, in consultation with its international partners in the ISS program, to support full and complete utilization of the ISS through at least 2020. Slide 4 4 Powerful International Partnerships Partnerships are key to Station and serve as model for exploration of spacePartnerships are key to Station and serve as model for exploration of space Partners: Canadian Space Agency, European Space Agency, Japan Aerospace Exploration Agency, Russian Federal Space AgencyPartners: Canadian Space Agency, European Space Agency, Japan Aerospace Exploration Agency, Russian Federal Space Agency Diversity in backgrounds, culture, and technical competencies significantly enhances ISS capabilitiesDiversity in backgrounds, culture, and technical competencies significantly enhances ISS capabilities Partnerships are key to Station and serve as model for exploration of spacePartnerships are key to Station and serve as model for exploration of space Partners: Canadian Space Agency, European Space Agency, Japan Aerospace Exploration Agency, Russian Federal Space AgencyPartners: Canadian Space Agency, European Space Agency, Japan Aerospace Exploration Agency, Russian Federal Space Agency Diversity in backgrounds, culture, and technical competencies significantly enhances ISS capabilitiesDiversity in backgrounds, culture, and technical competencies significantly enhances ISS capabilities Slide 5 5 International Partners Russian Space Agency (Roscosmos) (RSA) Russian Space Agency (Roscosmos) (RSA) Seats to ISS and back and associated services Seats to ISS and back and associated services Energia Energia Urine processor (toilet) and spare parts (connectors, cables etc.) Urine processor (toilet) and spare parts (connectors, cables etc.) Gagarin Research & Test Cosmonaut Training Center (GCTC) Gagarin Research & Test Cosmonaut Training Center (GCTC) Astronaut training and facilities in Star City Russia Astronaut training and facilities in Star City Russia Russian Space Agency (Roscosmos) (RSA) Russian Space Agency (Roscosmos) (RSA) Seats to ISS and back and associated services Seats to ISS and back and associated services Energia Energia Urine processor (toilet) and spare parts (connectors, cables etc.) Urine processor (toilet) and spare parts (connectors, cables etc.) Gagarin Research & Test Cosmonaut Training Center (GCTC) Gagarin Research & Test Cosmonaut Training Center (GCTC) Astronaut training and facilities in Star City Russia Astronaut training and facilities in Star City Russia Slide 6 6 International Partners European Space Agency European Space Agency Provides engineering services and products associated with Nodes 2 and 3 Provides engineering services and products associated with Nodes 2 and 3 Canadian Commercial Corporation (CCC) Canadian Commercial Corporation (CCC) Maintain and sustain ISS Robotic Arm and Grapple Fixtures Maintain and sustain ISS Robotic Arm and Grapple Fixtures Japan Aerospace Exploration Agency (JAXA) Japan Aerospace Exploration Agency (JAXA) Provides the capability for the rendezvous and berthing of the Orbital Commercial Visiting Vehicle (CVV) Provides the capability for the rendezvous and berthing of the Orbital Commercial Visiting Vehicle (CVV) European Space Agency European Space Agency Provides engineering services and products associated with Nodes 2 and 3 Provides engineering services and products associated with Nodes 2 and 3 Canadian Commercial Corporation (CCC) Canadian Commercial Corporation (CCC) Maintain and sustain ISS Robotic Arm and Grapple Fixtures Maintain and sustain ISS Robotic Arm and Grapple Fixtures Japan Aerospace Exploration Agency (JAXA) Japan Aerospace Exploration Agency (JAXA) Provides the capability for the rendezvous and berthing of the Orbital Commercial Visiting Vehicle (CVV) Provides the capability for the rendezvous and berthing of the Orbital Commercial Visiting Vehicle (CVV) Slide 7 7 Transportation to Space Station aboard Russian Vehicles Four Soyuz trips annually w/ 3 crew membersFour Soyuz trips annually w/ 3 crew members Launched to the Space Station from the Baikonur Cosmodrome in KazakhstanLaunched to the Space Station from the Baikonur Cosmodrome in Kazakhstan Since 2000 at least one Soyuz has always been at the station, generally to serve as a lifeboat should the crew have to return to Earth unexpectedlySince 2000 at least one Soyuz has always been at the station, generally to serve as a lifeboat should the crew have to return to Earth unexpectedly Slide 8 International Contracts Impact to Commercial Crew and Cargo Reduces U.S. dependence on Russia for access to the International Space Station and sustains U.S. industrial base ISS Program has been directed to utilize commercial launch vehicles as the primary method of delivering consumables to the ISS; Therefore, the capability to mix and load Energia ACY tanks must take place in the US. JAXA provides the capability for the rendezvous and berthing of the Orbital Commercial Visiting Vehicle (CVV) Orbital Sciences Antares Launch SpaceXs Dragon Resupplies Space Station Slide 9 9 Unique Challenges Affecting ISS Contracts Language Barriers/Interpretation difficulties Language Barriers/Interpretation difficulties Communication often requires translators Communication often requires translators Negotiation can be challenging concepts may be lost in translation Negotiation can be challenging concepts may be lost in translation Lack of Data Lack of Data Difficult to attain cost & pricing type data especially from the Russians Difficult to attain cost & pricing type data especially from the Russians All NASA international contracts are currently Firm-Fixed Price All NASA international contracts are currently Firm-Fixed Price Language Barriers/Interpretation difficulties Language Barriers/Interpretation difficulties Communication often requires translators Communication often requires translators Negotiation can be challenging concepts may be lost in translation Negotiation can be challenging concepts may be lost in translation Lack of Data Lack of Data Difficult to attain cost & pricing type data especially from the Russians Difficult to attain cost & pricing type data especially from the Russians All NASA international contracts are currently Firm-Fixed Price All NASA international contracts are currently Firm-Fixed Price Slide 10 10 Unique Challenges Affecting ISS Contracts Culture Culture Successful negotiations require an understanding of the culture with which you are negotiating Successful negotiations require an understanding of the culture with which you are negotiating Takes time to understand the culture and for the parties to get comfortable with each other Takes time to understand the culture and for the parties to get comfortable with each other Working relationships should be established with the specialist and technical counterparts in each country. Establishing trust between you and your counterpart plays an important part in international contracting. Working relationships should be established with the specialist and technical counterparts in each country. Establishing trust between you and your counterpart plays an important part in international contracting. Culture Culture Successful negotiations require an understanding of the culture with which you are negotiating Successful negotiations require an understanding of the culture with which you are negotiating Takes time to understand the culture and for the parties to get comfortable with each other Takes time to understand the culture and for the parties to get comfortable with each other Working relationships should be established with the specialist and technical counterparts in each country. Establishing trust between you and your counterpart plays an important part in international contracting. Working relationships should be established with the specialist and technical counterparts in each country. Establishing trust between you and your counterpart plays an important part in international contracting. Slide 11 11 Japan Cultural Differences Quiz During negotiations in Japan you try to confirm a point by asking, Do you not want this added to the agreement? Your negotiations counterpart answers yes, so you keep the item as part of the agreement. At a later date, you learn that the Japanese are upset that this was added to the agreement. Why might they be upset? 1) The Japanese answer positively to negative questions so they actually meant no. 2) Yes can sometimes mean maybe. In this case, the Japanese team wanted to think about it so answered yes, which actually meant let us think about it and check with us at the next meeting. 3) The Japanese assumed you knew they did not want the item to form part of the agreement and answered yes. During negotiations in Japan you try to confirm a point by asking, Do you not want this added to the agreement? Your negotiations counterpart answers yes, so you keep the item as part of the agreement. At a later date, you learn that the Japanese are upset that this was added to the agreement. Why might they be upset? 1) The Japanese answer positively to negative questions so they actually meant no. 2) Yes can sometimes mean maybe. In this case, the Japanese team wanted to think about it so answered yes, which actually meant let us think about it and check with us at the next meeting. 3) The Japanese assumed you knew they did not want the item to form part of the agreement and answered yes. Slide 12 12 Japan Cultural Differences Quiz During negotiations in Japan you try to confirm a point by asking, Do you not want this added to the agreement? Your negotiations counterpart answers yes, so you keep the item as part of the agreement. At a later date, you learn that the Japanese are upset that this was added to the agreement. Why might they be upset? 1)The Japanese answer positively to negative questions so they actually meant no. Yes can sometimes mean 'maybe'. In this case the Japanese team wanted to think about it so answered yes meaning 'let us think about it and check with us at the next meeting. During negotiations in Japan you try to confirm a point by asking, Do you not want this added to the agreement? Your negotiations counterpart answers yes, so you keep the item as part of the agreement. At a later date, you learn that the Japanese are upset that this was added to the agreement. Why might they be upset? 1)The Japanese answer positively to negative questions so they actually meant no. Yes can sometimes mean 'maybe'. In this case the Japanese team wanted to think about it so answered yes meaning 'let us think about it and check with us at the next meeting. Slide 13 13 Japanese Dress Etiquette It is important to Dress to ImpressIt is important to Dress to Impress Men should wear dark conservative attire/business suitsMen should wear dark conservative attire/business suits Women should dress conservatively, minimal accessories and low heelsWomen should dress conservatively, minimal accessories and low heels No pants, Japanese men find it offensive Slide 14 14 Japanese Dos and Donts Do Avoid the OK sign Dont point Dont blow your nose in public Dont pour your own drink Do come to an event fashionably late when invited Dont touch someone of the opposite sex in public YouTube - Japanese Etiquette 2 Slide 15 15 Russian Cultural Differences Quiz During intense negotiations, the Russian negotiation team keeps pressing you on a particular point in which you absolutely cannot budge. You have politely indicated your position multiple times and yet they remain insistent. Which of these options would be the most advisable as a proper course of action? 1) Keep politely insisting you are unable to offer any leighway. The Russians will eventually understand. 2) Drag your negotiation team out of the room dramatically. The Russians will then appreciate concessions on this point are unlikely. 3) Provide some sort of minimal concession. The Russians may then feel they have gained some sort of concession and move on. In business negotiations Russians view compromise as a sign of weakness. During intense negotiations, the Russian negotiation team keeps pressing you on a particular point in which you absolutely cannot budge. You have politely indicated your position multiple times and yet they remain insistent. Which of these options would be the most advisable as a proper course of action? 1) Keep politely insisting you are unable to offer any leighway. The Russians will eventually understand. 2) Drag your negotiation team out of the room dramatically. The Russians will then appreciate concessions on this point are unlikely. 3) Provide some sort of minimal concession. The Russians may then feel they have gained some sort of concession and move on. In business negotiations Russians view compromise as a sign of weakness. Slide 16 16 Russian Cultural Differences Quiz During intense negotiations, the Russian negotiation team keeps pressing you on a particular point in which you absolutely cannot budge. You have politely indicated your position multiple times and yet they remain insistent. Which of these options would be the most advisable as a proper course of action? 2) Drag your negotiation team out of the room dramatically. The Russians will then appreciate concessions on this point are unlikely. In business negotiations, Russians generally view compromise as a sign of weakness. During intense negotiations, the Russian negotiation team keeps pressing you on a particular point in which you absolutely cannot budge. You have politely indicated your position multiple times and yet they remain insistent. Which of these options would be the most advisable as a proper course of action? 2) Drag your negotiation team out of the room dramatically. The Russians will then appreciate concessions on this point are unlikely. In business negotiations, Russians generally view compromise as a sign of weakness. Slide 17 17 Russian Dos and Donts Dont swear or shout in public. Dont start off with a joke. Instead, keep your presentation serious, include facts and technical details. You can inject emotion in your discussion slowly. An old Russian proverb says that He who always smiles is probably stupid. Do Follow up after negotiations. Constant communication through visits and phone calls are crucial. Do Bring gifts with you: Russian people value gifts. Good gift ideas are brand-name products of high quality. With home visits try flowers, alcohol and branded food products. Slide 18 18 Unique Challenges Affecting ISS Contracts Must maintain consistency across technical organizations when dealing with International Contractors Must maintain consistency across technical organizations when dealing with International Contractors Technical / business counterparts must be in line with each others positions and strategies upfront and throughout the lifecycle Technical / business counterparts must be in line with each others positions and strategies upfront and throughout the lifecycle Must think long term when dealing with the International Contracts; Often, precedence is being set. Must think long term when dealing with the International Contracts; Often, precedence is being set. Visibility and attention related to ISS International Contracts Visibility and attention related to ISS International Contracts RSA sole source nature RSA sole source nature International contracts receive increased interest, involvement and inquiries from various groups within and outside the agency. International contracts receive increased interest, involvement and inquiries from various groups within and outside the agency. Must maintain consistency across technical organizations when dealing with International Contractors Must maintain consistency across technical organizations when dealing with International Contractors Technical / business counterparts must be in line with each others positions and strategies upfront and throughout the lifecycle Technical / business counterparts must be in line with each others positions and strategies upfront and throughout the lifecycle Must think long term when dealing with the International Contracts; Often, precedence is being set. Must think long term when dealing with the International Contracts; Often, precedence is being set. Visibility and attention related to ISS International Contracts Visibility and attention related to ISS International Contracts RSA sole source nature RSA sole source nature International contracts receive increased interest, involvement and inquiries from various groups within and outside the agency. International contracts receive increased interest, involvement and inquiries from various groups within and outside the agency. Slide 19 19 Unique Challenges Affecting ISS Contracts Lead-times for contracts (RSA, CRS, etc..) Lead-times for contracts (RSA, CRS, etc..) Lead-time on manufacturing rockets for RSA and commercial carriers Lead-time on manufacturing rockets for RSA and commercial carriers Coupled with laws like the Iran, North Korea, Syria Non Proliferation Act (INKSNA) Coupled with laws like the Iran, North Korea, Syria Non Proliferation Act (INKSNA) Have to plan/strategize roughly 3 to 5 years out to understand the dynamic environment & allow time for procurements Have to plan/strategize roughly 3 to 5 years out to understand the dynamic environment & allow time for procurements Lead-times for contracts (RSA, CRS, etc..) Lead-times for contracts (RSA, CRS, etc..) Lead-time on manufacturing rockets for RSA and commercial carriers Lead-time on manufacturing rockets for RSA and commercial carriers Coupled with laws like the Iran, North Korea, Syria Non Proliferation Act (INKSNA) Coupled with laws like the Iran, North Korea, Syria Non Proliferation Act (INKSNA) Have to plan/strategize roughly 3 to 5 years out to understand the dynamic environment & allow time for procurements Have to plan/strategize roughly 3 to 5 years out to understand the dynamic environment & allow time for procurements Slide 20 20 Unique Aspects of International Contracting Iran, North Korea, Syria, Non-Proliferation Act (INKSNA) Iran, North Korea, Syria, Non-Proliferation Act (INKSNA) INKSNA prohibits extraordinary payments both in cash and in kind from the US (whether directly or via contractors) to the Russian Government; Roscosmos and its subcontractors are affected. INKSNA prohibits extraordinary payments both in cash and in kind from the US (whether directly or via contractors) to the Russian Government; Roscosmos and its subcontractors are affected. NASA must receive a waiver from Congress before it can procure supplies or services from Russia NASA must receive a waiver from Congress before it can procure supplies or services from Russia The Space Exploration Sustainability Act (H.R. 6586) extended INKSNA relief through 12/31/20. The Space Exploration Sustainability Act (H.R. 6586) extended INKSNA relief through 12/31/20. Without further legislative relief, the current INKSNA restrictions would limit the U.S. in potential actions for sustaining and fully utilizing the ISS and pursuing a robust human exploration strategy with Russia. Without further legislative relief, the current INKSNA restrictions would limit the U.S. in potential actions for sustaining and fully utilizing the ISS and pursuing a robust human exploration strategy with Russia. Iran, North Korea, Syria, Non-Proliferation Act (INKSNA) Iran, North Korea, Syria, Non-Proliferation Act (INKSNA) INKSNA prohibits extraordinary payments both in cash and in kind from the US (whether directly or via contractors) to the Russian Government; Roscosmos and its subcontractors are affected. INKSNA prohibits extraordinary payments both in cash and in kind from the US (whether directly or via contractors) to the Russian Government; Roscosmos and its subcontractors are affected. NASA must receive a waiver from Congress before it can procure supplies or services from Russia NASA must receive a waiver from Congress before it can procure supplies or services from Russia The Space Exploration Sustainability Act (H.R. 6586) extended INKSNA relief through 12/31/20. The Space Exploration Sustainability Act (H.R. 6586) extended INKSNA relief through 12/31/20. Without further legislative relief, the current INKSNA restrictions would limit the U.S. in potential actions for sustaining and fully utilizing the ISS and pursuing a robust human exploration strategy with Russia. Without further legislative relief, the current INKSNA restrictions would limit the U.S. in potential actions for sustaining and fully utilizing the ISS and pursuing a robust human exploration strategy with Russia. Slide 21 21 Unique Challenges Affecting ISS Contracts Exchange rate and Inflation considerations Exchange rate and Inflation considerations Important to consider and understand the environment for international contracts Important to consider and understand the environment for international contracts Balance risk between parties Balance risk between parties International Barters vs. contracts International Barters vs. contracts Ensuring no overlap. Procurement does not typically work the barter agreements, we work contracts. However, it is important to understand what is in the barter to ensure that it does not overlap with contract negotiations. Ensuring no overlap. Procurement does not typically work the barter agreements, we work contracts. However, it is important to understand what is in the barter to ensure that it does not overlap with contract negotiations. Exchange rate and Inflation considerations Exchange rate and Inflation considerations Important to consider and understand the environment for international contracts Important to consider and understand the environment for international contracts Balance risk between parties Balance risk between parties International Barters vs. contracts International Barters vs. contracts Ensuring no overlap. Procurement does not typically work the barter agreements, we work contracts. However, it is important to understand what is in the barter to ensure that it does not overlap with contract negotiations. Ensuring no overlap. Procurement does not typically work the barter agreements, we work contracts. However, it is important to understand what is in the barter to ensure that it does not overlap with contract negotiations. Slide 22 22 International Contracting within FAR Guidelines Deviated Clauses Deviated Clauses A large number of the clauses in International contracts are deviated versions that are agreed upon through negotiations. A large number of the clauses in International contracts are deviated versions that are agreed upon through negotiations. Most contract provisions are written for domestic contractors and may not be applicable or may be in conflict with another countries customs or laws. New contracts usually require approval to deviate from the FAR. Most contract provisions are written for domestic contractors and may not be applicable or may be in conflict with another countries customs or laws. New contracts usually require approval to deviate from the FAR. Text messaging while driving Text messaging while driving Sex-trafficking Sex-trafficking Commercial clauses Commercial clauses Deviated Clauses Deviated Clauses A large number of the clauses in International contracts are deviated versions that are agreed upon through negotiations. A large number of the clauses in International contracts are deviated versions that are agreed upon through negotiations. Most contract provisions are written for domestic contractors and may not be applicable or may be in conflict with another countries customs or laws. New contracts usually require approval to deviate from the FAR. Most contract provisions are written for domestic contractors and may not be applicable or may be in conflict with another countries customs or laws. New contracts usually require approval to deviate from the FAR. Text messaging while driving Text messaging while driving Sex-trafficking Sex-trafficking Commercial clauses Commercial clauses Slide 23 23 International Contracting within FAR Guidelines NFS 1825.7002 (a) and (b) (1) Notification of a Foreign Contract Acquisition NFS 1825.7002 (a) and (b) (1) Notification of a Foreign Contract Acquisition Department of State Approval Department of State Approval FAR 30.201-5 Waiver of cost or pricing data FAR 30.201-5 Waiver of cost or pricing data NFS 1825.7002 (a) and (b) (1) Notification of a Foreign Contract Acquisition NFS 1825.7002 (a) and (b) (1) Notification of a Foreign Contract Acquisition Department of State Approval Department of State Approval FAR 30.201-5 Waiver of cost or pricing data FAR 30.201-5 Waiver of cost or pricing data Slide 24 Advancing Human Spaceflight Our Vision: JSC leads a global enterprise in human space exploration that is sustainable, affordable, and benefits all humankind. Laser focus on leading human space exploration beyond Earth orbit. Slide 25 Johnson Space Center Questions?