International Procurements Contracting Team Lyndon B. Johnson Space Center

NCMA Fall ConferenceNovember 20, 2013

Roger RobertsAneesah Vaughn

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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

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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 countries

• Enables 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.”

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Powerful International Partnerships

•Partnerships 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 Agency

•Diversity in backgrounds, culture, and technical competencies significantly enhances ISS capabilities

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International Partners

Russian Space Agency (Roscosmos) (RSA) Seats to ISS and back and associated services

Energia Urine processor (toilet) and spare parts (connectors, cables etc.)

Gagarin Research & Test Cosmonaut Training Center (GCTC) Astronaut training and facilities in Star City Russia

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International Partners

European Space Agency Provides engineering services and products associated with

Nodes 2 and 3

Canadian Commercial Corporation (CCC) Maintain and sustain ISS Robotic Arm and Grapple Fixtures

Japan Aerospace Exploration Agency (JAXA) Provides the capability for the rendezvous and berthing of the

Orbital Commercial Visiting Vehicle (CVV)

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Transportation to Space Stationaboard Russian Vehicles

• Four Soyuz trips annually w/ 3 crew members

• Launched 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 unexpectedly

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

SpaceX’s Dragon Resupplies Space Station

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Unique Challenges Affecting ISS Contracts

Language Barriers/Interpretation difficulties Communication often requires translators Negotiation can be challenging – concepts may be lost in

translation

Lack of Data Difficult to attain cost & pricing type data – especially from the

Russians All NASA international contracts are currently Firm-Fixed Price

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Unique Challenges Affecting ISS Contracts

Culture 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

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.

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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.”

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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.’

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Japanese Dress Etiquette

• It is important to “Dress to Impress”• Men should wear dark conservative attire/business suits• Women should dress conservatively, minimal

accessories and low heels– No pants, Japanese men find it offensive

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Japanese Dos and Don’ts

• Do Avoid the “OK” sign• Don’t point• Don’t blow your nose in public• Don’t pour your own drink• Do come to an event fashionably late when invited• Don’t touch someone of the opposite sex in public• YouTube - Japanese Etiquette 2

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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.

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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.

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Russian Dos and Don’ts

• Don’t’ swear or shout in public.• Don’t 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.

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Unique Challenges Affecting ISS Contracts

Must maintain consistency across technical organizations when dealing with International Contractors Technical / business counterparts must be in line with each other’s

positions and strategies upfront and throughout the lifecycle

Must think long term when dealing with the International Contracts; Often, precedence is being set.

Visibility and attention related to ISS International Contracts RSA – sole source nature International contracts receive increased interest, involvement and

inquiries from various groups within and outside the agency.

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Unique Challenges Affecting ISS Contracts

Lead-times for contracts (RSA, CRS, etc..)

Lead-time on manufacturing rockets for RSA and commercial carriers

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

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Unique Aspects of International Contracting

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.

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.

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.

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Unique Challenges Affecting ISS Contracts

Exchange rate and Inflation considerations Important to consider and understand the environment for

international contracts Balance risk between parties

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.

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International Contracting within FAR Guidelines

Deviated Clauses• 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.

• Text messaging while driving• Sex-trafficking • Commercial clauses

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International Contracting within FAR Guidelines

NFS 1825.7002 (a) and (b) (1) Notification of a Foreign Contract Acquisition

Department of State Approval FAR 30.201-5  Waiver of cost or pricing data

AdvancingHuman Spaceflight

Our Vision:

JSC leads a global enterprise in human space explorationthat is

sustainable, affordable, and benefits all humankind.

Laser focus on leading human space exploration

beyond Earth orbit.

Johnson Space Center

Questions?