NASA May Privatize Its Stairway to Heavens As a Way to Cut Costs


AS Endeavour's astronauts come home, they may join ground-based colleagues in wondering for whom they'll be working by decade's end.

The National Aeronautics and Space Administration (NASA) is preparing to take a significant step toward what could become a revolutionary change in space-shuttle management - "privatization" of shuttle operations.

At this stage, no one can say whether or when orbiting astronauts might get their wake-up calls from corporate employees rather than NASA flight controllers. But in two to three years, most managers, technicians, and other workers throughout the shuttle-operations program are likely to be working directly or indirectly for a single prime contractor - if they have jobs in the shuttle program at all.

Last Monday was the deadline for comments on NASA's so far sketchy plans. The agency will evaluate those comments over the next three months. Then NASA officials say they expect to call for prime contractor bids. They plan to take a year to evaluate proposals. By the end of 1997, they expect private enterprise to begin to take the space-shuttle helm.

NASA hopes to save a bundle on the $3.2 billion it now costs to fly seven shuttle missions a year. That means radically reorganizing operations to streamline processes and cut personnel. And NASA admits that government can't do the job.

NASA has already trimmed the work force and procedures to the minimum needed to fly the shuttles the way they are flown today. That has cut operating costs 25 percent below their 1992 level. But J. Wayne Littles, NASA associate administrator for space flight, has explained that the only way to gain more efficiency is "to do something fundamental, like looking at the basic requirements and organizational structure" of shuttle operations.

Speaking at an Aug. 21 briefing for contractors in Houston, he said that the program simply doesn't "have as much focused responsibility as we would like to have."

It takes 56 contractors working under 85 separate contracts to support current shuttle operations. This involves redundant layers of supervision by both NASA and contractor personnel. It also involves ultraconservative "safety" rules that lead to such inefficiencies as repeated checks of the same equipment.

Some in NASA defend the redundancies, saying they help avoid the sort of mistakes that led to the Challenger accident in 1986. But privatization backers say that contractors would maintain sufficient safety standards.

NASA's Space Shuttle Management Independent Review Team, in its report last February, recommended turning shuttle operations over to a single prime contractor who would streamline operations. NASA administrator Daniel S. Goldin subsequently embraced this concept.

Such a contractor would be responsible for all aspects of shuttle operations except those reserved by NASA. It also would be responsible for the performance of any subcontractors it hired. But no one - including NASA officials - can yet say what the contractor's duties would be.

This is especially true in the all-important area of safety. Bryan O'Connor, NASA deputy associate administrator for the shuttle program, says that NASA would keep "ultimate authority and responsibility for flight safety." NASA - not the contractor - would give the "go" for launch. But Rep. Robert Walker (R) of Pennsylvania, chairman of the House Science Committee, says that "ultimately, shuttle privatization will mean transferring ownership of the safety responsibility."

The hoped-for cost savings of privatizing also are unclear. NASA's current plan envisions cutting nearly $500 million from annual shuttle operating costs by 2001. It also envisions cutting as much as 40 percent of the 19,700 contractor jobs and 2,800 NASA jobs.

Yet associate administrator Littles told the Houston briefing "we cannot tell today how long this [privatization] process will take." Estimates of cost savings, therefore, are premature.

Ray Williamson, space transportation analyst with Congress's Office of Technology Assessment, notes that it is an enormous challenge to bring all the complex elements of shuttle operations under control of a single contractor.

Commenting in a telephone interview, he said that turning to private industry for unmanned launch vehicles has brought significant cost savings. But manned space flight complicates operations so much that cost savings are hard to anticipate. Nevertheless, he adds, "It's worth a try."

So far, there's only one declared candidate for the job. Lockheed Martin of Bethesda, Md., and Rockwell International of Seal Beach, Calif., - the companies that do two-thirds of present shuttle work - have formed United States Space Alliance to bid for the prime contract.

Meanwhile, critics of privatization within and without NASA already express concern about maintaining safety standards and ensuring accountability when shuttle operations involve profit motives of private operators. Even NASA officials acknowledge that agency flight-control personnel are reluctant to turn over what they consider critical operations to a private contractor. "Without question, a great controversy is ready to erupt over what it means to privatize the space shuttle," observes Congressman Walker.

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