Whatever happened to competition in space agency procurement? The case of NASA



Whatever Happened to Competition in Space Agency Procurement? 225

programs. It is expected that FBC would result in more competitive tendering and
more fixed-price competition contracts, which could act as a counterbalance to the
consolidation of the industry and reinforce the bargaining position of NASA.
Boeing (1998) states:

Since 1994 a significant percentage of information, space and defense
systems segment business has been in developmental programs under
cost-reimbursement-type contracts, which generally have lower profits than
fixed-price-type contracts.

The inability to account fully for such factors, given the difficulties associated
with quantifying the adoption and application of such policies, is a limitation of
this analysis that must be kept in mind when interpreting the findings. The analysis
will focus on a subset of the procurement issues discussed, by first looking into
the behavior of NASA towards competition.

In the following analysis empirical evidence is presented to examine NASA’s
procurement behavior with regards to competitive tendering to the industry and
distribution of contract types.

III. Empirical analysis of competition in NASA contracting

This Section analyses the determinants of the level of competition in NASA
contracting through time. Table 1 presents a list of variables used and their
description.

Figure 1 illustrates that the first half of the 1990s saw a reversal of a pro-
competitive trend in NASA contracting, since the end of the Apollo program
(early 1970s). Though this trend changed towards the end of the 1990s, there is a
balance between competitive and non-competitive contracts awarded towards the
end of the 1990s, as opposed to the situation in 1990 when non-competitive contracts
were just 18% of the total. Overall, from 1970 to the early 1990’s, competitive
contracts are increased as a percentage of the total.

The decline in the value of NASA competitive contracts as a percentage of the
total value awarded (
NASAc) in 1986 and 1987 is attributed to effects of changes in
reporting practices followed by NASA (NASA 1987: 10):

It should be recognized that a change was made in reporting categories
for this year’s report [1987] which had an impact on NASA’s reported



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