Tim Tebow, GPS, Space Acquisition, 60 Minutes and the GAO

Don Jewell

Tim Tebow, GPS, space acquisition, 60 Minutes and the GAO.

One of these things is not like the others. When you first learn this Sesame Street song as a child, where it may be presented as a series of cartoonish pictures, the odd item is usually fairly obvious. Years later, when you encounter this deceptively simple statement on a physics test at Stanford University — where the choices are beguilingly similar formulas or algorithms — the correct answer may be a bit more difficult to determine, and may actually require serious thought.

It seems the U.S. government (USG) acquisition cadre seems to have a similar problem when it comes to recognizing the critical importance of small businesses. The USG has a federally documented mandate and stringent policies (unfortunately, often ignored) in place to support small businesses in the United States. Supposedly, a quota system is in place where, in a perfect world, 23 percent of all eligible contracts should be won and performed by small businesses — the word eligible being the fly in the ointment.

Small Business

For government contractor purposes, what exactly is a small business? This is not an easy question to quantify or answer simply but let’s try. NAICS (North American Industry Classification System) codes specify, among other requirements, the maximum number of employees in a business qualified to compete for contracts of a certain dollar amount — that is one way to designate not only a small company, but their small business qualifications as well. Some companies are not only small in size, but have special qualifications that allow them to compete in a special category for certain contracts; such as being owned by a woman, a Native American, an Eskimo, a handicapped person (any of the five senses), or by the economic success or lack thereof, where the business is geographically located, or the population it serves and employs.

As you can readily see, this small business definition can become unwieldy in a hurry. For our purposes, let’s describe a small business as a company of 500 employees or less that may meet any or all of the aforementioned qualifications, but most importantly meets the operational requirement of having a certain field of expertise for which it is known and at which it excels in. In short, the small company is the domain expert in a certain field of endeavor and typically is sought after by government (municipal, state and federal) and commercial entities alike for their expertise.

Such companies are also sought out by large government contractor competitors known as prime companies that may range in size from several thousand to hundreds of thousands of employees. These companies have historically been likened to a battleship that takes forever to change course. The large primes are the Warren Buffets of government contracting, as they typically have tons of resources and stores of cash, but they historically lack the flexibility, expertise and low cost structure (read low overhead) of the small companies. Therefore, the smaller companies are frequently sought out as critical team members on large government contracts at all levels. Plus, since there is supposedly, in writing anyway, a small business quota system in place, if you can place a small company on any government contract, so much the better. To the prime and the U.S. government, it may be just statistics, but to the small company, it is often a matter of success or failure for the company.

It is a fact of life in government contracting that many times the small companies’ domain expertise is why the prime, who put a winning team together, wins the big contract in the first place. You would think this would ensure success for the small company. However, “build a better mouse trap” and “build it and they will come” are nice clichés, but often get lost in the real profit-and-loss world of government contracting.

In my experience, problems typically come about because both the government and the prime contractors lose sight of why the small, domain expert company is on the team in the first place. Great small companies are so good at what they do, they typically under promise and over deliver and begin to make both the government oversight institutions and the prime look bad. By bad, I mean less efficient, not as capable, and burdened with a plethora of rules and regulations and monstrous overhead rates that rarely apply to small companies.

Don’t think that I have a problem with prime contractors. I worked for two of the largest for many years and they were and are great companies. None of the satellites we have in orbit today would be there without prime contractors. So prime contractors are a great asset to this country and to the space programs, but even large primes occasionally lose their way or fail to deliver.

Acquisition Analogy

Bear with me as I present a simple football analogy some serious thought as it pertains to GPS contracting.

Tim Tebow was/is arguably one of the most famous and sought after American college football quarterbacks of all time. He was the first college sophomore to win the coveted Heisman Trophy, the First round NFL draft pick in 2010, and the winner of two NCAA National Football Championships.

At the conclusion of his phenomenal college career, Tim Tebow held the Southeastern Conference’s all-time records in college football for both career passing efficiency and total rushing touchdowns, appearing second and tenth (respectively) in the NCAA record book in these categories.

Playing his rookie season for the Denver Broncos, Tim started the last three games and became the team’s full-time starting quarterback beginning in the sixth game of 2011. The Denver Broncos were a dismal 1–4 before Tim became the starting quarterback, but began winning with him on the field, playing just as he did in college, often scrambling and running with the football and coming from behind late in the fourth quarter to win. Under his tutelage and leadership, Denver won their first AFC West title and first playoff game since 2005, defeating the Pittsburgh Steelers in overtime.

Tebow the Pro

What happened next? This is where is gets interesting and pertinent to government space acquisitions.

What happened is Tebow changed. He was made to conform to what is viewed as proper professional football behavior. Professional football pundits criticized Tim Tebow for everything from his scrambling and running plays to his obviously devout displays of Christian faith. Statements were made such as “He will get hurt scrambling and running the ball so much, then Denver will not have him as a starting quarterback.” “These college plays he keeps running just don’t work in the NFL.” “Tim needs to wake up and realize he is not in college anymore.”

Amazingly, despite all the critiques, the Tim Tebow college-based solution was working. College plays and Christianity were the formula that worked for Tim in college and was obviously, despite his critics, working well in the NFL, at least for the Denver Broncos. For all the other NFL teams, not so much. Then it all started to come apart, because what the other NFL teams were really admitting to was what psychologists call social phobia or the fear of being embarrassed. In other words, what the other NFL teams were really saying was:

“Come on Denver, we can’t have a college quarterback, using old college plays, defeating the NFL’s finest teams. It makes us all look bad. People pay big money to see NFL teams win on Sunday and Thursday. So get this flea flickering wunderkind under control and come back into the fold. You and your college quarterback are embarrassing the league with your success!”

The Denver Broncos and subsequently other teams in the NFL bowed to pressure and forced Tim Tebow to drastically change the way he played football. The winning formula was shelved, and T2 was made to conform. When that happened, he became the league’s top-losing quarterback. His once accurate passes started to miss their mark because he was told to stay safely in the pocket and not scramble or run with the ball, even though historically his most accurate passes were thrown while on the run. Since he no longer scrambled or ran, he not only lost accuracy but historically the yards he gained running with the football were gone as well. So he rapidly became just what the league declared he should be, not a winning collegiate quarterback in the NFL, but a nominal losing NFL quarterback. At least he was not doing anything outside the norm for the NFL. He was no longer embarrassing the league by winning, but by finally playing by the rules and losing.

Now let’s take the Tim Tebow saga and apply it specifically to federal government GPS acquisitions, or simply to space acquisition practices in general.

Random Scenario

Let’s take a random and totally make-believe scenario and say the federal government requires a new command and control system (C2) for a large global satellite constellation. For purposes of this imaginary scenario, I need to remind you of an old adage, that unfortunately is not imaginary, in the national security space business concerning space C2 systems. It goes like this: The space hardware is 95 percent complete when a team member remarks, ‘Wow! this satellite system is going to be the best in the world at what it does! I can’t wait to see the whole system up and running.” Another team member ponders that statement and replies, “A system, what system? All we have is space hardware. How are we going to launch it, control it (TT&C) and send and receive operational data? Oh yeah, we need a space C2 system. We better get right on that!” You may laugh, but this exact scenario has been played out more times than anyone cares to admit. But, of course, this is all just make believe! Right?

RFI/RFQ

Now imagine for a moment that you find yourself in this situation. As a member of the U.S. government acquisition team, at an SPO or (Special, Space, Strategic, Scientific — take your pick) Program Office, you quickly put an RFI (Request for Information) or an RFQ (Request for Quote) together just to see which companies have the requisite expertise and how much they, the companies, estimate it will cost to complete the C2 system for your constellation. The only problem being that in the RFI or RFQ, which is typically just a few pages, you only delineate the actual basic requirements and you only give the responding companies 30 days to determine how they will go about controlling a constellation you have been building for the last five years. Imagine that! The important part of the scenario is that the RFI/RFQ is actually on the street.

You can be assured most of the five big space primes are going to reply. After all, they have teams of highly qualified proposal writers that do nothing but respond to these requests. While the response process is often a thing of beauty, it is also frequently highly inefficient and misleading. Remember an RFI/RFQ format is almost inconsequential, as it is just the response the government is looking for at this point: Does your company or team of companies have the qualifications to do the work? How long will it take? How much will it cost?

This is far from the end of the story or process. Typically several small companies also respond to Space C2 RFIs and RFQs, primarily because the request concerns their area of expertise, not from a process point of view but from a domain expertise point of view, which may require radically different approaches.

Small technological companies in the space control business are usually flexible and agile, no-nonsense, lean and mean, replete with subject matter experts that specialize in C2 for satellite systems, both commercial and for the USG. They may well be the best in the world at what they do. Alas, they initially and naively think that is all that is required. They may even be under contract to the federal government doing exactly the type of work the RFI/RFQ specifies is needed, but they are frequently overlooked because they are, you guessed it, a small company. However, being small and sometimes naïve, they answer the RFIs and RFQs with enthusiasm, expectations and hope that the system will work and they will be recognized for their expertise, low cost, low overhead and even their outstanding past and present performance. Then, to quote Gilda Radner, “Oh, Never mind!”

Finally, the other shoe drops, as eventually the actual thousand-plus page RFP (Request For Proposal) is released. The RFP has critical detailed data for program success but unfortunately also contains frequently superfluous documentation and tedious requirements lists known as CDRLS (Contract Data Requirements Lists) that commonly reference hundreds of compliance documents so obscure that the USG provides the documents in a special digital online library, because no entity other than the USG would ever bother to keep such sleep-inducing documentation on hand. In this case, 90 percent of the CDRLs do not involve actual C2 of a space constellation, or whatever expertise is required to accomplish the mission, but rather they invariably pertain to some obscure government regulation concerning report formats and interfacing with the government oversight companies and committees.

Too Small To Succeed

Unfortunately we have all heard of companies and institutions that are supposedly too big to fail but what about too small to succeed? In one real-world example, and the USG actually put this in writing, the small expert company that was utilizing its expert system software to actively launch and control spacecraft flawlessly for seven years and is still actively controlling critical space payloads today was told in a competition debrief that they did not fully qualify for the new C2 RFP. Not because of any lack of expertise or past or current performance issues, but because they were too small — not that they could not and were not actually successfully accomplishing the same mission currently (they were the incumbent), but that they did not have the requisite number of personnel to interface with the government on a daily basis during the C2 contracts development phase. This 200+ person small expert company was told they would need to hire another 80 administrative staff just to keep up with the government paperwork and oversight the new C2 program would generate. None of these ‘required’ positions were engineers or subject-matter experts, just paper pushers that generate tons of paper and of charge at a high hourly rate that would add approximately $5M to the contract bid price. True story; sad but true.

So the small company, fully qualified to accomplish the task in record time and for a pittance, a fact nervously recognized by some in the government and by the primes, is not awarded the contract because their hourly rates are half those of the big primes, they can do the work in two years versus six, which for some reason is considered a high-risk proposal, and they do not have the additional 80 staff members sitting around waiting to respond to every government inquiry. Just like Tim Tewbow they were embarrassing the USG and worrying the big primes.

All is not lost. The small company is approached by Prime-A, a large company that is competing for the C2 contract even though they had never launched or controlled a satellite of this type before and are not known for their expertise in the space C2 area. Seeing the handwriting on the wall, the small company agrees to join Prime-A’s team on the six-year $900M effort that the small company was prepared to accomplish for $200M in only 24 months. Twelve months later, the contract is awarded to Prime-A. During the government debrief, one of the primary reasons for the “win” for Prime-A is because they teamed with the right small company — you guessed it, the one with all the domain expertise that was currently doing the work. Smart move by Prime-A.

Ok, so all’s well that ends well, right? Unfortunately, Prime-A now makes a bad move and announces just days after winning the new C2 contract that, having reconsidered their position, now that they have won, they will not be utilizing the tried-and-true operationally proven system from our small expert company, that actually helped them win the contract. No, Prime-A has decided to develop their own brand-new C2 system, become a competitor to the small expert company (a teammate), and allow the government to pay for it all. Of course, the end product, if it is ever successfully developed, will be a totally unproven and proprietary system and will take twice as long, cost five times as much and be far less capable, without any flexibility. But competition is king!

Time Passes

Five years into our imaginary scenario and the C2 program is years behind schedule. The only deliverables the USG has in its possession are those accomplished by the small company partner with the C2 domain expertise, along with invoices from Prime-A that add a 20 percent handling fee or surcharge to all the small company’s accomplishments and that now make the original $900M program a $1.8B program that will only accomplish 50 percent of the original RFP’s stated objectives. The program has moved so far to the right that full completion of all program phases will now take 10-12 years at a cost surpassing $4.2B, during which time all the space hardware will be placed in storage for an additional cost of $1M per space vehicle per year, because the space hardware cannot be launched and fully utilized without the C2 system that makes them incredibly valuable global assets instead of space junk on orbit. More space debris if you will.

Of course, if the small expert company had been awarded the contract or their product had been utilized by Prime-A at the outset, to do the job it currently does so well, valuable space assets would be ready for launch today and ready to benefit mankind worldwide. BTW the USG would also have $1.4B more in its coffers.

But, alas, that is not how our imaginary scenario plays out. In this scenario the small space company experiences the Tim Tebow process and government indoctrination. Their expertise is discounted because they are playing with the “big boys” now, and they are required to hire 80 additional administrative personnel just to compete. They are required to submit all work product through Prime-A that adds an extra 20-50 percent just to process the paperwork and keep the marching army of support staff employed.

As a consequence of the teaming agreement, the small expert company can no longer talk directly to USG representatives who are now suddenly very interested in the original $200M, 24-month proposal. As a member of Prime-As team, the small expert company cannot undertake any independent actions. It is under the thumb of the prime, and the USG will never have the opportunity to take the road less traveled that leads to success and a winning season with a small company. They have been Tebowed!

Rare

Fortunately, the imaginary scenario you just read rarely happens. The USG acquisition teams are very good at what they do, and they rarely allow the scenario described to take place. However, rarely is not “never,” and unfortunately similar scenarios do occasionally take place. Sometimes the USG just makes bad decisions. They fail to realize the true potential and the true domain expertise provided by small expert companies.

Budget

In this budget seques-castration era USG acquisition personnel and decision makers need to look beyond procedures, precedence and tradition. They need to think outside the proverbial box and consider all their options. A satellite C2 system does not require a huge prime company and a marching army of a thousand or more personnel. Constellation C2 can and has historically been accomplished by companies just like the 200+ commercial company in our scenario. Additionally once the USG realizes the prime has failed they need to stop throwing “good money after bad” and restructure the contract, reassign tasks or simply re-compete the contract. As I have said in these pages many times there is not a single satellite constellation in orbit today that requires a $1.6B and certainly not a $4.2B C2 system. And we should not have to wait for 10-12 years for it to come to fruition.

That is outrageous, I hear you say, and you would be correct. But, of course, this is just an imaginary scenario! Surely that never really happened, did it?

To quote Winston Churchill, as I have numerous times, “Gentlemen, we have run out of money; now we have to think.”

60 Minutes and GAO

Recently the investigative news program 60 Minutes has become keenly interested in space and so far it has been a great experience for AFSPC (Air Force Space Command), the United States Air Force (USAF) and the USG. Space and the technology it enables are force multipliers and our freedoms in this great country of ours depend more and more on the space domain and billions of people around the globe depend on GPS for positioning, navigation and timing. GPS is without a doubt the most successful and important constellation in orbit today; bar none. It is a good news story and one of which we can all be proud. Let’s hope it continues to be a good experience.

However, when the GAO, or Government Accountability Office, comes calling the story or experience is not always so positive. The word is out that the GAO has been snooping around AFSPC and several prime space contractors and small space companies as well. As the investigative arm of Congress, government programs rarely fare well or, should I say, sometimes bid “farewell” once the GAO is on the scent. I challenge you to find a single government program manager that can say he is just waiting with fond hopes for Congress to tell him how to run his program.

Bottom Line

This could be an outstanding and pivotal year for NFL football, for Tim Tebow and for USG space acquisition programs, if we all learn the hard lessons from the Tim Tebow experience. Don’t mess with success, and bigger and more sophisticated is not always better.

So, which word in the title is not like the others? Only time will tell.

Until next time, happy navigating, and remember: GPS is brought to you free of charge, courtesy of the U.S. Air Force.