Posts Tagged‘contract’

Bigelow Aerospace Brings NASA’s Technology Full Circle.

If you wander over to the Space section of this blog you won’t have to look far to figure out which company I have a huge man crush on. Whilst SpaceX might be the toast of the private space flight industry thanks to their incredibly impressive achievements and lofty goals they’re far from the only player in the game and they’re really only currently focused on getting cargo and people into orbit, keeping them there is still someone else’s job. This isn’t to say that no one is working on solving that particular problem however and Bigelow Aerospace, a company I’ve mentioned in passing a couple times, is one such company.

Bigelow Aerospace BA-2100 Inflatable Space Module

Bigelow Aerospace is the brain child of Robert Bigelow funded primarily from the fortune he made from his ownership stake in the Budget Suites of America hotel chain. Unlike most private space companies which are primarily focusing on the launch side of the equation Bigelow is instead focusing solely on the staying up there part, developing technology for a new kind of space station that promises to deliver much larger usable volumes at a fraction of the cost of traditional space station modules. They’re in fact so far along the development path that they already have 2 of their modules Genesis I and Genesis II in orbit right now and they’ve been there for the better part of 6 and 5 years respectively.

Their modules are based off of a pretty novel idea that NASA was developing back in the early 1990s. Dubbed TransHab the idea was to be able to build modules that were of a certain size when launched but could then be inflated once in orbit to provide much more room. Additionally the inflatable design means that it’s much more resistant to micrometeorite impacts as the outer surface will flex, reducing risks to the crew and lowering ongoing maintenance costs. Unfortunately due to the budget overruns of the International Space Station project the TransHab was ultimately cancelled but Bigelow licensed the technology from NASA and set about creating his own versions of them.

The goal for Bigelow was to start up his own private space stations in orbit, essentially extending his hotel chain to outer space. Whilst they’ve had functional verification of their systems for a long time now their biggest issue was a lack of transportation methods in order to get people up there. Seats on Soyuz craft are now going for upwards of $50 million dollars and Bigelow’s plans just aren’t feasible at that price point. Indeed the current lack of usable alternatives prompted Bigelow to slash its staffing by over half at the end of 2011 although they have begun rehiring now in preparation for the availability of such services coming online in 2016.

What is pretty incredible though was the recent news that Bigelow has won a contract with NASA to provide an inflatable module for the International Space Station. Whilst there’s scant details about what the module will actually be (that’s apparently scheduled for a press conference today) it’s a safe bet that it’d be something like their planned BA-330 although it’s entirely possible that they might go for gold and debut their giant BA-2100 (pictured above) which would almost triple the current liveable volume of the ISS. It may seem counter-intuitive for NASA to buy their own technology back off a private manufacturer but Bigelow has invested some $180 million into getting the project this far, a sum that I’m sure no one at NASA wanted to spend when they already have so much invested in rigid modules.

The amount of innovation we’re seeing in the private space industry is simply staggering as we’re fast approaching the point where the only thing that stands between you and your own private space station is the capital required. Sure that’s still no small barrier but the fact that we’re commoditizing space travel means that it’ll soon be something that will be within reach for all of us, much like the commercialization of air flight last century. NASA’s contract with Bigelow is proof that the nascent space company is at the point where it’s technology is ready for prime time and I can’t wait to see one of their modules up in space.

Insource/Outsource, Onshore/Offshore, let’s call the whole thing off!

In rough economic times such as these many public and private sector industries look to cut spending in pretty much any place that they can. One of the hottest topics that comes up around this time is the one of outsourcing certain business needs (usually corporate services such as human resources and IT) to other companies who can do the same service for less than it would cost internally. Traditionally this is met with strong resistance as it typically means either a loss of job for the people who are being outsourced or a relocation to the new company headquarters. I often see people confusing the term outsourcing with offshoring which are really completely different ways of achieving a similar goal.

Outsourcing in Australia has a tainted reputation mostly due to the catastrophe caused by the whole of government outsourcing solution. This is due in part to the lack of capability of the outsourcers to deliver on their promises but some of the blame lies on the government of the time. Up until this initiative none of the big government departments (apart from the Department of Veteran’s Affairs, who pioneered the initiative) had any experience dealing with a large outsourcing arrangement for their in house services. Whilst they did the right thing and sought expert advice this ultimately lead to the government deciding on the service providers based on the wrong, mostly cost based metrics. A subsequent review of the arrangements found the government wanting and the push to stop the outsourcing arrangements became even stronger.

Many departments haven’t recovered from this outsourcing arrangement and continue to use service providers for many of their IT services. In another life I was part of one such contract, working for Unisys as part of the IT services for the Department of Immigration and Citizenship. Whilst I was a minor player in the scope of things (I had nothing to do with the contract itself, but I was part of the new business team for about 6 months and a systems administrator for 6 months prior to that) it became quite clear during my time there why many of the outsourcing arrangements had failed.

The foundation of any big outsourcing arrangement is a large contract; and of course with any large contract there are going to be loopholes, missing requirements and misinterpretations. Once a contract like this has been signed corrections and augmentations to it are slow and cumbersome. When you’re working in mission critical areas, like DIAC’s visa processing area, finding out that a requirement isn’t met by the contract but can only be filled by the outsourcer means one thing: out of scope work. Anyone who has dealt with contract or project management will tell you that out of scope work either doesn’t get done, or you pay on a “time and materials” basis for the additional resources required. New business such as this is where outsourcers will make their money as most of these projects will be resourced by repurposing staff who are already fully paid for under the original contract. The bigger the deal the more room there is for this out of scope work to appear.

Offshoring is an augmentation to the outsourcing idea. In essence this means moving a labour force to another country or location where the services can be provided with a better rate or some other value add. The best examples of these are the call centers in places like Bangalore where the labour is cheap and plentiful. Government agencies in Australia typically shy away from offshoring arrangements due to the data sensitivity problem (government data going overseas? Hello wiretap). I’m more opposed to offshoring arrangements then outsourcing as for most of the outsourcing arrangements I’ve seen they have kept jobs in Australia. Granted the profits then fuel someone else’s economy but given the choice between less jobs in Australia and sending some money overseas I still be behind keeping people working in Australia

No one’s innocent when it comes to failing outsourcing arrangements and the Australian government learned that the hard way. Whilst many departments continue to outsource some of their IT services they are continually improving their contracting process, enabling them to get the delivered services and savings they were looking for. Probably one of the biggest steps forward is the demonstration that if the outsourcer doesn’t deliver, they’ll get the boot for someone else. Sometimes you have to hit them where it hurts before they’ll straighten up.

Personally I’d only consider outsourcing if I was building a company from the ground up. I’ve seen what happens when an established IT department gets outsourced and it isn’t pretty. A company built around these principals however tend to thrive on them, and that’s something that established companies lack. Most savings that are achieved with outsourcing arrangements can be achieved internally as well, it just requires that the current IT department be as motivated to keep their business as the outsourcers are to get it (something which I’ve found sorely lacking).

Now to outsource my job so I can relax at home…… 🙂