Monday, May 23, 2011

Nothing to See Here! Move Along Now!

It's worth noting that the recent news reports relating to the Radarsat Constellation (RCM) program, such as the May 20th, 2011 Canadian Press article "MDA signs $35.9M RADARSAT contract extension with Canadian Space Agency," aren't really going to tell us anything new unless we decide to look closely.
Canadian actor Leslie Neilsen in the Naked Gun movies, encouraging us to move along now.
And part of what this close look will illuminate is the parceling out of long-term, big dollar contracts into small, easily digestible, bite sized slices which cover only short periods of limited work.

This adds paperwork and press releases, but also lengthens lead times and normally drives up the total costs of a project as teams break apart, reform, attempt to justify themselves or move on to other things and generally kill time between funding infusions.

It's just the way the industry works, both here, in the US,  Europe and pretty much everywhere else.

For example, according to the May 22nd, 2011 SatNews Daily article "MDA + CSA... Continue the Cause," BC based MacDonald Dettwiler (MDA), the prime contractor for the RCM program" has been working on this contract under an Authorization To Proceed, since March 17, 2010. The value of the latest amendments totals $35.9 Million (CAD) and brings the contract value for the Design Phase to $123 Million (CAD)."

So this specific component of the RCM contract goes back to March 17th, 2010. However, if we go back to March 17th, 2010, we come across an MDA press release titled "RADARSAT Constellation Mission contract update" which states:
MacDonald, Dettwiler and Associates Ltd., (TSX:MDA), a provider of essential information solutions, announced today that the Canadian Space Agency has authorized the Company to start the design phase (Phase C) of the RADARSAT Constellation Mission. This authorization is limited to $11.8 million (CAD) and is expected to be completed by June 11, 2010.

The Company successfully completed work on Phase B in February 2010. This phase was originally announced in November 2008
So the contract really goes back to November 2008, at least according to this press release. Is it possible that the actual program goes further back in time (perhaps even to the very start of phase A)?

Of course.

It's possible that the real contract could even precede the 2010 Federal budget announcement that RCM would be funded to completion (as covered in the March 4th, 2010 article "RADARSAT Constellation Mission get Funding in Budget") and go back to the 2005 Federal budget allocation of $7 million CDN to MDA for "conceptual design work" as outlined in the March 14, 2006 MDA press release titled "MDA Starts Work On Next-Generation Satellite Constellation."

RADARSAT Constellation image.
Or it could go further back. After awhile, it gets hard to track these things and at least a part of that problem has to do with the concept behind the phrase "authorization to proceed."

It's essentially one of those confusing legal terms which helps to provide corporate lawyers with job security by replacing the time honored tradition of a verbal agreement and handshakes with lots and lots of paperwork intended to provide contractors and suppliers with the confidence needed to move forward in the absence of defined terms, payment schedules, milestones and other items that you would normally need when doing this sort of thing.

But paperwork coupled with ambiguity generally doesn't make people comfortable.

Authorized to proceed?
Because of this, every once in awhile, a new document is created to codify anything defined since the last contract, a  press release is issued and a bit more money is allocated in order to give everyone sufficient incentive to continue moving the process slowly forward.

Eventually, something might even get completed (possibly) and another press release could be issued (usually).

For it's part, MDA has recently objected to Canadian Space Agency (CSA) efforts to parcel out RCM contract awards in small slices covering only short periods by arguing that it lengthens lead times and drives up total costs as mentioned in the May 4th, 2011 Space News article "MDA Corp. Sets Internal Deadline for Reaching Acquisition Decision."

And to be fair, the CSA is bound by Federal governments announcements of long-term funding for expensive projects like RCM and spread out over the long term, but lacks access to any real allocated funds beyond the current fiscal year.

This places the CSA in the positions of being the bad guys, who must stretch out the payment schedule in order to maintain the cash flow and balance the books. No doubt it's not a position that the CSA would prefer to be in.

As for the press releases and the accompanying news reports based on the press releases? There's nothing to them. Move along now.

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