Posted on 09/23/2002 8:35:17 PM PDT by anymouse
Presentation To NASA Advisory Council
Innovation Catalyst Initiative
Dr. Scott Pace Deputy Chief of Staff
Jet Propulsion Laboratory Pasadena, CA September 11, 2002
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Commercial Innovation is Important
To fulfill Space Act mandates & to effectively implement its Vision & Mission, NASA needs commercial partners to:
- Translate NASA funded technology into commercial products that contribute to economic growth
- Join in developing new technologies and products that support NASA missions
- Explore market-driven research opportunities that exploit the unique environment of space
The Presidents Management Agenda calls for
- Increased dependence on private sector for functions not inherently governmental
- Limiting the size of government and making it more effective
- Competitive sourcing to meet governmental needs for goods and services
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Commercial Innovation at NASA
Engagement of private sector commercial and non-profit sectors already occurs using tools such as:
- Technology Transfer
- Joint Ventures and Partnerships
- Research Opportunities and Technical Assistance
We need to further organize and more effectively coordinate these tools in an integrated agency-wide effort that will
- Emphasize inside technology pull (e.g., mission-driven) rather than an outside technology push (e.g., external market-driven).
- Leverage areas of common technical interest with industry as part of a consistent operating strategy (e.g., make or buy decisions under full-cost accounting).
- Articulate a clear governance and functional structure that is inclusive of institutional and programmatic requirements.
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Innovation Catalyst Initiatives
Approach
- Re-focus NASAs commercial technology efforts to incentive U.S. companies to develop technologies and applications of mutual benefit. NASAs technology roadmaps are one means of identifying where NASA / industry RD&T interests overlap. These overlaps can become a basis for NASA / industry partnerships intended to help NASA achieve specific technology objectives.
Potential Additional Tools
- A NASA-managed private funding instrument, (somewhat similar to the CIAs In-Q-Tel fund). This Enterprise Engine would be the main driver for an Agency-wide shift from industry to Enterprise-focus. Competitive prizes are also envisioned with funds possibly reallocated from existing Enterprise budgets.
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Enterprise Focused IC Initiatives
- Shift emphasis of current commercial initiatives (e.g., Space Product Development Centers, Technology Transfer Centers, etc.) from pushing NASA-funded technologies on industry, to pulling industry in to help NASA develop technologies and applications of benefit to both.
- Implement new IC Initiatives (e.g., NASA venture capital entity, competitive prizes) to encourage industry to seek partnerships with NASA and exploit areas of mutual R,D&T interest. Encourage Enterprises to look more widely for cooperative opportunities to develop needed capabilities.
- Establish performance objectives for relevant NASA personnel to encourage use of IC Initiatives in meeting the Presidents Management Agenda.
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Impact Goals (see graphic in presenation)
1. Commercial Research Opportunities
2. Enterprise Mission Focused Partnerships
3. NASA Enterprises
4. NASA Mission / Vision
5. US Economy / National Security
SPDCs, Entrepreneurial Experiments, Engineering Partnerships:
- Industry and universities consistently exceed NASAs SPDC funds in cash / kind, producing highly innovative, low-cost space hardware for commercial experimentation, with possible applications for NASA Enterprise Missions.
Partnerships, Enterprise Engine, Prizes, SBIR / STTR, etc.:
- Establishing NASA / industry partnerships to leverage industry resources / business methods for rapid innovation applicable to Enterprise Mission requirements and commercial opportunities
- Provides clear, achievable objectives, concrete measurable results, and contributes to NASAs ability to achieve its mission faster and more efficiently.
- Enterprises make more efficient R&D management decisions in a full-cost environment
Technical Assistance / Spin-offs:
- Based on a track record of success, these initiatives disseminate technologies from NASAs efforts to achieve its Mission/Vision for use to strengthen the US economy and national security
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Key Concepts for Feedback
- Shift of emphasis from pushing NASA technology out to partnering that more directly benefits NASA missions and the Enterprises.
- Creating incentives to ensure productive engagement of the Enterprises -- Addressing efforts of potential benefit to NASA as a whole but not any particular Enterprise
- Clearly defining and communicating NASA technology needs to identify areas of mutual interest with industry
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Backup Charts
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NASA Vision & Mission
Vision: To improve life here, To extend life to there, To find life beyond.
Mission: To understand and protect our home planet, To explore the Universe and search for life, To inspire the next generation of explorers, ... as only NASA can.
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Congressional Mandates
The National Aeronautics and Space Act (1958), as Amended charges the Agency with responsibilities related to commercialization"
- "... seek & encourage, to the maximum extent possible, the fullest commercial use of space
- "preservation of the role of the United States as a leader in aeronautical and space science and technology and the application thereof ..."
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Presidents Management Agenda
Focusing and Integrating Agency Management
(see graphic in presentation)
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The "Enterprise Engine"
Objective: Create a NASA-backed venture capital entity that leverages industry resources, expertise and creativity to develop dual-use technologies that NASA needs to achieve its Mission.
Benefits:
- NASA investment should be able to attach co-investment commitments from the US private sector, based on the perceived value of NASAs brand, expertise and the Enterprise Engines investment objectives
- Focused on technology sectors apart from those dominated by traditional NASA contractors
- Highly competitive in selection process; should attract much more competition than NASAs traditional contracting process
- Enables NASA to hedge bets by investing in multiple companies focused on the same technology for dual-use applications; potentially less expensive and less risky than contracting. (Specific deals would typically be in syndicates, and not solely based on NASA.)
- Useful determinant for make-buy / competitive sourcing decisions
- Provides more flexibility to NASA Enterprises where substantial portion of funds are earmarked
Issues To Be Addressed: Statutory authority re: NASA investment, ownership, governance, constraints on use of SBIR funds, etc.
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Competitive Prizes
Objective: Create cash / kind prizes to be awarded to the winner(s) of competitions to develop technologies or applications, products or processes needed to achieve Enterprise Mission objectives
Benefits:
- NASA wouldnt have to pay unless the specified objective of the prize has been met
- NASA would have the rights to the technical results of all prize contestants
- Competition for the prize could be high and resulting work brilliant, depending on the focus and amount of the prize
- The prize should stimulate broad interest and awareness from the relevant technology sectors, as well as from the public at large.
- The prize could become a beacon in the distance to encourage development of future reach-technologies that could enable NASA to advance its strategic objectives faster than planned
- The prize also serves as an evaluation tool for make / buy decisions if insufficient competition, the clear indication would be to make it in-house or contract for it
- If insufficient competition by a date certain or milestones not achieved, the prize could be cancelled and NASA could stay on plan by contracting for the same thing.
- NASAs Centers required to participate on industry teams; could not compete; NRC can provide peer review
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Broad Issues for Consideration
- Are our commercial efforts consistent with the NASA Vision and Mission and Presidents Management Agenda?
- Who are NASAs internal and external customers?
- How is performance being assessed? How well do our programs meet their goals?
- Is there a coherent framework that promote internal agency cooperation and transparency?
- How can national capabilities (academic and commercial) be tapped beyond existing NASA field centers?
- How can the transaction costs of industry-NASA relations be reduced?
- Are appropriate mechanisms in place to perform due diligence on potential cooperative efforts?
- Are organizational reforms, different skills, and new authorities needed?
Problems that I see in this pitch:
Pg. 3, Commercial Innovation at NASA - "Emphasize 'inside technology pull' (e.g., mission-driven) rather than an 'outside technology push' (e.g., external market-driven)."
- Command economies rarely result in success. What is wrong with "external market-driven" solutions? Isn't one of NASA's goal to aid the industry?
Pg. 13, Competitive Prizes:
- "NASA would have the rights to the technical results of all prize contestants"
- This will keep commercial companies from going after these prizes. NASA should only be entitled to the winner's technical result (i.e., drawings, specs, patents), not any of the other contestants, who may want to recoup their investments by turn their effort into a spin-off commercial ventures. This would allow NASA to continue to control the commercial space marketplace. I'm not even thrilled about NASA claiming ownership of the winner's proprietary rights, as NASA should only be entitled to purchase the winning product or service at a pre-stated price defined in the prize contest rules.
- "The prize also serves as an evaluation tool for make / buy decisions if insufficient competition, the clear indication would be to make it in-house or contract for it."; "If insufficient competition by a date certain or milestones not achieved, the prize could be canceled and NASA could stay on plan by contracting for the same thing."
- If there is "insufficient competition, the clear indication would be to" re-evaluate the prize contest rules, not immediately jump to the conclusion that prizes don't work and then "make it in-house or contract" or assume the "prize could be canceled and NASA could stay on plan by contracting for the same thing." This is setting up the prize option for failure. It is clearly in here to appease NASA and contractors concerns that prizes might take away their funding.
- "NASAs Centers required to participate on industry teams; could not compete; NRC can provide peer review"
- Why would NASA centers be involved on a prize team at all?!! NRC is not a biased peer review as it is made up of corporate heads and other institutions dependent on NASA funding. A truly independent panel should define and interpret the prize contest rules. The rules should set clear winning criteria and minimize the opportunity for subjectiveness. By using the "peer review" term, it appears that Dr. Pace is assuming that the prize is for some subjective scientific accomplishment, rather than for a product or service of easily determined quality.
Pg. 14, Broad Issues for Consideration - "Are appropriate mechanisms in place to perform due diligence on potential cooperative efforts?"
- Competition rather than cooperation should be the goal - what is this a commune?!! If the prize winning criteria are clear and unambiguous AND the prize is awarded to a distinct product or service, then due diligence won't be necessary, as it will be "cash and carry" procurement rather than "trust me, I'm a government contractor, you're a NASA manager ready to retire and come work for us after we win" procurement as usual.
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