Proposed Legislation Would Free Up Money For NASA Projects

Posted on: 4:08 pm, December 4, 2013, by

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Congressman Mo Brooks (R-5th) offered up a bill on Monday that could free up some cash for NASA.

HR 3625 would make it so NASA did not have to keep funds on hand to cover termination liability costs for contractors.

So, what are those?

Let’s say a contractor gets hired by NASA to do some engineering work, and they specifically purchase some space to complete that contract in.

If NASA cancels the contract and backs out of the deal, they have to reimburse the contractor for the investment made to complete the now-void contract.

That’s a termination liability cost.

The bill points out that in 2010 NASA had 16,343 active contracts.

They only cancelled 28 of them.

Yet NASA has to hold money to cover all of its contracts in case of termination.

This bill makes it so NASA can spend that money on projects, instead of just hoarding it.

If the contracts get cancelled, Congress will have to appropriate new money for cost of termination.

The Marshall Space Flight Center declined to comment on the story

The bill is still in its earliest stages.

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