Post a comment
Print articleNASA’s Space Act Agreements: A Replacement for the Traditional Commercial Contract?
September, 2013 - John MacKenzie, Matt Phillip
In recent years, NASA has spent millions, if not billions, of dollars developing what they call “US commercial crew space capabilities” – in ordinary terms they want to make it easier to access the International Space Station from Earth.
In trying to achieve this aim they have entered into various commercial agreements under the National Aeronatics and Space Act, known as Space Act Agreements (SAAs), instead of using more traditional form commercial contracts.
What are they?
An SAA is covered by a valid law (either international law or federal US law) and there is clear specification of obligations contained within the agreement, which is legally binding. NASA uses SAAs to cover a whole range of different legal documents, all of which would normally be separate. They are used to cover not only commercial contracts but also leases, grants and cooperative agreements. By doing this, NASA claims to retain control over the process and the contents from the very beginning, as opposed to the more traditional approach where often the starting point is a house style or a previous version of a similar document.
Why?
The appeal of the SAAs relies on their flexibility, according to NASA. Parties to each agreement have more flexibility in determining their terms, managing their activities and meeting obligations laid down, with the joint aim of “cost-effective development of commercial space systems”.
The impact on litigation
So what does this mean for dispute resolution? Although NASA maintain that their approach simplifies things, the opposite may prove true in the event of a dispute. The first difficulty with their process is that there may be no standard or ‘boilerplate’ terms: beginning a contract from scratch every time may mean such terms are omitted. Unfortunately for NASA, many such clauses often contain key provisions about dispute resolution, including ways in which to resolve the dispute (such as using litigation or alternative dispute resolution). More often than not their absence, and their usefulness, is only noted once a dispute has already arisen, by which time it is too late.
The second difficulty stems from understanding what individual clauses mean in the event of a dispute. A more creative and unstructured drafting process, without standard terms and with different contributions, may result in a document which is very difficult to unravel in the event of a dispute.
These factors are likely to lengthen the dispute resolution process, resulting in a more costly and complicated process for everyone concerned. Which, to borrow from a certain space traveler, would be illogical…
In trying to achieve this aim they have entered into various commercial agreements under the National Aeronatics and Space Act, known as Space Act Agreements (SAAs), instead of using more traditional form commercial contracts.
What are they?
An SAA is covered by a valid law (either international law or federal US law) and there is clear specification of obligations contained within the agreement, which is legally binding. NASA uses SAAs to cover a whole range of different legal documents, all of which would normally be separate. They are used to cover not only commercial contracts but also leases, grants and cooperative agreements. By doing this, NASA claims to retain control over the process and the contents from the very beginning, as opposed to the more traditional approach where often the starting point is a house style or a previous version of a similar document.
Why?
The appeal of the SAAs relies on their flexibility, according to NASA. Parties to each agreement have more flexibility in determining their terms, managing their activities and meeting obligations laid down, with the joint aim of “cost-effective development of commercial space systems”.
The impact on litigation
So what does this mean for dispute resolution? Although NASA maintain that their approach simplifies things, the opposite may prove true in the event of a dispute. The first difficulty with their process is that there may be no standard or ‘boilerplate’ terms: beginning a contract from scratch every time may mean such terms are omitted. Unfortunately for NASA, many such clauses often contain key provisions about dispute resolution, including ways in which to resolve the dispute (such as using litigation or alternative dispute resolution). More often than not their absence, and their usefulness, is only noted once a dispute has already arisen, by which time it is too late.
The second difficulty stems from understanding what individual clauses mean in the event of a dispute. A more creative and unstructured drafting process, without standard terms and with different contributions, may result in a document which is very difficult to unravel in the event of a dispute.
These factors are likely to lengthen the dispute resolution process, resulting in a more costly and complicated process for everyone concerned. Which, to borrow from a certain space traveler, would be illogical…
