ABSTRACT
This chapter analyses the different types of contracts, and discusses the procurement processes, employed by space agencies. It is clear that dis-economies of scale in contract surveillance kick-in for sizeable agencies like National Aeronautics and Space Administration (NASA) that have to follow numerous contracts while maintaining a centralised process. The presence of an agency in an industrial sector invokes the concept of a regulated industry with substantial public involvement and controls. Civil space agencies are multi-faceted public organisations: they are promoters of scientific discovery and exploration, promoters of space applications. Space projects that are contracted by the government are often high-technology and Research and Development (R&D) intensive, but also enjoy a high degree of asset specificity. Incentive contracts must clearly specify the targets on which the incentives are linked and use appropriate incentive schemes that minimise inefficiencies. A further conflict in agency procurement objectives can also occur when then agency has the added objective to promote industrial competitiveness in commercial markets.
