Reference no: EM133312842

Assignment:

Question: Do you agree or disagree with Mr. Smith's suggestion? Why?

Case

Negotiations with the Aerospace Division of Notting Aircraft Corporation were not going well. Aerospace and the NASA negotiator had agreed on estimated cost and most of the other conditions of the prospective $5 million contract for development of a new weather satellite; the controversy revolved around the Rights in Inventions and Basic Data clauses, and the fee that Aerospace desired.

Aerospace was adamant in refusing to give up rights to inventions and data considered proprietary that might arise out of its research effort. The company maintained that it would supply NASA with a workable satellite, according to the work statement and specifications, but no inventions and no data. The negotiator insisted that NASA must have the inventions and data in the Government's best interests, and that no final contract could be written without the required clauses.

In addition, NASA was interested in a CPIF contract with a fee range of three percent to twelve percent, based on multiple incentives of performance, delivery, and cost. Aerospace refused to consider this type of arrangement because of the complexities and unknowns involved in developing the spacecraft. They felt that they were entitled to a ten percent fee on a CPFF basis because of the high risk factor inherent in the job.

George Smith, the cognizant engineer, who was sitting in on the negotiation, became more disturbed by the minute. Finally, he said, "Look, this job has to get started. Why don't we write a letter contract to include all the things we've agreed to, and continue this discussion later on? We just don't have the time to sit around talking. This project must get moving."