[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
NASA'S COMMERCIAL CARGO PROVIDERS: ARE
THEY READY TO SUPPLY THE SPACE STATION
IN THE POST-SHUTTLE ERA?
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON SPACE AND AERONAUTICS
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
THURSDAY, MAY 26, 2011
__________
Serial No. 112-20
__________
Printed for the use of the Committee on Science, Space, and Technology
Available via the World Wide Web: http://science.house.gov
_____
U.S. GOVERNMENT PRINTING OFFICE
66-561 PDF WASHINGTON : 2011
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR., EDDIE BERNICE JOHNSON, Texas
Wisconsin JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas LYNN C. WOOLSEY, California
DANA ROHRABACHER, California ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland DAVID WU, Oregon
FRANK D. LUCAS, Oklahoma BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois DANIEL LIPINSKI, Illinois
W. TODD AKIN, Missouri GABRIELLE GIFFORDS, Arizona
RANDY NEUGEBAUER, Texas DONNA F. EDWARDS, Maryland
MICHAEL T. McCAUL, Texas MARCIA L. FUDGE, Ohio
PAUL C. BROUN, Georgia BEN R. LUJAN, New Mexico
SANDY ADAMS, Florida PAUL D. TONKO, New York
BENJAMIN QUAYLE, Arizona JERRY McNERNEY, California
CHARLES J. ``CHUCK'' FLEISCHMANN, JOHN P. SARBANES, Maryland
Tennessee TERRI A. SEWELL, Alabama
E. SCOTT RIGELL, Virginia FREDERICA S. WILSON, Florida
STEVEN M. PALAZZO, Mississippi HANSEN CLARKE, Michigan
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
------
Subcommittee on Space and Aeronautics
HON. STEVEN M. PALAZZO, Mississippi, Chair
F. JAMES SENSENBRENNER JR., GABRIELLE GIFFORDS, Arizona
Wisconsin MARCIA L. FUDGE, Ohio
LAMAR S. SMITH, Texas JERRY F. COSTELLO, Illinois
DANA ROHRABACHER, California TERRI A. SEWELL, Alabama
FRANK D. LUCAS, Oklahoma DAVID WU, Oregon
W. TODD AKIN, Missouri DONNA F. EDWARDS, Maryland
MICHAEL T. McCAUL, Texas FREDERICA S. WILSON, Florida
SANDY ADAMS, Florida
E. SCOTT RIGELL, Virginia
MO BROOKS, Alabama
RALPH M. HALL, Texas EDDIE BERNICE JOHNSON, Texas
C O N T E N T S
Thursday, May 26, 2011
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Steven M. Palazzo, Chair,
Subcommittee on Space and Aeronautics, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 15
Written Statement............................................ 16
Statement by Representative Ralph M. Hall, Chair, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 16
Written Statement............................................ 18
Statement by Representative Jerry F. Costello, Member,
Subcommittee on Space and Aeronautics, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 18
Written Statement............................................ 19
Witnesses
Mr. William H. Gerstenmaier, Associate Administrator, Space
Operations Mission Directorate, National Aeronautics and Space
Administration
Oral Statement............................................... 21
Written Statement............................................ 23
Ms. Cristina Chaplain, Director, Acquisition and Sourcing
Management, U.S. Government Accountability Office
Oral Statement............................................... 30
Written Statement............................................ 32
Mr. Frank Culbertson, Jr., Senior Vice President and Deputy
General Manager, Advanced Programs Group, Orbital Sciences
Corporation
Oral Statement............................................... 55
Written Statement............................................ 57
Ms. Gwynne Shotwell, President, Space Exploration Technologies
Oral Statement............................................... 64
Written Statement............................................ 65
...............................................................
Appendix I: Answers to Post-Hearing Questions
Mr. William H. Gerstenmaier, Associate Administrator, Space
Operations Mission Directorate, National Aeronautics and Space
Administration................................................. 96
Ms. Cristina Chaplain, Director, Acquisition and Sourcing
Management, U.S. Government Accountability Office.............. 102
Mr. Frank Culbertson, Jr., Senior Vice President and Deputy
General Manager, Advanced Programs Group, Orbital Sciences
Corporation.................................................... 105
Ms. Gwynne Shotwell, President, Space Exploration Technologies... 107
...............................................................
Appendix II: Additional Material for the Record
Written Statement Submitted for the Record by Representative Pete
Olsen.......................................................... 112
Additional Material Submitted for the Record by Mr. William H.
Gerstenmaier, Associate Administrator, Space Operations Mission
Directorate, National Aeronautics and Space Administration..... 113
.................................................................
NASA'S COMMERCIAL CARGO PROVIDERS: ARE THEY READY TO SUPPLY THE SPACE
STATION IN THE POST-SHUTTLE ERA?
----------
THURSDAY, MAY 26, 2011
House of Representatives,
Subcommittee on Space and Aeronautics,
Committee on Science, Space, and Technology,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Steve
Palazzo [Chairman of the Subcommittee] presiding.
Chairman Palazzo. The Subcommittee on Space and Aeronautics
will come to order. Good morning. Welcome to today's hearing
entitled, ``NASA's Commercial Cargo Providers: Are They Ready
To Supply the Space Station in the Post-Shuttle Era?'' In front
of you are packets containing the written testimony,
biographies, and truth in testimony disclosures for today's
witness panel. I ask unanimous consent that the gentleman, Mr.
Olson, from Texas and Mr. Flores from Texas be allowed to sit
in at the dais with the Committee and participate in the
hearing.
Hearing no objections, so ordered.
I now recognize myself for five minutes for an opening
statement.
I would like to welcome everyone to today's subcommittee
hearing examining NASA's commercial cargo programs. I also want
to thank our witnesses for taking time out of their busy
schedules to testify before us today. We have a lot of ground
to cover, and I know Members want plenty of time to ask
questions, so I will keep my remarks short.
I think we are all well aware that NASA is preparing to
launch the final Space Shuttle mission to the International
Space Station. The cargo bay of Atlantis will be filled with
supplies and spare parts bound for the International Space
Station, enough to provide up to a year's margin of safety. The
flight was added in part because NASA and the commercial
partners are behind schedule and have not yet demonstrated the
capability to access the ISS. Without the Shuttle, and until
commercial cargo flights begin flying, NASA must rely on the
capabilities of the international partners.
NASA's international partners should be commended for doing
a fine job, but they simply do not have enough cargo-carrying
capacity by themselves to insure that sufficient equipment is
on board the Station to support a research team of six
astronauts.
NASA wrote the book on back-up systems, and thankfully with
STS-135 the Space Shuttle can be called upon one last time to
provide the much-needed cargo capability. But in the post-
Shuttle era will NASA's commercial cargo providers be able to
do that job?
Thus far we have very little by which to make an informed
judgment. Only one of the two cargo resupply contractors has
actually orbited a prototype vehicle, and that was only an
orbital demonstration that was not intended to reach the Space
Station orbit. Congress has generally been supportive of NASA's
commercial cargo efforts, but too often requests for
information have been met with a veil of secrecy and claims of
company proprietary information.
I want to remind NASA and the commercial partners that you
are spending taxpayer money and lots of it. So you will not be
exempt from oversight and financial scrutiny.
I also want to remind everyone in this room that today we
are talking about cargo and not capabilities to take astronauts
into space or to the ISS. Whether or not commercially-
developed, non-NASA launch systems can safely carry astronauts
to orbit in an economical way is a question that will require
some number of years before we have an answer and will be the
topic of future hearings.
Today let us focus our attention on NASA's programs to
commercially deliver cargo to the Space Station. NASA's
commercial cargo programs have been in development for several
years and have experienced delays. NASA has obligated over
$1.25 billion and is poised to spend more than $4 billion over
the next few years.
Yet, in spite of optimistic projections and even a
successful SpaceX Falcon 9 launch and Dragon capsule recovery,
NASA's commercial cargo partners have yet to demonstrate the
ability to safely deliver cargo to the ISS.
I am hopeful that we will see some progress soon, and I
look forward to hearing your testimony.
[The prepared statement of Mr. Palazzo follows:]
Prepared Statement of The Honorable Steven M. Palazzo, Chairman
Subcommittee on Space and Aeronautics
I would like to welcome everyone to today's subcommittee hearing
examining NASA's Commercial Cargo programs. I also want to thank our
witnesses for taking time out of their busy schedules to testify before
us today. We have a lot of ground to cover and I know Members want
plenty of time to ask questions so I will keep my remarks short.
I think we are all well aware that NASA is preparing to launch the
final Space Shuttle mission to the International Space Station. The
cargo bay of Atlantis will be filled with supplies and spare parts
bound for the International Space Station; enough to provide up to a
year's margin of safety. The flight was added in part, because NASA and
the commercial partners are behind schedule and have not yet
demonstrated a capability to access the ISS. Without the shuttle, and
until commercial cargo flights begin flying, NASA must rely on the
capabilities of the international partners.
NASA's international partners should be commended for doing a fine
job, but they simply do not have enough cargo carrying capacity by
themselves to ensure that sufficient equipment is onboard the station
to support a research team of six astronauts. NASA wrote the book on
backup systems, and thankfully with STS-135, the space shuttle can be
called upon one last time to provide the much needed cargo capability.
But in the post-shuttle era will NASA's commercial cargo providers be
able to do the job? Thus far, we have very little by which to make an
informed judgment. Only one of the two cargo resupply contractors has
actually orbited a prototype vehicle, and that was only an orbital
demonstration that was not intended to reach the space station orbit.
Congress has generally been supportive of NASA's commercial cargo
efforts, but too often requests for information have been met with a
veil of secrecy and claims of company proprietary information. I want
to remind NASA and the commercial partners that you are spending
taxpayer money, and lots of it. So you will not be exempt from
oversight and financial scrutiny.
I also want to remind everyone in this room that today we are
talking about cargo, and not capabilities to take astronauts into space
or to the ISS. Whether or not commercially developed, non-NASA launch
systems can safely carry astronauts to orbit in an economical way is a
question that will require some number of years before we have an
answer, and will be the topic of a future hearing.
Today let's focus our attention on NASA's programs to commercially
deliver cargo to the space station. NASA's commercial cargo programs
have been in development for several years and
have experienced delays. NASA has spent over $1.25 Billion and is
poised to spend more than $4 billion over the next few years. Yet, in
spite of optimistic projections, and even a successful SpaceX Falcon 9
launch and Dragon capsule recovery, NASA's commercial cargo partners
have yet to demonstrate the ability to safely deliver cargo to the ISS.
I am hopeful that we will see some progress soon, and I look
forward to hearing your testimony.
Chairman Palazzo. I would now like to yield my remaining
time to Science Committee Chairman Ralph Hall for a few brief
comments.
Mr. Hall. Thank you, Mr. Chairman, for yielding some time.
NASA's commercial cargo program was initiated as we all
know in 2006, five years ago, with the Commercial Orbital
Transportation Systems Program. It was, and is, a technically-
challenging program to initiate two commercial launch systems,
even for the seemingly-routine delivery of cargo to the
International Space Station, but the procurement strategy also
broke with NASA tradition by allowing the agency to use its
Space Act Agreement authority to fund these developments of
these two systems.
Two years later NASA signed contracts valued at 3.5 billion
with the same two COTS-funded companies for cargo supply
services, even though neither of these companies had flown any
demonstration flights.
So what started as a reasonable step-by-step approach to
develop and prove capabilities first, followed by competitive
acquisition simply didn't happen. NASA simply ran out of time
and is now gambling the future of Space Station on the success
of two very new launch systems.
We, NASA, Congress, and our Space Station partners expect
these companies to perform. It is my sincere hope and desire
that they perform and meet their contract goals. There is no
plan B if they encounter severe technical or schedule
challenges, and I want them to succeed. I simply regret that
there continues to be so much uncertainty about our Nation's
ability to reliably get cargo to the Station with the final
Shuttle flight now less than two months away.
It is unfortunate the decisions of the Administration have
created so many questions and turmoil in the outlook for space.
Thousands were handed unbelievable anxiety about their future,
about their jobs, and about our Space Station.
I just want to review just very briefly an article that has
been furnished to all of us up here. It simply points out that
the last Space Shuttle mission is scheduled for July the 8th,
just around the corner. After that how is NASA going to supply,
maintain, and utilize the multi-billion dollar International
Space Station?
NASA plans to rely on new commercial launch service
providers to supplement the international partners. NASA has
spent $500 million since 2005, on the Commercial Orbital
Transportation Services Program intended to demonstrate
commercial cargo delivery capabilities to the International
Space Station from two commercial partners; Space Exploration
Technologies and Orbital Science Corporation.
Despite initial assurances that NASA would not expend any
money to buy services until these systems were fully
demonstrated, NASA has spent over $466 million towards the
purpose of cargo delivery services even though no, I emphasize
no, demonstration flights to the ISS have been performed.
Furthermore, last year NASA requested an additional $312
million augmentation, a 62 percent increase, to reduce risk and
improve the schedule. To date NASA has obligated at least $1.25
billion on the commercial cargo effort without accomplishing a
single demonstration to the ISS.
Questions for the Congress include when will these systems
be ready, how much additional work, time, and money will be
required, and I join with Mr. Palazzo in welcoming our guests
here. You have had and will have disappointments. Just don't
over promise us as we work together and hopefully succeed
together.
Let us remember those that blazed the way to the moon and
back, the John Glenns, the Neil Armstrongs, the Buzz Aldrins,
the Gene Cernans, the Mike Collins, the General Tom Staffords,
and all those others who perished in missions that once thought
routine. We owe them so much. Let us not let them down.
I yield back my time.
[The prepared statement of Mr. Hall follows:]
Prepared Statement of The Honorable Ralph M. Hall
Thank you, Mr. Palazzo, for yielding me some time to inject a
couple of quick comments.
NASA's commercial cargo program was initiated in 2006, five years
ago, with the Commercial Orbital Transportation Systems (COTS) program.
It was--and is--a technically challenging program to stand-up two
commercial launch systems, even for the seemingly routine delivery of
cargo to the ISS. But the procurement strategy also broke with NASA
tradition by allowing the agency to use its Space Act Agreement
authority to fund the development of these systems. Two years later,
NASA signed contracts valued at $3.5 billion with the same two COTS-
funded companies for cargo resupply services, even though neither of
these companies had flown any demonstration flights.
So what started as a reasonable step-by-step approach to develop
and prove capabilities first, followed by a competitive acquisition,
did not happen. NASA simply ran out of time and is now gambling the
future of Space Station on the success of two very new launch systems.
We--NASA, Congress, our space station partners--expect these
companies to perform. It is my sincere hope and desire that they
perform and meet their contract goals. There is no plan B if they
encounter severe technical or schedule challenges, and I want them to
succeed. I simply regret that there continues to be so much uncertainty
about our nation's ability to reliably get cargo to station with the
final shuttle flight now less than two months away. It is unfortunate
that the decisions of this Administration have created so many
questions and turmoil in our outlook for space.
I join with Mr. Palazzo in welcoming our witnesses this morning,
and I look forward to your testimony.
Chairman Palazzo. Thank you, Chairman Hall.
The chair now recognizes Mr. Costello for an opening
statement.
Mr. Costello. Mr. Chairman, thank you, and Mr. Chairman,
thank you for calling this hearing today.
First I want to congratulate Associate Administrator Bill
Gerstenmaier, who is here with us this morning and his entire
NASA team for the successful launch of STS-134, Space Shuttle
Endeavor's final mission. We were all heartened that
Congresswoman Giffords was present at the launch, and our
thoughts are with the astronauts and their families for their
safe return home.
In 2006, NASA envisioned a commercial cargo program that
took into account the financial and programmatic risk to the
United States government, allowing private companies to service
the ISS. The initial plan 1) allowed NASA to partner with a
commercial provider to develop and demonstrate a safe cargo
mission to the ISS before signing a long-term resupply
contract, and 2) provided a contingency plan to use
Constellation vehicles and rockets if commercial providers
could not meet their goals.
In the last five years the landscape of human spaceflight
has changed. In 2008, NASA signed long-term resupply contracts
with SpaceX and Orbital before either company had safely
completed a cargo mission, and in 2010, NASA cancelled the
Constellation Program and shifted its focus to deep space
exploration. Under this new plan, commercial providers will be
fully responsible for the critical task of servicing the ISS
when the Space Shuttle retires this year.
Orbital and SpaceX have made significant strides in
achieving the goals laid out by NASA for providing commercial
cargo services under their initial agreements, but to date, as
the Chairman has noted and the Chairman of the full Committee
has also noted, neither company has successfully completed a
mission to and from the ISS.
However, both companies are under contract with NASA to
begin flying cargo missions in 2012. After the final Space
Shuttle launch brings supplies to the station this summer, NASA
has no back-up plan if Orbital and SpaceX are not ready to
launch in 2012. Without a robust and reliable commercial cargo
service, NASA will not realize its plans to fully utilize the
ISS as a research and development facility.
As chair of this Subcommittee, Congresswoman Giffords
expressed these concerns about commercial providers. She
strongly believed that commercial companies should be given the
time to demonstrate that they could safely provide cargo
services and felt NASA could not put the ISS or deep space
exploration at risk by not providing a back-up plan if they
fail.
I hope to hear today how NASA, Congress, and the commercial
providers can work together to identify any remaining risks to
reliable and timely commercial cargo operations, develop
realistic expectations for the program, and ensure NASA has
contingency options if commercial services are unavailable. We
must ensure NASA has sustainable commercial cargo services for
the life of the ISS without exposing the U.S. government to too
much financial and programmatic risks.
Mr. Chairman, I welcome our panel of witnesses this
morning, and I look forward to hearing their testimony.
[The prepared statement of Mr. Costello follows:]
Prepared Statement of Representative Jerry Costello
Mr. Chairman, thank you for holding today's hearing to receive
testimony on the readiness of commercial cargo providers to service the
International Space Station (ISS) after the Space Shuttle retires this
year.
First, I want to congratulate Bill Gerstenmaier and the entire NASA
team for the successful launch of STS-134, Space Shuttle Endeavour's
final mission. We were all heartened that Congresswoman Gabrielle
Giffords was present at the launch, and our thoughts are with the
astronauts and their families for their safe return home.
In 2006, NASA envisioned a commercial cargo program that took into
account the financial and programmatic risk to the U.S. government
allowing the private companies to service the ISS. The initial plan 1)
allowed NASA to partner with a commercial provider to develop and
demonstrate a safe cargo mission to the ISS before signing a long-term
resupply contract and 2) provided a contingency plan to use
Constellation vehicles and rockets if commercial providers could not
meet their goals.
In the last five years, the landscape of human spaceflight has
changed. In 2008, NASA signed long-term resupply contracts with SpaceX
and Orbital before either company had safely completed a commercial
cargo mission, and in 2010 NASA canceled the Constellation program and
shifted its focus to deep space exploration. Under this new plan,
commercial providers will be fully responsible for the critical task of
servicing the ISS when the Space Shuttle retires this year.
Orbital and SpaceX have made significant strides in achieving the
goals laid out by NASA for providing commercial cargo services under
their initial agreements, but to date neither company has successfully
completed a mission to and from the ISS. However, both companies are
under contract with NASA to begin flying cargo missions in 2012.
After the final Space Shuttle launch will bring supplies to the
station this summer, NASA has no back-up plan if Orbital and SpaceX are
not ready to launch in 2012. Without a robust and reliable commercial
cargo service, NASA will not realize its plans to fully utilize the ISS
as a research and development facility.
As Chair of this Subcommittee, Congresswoman Giffords expressed
these concerns about commercial providers. She strongly believed
commercial companies should be given the time to demonstrate they could
safely provide cargo services but felt NASA could not put the ISS or
deep space exploration at risk by not providing a back-up plan if they
fail.
I hope to hear today how NASA, Congress, and commercial providers
can work together to identify any remaining risks to reliable and
timely commercial cargo operations, develop realistic expectations for
the program, and ensure NASA has executable contingency options if
commercial services are unavailable. We must ensure NASA has
sustainable commercial cargo services for the life of the ISS without
exposing the U.S. government to too much financial and programmatic
risk.
I welcome our panel of witnesses and look forward to their
testimony. I yield back the balance of my time.
Chairman Palazzo. Thank you, Mr. Costello. If there are
Members who wish to submit additional opening statements, your
statements will be added to the record at this point.
At this time I would like to introduce our witness panel.
Our first witness will be Mr. Bill Gerstenmaier, Associate
Administrator for Space Operations at NASA. Mr. Gerstenmaier
began his career at NASA in 1977, and has worked on a number of
projects and programs including Shuttle, Space Station Freedom,
and the ISS.
Our second witness is Ms. Cristina Chaplain, Director of
Acquisition and Sourcing Management at the U.S. Government
Accountability Office. She has responsibility for GAO
assessments of military space acquisitions, NASA, and the
Missile Defense Agency. She has been with the GAO for 20 years.
Our third witness is Mr. Frank Culbertson, Senior Vice
President and General Manager of Orbital's Advanced Programs
Group. Mr. Culbertson is a graduate of the U.S. Naval Academy.
He was a naval aviator and served for 18 years as a NASA
astronaut, spending 144 days in space as Shuttle commander,
pilot, and station crew member.
And for our final witness introduction I recognize Mr.
Flores for two minutes.
Mr. Flores. Thank you, Mr. Chairman. I appreciate the
courtesy of each of you allowing me to introduce Gwynne
Shotwell, the President of Space Exploration Technologies. I
also appreciate the Committee holding this important hearing on
NASA's Commercial Cargo Providers.
As you are aware, this option will soon be the only
domestic American capability to transport cargo to the
International Space Station. All Americans know that Texas has
had a long and prominent role to play in spaceflight, and I am
proud that the City of McGregor in McClennan County is playing
a key role in this next phase of our space program.
I am pleased to introduce Gwynne Shotwell, whose company,
SpaceX, is bringing exciting new engineering and technical jobs
to McGregor. Since 2003, SpaceX has invested more than $50
million in its McGregor facility to develop state-of-the-art--
to develop a state-of-the-art rocket development facility which
sits on more than 600 acres of land and employs more than 120
Texans.
Mr. Chairman, I have had the opportunity to visit SpaceX
McGregor test site and meet with its employees, and I can tell
you it is an impressive place. There is a lot of energy and
excitement and to me it exemplifies the spirit of American
ingenuity and innovation. Not only was I able to see the Dragon
spacecraft, which successfully twice orbited the earth in
December of last year, but I was also able to see the great
engineers and technicians at work test firing one of SpaceX's
Merlin rocket engines.
My constituents all across our district have told me how
proud they are to have such an innovative and exciting company
in the community, and I am proud of what they are doing to
develop a safe and affordable domestic alternative to offset a
pending sole reliance on Russian spacecraft to deliver cargo
and ultimately crew into space. McGregor is a busy place today
and getting more industrious and busy by the minute. Every
SpaceX Merlin engine that powers the Falcon 9 rocket and every
Draco thruster that controls its Dragon spacecraft is first
tested on the ground in McGregor before launch.
SpaceX is now averaging about one test firing per day. This
frequency will only grow and increase as SpaceX expands to
support dozens of upcoming launches for its government and
commercial customers. And now that NASA is working with SpaceX
under its commercial crew development program, development of
SpaceX's innovative new integrated launch aboard system for the
Dragon spacecraft will be McGregor.
Again, Mr. Chairman, thank you for allowing me the time to
introduce Gwynne and SpaceX. Speaking from my experience in the
private sector, I support the principle that American private
industry leads the world in fostering innovation. It is
important that we in Congress do all that we can to make sure
that we highlight companies such as SpaceX. They robustly
exhibit the commitment to American innovation, and they are
doing it by creating jobs here in America instead of overseas.
And I wholeheartedly believe that NASA, working with
companies like SpaceX, the United States can and will maintain
its lead in space exploration. Thank you.
Chairman Palazzo. Thank you, Mr. Flores.
As our witnesses should know, spoken testimony is limited
to five minutes each, after which the Members of the Committee
will have five minutes each to ask questions.
I now recognize our first witness, Mr. William
Gerstenmaier, Associate Administrator of the Space Operations
Mission Directorate at NASA.
STATEMENT OF MR. WILLIAM H. GERSTENMAIER, ASSOCIATE
ADMINISTRATOR, SPACE OPERATIONS MISSION DIRECTORATE, NATIONAL
AERONAUTICS AND SPACE ADMINISTRATION
Mr. Gerstenmaier. Thank you, Chairman Palazzo and Members
of this Subcommittee. Thank you for the opportunity to appear
before you today to discuss the status of NASA's commercial
cargo efforts.
Tonight the crew onboard the Space Shuttle Endeavor will
begin their fourth EVA or spacewalk for the mission. This will
be a significant milestone as this will be the last spacewalk
based solely on Shuttle crew support. So tonight if things go
as planned the total spacewalk time associated with the Space
Station will be 1,000 hours. So we have spent--and that is just
building the Space Station. So we spent quite a bit of time
building the station, assembling it, and it culminates this
evening with the final spacewalk based from the Shuttle.
We have been preparing for the Shuttle retirement for
almost six years. In doing so we had to change the entire
maintenance philosophy for the Space Station. We used to
deliver spares to Space Station, return those spares to the
ground, refurbish them, and launch them again. When we changed
the cargo delivery system, we needed to change to a system
where we essentially replaced the units on orbit and disposed
of them in space.
So it is--not only did we need to develop and establish a
cargo supply system, we needed to change the basic way we bring
cargo to and from Space Station. This retirement of the Shuttle
Program has entailed many years of preparation and required
efforts beyond just the cargo delivery activities that we will
talk about today. The ISS is entering a new phase focusing on
research and utilization. The unique capabilities of the
Shuttle are no longer required, and I think the simpler systems
for cargo resupply will better serve this new phase of ISS
utilization.
The cargo delivered by these new providers will be
absolutely critical to the effective utilization of Space
Station. The next phase of Space Station will focus on
research, both fundamental and applied.
The agency has divided its commercial cargo efforts into
two unique activities. The Commercial Orbital Transportation
Services and that was to demonstrate commercial cargo systems,
and then the second activity was commercial resupply services
to procure cargo services to and from the ISS. These are unique
activities as one is based on Space Act as was discussed
earlier and the other is based on a fixed price of federal
acquisition requirements for our FAR-based services contract.
Both COTS partners continue to make progress in developing
their systems. NASA sees no reason to doubt either company's
ability to achieve its desired objectives. Both partners have
forward-leaning schedules and are facing challenges typical of
a spaceflight development program. Both have experienced some
milestone delays and have overcome significant technical and
programmatic challenges in the past. This was not unexpected.
Establishing a regular flight rate after the initial
flights will not be easy. NASA and the ISS Program are prepared
for these startup problems, however, NASA expects these
providers to deliver the services as required by the contracts
that they have signed.
On December 8, 2010, SpaceX successfully completed its
first COTS demonstration flight. This was a significant event
and has been talked about earlier. Orbital is currently
expected to complete their maiden test flight of its Taurus II
launch vehicle from the new launch pad at Wallops Flight
Facility this October and its demonstration flight to the ISS
for NASA in December.
On the commercial resupply services contract on December
23, 2008, NASA awarded these contracts to Orbital and SpaceX
with a delivery of cargo to ISS after retirement of the
Shuttle. This activity was separate from the COTS activity as I
had just mentioned. NASA anticipates both providers will have
their systems operational in 2012.
Again, I think both the companies are well prepared to move
forward. We are prepared for the problems that will occur as we
move forward. We anticipated these inevitable startup
challenges associated with the technologically-ambitious
endeavor. Both NASA and these providers have spent many years
preparing for the utilization of Space Station. Now is the time
when we will begin to see the fruits of this planning and
development. NASA is ready for the ISS utilization, and with
the help and dedication of these providers, ISS will be fully
utilized and demonstrate the benefits of space-based research
to the world.
Chairman Palazzo and Members of the Subcommittee, I would
like to conclude my remarks by thanking you, again, for your
continued support for NASA and its human spaceflight program
including our commercial cargo efforts. I will be pleased to
answer your questions as we go through the hearing. Thank you.
[The prepared statement of Mr. Gerstenmaier follows:]
Prepared Statement of Mr. William H. Gerstenmaier, Associate
Administrator, Space Operations Mission Directorate, National
Aeronautics and Space Administration
Chairman Palazzo and Members of the Subcommittee, thank you for the
opportunity to appear before you today to discuss the status of NASA's
commercial cargo efforts, which the Agency has divided into two
programs--the Commercial Orbital Transportation Services (COTS) Program
and the Commercial Resupply Services (CRS) Program.
Under COTS, NASA has helped fund the development of commercial
cargo systems, and under CRS, NASA has entered into contracts to
procure future cargo transportation services to and from the
International Space Station (ISS). Together and along with NASA's
initial Commercial Crew Development efforts, NASA is continuing to
expand the opportunity for commercial access to space, thereby creating
multiple means for NASA to access low-Earth orbit (LEO). Additionally,
by investing in these commercial efforts, NASA is helping to facilitate
the commercial uses of space, to help lower costs for commercial space
services and to spark an engine for long-term U.S. job growth in the
aerospace industry.
My testimony today will outline the progress made by our COTS and
CRS partners: Space Exploration Technologies (SpaceX) and Orbital
Sciences Corporation (OSC). Both companies competed as part of separate
competitions under COTS and CRS, and were initially selected for the
COTS development phase in 2006 and 2008, respectively, and later for
the CRS phase in December 2008.
NASA is pleased with the steady progress both companies continue to
make in their cargo development efforts. While both companies have
experienced technical and schedule challenges to date, that is not
uncommon with major aerospace development efforts. However, there still
remain significant challenges to developing reliable, regular cargo
transportation to the ISS. We need to anticipate and be prepared for
the inevitable start-up challenges associated with a technologically
ambitious endeavor, such as cargo delivery to the ISS.
We anticipate that the final COTS demonstration flights will
conclude by early 2012. The first CRS resupply flights are also planned
take place in 2012, thereby providing a critical capability that will
enable us to maintain the ISS following the retirement of the Space
Shuttle, thereby providing a critical capability that will enable us to
maintain the ISS following the retirement of the Space Shuttle.
Commercial Orbital Transportation Services
In 2005, NASA established the Commercial Crew and Cargo Program
Office at Johnson Space Center. The objectives of the Program, which
oversees the COTS projects, is to further the implementation of U.S.
space policy with investments to stimulate the commercial space
industry, facilitate U.S. private industry demonstration of cargo and
crew space transportation capabilities with the goal of achieving safe,
reliable, cost-effective access to LEO, and create a market environment
in which commercial space transportation services are available to
Government and private sector customers. NASA believes the eventual
availability of safe, reliable and economical service to LEO through
the private sector will help NASA achieve the Nation's space
exploration goals following retirement of the Space Shuttle, thereby
allowing NASA to focus on developing new space transportation
capabilities to support exploration beyond LEO.
As part of COTS, NASA entered into partnerships using funded Space
Act Agreements (SAAs) with emerging and established space
transportation providers to demonstrate the delivery of cargo to an on-
orbit destination. The SAAs include a schedule of performance
milestones that each partner is expected to achieve along with a fixed
milestone payment to be made upon successful completion of performance.
These milestones culminate in a flight demonstration where the
participant's vehicle will launch, rendezvous and berth with the ISS as
the demonstration testbed, and re-enter or return safely to Earth. If a
partner does not complete a milestone, as defined in the SAA, and to
NASA's satisfaction, they are not paid. Should a milestone be missed,
NASA would ascertain the cause of the failure, evaluate partner
progress made and determine whether additional efforts are in the best
interest of the Government. NASA does not pay for a milestone until the
work has been completed successfully.
It is important to understand that both NASA and the partners
themselves act as investors during the development and demonstration of
commercial cargo services under COTS. The partners (and their other
private investors) are investors because they partake in the financial
burden, and stand to reap the financial benefits of developing a proven
commercial space transportation capability that they can sell to NASA
and other customers. NASA's intended benefit is the future availability
of commercial providers, to enable less expensive cargo-transportation
costs and elimination of the operations burden for routine LEO
transportation.
Currently, NASA has two funded COTS partners, SpaceX and OSC. NASA
signed funded SAAs with SpaceX in 2006 and with Orbital in 2008. Prior
to awarding a funded SAA to OSC, NASA had an SAA with Rocketplane
Kistler (RpK). However, RpK failed to meet certain negotiated
milestones. In October 2007, after working with RpK for several months,
NASA decided that it was in the best interest of the Agency to
terminate the RpK agreement and re-compete the remaining funding. After
the re-competition, NASA selected OSC for a funded SAA in February
2008.
Both SpaceX and OSC continue to make progress in developing their
cargo transportation systems, based in part on NASA's financial and
technical assistance, coupled with that of the industry partner's own
financial contributions and technical expertise. NASA sees no reason to
doubt either company's ability to achieve its desired objectives--that
of demonstrating commercial cargo delivery to and from LEO. Both
partners have aggressive, success-oriented schedules, and are facing
challenges typical of a spaceflight development program. Both partners
have experienced some milestone delays. However, these milestone delays
are not unexpected, and have not required any additional NASA funding
of specific milestones, since the partners are paid only fixed amounts
for achieving milestones. Development costs beyond NASA's milestone
payments have been borne by the companies and/or other investors.
A detailed schedule of each partner's COTS progress is provided as
Attachment 1.
A review of what has occurred since SpaceX signed its COTS
agreement with NASA in August 2006 shows that:
To date, SpaceX has completed 25 of 40 negotiated
milestones for COTS work, receiving $298 million out of a
potential $396 million, including augmented funding.
On December 8, 2010, SpaceX successfully completed
the first COTS demonstration flight, demonstrating launch of
the Falcon 9 booster, separation of the Dragon spacecraft and
completion of two orbits, orbital maneuvering and control,
reentry, parachute decent and spacecraft recovery after
splashdown in the Pacific Ocean.
SpaceX's remaining demonstration flights for NASA are
scheduled for November 2011 and January 2012. NASA is reviewing
a SpaceX proposal to accelerate the third demonstration flight
test objectives, which include berthing to the ISS, during the
second demonstration flight. Initial safety and technical
assessments are expected to be completed by the end of May to
enable a decision on berthing with the ISS on the earlier
mission.
A review of what has occurred since OSC signed its agreement with
NASA in February 2008 shows that:
To date, OSC has completed 21 of 31 negotiated
milestones for COTS work, receiving $221.5 million out of a
potential $288 million, including augmented funding.
Recently, OSC began integration and testing of its
Cygnus Service Module and Taurus II launch vehicle.
OSC is expected to complete its maiden test flight of
the Taurus II launch vehicle from the new launch pad at the
Wallops Flight Facility (WFF) in Virginia in October 2011, and
its demonstration flight for NASA in December 2011.
Overall, NASA has invested $552 million in the COTS effort, which
includes funding invested with the two current funded partners, as well
as funding that was invested with Rocketplane Kistler that was
terminated for failure to perform in 2007. By the conclusion of the
COTS effort, NASA anticipates it will have invested $800 million in the
COTS project--not including in-kind and infrastructure support that
NASA has provided to the COTS partners. The $800 million includes the
original $500 million authorized for COTS milestone payments and
programmatic administrative costs, plus $300 million for augmented
cargo milestone payments and associated administrative costs to help
accelerate technical development, conduct flight tests and develop
ground infrastructure, as authorized by the NASA Authorization Act of
2010 and funded under the FY 2011 Full-Year Continuing Appropriations
Act (P.L. 112-10). To be clear, this augmented funding is being used
for additional content and risk reduction measures, and therefore
represents additional content and new work.
In total, NASA anticipates providing SpaceX and OSC $128 million
each in augmented funding via modifications to their respective funded
COTS SAAs and via the CRS contract during FY 2011, utilizing
Exploration funds under the FY 2011 Full-Year Continuing Appropriations
Act. To date, NASA has executed three SAA amendments (known as Quarter
1, Quarter 2, and Quarter 3/4 augmentations) for each COTS partner with
respect to the augmentation milestones authorized by the NASA
Authorization Act of 2010. These amendments outline the milestones that
each partner must successfully complete before receiving associated
NASA funding: For SpaceX, the augmentation milestones and associated
funding will improve the chance of mission success by adding ground and
flight testing, accelerating development of enhanced cargo
capabilities, or further developing the ground infrastructure needed
for commercial cargo capabilities. More specifically, the additional
SpaceX milestones include rendezvous and proximity operations sensor
testing, system level spacecraft testing (thermal vacuum
electromagnetic interference, and acoustic testing), and infrastructure
improvements at the launch, production and test sites.
For OSC, the augmentation milestones and associated funding will
support a maiden test flight of the Taurus II in the October 2011
timeframe, thereby helping to significantly reduce the risks associated
with a new launch vehicle development. The milestones also enable
additional software and control system testing.
Commercial Resupply Services
The ISS has transitioned from the construction era to an operations
and research era, with a six-person permanent crew, three major science
labs, and an operational lifetime through at least 2020. The ISS is the
largest crewed spacecraft ever assembled, measuring 243 by 356 feet,
with a habitable volume of over 30,000 cubic feet and a mass of 846,000
pounds, and is powered by arrays which generate over 700,000 kilowatt-
hours per year. The ISS represents a unique research capability, aboard
which the United States and its partner nations can conduct a wide
variety of research in biology, chemistry, physics and engineering
fields that will help us better understand how to keep astronauts
healthy and productive on long-duration space missions. In addition to
conducting research in support of future human missions into deep
space, astronauts aboard the ISS will carry out experiments with
terrestrial applications.
While the ISS is serviced by a fleet of cargo vehicles, including
the Russian Progress vehicle, European Automated Transfer Vehicle
(ATV), and Japanese H-II Transfer Vehicle (HTV), NASA will be depending
on U.S. industry to provide resupply services to and from the Station
following the retirement of the Space Shuttle. On December 23, 2008,
NASA awarded CRS contracts to OSC and SpaceX for the delivery of cargo
to the ISS after the retirement of the Shuttle. The companies will
enable operation of vehicles that can: 1) fly to the ISS orbit; 2)
operate in close proximity to the ISS and other docked vehicles; 3)
dock to ISS; and, 4) remain docked for extended periods of time. NASA
anticipates that both providers will have their systems operational in
2012.
The CRS contracts are firm-fixed price, Indefinite Delivery
Indefinite Quantity procurements with a period of performance through
Dec. 30, 2015. The contract allows the contractor to make deliveries
for one year following the end of the period of performance. This
allows the contractors adequate time to complete missions ordered for
CY 2015 that may move into CY 2016. The contracts are based on
milestone payments scheduled in terms of months from launch, and the
payment plan must meet the current requirements of the payment clause.
For example, total milestone payments through Mission Integration
Review shall not exceed 50 percent of the mission cost. The contracts
allow the flexibility to add or modify mission payments in the work
plans to accommodate specific mission tasks. Under Federal Acquisition
Regulation (FAR) Pt. 12 commercial services contracts, payments are
viewed as financing payments to the contractor. The government pays
incrementally for an end item service to avoid the cost of financing
that would be levied in the overall mission price if payment was not
made until the end. This is a standard practice for launch services
contract. Even though these are financing payments, the CRS contractors
are required to demonstrate that they are making key progress toward
providing the service and therefore the payments are typically tied to
major reviews or manufacturing milestones.
NASA ordered 12 CRS flights valued at $1.59 billion from SpaceX.
SpaceX will provide pressurized and unpressurized
upmass and return services.
SpaceX currently has completed 14 funding milestones
for the four CRS missions in process in FY 2011. In addition,
one more CRS mission may be turned on if progress continues.
Finally, two milestones in support of COTS demonstration cargo
have been paid.
The schedule margin that existed when the CRS
contracts were initially awarded has gotten smaller over the
last two years. Parallel development and mission activities
have been challenging for a relatively small company that
depends heavily on in-house capabilities, yet both cargo and
external integration activities have begun and are proceeding.
This next year will demonstrate the company's ability to manage
multiple missions. The first SpaceX CRS flight is currently
scheduled for late January 2012, and the company is currently
slated to fly three CRS missions each fiscal year from 2012
through 2015. The January 2012 date is dependent on SpaceX's
successful completion of its COTS demo flights.
To date, NASA has paid SpaceX $181 million for 14 CRS mission
milestones and $4.8 million for two demonstration cargo milestones (the
latter from the above-mentioned augmentation funding).
NASA ordered eight CRS flights valued at $1.88 billion from OSC.
OSC will provide pressurized upmass and disposal
services.
OSC currently has completed seven additional funding
milestones for three CRS missions in process in FY 2011.
OSC uses a different mission model than the in-house
focused work of SpaceX--one which involves using proven
suppliers. The distributed network of suppliers helps with the
multiple mission flows, and OSC has demonstrated an
understanding of cargo and mission integration interfaces and
processes.
The company is relying on NASA assets at Stennis
Space Center in Mississippi (for engine testing) and Wallops
Flight Facility (for launch vehicle processing and
integration).
The first OSC CRS flight is currently scheduled for
the end of the first quarter of calendar year 2012, and the
company is currently slated to fly two CRS missions each fiscal
year from 2012 through 2015.
To date, NASA has paid OSC $273 million for 11 CRS mission
milestones and $7.5 million for two demonstration cargo milestones (the
latter from the above-mentioned augmentation funding).
NASA has considerable insight into the progress that SpaceX and OSC
are making during the demonstration missions and for the CRS milestones
that have been given Authority to Proceed, or are in process. The
program has weekly meetings with representatives of the companies to
discuss schedule and technical issues. Both CRS providers are making
progress on their missions, and this year will be key to demonstrating
that their mission profiles are achievable. A number of challenges
confront both CRS providers, as even successful new rockets tend to
require adjustments following their initial launches. In addition, new
spacecraft themselves require adjustments--both ATV and HTV required
upgrades between their first and second missions--and they must be
integrated with their launch vehicles. Additional challenges arise from
the difficulties inherent in mastering automated rendezvous, proximity
operations, and docking with a crewed spacecraft. While these tasks
have been demonstrated many times by the Russian Progress vehicle, and
twice each by the European ATV and Japanese HTV, the technologies and
techniques required for their achievement are difficult, but clearly
not impossible, to develop.
All commercial cargo vehicles intended to dock or berth to the ISS
must meet the same visiting vehicle standards for each of their ISS
missions. These requirements are laid out in the ISS Visiting Vehicle
Requirements document. These standards include requirements for
automated rendezvous and joint proximity operations, physical and
software interfaces, and overall safety. These requirements are
consistent with those provided for the ATV and HTV. NASA has been
working closely with the commercial partners through the demonstration
phase and will continue to work with them through the CRS missions to
ensure that each mission meets these requirements.
There is now little to no schedule margin for significant delays in
the CRS missions, and this is a risk for consistent cargo resupply to
the ISS. NASA is pre-positioning maintenance and logistics items on the
final Space Shuttle mission as a contingency to mitigate any risk to
ISS operations due to a delay in the availability of the CRS vehicles.
The final Shuttle mission, STS-135, is targeted for launch in early
July. During the STS-135 mission, Atlantis will carry the Raffaello
multipurpose logistics module to deliver critical supplies, logistics
and spare parts for the ISS, as well as a system to investigate the
potential for robotically refueling existing spacecraft. This will help
reduce the risk to ISS operations and maintenance should the CRS
vehicles not meet their current launch dates. If the contracted
commercial cargo services are not available at the beginning of
calendar year 2012, there would be minimal impact to ISS operations. If
commercial cargo services are not available by the end of calendar year
2012, there would be a reduction in utilization of the ISS. In that
case, NASA would have to consider reducing the Station's crew size to
three in order to conserve supplies; this would in turn result in a
reduced ability to conduct research aboard ISS. The final Shuttle
flight will give the ISS the flexibility to maintain a six-person crew
into FY 2013 without any commercial cargo flights, effectively
increasing the schedule margin by about a year.
Another risk reduction option is the availability of the ATV and
HTV spacecraft. NASA already relies on bartered cargo transportation
services provided by the European Space Agency and the Japanese
Aerospace Exploration Agency using these vehicles, and such barter
agreements could be used to ensure a limited U.S. cargo delivery
capacity, on the currently planned vehicles, as a stop-gap measure
until the CRS vehicles are operationally available. NASA has also
purchased cargo delivery services from the Russian Space Agency through
2011, though there are no plans to extend this service beyond the end
of this year.
NASA has contracted for a minimum of 40 metric tons of cargo
delivered to the ISS from 2011 through 2015 under the CRS contracts,
and the Agency plans to continue to rely on CRS for cargo
transportation beyond FY 2015. This will require new contract action by
NASA. NASA is counting on its CRS suppliers to carry cargo to maintain
the ISS. It is hoped that these capabilities, initially developed to
serve the Station, may find other customers as well, and encourage the
development of further space capabilities and applications and the LEO
economy.
Summary
Chairman Palazzo and Members of this Subcommittee, I would
summarize by saying again that NASA is pleased with the steady progress
both companies continue to make in their cargo development efforts. I
would also like to conclude my remarks by thanking you again for your
continued support for NASA and its human spaceflight programs,
including our commercial cargo efforts. I would be pleased to respond
to any questions you or the other Members of the Subcommittee may have.
Chairman Palazzo. Thank you, Mr. Gerstenmaier.
I now recognize our second witness, Ms. Cristina Chaplain,
Director of Acquisition and Sourcing Management for the U.S.
Government Accountability Office.
STATEMENT OF MS. CRISTINA CHAPLAIN, DIRECTOR, ACQUISITION AND
SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Chaplain. Mr. Chairman and acting Ranking Member
Costello, thank you for asking the GAO's views for today's
hearing. Our testimony provides more details on the current
status of the COTS Program, reasons for delays, milestones that
have been recently added, and our perspectives on the use of
Space Act Agreements for COTS.
I would like to make a few points based on our COTS work as
well as broader work on government space acquisitions. We
assessed the COTS Program in 2009, and found that the program
incorporated criteria and processes that help provide insight
into the progress of the COTS providers. We also found that
while progress had been made in developing the COTS vehicles,
there were development risks that could slow down the effort
and schedules were aggressive.
Since our report the COTS partners have experienced
schedule delays. The delays reflect a combination of inherent
risks associated with development efforts and some schedule
optimism. NASA has added money to further stem delays as well
as reduce risks. For example, by adding testing activities it
would normally undertake in the development of its own launch
vehicles and spacecraft.
NASA is also taking steps to lessen the impact of the COTS
delay on the utilization of the ISS, for example, by pre-
positioning spares. These steps seem reasonable, particularly
because the landscape for COTS has changed considerably since
our last report. Principally, when COTS was started, NASA
envisioned that the Ares launch vehicle and Orion Capsule would
be available to initially service the Space Station. Now it is
unknown when any mass of vehicles will be available, and
reliance on COTS has grown. In other words, the COTS Program
has been elevated from plan B to plan A.
While reasonable steps are being taken to address risks,
there is still no guarantee that this approach will deliver
results when needed. It is likely additional delays will occur,
and additional money may be needed. At the same time, it is
important to recognize a significant amount of progress has
been made within a relatively short period of time and within a
reasonable cost. Moreover, the approach offers NASA lessons in
new ways of doing business.
In addition, regardless of whether NASA is acquiring a
capability or service under traditional contracts or more non-
traditional arrangements like Space Act Agreements, it is
important that the fundamentals of good management persist.
These include ensuring decisions are based on concrete
quantitative and qualitative knowledge, delaying program starts
until critical technologies are invented and understood,
developing sound cost and schedule estimates, providing
transparency and accountability for oversight, having the right
incentives for partners, and having strong risk management
plans and practices.
Overall, we have found that these fundamentals tend not to
be fully present in either traditional or commercial-like
approaches. Going forward it will be important for both NASA
and the commercial sector to also avoid hinging strategies on
assumptions that we know negatively impacted previous efforts
to adopt commercial-like approaches in space. These assumptions
include such things as one, a commercial-like approach requires
very little or no government involvement, and two, by backing
off the government is guaranteed it will receive a product
faster, better, and cheaper.
In conclusion, given the critical need, the government
bears the risk for having to make additional investments to get
what it wants when it wants. The additional investment
required, however, can be lessened by ensuring that accurate
knowledge about requirements, costs, schedule, and risk is
achieved early on and used to make decisions.
Thank you. This concludes my statement.
[The prepared statement of Ms. Chaplain follows:]
Chairman Palazzo. Thank you, Ms. Chaplain.
I now recognize our third witness, Mr. Frank Culbertson,
Senior Vice President and Deputy General Manager of the
Advanced Programs Group at the Orbital Sciences Corporation.
STATEMENT OF MR. FRANK CULBERTSON, JR., SENIOR VICE PRESIDENT
AND DEPUTY GENERAL MANAGER, ADVANCED PROGRAMS GROUP, ORBITAL
SCIENCES CORPORATION
Mr. Culbertson. Good morning Chairman Palazzo, Ranking
Member Costello and Chairman Hall and Members of the
Subcommittee. It is an honor to be a participant with this
distinguished panel as we address commercial cargo delivery to
low earth orbit and the status of the Orbital Sciences
Corporation development of that capability to help maximize the
return on investment from the International Space Station.
Before I go further, though, I would like to note the
absence of our stalwart space supporter, Representative
Gabrielle Giffords, whose presence in this discussion is sorely
missed. I certainly join all of you in continuing to hope and
pray for her speedy recovery and for her return soon to provide
us with her candor and ardor.
I also want to recognize the success to date of the crew of
Endeavor and combined with the ISS crew under Mark Kelly's
leadership, as well as the entire Shuttle team around the
country for their commitment in excellence. This country owes
that team a lot. Mark, by the way, was the pilot on Endeavor on
my most recent return home from the ISS. So we go way back.
It is especially fitting that we are meeting one day after
the 50th anniversary of President Kennedy's speech boldly
committing our Nation to landing on the moon. However, it is
not entirely clear to me what our Nation's, or the world's,
next audacious goal in space will be, but I know for sure that
the next great achievement will not be possible without maximum
safe, efficient, and continuous use of the ISS as a waypoint on
that journey. Just as Mercury, Gemini, X-1, and X-15 paved the
way for Apollo and Shuttle, the ISS, through effective use of
both commercial and government transportation systems, will
pave the way for human exploration of the rest of the solar
system.
Its potential as a national research laboratory, a
development center, and an engineering test bed must be fully
realized in order to take the higher-risk steps necessary to
send crews beyond low-earth orbit for extended periods of time.
Mr. Chairman, you have asked us to cover a lot of ground in
a short time today, so I have submitted a very thorough written
testimony which covers our program status fully, as well as
addresses the specific questions we were asked. I have also as
requested provided you with a one-page summary of the points I
will address briefly in the time allotted.
Our launch vehicle and launch facilities are on track for
our first launch, as was mentioned, in October of this year.
Our Cygnus Spacecraft is scheduled for its demonstration flight
to the ISS with birthing in December of this year. You will be
able to see both of those launches from here by the way, a real
treat for Washington, I think.
Our cargo services will begin in earnest in March, 2012,
with deliveries approximately every six months after that. So
even though it is a challenging schedule and there are risks to
it, we feel very strongly that by the end of 2012, we will have
flown four flights.
Orbital was awarded a $170 million COTS Space Act Agreement
in February of 2008, in a second-chance competition after one
of the first two awardees was dropped by NASA. That is a very
important fact. We received significantly less funding and a
later start than the predecessors.
Some other pertinent facts that I think are important. The
Taurus II development decision and corporate funding preceded
the COTS award. This was being done on Orbital money.
Spacecraft development began to move forward aggressively after
NASA's commitment to invest in our program in February of 2008.
This is a compressed development schedule compared to
traditional government programs. It has challenges, but it is
using commercial development and production practices with NASA
insight. We provide complete transparency to the NASA team.
However, 60 percent of the investment in this is from Orbital.
Human rating requirements are met through NASA oversight in
specific reviews of the--our ability to meet those
requirements. Our COTS development is fixed funding under a
Space Act Agreement, the base Space Act plus the augmentation.
Our CRS contract is firm fixed price, and there is a difference
under a FAR-based services contract. This contract was awarded
approximately 10 months after we were awarded COTS in December
of 2008.
We do use earned value management tools to control cost and
schedule, and currently our internal budgeted costs of work on
the Taurus II Program is 95 percent complete.
To briefly review, some of our major accomplishments to
date, the decision to use Wallops Flight Facility was made in a
very carefully and methodical fashion. It created over 300 new
jobs just in the construction alone. The Commonwealth of
Virginia and the MARS, Mid-Atlantic Regional Space Port,
provided financial backing at the start and are the space port
developers.
NASA has completed a horizontal integration facility. The
payload processing facility and the launch pad and liquid
fueling facility are 90 percent complete with certifications of
acceptance to begin in July and static test firing in
September. Our three teams are working very closely together.
The first two tank sets of our Taurus II have arrived at
Wallops. Checkout is continuing. We have tested three of our
Aerojet AJ26 engines, and engine four will be tested next week.
Our Cygnus Spacecraft is proceeding quickly and rapidly
through our integration and test per our ISO certified
processes and will go through a complete standard orbital
environmental testing this summer. The first of four cargo
modules--the first four cargo modules are complete or in work.
Very briefly, I wish to respond to the three questions
provided by the Subcommittee. The first is: what risk reduction
milestones were funded by the COTS Augmentation? We have eight
milestones addressing the test flight that has been mentioned.
They support integration readiness and launch, and then we have
two milestones that support additional simulators to help NASA
better understand our control systems.
the second question is: What launch failure contingency
planning do we have in place? Mr. Chairman, I can assure you
that Orbital is placing maximum emphasis on identifying and
controlling risks, as well as insuring that testing and
analysis are in place to minimize the chance of failure. This
includes taking the position that safety and mission success
will never be a lower priority than schedule, which will
occasionally result in delays as you have seen. We use every
available company resource, every bit of engineering expertise,
everyone's operational experience, as well as the advice and
insight of both NASA and our team of outside experts to
maintain the correct perspective and priorities.
If we do have a failure, the response will depend on what
that failure is and what the root cause is. However, we will
always have three to five vehicles and launch vehicles in
process at any one time so the stand down should be minimal if
we are able to quickly resolve the problem.
Our biggest challenges, technical is the launch site
development, the cost and schedule, and then meeting the safety
review panel requirements which turn out to be a very positive
experience. On the business side, design and development effort
under a fixed price model is very challenging. Setting prices
for services long before development is complete or the NASA
mission requirements are well defined is something that is not
usually done.
But these are challenges that we accept for the good of the
Nation and certainly are worth the risk when you take the long
view on human spaceflight. We established a new model for
industry and government relationships. We have more flexibility
in design and provide a tremendous value for the government
over the life of the contract.
In conclusion, we hope that these responses will help to
serve the needs of the Subcommittee as you work with NASA to
help ensure that more use of the private sector and support of
critical space program objectives is successful. We at Orbital
are proud that NASA has selected us to participate in COTS and
CRS. This partnership has energized our company and our
dedicated employees as well as our superb teammates to be fully
committed to executing this mission in support of human
spaceflight and exploration as safely and efficiently as
possible.
The enthusiasm and innovativeness I see around our team are
truly contagious. Thank you, again, for this opportunity. I
look forward to your questions, and I apologize for running
over. I had to use very small font on that thing as you can
see.
[The prepared statement of Mr. Culbertson follows:]
Prepared Statement of Mr. Frank L. Culbertson, Jr., Senior Vice
President and Deputy General Manager, Advanced Programs Group, Orbital
Sciences Corporation
Good morning Chairman Palazzo, Ranking Member Costello and members
of the subcommittee. I appreciate the opportunity to participate in
this hearing regarding the status of our commercial cargo delivery
capabilities to low earth orbit. Our job on this program is to help
maximize our nation's return on investment in the remarkable orbiting
facility known as the International Space Station.
It is especially fitting that this hearing is being held one day
after the 50th anniversary of President Kennedy's speech to Congress
boldly committing our nation to landing a man on the moon. It's not
entirely clear to me, however, exactly what our nation's--or the
world's--next audacious goal will be in space, but I know for sure that
the next big achievement will not be possible without maximum safe,
efficient, and continuous use of the International Space Station as a
waypoint on that journey. Just as Mercury, Gemini, X-1, and X-15 paved
the way for Apollo and Shuttle, the ISS, with the help of both
commercial and government transportation systems, will pave the way for
human exploration of the rest of the Solar System. Its potential as a
National Research Laboratory, development center, and engineering test
bed must be fully realized in order to take the higher risk steps
necessary to send crews beyond low-earth orbit for extended periods of
time, as well as to justify the extensive investment by the US and all
of our partners in this complex and highly capable facility.
Orbital Sciences Corporation is proud to have been selected by NASA
in 2008 to be one of the participants in NASA's Commercial Orbital
Transportation Services (COTS) and related Commercial Resupply Services
(CRS) programs. This partnership between NASA and private industry has
energized our company- which next year will mark 30 years of building
and operating some of our nation's most advanced and innovative launch
vehicle, spacecraft and satellite systems-to develop dependable means
of launching cargo and supplies to the ISS, and disposing of unneeded
waste, following the retirement of the Space Shuttle. When I left the
astronaut corps, I had spent over 20 years of my NASA career, plus my
Navy service, working diligently to ensure safety of flight and mission
success. When I joined Orbital, I immediately recognized a company team
that had a similar focus, and a record of tremendous innovation with
such vehicles as the Pegasus air launched rocket and the Minotaur
launch vehicle. Our work force is skilled, extremely dedicated to the
mission at hand, and individually accountable for meeting our
performance and safety requirements. I've had the privilege of working
with superb organizations in the Navy and at NASA, and I now consider
it a privilege to be a part of an Orbital team that can stand toe-to-
toe with any in the government.
Even prior to Orbital's partnership with NASA in the COTS program,
we were developing, with our own funding, a new medium-class space
launch vehicle, the Taurus II. Taurus II is a two-stage vehicle-with an
optional third stage-that will provide low-Earth orbit launch
capabilities for payloads weighing over 5,000 kg and access to
geosynchronous orbit for smaller spacecraft. This vehicle will provide
responsive, low-cost, and reliable access to space not only for CRS
missions, but also for national security payloads, NASA science
payloads, and certain commercial satellites as well. The Cygnus
advanced maneuvering spacecraft is capable of carrying up to 2700 kg of
cargo to the ISS, and possesses a multi-use potential as well. It can
be used as a maneuvering and hosting spacecraft for a variety of
government and private sector customers.
One unique aspect of our involvement in COTS/CRS is that we will
initially launch the Taurus II and Cygnus cargo delivery spacecraft
from NASA's Flight Facility at Wallops Island, Virginia. While Kennedy
Space Center provides outstanding launch service to a wide variety of
users, and remains a potential future site for Taurus II operations,
Orbital, NASA, and the Commonwealth of Virginia have committed
significant financial and technical resources to enable the United
States to have a second major east coast launch facility, providing
resiliency and flexibility to our nation's space launch capabilities.
An added item of interest about Wallops is that members of Congress
(and others) can actually view Taurus II launches at this space port
from the Capitol Building, so we hope through these launch activities
to generate renewed interest in space flight locally and throughout the
six-state Mid-Atlantic region.
COTS/CRS provides a new model for U.S. government/private-sector
collaboration to develop and operate dual-use space systems. In this
collaboration, Orbital has contributed about 60 percent of the
development costs for launch vehicle, cargo delivery and disposal
systems, and much of the ground-support infrastructure, up front. This
high level of investment from a private company recognizes the
potential benefits of having a consistent customer in NASA for cargo
delivery and disposal in support of the ISS's logistics needs in the
near future, and also requires us to work hard to develop new markets
for a variety of other users.
The Orbital COTS Program will literally get off the ground with a
test of the Taurus II launch system in early fall. Our current target
date for the Taurus II test launch from launch pad 0A at the Mid-
Atlantic Regional Space Port (MARS) on Wallops Island is mid-October.
Our Orbital/MARS/NASA team of over 400 scientists, engineers and
technicians, including our teammates from around the industry, is
working with great dedication toward this major milestone. Yet as we
look forward to the first launch of Taurus II, we are well aware that
there are significant risks to the schedule, as there are in any major
aerospace development program. Orbital and our government partners are
developing a rocket, a spacecraft, and a launch and control
infrastructure simultaneously. This is a significant undertaking, which
for the most part has gone extremely well. The Taurus II vehicle
planned for the Test Launch is currently undergoing tests at the newly
opened Horizontal Integration Facility, or HIF, at Wallops Island. The
MARS-developed launch pad and liquid fueling facility are completing
construction, and will begin certification testing in early July.
Like most of the aerospace industry, Orbital uses Earned Value
Management Systems to track our progress on schedule and cost
performance. I can tell you today that based on our internal budgeted
costs of work scheduled we are 95 percent complete with Taurus II
development and have completed successfully the first 41 months of the
46 month Taurus II schedule. There is also great progress to report at
Wallops, where the HIF and Payload Processing Facility are essentially
ready to support launches. Development of the launch pad and related
support facilities is 90 percent complete.
With respect to development of the Cygnus Advanced Maneuvering
Spacecraft, the first flight unit is on track for a December 2011
launch that will demonstrate our capabilities of providing cargo to the
ISS. We developed Cygnus on an aggressive 45 month schedule, and are on
track to finish the final six months on time.
The Cygnus Service Module for the Demonstration mission is being
assembled at our Dulles, VA, facility, and has begun our normal ISO-
certified Integration and Test process, which will be followed by
thorough environmental testing of the fully assembled spacecraft, tests
which we require prior to launch for all of our spacecraft.
The service module for our first CRS mission is in the
manufacturing flow as well, following closely behind the Demonstration
mission hardware, and hardware for the second CRS mission is arriving
at the plant. The hardware acceptance review for our Pressurized Cargo
Module (PCM) is occurring this week with our industrial partner, Thales
Alenia, with the PCM and its support equipment being essentially
complete and ready for shipment to the US. Last December we completed a
very successful cargo loading demonstration of the PCM to be used for
the first CRS mission, and just this month we conducted a very
successful crew equipment interface test with the astronauts and
representatives from NASA's mission operations directorate in the
actual PCM slated for the COTS Demonstration mission.
The COTS Demonstration mission in December will mark the first use
of a dedicated Mission Control Center for Cygnus flight operations.
Mission Control Center Dulles, a state of the art facility at Orbital's
headquarters five miles north of Dulles airport, was dedicated last
November, with the participation of NASA Administrator Charles Bolden,
and our operators will work hand in hand with ISS Mission Control at
NASA's Johnson Space Center, and other ISS partner nation control
centers, to manage the critical rendezvous and berthing of the Cygnus
at the ISS. The COTS demonstration mission will be a culmination of all
the hard work that has gone into the design, development, and the
safety reviews for operations in proximity with the ISS, as well as the
many hours of joint testing we are conducting with NASA. Orbital has
worked closely with NASA to move further into the ISS Human Spaceflight
mode of operation, successfully completing the first two phases of
NASA's Safety Review Panel, and are well on the path to completing the
requirements of the third and final Safety Review Panel, a prerequisite
for approaching the Space Station.
Success on the December COTS demonstration mission will then lead
directly to CRS, the actual contract covering the repetitive delivery
of cargo to the ISS, with two Orbital CRS missions slated every year
from 2012 to 2015. Again, this is a very ambitious schedule, and we
will know with greater certainty the exact dates to target for cargo
delivery once we have the experience of our first test launch and
demonstration flight.
To address our current schedule status versus the original program
plan, there are two significant factors that prevented us from
achieving the original target dates for the COTS demonstration: First,
the change from an unpressurized cargo module to a pressurized cargo
module, executed at Orbital expense in response to a desire from NASA
to duplicate the requirements of the CRS contract on the Demonstration
mission; and secondly, the unexpected challenges encountered in the
development of a minimally equipped Pad 0A into the Mid-Atlantic
Regional Spaceport's Medium Class Launch Facility at Wallops Island.
These challenges have been addressed, and while all activities are not
yet complete, the threats to the remaining schedule are small compared
to what we have encountered in the past two years.
That in summary is our progress to date. Our Orbital-NASA
partnership for the development of a cargo delivery capability to ISS
is on track, moving ahead steadily, and, in fact, nearing completion.
The subcommittee has also asked Orbital to respond to three
specific questions, which I'm pleased to do. First, you asked about the
justification and rationale for each of the risk-reduction milestones
funded by the COTS Augmentation that was supported by Congress in the
FY 2010 NASA Authorization Bill.
Some history may be useful in this regard. The original NASA COTS
competition for $500M resulted in NASA selecting Space X and Kistler
Aerospace for the program in August 2006, with Space X receiving the
majority of the funding, and Kistler a lesser amount of the $500M.
After NASA decided to terminate its funded space act agreement with
Kistler, the remaining $170 million was re-competed and awarded to
Orbital in February 2008. In determining how best to utilize the
reduced funding available for COTS, Orbital was placed in the position
of bidding a single demonstration mission along with the development of
the Cygnus spacecraft.
Both the Orbital and NASA COTS program offices recognized the
elevated risk in the plan for launching the first Cygnus maneuvering
spacecraft on the first Taurus II launch vehicle flight. Due to the
limited funding remaining in the program, however, this was viewed as a
necessity. There is acceptance in the industry that first flight
missions of new launch vehicles historically have elevated risk
associated with them, largely due to the complexity inherent in launch
vehicles, the necessarily small margins of safety in vehicle designs to
meet performance-to-orbit goals, and the fact that critical elements of
the launch vehicle can never be fully tested in exact flight-like
conditions through ground testing.
When the possibility of additional funding for risk reduction was
presented, Orbital and NASA mutually agreed that a Test Flight of the
Taurus II launch vehicle prior to the COTS demonstration mission was
the best use of risk reduction funding. This approach added significant
content and value to the program as well as an additional meaningful
test of the system. The concept for the Test Flight is to launch a
Taurus II vehicle with an instrumented Payload Simulator that mimics
the mass properties and other key characteristics of the Cygnus
spacecraft. This Test Flight would verify the operation of the launch
vehicle and also return valuable launch-environment data from the
Payload Simulator. After completing the test flight, the COTS
Demonstration mission can be properly focused on the operation of the
Cygnus spacecraft and its rendezvous and proximity operations with the
ISS.
Therefore, in the context of the above discussion of risk at the
programmatic level for the COTS program, Orbital and NASA worked
together to develop the 10 COTS Augmentation Milestones that authorized
the Test Flight as a top priority, and then added other Cygnus-related
risk reduction elements to the program that were deemed beneficial to
reducing risk on the spacecraft. Milestones 25 and 26 require the
development and installation of additional ground simulators of the
Cygnus system to facilitate joint testing and verification between NASA
and Orbital prior to acceptance for flight. Milestones 22-24 and 27-31
are associated with deliveries of key components of the test flight and
completion of critical readiness reviews. The criteria for success are
clearly described for each of the milestones in an amendment to the
SAA.
To further discuss the addition of the test flight and the risk
that Orbital assumed in adding content to the program, a typical launch
service procurement spans 24 months. This span is necessary to
authorize subcontracts for long lead suppliers such that all hardware
elements can be delivered to the launch site with sufficient time to
integrate and test the launch vehicle prior to flight. In the case of
Taurus II, the 2nd stage solid rocket motor is the longest lead item
requiring 18-21 months lead time. The liquid first stage tanks require
18 months lead time. The plan to incorporate the Test Flight into the
program is to utilize the first hardware set previously assigned to the
COTS-Demo mission for the Test Flight, and then to re-assign the second
hardware set previously assigned to Orb-1 CRS mission to COTS-Demo, and
so on. In this way, the earliest opportunity for the Test Flight can be
accommodated while minimizing the impact to the COTS-Demo launch date.
To protect for the possibility for the Test Flight, Orbital
proceeded at risk in summer 2010 to order a replacement Stage 2 motor
assembly from ATK along with other long lead purchases of ordnance and
separation joints. This hardware was necessary to backfill the hardware
queue to ensure later flights could still be executed on time given the
insertion of the Test Flight into the manifest as the first flight of
Taurus II. These long lead purchases were made prior to receiving any
COTS Augmentation funds and prior to being sure that the COTS
Augmentation funds would ultimately be added to the program due to the
extended debate on the budget and continuing resolution in Congress.
This decision to proceed at risk was based on Orbital's desire to
protect for the earliest opportunity for a Test Flight given the
uncertain FY11 budget situation for NASA that existed last fall. Two
incremental amendments to the COTS Space Act Agreement occurred prior
to negotiation of the full suite of milestones authorizing the Test
Flight mission.
Your second question was about Orbital's plan to recover in the
event of a launch failure or loss of a COTS demonstration flight or a
CRS missions. I assure you that Orbital is placing maximum emphasis on
identifying and addressing risks, as well as ensuring that testing and
analysis are in place to minimize the chance of failure. Based on my
experience in this high-risk, high-reward business, the most
significant thing an organization can do is to inculcate in its members
from top to bottom the strong belief that we will do everything
possible to successfully complete our mission, and that each person who
has a job to do on the project will be held to the highest level of
accountability for their work. This includes taking the approach that
safety and mission success will never be a lower priority than
schedule, which will occasionally result in delays. And that we are
doing, including using every company resource, engineering expertise,
and operational experience available, as well as the advice and insight
of both NASA and our own outside experts. Yet, if we do suffer a
setback, as occasionally happens in this business, what we will do to
recover, and our schedule for recovery will very much depend upon the
circumstances of the setback, what is learned from a careful review of
the available data to determine root cause, and what corrective actions
are necessary to be taken. An additional factor to consider is that
since we will have three or four Cygnus spacecraft and four or five
Taurus II vehicles in production at any one time, we will be able to
quickly move to the next mission and provide the needed cargo,
providing we are able to identify and correct the cause quickly. This
makes a lengthy stand-down in operations unlikely. Having participated
in accident investigations in both NASA and the Navy, I know that it is
impossible to tell exactly what course will be followed in recovering
from an accident, but having the correct program discipline, data
retention, and attention to detail prior to an incident will facilitate
that recovery. We have instilled those values in our team, which should
also minimize the chance of it occurring.
Finally, you have asked Orbital to discuss the biggest challenges
confronting us in the development and demonstration of our launch and
cargo systems. I will address some of the technical challenges for the
launch vehicle first:
The development of a new launch vehicle system is a very complex
and expensive task. If the development is done from scratch, meaning
that every subsystem and component and software item is brand new, it
is an extremely difficult task to complete on schedule and on budget.
In the case of Taurus II and Cygnus, Orbital is able to take
advantage of many heritage flight-proven design features. These
include:
a. Launch vehicle avionics--Using heritage common hardware for
flight control and sequencing, navigation, flight termination,
tracking, and telemetry subsystems. These common subsystems are used on
Minotaur, Pegasus, Taurus XL, and Ground-Based Midcourse Defense
Orbital Boost Vehicle.
b. Launch vehicle software--Using Object-Oriented code base common
across Orbital rocket programs.
c. Stage 1 tanks structure--Using 3.9m diameter core based directly
on the Zenit Ukranian launch vehicle design, using same pressurization
components as Zenit.
d. Stage 1 Propulsion--Using existing AJ26 LOX/RP engines with
large stock in inventory at Aerojet.
e. Stage 2 Propulsion--Using Castor 30 motor assembly built by ATK
based on Castor 120 heritage design.
f. Cygnus Service Module--Star Bus and Leo Star heritage design for
propulsion, command and data handling systems, and software
g. Pressurized Cargo Module--Thales Alenia heritage for the
development of pressurized modules for NASA and ESA, to include several
ISS pressurized modules.
However, there are other critical program areas where Taurus II was
not able to utilize heritage designs and new developments were
required:
a. Launch Pad With Liquid Fueling Facility--Despite performing
extensive searches early in the program, there was no launch pad
available on a US federal range that could accommodate the Taurus II
vehicle without significant modification. A new launch pad was
therefore required, and a trade study between Florida/Cape Canaveral
Air Force Station and Virginia/NASA Wallops Flight Facility was
conducted. Wallops was ultimately selected and Pad 0A was razed and
completely rebuilt to accommodate a medium class liquid rocket.
b. Stage 1 Propulsion Test Facility--Despite performing a search
through the National Rocket Propulsion Test Alliance (NRPTA), no
existing stage test facility was available that could accommodate the
Taurus II vehicle Stage 1 Static Fire Test without significant upgrade/
modification or modernization. It was decided to utilize Launch Pad 0A
as the stage test facility and pad systems were designed and built at
increased cost to accommodate the increased loads on the pad induced by
the Stage 1 Static Test firing.
c. Stage 1 Engine Propulsion Test Facility--After performing a
search through the NRPTA for a test stand to use for single engine
testing for the AJ26 engine, two were identified as primary
candidates--one at the Air Force Research Laboratory/Edwards AFB, and
one at the NASA Stennis Space Center. However, both stands required
significant funding to bring to a test ready condition. The Stennis E-1
stand was chosen but had to be significantly modified from horizontal
test configuration to vertical test configuration along with other
areas of modification.
The above three areas of the program that required significant
development resources to be applied constituted the biggest challenges
to the development of the Taurus II launch vehicle. The fixed price
nature of the COTS program funding meant that cost and schedule
overruns experienced during the development of the three facilities
listed above were largely the responsibility of Orbital to resolve.
Some may see the challenge of estimating costs for the fixed price
Cargo Resupply Contract so soon after our late award of the recompeted
COTS SAA, and before development costs or risks were completely
understood as a significant risk, and in many ways it is. This issue is
somewhat offset by the fact that a contract was indeed awarded, and
provided we execute the contract well, this will somewhat justify both
the risk and expense of the development effort. It is true, however,
that the CRS contract is a financial risk to Orbital, requiring the
submittal of fixed delivery mission prices so far in advance of the
actual mission execution, with the period of performance spanning a
five year period, and before critical development risks were completely
identified or addressed.
In summary, the biggest challenge to the company is that a complex
program with three major new elements is being developed in essentially
a fixed price environment through Space Act Agreements, which provide
no company protection for cost overruns or changes in government
requirements. And the subsequent business is also fixed price and
totally dependent on the success of the work under the SAA. These are
challenges that Orbital accepts as good for the nation in the long run,
and worth the risk from a long-term business viewpoint. It is important
to take a long view on this job. The ISS must be successfully
resupplied, possibly for decades. It's true that the technical
challenges are also large, but these will be resolved over time by the
professionals working the program.
We hope these responses will help serve the needs of the
subcommittee as you work with NASA to help ensure that our nation's new
path forward to utilize the private sector in support of critical space
program objectives is successful. Our company and our team recognize
that we have an important role in the ISS mission, and we will take all
of the steps necessary with our NASA partner to ensure that our flights
are safe and missions successful. Thank you again for the opportunity
to testify before this important hearing.
Biography for Mr. Frank Culbertson, Jr., Senior Vice President and
Deputy General Manager, Advanced Programs Group, Orbital Sciences
Corporation
Frank Culbertson is Senior Vice President and Deputy
General Manager of Orbital's Advanced Programs Group. In this
capacity, Mr. Culbertson's responsibilities include the
execution and performance of all Orbital programs related to
human space flight including the Commercial Orbital
Transportation System and Commercial Resupply Services Programs
as well as the Launch Abort System Program for the Orion
spacecraft. Prior to this position at Orbital, Mr. Culbertson
was a Senior Vice President at SAIC, following an eighteen-year
career as a NASA Astronaut.
He has flown three space missions and logged over 144 days
in space as shuttle commander, pilot, and station crewmember.
His last mission launched on the Shuttle Endeavour and lasted
for 129 days, from August 10 until December 17, 2001. During
that mission, he lived and worked aboard the International
Space Station for 125 days and was in command of the Station
for 117 days. Mr. Culbertson also held several key management
positions within the NASA Shuttle and ISS programs and was
Program Manager of the Shuttle-Mir Program.
Mr. Culbertson is a 1971 graduate of the US Naval Academy
at Annapolis. He was a naval aviator, a fighter pilot, and a
test pilot, and he retired from the Navy as a Captain in 1997.
Mr. Culbertson has received numerous honors, including the
Legion of Merit, the Navy Flying Cross, the Defense Superior
Service Medal, the NAA/FAI Gagarin Gold Medal, and the NASA
Distinguished Service Medal.
Chairman Palazzo. Well, you went over your time budget
here, but we don't want you to go over your time budget on the
COTS or CRS.
Mr. Culbertson. We are working it.
Chairman Palazzo. All right. I now recognize our final
witness, Ms. Gwynne Shotwell, President of Space Exploration
Technologies.
STATEMENT OF MS. GWYNNE SHOTWELL, PRESIDENT OF SPACE
EXPLORATION TECHNOLOGIES
Ms. Shotwell. Chairman Hall, Chairman Palazzo, and Ranking
Member Costello and Members of the Subcommittee, thank you for
the opportunity to appear before you today and thank you,
Congressman Flores, I am honored by your introduction and
appreciate the support for the work that we do in the fine town
of McGregor, Texas.
SpaceX is an all-American company that was founded in 2002.
Our singular goal was to provide safe, reliable, and cost-
effective access to space for cargo and eventually crew. In
just nine years the company has grown to over 1,300 men and
women who embody the best American ideals of intelligence, hard
work, ingenuity, and excellence.
In an era of increased outsourcing and off shoring,
especially in critical manufacturing technologies, SpaceX
maintains an all-American workforce. Every day at SpaceX there
are hundreds, nearly a thousand engineers and technicians
bending metal, wiring circuits, testing engines, and pushing
the boundaries of aerospace engineering and manufacturing.
With the Space Shuttle's imminent retirement I am pleased
to testify that in partnership with NASA SpaceX is on track to
support the ISS with cargo. Under the support and guidance of
NASA's innovative, cost-effective commercial Orbital
Transportation Services Agreement, otherwise known as COTS, we
have developed and successfully flown a launch vehicle that for
the first time since the 1990s has brought launch dominance
back to the United States. We are winning launches from French,
from the Russians, and from the Chinese.
In addition to this grand achievement and also under the
guidance and support of NASA, we have developed, launched,
operated on orbit, and reentered the Dragon Capsule. Notably,
after the Shuttle retirement in just a few weeks Dragon will be
the only capability of carrying cargo back from the
International Space Station.
On December 8, 2010--it was a great day--SpaceX became the
first commercial company ever in the history to launch,
reenter, and recover a spacecraft from earth's orbit. From
SpaceX Cape Canaveral launch site Falcon 9 lofted the Dragon
spacecraft to where it orbited the earth twice before splashing
down in the Pacific Ocean. The mission was truly an American
success story. Until late last year only six nations have
accomplished what we did, never a private company. These
achievements are nothing short of extraordinary, and I am
pleased to be able to share this success with you here today as
well as our NASA partner.
Including last year's mission SpaceX has completed 25
milestones under the COTS Agreement. Since 2006, NASA has paid
us $298 million under the COTS Agreement. SpaceX has matched
dollar for dollar NASA's investment to date. It is critically
important to understand that we only get paid when we complete
milestones according to the success criteria laid out in our
Space Act Agreement. We do not get paid merely for expending
effort. We have to achieve something.
If we overrun on an effort that we agreed to execute, we
must make up for that difference either through investment or
capital that comes from our operating expenses. The financial
facts are important to digest here. The Falcon 9 launch vehicle
and Dragon spacecraft were each developed from a blank sheet to
first flight in 4-1/2 years for approximately $300 million
each.
SpaceX's next Falcon 9 Dragon flight is on schedule to
occur later this year. If all goes as planned, Dragon will
berth with the International Space Station, deliver cargo, and
return cargo to earth. The final parameters of this flight are
under discussion with NASA.
At NASA's request SpaceX has been conducting additional
tests, cargo enhancement studies and demonstration, and
demonstrations on the spacecraft. These additions to our COTS
Agreement are known as the augmentation milestones. They were
designed to reduce overall risks, both technical and
programmatic. Once COTS is complete SpaceX will begin regular
cargo delivery to the International Space Station under our
Commercial Resupply Services or CRS contract.
Consequently, SpaceX is preparing for an increase in the
number of Falcon 9 and Dragon flights per year by expanding our
production capabilities, doubling our structural and production
test facilities in Texas, and streamlining our production
operations at both the Cape and Hawthorne, California. We are
working diligently to ensure that we successfully meet the
needs of our government and commercial customers.
I would like to show a video that shows some of the
capabilities that we have at our factory, our test site, and
our launch site. It is a quick, one-minute video.
[Video]
I am slightly over, but Mr. Chairman, thank you for
inviting SpaceX to participate in today's hearing, and I do
look forward to continue my cheerleading and answering your
questions.
[The prepared statement of Ms. Shotwell follows:]
Prepared Statement of Ms. Gwynne Shotwell, President, Space Exploration
Technologies
Mr. Chairman, Congressman Costello and the Members of the Space
Subcommittee,
On behalf of Space Exploration Technologies (SpaceX) and our more
than 1,300 employees across the United States, I thank you for the
opportunity to participate in today's hearing.
With the imminent retirement of the Space Shuttle and the United
States' forthcoming reliance on Russia to carry astronauts to the
International Space Station (ISS), the readiness of commercial
providers to support the ISS is a timely and critical topic. I am
pleased to testify that, in partnership with NASA, SpaceX is on track
to support the ISS, for cargo and eventually crew carriage.
To date, under the auspices of NASA's innovative and cost-effective
Commercial Orbital Transportation Services (COTS) program, the SpaceX
Falcon 9 launch vehicle and Dragon capsule have flown successfully and
SpaceX has become the first-ever private commercial entity to
successfully launch, orbit, reenter and recover a spacecraft. These
achievements are unprecedented in terms of their scope, pace, and low
level of expenditure. Let me repeat for emphasis here--what SpaceX
achieved last year with the support and guidance from our NASA partner
is nothing less than extraordinary. Indeed, in the history of space
development efforts, we believe that the United States Government has
never before received so much output and value relative to dollars
spent. The COTS program serves as a model for public-private
partnerships, focused on results-oriented, cost-effective, rapid
prototyping, design and development.
All praise for COTS aside, there remains work to be done and
challenges to overcome as the Nation looks to domestic commercial
providers like SpaceX to support the ISS. I will begin my testimony by
providing the Subcommittee with a brief overview of SpaceX and our
operations. Next, I will address key achievements realized to date,
then focus on remaining challenges in development, testing and
demonstration. Finally, I will discuss where SpaceX stands with respect
to the remaining COTS milestones with a focus on our upcoming mission
to the ISS, technical and operational risk reduction efforts and
contingency planning as we transition from COTS to our Commercial
Resupply Services (CRS) missions.
SpaceX: Innovation Yielding Highly Reliable, Affordable Launch Services
Founded in 2002 by Elon Musk with the singular goal of providing
highly reliable, cost-effective access to space to eventually
facilitate carrying crew, SpaceX is headquartered in Hawthorne,
California. The Company has developed a state-of-the art propulsion and
structural testing facility in Texas and maintains offices in
Huntsville, AL, Chantilly, VA, Washington, D.C., and shortly, Houston,
TX. SpaceX has established launch sites at Cape Canaveral Florida,
Vandenberg Air Force Base California, and the Kwajalein Atoll in the
Marshall Islands.
Recently ranked as one of the world's fifty most innovative
companies by MIT's Technology Review, SpaceX is governed by the
philosophy that simplicity of design, reliability and affordability go
hand-in-hand. We hard-wire that philosophy into our Falcon rockets and
Dragon spacecraft by focusing on simple, proven designs, keeping a
tight control over quality and ensuring a tight feedback loop between
the design and manufacturing teams. To be clear, safety and reliability
are paramount for any commercial company; and cost-reduction without
safety and reliability is meaningless.
Our workforce, which has grown rapidly from two employees in 2002
to more than 1,300 employees today, embodies the best American ideals
of hard work, ingenuity and excellence. Our particular emphasis on
developing U.S. engineering and manufacturing capabilities has yielded
SpaceX (and, by extension, the Nation) deep domestic, in-house
expertise in propulsion, structures, avionics, safety, quality
assurance, mission operations, launch, mission management and systems
integration.
SpaceX's operational vehicles currently include the Falcon 1 and
Falcon 9 launch vehicles and the Dragon spacecraft. Critically,
SpaceX's Falcon 9/Dragon system offers an affordable, American-made,
end-to-end transportation solution for carrying cargo and potentially
crew to the ISS. With respect to development efforts, the Falcon Heavy
launch vehicle development (which is not to be confused with NASA's
heavy-lift development efforts) is underway, with an expected launch in
2013, and SpaceX is a recent recipient of a CCDev2 award focused on the
development of an integrated launch abort system for the Dragon
spacecraft.
SpaceX has executed at an unprecedented pace of development and
success for an aerospace company, with nearly 40 Falcon 9 missions on
manifest, approximately $3 billion in contracts and a customer base
that spans the government, commercial and international markets in just
nine years. As a result, SpaceX has been profitable every year since
2007, despite dramatic employee growth and major infrastructure and
operations investments. Our ability to successfully compete in the
domestic and international commercial market demonstrates the long-term
viability of our business model and allows us to keep our costs to the
U.S. taxpayer low.
To ensure that SpaceX is not dependent upon a single source for any
key technology, we have developed the capability to manufacture the
majority of our launch vehicle and spacecraft in-house. This provides
us with control over quality, schedule and cost, for all key elements
from component manufacturing through launch operations. It also allows
SpaceX designers to work directly with manufacturing personnel located
just steps away, which streamlines the development process.
Total SpaceX expenditures from 2002 through 2010 were less than
$800 million, inclusive of all Falcon 1, Falcon 9 and Dragon
development costs. That $800 million includes the cost of building
launch sites at Vandenberg, Cape Canaveral and Kwajalein, as well as
the SpaceX corporate manufacturing facility. The total also includes
the cost of five flights of Falcon 1, two flights of Falcon 9 and one
launch and reentry of Dragon. It is fair to say that this level of
output versus expenditure is unprecedented in the aerospace community.
Indeed, NASA recently conducted a predicted cost estimate of the
Falcon 9 launch vehicle using the NASA-Air Force Cost Model (NAFCOM),
its primary cost estimating tool. It was determined that had the Falcon
9 been developed under a traditional NASA approach, the cost would have
been approximately $4 billion. The analysis also showed development of
the Falcon 9 would have been approximately $1.7 billion based on the
traditional commercial models and assumed factors. However, NASA
independently verified SpaceX's total development costs of both the
Falcon 1 and Falcon 9 at approximately $390 million in the aggregate
($300 million for Falcon 9; $90 million for Falcon 1).
COTS: Key Achievements to Date
The COTS program was the first of its kind for NASA: a ?pay for
performance? partnership between the government and private business to
rapidly design and prototype critical technologies. NASA structured the
COTS program as a collaborative partnership with the commercial space
industry, sharing the risks, costs and rewards of developing new space
transportation capabilities. Under the program, NASA provides seed
money for the development of private spaceflight capabilities, but
issues payment only after a company meets technical and financial
performance milestones. The participating COTS contractors, likewise,
invest in the program and put their own financial ``skin in the game.''
To date, SpaceX has completed 25 milestones under its COTS
Agreement for efforts associated with the development, manufacture and
testing demonstration of the Falcon 9 rocket and Dragon spacecraft for
cargo carriage to the ISS. (The milestones completed under SpaceX's
2006 COTS Space Act Agreement, prior to amendment for augmentation
milestones, are listed in Appendix A, attached.) Critically, SpaceX is
well on its way to completing the integration process with the ISS. To
date, NASA's Commercial Cargo program has contributed $298 million
towards this end. And, in doing so, the United States also has helped
facilitate the development of the first internationally competitive
launch vehicle in more than a decade and the first-ever operational,
private, orbiting and reentry capsule. In terms of ``bang for the
buck,'' the United States Government has made a savvy investment.
At present, SpaceX has performed two successful Falcon 9 flights.
Each flight carried a Dragon spacecraft--the first mission carried an
inert, non-separating Dragon, and the second carried an operational
Dragon. The second Falcon 9 launch was the first official launch under
the COTS program. It bears noting that the Falcon 9 launch vehicle
features nine SpaceX Merlin engines in the first stage, which allows
the Merlin engine to rapidly attain heritage by means of each flight.
The Merlin is the first new all-American hydrocarbon engine for an
orbital booster to be flown in forty years and Falcon 9 is the first
U.S. launch vehicle with engine-out capability after liftoff since
Saturn V.
On December 8, 2010, SpaceX became the first commercial company in
history to launch, reenter, and successfully recover a spacecraft from
Earth orbit. SpaceX's COTS demonstration mission blasted off at 10:43
AM EST from Launch Complex 40 at Cape Canaveral. Falcon 9 lofted the
Dragon to orbit where it twice circled the Earth at speeds greater than
7,600 meters per second (17,000 miles per hour). Dragon reentered the
Earth's atmosphere and splashed down just after 2:00 PM EST in the
Pacific Ocean. The mission was nothing short of a complete success.
Until late last year, launching, orbiting, reentering and
recovering a spacecraft was a feat previously performed by only six
nations or government agencies: the United States, Russia, China,
Japan, India, and the European Space Agency. NASA's expert advice and
mentorship throughout the development process helped SpaceX build upon
50 years of U.S. space achievements to reach this goal.
Once again, the financial facts are import to digest here: the
Falcon 9 launch vehicle was developed from a blank sheet to first
launch in four-and-a-half years for approximately $300 million. The
Falcon 9 is an EELV-class vehicle that generates roughly one million
pounds of thrust (four times the maximum thrust of a Boeing 747) and
carries more payload to orbit than a Delta IV Medium. Likewise, the
Dragon spacecraft was developed from a blank sheet to the first
demonstration flight in just over four years for about $300 million.
The Dragon is a free-flying, reusable spacecraft capable of delivering
pressurized and unpressurized cargo to the ISS and safely returning
cargo to Earth.
COTS Augmentation Milestones
At NASA's request, prior to Dragon's successful orbital flight,
SpaceX began conducting additional tests on the launch vehicle and
spacecraft and performed additional Dragon component system capability
demonstrations. Those tests and demonstrations contribute to the
eighteen new COTS milestones, known internally as `augmentation
milestones,' that have presently been added to our COTS Agreement. The
uncertainty in Fiscal Year 2011 funding profiles led NASA to divide
COTS funding among multiple amendments to its COTS agreements.
The COTS augmentation milestones exceed the tests and
demonstrations originally agreed to by SpaceX and NASA for COTS when
the parties first signed their Space Act Agreement. Specifically,
certain milestones augment pre-planned ground and flight testing, and
others accelerate the development of enhanced cargo capabilities with
the remaining focusing on infrastructure improvements. The additional
milestones further develop the ground infrastructure needed for cargo
carriage operations and help improve the launch and recovery
operations, test site and production facility infrastructure. In short,
COTS augmentation milestones are meant to further reduce risk and
enhance the execution of the cargo demonstration and operational
missions to be performed under the COTS and CRS programs. The COTS
augmentation milestones that have been completed to date total $40
million. NASA recently added eleven augmentation milestones as an
additional amendment to the COTS agreement. Those tests, reviews,
demonstrations and infrastructure enhancements are planned to be
completed prior to the next COTS mission. (The augmentation milestones
and associated rationale for each are listed in Appendix B, attached.)
Fulfilling the COTS Objectives: Next Steps and Remaining Challenges
SpaceX's next flight of Falcon 9 with the Dragon spacecraft is
scheduled to occur later this year. The final parameters of that flight
are under discussion with NASA; however, SpaceX's goal is to have that
COTS flight culminate in Dragon delivering cargo to the ISS and
returning cargo safely to Earth. The mission will require SpaceX to
accomplish all of the criteria for Demonstration Flight 2 prior to
beginning the Demonstration Flight 3 criteria, which include berthing
with the ISS. In effect, SpaceX will have fully achieved the
development and demonstration goals of the COTS program and be prepared
to undertake its CRS missions. Importantly, if SpaceX does not meet the
mission success criteria for Demonstration Flight 2, then we would be
prepared to fly once more under the COTS agreement if necessary. Here,
it bears noting as a point of comparison that the European ATV and
Japanese HTV conducted ISS operations on their maiden voyages.
Orbital's current plan likewise calls for berthing on their first
flight to the ISS.
A number of modifications have been made to Dragon to ensure a
successful next flight and ISS berthing. To reduce the risk involved
with Dragon approaching the ISS, redundancy has been added to the
safety-critical systems. As an example, the initial mission flew one
flight computer and one inertial measurement unit (IMU), while the ISS-
missions fly multiple flight computers and IMU's to meet the ISS
required fault tolerance.
To facilitate safe ISS berthing, the Dragon will be flying a
proximity operations suite, including space-to-space communication
systems and proximity navigation sensors. These are complex systems
that present challenges. Additionally, Dragon will be flying a grapple
fixture and a Passive Common Berthing Mechanism (PCBM), which are the
physical attachment mechanisms for the ISS. As the next mission will be
longer in duration than the first, a new power generation system,
including solar arrays and new batteries, are in development. Star
trackers and an active thermal control system have been added to
sustain Dragon on orbit.
Ensuring Safe, Highly Reliable Access to Space
Given the purpose for our founding, SpaceX is first and foremost
devoted to safety and reliability. By the nature of the business,
commercial spaceflight providers cannot afford to take unnecessary
risks that would endanger cargo or crew. As is true with respect to
commercial aviation, businesses will fail unless safety and reliability
come first, regardless of price. The need for a laser-like focus on
safety and reliability becomes even more acute when commercial space
companies have their own financial skin in the game, offer services on
a firm, fixed price basis, and only get paid in full if they perform.
Per the Subcommittee's inquiry, SpaceX has plans in place to
investigate, understand and take action, if necessary, for any anomaly
that occurs during a mission. SpaceX has worked with the FAA, NASA, Air
Force and National Transportation Safety Board in this respect. The
time required to complete the process would, of course, depend on the
actual nature of the situation being addressed.
SpaceX has demonstrated the capability to react rapidly in the
event of test or flight anomalies. As an example, during the Falcon 1
flight 3, which was a demonstration mission of our smaller launch
vehicle in mid-2008, a failure occurred in flight. SpaceX arrived at
the root cause of the failure within a day, quickly implemented the
fix, and less than seven weeks later, successfully launched Falcon 1
flight 4.
In the case of a COTS or CRS mission, SpaceX maintains an active
Falcon 9 and Dragon production line. The subsequent Falcon 9 and Dragon
spacecraft are always in production and able to be readied for launch
quickly after making any modifications that might be indicated by an
anomaly. Notably, due to our unique capabilities whereby we design,
develop, build and test the majority of our hardware, we can achieve
far faster turnaround on anomaly and failure investigations more
quickly than anyone else in the industry. Instead of getting bogged
down with an army of lawyers and subcontractors after a failure, our
engineering and test team can rapidly determine root cause and
resolution.
Commercial Resupply Services
In 2008, SpaceX competed for and was awarded a Commercial Resupply
Services (CRS) contract to deliver cargo to the ISS. Over the term of
the CRS contract, SpaceX will deliver pressurized and unpressurized
cargo to the ISS, including plants and animals, as well as return cargo
to Earth. The $1.6 billion contract represents a minimum of 12 flights
with an option to order additional missions.
It bears noting that the average price of a full-up NASA Dragon
cargo mission to the International Space Station is $133 million
including inflation, or roughly $115 million in today's dollars. That
price includes the costs of the Falcon 9 launch, the Dragon spacecraft,
all operations, maintenance and overhead and all of the work required
to integrate with the ISS. Under SpaceX's firm, fixed price contract
with NASA, if there are cost overruns, SpaceX will cover the
difference, not the taxpayers.
SpaceX is preparing for an increase in the number of Falcon 9 and
Dragon flights per year by expanding our production capabilities.
Currently, SpaceX's near-term production capacity supports five to six
Falcon 9 vehicles per year. The expansion plans will increase
production capacity to produce ten to twelve Falcon 9 launch vehicles
by 2013, and then twenty by 2015. This is roughly a 50% increase
annually. In preparation for increased production, SpaceX has more than
doubled the footprint of its structural and propulsion test facility in
Texas. We have also reorganized the production teams into a more
efficient, streamlined organization. SpaceX is working diligently to
ensure that we successfully service our government and commercial
customers.
Recapturing Commercial Launch Services Market Share
For the first time in more than three decades, an America company
has begun to recapture international market-share in the commercial
satellite launch sector--a sector in which the U.S. has seen steady
erosion relative to Chinese, Russian and French competitors. SpaceX has
begun successfully competing for and winning commercial satellite
launch contracts. Whereas in 1980, 100 percent of commercial launches
took place from within the United States; today, it is less than 12
percent.
Bringing back commercial launches to the United States is just one
example of the benefits of NASA's targeted investment in SpaceX. By
leveraging private funding with federal investment, controlling our
costs and developing a diverse customer base, we are able to offer
competitive pricing to our commercial and government customers.
Likewise, safe, reliable and affordable transportation of cargo and
astronauts to low Earth orbit by an American company will keep jobs in
the United States, eliminate reliance on Russia to support the ISS, and
save U.S. taxpayers significant money that instead can be invested in
what NASA does best, pursuing the next frontier.
Mr. Chairman, thank you for your support and for the opportunity to
participate in today's hearing. I would be pleased to respond to any
questions you or the other Members of the Subcommittee may have.
Chairman Palazzo. Thank you, Ms. Shotwell. I thank the
panel for their testimony and remind the Members that Committee
rules limit questioning to five minutes. The chair will at this
point open the round of questions. The chair recognizes himself
for five minutes.
As was originally presented to Congress for an investment
of $500 million, the COTS Program would allow NASA to enter
into Space Act Agreements, excuse me, with two potential launch
service companies to enable them to develop the capability of
delivering cargo to the International Space Station, provided
they could meet all milestones and were competitively selected
for the follow-on delivery contract.
Congress was supportive and provided the money beginning in
fiscal year 2005, but as Chairman Hall noted, what began as a
reasonable step-by-step approach to develop and improve
capabilities first to be followed by a competitive acquisition
did not happen. NASA simply ran out of time and is now gambling
the future of Space Station and the success of two very new
launch systems--on two very new launch systems. Excuse me.
The original cost estimates to be borne by the Federal
Government for COTS have escalated dramatically. What started
as a demonstration program for $500 million has not been
completed, and yet to date NASA has spent or obligated over
$1.25 billion under COTS, COTS Augmentation and Cargo Resupply
Services Contract.
So my first question to Mr. Gerstenmaier, why did NASA
originally sell COTS to Congress as a $500 million effort only
to later seek additional sums by asserting that further risk
reduction efforts were necessary?
Mr. Gerstenmaier. Again, as originally envisioned we went
into the COTS Program with the idea that we would do the
development activity for the $500 million that you recognized,
and then later as time progressed and we now are in the
situation where we no longer have the Constellation Program as
a backup, it became important to us that the delivery service
to keep Space Station viable and to provide a reasonable backup
capability we needed to look at a way that we could augment
that additional funding with some additional milestones to
lower the overall risk and help us ensure that we deliver cargo
to station.
And it is kind of a fine point but is that augmentation
absolutely required, or is it just prudent management, and I
think where we are in this situation with the requirement to
deliver this cargo in a timely manner to Space Station we
needed to invest in activities that lowered the overall risk.
You could say they are not absolutely required. The thermal
vacuum test that we have added. You could learn that in space,
but if that didn't work in space, you would be questioning why
you didn't do that testing on the ground ahead of time to help
you pull back in schedule.
So when we looked at it overall, we developed these
activities, these $300 million of other activities we thought
would help lower the risk to help us ensure that we keep Space
Station viable. So the reason for the change was we recognized
the criticality of the situation we were in, and we needed an
adequate backup plan to be prepared for the oncoming cargo
delivery of the cargo to Station.
Chairman Palazzo. And so you initiated that decision in
2008, even before the announcement of the cancellation of the
Constellation Program?
Mr. Gerstenmaier. Yes, and again, I think it is driven by
the overall requirement. We knew the criticality of this, we
saw the Shuttle Program coming to an end, we knew our spares
and our supplies, and we thought it was prudent at this point
to add some additional margin, some additional risk mitigation
to the program by recommending that we added these augmentation
milestones.
Chairman Palazzo. So NASA basically underestimated the cost
of meeting the COTS Program as originally laid out to Congress.
Mr. Gerstenmaier. And I would say that the environment when
we initiated the COTS Program was one environment, and then
later as we went through time that environment and the
criticality of the cargo delivery became more important to us,
and as prudent managers we saw that, and we recommended an
augmentation approach, which we provided to you to go ahead and
help us augment to provide some additional assurance that we
could provide the cargo when it was needed.
Chairman Palazzo. When does NASA realistically expect the
commercial partners will have these systems ready to fly CRS
flights?
Mr. Gerstenmaier. We expect the COTS demonstrations to be
late this year, and we expect the actual services to occur next
year in 2012.
Chairman Palazzo. Does NASA anticipate asking for
additional money to buy down further risks before these systems
become operational?
Mr. Gerstenmaier. No.
Chairman Palazzo. Mrs. Shotwell, Mr. Culbertson, how much
confidence do you have in your company's ability to meet the
latest schedule using available COTS and augmentation funds?
Mr. Culbertson. Go ahead.
Ms. Shotwell. We are only months away from the completion
of the development of the Dragon spacecraft that will berth
with the International Space Station. Once development is
complete schedules are much easier to predict. It is a
production environment, not a development environment. So we
are very confident.
Mr. Culbertson. We are in a similar position. We are in
production on the first two of the Cygnus spacecraft that will
deliver cargo already. The demo spacecraft is going through I&T
on the Taurus II side, and once we complete the test flight, we
will have increased confidence in the launch vehicle itself and
should be able to move rapidly through the missions as we are
scheduled.
The remaining challenges that we have are relatively small
compared to the ones that have been behind us that have
affected our schedule. So we don't see a lot of risk to the
upcoming schedule.
Chairman Palazzo. Thank you. I have consumed my time.
I now recognize the Ranking Member, Mr. Costello.
Mr. Costello. Thank you, Mr. Chairman.
To follow up on the Chairman's last question, Ms. Shotwell,
you are confident, I mean, under the contract you are doing a
final demonstration launch the last quarter of this year and
then you have four that you will be doing next year. Is that
correct? So a total of five in a one-year period.
Ms. Shotwell. That is correct.
Mr. Costello. And you are confident that--are you building
the necessary components fast enough to meet these missions and
the schedule over the next three years of the contract?
Ms. Shotwell. We have produced six first stages for Falcon
9 and we are in the fourth--second stage for Falcon 9, and I
believe we are in production on the fourth Dragon spacecraft.
So we do understand the timeframes associated with building
these capabilities. As I said earlier, it is much easier to
predict how long it takes to build something rather than
develop something.
Mr. Costello. Mr. Culbertson.
Mr. Culbertson. Yes, sir. We, as I said, we are in
production on the follow on to the demo missions. We have a
great deal of confidence that we will be able to continue that,
and so I believe we will be able to deliver, as I said, the
four launches that we intend to do by the end of 2012,
including the two demonstration flights and the two CRS
missions.
Mr. Costello. Associate Administrator Gerstenmaier, let me
ask you, has NASA independently verified, I mean, not only your
opinion but have you independently verified what they have just
testified to? Do you believe that they are building the
necessary components not only to meet the short term but the
three-year contract schedule for instance that SpaceX has with
NASA?
Mr. Gerstenmaier. We have insight, and they have produced
the hardware that they have described, and they have plans and
schedules to go deliver to the schedules that they just
described. But then as kind of a prudent buyer, we have made
sure that there is margin in our systems, and we can accept
some delays in processes that occur or start-up problems occur
or we discover something in flight that doesn't work right, we
have overall margin that will not affect the operation of Space
Station.
So we understand their schedules, they are very reasonable,
they are good schedules the way we see them, but then we have
gone above and beyond to protect on the Space Station side to
make sure that we are not absolutely 100 percent dependent upon
those schedules that they have to be on there at exactly those
times. We have some margin in the overall system that will
allow us to continue to effectively utilize Space Station.
Mr. Costello. Ms. Chaplain, would you like to comment?
Ms. Chaplain. Just in our general experience things happen
even at the last minute and in the late stages of development,
and it is well that they could happen here. If we are
conducting vacuum tests, they typically reveal problems, and we
don't know how difficult they would be to fix in late stages.
So I would agree with what Mr. Gerstenmaier was saying. There
is still the risk that there will be delays. It is typical with
a lot of spacecraft development.
Mr. Costello. Just--I think it would be helpful for the
Members of the Subcommittee, Associate Administrator
Gerstenmaier, if you would explain to us NASA's oversight in
the interaction that you have, that NASA employees have with
both companies here. On a day-to-day basis do you have
employees from NASA in the facilities, both SpaceX and Orbital?
Mr. Gerstenmaier. Yeah. We have minimum insight into their
activities. I think we have one employee basically at both
contractors that kind of just oversee what is happening in a
general sense. They are not involved in any of the processing,
any of the details. They are more of a facilitator,
understanding schedules, passing data back and forth.
We do numerous technical interchanges and meetings with the
teams. They are in the process of going through some safety
review functions for the Space Station. They have been involved
in the activities to approach Space Station. We spend a lot of
time in meetings understanding technical requirements, working
back and forth in that sense.
Mr. Costello. So you have one employee that physically is
there, assigned on a day-to-day basis?
Mr. Gerstenmaier. Yes.
Mr. Costello. Switching to another issue, let me ask you,
Russia has expressed publicly some unease about commercial
providers docking at the International Space Station, and these
reports come just months before SpaceX plans to dock at the ISS
during its final demonstration flight.
Can you explain the concerns of Russia to the Subcommittee
and how NASA intends to address their unease?
Mr. Gerstenmaier. Their concerns are fairly typical that we
have seen as a vehicle comes to station. We have pretty
stringent visiting vehicle requirements of what it takes to
approach Space Station, and we need to make sure that the
vehicle not only gets there safely but if it has to abort or
stop the motion coming in, that it won't do any damage to Space
Station. You know, we need to make sure that there is not a
collision potentially. We have very stringent requirements. We
are in the process of reviewing the way the individual
spacecraft meet those requirements. We are doing that activity
right now. We are working through some technical problems that
we need to understand, and we are working with SpaceX and with
Orbital on both of those.
When we complete those safety reviews probably in the June
timeframe, we will do a bunch of simulations to make sure we
have a high probability of doing this activity. Then we will
schedule the appropriate reviews with our international
partners, not only the Russians but the Europeans, and we will
go through the process of ensuring to them and showing to them
why we think it is safe and prudent for us to allow these
vehicles to come up and stop and be picked up by the SSRMS on
the Space Station and ultimately berth to the station.
So we are working through the same methodical process that
we used to bring the Automated Transfer Vehicle to orbit. That
is the European cargo transfer vehicle, and we did the same
process with the Japanese transfer vehicle that delivers cargo.
We are following exactly the same process with them. Both of
those spacecraft on their maiden flights, in the case of the
Japanese it was the first launch of their rocket, and it was
the first actual berthing of their spacecraft to the ISS. So
this isn't unprecedented territory for us. We are following the
same processes we did with the international partners with our
commercial providers, and once we understand to our level of
satisfaction and we are ready for that approach to Space
Station, we will then bring it up with the partners, and I
think we will get acceptance from the partners at that point.
Chairman Palazzo. The chair now recognizes the gentleman
from Texas, Chairman Hall.
Mr. Hall. Mr. Chairman, I thank you and thank you for your
questions, and I subscribe to your questions and Mr. Costello's
sincere approach to it.
Mr. Culbertson, you and I are probably the few that
remember some of these things because of our age but----
Mr. Culbertson. Thanks, Mr. Chairman.
Mr. Hall. I call you back to June 25, 1997. Mr.
Gerstenmaier just mentioned something there that accidents do
happen and things can happen that are unforeseen and not
predicted, but I think you remember the day the Russian
progress vessel collided with Space Station Mir. I call you
back to that time, and I say that because there can be
occasions like that.
I think, Frank, you were the manager of the Shuttle Mir at
that time, and Mr. Gerstenmaier was, operations manager, I
think, but at any rate, you both remember that. You remember
that the Space Station lost pressure, and it was a very
dangerous situation we thought, and you thought, all of us
thought. Luckily with your good work nothing happened, and no
one was hurt.
But those things make me wonder about whether the cargo
delivery providers, whether they are commercial providers or
one of our own international partners, bear any liability if
they cause an accident to the Space Station.
I am sure you have thought about that, and we go back to
that, even we have had the Discovery, those that have just
returned from up there that had some immediate problems we
thought. So those things can happen.
How are we assured that we can be compensated or made whole
by mistakes made by those that we contract with? More than
that. Let me ask this. How much non-NASA business are you going
to have to have to survive? You are going to enter into
contracts and Frank, I have every ability, belief in you that a
person can have. I have been told that Mrs. Shotwell is very
capable and her boss, Elon Musk, is a can-do person that has
succeeded, been successful, and I am very hopeful that all that
is true, but you are signing a contract. It is just a paper
contract, and we are going to have to know that they can--that
you can produce that that you are saying that you are going to
produce, and you have a chance to demonstrate that, and I think
you have a time set to do that in, and we will wait and see
when that time comes.
But to sustain your business model under the Cargo Resupply
Services Contract I guess I would like to know what percent of
the businesses have to come from customers other than NASA in
order to meet your internal rate of return projections to where
you can keep our contract.
Can your companies continue to be a reliable contractor to
NASA if a few or say no other contracts are secured from
commercial customers?
Mr. Culbertson. Mr. Chairman, as far as Orbital goes, right
now we are focused on the CRS contract, and we have set our
business model up so that we can support it from a business
standpoint and from a rate of return. It is pretty tight in the
beginning because of all the development, but we think that by
the end of the--this phase of the contract we will at least not
be under water.
We are hoping for additional business from NASA since the
Station will be extended and----
Mr. Hall. And it is logical that you will have.
Mr. Culbertson. Yeah, and it is something that we are
thinking about now, but right now we are really focused on the
immediate.
As far as additional customers for cargo, that really
depends on how other things develop both in the commercial
world and in the government. We are prepared to address those
markets, and our Taurus II vehicle as well as our Cygnus
spacecraft are available for other customers for other uses.
But right now we are not counting on that for the success of
the program.
Orbital has about $1.25 billion worth of annual revenue,
and we have lots of other lines of business that the company
continues to thrive on, and this is an area that is very
special to us, and we hope to continue to grow. But we do it
because we are committed to the success of the Station and not
because we have to try to make a pile of money on it.
Mr. Hall. Ms. Shotwell, you are here in the place of Mr.
Musk, and we are probably going to ask him to come before us
sometime in the future, and we wish you well, and if you have
any comments you want to add to Mr. Culbertson's comment, I
probably have maybe five seconds left.
Ms. Shotwell. I speak fast. SpaceX, even given the
tremendous amount of development activities that we have had
over the past few years, we have been profitable since 2007,
NASA represents less than half of the missions that we
currently have under full contract for Falcon 9. We have 38
missions contracted for Falcon 9, and, as I said, less than
half of those are for NASA.
So we can sustain a business without NASA. We like NASA's
business. We like the activity that we are executing both under
COTS and CRS. We are actually proud to be NASA's partner, but
we can survive without that activity.
Mr. Hall. And Frank, I will write you a letter to ask for a
question on whether or not you bear any--the liability of any
accident that is caused at the Space Station. I will write a
letter to both of you for that, and the chairman will ask you
to answer it. Thank you.
I yield back what time I don't have.
Chairman Palazzo. Thank you, Mr. Chairman.
I now recognize the gentleman from Oregon, Mr. Wu.
Mr. Wu. Thank you very much, Mr. Chairman.
Mr. Gerstenmaier, I would like to start with you and ask
for your assessment of what could cause further schedule delays
in the COTS demonstrations and as they say in biochemistry,
what are the rate-limiting steps which remain to be taken?
Mr. Gerstenmaier. Again, I think it as both Gwynne and
Frank have talked about, they have got a lot of development
behind them and things are very good from a hardware
standpoint. I think the next phase will be the operational
phase, and it is the approach to Space Station and how we
actually close the loop with the rendezvous, proximity
operations sensors that provide the information to the
spacecraft as it comes and docks.
So it is those kind of activities that I think will be the
next challenge, is how you actually take the vehicle and not
only get it to orbit but now you bring it into close proximity
where it can essentially stop and then be picked up by the
Space Station arm and then berth to the station.
So I think there is some challenges in that area. I think
we will see some surprises in the hardware as it gets on orbit
and operates. We try to mitigate those problems as much as we
can on the ground and through ground testing, but I think we
will see some potential surprises there that we will have to
deal with to make sure that we can accommodate those and have a
safe berthing to station.
So the concern there is you don't want to put yourself in a
situation like we did before with Progress where we were
essentially pushing so hard to get to station that we cut some
safety corners and then we had the accident and the collisions
with Mir. So we need to make sure that we have got the right
measures in place so we do this in a measured, straightforward
fashion, and we have enough margin in the overall system if
there is some little delays associated with that they can
recover so we can still meet what we need to.
Mr. Wu. So, Mr. Gerstenmaier, these are of an operational
nature. How would you test for that without actually
endangering the Space Station? I also would like the rest of
the panel to comment on that.
Mr. Gerstenmaier. We have a very methodical approach. We do
an activity called a collision avoidance maneuver. So we allow
the spacecraft to get to a distance where it cannot hit the
Space Station, and then we ask the spacecraft to do a collision
avoidance maneuver. It does that maneuver, we actually monitor
the performance of that maneuver on the ground, we compare the
performance that we observe in space with the performance that
we predicted on the ground pre-flight, and we certify that that
vehicle is now ready to move into a closer point to Space
Station.
We then allow them to move into a closer distance, we do a
similar verification and test maneuver, we go back and validate
that possibly even over an evening, and then we let them move
in.
So we have a series of steps or gates as we approach Space
Station where we learn more and more about the capabilities of
the vehicle, is it operating the way it was designed, and that
lowers the overall risk as we approach. That is exactly the
same approach we used with both of the international cargo
carriers we took to station.
Mr. Wu. Well, I would like the rest of the panel to comment
on that and also the additional question of if there is a delay
or a failure, who bears the financial risk and who has the
reserves? Is it the private company, or is it NASA, or both?
Ms. Shotwell. We have a very methodical approach to
addressing this exact concern. The first part is to ensure that
you have a fundamentally-reliable design. We do that by
architecting to reduce failure modes, and then we also make
sure that we have redundant hardware. Our Dragon spacecraft is
two-fault tolerant to issues.
So once you believe you have a good design or you have put
in place a good design, then you do extensive testing on the
ground. I agree with Mr. Gerstenmaier that one of the riskiest
subsystems is this proximity operations piece. We do still have
some activity left before we are ready to fly that, of course,
and so we do extensive ground testing. We have done ground
testing at Marshall. It is pretty extensive ground testing at
the Marshall Spaceflight Center. They have a great prox-ops
test capability there. We will be doing some additional ground
testing in our factory as well.
So you have a fundamentally reliable design, you do as much
ground testing as you possibly can, you do extensive software
work in coordination with NASA, and then you have to fly, and
then you get into this spaceflight test program and getting
through those gates on orbit, you do a little bit, you test it,
you look at your data, you fly a little bit closer, you again
review the data before you continue on.
Mr. Wu. Who is going to bear the risk of delay or technical
difficulties?
Ms. Shotwell. As far as the financial risk goes, SpaceX
bears that burden. We have signed a contract to do activities,
and it is our responsibility to execute.
Mr. Wu. Mr. Culbertson.
Mr. Culbertson. As to that part it is the same for us. I
mean, this is--there is no additional funding, so if we are
delayed, it costs us money, so we keep schedule in mind, but as
I said before, it doesn't reach a higher priority than mission
success or safety.
In terms of the safety of the Space Station, we take a
similar approach to SpaceX. In addition, just like them, we
have hired people with experience in this area. We use the NASA
expertise as advisors and insight into what we are doing, and
then in the critical approach phase there is actually NASA
oversight through the Safety Review Panel of what we are doing.
The simulations we go through are very realistic, they are very
mature, and very thorough. We have the same fault tolerance,
and our rendezvous design is such that if we have a problem at
some point and we lose control of the spacecraft, it will just
sail past the ISS because we don't get on the final approach
until the last few--couple of hundred meters.
At that point we do have to demonstrate the avoidance
maneuver. We have to show that we can back out, that we can
clear the Station, and that we have sufficient redundancy in
the system to do that.
So this is an area that we have paid a lot of attention to.
It is the most critical phase of the flight, and we have to
protect the Station. This is more important than delivering the
cargo.
Mr. Wu. Thank you very much, Mr. Chairman.
Chairman Palazzo. I now recognize the gentleman from
California, Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much, Mr. Chairman, and
that last description of your company's ability to complete
that part of the mission was very impressive considering the
fact that you personally have gone through this and so I think
of anybody in the room, we have got some fellow that actually
went through the procedures that we are talking about. Well, I
say at the desk there.
So let me ask a couple questions. Mr. Chairman, with all
due respect to the concept of gambling on two companies, if we
are, indeed, gambling on two companies, I think it is a good
bet, a much better bet than gambling on patching up the
Shuttle. We have spent a little over $1 billion now on trying
to achieve a commercial and competitive approach. It is
fascinating to see we have two competitors sitting right next
to one another here today offering us their services and
continuing to want to win this competition.
We have spent in order to achieve this a little over $1
billion. Let us just note one flight of the Shuttle is a little
over $1 billion without the payload, and that is a system that
we know does not have the reliability that we need to have in
order to rest assured that the Space Station can be resupplied
and that we can meet other, our other goals in space.
So that billion dollars that has been spent rather than
spending it on another Shuttle flight I think has been a very
good decision.
With that let me also note, and let me see if I can get
this right, both SpaceX, you have received about $300 million
in government money so far, in NASA money in the development of
Falcon 9?
Ms. Shotwell. We have received $298 million under the COTS
Program for Falcon 9 and Dragon development.
Mr. Rohrabacher. Orbital has received how much?
Mr. Culbertson. A little bit less than that.
Mr. Rohrabacher. Okay. So we have had--and is Orbital like
the SpaceX match dollar for dollar?
Mr. Culbertson. It is not really a dollar for dollar. It is
whatever it takes to complete the program once you have spent
the Space Act funds.
Mr. Rohrabacher. All right.
Mr. Culbertson. And so the onus is on the company to
complete the project no matter what the government is funding.
Mr. Rohrabacher. But how much have you spent so far in the
project non-government money?
Mr. Culbertson. Probably a little more than the government
has.
Mr. Rohrabacher. Okay. So what we have if we really look at
this, the government . . .
Mr. Culbertson. Actually quite a bit more than that when
you count Taurus II.
Mr. Rohrabacher. Okay. Well, America, if we are not saying
that the Space Program belongs to the government but instead
belongs to the people, America has received for $300 million
each, let's say, we have received at least $600 million in
benefit to the Space Program, unless, of course, we think the
Space Program is a government program and is owned by the
people who work for the government and not the people who are
of this country who are paying for, out of their pockets for
whatever is achieved into space.
So I would suggest that gambling on these two new systems,
as I say, and the price that we are talking about is--was a
very good bet indeed. I take it that both of you, the Orbital
and SpaceX, are operating on a fixed price contract, and you
have--now, we know that the cost has gone up a little bit as
has been noted as this commercial space endeavor has moved
forward, but the costs that have gone up have been basically
going up because new milestones were set for your companies by
NASA. Is that correct?
Mr. Culbertson. Additional content was added to the
development program under the Space Act Agreement that we
agreed to add to the program, and NASA agreed to invest in that
partially.
Mr. Rohrabacher. So but no, there has been no additions of
cost to the taxpayers that was generated by something that you
didn't foresee but were not required to do. In other words, you
have done what you were required to do for the price that you
agreed to do it at as compared to, I might add, the development
of other programs for NASA that are not fixed price that seem
to always go over and need more money, not based on meeting
NASA milestones but just because they underestimated what their
costs would be. Is that correct? Go right ahead.
Mr. Culbertson. It is probably better for Bill to answer
that.
Mr. Rohrabacher. What do you think, Bill?
Mr. Gerstenmaier. Again, in this case we added these
augmentation milestones to help assure where we needed to be.
Mr. Rohrabacher. Right.
Mr. Gerstenmaier. They weren't absolutely required, and
this is a better way from a cost risk to the government for us
to go enter into these activities.
Mr. Rohrabacher. Right, but let's just note this was not
that this program cost more money because as we have seen in so
many other NASA programs because the people who had contracted
were being unrealistic about what they could achieve or what
they were willing to put in. What we have here is, again,
examples of when we deal with the private sector, we make
things a private endeavor rather than just a totally government
endeavor, it costs the American people less, we end up getting
more for the dollars that are being put in rather than less and
more risky.
And, again, when we talk about the risk factor, I, when I
look at the Shuttle, the risk compared to what we are talking
about is overwhelming, and it always has been, and the Shuttle
went from being--I was--I happened to be a young reporter when
that, when the decision was made to move forward with the
Shuttle and covered some of the earlier press conferences, and
the Shuttle was going way, way over everything, whatever
anybody believed it would cost. And there was no reliability on
the people who were building the Shuttle to keep those costs
down.
In fact, they were operating on cost plus, which gave them
free reign. I think that now we are dealing in a very
responsible commercial way. So I appreciate this hearing, Mr.
Chairman, and I think we have learned a lot. Thank you very
much.
Chairman Palazzo. I now recognize the gentlelady from
Maryland, Ms. Edwards.
Ms. Edwards. Thank you, Mr. Chairman, and thank you to our
witnesses today.
Mr. Gerstenmaier, you commented to Committee staff that
your decisions frequently involve consideration of different
risks, the source of the risks, and the mitigating measures,
and I know this hearing is focused on commercial cargo but I
think some of the lessons that are learned for commercial crew,
if any, are too valuable not to be highlighted right now.
And so I wonder if you could tell us whether the risk and
mitigating measures involved in testing the industry's ability
to bring crew to the Space Station is likely to be similar to
those in developing commercial cargo transportation?
Mr. Gerstenmaier. I like to think our experience in this
cargo activity will help inform us on how we move forward into
the crew activity so we can take what we have learned through
this process through cargo and dealing with the commercial
providers in a kind of a non-traditional government manner with
both the space act and also with the fixed price contracts, and
we can see what works well, what doesn't work well from an
overall product standpoint, and that can inform the approach
that we take as we move forward into the cargo or into the crew
activity.
So I think we can learn the lessons of working with these
guys from a cargo standpoint. We can understand some of the
risks, some of the things we understand, we don't understand,
and understand how to move forward as we move into crew with
the proper safeguards in place for the criticality of
transporting crew to orbit.
Ms. Edwards. Are there factors that you would anticipate
make it more challenging to develop commercial transportation
of crew than cargo?
Mr. Gerstenmaier. I think crew is more--is less fault
tolerant from an overall standpoint. We have a very high regard
for life and so we want to make sure that the crew is protected
in all aspects, whereas the cargo, if it is lost, it is an
impact to us, but it is recoverable. We can manufacture more
hardware on the ground and fly again.
So crew carries a higher burden for perfection in order to
make sure that the activity is performed in the best manner
possible. So I think we need to factor that into our thinking,
into our logic, into our acquisition approach for those
activities to make sure we have got those proper safeguards
that are proportional to the criticality of the cargo that we
are carrying.
Ms. Edwards. And how important are the mitigating measures
that are available under CRS such as pre-positioning by the
STS-135 and availability of partner spacecraft and giving you
the needed margin to ensure the continued Space Station
viability?
Mr. Gerstenmaier. Those are extremely important to us from
a Space Station standpoint. Our philosophy of putting all the
necessary cargo to keep Station viable for roughly about a year
period on orbit is tremendously valuable to us. That allows
some schedule slips to occur, that allows some of these flights
to move around, and it is not an immediate impact to us. We had
the critical items to make sure we can effectively utilize
Space Station with minimal resupply for about a year.
So it has been really important for us to take these
remaining Shuttle flights to get the cargo up to Space Station.
It has also been very important for us during this phase to
have the ability to return cargo from Space Station so we can
understand what failures are occurring on orbit so we can make
repairs in the next generation of hardware that we deliver to
Station.
So I think we have utilized the Shuttle in the most
effective manner for this lead-up period, and we have postured
ourselves with the proper margin to allow us to bring these new
providers online in a safe and reasonable timeframe.
Ms. Edwards. And how are you going to ensure that the
margin will be available during the industry's attempt to
demonstrate the ability to provide commercial crew
transportation safely and reliably?
Mr. Gerstenmaier. Again, this overall margin sits there
throughout that period of time. It doesn't go away
instantaneously on one particular date. We also assumed pretty
conservative failure rates for our components on orbit, and we
are in a pretty good period with Space Station where there is
not a lot of failures occurring. Typically when you launch a
spacecraft the first period on orbit there is a lot of failures
as new systems come online. Then you reach a period where there
is not many failures. Then towards the end of life as
components start aging you start seeing more failures. We are
in that low part of the curve, but we have assumed in our
estimates that we would be in the higher part where more
components are failing, so we have margin in the overall
systems design on Station.
So I think we have a very reasonable margin to move
forward. We need them to keep moving forward as fast as they
reasonably can. We will encourage them to stay on the schedules
they described to you, but we recognize that we won't push
those schedules so far that we take risks to Space Station or
we take risks to overall goal that we end up with a major
failure on our hands.
So we will balance that risk of delivering on time as much
as we can versus the margin we have on orbit, and we will
balance those two as we do all along in all of our activities
in space.
Ms. Edwards. Thank you very much. I just want to get in
really quickly with Ms. Shotwell and Mr. Culbertson, I wonder
if you can tell me as you talked about absorbing the potential
for delay or for catastrophic failure, are you holding reserves
in place of--in order to be able to, you know, to pay for those
risks should they happen? I mean, how do we know that your
company isn't just going to go belly up and then the taxpayers
are left holding the bag?
Ms. Shotwell. Under our cost agreement with NASA we meet
quarterly with their program management and show them our
financials and show them what we have on our books. We do have
some reserve right now.
Ms. Edwards. How much?
Ms. Shotwell. In our bank account?
Ms. Edwards. How much do you have in reserve that you are
holding in case there is a delay or failure?
Ms. Shotwell. Currently we have about $30 million worth of
reserve, and that grows monthly.
Ms. Edwards. And that is going to pay for a delay or a
failure?
Ms. Shotwell. Not quite yet. No.
Ms. Edwards. Thank you.
Ms. Shotwell. It will build up by the time we reach the
Station.
Ms. Edwards. Thank you.
Chairman Palazzo. I now recognize the gentleman from
Oklahoma, Mr. Lucas.
Mr. Lucas. Thank you, Mr. Chairman.
Ms. Shotwell, in your testimony you say that NASA
independently verified SpaceX's total development costs for
Falcon 1 and Falcon 9 at $390 million. Does that include the
cost of development for the Dragon Capsule?
Ms. Shotwell. No, sir. That was just for the Falcon 9 and
the Falcon 1 Program.
Mr. Lucas. So how much more was spent to develop the Dragon
Capsule?
Ms. Shotwell. As of December last year another $300
million.
Mr. Lucas. As of December last year. Okay. So what is the
total development cost then for the entire Falcon and Dragon
system?
Ms. Shotwell. We are not quite done with the Dragon
development. I anticipate the entire development to be----
Mr. Lucas. I have been led to believe maybe $690 million.
Is that a fair number?
Ms. Shotwell. No. It will be $50 or $60 million more than
that, sir.
Mr. Lucas. So $700 million then.
Ms. Shotwell. That is correct.
Mr. Lucas. Did NASA independently verify SpaceX's total
development cost for the entire Dragon 9 and--Falcon 9 and
Dragon Systems?
Ms. Shotwell. They had access to our financial data for
that. I don't know the extent of the analysis they did on the
data.
Mr. Lucas. And maybe this is a question for the director as
well as yourself then. Who exactly performed that kind of
verification? An entity from within NASA or----
Mr. Gerstenmaier. I will need to take that question for the
record. I don't know the specifics of how that detailed cost
accounting was done.
Ms. Lucas. Well, as you can well expect just looking at
this from the perspective of the taxpayer, we are curious about
the money and the details and the verification.
You told our staff, Ms. Shotwell, that SpaceX does not
assign engineering costs to individual vehicles. Is that
correct?
Ms. Shotwell. Our engineers do not sign timecards. On the
other hand, we can estimate the numbers of engineers that are
working individual projects, but it is just estimates.
Mr. Lucas. So I guess my question then doesn't that make it
kind of hard for SpaceX or NASA to know what the true
development cost is?
Ms. Shotwell. It makes it difficult to understand the exact
cost. On the other hand, the overall cost for the total program
is not. It is the money that we have expended.
Mr. Lucas. So then I would ask thinking about that and
looking at what the real costs are involved to both yourself
and the associate administrator, so do either one of you keep
track of the value of the technical services received from NASA
since you mentioned using various facilities and testing
equipment? Has that just been a freebie so to speak, or is that
accounted for by either entity?
Ms. Shotwell. We pay for the facilities that we use from
NASA, for example, the Marshall Spaceflight Center facility. We
have leveraged the Arc Jet facility testing out of Ames, and we
pay for that.
Mr. Lucas. So that is all tracked, that is all verified,
that is all of public record then?
Mr. Gerstenmaier. Yes.
Mr. Lucas. To you, Associate Administrator, NASA has told
us that the average cost to deliver a kilogram of cargo to the
International Space Station by the RS--CRS contract is $59,000
per kilogram. I believe CRS providers are expected to deliver
40 metric tons, 40,000 kilograms times $59,000 per kilogram. By
my math that is about $2.36 billion, and the CRS contract total
is $3.5 billion, totals on the contracts.
So what is the remaining trillion--billion, sorry, we are
into too many trillions in this town anymore, billion, $140
million paying for?
Mr. Gerstenmaier. The way we--the numbers we talk about in
cargo, we talk about the 40 metric tons of cargo, 20 to each
contractor. That is what we consider usable cargo. So for that,
for us that is the actual cargo that is delivered to space.
That is the thing that we can actually use, but you can't just
deliver it. You actually have to pack it, it has to go into
flight support equipment in the spacecraft, and there is other
things that hold it in place or allow it to be delivered, and
that is the difference in price.
So we are paying for a price per rocket and then we have
been asked to provide the price per kilogram, so then we just
divide those out, and whether we include that other support
equipment or not, you can get two different prices for the
price for kilogram. And we can show you all the accounting and
all the math and all the details behind that if you would like
to go review that in detail.
Mr. Lucas. I suspect we will look at all the numbers
because it on the surface appears to be about a $1 billion
prize here for successfully prevailing in this contract.
With that, Mr. Chairman, I yield back the balance of my
time.
Chairman Palazzo. Thank you. I recognize the gentleman from
Alabama, Mr. Brooks.
Mr. Brooks. Thank you, Mr. Chairman.
I am looking at what the Committee staff has prepared for
us, and there are some things that kind of stood out, and I
would like any of the witness's response to it, and this is on
page five of 12 of our handouts.
The following chart lists approximate cost to deliver one
pound of cargo to the International Space Station under various
programs. Development costs are not included in these
calculations and are considered proprietary information by the
COTS partners. We have got for the Space Shuttle $21,268 per
pound, $21,268. We have got for the Russian Progress $18,149
per pound, and then we have the Commercial Resupply Services,
CRS, of $26,770 per pound.
So if this information is accurate, CRS costs 26 percent
more to deliver a pound to the International Space Station than
does the Space Shuttle and 47 percent more per pound than if we
used the Russian Progress. And then there are some further
notes. Costs for the Russian Progress and the Commercial
Resupply Program are NASA estimates. The CRS estimate would be
higher at around $39,700 per pound if derived using a method
similar to that used for the Space Shuttle.
Now, if that ends up being the correct number, $39,700 per
pound using the CRS Systems, well, that is 118 percent higher
cost to American taxpayers than the Russian Progress and
21,000--excuse me. Eighty-seven percent higher cost to American
taxpayers than the cost of using the Space Shuttle.
My first question is are these numbers accurate or
inaccurate, and if they are inaccurate, where did the Committee
staff make their mistakes, and second, just your general
thoughts concerning this information.
Mr. Gerstenmaier. I think I would like to go ahead and we
can take that for the record. We need to understand exactly
what went into those calculations and then compare them with
what we have got for estimates. It is difficult on how you
assume what costs are where, whether we have--we look at new
obligation authority, we look at actual costs during the year,
you know. How many Shuttle flights occur per year drives that
clearly right. If we only fly one or two Shuttle flights, that
dramatically changes that number in that table.
Mr. Brooks. Well, this is assuming four missions per year.
Mr. Gerstenmaier. Okay.
Mr. Brooks. According to another one of the footnotes.
Again, I don't know if this information is accurate or
inaccurate, but I do find it startling that at least according
to what the staff has handed me that the Commercial Resupply
Service approach is so much higher for American taxpayers than
is either the Russian Progress or the NASA Space Shuttle.
Mr. Gerstenmaier. Again, we also have to look at how we--
those are calculated, the development costs for the Shuttle
Program are not in those numbers. There is lots of things that
we need to talk about specifically, so it is not as simple as
the table implies. I would like to take the question for the
record, and we can provide you much more detail behind those
numbers, and we can understand better what is in the table, and
we can do much more of a fair comparison between the two and
show you the range of how you can look at these numbers, and it
is not--there is not a single number as you described. There
will be a range of numbers for each one of those columns that
you described in the table, and we can show you those ranges
and how they fit across all three providers.
Mr. Brooks. Well, please, if you could have some of your
staff get with the Committee staff and consult about this,
would that be satisfactory?
Mr. Gerstenmaier. We will do that.
Mr. Brooks. Thank you.
[The information can be found in Appendix II.]
Ms. Shotwell. Could I respond?
Mr. Brooks. Certainly.
Ms. Shotwell. I appreciate that. One of the assumptions
used to calculate at least our dollars per pound here in the
charter was--it is an erroneous assumption. It was purely
taking the $1.6 billion under the CRS contract and dividing
that by 20 metric tons. The fact is that NASA has bought 12
flights from SpaceX. We could take much more than 20 metric
tons to orbit on those flights. We don't charge NASA extra for
anything above the 20 metric tons as long as we are still doing
the 12 flights.
Depending largely on the density of the cargo that we take
and we haven't packed the Dragon yet with actual cargo, but in
the best case from a taxpayer perspective, if we can take the
full Falcon 9 performance capability to the ISS, the cost per
pound of cargo is under $10,000 a pound using our system. It is
not $26,000 a pound.
Mr. Brooks. Thank you, and would you please get with the
Committee staff at some point, either you or someone else, and
try to ascertain what the true numbers are in as much as that
is critical I am sure to the decision making process that the
Congress will make.
Ms. Shotwell. Yeah. I would be happy to.
Mr. Brooks. Thank you.
Chairman Palazzo. I now recognize the gentlelady from
Florida, Mrs. Adams.
Mrs. Adams. Thank you, Mr. Chairman, and I appreciate you
holding this hearing.
We are working through an incredible time in the history of
the American Space Program. I would be shocked if you would
find anyone on this panel who didn't understand this. You know,
yesterday was the 50th anniversary of those famous words from
our 35th President, John F. Kennedy, who said, you know, we are
going to go to the moon, and he inspired all of us to believe
we could beat the Russians, and we could make it to the moon,
and American ingenuity was limitless in the face of seemingly
insurmountable odds.
Mr. Chairman, in my district people are hurting. Their
families are hurting, they are fighting tooth and nail to
scrape together to pay their mortgage, they are looking for
change to pay for their gas, and now here comes the layoffs,
lots of layoffs. And I understand sometimes layoffs happen, but
what is most troubling is this one was unnecessary. It was
unnecessary because we didn't have to get to this point. It was
poor planning, poor management, and a lack of vision that led
us here. And as I see it we must continue to invest in our
exploration capabilities, we must continue to invest in our
cargo transport capabilities, and we must continue to invest in
job creation.
This all starts by NASA following the directives of
Congress. We cannot lose sight of the fact that an
Authorization Bill exists, and if we don't like the direction
of the Authorization Bill, if we think that as a Nation we need
to move in a different direction or change something in that
Authorization Bill, then we should have that conversation
rather than trying to start a different direction through
budget requests.
Ms. Shotwell and Mr. Culbertson, I hope you both fully
understand the awesome, awesome responsibility being laid on
your respective companies. This is not some meaningless
investment or some contract that your country--company can just
simply hope to fulfill. The future of our international
commitments, the bond and the promise of the United States is
on the line, and you signed up for the responsibility to ensure
those promises have been met.
History has trusted the United States of America to lead
the way in space technology and exploration. I hope you and
your companies understand what is being asked of you by the
American people and the trust that the American people have put
in you because it is not something I take lightly, and I will
not be able to let you forget that either.
With that said, I would like to start with Mr.
Gerstenmaier. This country has spent over $1.25 billion on the
commercial cargo effort to date. When is our first cargo
mission going to supply Station?
Mr. Gerstenmaier. The demonstration flights will be later
this fall, and the first cargo resupply mission will be in
2012.
Mrs. Adams. How much more money do you expect NASA will
request for this effort before the commercial companies will be
able to resupply on a regular basis?
Mr. Gerstenmaier. We will request no more funds than what
are there. These are fixed price activities as we described
earlier, and the cost that we have laid and we brought forward
are the costs we expect, and so we--there will be not any more
increase to deliver the cargo that we have purchased through
these service contracts.
Mrs. Adams. How many people does NASA expect to hire to
manage our Commercial Cargo Program as the flight manifest
starts to fill up?
Mr. Gerstenmaier. We will not hire any NASA civil servants
beyond what we currently have monitoring the Cargo Program as
the flights ramp up.
Mrs. Adams. What confidence level does NASA have in each
contractor meeting the latest revised schedules for their first
cargo resupply missions?
Mr. Gerstenmaier. I think the schedules they have laid out
are optimistic but realistic schedules. I think I would also as
we have discussed here earlier, I would also say that I would
be remiss if I didn't expect to see some schedule delays and
delays in those schedules, and we will be prepared for those
delays. They will not have financial penalties to us for those
delays, but we have to make sure we had the right margin on
Space Station that we don't impact the operations of Space
Station when those inevitable delays occur.
Mrs. Adams. Now, when asked about the article in the paper
about possible problems with docking, SpaceX docking and doing
the test docking, you said there were technical problems that
needed to be understood. What type of technical problems? I
mean, are they such problems that could delay any kind of test
docking for a length of time, a longer length of time?
Mr. Gerstenmaier. No. They are understandable problems that
we have seen before. There are some hardware differences. As
Gwynne described earlier, there is a lot of software activity
that needs to be done. We are very closely monitoring that
software activity to make sure that it gets done correctly.
I don't see anything there that is an extraordinary
problem, but they are not easy technical problems to solve. We
will work through the contractors as we have before. We will
apply our best folks to help where we can, and the companies
have been doing a great job of responding and helping and
working with us in those areas. The activities they are doing
at Marshall to actually verify software and hardware
functionality is a tremendous testimony that SpaceX has stood
up, to recognizing this as an area that needed extra help. They
went and procured some extra help from NASA in that area.
Mrs. Adams. So you don't believe it will be delayed?
Mr. Gerstenmaier. There will be some delays, but they will
be manageable within the overall margin we have onboard.
Mrs. Adams. Ms. Shotwell, I know but SpaceX has received
$250 million of the American tax dollars so far for Region 18
of your 22 COTS. Are you going to be ready to deliver on your
promise to supply the Station when this country needs it?
Ms. Shotwell. Yes, we are.
Mrs. Adams. Thank you.
Chairman Palazzo. All right. Thank you.
I now recognize the gentleman from Texas, Mr. Olson.
Mr. Olson. Well, thank you, Chairman Palazzo and Ranking
Member Costello, for your courtesy and the opportunity to come
back to Science and Aeronautics Subcommittee. While I am no
longer on the Subcommittee, I still represent the heart of
human spaceflight, the Johnson Space Center in Space City, USA.
I am grateful to our witnesses for being here today, excuse me,
to give us your insights and perspectives.
The commercial industry has been part of the human
spaceflight program since its inception. The only thing that
has changed is the means in which we contract with the
commercial sector for the critical services and support they
provide to NASA with change, prudent management, and forthright
accountability by all parties, Congress, NASA, and industry is
imperative.
Adherence to the goals, objectives, safety requirements,
and budgets and milestones are critical to the agency's
success. If we falter in any one of these areas, we risk
failure, and in our business failure can cost lives, waste
precious funding, result in irreversible damage to the
industry, and in some cases result in the failure of an entire
program.
In this business failure is not an option. We must avoid
failure at all costs, and in doing so it is imperative that we
provide candid and factual updates of the program
accomplishments and issues so they can be mitigated before
failure. This is the essence of why we are here today, to
assess where we are in the NASA COTS Program that began in
2005, six years ago.
My first question is for you, Mr. Gerstenmaier. First of
all, I want to tell you you were missed at the Art at NASA Gala
in Houston a couple weeks ago, and I understand the COTS
Program is behind schedule relative to the pronouncements over
the past year by the COTS providers. In your view where do we
stand today relative to both program investment and schedule
now that we are five years and $1.2 billion into the program?
Mr. Gerstenmaier. Again, I think as we have discussed
earlier, the development activity is a very tough time for
these, for the contractors to do development, and we see that.
We wanted to make sure we got the development right, and we
didn't rush that, so we had some schedule delays in the
development activity. I think that is appropriate and
reasonable for where we are, and we have retired some of those
development activities. We now entered into the operational
phase, and we need to continue to monitor that moving forward.
So I think I see the scheduled delays that have occurred. I
think they are reasonable with what we have seen. I have seen
these companies rise to the challenges that they have
encountered during these development delays, and they both have
done a very good job of working through those problems. I think
there will be problems in the future. They need to address
those in a very straightforward manner as you described, and we
need to make sure we get to the right technical solution and
don't shortchange things or cut things to move forward because
it is absolutely important we get this service to Station as
soon as we can and make sure we get it there safely.
Mr. Olson. Yes, sir. I agree completely. We do have to
minimize that gap, but just following up with that question, is
it your view that the COTS providers had the capacity and
resources in place to successfully execute this manifest, their
manifest on this timeline?
Mr. Gerstenmaier. I think they have the appropriate
resources to do that, but I think we, again, need to be
prepared that if they run into problems, we have some ability
to absorb some delays, and we don't force them into a situation
where they have to take undue risks.
Mr. Olson. Appreciate that.
Ms. Shotwell, Mr. Culbertson, would you like to comment on
that question?
Mr. Culbertson. Well, as far as how we are executing here,
I want to, first of all, I want to apologize to Bill for
tossing my customer a grenade a few minutes ago and without
taking it back, and I will take it back right now. What we are
doing is a combination of Space Act Agreements with, as I said,
fixed funding and fixed price contracts under the FAR, which
are to protect both parties from--on a contractual basis. But
they are fixed price, and if we have to go redo a test, we
absorb the cost of that test. If we have to figure out a
different way to ship our first stage to Wallops, we have to
absorb the cost of doing that. We don't transfer that cost to
the government. This is not a cost-plus contract.
So there is not going to be a growth in cost on the CRS to
the government, but there may be cost to us, and so that
affects our ability to continue on the program in the future,
and we will have to evaluate as we go forward whether it is
profitable and worth the risk or not. Right now it is worth the
risk because we see it as very important to the Nation that we
provide this cargo delivery. But we see it important to the
industrial, the space industry that commercial companies step
up to this responsibility and figure out a way to accomplish
this.
This is a precedent for what is coming in the future, I
believe, and the amount of money that has been paid to us on
the CRS contract has been mentioned several times as extra
money that has been sent to the contractors. That is not the
case. When you do business in a commercial world, you are given
milestone payments. You are given progress payments in order to
make sure that you can buy your long-lead items, you can pay
your staff, you can pay your engineering development and keep
the program moving until you reach that final goal, and we have
20 to 30 percent at stake on every mission if we don't execute
it. So we are not going to get paid ahead of time. We have to
execute it, and so we are committed to making it happen, but it
is a commercial endeavor and not a traditional government cost
plus development, and that is a really big difference from what
people are used to, and I think some folks in the community
might be having trouble understanding that.
We are very sympathetic to the impact of layoffs and what
is going on. If I could hire all the people that are being laid
off in the Shuttle Program, I would do it, but then I couldn't
control my costs in order to provide you the service you need.
Mr. Olson. Ms. Shotwell.
Ms. Shotwell. Yes. Just to be clear, we have built enough
hardware and we are far enough along in our development, we are
very confident of our costs and thus our prices. We will
execute, we will complete the COTS demonstration, and we will
execute the CRS missions to Station for what we have proposed.
Mr. Olson. Thank you, ma'am, and since I have crossed into
the realm here where the clock is actually increased, I have a
red light, I yield back the balance of my time.
Chairman Palazzo. Thank you, Mr. Olson.
That is it for our questions today. I do want to thank our
witnesses for their testimony.
Mr. Olson. Mr. Chairman, one question. I would like to ask
unanimous consent that I enter--I have a statement to enter
into the record about my concerns, some of my concerns
elaborated on my concerns with the course our country is
following. I apologize.
[The prepared statement of Mr. Olson appears in Appendix
II:]
Chairman Palazzo. Without objection, so approved.
Several things seem clear from today's testimony, namely
that there is still tremendous challenges both companies need
to address, and time is growing short. NASA has obligated 1.25
billion over the last five years, and it is my firm hope that
before the year is out we will have real proof that this
investment has been worthwhile.
Congress has been very supportive and has provided
significant additional funding, but the burden of proof is now
on NASA and its commercial partners to accomplish what they
have signed up to do.
I thank the witnesses for their valuable testimony and the
members for their questions. The members of the Subcommittee
may have additional questions for the witnesses, and we will
ask you to respond to those in writing. The record will remain
open for two weeks for additional comments from members.
The witnesses are excused, and this hearing is adjourned.
[Whereupon, at 11:41 a.m., the Subcommittee was adjourned.]
Appendix I
----------
Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by Mr. William H. Gerstenmaier, Associate Administrator,
Space Operations Mission Directorate, National Aeronautics and
Space Administration
Questions submitted by Chairman Steven Palazzo
Q1. If a reduction of ISS crew size were implemented because of delays
in CRS, how would the reductions be apportioned among the ISS member
nations? Would a NASA astronaut continue to serve on board even if it
was the U.S. who failed to maintain a reliable cargo delivery system?
A1. Any impacts caused by Commercial Resupply Services (CRS)
contract delays would need to be jointly worked with the International
Space Station (ISS) International Partners. NASA has kept the Partners
apprised of the progress of these vehicles. Any impacts to overall ISS
crew complement planning will be negotiated with the Partners along
with the other impacts to science and cargo.
Q2. Do the cargo delivery providers, whether they are commercial
providers or one of the international partners, bear any liability if
they cause an accident to the space station?
A2. The Intergovernmental Agreement (IOA) for the International
Space Station (ISS) contains a broad cross-waiver of liability clause
to encourage participation in the exploration, exploitation and use of
outer space through the ISS. The United States and its international
partners waive claims against each other, and against each other's
contractors, for damages caused during space operations, except for
damages caused by willful misconduct. The IGA requires NASA to flow
down this cross-waiver to its contractors. The CRS contract also
includes this cross-waiver of liability. Neither the CRS contractor nor
NASA is liable for damage to the other's property that occurs during
space operations, including damage to the ISS, except for damage caused
by willful misconduct. If the contractor damages the ISS, the mission
is deemed a failure and the contractor forfeits the final milestone
payment for that mission.
Q3. If a commercial cargo provider loses a mission, do they have to
replace the cargo?
A3. In the event of a failed mission, the contractor forfeits the
final milestone payment (20 percent of the mission price). The
contractor is not required to replace the cargo.
Q4. If they lose a mission do they owe NASA a replacement flight? If
no, why not?
A4. In the event of a failed mission, the contractor forfeits the
final milestone payment (20 percent of the mission price). The
contractor is not required to re-perform the flight.
Q5. NASA is investing considerable sums to stand-up two new launch
providers. What were the factors that led NASA to take this path
instead of using existing capabilities of the EELV program? Current
Delta and Atlas launch systems have proven to be highly reliable, but
they're also under-utilized. How and why did NASA come to the
conclusion that using a clean-sheet approach with new launch systems
was more cost-effective?
A5. The Commercial Resupply Services (CRS) contracts were awarded
through a full and open competition for the delivery of a minimum of 40
metric tons of cargo from 2011 through 2015. None of the proposals that
were received by NASA in the competition proposed the use of an Evolved
Expendable Launch Vehicle (EELV). The successful bidders--Space
Exploration Technologies (SpaceX) and Orbital Sciences Corporation
(OSC)--were selected on the basis of the responsiveness of their
proposals to the requirements of the announcement. These proposals
involved the use of the new Falcon-9 and Taurus-2 launch vehicles.
Q6. Have NASA and FAA clearly worked out roles and responsibilities
regarding the safe launch and reentry of cargo payloads?
Q6a. Are there any unresolved issues between the two agencies relative
to the licensing of NASA-contracted cargo payloads to ISS?
A6a. Launches under the CRS contract are commercial launches, not
Government launches. The contractor is required to obtain a FAA license
for launches and re-entries.
Q6b. Is FAA treating the resupply flights in the same manner as any
other commercial launch?
A6b: NASA cannot speak for the FAA with regard to how it treats
other commercial launches. Launches under NASA's CRS contract are
commercial launches, not Government launches. The contractor is
required to obtain a FAA license for launches and re-entries.
Q7. It's my understanding that fixed-price contracts are generally used
to buy commodities or other services that have relatively low risk.
Since CRS is not a low risk venture why did NASA choose to use a fixed-
price contract for the cargo resupply services program?
A7: The CRS acquisition was conducted under Part 12 of the Federal
Acquisition Regulation (FAR), Acquisition of Commercial Items. The
contract complies with the Federal Acquisition Streamlining Act (FASA),
which requires that acquisitions of commercial services must be fixed-
price contracts. Cost-type contracts are prohibited for commercial
services.
Q8. Why was FAR Part 12 chosen over FAR Part 15 for Cargo Resupply
Services acquisition?
A8. The Commercial Space Act of 1998 states that space
transportation services are considered to be commercial items for
acquisition purposes. NASA complied with this requirement by using Part
12 of the FAR, Acquisition of Commercial Items, to acquire ISS cargo
resupply services under the CRS contract.
Q9. Given the degree of risk using newly developed launch systems to
deliver critical cargo to the ISS, do one or two demo flights equate to
a mature system?
A9. NASA recognizes that one or two missions do not equate to a
mature system. The commercial cargo contractors and NASA will be
learning new things about these cargo vehicles as they fly their test
launches, demonstrations, and the CRS missions. Even after the Space
Shuttle had flown for several years, NASA was learning new things about
the operation of the vehicle. NASA recognizes that there is risk in
these new systems that will only be reduced through continued safe and
reliable performance. One of the reasons NASA invested in two cargo
providers was to mitigate the normal start -up issues that may occur
with these new cargo launch systems.
Q10. Your testimony said, ``NASA sees no reason to doubt either
company's objectives,'' yet there have been no demonstrations flights
to the ISS so their capabilities are unknown.
a. If the demonstration flights are unsuccessful, what is NASA's plan?
A10a. The COTS partners are strongly incentivized to successfully
complete their demonstration flights. The companies do not get paid for
their milestones unless they are successful. In addition, both
companies have over a billion dollars at stake for the services
missions under the CRS contracts. If either company has an unsuccessful
demonstration flight, NASA expects them to keep trying until they are
successful. However, in the event that one of the CRS contractors
cannot meet its obligations under CRS, then NASA could rely on the
remaining CRS contractor to fly additional cargo flights. Both
companies have indicated that they can increase their flight rate for
CRS missions if required by NASA. In addition, NASA could contract for
additional HTV, ATV, and/or Progress flights for more cargo delivery.
Q10b. Does NASA have any recourse, monetarily or otherwise, if the
providers fail to meet NASA's requirements?
A10b. Under the terms of the SAA, the partners are only paid for
milestones that are successfully completed. If milestones are missed,
NASA may unilaterally terminate the agreement if it is determined that
sufficient progress is not being made and it is in the best interest of
the Government. See the response to Question 10 for a non-monetary
recourse. The CRS contracts include termination for cause provisions.
They also contain clauses regarding recovery of interim milestone
payments and require the contractor to forfeit the final milestone
payment in the event of a failed mission.
Q10c. Do the CRS contracts contain any ``look back'' provisions which
would allow NASA to recover damages if the providers fail to fulfill
their obligations?
A10c. In the event of a failed mission the contractor forfeits the
final milestone payment. Once the contractor reaches the final
milestone event, prior milestone payments for that mission are not
recoverable.
Q11. In briefings by senior NASA officials leading up to this hearing,
committee staff was told, ``NASA did not get the level of detail with
Space Act Agreements that they expected.''
Q11a. What was missing and what were the weaknesses NASA found in
dealing with a complicated development activity under a Space Act
Agreement?
A11a: There has been no information missing from the data provided
to NASA. Under the COTS SAAs, the partner proposes its own milestones
and provides NASA with the data needed to verify that the milestone was
successfully accomplished. To date, this has been done for every
performed milestone under the COTS SAAs. It should be noted that after
the SAA partners chose to use the ISS as their on-orbit test bed, the
provision of key development data related to meeting safety
requirements for conducting proximity operations and berthings to the
ISS was made a requirement of their SAA agreements. To date, the
information required by NASA to determine that the SAA partners are
meeting those safety requirements has been provided.
Q11b. What lessons were learned from this?
A11b. NASA believes that it is important to have the option of
using different mechanisms to work with its partners. In this case, use
of SAAs for the COTS demonstration flights and contracts for CRS
operational missions was appropriate. The former approach maximized
flexibility for the COTS providers in preparing for a demonstration of
their commercial capabilities, while the latter obtained cargo delivery
services specifically for NASA including the insight required for an
operational system.
Questions submitted by Acting Ranking Member Jerry Costello
Q1. What types of in-kind or non-reimbursable services allowed by Space
Act Agreements are being provided to COTS companies? Has NASA analyzed
and estimated the value of those in-kind services? If so, what are the
results of the analysis and estimated values?
A1: NASA provides limited technical assistance to the COTS partners
from the Commercial Advisory Team (CAT). The CAT is made up of
technical experts throughout the Agency who assist NASA and the COTS
companies in the disposition of technical milestones. NASA has not
estimated the value of these services, as the Agency does not track the
time providing assistance only and specifically to the COTS partners.
Their function supports both the COTS partners and NASA management.
Other than the CAT, NASA has offered use of the Tracking and Data Relay
Satellite Services (TDRSS) for space communications with the ISS and
has provided some equipment to facilitate ISS ground testing and
integration. The estimated value of these equipment and services has
not been calculated.
Q2. What insight and oversight mechanisms is NASA using to ensure that
CRS contractors are on track to meet their production goals and
scheduled flight milestones? Are they the same mechanisms for either
COTS or CRS?
A2. NASA has weekly schedule meetings with the CRS providers,
SpaceX and Orbital, and so has considerable insight into the progress
that the contractors are making. In addition, under the contract, each
provider delivers monthly detailed schedule updates on not only the CRS
missions but also their demo activities. The schedules show progress on
major vehicle hardware, software and integration activities including
insight into their schedule slips. In addition, the ISS Program has key
design, test, and analysis deliverables that are required from the
providers to verify safety and interface requirements are met, and to
perform integrated analysis and verification that ensures that the
final vehicle can be successfully integrated with the on orbit ISS
vehicle. The ISS Program also has insight into the conditions that
drive these deliveries. And finally, the program performs independent
analysis of the schedules and deliverables that SpaceX and Orbital
provide and assesses their performance.
Q3. What is the nature of your insight into COTS contractors and what
specific areas do you have exposure to?
A3. NASA has significant insight into the COTS partners' technical
and schedule status. The COTS program office has frequent and thorough
communications with the partners ranging from daily telecons for
technical integration issues to formal quarterly management reviews
with the NASA program manager and company executives. NASA also has
limited insight into company financial status to assess the company's
financial viability and verify that both the company and NASA
contributions are consistent with the terms of the agreements.
Q3a. Why have the COTS launch dates slipped, and how much advance
insight did you have that the slips would occur?
A3a. The COTS partners have experienced delays due to development
challenges as their program transitions from design to integration and
testing. Both partners continue to make technical progress toward their
development and demonstration milestones. Schedule status is formally
reported by NASA, using its own judgment regarding estimated dates at
the quarterly management reviews.
Q3b. Will NASA's level of insight be any different under the CRS
contracts?
A3b. NASA's level of insight is different under the CRS contract
than under the COTS SAAs. Under a contract, NASA has the ability to
levy specific contractual requirements and the responsibility to verify
them. Under the CRS contract, the contractors have to demonstrate that
they meet specific cargo configuration requirements and environmental
constraints (and provide the relevant data to NASA). In addition, NASA
is performing a risk assessment on the launch system design for the
contracted missions that are not being performed for the demonstration
missions.
Q3c. What indicators from CRS provider activities, for which NASA
currently has no insight into, might enhance the accuracy of projected
mission launch dates?
A3c. NASA receives detailed schedules from the contractors, and
believes that it currently has sufficient, continuing insight into CRS
provider activities to be able to make reasonable projections of
mission launch dates. This is an important consideration, as it impacts
the cargo complement to be flown on a given CRS mission.
Q4. If cargo delivery flights fall behind schedule, how will NASA
prioritize what cargo is carried on those flights? What priority is
given to utilization payloads in CRS mission manifesting and
scheduling?
A4. If CRS cargo delivery flights fall behind schedule, NASA will
prioritize the cargo carried on those flights on the basis of payload
criticality to the maintenance and operation of the International Space
Station (ISS). Beyond meeting these requirements, NASA will first
satisfy additional requirements associated with NASA utilization
missions involving the Human Research Program and Technology
Development and Demonstration projects necessary to NASA's exploration
mission. Finally, NASA would work together with the Non-Profit
Organization managing the National Laboratory aspects of the ISS to
determine the priority of utilization-related cargo, including
equipment and samples supporting research objectives by organizations
other than NASA. The success of the CRS cargo delivery flights and use
of the ISS as a National Laboratory have always been directly linked.
Q5. How will NASA respond if a commercial provider experiences a
failure and indicates to NASA that the cost of recovering puts the
financial viability of its company at risk?
A5. NASA would assess the specific situation before determining an
appropriate course of action. The Government may terminate the CRS
contract if the contractor fails to perform or fails to provide, upon
request, adequate assurances of future performance.
Q6. How do the CRS contracts deal with last minute payload additions on
CRS flights? For instance, if NASA determines that there is a need for
a critical life support component to be shipped up to the Station, is
there flexibility to allow NASA to add that payload to a CRS flight at
the last minute? Would there be a financial implication for such a late
addition to the payload?
A6. The CRS contract allows flexibility in the specific manifest as
long as the cargo bag complement and overall weights of the bags remain
within the negotiated limitations of the mission. NASA specifically
designed the contract this way to allow late-load items and the ability
to fly critical life support spares at the last minute.
Q7. Does NASA plan to include National Laboratory payloads on the
scheduled 2012 commercial cargo flights? If not, why not? What will be
the impact on that research if commercial providers are not ready to
deliver cargo to the ISS next year? How can researchers plan for ISS
utilization under these circumstances?
A7. NASA does plan to include National Laboratory payloads on 2012
CRS cargo flights. Should the CRS capabilities be delayed, delivery of
material in support of National Laboratory research would be delayed,
as well. While NASA and its CRS providers are working to establish a
routine cargo delivery capability to the ISS to enable maximum use of
the Station for research in a wide variety of science disciplines, it
is important that researchers build a degree of flexibility into their
schedules to accommodate possible slips in the availability of these
new services.
Q8. What do any CRS delays mean for the number of scientific
experiments that can utilize the ISS, the nature of science that can be
conducted, and the duration of potential experiments on ISS?
A8. The specific impacts of a potential delay in the availability
of CRS capabilities would depend on the length of the delay, the
planned duration of a given experiment, and whether such a delay
involved resupplying an experiment already in progress aboard the ISS.
In most cases, a delay in the operational availability of cargo
services would mean a delay in the commencement of a particular
experiment. NASA and its CRS providers are working to ensure that cargo
resupply will be available in a timely manner, both to support
scientific research and utilization and to maintain Station operations.
Questions submitted by Congresswoman Donna Edwards
Q1. As with any space mission, commercial cargo providers are at risk
of suffering a launch failure.a. How will NASA respond if a commercial
provider experiences a failure and indicates to NASA that the cost of
recovering puts the financial viability of its company at risk?
A1a. With regard to COTS, NASA's response to a commercial partner's
failure and resultant financial uncertainty would depend on the nature
of the failure, the financial risk posture of the company, and its plan
for recovery after the failure. However, in general, if a company is
unable to complete the milestones listed in the SAA, NASA may terminate
the agreement and is under no obligation to make any further payments.
With regard to CRS, NASA's response would be dependent on the
particular circumstances of the failure and the company's performance.
The Government may terminate the CRS contract if the contractor fails
to perform or fails to provide, upon request, adequate assurances of
future performance. One of the NASA mitigations for this risk was the
award of two CRS contracts.
Q1b. Who is responsible for funding any technical work needed to
address the failure to meet technical objectives?
A1b. With regard to COTS, NASA pays for a milestone only if the
milestone is successfully completed. The COTS partners are responsible
for funding any work needed to address the failures of any technical
objectives in order to retry and successfully complete the objective
for payment in a subsequent milestone.
With regard to CRS, the CRS contractor is responsible for ensuring
that its launch system and spacecraft provide the required service and
meet the technical requirements of the services contract. NASA makes
fixed-price payments for the services, regardless of the actual costs
the contractor incurs to ensure its system meets the requirements or to
address failures to meet the requirements. NASA does perform insight
activities of the contractor and pays for those activities.
Q1c. Are there any reserves being held at NASA should a major failure
to meet COTS [or CRS] objectives occur?
A1c. With regard to COTS, there are no reserves held in the COTS
program for additional payments to the COTS partners since NASA is not
financially responsible for additional costs associated with failures.
NASA is responsible only for the investments included in the Space Act
Agreements and those payments are only made upon successful completion
of milestones in the Space Act Agreements.
With regard to CRS, NASA does not hold specific reserves to address
a major failure. Program reserves or other Agency reserves would need
to be used if additional flights were required.
Questions submitted by Congressman David Wu
Q1. Is NASA assuming any liability risk or providing any
indemnification for the CRS missions?
A1. Launches and re-entries under the CRS contract are licensed by
the FAA, and are covered by the FAA's statutory provision for
Government payment of third-party liability claims exceeding the
contractor's required insurance. NASA does not have authority to
indemnify the CRS contractors, and contractually has not assumed the
risk of third-party liability for the CRS contractors.
Q2. Do the.CRS contracts protect NASA's assurance of cargo delivery in
the event that a commercial provider experiences a launch failure?
A2. In the event of a failed mission, the contractor is not
required to re-perform the mission. One of the mitigations for this
risk was the award of two CRS contracts.
Q3. Do the COTS Space Act Agreements and CRS contracts allow for non-
NASA payloads to be flown on the same NASA mission?
A3. With regard to CRS, the contractor is performing a service
specifically for NASA. In the case of a shared CRS cargo flight to ISS,
NASA and non-NASA payloads would have to meet the same requirements.
Payloads are prohibited from interfering with each other, with the
function of the cargo delivery vehicle, or with ISS systems and
functions.
With regard to COTS, the partner is conducting its own
demonstration of its capability and may choose to fly other payloads on
the demonstration flights. However, other payloads cannot interfere
with ISS systems and functions.
3a. Can NASA veto such a shared mission?
A3a. With regard to COTS, yes, NASA can disapprove any payload for
missions to the ISS that does not meet ISS safety requirements. Under
the CRS contract, NASA has the ability to disapprove a shared mission
that has an impact to the CRS mission, does not meet ISS safety
requirements, or causes NASA to perform additional work for which NASA
has not received consideration.
3b. What precautions must NASA take if it shares the same mission and
what is required of NASA?
A3b. With regard to COTS, all payloads proposed to be flown to or
near the ISS must be approved by the ISS Safety Review Panel.
With regard to CRS, in the case of a shared CRS cargo flight to
ISS, NASA and non-NASA payloads would have to meet the same
requirements. Payloads are prohibited from interfering with each other,
with the function of the cargo delivery vehicle, or with ISS systems
and functions.
3c. Does NASA get any cost-reduction from the CRS contractors if it
allows them to fly non-NASA commercial payloads on a CRS mission?
3d. If not, why not?
A3c&d: NASA purchases CRS services in terms of kilograms of up
mass, not flights; the NASA cargo upmass on a particular CRS flight
might or might not take up the total upmass capacity of that flight.
Therefore, NASA does not receive a cost reduction from the CRS
providers if a given flight is able to take up some non-NASA cargo in
addition to that upmass procured by NASA.
Answers to Post-Hearing Questions
Responses by Ms. Cristina Chaplain, Director, Acquisition and Sourcing
Management, U.S. Government Accountability Office
Questions submitted by Chairman Steven Palazzo
Q1. What were the weaknesses that were found with the government's use
of Space Act Agreement for complicated development activities like CRS?
A1. Space Act Agreements were not used in the procurement of
Commercial Resupply Services(CRS). In June 2009, we reported that the
International Space Station program office awarded, under a separately
competed procurement from COTS, two commercial resupply services
contracts in December 2008 to SpaceX and Orbital. In prior reports we
have noted weaknesses on DOD development activities that were conducted
through the use of the other transaction authority including the
Evolved Expendable Launch Vehicle (EELV) and Future Combat Systems
(FCS). For more information on these weaknesses in these programs,
please see question 2 below.
Q2. In your testimony you state, ``Going forward, it will be important
for both NASA and the commercial sector to avoid hinging strategies on
assumptions that we know have negatively impacted previous efforts to
adopt commerciallike approaches in space.'' Would you please elaborate
on some of these erroneous assumptions and explain by providing
examples from other government procurements that you think are
applicable?
A2. We have previously reported that DOD's EELV program was begun
under the assumption that there would be a large national and
international marketplace for commercial satellites and therefore, for
launch vehicles. However, this commercialmarketplace never
materialized. As a result, the government became the lonepurchaser,
increasing costs above the original baseline. Additionally, because
thisprogram was begun under an ``other transaction authority'' (DOD's
authority similarto NASA's Space Act agreement authority), DOD has been
unable to fullyunderstand the costs associated with the program. This
lack of knowledge canimpact the government's ability to negotiate costs
when awarding a contract.
In 2003, the Army and Boeing entered into an ``other transaction''
agreement for the system development and demonstration phase of the FCS
program. The Army's rationale for using such an agreement was to
encourage innovation and to use itswide latitude in tailoring business,
organizational, and technical relationships to achieve the program
goals. The FCS program faced significant challenges in setting
requirements, developing systems, financing development, and managing
the effort. Congress raised concerns over the use of the agreement for
the development of a program as large and risky as FCS, and the
Secretary of the Army directed that the other transaction agreement be
converted to a FAR-based contract.
In addition, the X-33 and X-34 programs were developed as an effort
to significantly reduce the cost of access to space by partnering with
private industry to develop and demonstrate technologies needed for
future reusable launch vehicles reaching orbit in one stage. Both
programs experienced difficulties achieving their goals primarily
because NASA did not develop realistic cost estimates, timely
acquisition and risk management plans, and adequate and realistic
performance goals. In particular, neither program fully assessed the
costs associated with developing new, unproven technologies; provided
for the financial reserves needed to deal with technical risks and
accommodate normal development delays; developed plans to quantify and
mitigate the risks to NASA; or established performance targets showing
a clear path leading to an operational reusable launch vehicle.
Underlying these difficulties were problems with the agreements and
contracts that established the relationship between NASA and its
industry partners and eventual erosion of commercial prospects for the
development of new reusable launch vehicles. As a result, both programs
were cancelled.
Questions submitted by Acting Ranking Member Jerry Costello
Q1. How timely has the response been to delays in SpaceX's second COTS
demonstration flight due to the need to redesign components for the
propulsion system, producing the launch vehicle tank, and in testing of
the Dragon spacecraft's navigation sensor?
A1. As of June 2011, no new delays have been reported and SpaceX
has completed two additional milestones as part of its risk reduction
efforts.
Q1a. Should we expect that SpaceX will need to address other technical
issues following the second and third COTS demonstrations, and even
after the initial CRS flights, given that the launch vehicle is so
early in its flight history?
A1a. We reported last November that NASA certifies rockets based on
payload risk classifications, which require anywhere from 3 to 14
successful launches for the highest classification category (lowest
risk tolerance), depending on various certification alternatives.
Officials at the Aerospace Corporation told us that while the
causes of a given system's failures can change over time (i.e. from the
first three to seven flights, or even later in the design-life of the
system), early failures are heavily weighted toward engineering design
or process errors, especially in the first three launches. Once these
errors are caught and ``driven out'' of a system, workmanship errors
are the next most frequent cause of failures. After about the seventh
launch, the frequency/severity of workmanship errors exhibits a steady
state throughout the flight history of a system. Aerospace officials
said this basic trend is the same for both expendable and reusable
launch vehicles, as well as for both government and commercial systems,
although the failure rate is much higher for the latter.
As such, there is a reasonable expectation that SpaceX will need to
address additional technical issues following future demonstration
missions; however, the incidence or duration of any delays resulting
from such issues is a matter of speculation.
Q1b. If so, has time been added to the schedule to accommodate these
types of changes?
A1b. This question would best be addressed by SpaceX and NASA.
Nevertheless, as of June 2011, there have not been any apparent changes
to the company's COTS schedule from what we testified on May 26th. It
has been reported in the media that NASA has given tentative approval
for SpaceX to combine its second and third demonstration missions into
one mission to be completed near the end of 2011.
Q2. What do any CRS delays mean for the number of scientific
experiments that can utilize the ISS, the nature of science that can be
conducted, and the duration of potential experiments on ISS?
A2. We reported in November 2009 that if these vehicles are
delayed, NASA officials said they would pursue a course of "graceful
degradation" of the space station until conditions improve. Under such
conditions, the space station would only conduct minimal science
experiments. International Space Station program officials told us in
May 2011 they have taken steps to mitigate the short-term impact of CRS
flight delays through prepositioning of cargo on the last space shuttle
flights. Officials added that these flights and the planned European
Space Agency's Automated Transfer Vehicle and Japan's H-II Transfer
Vehicle flights in 2012 will carry enough cargo to meet science-related
cargo needs through most of 2012. Despite these steps, NASA officials
said they would still need one flight each from SpaceX's and Orbital's
vehicles in order to meet science-related cargo needs in 2012. Beyond
2012, NASA is highly dependent on SpaceX's and Orbital's vehicles in
order to fully utilize the space station.
Questions submitted by Congresswoman Donna Edwards
Q1. You say in your statement that GAO's work looking at other
government acquisitions has shown that the government is required to
make additional investments to mitigate risks and that the amount of
investment can be lessened by securing, early on, accurate knowledge of
costs, schedule, and risks. You also say that NASA has limited
influence over the approaches taken by cargo providers. What does this
say about the appropriateness of using the NASA cargo model to acquire
crew transportation services?
A1. NASA has performed extensive analysis to determine if Space Act
agreements are appropriate for remaining phases of its commercial crew
effort and has tentatively concluded that such agreements would not be
appropriate. Specifically, NASA's entire commercial crew certification
process is based on partners' compliance with NASA safety requirements
for human spaceflight, but according to NASA, such requirements cannot
be levied in a Space Act agreement.
Q2. Mr. Culbertson stated that for Taurus II and Cygnus, Orbital was
able to take advantage of heritage flight-proven design features
although new developments were required for other program areas. In the
partnership between NASA and the commercial cargo providers, who is
credited with the invention of the capabilities according to the Space
Act agreements?
A2. The Space Act agreements between NASA and Space Exploration
Technologies Corporation (SpaceX) and Orbital Sciences Corporation
(Orbital) state that "NASA has determined that to stimulate and support
the capability of a United States commercial provider to provide space
and orbital transportation services to the public and the Federal
Government, the interest of the United States would be served" by
waiving the government's rights to inventions \1\ made \2\ by the
partners in the performance of work under these agreements. The Space
Act agreements include a provision that provides a means for NASA to
waive rights to any or all inventions that may be made under the
agreements. We contacted NASA about whether the waivers were granted,
but have not yet received a response. Because GAO has not specifically
analyzed issues related to intellectual property rights and the
commercial cargo Space Act agreements, we do not know whether or not
the partners petitioned for such a waiver or if NASA granted it.
Ultimately, the determination of whether or not a certain invention
falls within the parameters of these provisions will be made on a case
by case basis.
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\1\ ``Invention'' is defined by both SpaceX's and Orbital's Space
Act agreements as ``any innovation or discovery that is or may be
patentable or otherwise protectable under title 35 of the U.S.C.''
Title 35 relates to patents.
\2\ ``Made'' is defined by both SpaceX's and Orbital's Space Act
agreements, in relation to any invention, as ``the conception or first
actual reduction to practice of such invention.''
---------------------------------------------------------------------------
Questions submitted by Congressman David Wu
Q1. Your prepared statement notes that ``additional resources have been
allocated to development of the launch complex in Wallops Island to
mitigate further slips.''
Q1a. Who is supposed to be responsible for developing the launch
complex--NASA or Orbital?
A1a. To support its COTS demonstration mission, Orbital and the
Mid-Atlantic Regional Spaceport are responsible for funding the
construction of several new facilities, including a horizontal
integration facility (to integrate the Taurus II with the Cygnus
spacecraft); a launch pad, mount, and ramp; and separate fueling
facilities for the Taurus II and the Cygnus spacecraft. As required by
its Space Act agreement with NASA, Orbital completed an initial review
in September 2008 of the launch site facilities to be developed and
prepared a concept of operations for its launch activities. NASA
provided Orbital with $10 million for completing this milestone.
Q1b. What is the extent of additional funding that has been provided to
develop the launch complex and what is the source of that funding?
A1b. We have not conducted audit work to determine the extent and
source of the additional funding. This question would best be addressed
by Orbital and NASA.
Q1c. In your view, is the plan and schedule to complete the launch
complex viable?
A1c. We previously reported that Orbital's development schedule was
aggressive and the company continues to experience delays in developing
its launch complex at Wallops Island. In June 2009, we reported that
Orbital's construction schedule indicated that its launch pad, mount,
and ramp would be completed by the end of 2009, its horizontal
integration facility was planned for completion in May 2010, and the
Cygnus space vehicle fueling facility was planned to be completed by
October 2010. In May 2011, we testified that the completion of the
company's launch facilities remained the key program risk to meeting
its COTS demonstration mission schedule. Orbital officials told us that
an around-the-clock schedule would be initiated later in the summer to
expedite the completion of verification testing of the liquid fueling
facility, which is the primary risk factor in completing the launch
facility. Orbital officials indicated in July 2011 that its COTS
demonstration mission would slip from December 2011 to February 2012 to
allow for the completion and certification of its rocket propellant and
pressurization facilities at Wallops Island.
Answers to Post-Hearing Questions
Responses by Mr. Frank Culbertson, Jr., Senior Vice President and
Deputy General Manager, Advanced Programs Group, Orbital
Sciences Corporation
Questions submitted by Chairman Steven Palazzo
Q1. Under the COTS agreement your company has to meet milestones in
order to receive progress payments:
Q1a. How would you describe NASA's responsiveness to data submissions
made by your company when seeking to prove compliance with a milestone?
A1a. NASA has been very responsive to our data submissions. Our
approach has been to pre-coordinate with NASA the type of data they
expect as part of the milestone completion criteria, which has helped
to avoid confusion when milestone completion letters are submitted.
Further, when submissions are made, NASA has been very responsive in
reviewing the data and responding with questions, allowing us to
satisfy their concerns in a timely fashion and meet our milestone
plans.
Q1b. How responsive has NASA been with requests for technical
assistance?
We have generally worked any requests for technical assistance
through NASA's Commercial Cargo and Crew Program Office and in all
cases, they have been very responsive to our requests. They have
coordinated the support on the NASA side and the resulting support has
been very good.
Q2. In your testimony you state, ``. . .this is a compressed
development schedule compared to traditional government programs, it
has challenges, but it is using commercial development and production
practices with NASA insight.'' NASA has always used commercial
suppliers to build and operate launch vehicles and spacecraft, so
please explain exactly what these ``commercial development and
production practices'' are and how they differ from any other NASA
development and production.
A2. While NASA has certainly purchased goods and services from
privately owned companies throughout its history, the federal
acquisition regulations impose restraints on NASA's purchases which are
quite different from commercial practices. Orbital Sciences' continuing
analysis over several decades indicates that the spacecraft we build
for private companies cost between one-third and one-half of the cost
of U.S. government spacecraft. That difference is largely accounted for
by the additional oversight required by the government at all levels
(e.g. technical, managerial and financial).
Q3. Orbital is planning its first demonstration flights in October;
when do you expect the launch pad at Wallops Island, Virginia will be
ready?
A3. Orbital has relatively little influence on the readiness date
of the launch pad that is owned by MARS. It is our understanding that
MARS plans a dedication ceremony for the launch pad in October. The
first demonstration flight cannot occur any sooner than three months
after the pad becomes available.
Q4. When does Orbital plan to fly its first non-NASA commercial mission
with the Taurus 2 launch vehicle?
A4. Orbital continues to discuss non-NASA Taurus II flights with
potential customers. Since no contract has been signed, it is not yet
appropriate to announce a mission.
Question submitted by Ranking Member Jerry Costello
Q1. To what extent does Orbital purchase insurance for the launch and
payload associated with a CRS cargo launch? What, if any, other steps
does Orbital take to mitigate against the potential failure of a CRS
cargo launch?
A1. Orbital plans on procuring insurance against the final payment
of our milestone based contract with NASA which is approximately 20% of
the total mission cost.
Orbital has performed satellite launches dating from 1990 and has
developed a solid performance record over two decades of missions for
commercial and government customers. The keys to Orbital's success
include well documented design, verification, and operations processes
that are certified to AS 9100/ISO 9001 industry standards. These
documented processes allow Orbital to incorporate lessons learned from
earlier launches into the mission cycle for the CRS cargo launches.
Another key attribute is Orbital's use of hardware and software that is
common across multiple programs within Orbital, meaning that teach
rocket component benefits from an active production line and extensive
testing performed on several different products. In addition, Orbital
takes several active steps to mitigate against the potential failure of
a CRS cargo launch, including:
1) Independent Peer Review: One of Orbital's ingrained internal
processes is an Independent Design review performed by peers within
each engineering department but outside of the program to ensure the
vehicle is ready to fly.
2) Independent `Gray Beard' Review: Orbital has retained an
Independent Readiness Review Team (IRRT) comprised of experts with long
careers with NASA, the Air Force and industry leading technical
organizations. The IRRT has attended each of the Taurus II design
reviews dating to the start of development to actively apply technical
expertise and industry lessons learned.
3) Independent Safety and Mission Assurance Organization: Orbital
has created an independent S&MA reporting chain that is outside of the
program and which reports directly to the General Manager of the Launch
Systems Group. Patterned after NASA lessons learned from the Challenger
disaster, the S&MA group places quality inspectors and safety engineers
in positions of active oversight on the Taurus II program while
maintaining independence from the program.
4) Component Qualification Program: Orbital has developed an
internal process for verifying the design of flight hardware prior to
flight that is based on MIL-STD-1540, which is a recognized aerospace
industry standard. This process ensures that each hardware component is
tested to environmental levels exceeding the flight environments to
demonstrate design margin (called Qualification Testing). In addition,
each flight component is tested to flight environment levels to screen
out workmanship defects (called Acceptance Testing). The combination of
Qualification and Acceptance Testing provides confidence that the
rocket components will function properly during flight. Flight software
goes through a disciplined Functional Qualification Test that similarly
verifies that he software meets all design requirements and that it
functions in a reliable manner.
5) Test Like You Fly: Orbital has created the simulation tools
necessary to rigorously test the software and hardware together in
realistic `hardware in the loop' environments that exercise the
integrated system throughout multiple mission sequences prior to
flight. Off nominal logic and redundant functions are also tested as
part of the rigorous ground test program. Statistical methods such as
Monte Carlo analysis are utilized in simulation environments to ensure
mission success is still achieved even while varying critical subsystem
parameters to worst case deviations.
Questions submitted by Congresswoman Donna Edwards
Q1. Are there any reserves being held at Orbital should a major failure
to meet COTS objectives occur? How much reserve is being held?
A1. Orbital's contract for the Commercial Orbital Transportation
System (COTS) and Commercial Resupply Services (CRS) with NASA is a
fixed price contract with Orbital responsible for additional costs for
tasks above and beyond what NASA requires us to do to fulfill our
obligations under the contract. Orbital has an extremely healthy
balance sheet including hundreds of millions of dollars of cash on
hand, and thus is in no risk of not meeting its obligations.
Q2. In the partnership between NASA and Orbital, who is credited with
the invention of the capabilities according to the Space Act
Agreements?
A2. Orbital owns the intellectual property associated with our
launch vehicle, the Taurus II, which is being entirely developed by
Orbital with its own money. The development of the Cygnus is partially
funded by NASA-the COTS Space Act agreement signed in 2008 gives
intellectual property rights associated with the development of Cygnus
to Orbital.
Answers to Post-Hearing Questions
Responses by Ms. Gwynne Shotwell, President, Space Exploration
Technologies
Questions submitted by Chairman Steven Palazzo
Q1. Under the CQTS agreement, your company has to meet milestones in
order to receive progress payments:
a. How would you describe NASA's responsiveness to data submissions
made by your company when seeking to prove compliance with a milestone?
A1. NASA has created an efficient and effective process for
receiving and responding to data submissions. NASA has been prompt in
providing comments or additional data requests with respect to
milestone reviews, notices of successful milestone completion, and
timely payments.
b. How responsive has NASA been with requests for technical assistance?
To date, NASA has been highly responsive in providing SpaceX with
technical assistance as requested in the context of COTS. Here, NASA
and SpaceX technical teams have worked as partners towards achieving
the objectives of the COTS agreement. Separate from the COTS Space Act
Agreement, SpaceX also has executed Reimbursable Space Act Agreements
(by which SpaceX pays NASA for the use of the agency's time and
facilities) with other NASA centers. For example, SpaceX has executed
Reimbursable SAAs with NASA AMES Research Center and the Jet Propulsion
Lab for technical assistance and use of facilities.
Q2. When does SpaceX plan to fly its first non-NASA commercial mission
on the Falcon 9 launch vehicle?
A2. SpaceX has already flown a non-NASA Falcon 9 mission. The first
Falcon 9 flight, launched successfully on June 4, 2010 under an FAA
commercial launch license, was a nonNASA demonstration mission. At
present, SpaceX's next flight of the Falcon 9 for a commercial customer
is scheduled for the third quarter of 2012.
Q3. In your testimony you said, ``SpaceX, even given the tremendous
amount of development activities that we have had over the past few
years, we have been profitable since 2007.'' Is this based on GAAP
reported earnings? Has SpaceX had positive free cash flow each year
since 2007?
A3. We consider the most important financial metric related to
profitability to be positive cash flow. SpaceX has experienced a
stronger ending cash balance through positive cash flow each year since
2007.
Q4. In your testimony you said that NASA represented less than half of
SpaceX's 38 contracted Falcon 9 missions. Who are the non-NASA
customers, and how many missions are scheduled for each customer?
A4. Per the attached, SpaceX's current NASA, commercial and
international missions under contract include 33 full Falcon 9 missions
plus 5 optional flights to total 38. Of those flights, thirty-seven
percent are NASA resupply missions to the International Space Station
(ISS). The list of customers and the number of missions are indicated
on the attached manifest; please see Attachment 1--SpaceX Manifest.
Question submitted by Acting Ranking Member Jerry Costello:
Q1. Please explain to what extent SpaceX purchases insurance for the
launch and payload associated with a CRS cargo launch. What, if any,
other steps does SpaceX take to mitigate against the potential failure
of a CRS cargo launch?
A1. SpaceX will comply with all contractual and regulatory
requirements for each launch mission it performs. In accordance with
the terms of its CRS contract and the applicable FAA regulations,
SpaceX will purchase insurance at least in the amount prescribed by the
FAA to cover the potential claims of third parties for bodily injury or
property damage arising out of any particular licensed activity. Third-
party launch liability insurance, however, does not cover any loss or
damage to the payload on a CRS mission. The FAA's regulatory regime
requires NASA (or any other purchaser of launch services) to bear the
risk of loss to the payload during a licensed activity.
Specifically, the FAA's regulatory regIme requires (and the CRS
contract reflects) the implementation of a reciprocal waiver of claims
for each licensed activity, under which each party waives and releases
claims against all the other parties to the waiver and agrees to assume
financial responsibility for property damage it sustains and for bodily
injury or property damage sustained by its own employees, and to hold
harmless and indemnify each other from bodily injury or property damage
sustained by its employees, resulting from a licensed or permitted
activity, regardless of fault.
The risk of loss is minimized, however, as SpaceX performs
extensive testing and analyses to ensure the success of each mission.
In addition, NASA maintains extensive insight and approval rights under
the CRS contract in order to allow NASA to assess the risk to the cargo
itself and to its safe and timely delivery. Finally, NASA reserves the
right to utilize Government-performed technical assessments of launch
and cargo vehicles/configurations to evaluate the readiness of the
Contractor to deliver NASA cargo to the ISS. The combined efforts of
the SpaceX-NASA team effectively mitigate the risk of potential failure
of a CRS cargo launch.
Questions submitted by Representative Donna Edwards:
Q1. I take from your testimony that SpaceX will be able to sell its
designs, vehicles, and capabilities to partners other than NASA. Can
you estimate the market value of this transfer? How much could SpaceX
stand to gain from selling its capabilities in the private market?
A1. As described by NASA in its initial COTS solicitation of
January 2006, the COTS program was established to: (a) implement U.S.
Space Exploration policy with an investment to stimulate commercial
enterprises in space, (b) facilitate U.S. private industry
demonstration of cargo and crew space transportation capabilities with
the goal of achieving reliable, cost effective access to low-Earth
orbit, and (c) create a market environment in which commercial space
transportation services are available to Government and private sector
customers. As the product of joint public-private funding, there is no
``transfer'' and the work performed under COTS is meant to be
commercialized. SpaceX, like all U.S. entities, is bound by export
control laws and other restrictions from selling designs, vehicles or
capabilities to non-U.S. entities, absent State Department approvals.
SpaceX may sell services, for which some of the underlying technologies
were developed under the COTS program, into the commercial and
governmental space transportation markets. Demand in the private
commercial market varies from year-to-year and market share potential
depends on a wide range of factors; however, as noted in hearing
testimony, whereas in 1980, 100 percent of commercial launches took
place from within the United States; today, it is less than 12 percent.
For the first time in more than three decades, via SpaceX, an America
company has begun to recapture international market-share in the
commercial satellite launch sector--a sector in which the U.S. has seen
steady erosion relative to Chinese, Russian and French competitors over
the three previous decades.
Q2. In the partnership between NASA and SpaceX, who is credited with
the invention of the capabilities according to the Space Act
Agreements?
A2. Under the standard Invention and Patent Rights Clause included
by NASA in Space Act Agreements under which the nongovernmental partner
performs work of an inventive type for NASA, the partner may obtain
title to inventions it makes under the SAA through an advance or
individual waiver, and NASA benefits through retention of a government
purpose license in the invention, as well as from the available
commercial source of a needed technology. In this case of the
partnership between NASA and SpaceX, NASA has determined that in order
to stimulate and support the capability of a United States commercial
provider to provide space and orbital transportation services to the
public and the Federal Government, the interest of the United States
would be served by waiving to SpaceX the rights to any inventions made
by SpaceX in the performance of work under the COTS SAA. With respect
to each SpaceX invention for which a waiver of rights is applicable,
however, NASA reserves (a) an irrevocable, royalty-free license for the
practice of such invention throughout the world by or on behalf of the
United States or any foreign government in accordance with any treaty
or agreement with the United States; and (b) march-in rights.
Appendix II
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Statement Submitted for the Record
Statement Submitted for the Record
Prepared Statement of Representative Pete Olson
Since I have been a Member of Congress, I have been a strong
advocate of NASA, its mission, and the significant importance that
space has had around the world and to our country. NASA's programs
profoundly impact almost all aspects of the U.S. economy and our daily
lives through technology development and influence in national
security, medical science, aeronautics, planetary science, research,
education and many other areas.
However, what is no longer clear to me and many of my colleagues is
. . . NASA's current mission. The U.S. space industry needs a path
forward that sets a clear direction with attainable goals and an
appropriate balance of human space flight, exploration, technology,
science, and aeronautics programs that can assure U.S. competitiveness
and a strong future for our country and the industry.
Collectively, the agency and programs have been studied and
evaluated extensively in the past decade by Presidential Commissions,
independent commissions, The Government Accountability Office, NASA's
Office of the Inspector General, professional organizations and NASA,
resulting in complete instability due to too many changes in direction,
policy, budget and programs, to safely, affordably, and successfully
move forward in any U.S. space endeavor. This trend must stop--NASA is
wasting billions of tax payer dollars as a result of ineffective
management, and imprudent decisions. The agency, a proud symbol of U.S.
exceptionalism and regarded as one of the most technically capable,
worthy of our national investment, has now deteriorated to an agency
whose future and purpose is in question and programs under constant
scrutiny.
Right now we face a gap with an unknown end . . . a gap in U.S.
space capability that was unnecessary, risking our future and global
leadership in space, and creating a detrimental and irreversible impact
to our industrial capability for years to come. The position we find
ourselves in was entirely avoidable and must now be corrected with
explicit direction, clearly articulated goals, and the commensurate
funding. Performance and accountability to these goals--safety, cost,
program milestones, and succeeding or failing--is our collective
responsibility. The viability of NASA's future and our nation's future
in space depends on our success, right now.
The civil space program needed to evolve in order to move beyond
Low Earth Orbit where our expertise and resources have been the focus
for more than 30 years. There is challenge in this necessary evolution
but methodical, strategic planning could have preserved the critical
capabilities required for the next step. Instead, the Administration
opened up a revolution in February of 2010 that has led to our
fragmented industry. By evidence of actions on the part of NASA and the
Administration, we are operating under two government policies--the
NASA Authorization of 2010 enacted last October and the President's
National Space Policy released last June. Now, as Congress has stepped
in, in partnership with the Agency and industry to bring stability back
into the agencies programs, we must understand where our programs are
in accomplishing the goals and objectives of their programs. In order
to equitably manage our precious government resources, we must hold all
segments of the industry--The Administration, NASA, and contractors--
accountable for their actions and performance.
There is only one policy that should be directing NASA and the
civil space industry . . . the Authorization Act of 2010, funded
through the Continuing Resolution. NASA must move forward, without
hesitation, in implementing the actions detailed in the NASA
Authorization of 2010, enacted by the President and Congress, last
October.
The Authorization directs NASA to continue the development of a
commercial cargo and crew capability to support the International Space
Station and accelerate the development of the Space Launch System (SLS)
and Multipurpose Crew Vehicle (MPCV) that will take the U.S. beyond low
earth orbit (LEO) order to develop capabilities to take humans to Mars.
The Authorization is the most prudent action at this point, well
thought out in the context of the budget environment, current
capabilities, and industry development to assure a strong future in
space for the U.S.
Additional Material Submitted for the Record by Mr. William H.
Gerstenmaier, Associate Administrator, Space Operations Mission
Directorate, National Aeronautics and Space Administration