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Armstrong, Cernan, & Lovell Oppose Lenient Contract For Commercial Space

Astronaut Letter to Wolf May 2012

Today, Neil Armstrong, Gene Cernan, and Jim Lovell came out in opposition to NASA using Space Act agreements for commercial crewed space funding, which NASA has proposed. As they mention in their letter, given NASA’s constrained budget for the foreseeable future, they agree with House CSJ Appropriations Chairman Frank Wolf that NASA needs to ensure that any funds its handing-out be closely monitored. Their reasoning is that Federal Acquisition Regulation (FAR) based contracts “…developed over years of experience and represent lessons learned and best practices in contracting”. They close by noting the use of FAR based contract will “…do everything possible to ensure that any commercial crew services meets standards equal to those that we would enforce would the craft be government owned and operated”. Armstrong and the others support a forced down-select so that limited commercial crew program funds can be better concentrated by having fewer CCP participants, something echoed by Wolf’s Senate counterparts.

8 comments to Armstrong, Cernan, & Lovell Oppose Lenient Contract For Commercial Space

  • D. Messier

    If they want to do “everything possible”, they should be calling for a boost in funding for commercial crew with money freed up from the cancellation of the Space Launch System.

    That’s probably asking too much from these guys. So is expecting that they would educate themselves on Space Act Agreements before dismissing this approach out of hand.

  • Karol

    “everything possible” . . . “to ensure that any commercial crew services meets standards equal to those we would enforce would the craft be government owned and operated.” So, CommSpace spacecraft should not have have to meet the same high standards demanded of government spacecraft? Oh, we are supposed to divert money “freed up from the cancellation of the Space Launch System” and no doubt from the NASA planetary science budget to give to Elon so that he can make a privately owned spacecraft as safe as a NASA spacecraft owned by all Americans. “Commercial” means “for private profit” Capitalism means that an “entrepreneur” like the PayPal Prince invests HIS MONEY or convinces others hungry for profit that his idea will succeed so that they will invest THEIR money. If the idea works, they keep the profit. If taxpayer money is used as “venture capital” the taxpayer should keep any profit. It is the funding of CommSpace that should be cancelled, and the funds used for NASA missions on behalf of all Americans. It isn’t Armstrong, Cernan, and Lovell who need to educate themselves, it’s the NASA-bashing CommSpace cheerleaders. Read what Jim Hillhouse has written on the issue of the SLS, if you’re not afraid of the truth. “When is the Administration going to get the message that the Congress, I believe, is not willing to subsidize so-called commercial vendors at the expense of NASA’s core mission of engineering and exploration?” Sen. Richard Shelby (R-AL)

  • Jason

    “Read what Jim Hillhouse has written on the issue of the SLS, if you’re not afraid of the truth.”

    I did, I also read the comments. The truth is that twice Jim SUGGESTS using government subsidized launchers to ‘disrupt’ the market.

    In the comments to his opinion article, we finally see that comparing launch capacity (SLS) to contracted minimum delivered (and the ignored return capacity) payload, is apples and oranges.

    We coulg try to get closer using his suggested subsidized SLS/Super Sized MPLM. It could carry 40-50mT to the ISS. Including a profit for his ‘commercial’ company proposing it, the cost of his SSMPLM, and assume NASA only contracts for a minium delivered payload (or you assume both Dragon, and SSMPLM are stuffed full) you would get closer to the current CRS prices (or be more expensive.)

    Both assume all optimistic figures for SLS/SSMPLM:
    $1.5b for SLS, 50mT payload capacity SSMPLM, $0.5b for SSMPLM $0.5b profit.

    Minimum Contracted (Generously assuming 70% capacity SSMPLM, and F9/Dragon is only 56%):
    SLS/SSMPLM – $2.5b – 35mT – $71,429/kg
    F9/Dragon – $1.6b – 20mT – $80,000/kg

    Full Capacity:
    SLS/SSMPLM – $2.5b – 50mT – $50,000/kg
    F9/Dragon – $1.6b – 36mT – $44,444/kg

    That doesn’t look like such a great deal to me. And it also isn’t against government ‘subsidies.’ Jim just wants to choose his favorite.

    You also, in the comments to that opinion article suggest that the companies recieving NASA funds should pay it back:

    “…CommSpace be true disciples of Ayn Rand and return all taxpayer money and pay market value for all taxpayer provided NASA services.”

    Does that also apply to ATK for the first stage of their commercial “Liberty” rocket?

    It is people like you and Jim who have forced the taxpayer subsidies by your anti-commercial space attitudes frightening away potential investors, advocating government competition, and in some cases making false arguments. It is to remove the stigma you all have placed on them, so VC’s can invest, instead of just the Billionaires.

    • It is people like you and Jim who have forced the taxpayer subsidies by your anti-commercial space attitudes frightening away potential investors, advocating government competition, and in some cases making false arguments. It is to remove the stigma you all have placed on them, so VC’s can invest, instead of just the Billionaires.

      JasonM,

      I wish I had the powers of persuasion over investors that you attribute to me and others here. But, speaking only of myself, I don’t.

      I have, as an angel investor over the past 20 years, dealt with VC’s. I can state unequivocally that VC’s don’t check the space blogs, even one as well-written and well-researched as AmericaSpace, before making an investment. Instead, investors of that calibre look at the numbers.

      And the numbers for commercial space look about as good as they did in 1999.

      JasonM, do you remember what happened to the commercial space market in 1999? VC’s do.

      VC’s will talk with industry experts to get a better understanding of the market. And they will be informed of the troubles that both SpaceX and OSC have encountered, even with receiving every single bit of promised funding, and then an additional $118M beyond that.

      VC’s will want to know what is driving the commercial space launch business. They’ll want to know of the potential growth of of the market.

      Then comes the key issue, ROI. If VC’s invest, they generally expect a sizable ROI multiple. Professional investors will look at the CRS contract, which is a fixed-cost contract and wonder how either OSC and SpaceX will make a profit sizable enough to reap 3-5 times or more the initial investment. What’s the market outlook for space services? Whose paying for what? What drives this whole thing?

      And a smart VC firm will likely come to the conclusion that the market needs to prove itself. Will SpaceX, OSC, never mind the dozens of other commercial space companies, last a year? Especially since there’s a 50-50 chance that the people who’ve made it their life’s purpose to fund commercial space in every way, shape, and form, without running the economics numbers, may not be around after January 20, 2013 to ensure that the generous subsidies flow as they have.

      The sad thing for commercial space is that there is not as yet any compelling market driver for space expenditures other than gov’t funding. I hope that changes in my lifetime. I will hazard a guess tat will likely come from either mining either asteroids for metals or tritium from the Moon for fusion reactors. And when that market appears, investors will know it and fund the rush to tap that market.

      But what about Space tourism, you’re wondering? Don’t even get me started on how “off-base” every space tourism study has been. How many space tourism launches have we had this year? 0. How many were predicted? Many, many more than will occur this year.

  • D. Messier

    Karol:

    I respect these astronauts immensely. But, they have openly admitted that they know little about either modern government contracting or Space Act Agreements. Their claim that SAA’s require “little in the area of requirements” is not factually accurate. That’s very disappointing coming from people who are heroes of mine.

    As for SLS….

    NASA needed crew transport yesterday. Actually, about 500 yesterdays ago. Instead of funding that these systems can be build quickly and safely, Congress is putting enormous resources into an incredibly expensive heavy-lift vehicle that won’t be ready to fly with crew for nine years and will be so expensive to build and launch that NASA won’t be able to use it very often. This is a failure of prioritization that prevents NASA from solving its most pressing human spaceflight problem.

    My point is that Armstrong, Lovell and Cernan don’t seem to realize that at least part of NASA’s problem with limited funding results from the disconnect of priorities insisted upon by Congress. If you canceled SLS — or at least de-prioritized it — you would be able to fully fund commercial crew and fairly rapidly get NASA back into the business of launching American astronauts into space.

    You also mention Elon Musk (and no one else). You do realize that he is not the only competitor and that you have older, established aerospace companies like Boeing, ULA, Lockheed Martin and ATK competing in commercial crew?

    • Armstrong, et al. didn’t just whip this letter out. There has been growing concerns about NASA’s use of SAA’s and the Agency’s unwillingness to force commercial crew companies to adhere to NASA human rating standards. The use of Space Act Agreements has gone overboard. There are over 250 currently. Given some of the stuff that NASA HQ is funding through SAA’s, Wolf wants to rein that in.

      Congress created the 2012 NASA Authorization Act in direct opposition to the President’s proposed FY11 plans to end NASA’s HSF program. President Obama signed that legislation in October 2010. Advocates of deprioritizeing SLS and Orion for more subsidies for the commercial sector will have their chance in 2014. Until then, there is zero appetite in Congress to change mid-stream yet again.

      In any case, SpaceX CEO Musk’s showboating hasn’t exactly helped the credibility of commercial space since both COTS companies are nearly 3 years late in meeting the COTS goals, even after getting all the money promised and $118M more each.

      I mention Elon most often because he’s a press hound. OSC’s CEO is, in stark contrast to Musk, not. While OSC isn’t doing a great job under COTS, at least it’s CEO isn’t promising Mars while having trouble launching, again unlike Musk.

      • D. Messier

        Um…Armstrong and his colleagues wrote the letter without learning about Space Act Agreements themselves. Their views clearly reflect what other people (Mike Griffin, I’m guessing) have told them. Fortunately, they weren’t this hands off or sloppy in their analysis during their test pilot days or they wouldn’t be here today to weigh in on these things.

        Wolf wants to do much more than rein in SAA’s. He wants to immediate kill the purpose of the program, which is genuine competition. Once to go to one provider, your costs will soar. If you can’t afford two, you can’t afford one.

        The COTS delays are very problematic and show the original schedules and funding were overly optimistic. I’m not sure that OSC is more than three years behind schedule at this point because I believe they started about two years after SpaceX did. They were chosen only after Kistler had to bow out. I haven’t looked at the schedule slips in a while, but I’m not sure it’s that bad. (I could be wrong.)

        If COTS was underfunded and overly optimistic, I don’t see how Congress’ endless cuts to the Administration’s request for the CCDev program can possibly help matters. Nor would down selecting now and moving immediately to FAR. That would choke off competition and raise costs prematurely.

        As for Elon Musk, he seems to be the only person opponents ever mention. Elon Elon Elon. SpaceX SpaceX SpaceX. He’s an easy target, but what about everyone else?

        What about Boeing, Lockheed Martin, ATK, ULA? They’re in this CCDev competition. And I think they’re capable of doing the job properly, on a reasonable budget and time table.

        Have you asked yourself what happens if NASA, forced to choose prematurely and lacking sufficient funds to do the job properly, finds the proposals from companies with deep space experience (Boeing, ULA, ATK/Lockheed) far too expensive?

        Who might NASA choose who could promise a much cheaper price within the budget allocated? Could it be…Elon Musk and SpaceX? The company with no human spaceflight experience? Or maybe Blue Origin? Or Sierra Nevada?

        How would you feel about that?

  • Can’t go into this more, but Armstrong, et al. did know about the SAA’s. And their info comes from a broad range of people that they’ve gotten to know over 40 years in the biz.

    OSC’s ills also stem from the Virginia Space Authority not coming up with the money originally promised. So much for the efficacy of small gov’t.

    If, as Elon has done with aplomb, you make yourself the spokesperson for commercial space, then you’re going to be the guy that gets the good, and bad, media attention.

    The problem is thusly, Congress set the policy for CCDev. Now a bunch of players want to participate. But the level of vitriol, distrust, and out-and-out loathing of NASA’s leadership by members of Congress precludes NASA from getting any more funds. It just isn’t going to happen. And even when Bolden and Garver are gone, it will take years for any trust between NASA and Congress to exist.

    I’ve never met Jeff Bingham and the other staffers that do the grunt work for the House and Senate Committees with oversight of NASA, but I imagine, having read their comments, they are aware as are we that making seemingly small bad choices now have huge and terrible downstream effect. These folks have mapped a good course so far, I remain confident they will continue to.