NASA Finds Supplier Lied, Used Faulty Materials in $700 Million+ Loss of Two Missions

NASA’s Orbiting Carbon Observatory and its Taurus booster lift off Feb. 24, 2009 from Vandenberg Air Force Base in California at 4:55 a.m. EST. The mission was lost not long after, now determined to be caused by a supplier who lied about tests and certifications, providing faulty materials which led to the loss of this and the Glory mission in 2011. Photo: NASA

A years-long technical investigation by NASA’s Launch Services Program (LSP) has concluded that two important science missions lost in 2009 and 2011, the Orbiting Carbon Observatory (OCO) and Glory, were not only caused by faulty materials provided by aluminum manufacturer Sapa Profiles, Inc. (SPI), but also found that the company altered test results and even completely falsified certifications.

Its been known that the Taurus XL rocket’s payload fairing on both missions failed to separate on command, but no technical root cause had ever been identified. Now, from NASA’s investigation, it is known that SPI lied (in more ways than one) to Orbital Sciences Corporation, the manufacturer of the Taurus XL, regarding the aluminum extrusions used in the payload fairing rail frangible joint, which is a structural separation system initiated using ordnance. 

NASA’s Glory spacecraft, designed to improve our understanding of Earth’s climate, was lost March 4, 2011, when it failed to reach orbit after launch aboard an Orbital Sciences Corp. Taurus XL rocket from Vandenberg Air Force Base in California. Image: NASA

Both NASA’s Office of the Inspector General and the U.S. Department of Justice (DOJ) got involved, resulting in the resolution of criminal charges and alleged civil claims against SPI, and its agreement to pay $46 million to the U.S. government and other commercial customers relating to a 19-year scheme that included falsifying thousands of certifications for aluminum extrusions to hundreds of customers. 

According to court documents, Hydro Extrusion Portland, Inc., formerly SPI, and its corporate parent, Hydro Extrusion USA, LLC, formerly known as Sapa Extrusions Inc. (SEI), admitted to providing customers, including U.S. government contractors, with falsified certifications after altering the results of tensile tests designed to ensure the consistency and reliability of aluminum extruded at the companies’ Oregon-based facilities. Tensile testing involves slowly stretching and then ripping apart a sample of the metal using a machine, which then measures the force applied to the sample at each stage of the test.

“For nearly 20 years, Sapa Profiles and Sapa Extrusions falsified critical tests on the aluminum they sold — tests that their customers, including the U.S. government, depended on to ensure the reliability of the aluminum they purchased,” said Assistant Attorney General Benczkowski of the Department of Justice’s Criminal Division.  “Corporate and personal greed perpetuated this fraud against the government and other private customers, and this resolution holds these companies accountable for the harm caused by their scheme.”

NASA’s Orbiting Carbon Observatory encapsulated in the rocket’s doomed payload fairing for launch. Photo: NASA / Robert Hargreaves Jr

NASA’s Orbiting Carbon Observatory was a $273 million satellite, while Glory was a $424 million loss, and both missions were launched in back to back flights. With the extra weight of a fairing, the spacecraft plummeted back through the atmosphere and now lay in pieces at the bottom of the Pacific Ocean near Antarctica.

“NASA relies on the integrity of our industry throughout the supply chain. While we do perform our own testing, NASA is not able to retest every single component. That is why we require and pay for certain components to be tested and certified by the supplier,” said Jim Norman, NASA’s director for Launch Services at NASA Headquarters in Washington. “When testing results are altered and certifications are provided falsely, missions fail. It is critical that we are able to trust our industry to produce, test and certify materials in accordance with the standards we require. In this case, our trust was severely violated.” 

The space agency suspended SPI from government contracting in Sept. 2015, and has since proposed SPI for government-wide debarment. NASA also has proposed debarment for Hydro Extrusion Portland, Inc. (again formerly SPI), and the company currently is excluded from contracting throughout the federal government.

Technicians check the placement of the first half of the protective payload fairing that will encapsulate NASA’s Glory spacecraft. Photo: NASA / Don Kososka / VAFB 

“Due in large part to the hard work and dedication of many highly motivated people in the NASA Launch Services program, we are able to close out the cause of two extremely disappointing launch vehicle failures and protect the government aerospace supply chain,” said Amanda Mitskevich, LSP program manager at NASA’s Kennedy Space Center in, Florida. “It has taken a long time to get here, involving years of investigation and testing, but as of today, it has been worth every minute, and I am extremely pleased with the entire team’s efforts.”

SPI has agreed to plead guilty to one count of mail fraud, and SEI has entered into a deferred prosecution agreement (DPA) in connection with a criminal information charging the company with mail fraud. As part of the plea agreement, SPI has agreed to pay $34.1 million in combined restitution to NASA, the Department of Defense’s Missile Defense Agency (MDA), and commercial customers, and has also agreed to forfeit $1.8 million in ill-gotten gains. 

The plea agreement remains subject to acceptance by the court at a plea hearing currently scheduled for May 13, 2019, before U.S. District Judge Liam O’Grady. 

From the DOJ:

“According to the companies’ admissions, employees at SPI facilities in the Portland area generally altered the tests in one of two ways. First, from in or about 1996 through in or about 2006, an SPI plant manager led a scheme to make thousands of handwritten alterations to failing test results by changing failing numbers that fell below the minimum required test results to appear to be passing. Those numbers were then typed onto a certification and provided to customers. Second, from in or about 2002 through September 2015, Dennis Balius, the SPI testing lab supervisor, led a scheme to alter tests within SPI’s computerized systems and provide false certifications with the altered results to customers. Balius also instructed employees to violate other testing standards, such as increasing the speed of the testing machines or cutting samples in a manner that did not meet the required specifications. Balius pleaded guilty in July 2017 and was sentenced to three years in prison and ordered to pay over $170,000 in restitution.”

You can read the full DOJ summary released April 23, 2019 HERE.

You can read a top-level outline of NASA’s updated findings pertaining to the cause of both missions HERE.



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One Comment

  1. Cause a $700 million damage and pay $46 million reparation? Does not sound too fair to me… what about the criminal consequences for Sapa’s management? Nothing? I feel shameful of being Norwegian today

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