NASA

The consequences of NASA’s ISS resupply contract

About a week and a half ago I noted here that some were concerned with NASA’s decision earlier this month to sign a contract with Roskosmos for ISS resupply through 2011, including both Progress cargo and Soyuz crew missions. Their concern was with mixed messages or a lack of confidence that NASA appeared to be showing in the two companies with COTS demonstration contracts, Rocketplane and SpaceX.

Now there’s word that those concerns may have adverse consequences for the industry. An an email sent out very late last night (or very early this morning, depending on your point of view) by space consultant Charles Lurio warns that the NASA-Roskosmos contract could deal a fatal blow to one company by reducing the market for resupply services, and thus the potential revenue available to the company. “My primary informant stated that within weeks (or at best a few months) this will likely directly lead to the collapse of one of the COTS winners due to the loss of ability to close the business case for needed private capital,” he writes. Lurio doesn’t say which company is at risk, but Rocketplane had been working for months to line up private funding to supplement its COTS award, while SpaceX appears to relying for now on founder Elon Musk’s pocketbook. (Lurio adds that “the other winner may not be as immanently [sic] vulnerable, but still has limits to how far it can go without a firm initial market.) Such a failure, Lurio warns, would be “a body blow to a big part of the ‘New Space’ enterprise,” an assessment that’s hard to disagree with, regardless of the exact nature of the current situation facing one or both of the COTS companies.

46 comments to The consequences of NASA’s ISS resupply contract

  • Jay Woods

    Keep in mind that from a business prospective, Roskosmos is just another supplier and should be allowed to compete as such. China and Japan could also develop a competing supplier and SpaceX and Rocketplane can compete to supply any space station used by China and India as well as other business enterprises such as Bigelow.

    If the contract itself is inspected, four years is a reasonable time frame for a contract and not abusive. Furthermore, NASA is giving these two companies a hand up in getting into the business. While it is always nice to get a big chunk of cash from somebody, it is not necessary. Rocketplane could reach out for other sources of capital just as SpaceDev did in the beginning. I bought stock in them and would do so for Rocketplane. I would buy convertible notes from Rocketplane as would many others.

  • richardb

    I smell a sore loser here. Given that COTS won’t come on line earlier than 2010 and this contract goes thru 2011, how can in hurt either party? COTS

  • kert

    Roskosmos is just another supplier and should be allowed to compete as such.
    Thats if you are speaking of global marketplace, and are willing to pour US taxpayers money into russian products even more, for dubious returned value.
    When you subsidize either SpaceX or RpK, you at least give the chance to dometic competitive launch services do develop, but giving this money to russians, you get basically nothing in return, as ISS resupply in itself is not an investment but a money basically wasted.

  • Folks,

    Several U.S. companies have proposed near-term ISS cargo services using proven spacecraft on existing launch vehicles. Instead, NASA bought services not from RSC Energia, but from the Russian government (not a supplier in any normal sense of the word).

    Several COTS “losers” are trying to raise money to continue their development efforts. Whether or not the market will exist has a huge impact on their fundraising, to say nothing of RpK’s.

    It’s one thing for NASA to invest “seed capital” in two COTS systems.
    Nothing spurs private investment like real dollars allocated to a real procurement with on-ramps for more competitive systems.

    Instead, NASA gave the Russian government a sole source. How is that a market-friendly behavior?

  • anonymous

    WishICouldSay is right. Soyuz and Progress flights bartered by diplomats under the terms of the ISS partnership are far from commercial transactions.

    That said, NASA’s Soyuz purchases are necessary as no COTS performer is under contract or will be under contract to develop a crew transport capability for some time to come. That’s an option on the Space-X and RpK agreements that NASA will exercise only after these companies have demonstrated cargo transport to ISS.

    But per the next-to-last post in this earlier thread…

    http://www.spacepolitics.com/2007/04/13/nasa-cots-and-russia/#comments

    … NASA has jumped the gun on the Progress purchases. If the Ruskies really need only two years of lead time to add another Progress to the queue, then NASA should have waited until 2009 — or at least until RpK had its financing together — before buying another Progress.

    This unfortunate unfolding of events is probably just another unsurprising but sad case of the right hand not talking to the left at NASA.

    But it’s also possible that senior management is purposefully trying to back away from COTS in order to free up the $500 million dedicated to those agreements for Ares 1/Orion. Even after paying for a couple Progresses, NASA could recover most of those dollars.

    If RpK falls out, it will be interesting to see if NASA applies the RpK dollars to the Space-X agreement or adds a new agreement with one of the runners-up from the COTS competition (Benson Space, t/Space, etc.). If the RpK dollars stay within COTS, then one could argue that NASA remains dedicated to enhancing its human space flight activities through commercial efforts.

    But if not — and if the RpK dollars go to solve Ares 1/Orion problems — then the old NASA institution will have reared its ugly head and no commercial entity should trust customers in NASA’s human space flight programs until new leadership is appointed after the next national election.

    Finally, RpK and any other COTS partner will find fund-raising from private financial markets extremely difficult, if not impossible, as long as NASA’s leadership remains dedicated to spending billions on an in-house competitor in the form of Ares 1 and Orion’s ISS variants. Although Griffin has stated that he is dedicated to standing down Ares 1/Orion if COTS delivers and has even taken one recent step in that direction, Griffin won’t be in charge when the critical decisions between Ares 1/Orion and COTS are made in 2009 and out. You don’t have to be genius financier to know that competing against the government is a fool’s game.

    Until NASA abandons Ares 1/Orion and holds open competitions for its human space flight LEO transport needs (where, at worst, NASA could get a more affordable capsule on an existing EELV), no institutional investor is going to put dollars towards meeting NASA’s needs — it will be a game limited to self-funded entrepreneurs like Musk.

  • Lurking Lurker

    This is such a load of horse hockey. Anyone who actually read the COTS space act agreement and then went out and told investors that they had this huge market for cargo services for ISS made at best inaccurate statements. The COTS space act agreement was for a demo mission and it was explictly stated in the SA that there was no pledge from the government to buy services from these entitites after the demo.

    At what point in time will any of these companies figure out that to be a commerical space company you have to have commercial customers? These companys have become adept at whining for scraps from the NASA table, and watch their lobbyists start showing up in congressional offices claiming that NASA has betrayed them when nothing is further from the truth. NASA has even issued stop work orders on the cargo version of the Orion/Ares 1. This should be a huge boost to the COTS contenders but they have clearly missed that one.

    IF RpK misses their next funding milestone it will be blamed on this contract with RSA (Which is the entity that NASA has to deal with in these deals which are agency to agency deals) which is a load of hooey.

    NASA has said repeatedly that they need COTS style services if they can deliver and internal agency projects have large tonnage shortfalls even under the new deal, especially if the Shuttle has problems with its last few logistics missions in 09 and 10.

    This writer detects some posterior covering from people who got into a biz without understanding that it was highly risky, but with high rewards for those who actually pull it off and that the government was the worst possible customer to have for an enterprise.

    It is incredibly difficult to raise money for speculative deals of this nature but to whine that this deal with RSA that NASA just did (which has been under negotiation for over a year) kills the market just reveals the level of delusion that these companies labor under.

    The poster above thinks that until NASA abandons Ares1/Orion and holds open competitions that the game will be limited to folks like Musk. Well duh. That is how it is in the real commercial world. NASA and Congress are not going to do that as it is pork for the ten healthy center initiative. They may end up being forced to go to EELV but they will never abandon Orion.

  • anonymous

    “The COTS space act agreement was for a demo mission and it was explictly stated in the SA that there was no pledge from the government to buy services from these entitites after the demo.”

    You miss the importance of the follow-on services to financial markets. The existing COTS Space Act Agreements (SAAs, not SAs) provide only partial funding for the demos. In order to fund the demos to completion, the COTS performers must raise private dollars internally (in the case of Musk and Space-X) or from financial markets (in the case of RpK). In the latter case, financiers must see a revenue stream from which their investment will get paid back with interest, i.e., the services.

    Even though there is not a promise of services in the SAA, companies like RpK need NASA to be a reliable customer and keep that potential future revenue stream as predictable as possible. When NASA needlessly redirects that future revenue stream to other performers (Ruskie Progress flights in this case), financiers see that NASA is not a reliable customer and do not provide the private financing necessary for the COTS performers (RpK in this case) to complete their demonstration phase.

    The alternative is for NASA to provide all, or nearly all, of the development milestone funding so that there is little reliance on private financial markets until the vehicles are nearly operational.

    “The poster above thinks that until NASA abandons Ares1/Orion and holds open competitions that the game will be limited to folks like Musk. Well duh. That is how it is in the real commercial world.”

    No, that’s not how most of the commercial world works, and again, you miss the point. As long as one part of NASA (Ares 1/Orion in ESMD) is competing with the commercial contracts taken out by another part of NASA (COTS in SOMD), the amont investment money available to companies like Space-X and RpK to perform those commercial contracts shrinks dramatically — from a large pool that includes a vast number of institutional investors (mainly venture capitalists but also possibly various investment funds, banks, various personal savings plans, etc.) to a very small pool that includes only a limited number of extremely wealthy individuals (self-funded entrepreneurs like Musk at Space-X or angel investors like the Saudis that funded the original Kistler). The former is in no position to take on the high risks associated with competing against the government but can provide a much larger and more accessible pool of investment money to developing companies.

    “They may end up being forced to go to EELV but they will never abandon Orion.”

    With its current requirements and specifications, Orion is likely too heavy and large to launch on any commonly used EELV. NASA will have to abandon Orion and the ESAS requirements that drove it in their current form before it can merge the agency’s exploration activities with a commonly used LV that effectively leverages prior investment and a wide operational base. Otherwise, NASA will probably just end up with an EELV configuration unique to its needs, which will limit cost-savings over Ares 1.

  • anonymous

    “NASA has even issued stop work orders on the cargo version of the Orion/Ares 1.”

    Incorrect. NASA has only deferred _design_ of the _pressurized_ cargo variant of Orion (not Ares 1). Moreover, NASA only did so to pay for a slip in the overall Orion schedule (robbing Peter in the design phase to pay Paul in the production phase) — not to help COTS or because there is new confidence in the COTS performers at NASA. See article at:

    http://www.aviationweek.com/aw/generic/story.jsp?id=news/nasy042307.xml&headline=Orion%20Development%20Extended%20By%20Two%20Years%20&channel=space

    “This should be a huge boost to the COTS contenders”

    It shouldn’t be. Moving monies around within Orion does not remove the likelihood that Orion’s pressurized ISS variant will be built at a later date and that NASA will barter with the ISS partner for foreign vehicle services in the interim or in lieu of buying COTS services (which is what’s actually happening). Until Orion or elements of Orion are formally cancelled and/or the outyear COTS services budget is restored (it got a massive cut in NASA’s FY08 budget), there’s no reason to believe that NASA’s current backing away from the COTS program will not continue.

  • Lurker,
    I think the fundamental problem here is that there were COTS competitors (not the ones who won, but some of the others) who had workable solutions, some of which used almost entirely off-the-shelf and proven hardware (like CSI’s “LEOExpress”, and Lockheed’s Atlas +ATV ideas), and could very likely have been ready long before 2011. Had NASA had a fair and open competition and had the RSA still won, I don’t think there would be as much complaint. But doing non-competed contracts with foreign governments when there are mostly domestic suppliers that weren’t even given the opportunity to bid, that’s a misuse of public funds. I don’t know why NASA has such a fetish for giving out massive contracts like this without actually openly bidding it (when there are others who could and would have bid).

    It’s not whining about how I’d like to see money funneled to this or that COTS competitor (or other service provider), or that I think Uncle Sugar should protect local providers against the risks of the market. It’s that I think that it’s fundamentally counter to the national interest to have NASA delivering large, unbid contracts like that when by they bidding them out, they could likely get a better deal, while also helping to make the commercial space transportation market more robust.

    I don’t have a dog in this race. I work for a suborbital company that’s a long way off from competing in this arena. I’m just sick of NASA doing stupid, wasteful, counterproductive crap like this and then having others try to accuse those who criticize such moves as somehow being protectionists or not understanding capitalism.

    ~Jon

  • Ray

    There are a lot of risks that a potential investor in RpK has to consider. Some aren’t in NASA’s control, like potential technical problems, potential technical delays, non-NASA customer characteristics, regulatory issues, and so on. Those are difficult enough. On top of that are risks that NASA has a lot to do with, such as whether or not NASA will live up to its end of the COTS funding bargain, whether or not the shuttle retirement will be delayed a couple years to reduce the “gap” (and in the process the shuttle delivers a lot of cargo to ISS), whether or not ARES will be set up as an internal competitor to COTS, and whether or not NASA will actually purchase commercial services if the COTS companies meet their goals (and if so what are the details – reasonable returns on their very risky investments, or cost-plus arrangements; number of missions, etc). The deal with Russia just makes it that much more difficult when it is already difficult enough. What is to stop NASA from making additional deals or barters with the programs in Russia, Japan, and Europe? To turn the question around, what could NASA do to reduce or eliminate some of those risks, so the whole proposal looks more attractive to investors and ultimately NASA can go to the moon instead of being stuck just using ARES for ISS for the next 15 years? If Griffin adopts the attitude “if COTS fails NASA’s human program has failed and my legacy will not look too good, regardless of what happens with ESAS”, NASA could probably find ways to make it easier.

    I also wonder if there are other sources of risk retirement. For example, could Bigelow modify the America’s Space Prize (giving first priority to anyone that meets the original prize requirements of course) to give COTS investors an incentive to succeed, and do it so they can help Bigelow? There are some difficult hurdles for SpaceX and RpK in that prize as far as schedule, government funding, number of passengers, etc. are concerned.

  • Gabriel

    Hello Jonathan,

    I dont think Nasa’s is doing stupid, wasteful things. They are just very risk adverse and conservative. Russian resuply is a working fact for decades now, and russian hardware is cheap. When the shuttle was down, it was only by russian help the ISS was able to survive (remember Skylab). Betting on Rpk or SpaceX is sort of a gamble. I am a pro Alt Space nut myself, but these new companies have yet to prove they can offer orbital ressuply services at a competitive price. At this moment, Rpk is flying nothing, and SpaceX barely made it to 200 miles high with a demo rocket (it’s a great win for New Space!). 4 years is a short time to build and test a big, reliable rocket able to haul substantial cargo or crew to the ISS. To bidd a contract like that out, you need real space bidders and in the short term, don’t see any credible new one (if you forget the usual suspects).

  • tom

    This is silly. 2011 is not 2021. RpK has much bigger problems anyway–the K-1 is going to turn out to be extremely expensive on a per-flight basis, far more expensive than the potential value of the COTS contracts. Investors just need to do a short read-through of James Wertz’s reusability study, take one look at the similarities between shuttle and the K-1, and the obvious becomes even more obvious–there’s no way RpK can ever recover the cost of investment in the next decade. It’s a black hole of investment, as the previous Kistler investors have already discovered.

  • Lurking Lurker

    Anonymous you are one of them “glass half empty” kinda guys I guess and Goff is just funny, stating that by not picking two EuroRussian solutions to COTS (which in the solicitation specifically indicated that an all American solution was required) that somehow making a deal with the Russians for hardware until 2011 is unAmerican?

    The Lockmart/ATV solution would have been $400M per launch as the ATV is so expensive that only a huge subsidy by ESA can possibly keep it operational while supporting the development of European operational space capability.

    The CSI LEO Express was a rebranding of a Russian system which NASA could get cheaper by dealing with the Russians directly. Basically all CSI was going to be is a processor of checks with a marketing rake off for doing the deal. How was that good for American technology?

    The contortions that some people will go to in order to blame big bad NASA for self inflicted wounds.

  • Jess Lomas

    >SpaceX and Rocketplane can compete to supply any space station used by China and India as well as other business enterprises such as Bigelow.

    FYI…

    If anyone thinks or dreams that thses two would be allowed to re-supply a Chinese station, think again… Aint gonna happen…

  • Lurking Lurker

    >Even though there is not a promise of services in the SAA, companies like RpK need NASA to be a reliable customer and keep that potential future revenue stream as predictable as possible. When NASA needlessly redirects that future revenue stream to other performers (Ruskie Progress flights in this case), financiers see that NASA is not a reliable customer and do not provide the private financing necessary for the COTS performers (RpK in this case) to complete their demonstration phase.

    NASA a reliable customer? You are joking right? Since when has NASA ever been a reliable customer to anyone? Ask Spacehab about reliable customer. The current administrator had a business go down because NASA had zero interest in the best value for the dollar.

    Always count on NASA to do what is best for pork, not what is best for business. Those who forget that axiom make a long line of those who made small fortunes from large ones. When are the so called newspace businesses going to figure this one out?

  • Lurker,
    Goff is just funny, stating that by not picking two EuroRussian solutions to COTS (which in the solicitation specifically indicated that an all American solution was required) that somehow making a deal with the Russians for hardware until 2011 is unAmerican?

    Wow. How on earth did you get *that* out of what I said? All I said was that it would have been much better for NASA to hold a fair and open competitive bid, and that if RSA still won that, I wouldn’t have a big problem with it. How did you jump from that to saying that I was accusing people of being unAmerican? Are you related to Mark Whittington, or are you just a fellow denizen of his from Planet Strawman?

    Seriously, if the RSA solution were really so absolutely superior to all other competitors, or if none of the competitors were really sufficiently serious, they would’ve won the bid hands down, so what’s to be lost by actually having a fair bid in this case? Also, your poo-pooing of CSI’s proposal makes me wonder how much you really understand it. Their system can deliver a lot more cargo mass per launch than a normal Progress could, and that Progress in question is a used one that already delivered some cargo. It isn’t 100% clear if it would be substantially cheaper than Progress, equivalent, or possibly worse, but that’s what bidding and RFQs are for. My big gripe with NASA is that it is behaving in such a closed and non-transparent manner when supposedly its so obvious who would’ve won that it would’ve have hurt to be more open.

    ~Jon

  • anonymous

    “2011 is not 2021.”

    Right. Due to the time-value of money, revenue in 2011 is actually much, much more important than revenue in 2021. That’s yet another reason why NASA should not buy Progresses to cover the “gap” until absolutely necessary.

    “Anonymous you are one of them “glass half empty” kinda guys”

    Please, argue the facts and my opinions, not my personality.

    “NASA a reliable customer? You are joking right?”

    So it’s okay for NASA to act unreliably with its commercial partners, wasting millions of taxpayer and private investment dollars?

    Now whose glass is half-empty?

  • al Fansome

    LURKER said: “NASA a reliable customer? You are joking right?”

    Lurker’s passionate defense of NASA’s right to be an unreliable customer and partner in the nation that calls itself “the land of the free” — and which likes to think of itself as the home of free enteprise capitalism — is illustrative of the problem.

    The average American would consider this bureaucratic NASA attitude to be unacceptable. But most of them don’t pay attention, which is why NASA gets away with it.

    Lurker’s “attitude” is part of the SAME problem as the original attitude shown towards US commercial providers in cutting a sole source deal with Roskosmos. Lurker’s “attitude” is completely consistent with the negative message that NASA is sending to large private capital investors to “not trust NASA” and “investing in a NASA-related business is too risky.”

    Unfortunately, big Wall Street investors do pay attention, as they will do their due diligence.

    Who will be hurt when Wall Street takes a pass on RkP, and later when the entire COTS initiative collapses?

    All of us.

    As long as we have people who are willing to passionately defend such adverse behavior, and such a counter-productive use of taxpayer dollars, our nation has a big problem.

    - Al

  • Lurking Lurker

    You rubes are funny indeed. No one is defending NASA, merely stating reality of dealing with any government agency. To ignore reality and insist that a government agency not act like a government agency is the height of delusion. Guess what, in 2009 the government will change directions again, and you all will still be living in delusion and whine and complain about the government giving you the shaft or even possibly supporting your compeitors. You are whining about the government wasting millions when billions are wasted for political reasons all the time? Just the pork factor in this new Iraq bill is 50% higher than the entire NASA budget. Get real, wake up, the government sucks as a customer and as soon as that is tatooed across the forehead of every budding space company CEO the better.

    It is a crap shoot and no sane investor invests in a crap shoot unless they are a true believer. That is what Walter Anderson was but he was taken in by the same delusional ones who thought that his money was a free ride for nice offices and large buildings at Mojave airport.

    Anyone who goes to Wall Street for investment in space is doomed to either lose their companies or their fortunes as the inevitable milestones are missed.

    For those who have not looked, the vast majority of the space tourists and well funded entrants into the space field of late (Musk, Bezos, Carmack) are from a Silicon Valley/Dot Com world. Yet you continue to suck up to the money guys in New York that at best see you as a new round of suckers to soak for money for finders fees.

  • Lurker,
    I fully agree that NASA isn’t being helpful, and for all the projects I’m involved in, I’ve assumed that the government can’t be counted on as a customer. But that doesn’t mean they should get a free pass on things. Sometimes public criticism can make a difference, and if they’re doing something that is wrong, it should be criticized. And the way they’ve handled this (and many other things) is poor, even if it may be par for the course. I may have as low of expectations for NASA doing the right thing as you do, but that still doesn’t justify letting them get away with it.

    ~Jon

  • Lurking Lurker

    Lets see, NASA was called on something recently. It was Elon Musk a few years ago that challenged a contract that NASA had given, guess who, Kistler. That contract was for well over $150M dollars for data collection for a launch of a reusable system. Musk whined that it was not competitive (when he was years further away from a launch than Kistler) and eventually prevailed. Where did that money go?

    Did it go to a competition? Nope.

    Was it put into another contract that commercial companies could bid for? Nope.

    It was absorbed in the NASA budget just like any COTS money will should one or both of the contenders fail. Also, watch what happens if one of the contenders misses a milestone and gets an extension. The vultures (you know, your fellow traveler COTS losers) are likely to file a lawsuit claiming that if they had just been given a chance they would have been able to meet their milestones.

    Lockheed Martin has been the only company out there that has stuck it to NASA recently. First the are banned from even talking about the Atlas V as a human vehicle, then they get a contract for the CEV and then immediately start talking about the Atlas as a human launch vehicle with a purely commercial customer. That is guts.

    Commercial is the only way to go if anyone ever is going to make this happen and to continue to whine about NASA being NASA is just self defeating delusion.

  • anonymous

    “You rubes are funny indeed.”

    Please, no ad hominem attacks. This is the second time you’ve been asked. No one has insulted you. If you’re incapable of participating in these debates without insulting the other debators, then take your anger elsewhere.

    “To ignore reality and insist that a government agency not act like a government agency is the height of delusion.”

    To base an argument on the supposition that every single federal program is an unreliable customer — and that there’s nothing the voting taxpayer can or should do about it — is ridiculous on its face.

    If you’ve given up on government, then why even waste your time participating in a political forum?

    “government giving you the shaft or even possibly supporting your compeitors”

    Besides Mr. Goff, has anyone on this forum indicated that they work for an emergent or established aerospace company?

    “Anyone who goes to Wall Street for investment in space is doomed to either lose their companies or their fortunes as the inevitable milestones are missed.”

    There are a number of space CEOs and CFOs in the telecom, launch, and remote sensing sectors that have proven otherwise.

  • anonymous

    “Lockheed Martin has been the only company out there that has stuck it to NASA recently. First the are banned from even talking about the Atlas V as a human vehicle, then they get a contract for the CEV and then immediately start talking about the Atlas as a human launch vehicle with a purely commercial customer. That is guts.

    Commercial is the only way to go if anyone ever is going to make this happen and to continue to whine about NASA being NASA is just self defeating delusion.”

    You do realize that Lockheed Martin raises money on Wall Street, right?

    Your argument is not consistent. Either commercial human space flight is the sole domain of self-funded billionaires or it’s something that should be incorporated into the regular fabric of the U.S. economy.

    Which side are you arguing? So far, it’s both.

  • Ray

    >these new companies have yet to prove they can offer orbital ressuply >services at a competitive price.

    And they never will if they can’t get enough investment (and even then there’s no guarantee). That’s why so many taxpayers are objecting to the hasty ISS cargo deal. The COTS effort is a huge challenge – build a launch vehicle *and* a cargo transporter. The NASA COTS funds are not enough. The companies need to be able to attract investors, and investors are going to be scared off both by the potential business lost to this contract, and the strong signal it sends about NASA’s intentions. The results could be very bad, not just to the COTS companies but to NASA and the U.S. taxpayers. No COTS, NASA spending the next 15 years funding Russian, Shuttle, and ARES ISS resupply, and the rest of NASA on life support.

    >To bidd a contract like that out, you need real space bidders and in the >short term, don’t see any credible new one (if you forget the usual >suspects).

    Only if you think having ISS well-supplied is more important than commercial space, which I don’t. Actually, you’d have to value ISS so much more than commercial space that you can’t take a small risk that you’ll have to revisit your NASA/Russia deal in a year or 2 if the COTS teams aren’t making progress.

    Now, it sounds from the email message mentioned in the original post that RpK isn’t happy about the loss of potential business and the signal to potential investors. Dr. Griffin, on the other hand, has said NASA still needs all of the COTS cargo resupply the 2 companies can offer. The challenge to NASA then is to demonstrate this is true. How much can the 2 companies offer? What do the 2 companies say they can offer, assuming their plans go smoothly? Can NASA put its money where its mouth is? Make the real (not demo) ISS cargo resupply contracts with the COTS companies *now*, at least through 2011, as was just done with Roskosmos. Since the companies aren’t supposed to be ready for some years, that will not be a huge number of missions. Preferably, make these contracts for all the 2 COTS companies say they can offer, based on Dr. Griffin’s statement. If the companies don’t deliver, they get nothing. This will take the embarrassment of the recent episode away from NASA. It will also give potential COTS investors a crystal-clear demonstration of NASA’s seriousness, as well as a quantifying what the ISS market really is. As they say, investors hate uncertainty, and this would remove a lot of uncertainty.

  • Lurker,

    You are incorrect in stating that the COTS program required all-U.S. solutions. For example, SpaceX’s winning bid includes rendezvous technology from Canada.

    COTS *was* clearly about new launch vehicles. That is why the near-term options that don’t require new launch vehicles didn’t win, including the ones you diss as “eurorussian”.

    But you cannot have it both ways. You cannot defend NASA for picking new and futuristic quasi-all-U.S. concepts for COTS (which I agree is defensible) *and* then defend NASA for excluding the more conservative, less-attractive, and proven-but-foreign-content and proven-but-expensive EELV service offerings from their 2010-11 market.

    The way the real commercial marketplace works is that a customer or set of customers have a demand, and suppliers raise capital to go meet that market need. Innovation and investment result from a real or perceived market.

    So, if Griffin and NASA want to get credit fpr embracing U.S. commercial space, and giving them this huge opportunity with ISS resupply, then they need to put out a competitive procurement that U.S. companies can bid on. THAT will produce investment, and new capabilities, and (as COTS offerors enter the marketplace) lower prices.

    Until then, Griffin is just another lying NASA socialist.

  • Thomas Matula

    And when did COTS become commercial human spaceflight? Last I looked it was for demonstrating an unmanned cargo vehicle that could be used to supplement the Progress for supplying ISS when the Shuttle is retired. And NASA had stated repeatly Progress would be used to supply the Shuttle even IF it selects a COTS winner to supplement it. And IF New.Space/Alt.Space firms were telling their investors differently then they need to take a look at the ethics of their investor relation strategy.

    Also Space Commerce is already an established $110 billion dollar industry that Wall Street is well aware of. But Wall Street is for established firms and/or relatistic business plans built on demostrated markets, not Start-ups like the COTS firms are. That is the domain of Angels and will remain so until one or the other COTS firm, or another New.Space/Alt.Space makes it big with an IPO. And the hype that some how New.Space/Alt.Space invented space commerce is basically a joke in an industry that has been around for over 40 years.

    And of course when they do, like Orbital Sciences did, then the firm will become one of the “evil” old space firms as Orbital has become :-)

    So this press release is just another step in the New.space/Alt.space campaign to force NASA to use the ISS as corporate welfare for New Space/Alt.space firms unable to find real commercial markets to serve. And to provide a justifiable excuse when the New.space/Alt.space firms fail to deliver – i.e. Its NASA’s fault because they contracted to use Progress like they said they would…

  • Lurker,

    In general I agree that focusing on commercial markets is the right approach. God knows trying to solve NASA’s own stated ISS cargo problem for the past 7 years has been a painful experience.

    But let me offer a counterexample: Parabolic Flight Services.

    Zero Gravity raised private capital and developed a commercial capability to meet PRIVATE markets. Now the issue is will NASA buy the services they need from a commercial company, or continue to own and operate a C-9 airplane that costs more, does less, but “belongs to them”.

    What NASA folks have been saying FOREVER is “don’t ask for development money, don’t ask for a service contract… just go take all the risk and find commercial customers and THEN we will buy from you.”

    Well, Zero Gravity has done that. We will see if NASA ever buys.

  • Lurking Lurker

    Adam

    If COTS was about launch vehicles then why did the Apex from Spacehab, which was a completely U.S. effort fail?

    If COTS was just about U.S. launch vehicles why did the Atlas/ATV fail?

    You just defeated your own argument.

    NASA picked the two companies that had A. An American Solution (MDA does not count as non American as NASA and DoD purchase from them all the time), and money. B. Mike Griffin said time and time again, you have to have skin in the game. Kistler and Spacex had the most on the table, that is why they won.

    Anonymous

    Lockheed can raise money on Wall Street because it is a $40 billion dollar public corporation. The discussion was about COTS and the COTS competitors. Which begs the question, why did Lockmart, Boeing, and Northrup, along with Orbital, not even bid? You can’t have this both ways.

    Ray

    Yer joking right? I have yet to see anyone outside on the front steps at NASA headquarters objecting to the deal with RSA, that by the way has been in progress for over a year and was/is the only real game in town to deliver cargo today, that is unless that rocket in your pocket is more powerful that it appears.

    You are exactly right, without a subsidy from the USG these guys aren’t going to make it, which means, go back to rule number one, the U.S. government is an unreliable customer and anyone who depends on them for business has rocks in their collective heads. Make up your mind, do we live in a free enterprise system or a socialist one? The argument can be made that to have these companies out here doing this is in the national interest on a number of levels but the article that started this does not use this positive argument but whines about NASA being NASA.

    There are a lot of reasons to support COTS and COTS providers but they aren’t making the arguments.

    If the investors were not scared off when they read the space act agreement that stated that NASA could terminate the contract at any milestone point for any reason, then this should not scare them off either, unless they were making unrealistic claims that NASA was going to purchase critical goods for the station from unproven commercial providers rather than do the safe thing and buy from the Russians for a few more years. Yea I can see that meeting:

    NASA offical: We want to limit our contracts with RSA till 2009 so that we can provide contracts to COTS companies so that they can attract investment dollars and give us an all American solution to our upmass problem!!

    NASA Reviewer:

    Has either one of these companies launched anything?

    NASA Official:

    Well, not really, one of the companies has launched their subscale first orbital vehicle twice.

    NASA Reviewer:

    Really? What was the results?

    NASA Offical:

    Well the first one blew up because they did not have a materials guy who understood stress and corrosion of mechanical parts and the second one failed because of pogo in the upper stage. It did make it to 10,00 kilometers per hour though and the CEO said that it was 95% successful.

    NASA Reviewer:

    Ok, did the vehicle meet their development milestones to reach this 95% success?

    NASA Official:

    Well no, it was only two years late and cost twice as much as the first successful Pegasus launch.

    NASA Reviewer:

    Ok, how is their COTS launch vehicle and their cargo capsule that has to meet all ISS requirements coming?

    NASA Official

    Well the company assures us that it will be on time!

    And thus concludes the career of the offical that first proposed not using the proven Russian system for ISS reboost and cargo services past 2009. Oh, and by the way, that was the company with the best chance of meeting the COTS contract requirements.

    Get serious no competent source selection offical in their right minds would propose such a thing.

    Also, Wall Street hates deals where the USG is the only customer, especially for risky development contracts. They simply do not have the mindset there to wrap their arms around it. In the 1990′s the only way that Wall Street got involved in Iridium, Globalstar, and XM/Sirius is because either GM or Motorola, major Wall Street players who could do debt/equity deals without going bankrupt, thereby providing at least some security. What happens if either one of these companies miss their milestone? There is an explict exit clause in the space act agreements that allows NASA to walk away and own the IP of the company that missed the milestone. Yea that makes Wall Street just run to that deal. Oh did I mention that the customer that wields this power is also the only customer? Yea baby, let me plop down a few hundred million on that one.

    The only one here with even half a clue are Muncy and Matula. Muncy is right about the Zero gravity flights and if that company put it right to the administrator that, hey guy you can dump that plane of yours, have preferential rights on ours for much cheaper than what you pay now, and you can spend the savings on your pet CEV/Ares 1. That is the kind of argument that makes sense. However, you have those pesky Texas congress critters who will object to that. You might want to think about moving operations to Clear Lake.

    For every problem there is a solution but there are painfullly few solutions coming from this crowd.

  • GuessWho

    Lurking,

    It is my understanding that Lockheed submitted two COTS bids, one working with the ATV and one working with Progress. I suspect they were not selected because LM wouldn’t commit big internal dollars to a solution that was in competition with a NASA funded competitor (CEV) and a questionable market customer (NASA & ISS). I also believe they were thinking of submitting a third, all-US solution but couldn’t bring it in under the $500M cap and correctly saw that a “traditional” aerospace firm would never be selected as a Prime. COTS is nothing more than a bow to the alt.space crowd that, in my opinion, NASA never expects to be successful. Just my $0.02.

  • That is what Walter Anderson was but he was taken in by the same delusional ones who thought that his money was a free ride for nice offices and large buildings at Mojave airport.

    “Nice offices at Mojave airport”? One large building was built, because there was no existing high-bay that could accommodate the vehicle. If you think that Rotary was in “nice offices,” you’re apparently unfamiliar with Mojave Airport.

  • WishICouldtellya

    If COTS was about launch vehicles then why did the Apex from Spacehab, which was a completely U.S. effort fail?

    If COTS was just about U.S. launch vehicles why did the Atlas/ATV fail?

    You just defeated your own argument.

    Lurker — you are not listening (reading what is in front of you.)

    Adam Smith did NOT say it was about “launch vehicles”. Adam Smith said it was about “NEW launch vehicles”. He is correct.

    If NASA had wanted an ISS cargo system, *more* than it wanted a new breakthrough launch vehicle, then it would have picked one of the proposals that used existing launch vehicles, and only proposed to solve ONE problem — the last mile to ISS.

    Instead, NASA picked companies that are proposing to solve 3 big problems, (New breakthrough launch system, new reusable & recoverable spacecraft, plus solve the last-mile-to-ISS problem). Anybody who understands probability and risk will understand that this significantly increases the risk of failing to achieve the overall objective.

    The only conclusion a disinterested observer can take is that “achieving the overall objective” of a commercial ISS cargo delivery system was not the top priority. In other words, COTS is about developing new launch vehicles, not about ISS cargo delivery.

    More specifically, it appears that you have not read (or do not recall) the original COTS Broad Area Announcement (BAA). If you like, I would be happy to quote you the 3 “industry goals” from that BAA.

    - WishICouldTellYa

  • Al Fansome

    Lurker,

    I agree with “WishICouldTellYa” about the “new breakthrough launch vehicle” being the goal — which eliminated existing/proven launch vehicles — but you do make some good points that nobody else is making.

    Investing in a COTS company, based on the terms and conditions of the COTS Space Act Agreements (some of which you point out), and the lack of a long-term service contract … is a BAD investment deal. I have previously written about why RkP is likely to fail because of the investment risk. This is their primary achilles heel.

    Now, it is possible that RkP will prove us wrong, and will raise the big bucks, and it would be good for our country if they succeed, but I am not betting anything on it. I think we should expect they will fail to raise the $$ because of this exact issue.

    So, of the odds are that they will fail, an interesting (and important) space policy question (which anonymous brings up above) is “What happens if/when RkP” fails to meet their major investment milestone?”

    Does NASA extend/revise RkP’s milestones again? (RkP already missed a February milestone, and NASA revised the agreement.) How many more times will they “give them another chance?”

    If (& when) they cut RkP off, what do they do with the $$?

    Does Griffin give it to another COTS bidder, or bidders?

    Or does Griffin decide to take the COTS money back to feed that great sucking sound called the Orion/Ares 1?

    If so, how much would “less than $200 M” accelerate the Orion? 1-2 months?

    What would you do?

    - Al

  • Lurking Lurker

    Dear Wishfulthinking

    The proposals that used the existing U.S. launch vehicles had one fatal problem, they used the Atlas V which Scotty Horowiz will allow to go to station over his cold dead, Ares 1 wrapped ATK retiring fingers. Heck they could picked Andrews space which was going to use the Ares 1 with their own cargo pod.

    Scotty has nightmares every night worrying that Lockmart/Bigelow or anyone flying on the Atlas V is going to be able to do what the CEV/Ares 1 won’t do for most of another decade.

    Al Fansome, the money is going on CEV/Ares 1, duh. Those pesky mammals, if they blow their chance, will just have to suck eggs for another several years.

  • WishICouldtellya

    Dear Lurking Lurker:

    Your ad hominem attacks don’t forward the discussion, and reduce your credibility. Resorting to such tactics suggests that you don’t have confidence in the strength of the logic of your arguments. But I will ignore the insult, and focus back on the core logic of your assertions.

    The proposals that used the existing U.S. launch vehicles had one fatal problem, they used the Atlas V which Scotty Horowiz will allow to go to station over his cold dead, Ares 1 wrapped ATK retiring fingers. Heck they could picked Andrews space which was going to use the Ares 1 with their own cargo pod.

    You actually contradict yourself in these two sentences. If “helping the Ares 1″ was a discriminator in the separate COTS competition — as you suggest was the reason for eliminating those who bid the Atlas V — then the same Horowitz desire should have helped Andrews. By that logic, Andrews should have done well. However, Andrews finished about dead last among the six finalists.

    There is a better explanation, that has a better fit with the facts.

    I have read the 16-page source selection document that was signed by Horowitz. Based on this document, it looks like SPAB and Andrews finished 5th and 6th, with tSpace finishing 4th (after Horowitz downgraded tSpace by overruling the COTS evaluation panel on some technical issues) and SpaceDev 3rd. Meanwhile, Horowitz did not down-grade COTS evaluation panel on their assessment of the huge cluster of hybrid rocket motors proposed by SpaceDev (which in my mind a LOT more technical risk than the narrow tSpace issue.) However, SpaceDev clearly saw this as a problem as they have recently moved towards the Atlas V.

    The reason that SPAB and Andrews finished 5th and 6th among the 6 finalists is obvious (to me). They both scored lower on specific criteria set out in the competition, than the other 4 finalists.

    Using existing “more expensive”, but existing & proven, launch vehicles did not address two of the three specified goals of COTS (spelled out in the COTS final announcement) as well as paper “much lower cost” LVs.

    Those two discriminating goals were:

    • implement U.S. Space Exploration policy with an investment to stimulate commercial enterprises in space,

    • 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

    Every company was given a grade on how well it addressed the goals.

    Upon reflection, it can be seen that the competition was totally biased against using “existing LVs”, or new LVs that would not be judged as low cost (such as the Ares 1).

    SpaceX, Kistler, tSpace, and SpaceDev all scored higher than SPAB and Andrews on these two specific objectives.

    There is no need to speculate beyond this, and imply a conspiracy by Horowitz to explain the end results. (I am not saying that a Horowitz/Griffin bias does not exist, and I would be “totally shocked” to find out this was the case, I am just saying you don’t need it to explain the result … and that such a bias does not explain the outcome in this case.)

    FWIW,

    WishICouldTellYa

  • Ray

    Here’s something else I imagine has the attention of the COTS companies and any potential investors, from AW&ST (April 16, 2007, p 27):

    “Administrator Michael Griffin says the more users that can be found for the new vehicles once they start flying in the coming decade, the better.”

    Sounds ok so far, right? Those COTS people sure should be looking for customers outside of NASA!

    “Aside from the benefits of larger production runs and more flight experience that would come from a bigger Ares-user base, he says, turning the taxpayer-funded launch vehicles over to other U.S. users would be an appropriate way for the U.S. government to support the commercial sector. The same goes for the Orion crew exploration vehicle also being developed user Contstellation.”

    Oh, he wants to give Ares and Orion to the cost-plus contractors, and let them sell Ares and Orion to commercial and DOD customers! I wonder what the COTS investors think of that, if any didn’t run away already? Now I finally understand what the “Shuttle-Derived” part of Ares is. Didn’t the Shuttle give rides to commercial and DOD customers in the 1980s? What a great idea that was! Is NASA going to make Ares the National Launch System?

    While we’re at it, maybe NASA can find more users for their parabolic flight airplane. Maybe NASA can start selling parabolic flights to tourists on the side? That will help NASA spread out their plane costs, and help the commercial sector, such as jet fuel companies, right? It could be the National Parabolic Flight System!

  • Lurking Lurker

    Dear WishICouldTellYa

    I do understand that Andrews finished badly in the evaluation but it was not the launch vehicle part (CLV) that did them in unless they were using the earlier 4 segement design that the agency had already dismissed as unworkable.

    In July of last year I happened to be spending time with a senior official of Lockmart and was told that Scotty H had called the senior management at Lockheed threatening them with dire consequences if they even presented papers about the Atlas V in conferences. The source selection board can either be a tool to discriminate between the value of proposals, or it can be a bludgen to punish those who’s solutions do not fit the preconceived biases of the reviewers.

    It was absolutely clear from presentations by administrator Mike Griffin that one of their prime criterion for selection was how much “skin in the game” that they had. If you saw the documentation then you saw where Spacex and Kistler scored the highest on that critera. To Mike that was the key factor.

    I know for a fact that Spacehab did not have the same financies behind them, nor did Andrews or tSpace or even SpaceDev. tSpace was a joke from the beginning as their technical staff had learned nothing from prior mistakes.

    I don’t know all of the other details but it is also clear that Lockmart, as part of their teaming with SPAB did not put any money on the table or at most only a token amount in the form of cost concessions on the launch price.

    If you want to see biases on source selection to reach a preconceived solution there are many examples out there, just look at Ares 1.

    Look at the joke that Ares 1 is and if what Ray is saying about Mike Griffin trying to offer that dead bird as a competitor to COTS/EELV, that just shows how desperate they are at NASA as well.

    Thanks for an illuminating post and apologies for any snideness but there is just so much wishful thinking that goes on related to this subject. To get back to the original point of this post, the COTS guys, both of them, have little chance of survivial unless customers beyond NASA are found. The agency simply cannot be trusted over the long haul to keep their word. Look what happened to Spacehab when Dan Goldin bartered away much of their business to the Europeans and the MPLM. Mike Griffin recently gave $120M dollars to Goddard to build a cargo carrier that will be used exactly once instead of contracting with SPAB. From that I hear that was a payoff between JSC and GSFC with Barbara Mikulski looking over their shoulders. When NASA gets desperate, and Mike will do desperate things to keep his pet Ares 1 going, there is no telling what he will do to the COTS effort in the name of survival.

  • WishICouldtellya

    LURKER: The agency simply cannot be trusted over the long haul to keep their word. …. When NASA gets desperate, and Mike will do desperate things to keep his pet Ares 1 going, there is no telling what he will do to the COTS effort in the name of survival.

    I totally agree.

    Look at the agreement that Griffin made with the DoD to acquire White House permission to build the Ares 1&5 — Griffin got everything he wanted, and in return promised that NASA would buy ISS cargo on either EELVs or other emerging US LVs. When the time comes for NASA to keep its part of the deal, they broke it.

    If that is not a total breach of integrity on NASA (and Griffin’s) part, then I don’t know what is. If you are an investor, and you see that NASA does not even keep its agreements with the DoD, how can you trust them to keep any promises to commercial industry?

    – WishIcouldTellYa

  • Ferris Valyn

    WishIcouldtellya,
    I gotta disagree slightly on SpaceDev’s – they weren’t using a huge cluster of hybrids (at least, thats not how I remember it – They did have LARGE hybrids (somethign which I admit hasn’t really been tested), but they only had 3 large hybrids, and a single smaller hybrid. So the most you could say is 4, which isn’t that big. At least, thats how they portrayed it in the media.

    Anyway, prolly a minor nitpick, but still worthwhile to get it right

  • Some of the comments made here have been incorrect, or missed key facts. I’d like to provide some additional info to the discussion, taken somewhat out of order the comments were posted in:

    Lurking Lurker wrote @ April 24th, 2007 at 9:32 am

    “The CSI LEO Express was a rebranding of a Russian system …”

    The first generation of CSI’s LEO Express(SM) intermodal cargo system uses the existing Progress-M and -M1 spacecraft as a reusable space tug, and a separately-launched Cargo Container, on U.S. or foreign launch vehicles, that is modified from the Progress Cargo Compartment, STS/Mir Docking Module (launched on STS-74 in 1995) and the ISS Pirs Docking Compartment-1 (launched to ISS in 2001).

    The CSI system provides a dramatic increase in efficiency in delivered cargo for any given launch vehicle. For example, using a standard Soyuz launch vehicle a Progress M can deliver a maximum of 2350 kg of mixed cargo to ISS @ 400 km, with gross dry cargo max of 1518 kg @ 230 kg/m^3. Using the equivalent commercially available Soyuz/Fregat launcher, CSI’s intermodal CC can deliver 3463 kg gross cargo @ 230 kg/m^3 (3055 kg gross cargo when Progress space tug propellant is subtracted).

    CSI was awarded U.S. patent #6,669,148 for this system.

    Both of those facts show that even CSI’s 1st generation system is not simply “a rebranding of a Russian system.”

    Additionally, once we move to a tug-based architecture, it makes economic sense to invest in space tugs that can operate in orbit for longer periods of time, and with greater re-use. Our intermodal system can accommodate the use of future U.S. or foreign spacecraft in the space tug role, resulting in a major jump in efficiency for space station cargo delivery over those systems used by themselves.

    “… which NASA could get cheaper by dealing with the Russians directly.”

    System cost is greatly reduced by reusing the Progress that has already been launched, and launching CC’s that contains fewer subsystems that a full Progress.

    “Basically all CSI was going to be is a processor of checks with a marketing rake off for doing the deal.”

    CSI’s business responsibilities as laid out in our COTS proposal are: Prime Contractor; Program Management; System Engineering and Integration; Flight Readiness Certification; Marketing/Business Development. That is more than just being a “processor of checks.”

    “… the solicitation specifically indicated that an all American solution was required)”.

    Solicitation Section 4.3.1, “Iran and Syria Nonproliferation Act (P.L. 106-178, amended by P.L. 109-112)”, discussed restrictions to be imposed “after December 31, 2011 for work on the ISS to organizations or entities that are now or were in the past under the jurisdiction or control of Roscosmos (the Russian Federal Space Agency), or to any other organization, entity or element of the Government of Russia.”

    In the Q&A, NASA specified that “A: Participants will need to explain in the proposal how they intend to mitigate the risk of using Russian equipment post 2011 should the ISNA restrictions exception not be extended.”

    Solicitation 4.3.2 “U.S. Space Transportation Policy, December 2004″ requires flight on a U.S.-manufactured launch vehicle per the policy’s Implementation Guideline V(1)(a). Note that the policy does not require that the in-space transportation segment be U.S. manufactured, and Implementation Guideline V(1)(b) expressly permits “the use of foreign components or technologies, and the participation of foreign governments and entities, in current and future U.S. space transportation systems.”

    Neither of those requirements, nor Section 4.3.3 “Commercial Space Act of 1998 (P.L. 105-303; 42 U.S.C. 14701 et seq.)” or Commercial Space Launch Act. (49 USC Chapter 701) require “an all American solution.”

    For the record, CSI’s COTS proposal was compliant with all those requirements, including the post-2012 timeframe.

    “How was that good for American technology?”

    The Solicitation background stated the goals of the COTS program as: “implement U.S. Space Exploration policy with an investment to stimulate commercial enterprises in space,” “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 “create a market environment in which commercial space transportation services are available to Government and private sector customers.”

    It also stated “COTS is envisioned to be executed in two phases: “Phase 1 – A period of development and demonstration by private industry, in coordination with NASA, of various space transportation capabilities to and from low-Earth orbit (LEO) determined to be most desirable for the Government and other customers; Phase 2 – A potential competitive procurement of orbital transportation services to resupply the ISS with cargo and crew, if a capability is successfully demonstrated and the Government determines it is in its best interest.”

    None of that says be “good for American technology.”

    Just to note, CSI anticipates that the “market environment in which commercial space transportation services are available to … private sector customers” will not restrict services to “American technology” only. We believe the private sector will procure these services the same way the rest of the private sector aviation and space market currently does, concentrating on values such as price, performance, reliability, service, etc. rather than country of origin. Policy restriction such as ISNA do not explicitly apply to those customers.

    richardb wrote @ April 23rd, 2007 at 11:47 am “Given that COTS won’t come on line earlier than 2010 and this contract goes thru 2011, how can in hurt either party?”

    CSI provided a response to NASA on JSC RFI NNJ07ISSBG indicating that we could meet all those requirements, including delivering cargo to ISS in April 2009, which is “earlier than 2010″. There may be other companies that provided similar info.

    Lurking Lurker wrote @ April 23rd, 2007 at 11:02 pm

    “The COTS space act agreement was for a demo mission and it was explicitly stated in the SA that there was no pledge from the government to buy services from these entitites after the demo.”

    This is true, but overlooks the fact that NASA’s COTS Announcement Number COTS-01-05 specifically laid out annual cargo mass requirements, a manifest of example payloads, stated ‘The participant shall describe the space transportation system’s compatibility with the targeted COTS Service Reference Mission (SRM) …” and also stated in Template 6 – Projected Operational Prices for Capabilities A, B, C stated that “Two copies of this template are required; one with estimated operational prices per kilogram of useful cargo by Government Fiscal Year, the second with estimated prices per launch. … Provide a graphical representation (as in the format shown below) of the estimated average price per kilogram for the period 2011 through 2015.”

    Any proposal that did not look beyond just the demo flight and did not provide an analysis for service beyond the demo out to the year 2015 as requested by NASA would have been non-compliant.

    Gabriel wrote @ April 24th, 2007 at 8:35 am

    “When the shuttle was down, it was only by russian help the ISS was able to survive”

    CSI’s System Design Review in the Alternate Access to Station (AAS) program was held in July 2003. CSI worked with ARES Corp. on a statistical schedule analysis, and we reported to NASA that we could launch cargo to ISS using U.S. launch vehicles in 25 months with 50% likelihood and 27 months with 90% likelihood. Had NASA awarded CSI a contract for AAS Phase II, the first launch — baselined on U.S. Delta II — therefore could have occurred between Aug. and Oct. 2005. That would have increased the time for which U.S. launch vehicles could have been used to deliver cargo to ISS.

    Gabriel wrote @ April 24th, 2007 at 8:35 am

    “To bidd a contract like that out, you need real space bidders and in the short term, don’t see any credible new one (if you forget the usual suspects).”

    CSI’s management team — that gathered its experience on NASA, DoD, and commercial programs — was listed as a “Significant Strength” by NASA in their evaluation of our COTS bid. Our subcontractors included ARES, Barrios Technology, Lockheed Martin Space Systems, Oceaneering Space Systems, Odyssey Space Research, RSC-Energia, and limited additional support from L3-Titan. I think that team could be considered “credible.”

    Thomas Matula wrote @ April 24th, 2007 at 9:30 pm

    “And when did COTS become commercial human spaceflight? Last I looked it was for demonstrating an unmanned cargo vehicle that could be used to supplement the Progress for supplying ISS when the Shuttle is retired.”

    That happened in the transition from the still-born ISS Commercial Cargo Service (ICCS) program in 2005.

    Lurking Lurker wrote @ April 25th, 2007 at 6:45 pm

    “The proposals that used the existing U.S. launch vehicles had one fatal problem, they used the Atlas V …”

    CSI’s AAS program development, as reported to NASA under contract in 2002-2003, used Delta II as the baseline, with refurbished Titan II and Kistler K-1 as other launchers, and we have reported on the use of other launchers to NASA as well. CSI’s COTS proposal specifically said that our system is “launch vehicle independent” which “substantially reduces the risk of depending on any single launch vehicle, or family of LVs.”

    Unfortunately, the NASA COTS proposal process specifically did not allow a standard commercial communications satellite business development approach of bidding several launch vehicles, and letting the customer choose the one that best suits their needs. This was allowed in the AAS program.

    Benigno Muñiz Jr.
    Chief Technical Officer
    Constellation Services International, Inc.

    PS A non-technical/program comment: some of the comments here regarding early commercial space ventures border on urban legend. I suggest that those who are really interested in the subject do some research, such as the Dept. of Commerce’s April 1990 report “Commercial Space Ventures: A Financial Perspective.” Although I’ve been told that some behind-the-scenes info is missing, and of course the investment climate is different today, but sources like this still beats folklore when it comes to business planning.

  • Lurking Lurker

    And with all the above rebuttal CSI did not even make it to the finals. I guess you forgot that part in the congressional appropriations language that stated that COTS be a vehicle for American solutions to the cargo problem.

    Even you CEO has admitted that this was a factor in the selection. Since you have been so free in data so far, you can also publish your proposal debrief so that CSI can set the record really straight.

  • Thomas Matula

    Yes, another long rant by the alt.space community hoping that if they scream loud enough and often enough folks will accept their version of how the world works. Seems the alt.space crowd have imported more from Russia then simple hardware.

    At best COTS is just a form of alt.space welfare that might produce a cargo capsule on a Falcon 9 that will cost more to fly then the Progress does now.

    If alt.space firms really believed what they said about free markets and commercial services they would forget playing Washington politics to get a piece of NASA’s 16 billion dollar budget and learn the Wall Street game in order to go after the 110 billion dollar space telecommunications and remote sensing markets. That is what real space commerce firms like Orbital Recovery are doing.

    Microsoft, Paypal and Apple didn’t succeed because they got government contracts to close their business models. They succeeded by focusing on real markets instead of ones artificial markets like COTS that are invented by playing backroom games in the beltway. If I was Zero-G corporation I wouldn’t touch the new NASA RFP for microgravity flights with a 10 ft pole.

  • cotsfan

    Ben CSI has never sold anything of value. They just sniff the fumes of other people’s accomplishments. Everyone who works for CSI is a whiner and a loser.

  • Nona

    Prof. Matula: is this the same Orbital Recovery that is getting substantial support from DLR and ESA? And is years behind schedule? And doesn’t have customers? And was once backed by Walt Anderson?

    “Real space commerce” indeed, but probably not in the way you intended.

  • Lurking Lurker wrote @ April 27th, 2007 at 5:14 pm
    “And with all the above rebuttal CSI did not even make it to the finals.”

    The subject of the discussion was not about CSI not being selected as a finalist, the subject was your assertions re: CSI’s systems, and the language of the COTS Solicitation. I provided contravening facts. Since you’re trying to change the subject, I assume that you now acknowledge those facts that I stated. If you do not acknowledge those facts, please feel free to provide other data.

    “I guess you forgot that part in the congressional appropriations language that stated that COTS be a vehicle for American solutions to the cargo problem.”

    As I said, CSI bid a COTS solution per the Solicitation that was compliant with all U.S. policy and law, including the post-2012 timeframe.

    Thomas Matula wrote @ April 27th, 2007 at 7:52 pm
    “Yes, another long rant by the alt.space community …”

    I’m not sure if that was directed in response to my comment, but if it was, let me say that I provided facts about CSI’s systems and the language of the COTS Solicitation. I don’t understand how that could be considered a “rant.”

    “If alt.space firms really believed what they said about free markets and commercial services they would forget playing Washington politics to get a piece of NASA’s 16 billion dollar budget and learn the Wall Street game in order to go after the 110 billion dollar space telecommunications and remote sensing markets …”

    The above seems to ignore the actual history of commercial satellite development, much of which has actually intertwined commercial and government activity. For example look at the most successful commercial comsat in history, the HS-601 which is now known as the BSS 601 (I will grant that some would argue that claim, but as an ex-HSC employee I don’t have to agree with them :-) In June 1988, AUSSAT placed the very 1st commercial order for a HS-601 satellite (Optus B1). But the next month (July 1988), the U.S. Navy placed an order for a HS-601, with options for ***9 more***, for the UHF Follow-On program. HSC did not sell a 10th commercial HS-601 until 1991. The government market eventually became an important part of the overall 601 program.

    This kind of development also happened in commercial aviation. Sometime the commercial market lead the government (e.g. commercial DC-1/-2/-3 leading to C-47), sometime vice versa (Boeing’s Dash 80 was aimed at the USAF tanker/transport market, resulting in the KC-135′s, and then the 707 was designed for commercial markets). BTW this cross-pollination between markets and govt.-funded R&D for commercial applications has been the bone of contention between the US and Europe for many years in aviation and space trade negotiations — each side claiming the other’s subsidies are unfair.

    And to state the obvious, with the demise of MirCorp, there are no currently operating commercial space stations in orbit that need cargo resupply. There is how ever one station which exists today that does need cargo resupply:

    “… They succeeded by focusing on real markets instead of ones artificial markets like COTS that are invented by playing backroom games in the beltway.”

    NASA has a mission need for cargo delivered to ISS, unless they want to halt their ISS ops. They have stated this need with cargo manifest requirements in publicly available documents starting with the NASA Alternate Access to Station (AAS) RFI’s and 90-day studies back in 2000, leading into the AAS Phase I program back in 2002 the Commercial Space Transport RFI in Sep. 2004, and the ISS Commercial Cargo Services (ICCS) program in 2005, all of which set the stage for cargo manifest requirements specified for COTS.

    All that, and NASA’s recent purchase of ISS cargo services from the Russian govt., should show that NASA’s ISS cargo market is real, and is not “artificial”.

    Now whether that market is addressable by commercial companies — or even should be — is another matter. But as NASA Administrator Mike Griffin said to the Space Transportation Association (STA) on 11 January 2007: “The collapse of the hoped-for commercial launch market, and consequent higher launch prices for the remaining government customers, are due not to the need for new technologies, as some have said, but for a stable market. With the completion of the International Space Station, NASA can for the first time offer such a market.” He went on to say “Most of the nation’s economy is driven by commercial rather than government interests, and I believe that most of us are thankful for that. In that context, NASA’s announcement that its preferred approach to meeting ISS logistics requirements would be through commercial purchases can hardly be considered “non-traditional”. The vast majority of our economy is fueled by such commercial transactions.”

    I hate to break rambling Internet debate tradition, but I must point out that this issue is in fact at the core of what started this debate on “The consequences of NASA’s ISS resupply contract.”

    However, some people are intellectually bankrupt, and prefer to sling mud …

    cotsfan wrote @ April 28th, 2007 at 12:01 am
    “Ben CSI has never sold anything of value.”

    For the record, CSI to date has won eight prime or subcontract awards. I don’t know what that has to do with the original subject of discussion here, though.

    “They just sniff the fumes of other people’s accomplishments.”

    By “other people’s accomplishments”, I assume you mean that providing improved (and new) capabilities by integrating existing system elements into a new architectures has no value. I wonder what civil architects, who create new building designs from standard components, would think of that. In his speech at Purdue University on 28 March 2007, Administrator Griffin talked in part about the art of engineering design and noted “the fundamental nature of design, which still depends, as it did in antiquity, upon the generation of a concept for a process, technique, or device by which a given problem might be solved.” And in his comments to the STA, Griffin also said “while we sometimes have legitimate reasons to push the state of the art in certain technology areas for a mission, we need to be disciplined in doing so, and to encourage the use of off-the-shelf and commercial hardware in those areas where we don’t need to push the state-of-the-art.”

    CSI focused on solving the problem of improving ISS cargo delivery by working on the overall system “technique” using “off-the-shelf and commercial hardware.” We did not focus on creating new “devices,” since they are not needed at this point to solve the original problem.

    So in working to solve that problem, CSI focused our capabilities on project management and systems engineering. These are not trivial capabilities. At the NASA PM Challenge 2006 Conference, Mike Griffin noted that the losses of Challenger and Columbia orbiters, the HST’s flawed optics, and failures of Mars Observer, Mars Climatology Observer ’99, Mars Polar Lander and Genesis missions were due to failures in program management and systems engineering.” Focused on addressing that need for the development of our systems, CSI was able to assemble a senior management team in our COTS proposal with significant NASA and commercial space experience and accomplishments that was judged by NASA to be a Significant Strength, specifically “The participant’s management team has considerable relevant experience and demonstrated expertise, providing very high confidence that it can successfully accomplish the COTS goals.”

    “Everyone who works for CSI is a whiner and a loser.”

    That CSI lost COTS obviously cannot be disputed. But I think an unbiased person looking at the full management team we assembled might come to a different conclusion that yours.

    Now I would hope that anyone I’ve worked with in my 25 year aerospace career (see http://www.rain.org/~bmuniz/Ben_Muniz_CV_public_29_April_2007.htm for my CV) would say about me that while I have always held strong opinions, I’ve tried to always conduct myself professionally and treat other people with the respect they deserve.

    So I’ll now treat you with more respect that you deserve.

    Anonymous writing has a long and valued existence in political writing (including subjects like space policy), helping in highly-charged debates to separate the merits of a position or argument from the background of the author. And anonymity certainly has a place in whistle-blowing, increasing the likelihood that illegal or unethical acts will be reported.

    But I think that anyone who hurls personal insults behind such a shield fully deserves the title used in Slashdot — “Anonymous Coward” — with all the implications thereof.

    Adam Smith (the economist, not the commenter above) said that it is in the interest of merchants to narrow the competition and expand the market. From the nature of your comments, I’ll assume that you are a CSI competitor (or someone seeking to narrow the market), or perhaps have a personal grudge against someone associated with CSI; your insults should therefore be given the full consideration they actually warrant — none.

    For those who wish to engage in civil discourse on the issues discussed here, please feel free to comment here or contact me directly.

    Ben Muniz

  • Anonymous Coward

    Ben you and your CSI cohorts are still sniffing other people’s fumes. Your COTS proposal was laughed at during review. Anyone who reacts to simple Internet BBS behavior with such a long defensive rant is either insecure or arrogant or both.

  • Jeff Foust

    With that, it’s time to close comments for this post.