Many people who are opposed to the administration’s proposal to invest up to $6 billion over the next five years to develop commercial crew transportation capabilities insist that they’re not opposed to the concept of commercial crew, only the approach. If a company develops a commercial crew system on their own dime, they argue, they’d be happy to support buying services from them—they just don’t want their development subsidized by the federal government. However, one industry official warned last week that such an approach threatens to repeat the history of another program.
George Sowers, vice president of business development for United Launch Alliance, noted during a panel session at the AIAA Space 2010 conference in Anaheim, California, last Thursday that the Evolved Expendable Launch Vehicle (EELV) program had a mixed outcome. The program was a technical and programmatic success, he noted, and “an even bigger success” for the US government, in that it invested $1 billion into the program ($500 million each to Boeing and Lockheed Martin), while the two companies put about $4 billion of their own money to develop the Atlas 5 and Delta 4 launch vehicle families. However, it was “a business failure” for the two companies, he said, as they failed to recoup their investment into the vehicles, especially as anticipated commercial launch demand failed to materialize. He noted that at one point in the 1990s Lockheed had a conservative forecast of 19 Atlas 5 launches a year; current launch rates are instead about five a year, virtually all for government customers.
Sowers noted the parallels between the EELV and commercial crew debates are “kind of eerie”. Because of that, he argued, repeating the same approach of the EELV program, with private ventures picking up most of the costs of developing systems on the basis of capturing promised commercial markets, is unwise. “Assuming the existence of a commercial market to entice or extort the companies to invest is the wrong way to go,” he said. Having the government invest in developing commercial crew capabilities is better for several reasons: the government needs the capability, a commercial approach can reduce costs over an all-government system, and the government can get a long-term benefit as commercial markets do emerge and cost go down as flight rates increase. “The government should invest” up front, unlike the EELV case, he said, “and if the government does invest, then a commercial market can be established and then the government can get its return on investment.”