NASA

Another call for—and warning about—commercial crew funding

As NASA celebrated the end of its Commercial Orbital Transportation Services (COTS) program at a press conference in Washington on Wednesday, it also made another pitch for the program following in COTS’s footsteps, the Commercial Crew Program. But as NASA leadership were calling for full funding for commercial crew, a separate report by NASA’s Inspector General said it looked increasingly likely NASA would not be able to support more than one company in the next phase of the program.

“It’s now critically important to get full funding from Congress to keep us on track to begin these launches in 2017,” NASA administrator Charles Bolden said in opening remarks at the COTS press conference, referring to commercial crew. He said that NASA will release the request for proposals for the next phase of the program, called Commercial Crew Transportation Capability (CCtCap), next week (November 19, according to a notice by NASA earlier this month.) “In many ways, the completion of COTS is simply a passing of the torch of innovation to our partners in the commercial crew program.”

NASA requested $821 million from Congress for commercial crew in its fiscal year 2014 budget proposal. However, House appropriators only offered $500 million for the program in its spending bill, while their Senate counterparts proposed $775 million. (There’s been no recent action on either bill as appropriators await the outcome of broader House-Senate budget negotiations.) In late July, shortly before announcing plans to leave NASA, then-deputy administrator Lori Garver said the Senate figure would be good enough, but pressed for full funding to stay on schedule and “keep competition as long as possible.”

“It’s obviously a very difficult budget environment for all discretionary programs,” said Phil McAlister, director of commercial spaceflight development at NASA, during Wednesday’s press conference. “We’ve said this many times: less money means we go slower than we’d like to go. It’s a pretty straightforward equation.”

An alternative would be for NASA to downselect to a single company in the CCtCap round, a move some in Congress have endorsed to keep the program on schedule with constrained funding. “Getting the systems as soon as possible and also having competition are both goals that NASA would like to maintain through this program,” McAlister said. “I can’t say one is more important than the other.” He added they would wait to see the contents of the CCtCap proposals, due in January. “Those proposals will really dictate how fast we go and how many we have.”

Shortly after the press conference ended, NASA’s Office of Inspector General (OIG) issued a report on the commercial crew program, identifying funding as one of several key challenges it faces. The report noted that the program has received only 38 percent of its original budget requests in fiscal years 2011 through 2013, pushing back the beginning of service to 2017. “Generally speaking, we determined that each year’s budget decrement has resulted in an additional year of schedule delay,” the report concluded. “Even if the Program receives its full budget request in future years, the cumulative difference between the Program’s initial budget requests and receipts over the life of the Program would be approximately $1.1 billion.”

The report added that continued funding shortfalls could force NASA to downselect to a single company in the upcoming CCtCap contract. “While NASA officials said they would prefer to continue to work with at least two companies until the transportation services contract, a lack of funding will likely require them to ‘down select’ to a single partner during Phase 2 of Certification [aka CCtCap], which is currently scheduled to begin in mid-2014.” The reports adds that such a downselect, while saving money in the short term, may drive up costs in the long term based on experience with other major spaceflight programs.

The OIG report includes one additional item of interest about commercial crew funding, regarding the amount being provided by the industry partners. Specific amounts of investment by the commercial crew partners—Boeing, Sierra Nevada, and SpaceX—have been hard to come by; specific information has been redacted from their Space Act Agreements, and company officials have spoken only vaguely of making significant internal investments. However, according to the OIG report, the commercial crew partners have contributed “under 20 percent” of the overall development costs for the ongoing Commercial Crew Integrated Capability (CCiCap) effort. By comparison, the report notes that the two COTS awardees, Orbital Sciences and SpaceX, contributed “roughly 50 percent” of the total development costs of their systems.

25 comments to Another call for—and warning about—commercial crew funding

  • Ben Russell-Gough

    Regarding the difference in private/public funding for crew and cargo, this doesn’t surprise me as crewed spacecraft are more complex and more expensive machines.

    That said, it is worth noting that the figures are harder to calculate with SpaceX. By OIG’s own figures, SpaceX contributed around half of the cost of developing the Dragon spacecraft to its initial uncrewed version. So, what they’re currently providing around a fifth of the cash to fund is turning the cargo ship into a piloted ship. That probably means the overall NASA contribution for SpaceX will be significantly lower than for CST-100 and Dreamchaser, which are both clean-sheet projects.

  • Coastal Ron

    …the commercial crew partners have contributed “under 20 percent” of the overall development costs for the ongoing Commercial Crew Integrated Capability (CCiCap) effort. By comparison, the report notes that the two COTS awardees, Orbital Sciences and SpaceX, contributed “roughly 50 percent” of the total development costs of their systems.

    I think this is due to the business risk between cargo and crew, but not for reasons of safety. I think it’s due to the potential service life of any contracts.

    For instance, when Commercial Cargo was bid, the winning companies could expect to have at least two service contracts (CRS-1 thru 2015, CRS-2 through at least 2018) even if the life of the ISS was not extended. That is not the case with Commercial Crew, which won’t start service till at least 2017, and could only be needed through 2020 if the ISS mission is not extended.

    It’s not complicated. And it’s completely understandable, especially since the U.S. Government is not the most reliable customer companies work with.

  • Boeing wouldn’t have bothered if they didn’t think they had enough Congress-critters on their side to support the old expensive launch paradigm.

    SpaceX couldn’t care less. Their pricing puts everyone else out of this business in a short number of years. DoD mission planners will also be unable to not consider and purchase SpaceX launch vehicles. Dream-chaser if abandoned by NASA, might want to consider a cheaper launch provider; which again means SpaceX or Dream Chase wil lgo the way of most dreams.

    As Elon said, he has no serious competition except China.

    • Coastal Ron

      sftommy said:

      SpaceX couldn’t care less. Their pricing puts everyone else out of this business in a short number of years.

      I think you are ignoring a huge issue, which is money. SpaceX DOES care about cash flow, since without it they can’t get everything going to become truly successful. The investment from NASA is not something to sneeze at, and it is unknown if SpaceX would have continued the pace of Dragon Crew without NASA’s near-term need and funding.

      As to their domination of the launch market, the satellite market doesn’t want anyone to have a monopoly, no matter how benign it may seem. They will continue to support the #2 and #3 more expensive launch providers because it makes business sense to have options. It’s just a cost of business, and as long as SpaceX is lowering the average price anyways, it’s all good.

  • amightywind

    CC clearly is delayed beyond 2017, putting it at risk of cancellation by the next administration. By then these fast paced private programs will be in it their 13th(?) year of existence without a manned flight. (A failure, and a redundant one at that!) The ‘space entrepreneurs’ clearly need access to a level capital that their business plan cannot support. Can you say government bailout? Crony capitalism in this country stinks to high heaven.

    • Dark Blue Nine

      “CC clearly is delayed beyond 2017,”

      Dragon is still working towards its first crewed mission in 2015-16:

      http://www.spacex.com/dragon

      SpaceX has the motivation and resources to finish it even if NASA turned off the spigots tomorrow. In fact, they might finish more quickly without unnecessary NASA requirements and reviews.

      “putting it at risk of cancellation by the next administration.”

      Unlikely. The development program will be done by then, even for CST-100 or Dreamchaser. It took the Obama Administration two years to terminate Ares I.

      MPCV/SLS in 2017, by contrast, will still have another four years of development to go and another potential change of Administration before its first crewed mission. It’s much more likely to get terminated under a new Administration.

      “By then these fast paced private programs will be in it their 13th(?) year of existence without a manned flight.”

      Commercial crew development (CCDev1) started in 2010. It’s been going for 3+ years, not 13. Learn 1st grade math.

      “Can you say government bailout?”

      A bailout is government intervention in a commercial market, like car manufacturing. The government buying the capabilities and services it needs is not a bailout. That’s just the government acting as a customer. Military equipment, Park Service uniforms, and embassy supplies are not “bailouts”. Neither is space transport for government needs.

      “Crony capitalism in this country stinks to high heaven.”

      It sure does. Awarding tens of billions of dollars to Shuttle and failed Constellation contractors in the absence of any competition for an MPCV capsule that’s thousands of pounds overweight and a kludged SLS HLV that requires five different engines, will only fly once every two years, and can’t meet NASA’s Mars DRM requirements is one, huge, stinking, pile of holy crap.

      • josh

        you’re such a hypocrite. the delays are due to chronic underfunding. still, spacex will likely fly in two or three years. while orion still sits on the ground even though ten times as much money is being spent on this useless make work project.

    • josh

      commercial crew started in 2011 and has been chronically underfunded ever since to protect useless jobs (like yours).

  • Vladislaw

    Wonders … did windy break out laughing hysterically when he typed:

    “The ‘space entrepreneurs’ clearly need access to a level capital that their business plan cannot support. Can you say government bailout? Crony capitalism in this country stinks to high heaven.”

    and with a straight face supports the 100 billion dollar nightmare Constellation/SLS.MPCV ?

    A disposable capsule that could have been built LITTERALLY out of solid diamonds and been cheaper than the current Orion/MPCV.

    • Hiram

      Well, crony capitalism stinks to high heaven, and the cronies and their constituents absolutely love it. I vividly recall stopping on the highway long ago at a cafe near a pulp and paper plant that was obviously a major employer in the locale. The plant stunk to high heaven. I mentioned that stink to the waitress. She grinned, and said, “Oh, we LOVE that stink!” But, you know, that’s what human spaceflight is mostly about. It’s a pump that pumps dollars into selected congressional districts. That pump is most efficient when it is primed by big stinky things like SLS and Orion.

      That’s what’s so good about space entrepreneurs compared to Congress. Their ultimate motivation is making money, not spending it with a fire hose. Their plan has a clear value metric, that goes beyond just creating jobs and votes.

      • Coastal Ron

        Hiram said:

        That’s what’s so good about space entrepreneurs compared to Congress. Their ultimate motivation is making money, not spending it with a fire hose. Their plan has a clear value metric, that goes beyond just creating jobs and votes.

        Well said.

        And while that may not mean the fastest route to the Moon and beyond, in this day and age it is likely the most sustainable. Especially since there is no current, acknowledged rationale for spending profligately on HSF like Congress is forcing NASA to do with the unneeded SLS and the uninspired MPCV.

        • James

          Especially since there is no current, acknowledged rationale for spending profligately on HSF like Congress is forcing NASA to do with the unneeded SLS and the uninspired MPCV.

          From a congress critter perspective there is rationale. It’s called ” I got to get re-elected, even if it means screwing the rest of American who dont’ vote in my district/state”

          From any level headed American’s perspective, indeed, there is no rationale.

          NASA Human Space Flight is like the chicken who has had his head chopped off. It still walks around thinking it’s alive. Eventually though it will fall over and drop dead.

    • amightywind

      $100 billion? There is only one technological program in history that has touched that number, our beloved ISS. Would that we had invested the $100 billion in a shuttle replacement, instead of a prop for Putin’s torch run.

      • Coastal Ron

        amightywind said:

        $100 billion? There is only one technological program in history that has touched that number, our beloved ISS.

        Oh what a short memory you have. Just the most recent debacle with NASA was on track to blow through $100B – you know, the program that was known as Constellation?

        NASA estimated that the Constellation program would have cost over $97 billion (in 2008 dollars) through 2020, half of which would be for Ares I and Orion. And since the Ares V wouldn’t have finished until the mid-2030′s, Constellation would have likely blown through $150B quite easily.

        It’s amazing how blind you can be to reality…

      • josh

        totally ignorant, as usual. apollo cost around 200 billion in today’s dollars.

  • Dark Blue Nine

    “$100 billion? There is only one technological program in history that has touched that number, our beloved ISS.”

    Bzzzt, wrong again, nitwit:

    “Everybody knows that the Apollo program costs $20 billion in 1970s dollars—the equivalent of $100 billion in today’s money.”

    http://www.thespacereview.com/article/1579/1

    • amightywind

      “Everybody knows that the Apollo program costs $20 billion in 1970s dollars—the equivalent of $100 billion in today’s money.”

      By your moronic reasoning any gobment program will cost $100 billion if you wait long enough.

      • Dark Blue Nine

        “By your moronic reasoning any gobment program will cost $100 billion if you wait long enough.”

        It’s not moronic to employ basic economic principles like inflation when comparing programs from two different time periods like ISS and Apollo.

        Your claim that ISS is the only program “in history” to hit $100 billion has to be assessed in today’s dollars because ISS is an ongoing program and historical programs are not. When we do that, Apollo is a $100 billion program. Your statement, as usual, is patently false.

        Your facts are wrong. Your use of economics is wrong. Try to get something, anything, right before you post. If you can’t, then don’t post, you ignorant, flaming idiot.

    • josh

      i think nasa estimated it at 170 billion a couple years back. should be more like 200 billion now.

  • numbers_guy101

    Consider the scenarios here, both how the current situation has evolved and why, and then where it is going. Think of this with a certain dose of narrowing down to what is inevitably probable. Think of this in a Hari Seldon sort of way, how the story so obviously ends. Obvious in retrospect, that is.

    First, looking back, there was a time when the key variables for getting a US crew capability again after the loss of Columbia revolved around 4 items. First, how long was the ISS going to continue? Second, would the Shuttle decision be retracted? Third, would Ares I and the CEV (Orion) be developed on schedule, to service ISS some years? Lastly, would commercial cargo and crew keep at it, meaning having some minimal but real support, over time, on some level?

    There were people in the 2008 time-frame who I know already had a good idea on all these questions as to how they would turn out, principally by seeing that big budget plus ups as well as big budget shifts were unlikely to occur anytime soon and for years out once we started down the path of ending Shuttle flights. The key was giving credit to inertia where it was due. That meant ISS was staying. That meant Constellation as a multi-vehicle exploration program was not going anywhere, as this had been a bet on the ISS money (and commercial cargo and commercial crew funds) becoming fully available. So ISS sticking around meant commercial cargo and crew were sticking around. The hard one to call at the time was about the Shuttle decision. My own opinion at the time was the decision on Shuttle would not be reversed, simply because no one trusted NASA anymore to not lose another Shuttle, as we had lost all safety credibility. No one would want to be the person who played a key role in reversing the end-of-Shuttle decision, only to later be held responsible when another loss were to occur. Anyone considering championing such a reversal on the Shuttle decision, meaning a politician, would hthink about this consequence. After Challenger, yes, a second chance. After Columbia, no such being believed the system could be safe ever again. Far easier to support a thing far in the future.

    Now that may sound a bit like too much Monday morning quarter-backing, granted. But some people did document and/or lean this way in discussions about this combination of inevitable outcomes way back when. How all four of these factors ended was something called rather well by some.

    So fast forward to now. Lets try this again. Does anyone honestly think the ISS will be de-orbited in 2020? This affects the commercial crew business case for some players, but not all. Think of it this way – think optics – which president want’s to campaign on bringing the ISS down in a fireball that who knows just might show up on you-tube and go viral? So it’s safe to say that the ISS will be around as long as it can be be, even bandaged, repaired, and by hook and by crook. Far easier to “support” the ISS.

    Now consider budgets. Are they likely to be tight for NASA for the next decade? Flat is the new increase? So commercial cargo contracts will get extended. Throw a few hundred million the way of commercial crew year after year (less than current). Which company is likely to get to a crew capability even with such small amounts? Not when, but in ANY time-frame well before an ISS end? CST-100 comes out of this commercial crew cycle with information, a critical design review. And some mock-up hardware and some prototype pieces. And Boeing hemming and hawing about the business case in the news. Drawings and plans. DreamChaser not too far behind, more design maturity, on paper, with a few flight tests of boilerplate articles as well. Dragon gets as far as the same critical design review, plus an in-flight launch abort test, and a ready and waiting production line already spitting out cargo-Dragons. Cargo Dragons that will likely be needed after the current cargo contract…in a new series of contracts…

    So, if you ended the Soyuz payments at about $150M a year, kept all the acquisition capability (and costs) in place, and added in the mere few hundred million of Commercial Crew yearly funding, who can launch crew twice a year for about $200M a flight (spacecraft and launcher)? Who could complete a spacecraft, for only some few hundred million more here and there?

    Atlas’s alone cost more than $200M a flight. That’s without a spacecraft. Flat budget’s are actually a loss of purchasing power. That will affect Orion, SLS, and any traditional business-as-usual programs more than programs that favor ever increasing efficiency.

    I think we all know where this ends up, by just the numbers.

    • Coastal Ron

      Nice historical summary.

      numbers_guy101 said:

      Atlas’s alone cost more than $200M a flight.

      I’d have to dig around, but I thought ULA stated that the price for the Atlas V-402 would be around $140M. The -541 version was recently stated to be above $200M.

      I think we all know where this ends up, by just the numbers.

      SpaceX of course.

      But the bigger question is whether the U.S. will continue to stay in space, and that means supporting the ISS. Without the ISS, and with the lack of an affordable space exploration architecture, our space skills will stagnate. Using the SLS/MPCV to fly in space for a couple of weeks every 2-4 years is not enough to keep the momentum we have had in space for the last 13 years of continuous occupancy on the ISS.

      We have spent the past 13 years living and working in space, and we still have a lot to learn about living and working in space. Progress is being made, but we’re still a long way off from living somewhere beyond LEO.

  • Andrew Swallow

    SpaceX can get a head start by launching a manned Dragon with a Common Berthing Module (CBM). Where as its rivals have to wait for their NDS docking ports to arrive.

    Using a CBM is a third class way of docking to the ISS but the USA could get people to the ISS that way. In practice it is a trick to use when negotiating with the Russians.

    • Coastal Ron

      Andrew Swallow said:

      Using a CBM is a third class way of docking to the ISS but the USA could get people to the ISS that way.

      Won’t happen, and for good reason. It’s not safe. If the point of having a spacecraft at the ISS is to be able to leave in an emergency, then you can’t do that with CBM ports. Sure you could do test flights with one, but I doubt the safety experts at NASA would sign off on having a vehicle dock with one.

      In practice it is a trick to use when negotiating with the Russians.

      The Russians are pretty smart, and they would see it for what it is. Besides, they know that as long as the U.S. doesn’t have a real crew transportation alternative to the Soyuz, they don’t have to drop their prices, and could continue to increase them.

  • vulture4

    agree except that ULA could cut cost on Atlas (maybe not as much as Falcon) and still make a profit if they are given an incentive to do so.

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