The Commerce, Justice, and Science (CJS) appropriations bill remains in the Senate, after action on the bill stalled out on the Senate floor two weeks ago due to matters unrelated to NASA. The earliest debate on the bill could resume is early next week, although it’s unclear exactly when they’ll take up the bill again.
The absence of action, though, has not meant an absence of commentary about the bill, in particular a provision in report language accompanying the bill requiring “certified cost and pricing data” from companies receiving commercial crew and cargo contracts from NASA. As floor debate on the bill began two weeks ago, Sen. Richard Shelby (R-AL), who requested that provision, defended it by arguing that it ensures “the price NASA has agreed to pay for vehicle development matches actual development expenditures.” Many in the commercial spaceflight industry, and advocates of that industry, opposed the language, arguing it would drive up costs.
In an op-ed in Space News this week, Eric Sterner of the Marshall Institute argues that, at first look, it makes sense to apply those cost requirements to the commercial crew program, since it is primarily funded by the government, which will also be the primary customer of those services. “Despite constant rhetoric to the contrary, there is nothing ‘commercial’ about the commercial crew program,” he writes.
Yet, he notes that such pricing data is not required for NASA’s existing contracts for crew transportation services from Russia, which “means is that the need for FAR-compliant cost and pricing data is not absolute, required above all other things.” The need to expedite development of commercial crew systems to end reliance on Russia and maximize their use over the remainder of the International Space Station’s lifetime calls for approaches that minimize the bureaucratic red tape associated with conventional contracting approaches, he argues, among other reasons. “When it comes to human spaceflight in the United States, NASA cannot pursue ‘business as usual’ approaches. It lacks funding and time for a traditional procurement or development program.”
Meanwhile, the Houston Chronicle takes a different, and more Texas-centric, approach to its criticism of Shelby’s report language in an editorial Tuesday. Shelby, the paper argues, “wants to drag companies like SpaceX back to Earth and force them to comply with NASA’s usual regulatory paperwork. This idea threatens to kill the goose that could lay the golden egg,” adding that Shelby is perhaps motivated to protect the Marshall Space Flight Center in his state.
“As fans of the Johnson Space Center, we can sympathize with Shelby’s desire to protect his constituents’ jobs against a perceived competitor. But Shelby’s policy is misguided,” the editorial continues. The editorial concludes by asking Texas’s two senators to fight back: “Texas’ own senators should go to bat for SpaceX and ensure that its multimillion dollar investment outside Brownsville doesn’t get tied up in Shelby’s red tape. Shelby is fighting for his state. Where are the Texans fighting for Texas?” The Brownsville reference is to the likely site of a future SpaceX commercial launch site, although it’s unlikely that facility will be used for commercial crew or cargo missions to the ISS.
“Shelby, the paper argues, “wants to drag companies like SpaceX back to Earth and force them to comply with NASA’s usual regulatory paperwork. This idea threatens to kill the goose that could lay the golden egg,†adding that Shelby is perhaps motivated to protect the Marshall Space Flight Center in his state.”
Yep. That says it all. And for someone that supposedly is part of the party that is pro-business and anti-regulation this just goes to show how hypocritical the actions of Senator Shelby are. Indeed, it could be argued that he is directly supporting Putin by his actions…
“When it comes to human spaceflight in the United States, NASA cannot pursue ‘business as usual’ approaches. It lacks funding and time for a traditional procurement or development program.â€
Which is as applicable to SLS as to commercial crew, certainly as far as funding is concerned. NASA officials have occasionally said pretty much exactly that, but NASA corporately says that they’re applying traditional procedures (NPR 7120.7). Not very consistent.
“Despite constant rhetoric to the contrary, there is nothing ‘commercial’ about the commercial crew program.”
That’s a curious statement. So anyone who does a large fraction of their private business with the U.S. government isn’t “commercial”? My impression was that commercial concerns are those who define the product, and sell it. NASA may be a buyer. There can be other buyers. Legacy NASA contracts are those where NASA defines the product, and oversees an external house that builds it. When we say “commercial”, that’s what we’re talking about. So Sterner is just playing with words.
Shelby’s case is just as weird. That “the price NASA has agreed to pay for vehicle development matches actual development expenditures†really doesn’t matter. What counts is that the fixed cost that NASA agreed to pay actually gets them the product. The $1000 toilet seats that the DoD paid for a few years ago were a fixed cost contract. No way did that expense correspond to actual development expenditures. But it was what the DoD agreed to pay. Period. They paid, and they got the product. Much to the embarrassment of the DoD contract monitors.
“So Sterner is just playing with words.”
Sterner was one of Griffin’s lieutenants and has the same love/hate relationship with the commercial programs. On the one hand, Sterner recognizes the reality that commercial crew is the civil human space flight program’s last, best hope to reestablish a domestic capability and get off Soyuz. On the other hand, COTS was successful, while Sterner’s international lunar base effort went nowhere. So like Griffin, instead of owning the one success from that era, he can’t help himself and dings these programs on the definition of commercial, even though: 1) Falcon 9 launches (and Antares is pursuing) commercial comsats and is increasing the US share of the commercial launch market, 2) Sierra Nevada and SpaceX plan to complete their crew vehicles even if they don’t win further government funding; and 3) Bigelow has agreements with Boeing and SpaceX.
Sterner is also confused in the article about the reason for cost-plus contracts. He claims they’re necessary to control costs in monopsony markets. That’s not true. A monopsony buyer can always compete and recompete purchases as long as multiple sellers exist. Or compare quotes from different sellers. That will control costs and maximize value for the buyer’s dollar.
Cost-plus is only necessary when you’re dealing with a monopoly market, which is not an uncommon occurrence in the world of defense procurement. In that case, you must have cost insight/oversight via a cost-plus contract (or other mechanism) because you can’t rely on competition or cost comparisons between providers to deliver value for your dollar.
(The other reason to go cost-plus is when no company is willing to invest to take the risk of developing the product you want, which obviously also applies to a lot of unique, high-tech military systems.)
“Much to the embarrassment of the DoD contract monitors.”
And no type of contract is a cure for stupidity and inattention. If you go fixed price in the absence of competition or comparing prices, you’ll get screwed. And if you don’t stay on top of the big cost drivers and embed adequate incentives in a cost-plus contract, you’ll also get screwed.
You should send a shorter version of this as a letter to Space News
— Donald
Dark Blue Nine said:
“The other reason to go cost-plus is when no company is willing to invest to take the risk of developing the product you want, which obviously also applies to a lot of unique, high-tech military systems.”
And in those cases it’s not always that a contractor doesn’t want to develop a product for the government, but that the definition of the product is incomplete or unknown at the time work is started. Like the SLS was when Congress defined it in broad strokes, but it was up to NASA and Boeing to figure out how to build a working rocket from the pile of parts Congress mandated.
But this doesn’t apply to Commercial Crew, since the companies are designing their own products – NASA is ensuring their standards are being met with the company designs, and offering advice when asked, but otherwise is not responsible for the vehicles.
Hiram: So anyone who does a large fraction of their private business with the U.S. government isn’t “commercial�
If so, that means that, say, Lockheet Martin is not a commercial company. Nor are the contractors that build the country’s freeways, ports, and all the rest of the infrastructure we take advantage. (Interestingly and ironically, the only truly commercial transportation industry in the US that actually pays for most its costs from profits are the freight railroads.) You could make a case either way, but it’s a safe bet LM would not agree they are not a commercial company.
Moreover, while I haven’t seen figures, it is my understanding that Boeing is behaving almost entirely as the usual leach on the government. SpaceX and Sierra Nevada have put significant private money into their efforts. In my opinion, this alone should prevent Boeing from winning a CCtCap award.
— Donald
The fact that there are milestones built into these contracts and that payment by NASA does not occur until they are satisfied that the milestone has been met. Therefore there is inherent in the contracts that NASA is getting what they pay for.
Shelby is just protecting his income stream (i.e. donations) and his state jobs and as has been mentioned, it’s a short-sighted policy. Besides which, he’s just a hypocrit mouthing competitive rhetoric whilst his actions are completely anti.
Cheers.
Last Friday I actually wrote letters to Boxer and Feinstein with copies of page 117 and 118 with Shelby’s language highlit (personal preference versus highlighted). Seemed necessary after my email to Feinstein got an idiotic standardized reply about Russia’s space program.
Texas’, Florida’s and California’s Senators working on the same side?
unbelievable!
I actually wrote letters to Boxer and Feinstein
Best bet is to call their staffers. You’re harder to ignore and you might actually get someone with the bandwidth to listen.
Texas’, Florida’s and California’s Senators working on the same side?
As a (fellow?) resident of San Francisco, I too find this amazing, though not exactly “unbelievable.” Nothing makes friends like a common enemy. (Note in proof: Russia’s and China’s new-found friendship in space in response to what they perceive as the threat from the US. I don’t expect this to go anywhere, but even a few months ago, I would have considered this an unlikely development even as rhetoric.)
— Donald
“… my email to Feinstein got an idiotic standardized reply about Russia’s space program”
That’s why you always call. If they try to lay an idiotic rationale on you, you (gently and politely) set them right. You actually develop a personal linkage with a staffer. E-mails, paper letters, and even faxes are fabulously ignorable on Capitol Hill. A constituent voice is not. BTW, ever since the anthrax episode, snail mail is especially slow, and often sits in giant hoppers waiting to get some sort of clearance. Even then, the metric for opinion is measured in inches (the size of the stack). If you must write a letter, send it to the district office.
My Senator, Ted Cruz is as big of an idiot as Shelby is. But, if he let’s Shelby push this through the Senate, then, he can move his behind back to Canada. This will prove that he is anti-Texan & against Texas businesses & never to be trusted again.
The first thing to go is language.
Those “jobs” in Shelby’s district are a part of the US technical base. Just as the other existing companies are.
Defense contractors have been required to justify the prices they charge to the government since the Civil War.
If Musk wants to develop systems for manned flight to Mars, he’ll have to do it from his own pocket or by bidding for NASA work. DoD is not interested in paying for it.
“Defense contractors have been required to justify the prices they charge to the government since the Civil War.”
That historical requirement for cost justification is true only to the extent that there were cost plus arrangements, or some contractual agreement for such justification. So yep, to the extent there were such arrangements, I’ll bet some defense contractors were indeed required to justify costs. But I’ll bet Lincoln never told Joe’s cannon wheel company that the U.S. needed to see justification of their costs in building cannon wheels before Joe got paid for his work. Joe said “Here’s how much they’ll cost. Tell me how many you want, I’ll deliver, and you write me a check.” Once contractually bound, with a price that looked reasonable and competitive, the government could care less how many timber fellers and lathe operators (and perhaps barrels of whiskey) Joe needed to do the job.
Now, if Joe were going to say “Tell you what. I’ll start working on these wheels, and if I go over my estimate, you’ll just need to agree to pay the extra amount before I deliver.” Then Lincoln would say, “Um, well, we probably should see some justification for why that happened. I sure hope we don’t see a lot of barrels of whiskey that account for the increase over what you originally told us.”
“If Musk wants to develop systems for manned flight to Mars, he’ll have to do it from his own pocket or by bidding for NASA work. DoD is not interested in paying for it.”
That’s right, and at least Musk has a pocket to pay for things he wants to do. DoD not only doesn’t care about trips to Mars, they don’t care a whit about human space flight. So let’s not even bring them into the picture. But let’s face it. The U.S. government is not going to be sending humans to Mars in the forseeable future. I think Musk knows that. Legacy aerospace companies, by the way, aren’t going to reach into their own pockets to do it. That option won’t even be broached.
Hi Hiram –
From your statements here, apparently you know little about contracting and contractors during the Civil War, and thus little about the development of defense contracting law.
You may want to google the subject. Try the phrase “false claims act”.
“You may want to google the subject.”
No, I may not. I’m actually familiar with the Lincoln Law. But you’re welcome to illuminate us here about what that has to do with this topic. I believe it has very little to do with it.
If Joe is paid, and delivers what turn out to be defective cannon wheels to the government, KNOWING that they were defective, an FCA liability is incurred. A fixed price contract stipulates that what is delivered has to meet the procurement requirements. That has absolutely nothing to do with price justification. So you’re saying that Joe should be locked up for charging too much for delivering defective goods? That’s nuts. He shouldn’t have been paid at all.
Please be less clueless.
“Please be less clueless.”
Yes, good advice, Hiram. You do not know what the False Claims Act Covers. I wish it did read the way you understand it, but it does not. Perhaps you would join with me in having its language changed so that it does.
I won’t go into the evolution of military procurement law through WWI or WWII or Korea or Vietnam or Reagan and later.
I will note that given SpaceX’s superb IT abilities, they could sell any system they come up with to other defense contractors. While you are viewing this as a problem, IMO this could actually be an opportunity for them.
If Musk wants to use his reasonable profits from defense contracts to fly men to Mars, that will be his decision.
“I wish it did read the way you understand it, but it does not.”
But you aren’t telling us how you read it. I invited you to do so. Sayonara.
The jobs at Marshall may be part of the U.S. “technical base” but they have been a singularly unproductive part of said base for a long time. I mean really, what has Marshall done since Von Braun died other than tidy up the work on the Shuttle that was already underway – except soak up billions of U.S. tax dollars. MSFC delenda est.
Hi Dick –
Memory may fail me here, but I seem to recall that SpaceX’s engines use technologies developed at Marshall.
You are avoiding the question of why the use of that technical base was not optimized.
I have my answers, but yours may differ.
The Merlin engine, and the Raptor too, so far as I know, are based on pintle injector technology. Wikipedia says the technology was invented at JPL and a predecessor company of TRW. Marshall seems to have had nothing to do with it. The first use of a pintle injector engine of which I’m aware, and which Wikipedia also confirms, was on the descent engine for the Apollo LEM, a Grumman project. TRW later developed quite large engines using pintle injectors but none of them ever flew. SpaceX’s propulsion chief was the developer of these engines at TRW and joined SpaceX supposedly to finally work on something that would enter production and fly.
Not really avoiding anything. MSFC appears to have decided long ago that being a welfare program for men with engineering degrees was a lot easier than being an actual design center and has acted accordingly ever since. Every human spaceflight initiative since Shuttle – with the notable exception of Commercial Crew – has been first appropriated by Marshall and then rendered non-viable by a combination of managerial incompetence, engineering blunders and dog-in-the-manger insistence on maintaining budgets and headcount regardless of results, ably aided and abetted by the genial sleazeballs of the Alabama congressional delegation, past and present, Republican and Democrat.
Since Shuttle, MSFC has produced nothing that has flown except the ludicrous Ares 1-X. A third of a century of sucking up massive amounts of NASA funding without any tangible return is way too much in my opinion. Marshall should be shuttered as quickly as possible. Given the wretched nature of current politics, that probably won’t be until Sen. Shelby either retires or dies.
Dick Eagleson wrote:
Given the wretched nature of current politics, that probably won’t be until Sen. Shelby either retires or dies.
I’m not sure that even death would stop Senator Shelby from re-election. It is, after all, Alabama.
??
It’s Alabama, not Chicago.
Hi Dick –
Given that engineers do like to engineer real and useful products, I am fairly sure that the engineers at Marshall are fed up with the situation as well.
The fault for this lies elsewhere.
I will add that when US industry was healthy, they would have set up labs near the micro-gravity facilities in Alabama.
But since those companies are no longer able to do this, NASA needs to move those efforts to where the client companies are.
To the extent that you are right and that any engineer with both competence and self-confidence has long since left MSFC’s employ, then all the more reason to shut it down and keep the remaining drones from bleeding NASA dry.
CCtCap contract is being issued under Federal Acquisition Regulations (FAR) Part 15. FAR 15 already has rules covering paperwork and cost data that were released in 1997.
https://www.federalregister.gov/articles/1997/09/30/97-25666/federal-acquisition-regulation-part-15-rewrite-contracting-by-negotiation-and-competitive-range
It is up to the Senator to prove beyond reasonable doubt that the normal contractual rules are wrong or inappropriate.
CCtCap is a fixed price contract with at least 4 bidders. That suggests competitive bidding.
The know bidders are SpaceX, Boeing, SNC and Blue origin.
[quote=the SpaceNews article]Cost and pricing data are the principal means of setting a reasonable price and protecting taxpayer interests.
Normally, human spaceflight would fall into this category. The only meaningful customer is the government and it has rather unique requirements. A truly healthy free market does not exist. Moreover, the taxpayers are contributing significant resources to the development of these capabilities, which they then will not own. Despite constant rhetoric to the contrary, there is nothing “commercial†about the commercial crew program. Without government demand, funding and support, the private companies working with NASA likely would not be in this business. Investors and shareholders would not stand for the expenditure of such resources, preferring to chase higher returns in a more profitable sector. This may be changing, but not in a time frame useful for government needs. From that standpoint, the Senate Appropriations Committee’s move to apply the FAR’s cost and pricing data to NASA’s efforts to acquire crewed access to low Earth orbit (LEO) makes perfect sense.
However — and there is always a “however†in public policy — it is also a mistake in this case. The United States does not apply the cost and pricing provisions of the FAR (among others) to its procurement of human launch services from Russia. [/quote]
But, and there’s always a but: I think the current state of affairs resembles Narcisstic Personality Disorder (NPD) more than anything. There are nothing but political and corporate egos who are running the show these days, and they will not let there be any accomplishment unless their damn palms are greased. That’s the only way their egos are assuaged.
Agree with Mr. Fornaro’s last two paragraphs, but not his first two.
Even with only one customer, if there are multiple potential suppliers, then there is a market. It is, also, presumptuous to suggest that there is no private market for human crew launch services. Robert Bigelow, for one, would beg to differ. So, contra Mr. Fornaro, there is plenty that is commercial about Commercial Crew – pretty much everything, in fact. What is completely non-commercial is a no-bid, sole-source block buy contract like the one ULA recently inveigled the Air Force into granting or a sole-source, no-bid, cost-plus, dead-end boondoggle like SLS.
The controversy is not using FAR 15 for CCtCap, that was accepted last year. The noise is coming from the extra none FAR 15 paperwork added by Congress.
“You are avoiding the question of why the use of that technical base was not optimized.”
The answer is partly in why it is that the head of TRWs engender development program’s was building a serious rocket engine in his garage – frustration in an entire industrial culture where nothing happens. Where effort is wasted on an epic scale. At this level of things it barely registers wether it is inside NASA itself or one of the big space contractors.
This is a deliberate policy – lots of jobs in development. Lots of profit. So politicians like it. Senior managers get lots of people working for them…. What is not to like?
Of course some crazy space cadets who have stupid ideas about space travel might get annoyed. But they are irrelevant.
Some interesting stuff I heard from someone who is a very minor bag carrier in DC.
The Shelby stuff is rooted in the anti-CC FUD being sold by certain parties. the song goes like this :
– Real Space ™ can only be done with proctological level of involvement from NASA.
– CC is therefore unsafe
– in addition SpaceX can’t really be that cheap. So what is really happening is that Bolden and company are really stealing money from SLS and Orion and passing it to Musk.
Yes, deranged stuff. The fun bit is that it is all about SpaceX – despite the fact that SNC and Boeing are equal players with them…
The less nutty version of this shows through in the recent interview with Jerry Ross where he implied that SLS was having all it’s money diverted to CC
This is money being spent by NASA. Standard government accounting procedures will show how much money is going to SpaceX, Boeing, SCN and staying within NASA. The audited figures for FY 2013 should be available.
CC and SLS/Orion are not the only rocket programmes being run by NASA. It has some small ones as well. The Centennial Challengers produced demonstration lunar landers – small rockets designed to land on the Moon. NASA has its own called Project Morpheus. Congress may wish to ask for the costs and timescales for these projects.
http://www.nasa.gov/directorates/spacetech/centennial_challenges/lunar_lander/index.html
http://morpheuslander.jsc.nasa.gov
If Congress wants to do a cost investigation ask for a list of documents. Order copies of 3 documents from each of Masten Space Systems, Morpheus, SpaceX and Boeing (SLS) then compare them. Lawyers may not be able to follow the maths but they can read English.
Competition – Masten paid for the documents out of his own money. SLS is cost plus so Boeing is charging the Government for every word.
I have just worked out what is going on.
Malmesbury opinionated
That is not Real Space that is NASA.
Engineering saying from Fast, Good and Cheap pick any two.
When he sent NASA racing to the Moon President Kennedy picked Fast and Good (very difficult). The traditional managerial way of doing something fast is to hire more people. Difficult requires lots of cleaver people organised in a Task culture.
Fast and Difficult = more * lots = half a million people
Whose wages are very expensive.
SpaceX chose Cheap and Slow. It employs about 4000 people.
Commercial Crew is several people to the ISS. The closest to that is Gemini.
NASA was operational in 1958. (Although Kennedy’s speech in 1961 may be a better start date)
Gemini was manned in 1965.
1965 – 1958 + 1 = 8 years
SpaceX was formed in 2002.
Manned Dragon to ISS in 2016 (estimated).
2016 – 2002 + 1 = 15 years.
So SpaceX is taking near twice as long as NASA. Methods of getting to the ISS already exist where as NASA had to invent everything. That is why it is cheaper.
“This is money being spent by NASA. Standard government accounting procedures will show how much money is going to SpaceX, Boeing, SCN and staying within NASA. The audited figures for FY 2013 should be available.”
This isn’t about reality, sadly.
It is about a deep seated belief that (a) it can’t be that cheap and (b) the results are rubbish.
This is why the hardcore SLSites state that CC is wasting vast quantities of money on competition – in their hearts they *know* (in the sense of religious conviction) each CC vehicle must be costing billions a year.
Compared to such *knowledge* what value is a certified audit?
The SLS sites do not make the decision, Congress does. Lawyers have learnt that judges have to listen to both sides of the story.
* If an investigation is held CC has a defence.
* If a witch hunt is started divert it into a warlock hunt. The warlock doing the price goring whilst the people are tricked into looking the other way.
* If an honest price investigation is held then the large quantity of SLS can be shown. New (smaller) documentation standards and fewer big meeting becomes the solution.
In rational terms SLS and Orion are walking dead
In the world of politics they are being kept alive by force of will. That force of will is sustained by “facts” that are increasingly divergent from reality. What d you think will happen when Shelby meets reality? An apology? Or scorched earth and blame for everyone else?
I do not know what Shelby will do when cornered. He may be able to hold thing off until he is transferred to a different committee.
Providing it can fly by 2017 there is work for a 70 tonne payload SLS. It can send things to the Moon. Possibly even two legged things. AES has some prototype machines that need space-rating and testing in a vacuum on a solid surface. However if it misses the 2017 date the new president will probably cancel the SLS rather than give it Moon missions.
The Saturn V, which could put a quarter-miilion pounds into LEO, was barely able to send three men to the moon and land two of them. If an SLS with a measly 70 tonne LEO payload capability – 100,000 pounds less than a Saturn V – could send a man to the Moon it would be just that – a man, one, uno, ein, un, singleton. He’d probably have to put up with a lander not much larger or more sophisticated than a Bell Jet Pack and his re-entry vehicle would have to be something the size of a Mercury capsule. Even then it would probably be impossible. The Moon pretty much left the room as a reasonable SLS destination when the Block II SLS upgrades were cancelled.
Only if you stick to Apollo style single launch Moon trips. The astronauts, lander and propellant can meet up at a spacestation. They can join the rover (SEV) on the Moon’s surface.
Spacestations are about to be come sufficiently cheap that they can be used for a single mission. (However it is trivial to reuse them by restocking the consumables.)
IMHO Within the next president’s term NASA could land 6 tonne payloads on the Moon. This would allow a tiny ascent cabin of about 1.5 – 2 tonnes.
Since many Senators have cars that weight more than a ton the astronauts will have to use something like the Space Exploration Vehicle (SEV) as a mobile home.
I hypothesized a single launch Moon trip because that’s – at least in the minds of its supporters – the whole reason for doing SLS in the first place. Got to avoid that demon on-orbit assembly stuff. Once you open the door to two or more launches per mission, SLS falls off the edge of the universe. The thing is insanely expensive and can’t be built and launched fast enough to support any mission architecture requiring two or more launches.
Neither of these limitations applies to the upcoming Falcon Heavy. I quite agree with you about the utility of LEO space stations as assembly points for Moon mission hardware. Now that Bigelow has emerged from hibernation mode, I don’t think we have more than three years to wait before his first manned hab is up. There are all sorts of architectures possible for even quite plush return-to-the-Moon missions, but SLS is not only not on the critical path for any of them, it’s not on the path at all. It’s off in the weeds somewhere.