Space Access Update #132 5/30/13
Copyright 2013 by Space Access Society
In this Issue:
- Commercial Crew, The Budget, and The FARs
Search on "The Sequester" at this point and you'll get over 2.5 million hits, but it's surprisingly hard to find an explanation of the actual mechanics. Briefly, it is a set of mandatory across-the-board post-2012 budget cuts, passed by Congress and signed into law by the White House in fall 2011. It was intended to serve as a political doomsday device that would force resolution of the political impasse over how to deal with continuing high Federal deficits.
As best we can tell, the Sequester failed to force an agreement when the side favoring spending cuts belatedly realized that letting it happen would give them, well, spending cuts, even if in many cases not the ones they would have preferred. After a two-month postponement from its original start date, the Sequester went into effect this March 1st.
The Sequester law sets mandatory overall ten-year deficit-reduction amounts for both Defense and "non-Defense discretionary" programs (IE non-DOD non-entitlement programs like NASA.) The actual reductions come in the first two years, ~5% cuts on overall non-defense discretionary for FY'13 (the federal fiscal year that ends this coming September 30th) plus an additional ~4% cuts in FY'14. Overall budgets will then stay flat (with a ~2% inflation allowance) for the following eight years.
The law specifies that White House OMB must apply the cuts equally down to the budget account level, but need not apply them equally to each type of budgetary resource within a budget account. This gives the White House some limited control over the details of the cuts. Congress of course retains control over each year's nominal budget amounts that the cuts are based on. The potential resulting tug-of-war makes it extremely hard to say ahead of time what this means for any individual program.
One immediate result is that we're now seeing a government-wide case of "Washington Monument Syndrome" (legendarily, what the Parks Service threatens to close first if its funding is cut). Many of the agencies and departments and programs affected are now loudly proclaiming that the Sequester will force drastic cutbacks in whatever they do they hope the public cares about.
There are limits to this tactic, however - when FAA furloughs of air traffic controllers started actually backing up air traffic, the Congress quickly passed a law saying in essence "cut something else", and the White House quickly signed it. The way to bet though is that we won't see such bipartisanship on most lesser program disruptions, but rather bitter political clashes - sometimes crosswise to traditional party lines, depending on the interests involved.
We don't see much chance of the Sequester being repealed or replaced this year or next. Between its cuts, the tax increases enacted at the start of this year, and a slowly improving economy, projected deficits are down considerably from the record levels of the past few years, but are still far too high for budget loosening to be a good bet anytime soon. We expect that it's going to be an interesting next couple of years as the non-Defense non-entitlement parts of the Federal government forcibly get ~9% smaller.
So, the Sequester is in effect, and NASA is not exempt. White House OMB and NASA have some limited discretion in how they allocate the cuts within NASA, but cuts are happening already to this year's funding, and there will be more in the year to come. And of course Congress will decide the baseline FY 2014 (starts October 1st) budget that those second-round cuts will be made from, and thus will have considerable say on individual account levels. But Congress is very unlikely to make up much (if any) of the overall NASA cuts, since they have a host of other budget items also facing cuts.
NASA's annual budget jumped from $15.9 billion in 2007 to $17.3 billion in the first stimulus year of 2008, climbed steadily from there to a peak of $18.7 billion in 2010, and has dropped since - $18.4 billion in 2011 and $17.8 billion in 2012. NASA's current-year budget (FY'13) is nominally $17.9 billion, but as of March 1st the Sequester cut that to $16.8 billion. The White House FY'14 NASA request is $17.7 billion, but the Sequester will cut whatever final budget Congress sets by ~9%. That's $16.2 billion, if Congress leaves NASA's nominal total at $17.7 billion.
The overall balance between NASA programs within this year's budget (FY'13 finally passed earlier this spring, and ends this September 30th) stayed largely unaltered. (All figures are pre-Sequester unless stated otherwise.) Commercial Crew got a significant increase to $525M, from $406M in FY'12 (but still far short of the $830M FY'13 NASA request.) Space Technology also got a respectable increase, from $575M in FY'12 to $642M. The Orion multi-purpose crew vehicle (MPCV) stayed steady at around $1.2 billion, and the Space Launch System (SLS) heavy booster also stayed steady, at something close to $1.9 billion once you add in the various related ground equipment and construction projects. Most of NASA's other major budget items also stayed close to their FY'12 levels - at least before the ~5% FY'13 Sequester cuts are applied.
One notable exception to roughly level FY'13 funding was Planetary Exploration, $1.5 billion in FY'12. The White House cut it back to $1.2 billion in their FY'13 request, Congress bumped that back up to $1.4 billion in their final funding bill, and the White House and NASA then used the reprogramming wiggle room they have (plus the Sequester cut) to trim the final total back to $1.2 billion. This is a preview of the sort of infighting we expect to see more of in the FY'14 budget process.
That's already starting. The FY'14 budget process got underway recently with delivery of the White House budget proposal to Congress. The White House proposal's nominal NASA total is down slightly at $17.7 billion (again, ignoring the ~9% FY'14 Sequester cuts.) The Commercial Crew FY'14 request is once again for a major jump, to $821M, but we have our doubts about that happening - more on that below. Space Technology is up for another increase to $743M. The Orion MPCV request is for a 15% cut, to just over $1 billion, and the baseline Space Launch System development request is down around 10% (although the overall SLS amount including ground equipment and construction projects seems to have declined less than 2%, to about $1.85 billion.)
The relevant Congressional committees are already making clear that they have their own NASA priorities. Spending more on SLS is a particular focus, and the money will have to come from somewhere. Commercial Crew's $821M FY'14 request (a large increase from this year's nominal $525M) is near-certain to again get scaled back considerably.
(See Jeff Foust's Drawing the battle lines for NASA’s 2014 budget for more detail on this.)
NASA has a full plate of programs, several of which are nominally due to ramp up spending considerably over the next few years, but the agency's overall budget is dropping ~9%. Something has to give. Pressure for program cuts and delays will be ferocious, increases rarer and harder to defend, competing priorities far harder to balance. NASA is likely to have a very rough next few years.
Our take on solving the majority of NASA's Sequester troubles is simple: Cut SLS funding by two-thirds, scale the program back to a heavy-lift technology effort, and thus allow the rest of NASA to get on with their useful missions with only mild cuts.
SLS is a jobs program, nothing more. Current levels of SLS funding go largely to keeping various Congressionally-protected Shuttle program remnants alive beyond their time; very little is left to build and operate hardware. It's not clear to us that SLS will ever fly without significant increases on its current ~$2 billion a year. (We, and many others, would vigorously oppose such increases, because they would further cannibalize the useful parts of NASA.) NASA most likely can't even afford to develop and fly SLS, never mind then spend many billions more to develop actual SLS payloads and missions.
Think we're making this up? An independent review of SLS plans by the consulting firm Booz Allen Hamilton singled out the project's cost projections as unjustifiably optimistic: "Finding: There are many instances of unjustified cost reductions in the Program estimates. This exposes the Programs to cost risk and undermines the credibility of the estimate. Cost reductions were generally observed in either of two categories: scope reductions where the removed work will likely be required, or the application of anticipated efficiencies (production, competition, etc.) that NASA has not historically achieved." In other words, SLS's long-term budgeting contains a large element of wishful thinking.
Assuming it does eventually fly, we see nothing SLS might then do in the way of deep-space exploration that commercial boosters plus propellant depots couldn't do sooner and cheaper. Finally, it has recently been pointed out that the current plan to fly SLS once every two years after 2021 (in a probably vain attempt to stay within its likely budget) would mean the launch crews would not get anywhere near enough practice to operate it safely. Shuttle at four launches a year was near the minimum. One launch every two years greatly increases the risk, every time SLS flies, of vital details being forgotten.
Once again, we don't expect the regional SLS coalition in Congress to agree with us - but the time to kill SLS is now. Failing to do so now will greatly increase cannibalization of other (useful) NASA programs, damaging the agency more with every year that passes. At some point, the rest of Congress will realize that SLS is no longer just Congressional horse-trading as usual, that it's destroying NASA programs the country both needs and cares about. The sooner that day comes, the sooner NASA can get back to actually exploring space within a budget likely to remain austere for years to come.
Commercial Crew, The Budget, and The FARs
For the third year in a row, NASA is asking Congress for over $800 million for the Commercial Crew program (CCP), the NASA-commercial partnership to competitively produce affordable new US crew transports for Station. For the third year in a row, Congress is not likely to provide more than a fraction of that amount. And for the third year in a row, we have no intention of fighting for full funding, despite the fact that we very much support this program.
Partly this is because we again see zero chance of Congress funding CCP at the requested level no matter what we do. But also, once again, we think Congress reducing CCP funding from NASA's request may actually do more good than harm.
This requires a bit of explanation...
Back in 2011, NASA was getting ready to take CCP to its third phase, CCiCap (Commercial Crew integrated Capability), where complete crew transportation systems would be designed and initial demonstrations flown. CCP up to that point had been run under a special type of contract called "Space Act Agreements" (SAAs), designed to allow maximum flexibility for NASA-industry cooperative projects. The result had been rapid progress at costs many times lower than traditional NASA development projects run under the standard Federal Acquisition Regulations (the FARs).
However, factions in Congress and in the NASA "Human Spaceflight" (HSF) establishment wanted this next CCiCap phase to be run under the FARs as a traditional NASA procurement. Under pressure, in summer 2011 NASA HQ announced plans to run CCiCap under standard FARs-based contracts.
We had a few things to say about this at the time. From SAU #127, July 2011, and SAU #128, September 2011:
"They plan to switch over to contracts under the standard Federal Acquisition Regulations (the FARs) for the remainder of the program. The reason they gave was that SAAs don't give them sufficient control over the details of the commercial crew launch projects, nor sufficient authority to order changes in mid-project."
"Our short response: Excessive NASA bureaucratic control over project details, plus NASA's bureaucratic tendency to mandate mid-project changes with no consideration for cost and schedule effects, are major parts of why big NASA projects so consistently run years (if not decades) late and cost ten or more times the commercial equivalents."
"COTS, and CCDev till now, succeeded because their non-traditional Space Act Agreement contracts prevented NASA from imposing their normal procurement practices, and allowed the commercial partners to get things done at far lower commercial cost levels." "...the basic fact [is] that by their own admission NASA costs for [even] 'modified, streamlined' versions of their normal procurement process are still up to six times equivalent commercial costs."
"If CCP management goes ahead with [the switch to FARs] they will be effectively killing the program, absent money miraculously raining from the skies." "...all the arguments over whether the results will actually be any better or safer are moot. There will be no results, because the money isn't there."
When Congress trimmed NASA's $850m FY'12 CCP request to $406m, apparently our arguments gained some force. From SAU #129, December 2011: "NASA has announced that in order to make the most of the limited Commercial Crew funding in this year's budget, the program will continue with multiple competitive Space Act Agreements (SAAs) with the commercial crew developers, rather than (as had been announced over the summer) switching over to contracting under the standard Federal Acquisition Regulations (the FARs)."
Now, two years later, CCiCap has also been working fine without benefit of FARs-based contracts, but NASA HQ, again under Congressional and NASA HSF pressure, is planning to cut CCiCap short and skip ahead to the next phase, Certification Products Contracts (CPC), once again ditching SAAs to contract CPC under the FARs. (The first round of CPC contracts, $10m each to the three CCP competitors, are already in place.)
(Are we the only ones feeling a strong sense of deja vu here?)
CPC is where the Commercial Crew systems will be gone over by NASA HSF in excruciating detail, in order to be officially NASA-certified to carry NASA employees. CPC is supposed to finish (assuming max requested budgets and if all goes well) with initial flights to Station in 2017. This schedule is important - NASA just finished contracting with the Russians for a half-dozen more Soyuz seats (at more than $70m a seat) to carry them to 2017. If Commercial Crew is delayed further, the next batch of Russian seats will certainly cost even more.
We've already pointed out that "max requested budget" just isn't going to happen - we'll be pleasantly surprised if Congress provides two-thirds of the request.
Nor do we think very much of the solution some in Congress have been pushing, an immediate downselect from three CCP competitors to one winner. NASA has not had a good track record picking winners in recent decades. (Venturestar, anyone?) Nor is picking a monopoly provider and eliminating competition early any way to hold prices down over the long term. Picking an early winner also places all NASA's eggs in one basket. If the "winner" stumbles, NASA yet again ends up with nothing for our money.
We also think the micromanagement mischief the NASA HSF establishment could do under FARs-based contracts is only amplified in the CPC certification phase. The potential for endless delays and cost increases as HSF insists on systems that already work being redone their preferred way is huge. Even with a downselect to one vendor, it's entirely possible the FARs-based certification process would end up behind schedule and over budget. "...by their own admission NASA costs for [even] 'modified, streamlined' versions of their normal procurement process are still up to six times equivalent commercial costs." (The unmodified, unstreamlined version costs ten to fifteen times more than commercial - see SAU #128 "Impossibly high NASA system development costs are the heart of the matter".)
Speaking of NASA certification of commercial ships to fly NASA employees - why? Every other person who will ever fly on these vehicles will do so under FAA AST paperwork. NASA does not specially certify commercial air transports to fly NASA's people, they buy airline tickets like everyone else, while FAA handles air vehicle safety. Why should commercial space transports for routine flights of the sort we've been doing for fifty years be different? Why are NASA astronaut transport safety requirements so different from those of commercial pilots and passengers? Why do NASA astronauts require a billion dollars worth of certification paperwork before they can follow where commercial test pilots will have already gone? The only answer we can see is that NASA HSF just doesn't want to give up its traditional ultra-detailed (and ultra-expensive) control of the spaceflight process.
"Safety" gets cited as a certification benefit a lot, by NASA HSF to Congress, and by Congresspersons to the world. Some legislators don't know any better, and some stand to lose projects in their districts if Commercial Crew is allowed to finish utterly discrediting the traditional NASA development model (exemplified by SLS.) But all involved should keep in mind that NASA's traditional safety-assurance model led to losing the crew twice in 135 missions, before they just assume that "certification" will improve safety enough to justify the cost and delay. If, that is, it improves safety at all. Aerospace history is full of instances where well-intentioned "improvements" killed people.
Everybody involved with CCP seems to understand that the only practical option is to stick with SAAs, but nobody quite wants to come right out and say it. Administrator Bolden was asked earlier this month whether SAA's provided a sufficient degree of oversight and insight into what the commercial crew developers were doing. Bolden's reply was that SAA's are "good enough". And SpaceX pointed out recently that there are options under CCiCap for competitors to fly their own test crews on their vehicles, as soon as 2015 for SpaceX and 2016 for Boeing. That would be a major step toward assurance that the vehicles are ready to transport NASA employees in 2017 - if it's allowed to happen.
Certainly NASA HSF contains valuable spaceflight expertise, among all the bureaucratic dysfunction. SAAs have allowed the CCP vendors to access this expertise, while avoiding the worst of the bureaucracy. Certainly NASA as the lead customer for (and partial financer of) these services deserves deep insight into just what it is they're buying, and oversight of whether or not it will do the job. Insight into the process, oversight of results, yes. Traditional NASA FARs contract we-need-you-to-reverse-the-fixture-threads-on-that-gold-plated-kitchen-sink-we-made-you-add micromanagement, no.
If it ain't broke, don't fix it. If we actually want multiple viable US commercial space transport vendors to emerge from the Commercial Crew program, the only sensible thing to do is continue running it under what's gotten it this far: Space Act Agreements.
The 2013 edition of our Space Access Conference went well. We were once again fortunate to have a schedule full of interesting speakers (SA'13 conference agenda) willing to show up and share. Attendance was up slightly from last year - given the economy we're very pleased. The proportion of student and new attendees was up also, something we've been working on in recent years. We're in this for the long haul, and the future of this field depends on bringing in new blood and helping them get up to speed on things. (There was considerable deja vu involved, as that's where we first started over twenty years ago.)
The new hotel and neighborhood (lots of nearby restaurants) got generally positive reviews. We've opened discussions with that hotel about hosting next year's conference. The SA'14 dates we're currently looking at are Thursday-Saturday, April 3-5 or April 10-12, 2014, leaning toward the latter. If anyone is aware of major conflicts on either of those dates or has a strong preference, drop us an email.
Conference coverage: As usual, Clark Lindsey of NewSpace Watch did an amazing job, both covering the conference in detail and rounding up pointers to other coverage. His Space Access'13: Summary and Resources leaves very little out; the only things we can think of to add are Jeff Foust's Space Review piece Hacking Space, and a pointer to Twitter coverage under the hashtag #sa13 (somewhat confusingly, other events have used the same hashtag, but it's pretty clear which are which.)
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