Republican Space Socialism Update

by Rand Simberg on May 9, 2012 · 6 comments

in Deregulate to Stimulate, Space

Last time we checked in on this topic, House Appropriations Chairman Frank Wolf (R-Virginia) was decrying the wastefulness of competition. Well, he’s still at it.

A couple weeks ago, the draft report language for the appropriations bill that includes NASA demanded both a reduction in that pesky competition and a return to the traditional acquisition process, rather than the cooperative use of Space Act Agreements that involves private investment:

Commercial crew.—The Committee supports the goal of achieving independent and redundant access to the International Space Station (ISS) but remains concerned about many aspects of NASA’s approach to the commercial crew development program. First, the Committee believes that the program’s total estimated development costs of $4,868,000,000 are too high given that the current commitment to the ISS leaves NASA with only a few years to make use of commercial crew services and no sufficient additional market has been clearly demonstrated in the absence of NASA as a base customer.

Second, the current structure of the program has insufficient safeguards in place to protect the government’s interests in intellectual or physical property developed with Federal money in the event that companies are terminated from or opt to leave the program. As such, there is a risk of repeating the government’s experience from last year’s bankruptcy of the solar energy firm Solyndra, in which the failure of a high risk, government subsidized development venture left taxpayers with no tangible benefit in exchange for their substantial investment.

Third, the Administration appears to be pursuing potentially inconsistent goals for the program: (1) the achievement of the fastest, safest, most cost effective means of domestic access to the ISS, and (2) the ‘‘seeding’’ of a new commercial spaceflight industry. Given the overwhelming importance of the first of these goals, any funding, time and effort expended in pursuit of the second is potentially a distraction from other necessary work, and, in an environment of fiscal constraint, a dilution of limited resources.

Finally, the program’s current acquisition strategy lacks any defined plan to transition from the planned Space Act Agreement (SAA)-based Commercial Crew Integrated Capability (CCiCap) round of awards to a Federal Acquisition Regulation (FAR)-based certification and service contract. As a result, the strategy presents a significant risk of costly, lengthy delays as NASA attempts to retroactively assess competitors’ designs on safety and other standards and companies attempt to make changes in fully mature integrated designs to address instances in which NASA cannot verify that a necessary qualification criterion has been met. The Committee believes that many of these concerns would be addressed by an immediate downselect to a single competitor or, at most, the execution of a leader-follower paradigm in which NASA makes one large award to a main commercial partner and a second small award to a back-up partner.

With fewer companies remaining in the program, NASA could reduce its annual budget needs for the program and fund other priorities like planetary science, human exploration or aeronautics research. In addition, an accelerated downselect would allow NASA to focus its remaining funds and technical assistance resources on the most promising contender, potentially enabling that competitor to produce a final capability faster than otherwise possible. It would also allow NASA to return to its previous acquisition strategy of holding an open competition (to include current funding recipients and new entrants) and following a more traditional FAR-based management approach, avoiding a complex transition from SAAs late in the development process and allowing the government to better protect its interests in intellectual and physical property developed with taxpayer funds. Finally, this strategy is more consistent with current overarching fiscal guidance included in the fiscal year 2013 House budget resolution. In a climate of decreasing non-defense discretionary spending, the Committee does not believe that the Administration’s proposed budget runout for commercial crew is sustainable. [Emphasis added]

Irony abounds here.

First, Solyndra was a company that borrowed money using a half-a-billion-dollar loan guaranteed by the taxpayer, whose investors were major campaign contributors to the White House, and who fraudulently were allowed to get in line ahead of the taxpayers if the loan went south. Commercial Crew is a pay-for-service contract, in which the contributors are only paid when they achieve specific milestones laid out in advance, with little risk to the taxpayer. The notion that (for instance) Boeing is going to go out of business and the taxpayers will be left with no benefit is ludicrous, and any comparison to Solyndra is little short of libelous.

Second, there is a program in which the taxpayers spent not half a billion, but many billions, for little in the way of tangible results — it is called Constellation, the program that was canceled by Congress after it became clear that the Ares I vehicle was going to be years late, cost many more billions, and be unaffordable (or to use the committee’s word, “unsustainable”). And now the Space Launch System, for which the committee wants to fund with almost two billion dollars this year alone, but won’t have a first flight until 2017, and no manned flight until 2021, and will cost at least ten billion to eve get to the first flight, appears headed for the same fate once budget realities kick in with a new Congress and administration. So if you want to look for space comparisons to Solyndra, look at NASA business as usual, not commercial crew.

There are currently at least four (and possibly a fifth, though not funded) candidates to provide crew delivery services to the International Space Station. NASA has repeatedly stated its desire to eventually have at least two providers, both because they want to maintain competition to keep prices down, and so that there is a backup if one of them has a problem (i.e., they don’t want to repeat the mistake of the Shuttle, in which each time there was a problem with it, the agency had no access to orbit for its astronauts for a period of over two years). On Tuesday, the NASA personnel responsible for the program said that Chairman Wolf’s proposal wouldn’t save money, but instead would double the costs:

“We need competition as long as possible. The price to go with one [provider] starting today, and then all the way through certification and into services, is at least twice what it would be if you had competition at least as long as possible,” Mango said.

Mango and other officials spoke with the NASA Advisory Council’s commercial space committee Tuesday.

House appropriators wrote an immediate downselect to one commercial crew firm would reduce the program’s projected $4.8 billion cost, but NASA officials said such a move would move the cost in the opposite direction.

“If we get narrowed down to one [provider] now, we’re kind of back into the same old way of doing business, and that’s why a system costs $8 billion to build,” said Brent Jett, NASA’s deputy program manager for commercial crew.

According to Mango, a budget reduction now would delay the beginning of commercial crew service to the International Space Station, extending U.S. reliance on Russia for astronaut access to space.

Stretching out development would lengthen the gap in U.S. human spaceflight capability and would ultimately make the program more expensive, according to Mango.

“If we did that, then the overall total cost would be more,” Mango said. “The area under the curve is going to go up.”

The administration objected as well, with a veto threat:

The Administration strongly opposes the level of funding provided for the commercial crew program, which is $330 million below the FY 2013 Budget request, as well as restrictive report language that would eliminate competition in the program. This would increase the time the United States will be required to rely solely on foreign providers to transport American astronauts to and from the space station. While the Administration appreciates the overall funding level provided to NASA, the bill provides some NASA programs with unnecessary increases at the expense of other important initiatives.

For “unnecessary increases at the expense of other initiatives,” read (among other things) the Space Launch System.

Now, it’s probably too much to expect a congressperson to know what the phrase “area under the curve” means, but it shouldn’t be too much to expect Apollo astronauts to do so. Sadly, though, perhaps it is. No doubt at his elicitation, Congressman Wolf received a letter of support for his position from Neil Armstrong, Gene Cernan, and Jim Lovell, the first and last men to walk on the moon, and the only one to fly around it twice. This argument from authority might be more convincing had they not made this admission:

Our recollection is that FARs exist to protect taxpayer investments and the best interests of the government by reducing risk in procurement. They were developed over years of experience and represent lessons learned and best practices in contracting. We are generally unfamiliar with Space Act Agreements but understand that they include little in the area of requirements and would be unlikely to provide the documentation that we normally depend upon to provide high confidence in reaching our technical goals.

In other words, despite the fact that they are “generally unfamiliar” with SAA’s, they know the way to go anyway, despite the fact that their experience with rockets consisted of riding them four decades ago, not procuring them. Compound that with the fact that none of them are familiar with any of the companies involved (on Sixty Minutes a few weeks ago, Elon Musk of SpaceX expressed his dismay that none of them — his childhood heroes — has bothered to come even see what his company is doing), and it might be better to rely on the judgment of the people who are actually doing the procuring.

This probably isn’t important in terms of what NASA does over the next year or so — the restrictive language doesn’t appear in the Senate version of the bill, report language is not binding law, and it’s unlikely that the bill will even be passed and signed this year in light of recent history. But it’s a sad indicator that once again, Democrats don’t seem to think that competition works within the atmosphere, and at least some Republicans don’t seem to think it works above it.

Craig May 10, 2012 at 7:25 am

Great article! Don’t forget that SLS is only budgeted to launch once every two years after 2017. It will never be a cost-effective system, and will be another developmental dead end. Far better would have been to drop SLS, and develop deep space capabilities by using existing commercial medium-lift rockets and develop fuel depots at appropriate locations in space. Deep-space spacecraft would launch empty of fuel, fuel up and continue on their way. This added infrastructure would enable further commercial development and exploration, akin to building the railroads in the 19th century and the interstate highways system in the 20th. Why isn’t this happening? Because Congress decided it was better to preserve expiring shuttle-jobs by developing the (sort-of) shuttle derived launch system. Essentially NASA has become a jobs program, not a means for advancing the state of the art in a field critical to national security and economy. If commercial succeeds, and I’m certain it will despite Congressional interference, by the time 2017 comes around and SLS is ready to fly, SLS will be a dinosaur by rocket standards, being outrun by the smarter, smaller mammals around it.

Bob May 10, 2012 at 1:20 pm

Isn’t Socialism another word for Crony Capitalism….?

clifford May 11, 2012 at 3:29 pm

with all those editors did any of them figure out how bidding works for the goverment? the truth is there isn’t any. try looking up the term Prevaling Wage.

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