Category / Space

by dietrichknauth

$6.8B NASA Contract Gets Green Light Despite GAO Protest

By Dietrich Knauth

Law360, New York (October 22, 2014, 5:30 PM EDT) — A federal judge on Tuesday allowed NASA to move forward with a $6.8 billion space transport contract awarded to SpaceX and Boeing Co., letting the agency take the unusual step of overriding the automatic stay that is triggered by protests at the Government Accountability Office.

Losing bidder Sierra Nevada Corp. had protested at the GAO after being denied a chance for further work on a contract to develop privately owned space vehicles that will be used to transport NASA astronauts to the International Space Station and back …

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by dietrichknauth

Gov’t, Private Space Industries Becoming More Intertwined

By Dietrich Knauth

Law360, New York (August 7, 2014, 9:40 PM EDT) — U.S. funding and support for commercial space companies, often with the goal of graduating those companies into more typical government contracts, have increasingly blurred divisions between commercial and public projects in the space industry, a panel of attorneys at the American Bar Association’s annual public meeting said Thursday.

The panel in Boston noted that the mixing of Space Act agreements with more typical contracts governed by the Federal Acquisition Regulation has created more opportunities for the growing space industry, while also creating new regulatory challenges for the agencies involved in regulating space launches.

“What you’re seeing here, with FAR contracts and Space Act agreements more broadly, is a new blurring of the lines between government and commercial programs,” Chuck Dickey, general counsel for Lockheed Martin Space Systems Co.

A recent example of that blurring is NASA’s Orion program, which aims to build a next-generation space shuttle that can take astronauts to Mars and beyond, according to Dickey. Test launches for the program began with indemnity provisions governed by the FAR contract and the company’s NASA contract, but later launches have involved the Federal Aviation Administration’s requirements for indemnifications and waivers of liability, which are more often used in commercial space launches, Dickey said.

Space Act Agreements are not subject to the competition or pricing rules in FAR and allow NASA to pursue a wider variety of partnerships in its quest to support America’s nascent commercial space industry.

Agreements under the act are generally classified as funded agreements, in which NASA pays contractors who are working in support of a NASA mission; non-reimburseable agreements, in which NASA and its partners bear their own costs for joint projects; and reimburseable agreements, in which contractors pay NASA to borrow NASA facilities or expertise to support a commercial project.

Julie Jiru, a contracts officer with Space Exploration Technologies Inc., said that NASA support in Space Act projects like the Commercial Orbital Transportation Services and Commercial Crew Development program have helped SpaceX win contracts for a NASA commercial launch market that didn’t exist until recently. The law allows companies to turn the tables on the normal government contracting by hiring out NASA expertise to support commercial goals that line up with NASA’s mission.

“When we talk about government contracts in general, it’s usually thinking of what does the government want from you — what do you do for the government, what are the requirements, etc.,” Jiru said. “The reimbursable space act agreement is fantastic, because it’s finally about us and what we want. We get to choose the technology and expertise we want from the government in order to advance and improve our own space technology.”

The agreements share one thing with typical government contracts though, Jiru said. They allow the government to leverage its weight to get favorable terms; namely insisting on upfront payment for its services.

“It wouldn’t be government contracting if it wasn’t a little contradictory,” Jiru said. “By ‘reimbursable’ Space Act agreement, what the government means is ‘prepaid’ Space Act agreement.”

The increasing mixture of NASA contracts and NASA-supported commercial launches makes it more difficult for the FAA to handle cross-waivers, which essentially prevent any of the parties involved in a space launch from suing each other for damage or liability during a launch or reentry, according to FAA attorney Sabrina Jawed.

It is not uncommon for NASA to contract with a company like SpaceX or Orbital Sciences Corp. to send “a black box of stuff” into space, but NASA’s secrecy about some of its payloads makes it difficult for the contractors to obtain necessary waivers, Jawed said.

“This causes a big issue because we at the FAA have a regulatory requirement that SpaceX or Orbital Sciences gets the signature of every customer on the cross waiver, and they have to do this prior to launch,” Jawed said. “They’re required to do this by law, but how are they going to do this if have no idea what’s in the black box?”

Thus far, the FAA has been issuing waivers to the regulatory requirement since NASA has a similar cross-waiver and can typically assure FAA that it has appropriate waivers in place with the party that is unknown to the launch contractor, Jawed said.

The FAA and NASA must also coordinate with the Air Force, since commercial launches can use Air Force facilities, or the Air Force could put payload on a commercial launch vehicle or possibly share a payload with a commercial launch company. For those launches, the FAA coordinates with the Air Force to ensure that safety is being upheld through a formal Memorandum of Understanding between the agencies.

“Our rules trump, but we defer to the Air Force” as long as any deviations from shared procedures can be looked at and approved by the FAA, Jawed said.

Both NASA and the Air Force use contracts to push companies into the space launch market. NASA has used the COTS program to help develop vehicles that it now hires to deliver cargo to the International Space Station, and the Air Force uses its Orbital/Suborbital Program-3 (OSP-3) to fund less challenging launches while testing companies for riskier work under its Evolved Expendable Launch Vehicle program.

“There’s a real statutory framework and policy framework for supporting the commercial space industry,” said Patricia Ewing, senior counsel for Orbital, which has transitioned to ISS supply contracts along with SpaceX. “Both NASA and DOD have certain contract vehicles that they use that are structured in a way to help support the commercial space industry. The prime example of that is the space station resupply contracts.”

Both Orbital and SpaceX spent a lot of money in getting their space vehicles off the ground, but NASA’s support made the current commercialization possible, Jiru said.

“It’s great to see how the reimbursable Space Act agreements basically work in concert with the government FAR contracts in order to make out industrial base stronger, and that in turn makes the U.S. as a whole stronger in space,” Jiru said. “There was no marketplace or business case for going into ISS resupply, so in order to demonstrate and get that capability, funding from the government was needed in order to help companies start that because that ‘s a very, very expensive endeavor, especially if you didn’t have a client for it.”

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by dietrichknauth

Senators Debate Adding Funds To Accelerate Space Programs

By Dietrich Knauth

Law360, New York (July 16, 2014, 5:33 PM EDT) — Senate Armed Services and Commerce committee members expressed frustration about the U.S.’s continued reliance on Russian rockets for NASA and Air Force space launches Wednesday and debated adding more funds to expedite efforts to build a new generation of American-made launch vehicles.

The Commerce space subcommittee’s chairman, Sen. Bill Nelson, D-Fla., noted that the day’s hearing took place on the 45th anniversary of the Apollo 11 launch that sent the first astronauts to the moon, and emphasized space exploration’s importance to research, commerce and national security. Senators questioned witnesses from the Air Force and NASA, and other government and private sector experts, about challenges raised by reliance on Russian rockets and the slow pace of U.S. entrants into the market for Air Force launch contracts.

Gen. William L. Shelton, commander of Air Force Space Command, said that the recent reliance on the Atlas V rocket, which uses Russia’s RD-180 engine as a key component, made sense in the near term, saying that the rocket is “probably the most advanced rocket engine in the world” and has proven both cost-effective and reliable.

“If you look at the Atlas V performance, there’s nothing to complain about,” Shelton said. “But in my opinion it’s time to move on from reliance on that foreign engine.”

Russia’s role in American space programs has become a topic of debate thanks to rising tensions over Russia’s annexation of Crimea and the U.S. sanctions that followed. Russian Deputy Prime Minister Dmitry Rogozin, who heads Russia’s defense industry, has floated the possibility of restricting U.S. access to its engines, and reportedly suggested that the U.S. “use a trampoline” to send astronauts to the International Space Station.

Those remarks have played into the debate over both NASA’s civilian spaceflight programs and the Air Force’s Evolved Expendable Launch Vehicle program, which sends military satellites into space. Space Exploration Technologies Corp., or SpaceX, which is jockeying for the chance to compete with the Air Force’s EELV contractor, United Launch Alliance, has positioned its U.S.-made Falcon rockets as an alternative to the Russian rockets used by ULA.

If tensions worsen and Russia carries out the threat to cut off RD-180 rocket sales, the move would significantly disrupt the Air Force’s national security launches, Shelton said. But both he and RAND Corp. senior engineer Yool Kim said that that is unlikely, because the Russian space industry relies on money from U.S. space launches. And even if Russia stops selling the rockets, the U.S. could use its stockpile of 15 Atlas V rockets to continue with the most significant space launches for at least two years, although it would have to give up some lower-priority launches to make that work, Kim said.

When asked about the ability of SpaceX to pick up the slack, Shelton pointed out that the SpaceX Falcon 9 rocket, used to deliver NASA cargo to the ISS, cannot handle heavier and more sensitive launches, and its Falcon Heavy rocket, which is in the same class as the Atlas V, is not as close to certification for space launches. Under current plans, the Falcon 9 rocket will be certified for Air Force launches by December, Shelton said.

Many senators seemed eager to speed the development and certification of U.S. rockets and space vehicles, asking whether additional funding could accelerate that process. But witnesses said that federal procurements and development of new technology can’t always and shouldn’t always be rushed.

“Part of the issue we’re dealing with is we’re in the middle of a procurement, so we have a procurement right now that we’ll make a selection on later this year,” NASA Associate Administrator Robert M. Lightfoot said. “Having not seen the proposals, I can’t tell you what the acceleration options are, but we’re in 2014 already. When you order a rocket, you typically order them three years in advance, so that’s where we are.”

SpaceX, which has sued the Air Force for entering into a five-year deal with ULA while it was gearing up for launch certification, was a frequent topic of senators’ questions. Senators questioned the Air Force’s claimed $4.4 billion in cost savings for its recent five-year contract, as well as an earlier comment from Shelton that seemed to criticize SpaceX for taking the Air Force to court. Other asked why SpaceX’s rockets were good enough to deliver cargo to the ISS for NASA but not good enough to take military satellites into space.

Lightfoot said that the cargo deliveries were relatively low-priority and low-risk, so NASA accepted some additional risk in starting those deliveries and speeding SpaceX’s certification for future delivery of more sensitive cargo, including high-tech research equipment and, eventually, NASA astronauts. In the process, NASA took SpaceX through very rigorous testing of its ability to navigate in space and safely dock with the ISS, which are less applicable to the Air Force’s launch needs.

Senators also criticized the Air Force for sharply reducing the number of near-future EELV launches that it planned to open up for competition, from 14 to seven in the Air Force’s 2015 budget proposal. Shelton replied that the Air Force, trying to save money, cut five launches of GPS satellites, which are available to competition because they don’t require a rocket as heavy as the Atlas V, because it realized that its GPS networks didn’t require as much maintenance as it had thought. The heavier launches, reserved to ULA, were generally preserved, but one was canceled, which required the Air Force to give them one of the lighter launches from the formerly competitive pool to keep the terms of the five-year contract, Shelton said.

“We didn’t need to procure the GPS launches on the schedule that we thought we needed, so we stretched those launches out. That resulted in the loss of five of the seven launches that we had set aside for competition,” Shelton said. “It really wasn’t an anti-competitive thing.”

While lawmakers were frustrated by the pace of getting new rockets into production, the deputy undersecretary of defense for acquisition, Alan Estevez, said that developing new technology isn’t always as easy as “throwing money at the problem.”

“Without sounding glib, it is rocket science,” Estevez said.

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by dietrichknauth

NASA Commercial Space Program Needs Clarity: Report

By Dietrich Knauth

Law360, New York (July 1, 2011, 5:07 PM EDT) — In its efforts to promote commercial space flight, NASA must develop clear safety and performance requirements while taking care to avoid potential conflicts of interest, according to a Thursday report by the agency’s inspector general.
NASA Inspector General Paul K. Martin said that the agency has made significant progress in working with commercial partners, awarding more than $300 million in contracts through its commercial crew development program, but still needed to finalize regulations, develop a procurement strategy and coordinate safety standards with the Federal Aviation Administration.

In the wake of the space shuttle program, which will be retired after the July 8 launch of the shuttle Atlantis, NASA is simultaneously working on building a next-generation government spacecraft and kick-starting a commercial space industry.

NASA has never launched a manned mission on a commercially-developed vehicle and the transition will be challenging, the report said. Getting it right will be critical because the U.S. will rely on Russian Soyuz spacecraft to access low Earth orbit and the International Space Station until it develops an alternative.

“NASA faces an imperative to nurture development of a U.S. commercial transportation service to re-establish the nation’s ability to access low Earth orbit and the space station as soon as possible,” the report said.

NASA’s shuttle successor was scheduled for completion by 2016, but NASA recently indicated that the target may be overly optimistic, the report said, making commercial partnerships even more pressing.

In its commercial crew development program, NASA is focusing on promoting innovation and development, and is not dictating specific system concepts or mandating compliance with NASA requirements, according to the report, leading to a risk that companies will develop space vehicles that are ultimately unsuitable for NASA missions.

To mitigate that risk, NASA is considering an approach that would proactively identify significant design differences that could prevent a partner from obtaining NASA certification in future acquisitions. However, that strategy carries a risk of its own because companies without commercial crew development program contracts could complain that the advice represents an unfair competitive advantage, the report said.

Failure to mitigate the apparent conflicts of interest could lead to bid protests, which would delay and jeopardize NASA’s commercial crew program, according to the report.

In its commercial space transport acquisition strategy, which will be submitted to Congress later this summer, NASA will likely announce its reliance on competitive procurements or fixed-price contracts to keep costs down.

But fixed-price contracts could be risky, too, as they would require NASA to commit large sums of money while relevant regulations may be subject to change, according to the report.

“Some of NASA’s potential commercial crew partners are building spacecraft for the first time and design and development are under way without fully defined and finalized requirements,” the IG said. “In this type of environment, there is a risk that during the period of contract performance NASA’s requirements may change so significantly that contractors can successfully argue that the agency is changing the contract’s scope, in which case NASA could be required to pay the contractor to make necessary modifications.”

In 2010, the year after the start of the commercial crew development initiative, NASA awarded $50 million to companies working on space transport projects. The agency announced in April that it was ramping up the program, awarding $269.3 million to accelerate the availability commercial space capabilities.

Because of uncertain progress in developing both commercial and U.S. spacecraft, the report recommended that NASA consider extending its purchase of seats on the Russian Soyuz spacecraft as a contingency plan.

Although NASA has arranged with Russia to continue missions via the Soyuz until 2016, the length of time needed to procure additional seats means that NASA will have to make a decision in 2013, about three years before commercial systems are expected to be ready, the report said.

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by dietrichknauth

NASA Contractor’s Launch Kicks Off Commercial Space Race

By Dietrich Knauth

Law360, New York (May 22, 2012, 6:21 PM EDT) — NASA contractor Space Exploration Technologies Corp. launched the first commercial space flight to the International Space Station on Tuesday, a significant milestone in NASA’s quest to open up outer space to private companies.

SpaceX’s unmanned Dragon spacecraft, funded by a mix of private investment and NASA contracts, will deliver cargo to the International Space Station, and if successful, would position the company to begin a cargo delivery contract worth between $1.6 billion and $3.1 billion.

But both NASA and SpaceX have even bigger goals in mind for the project, which they view as an early step toward a future in which commercial space flights provided by private U.S. companies are almost routine and private innovation spurs greater access to space.

SpaceX CEO and Chief Designer Elon Musk compared the commercial entry into spaceflight to the growth of the Internet in the mid-1990s, when commercial companies entered what was originally a government endeavor, making the technology available for mass consumption.

“I think we’re at a similar inflection point for space,” Musk said. “I hope and I believe that this mission will be historic in marking that turning point toward a rapid advancement in space transportation technology.”

While it develops a replacement for the retired space shuttle, NASA has been funding SpaceX and other contractors to develop and build spacecraft capable of short-range space flights. Contractor-owned vehicles, including a variant of the SpaceX Dragon, will eventually transport astronauts as well, reducing U.S. reliance on Russia, which charges about $62 million to send an astronaut to the International Space Station, as well as smoothing the way for future commercial spaceflights.

John P. Holdren, assistant to the president for science and technology, said Tuesday that partnering with U.S. companies helps free up NASA resources to focus on more long-range goals, and Tuesday’s mission, if successful, may well kick-start a new era in American spaceflight.

“Partnering with U.S. companies such as SpaceX to provide cargo and eventually crew service to the International Space Station is a cornerstone of the president’s plan for maintaining America’s leadership in space,” Holdren said. “This expanded role for the private sector will free up more of NASA’s resources to do what NASA does best — tackle the most demanding technological challenges in space, including those of human space flight beyond low Earth orbit.”

Henry Hertzfeld, research professor of space policy and international affairs at George Washington University, praised the SpaceX team, while pointing out that its launch, which was built with funds from government contracts and designed for a specific government mission, was a natural progression from previous NASA efforts, like the space shuttle, which depended on NASA contractors Boeing Co. and Lockheed Martin Corp.

Space technology has matured through decades of previous launches, making it possible for NASA to switch to a more contractor-driven approach, tying contract funds to certain goals and checkpoints and giving contractors like SpaceX more responsibility and the flexibility to design with future commercial opportunities in mind.

“One of the things that’s different about the whole commercial program is that we try to stay out of the details of how the problems are solved,” said Sean O’Rourke, NASA’s lead visiting vehicle officer for SpaceX’s Dragon. “They have to weigh our requirements against what other markets they see out there, which would be great because if they can take this vehicle and make money in others ways then that could bring our costs down in the long run.”

Increased commercialization of outer space will also accelerate the evolution of space laws and regulations, according to space law experts. The U.S. and other space-capable nations will have to further develop laws on space safety standards and liability, develop a strategy to deal with increased space debris, and rethink current restrictions on the import and export of space technology.

“The commercial participation in space activities, more specifically space launch and manned spaceflight, is the most exciting and fundamental development in space over its last half century — and that applies to space law as well,” said Frans von der Dunk, professor of space law at University of Nebraska-Lincoln’s College of Law.

Space law is largely based on international treaties that date back to the 1960s and 1970s, when large-scale commercial space flight was not seriously expected, von der Dunk said. The laws around commercial space flights are evolving, and in 2004, the U.S. Commercial Space Launch Act was amended to include manned spaceflight, which would apply not only to future SpaceX launches of a manned-version of the Dragon cargo vehicle, but also to space tourism, the “next new kid on the block.”

“With Virgin Galactic planning to start flying space tourists later this year or early 2013, the 2004 amendments allowed for such companies to offer their services effectively disclaiming liability on the basis of ‘informed consent,'” von der Dunk said. “The issues, however, certainly gain in importance once we would be talking about private passenger services for public astronauts to the ISS — is NASA going to allow Space-X to fly on the basis of informed consent? Is it going to impose its own safety standards?”

Currently, the Federal Aviation Administration is in charge of safety standards for commercial spacecraft, an extension over its current oversight of commercial aircraft, while NASA handles safety standards for government missions and government personnel.

However, U.S. law prevents the FAA from implementing full-blown safety regulations until 2015 because lawmakers don’t want the FAA to stifle innovation by setting standards that give preference to one vehicle type, according to Matthew Kleiman, professor of space law at Boston University Law School.

“The FAA so far has a very hands-off approach to spacecraft,” Kleiman said. “Once it can become routine, like airline flights, and there’s a precedent for how these tourism rides work, it will make a lot more sense for the FAA to come in and regulate it.”

Despite the relaxed regulation, companies like Virgin and Space X have every incentive to put safety first.

“Nobody is looking at these companies like they’re cowboys. Even without strict regulation, they are taking every precaution,” Kleiman said. “They know that if they have an accident on one of their early flights, it’s game over for the whole industry.”

Still, the commercial spaceflight contracts have their detractors. In testimony to Congress, NASA Inspector General Paul K. Martin said that NASA still needs to develop clear safety and performance requirements and be more careful to avoid potential conflicts of interest. While NASA has awarded more than $300 million in contracts through its commercial crew development program, it still needs to finalize regulations, develop a procurement strategy and coordinate safety standards with the FAA.

And members of Congress like Rep. Brad Miller, D-N.C., have questioned whether the U.S. should make huge investments in a private space industry that will then have great leverage over the U.S. in negotiating transportation prices. The U.S. is prepared to spend $4 billion to $6 billion to develop commercial spacecraft, and the contractors might not charge much less than the $62 million per seat that the Russians are charging, he said in a November hearing.

“It sounds like it’s a lot more expensive than the deal we have now,” Miller said.

Despite current skepticism, early successes for Space X and other contractors will go a long way toward making investors and Congress more comfortable with the technology and give companies like Space X more credibility in performing these missions, according to Kleiman.

“If we’re actually going to have a space faring civilization that routinely goes to outer space, these companies need to be successful, it can’t be just the government,” he said.

Tuesday’s Space X launch was originally scheduled for Saturday, but Space X’s computers aborted the launch at the last minute, after discovering high pressure in one of the Dragon rocket’s nine engines. Space X said that the problem was caused by a failed valve that was quickly repaired.

“In some ways that [aborted launch] was a success even if they didn’t get off the ground,” Hertzfeld said, noting that the aborted launch demonstrated SpaceX’s effective safety controls and allowed the company to save their rockets for another flight.

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