Competition and EELV: Challenges and
Opportunities in New Launch Vehicle
Acquisition
PART II
Future in-Space Operations Presentation
June 13, 2012
Stewart Money
stewart@innerspace.net
1
Background and Summary of Part I
The United States in 2012 is at a crucial decision point in
determining how it will access space for the next decade or longer
The Evolved Expendable Launch Vehicle Program is celebrating a
remarkable string of successful launches, but costs are increasing
beyond the point of sustainability
At the same time, a different approach to launch development
represented by the COTS Program and the SpaceX Falcon 9 is
yielding impressive results but flight history is limited
2
EELV Program and Acquisition Costs are Rising
To Unsustainable Levels

The estimated average total price for a Department of Defense EELV launch
varies with annual launch rate, but has risen from $72 million in 2002 to
approximately $420 million in FY 2012

NASA currently pays the per unit cost for each launch acquired, receiving a
comparatively reduced price from the full cost assigned to DOD

EELV cost increases are being passed on to NASA in the form of the NLS-II
contract prices which are 50% higher than in the previous NLS I Contract. Not
to exceed price for the Atlas V has increased from $125 million to $334 million

A 2011 OIG Report found that NASA carries a substantial risk of being
assessed an additional $100 million per flight for its share of full program costs
currently carried by DOD*
*NASA OIG Report “Review of NASA’s Acquisition of Commercial Launch Services”
2/17/2011 IG-11-012
3
A Questionable Remedy
The EELV Proposed Block Buy

GAO released a report in September 2011 heavily critical of a proposed Air
Force / ULA solution to rising EELV prices; a 5 year 40 core ‘block buy” of
EELV launch cores through 2017

The GAO report determined that the rationale for the block buy was based
on a flawed industry survey conducted by United Launch Alliance biased
towards a desired outcome, and further determined that DOD used the
survey to formulate acquisition policy without ever asking to see source data

GAO further determined that the block buy would:
Potentially “Lock in” high prices (averaging $375 million per core)
Create a bow wave of unused launch cores which could effectively extend the
monopoly and preclude real competition for several more years


4
Block Buy Response







Following GAO report release, Congress issued a hold letter to the Air Force
regarding the block buy
Air Force responded by announcing it would alter strategy and seek a price
matrix from ULA searching for a “sweet spot”
Also released an overdue New Entrant Certification Strategy
Unconvinced, Congress effectively re-classified the program as ‘in
development” subjecting it to increased scrutiny, resulting in an April report
of a Nunn-McCurdy cost breach.
The Air Force announced it would set aside a series of non critical launch
opportunities for new entrants beginning in 2014
The actual level of commitment to competition is still difficult to determine
Meanwhile…
5
Part III : A Different Approach
NASA uses Space Station Resupply to Leverage
Two New Launch Vehicles
6
COTS Program

2002: Policy Origin lies in Alternate Access to Station Program which is
focused on supplementary delivery to ISS

2004: Post Columbia, the new Vision for Space Exploration leaves a gap in
ISS transport after the Shuttle program’s scheduled end in 2010. Subsequent
delays in Project Constellation widen the gap

2006: COTS is introduced as a secondary effort to support ISS and to spur
Silicon Valley style competition in space access. Relies on Space Act
Agreements, rather than Federal Acquisition Regulations

2007: Delays in Project Constellation and suspension of Delta II production
add new emphasis to COTS, and place a premium on securing new launch
vehicles
7
Orbital Sciences Introduces Antares

Fills missing Delta II medium
category

Estimated pricing in line with
historical Delta II range

Modest business plan contingent
on 2-3 launches a year

Significant foreign content

Lingering reliability concerns
following consecutive Taurus XL
fairing failures
Credit Orbital Sciences
8
SpaceX Introduces EELV Class Falcon 9
With Revolutionary Pricing



First Launch:
6/4/2010
Second Launch: 12/8/2010
Third Launch: 5/22/2012

Updated Performance
LEO 13,150 kg / (29,000 lb.)
GTO 4,850 kg / (10,692 lb.)

Standard Launch Price 2012
$54 Million
$ 1,862 per lb. to LEO
$5,050 per lb. to GTO
24 Commercial launches on
manifest

Credit SpaceX
NASA NAFCOM Study to determine what it might have cost to
develop the Falcon 9 under two different assumptions, a traditional
versus a more commercial approach
Initial work performed in 2010
Summarized in Appendix B Commercial Market Assessment for Crew and Cargo Systems
4/27/2011.
10
NASA NAFCOM SpaceX Cost Analysis

Used NASA Air Force Costing Model with inputs supplied by SpaceX to see
what the cost of a traditional procurement and single test flight would have
been.

Format was Cost Plus Fee for both NASA and Commercial Approach
Results:
3.97 Billion under NASA model
But:
1.69 Billion under a more commercial approach






Actual SpaceX numbers were somewhat closer to 300 million, plus 90 million
for Falcon 1
NASA personnel visited SpaceX; asked questions and refined their inputs
Reran the model; this time to include a second test flight as well
Results:
1.38 Billion for cost plus commercial approach
443 million for a fixed fee approach
11
NAFCOM Study Inquiry into SpaceX Cost Basis
Cites Three Key Factors for Low Cost

SpaceX operates a lean, production oriented workforce
- pricing is very much a factor of overall payroll

SpaceX is vertically integrated
 Cites 80% of value produced in house
 Maintains every dollar contracted out costs 3 – 5 dollars in administrative
and overhead expense

Reduced infrastructure cost with Design Development Test and Engineering
 Falcon 9 uses a common engine to both stages, Flown on Falcon 1
 Uses a common fuel to both stages
 Uses a common fabrication technique to both stages; Second stage is
essentially a shorter version of the first
12
SpaceX / COTS Partnership Now Successfully Extends
Beyond Launch Vehicles Into Orbital Systems

COTS 2/3 Mission success provides NASA with ISS cargo capability only 11
months after final Shuttle mission

Only source of significant downmass for ISS

Flight proven entry for Commercial Crew Competition

Commercial market expansion with Dragonlab

Potential BEO capability
Credit SpaceX
13
Sailing into History
SpaceX Dragon

Mission marks a clear validation for the COTS program, and the use of Space
Act Agreements in achieving major accomplishments with historically low
public investment.

$396 million total NASA investment leverages both the Falcon 9 and the
complete Dragon system, an unprecedented return

Marks the full scale introduction of an entirely new space transportation and
exploration infrastructure with far reaching implications

SpaceX success is going to spark a vigorous debate over current and future
space programs which will intensify dramatically with the introduction of the
Falcon Heavy
14
COTS Secondary Benefits

Engines:
All U.S. Production Engine, Merlin 1C
Imported Engine: AJ-26
Mid Atlantic Regional Spaceport

Spaceports:
Improvement s to Mid-Atlantic Regional
Spaceport
Potential SpaceX commercial
spaceport

Next Generation Improvements
RLV Testing : Falcon Grasshopper
Falcon Heavy
AJ-26
15
Almost There:
Assured Crew Return Vehicle

NASA has pursued different programs for an ISS emergency return vehicle
over the years including HL-20, X-38 and an Orion based version. In each
case, real or projected cost overruns prevented implementation
HL-20
ACRV
X-38

The COTS 2/3 flight and successful landing demonstrated many of the
elements necessary achieve to this long held goal

An interim crew capable Dragon, without launch abort system offers an early
option for achieving U.S. capability with minimal additional investment
16
Assessing COTS : What Does it Mean?

The NAFCOM results confirm what many assume to be self evident, that a
“commercial like “ approach to hardware development can be generally far
less expensive than a traditional cost plus effort when the technology is
readily achievable

The COTS experience to date indicates that development costs can be
minimized even further when a private company invests its own capital in
pursuit of a solution with commercial applications

It remains an open question whether NASA is willing, or even able to extend
the COTS approach to future procurement, but the possibilities are
compelling

A failure to fully examine potential future applications would amount to a
major failure of leadership unworthy of a great nation
17
Part IV: Existence Proof
With a 3rd Successful Launch of Falcon 9,
SpaceX Has Passed a Critical Threshold
Can extending the COTS approach
meet new launch needs?
18
Policy Basis for Extending the COTS /CRS Experiment

The need for low cost access to space across all sectors is greater now than at
any previous time due to constricted budgets and looming demographic crises.

NASA efforts at lowering costs through direct development of reusable
launch systems such as the Shuttle, X-33 and other programs failed to achieve
critical goals

EELV program has clearly failed to reduce costs as well

Though results are currently limited to one company, SpaceX, it appears the
COTS program’s soft approach to hardware development is providing an
example of an alternate path towards achieving progress in lowering the cost
and increasing the capacity for access to space.

Absent a new major policy initiative: This is as good as it gets
19
Extending the COTS Example
What Are the Key Factors?










Establishing a core market “Anchor Tenancy”
Close Integration With Potential Commercial Applications
SAA or Non Traditional Contract Approach
Modest investments from government combined with “In the Pink”
contactor investment
“Cut Your Losses” strategy for failed entries : Kistler
Performance Milestones
Commitment to competition through all phases
Multiple winner strategy through service period with contract assignment by
price and performance
Partially funded test flights
Taking the long view
20
New Launch Needs

Flight Qualified Medium Class Science Launcher

Affordable Alternative To Atlas V Throughout Intermediate Class Range

Competitive Commercial Crew Entrant

Heavy Lift Vehicle for Future in Space Operations

SLS Booster Competition w/ New Main Engine Development

Advancement in Re-usable Launch Technology
21
Medium Category: Delta II Experience Highlights the Risk
of a Single Launch Solution

Both Falcon 9 and Antares await a launch task order to begin the certification
process, however in the case of Falcon 9, this should be forthcoming

NASA has streamlined the certification process, but it still takes time

SMD launches are frequently more demanding, requiring additional stages and
extra consideration, and offer the familiar dilemma of placing a valuable
payload on new launch vehicle. NASA lacks a method for demonstrating high
orbit or deep space capability on new vehicles without endangering expensive
payloads

Incorporating a key COTS element, partially funded demonstration flights,
following an anticipated science mission trajectory with test or non critical
payloads would allow for faster integration of new launch vehicles for SMD at
an earlier point in the process
22
Intermediate Category: The Falcon 9 Offers Existence Proof of
An Affordable EELV Class Vehicle

The third successful launch marked a major milestone in the Aerospace
Corporation’s 3/7 reliability rule

Accelerated launch schedule will offer new data points quickly

A planned upgrade, the Falcon 9 v. 1.1 is scheduled to be introduced in 2013,
debuting on CRS flight # 3. With a successful campaign, SpaceX will have
unambiguously demonstrated what an EELV class launcher “should cost”

At that point continued support of radically more expensive launch systems
become financially and morally unacceptable

The policy question should then shift to establishing a price ceiling and
encouraging new competition at or below that level
23
Applying COTS Lessons in Enabling Commercial Crew

The recent Congressional pressure to select a single provider highlights a
struggle over the future of NASA and the U.S. space program, and whether it
will apply lessons learned in the COTS program

Commercial Crew began as COTS-D

Program officials explicitly recognize the goal is not simply to develop
commercial transportation, but to use competition to drive costs lower.
“To down select to one (provider ) now would kind of take us back to
the old ways of doing business”

Reversion to FAR contracting poses a significant threat to progress made.
NASA will have to wield it lightly
Deputy Program Manager Brent Jett, Spaceflightnow.com
5/2/2012 “NASA: competition at core of commercial crew program”
24
A Sustainable Solution for Commercial Crew
Falcon 9

SpaceX has publically offered Commercial Crew at $140 million per flight.
Based on NLS-II pricing, there is a reasonable expectation of a significant
cost difference between Falcon 9/Dragon and the least expensive Atlas V
based entrants of not less than $100 million per flight.

Rocket agnostic crew vehicle proposals suggests a strong rationale for Falcon
9 inclusion under multiple scenarios

Falcon 9 ‘s current limited flight history is offset by a manifest which includes
approximately 17 flights before operations begin in 2015 at the earliest

Elimination of a planned CST-100 escape system demonstration flight
suggests the intersection of budget and launch costs is already having an
effect
25
Developing Heavy Lift : Planned Falcon Heavy
Approaches $1,000 per lb. Threshold

A successful introduction would mark
a bell weather event in access to space

Delta IV Heavy has already proven
CBC concept but price is exorbitant
$375 million plus DOD infrastructure
support renders full cost close to
$500 million per flight

Falcon 9 V 1.1 serves as the core
booster for Falcon Heavy
Credit SpaceX

Is it possible to integrate into current
plans the arrival of an affordable heavy
lift option without undue disruption?
53,000 KG to LEO
$128 Million
26
ISS U.S Flight Manifest Through 2020
27 Unassigned cargo flights present a unique
opportunity to drive new launch innovations
Source : FAA 2011 Commercial Spaceflight Forecast
27
Possible Path: COTS-HL

Unassigned Cargo flights represent a low risk strategy for extending the
COTS approach to accelerate the introduction of Falcon Heavy as a NASA
launch vehicle and establish an affordable heavy lift option

Achievable through a progressive development schedule

Contract provision to allow for initial payload delivery via existing Dragon
capsule with optional 4.3 meter extended trunk in lieu of standard CRS
delivery

Initial pathfinder for larger cargo containers in ATV class or greater

On ramp provision for additional entrants
28
COTS-HL Benefits

Falcon Heavy introduction with no disruption of ISS support

ISS cost reduction with possible operating lifetime extension, and increased
opportunity for private investment

Carrier vehicle for ISS expansion elements such as a Bigelow module

Potential for multi destination manifesting “space freighter”

Affordable heavy lift vehicle for Future In Space Operations which do not
require a SLS sized booster

Effective near term demonstration of the Falcon Heavy / Dragon
combination which is capable of Lunar and Mars mission architectures
29
Follow On to COTS-HL
Implementation of COTS-HL would
open the path for a COTS style acquisition of a
new and more affordable Multi Purpose Logistics
Module with applications for ISS, FISO and SLS
exploration and commercial architectures
MPLM
NASA MSFC Advanced Concepts Office
30
SLS Advanced Booster
and Main Engine Development

SLS Program calls for a competitively bid Advanced Booster of roughly 3
million lb. thrust to support a goal of 130 ton LEO capacity

Likely powered by a new large (> 1 million lb. thrust) RP-1 main engine

Winning entrant would be a Heavy Lift first stage in its own right, suggesting
a wider market potential

A conventional sole winner, cost plus acquisition model will almost certainly
perpetuate the inefficiencies of prior systems

Given SpaceX’s demonstrated success with Falcon 9 and purported interest in
developing a Falcon X with an F-1 class main engine, could a COTS-HL
competition be extended to the Advanced Booster program?
31
Whither Reusability ?
Potential Path : COTS-R

NASA has effectively abandoned the pursuit of reusability as a major
initiative, even though it remains the only real avenue for a permanently
expanding future in space

The Air Force is funding a long term Reusable Booster Program as a
successor to EELV, but runs the risk of repeating past mistakes

Private companies such as SpaceX, Blue Origin, XCOR and Armadillo are
pursuing the goal from many different directions

A continued COTS style campaign of ISS re-supply offers a unique and
otherwise unavailable opportunity to progressively test and incorporate partial
or fully re-usable launch elements with modest public investment
32
Towards Reusability
Incentives can be incremental:
Purchase of performance data on first stage “fly back” maneuvers
Demonstration of hardware recovery procedures
Recovered engine test firings
Demonstration launch of recovered elements
ULA Aerial
Engine Recovery
Concept
33
Achieving Reusability with COTS-R
Incentivizing SpaceX and Blue Origin
SpaceX and Blue Origin are both pursuing
fully reusable launch systems. Breaking the
barrier of reusability is of sufficient
importance to trump other considerations
including temporary ISS oversupply
• Automatic rewards for achieving first or
second stage reusability in an ISS supply
context
• Guaranteed minimum flight contract
assignment incentive for re-usable
systems with non punitive pricing
• Standing incentive for new entrants
SpaceX
Falcon 9
Second Stage
Blue Origin
Suborbital Test
Article
34
Solving the ISS “Last Mile Problem”

A significant component in FISO and SLS applications with no current
development path is a Multi Mission Space Exploration Vehicle (MMSEV)

Preliminary incorporation at ISS could be used in automated mode to
rendezvous with cargo delivered to the vicinity, but not within proximity to
the station, functioning much as a harbor pilot
Would allow delivery by virtually any
launch system with minimal constraint,
allowing wide open competition in
driving down launch costs
Flexcraft
NASA MSFC
Advanced Concepts Office
MMSEV
NASA MSFC
Advanced Concepts Office
35
Final Considerations
NASA’s focus on BEO overlooks the inescapable fact that the
job in LEO is far from finished, and that launch costs are still
too high to support an expanding commercial infrastructure
Applying a COTS like approach to extended ISS logistics
presents the opportunity to make significant progress in
lowering the cost and increasing capacity of space launch
systems while continuing a renewed program of deep space
exploration
36
A “Matrix Moment”
Innovations being driven by NASA’s Commercial Orbital
Transportation Program and currently best represented by
SpaceX offer decision makers with a choice, to remain
trapped in a cycle of high costs and limited progress, or to
embrace an emerging reality in which the sky is no longer the
limit
Screenshot from “The Matrix”
37
Epilogue: The Fruits of Competition
Boeing introduces the B-247 in 1933.
Defers TWA order until 60 units are
delivered to United Airlines
10 Passengers 180 MPH
Range 745 Miles
B-247
Credit United Airlines
TWA CEO Jack Frye asks Douglas Aircraft
to produce a new airplane with specifications
exceeding the B-247.
DC-2
14 Passengers 210 MPH
Range 1,085 miles
Finishes second in the 1934 LondonMelbourne Air Race
38
1934 : American Airlines CEO asks
Douglas to produce a luxury
sleeper aircraft with more capacity
than the DC-2.
1935: The result is the Douglas
Sleeper Transport. After 7
production units, a daytime
version is produced and
The DC-3 is Born
DC-3
21-32 Passengers
Max speed 230 MPH
Range 1513 Miles
First Flight 12/17/1935
39
And More than 70 Years Later….
The DC-3 and its immediate offspring are still flying in
commercial applications around the world on a daily basis,
including the Space Coast Regional Airport
40
Author’s Articles Cited in Presentation
Competition and the future of the EELV program
The Space Review, 12/12/2011
Competition and the future of the EELV program (part 2)
The Space Review, 3/12/2012
Following SpaceX down the rabbit hole
The Space Review, 4/18/2011
An American fable
The Space Review, 10/10/2011
Sailing in the Wake of History
The Space Review, 6/04/2012
stewart@innerspace.net
Cover Credit SpaceX
Concluding Credit American Airlines
41