A Crucial Moment for Commercial Space
NASA budget bill could include a poison pill for SpaceX, other commercial companies, Houston Chronicle
“With NASA under the thumb of the Russian space program, Congress continues to play political games with the space agency. On Thursday the U.S. Senate’s Appropriations Committee unanimously approved the fiscal year 2015 Commerce, Justice, Science, and Related Agencies Appropriations Bill. This means they agreed upon a spending plan to fund NASA, among other agencies. But buried within the bill could be something of a poison pill for a company like SpaceX. Allow me to explain.”
Senate’s NASA budget bill may hamper commercial spacecraft makers, Ars Technica
“When asked about the requirement, Shelby argued that it was necessary for transparency. But the whole idea behind adopting a fee-for-service approach to orbit is that it doesn’t matter so much what the contractors are paying for their parts–if they offer the cheapest safe ride to orbit, that should be all that matters. Requiring contract pricing-type accounting, as proposed here, could be viewed as an action that unfairly grants advantage to Boeing.”
First Florida Today, and now the Houston Chronicle. Looks like this story is starting to get a little traction in the mainstream press.
Good. The issue of the new versus old ways of developing space transportation deserves proper debate, not dead-of-night amendments.
BTW, there’s also a story in the main Houston Chronicle, not just the blog section. Behind a subscription wall, alas – but it’s mainstream coverage.
http://www.houstonchronicle…
Shelby obviously wants his campaign contributors/lobbyists to win the contract. Perhaps Musk should relocate to Alabama?
I think this is as much about which faction within NASA controls space launch development and how they control it, as it is about which contractor brings home the bacon.
The agenda here seems to include both regaining the excruciatingly detailed NASA control of the development process that “Certified Cost And Pricing Data” enables, and also bringing overall space launch development control back to Huntsville. Affordable timely launcher development and the US taxpayer meanwhile get thrown to the wolves.
Merely bringing a few hundred jobs to Alabama probably wouldn’t be enough to stop this. Under this (and under the House’s “there will be only one” clause) the only way to win the next Commercial Crew phase will be total embrace of the old slow high-cost “cost-plus” way of doing things.
I can’t understand why SpaceX is based in California? The cost of doing business and its related restrictions are enormous.
Why are stockbrokers in New York City? The cost of doing business and its related restrictions are enormous.
Why are software startups in Silicon Valley? The cost of…
Why are oil companies in Houstan? …
Because California is still the center of the aerospace universe. Aerojet in Sacramento and Canoga Park, Lockheed in Sunnyvale and LA, Boeing in LA, NG in LA, NASA at JPL, Ames and Armstrong.
Employee/Engineering Knowledge base.
Relative Proximity to Vandenberg
Relative Proximity to Tesla @ Fremont.
Additional location(s) in Florida and Texas will each ramp.
This one’s hard to understand as to motivation. Say I’m a US senator and this little program called commercial crew has become a thorn in my side; in the sense that I’m taking it as a given that this program just uses funding that otherwise would have come to my home state (for SLS). So I put some language in a 2015 spending bill about any further development awards having to do all the cost certification typically associated with cost-plus contracts (we’ll come back to that). Yet NASA will award the last of this contract soon, making the 2015 cost reporting requirements a moot point. So, what’s the motive here? I’m not seeing it?
On a related point, though I’m not so naive enough to believe this has to be consistent or rational, as it may be it’s purely spite for spites sake, where is the certified cost data for SLS and Orion? Transparency is PUBLIC transparency right? Not just transparency to a select few budget office weenies or some program manager who will never share it, right?
So is that all this comes down to…Senator Shelby just acting out of spite? Some shot across the bow?
Oh, it’s all starting to make sense.
Combine the House mandate to immediately downselect Commercial Crew to one contractor, Shelby’s mandate to immediately go to cost-plus accounting, and Shelby’s support for raising Commercial Crew funding to $805m, and it forms a clear picture:
One old-line cost-plus contractor doing Commercial Crew out of Huntsville the old NASA-total-detail-control way, with anyone who won’t play that game out in the cold.
Certified cost and pricing data is the gold standard for procurements using the Federal Acquisition Regulations. The certification permits the USG to proceed with source selections knowing the labor/overhead/G&A rates in the proposal are reasonable. Otherwise, a proposer could submit data that was based on business base assumptions that were over-optimistic, get selected on the basis of cost, and later change its rates to reflect the real cost allocable to the program.
Compliance with Cost Accounting Standards is the greater issue. Without CAS, manufacturers can manipulate their offering prices for products by selectively allocating overhead & G&A rates to customers, or by not paying overtime to FLSA-covered workers, etc.
What we need are voters in Alabama who will complain to Shelby about this.
North AL voters are the ones who understand (or care). But the rest of the state may as well be from another country. Shelby deals with those folks on a whole ‘nother level. Not to mention he is from Tuscaloosa and he only ventures up this way to have buildings named after himself.
As an Alabamian, this shows the pettiness of someone like Shelby as opposed to someone like the late Senator John Sparkman. People like Sparkman were able to leverage resources like Redstone Arsenal and bring the space program to us. Rather than emulate that, Shelby would rather play political games that at most will offer only short term benefits. MSFC has been in Huntsville close to half a century. How long does he expect SLS to last? Stratolaunch is here. Sierra Nevada has an office here. More would come if Shelby and others would make it worth their while. Instead we may be forced to watch the slow decline of Marshall’s relevance to the space program, enhanced by our illustrious Senator.
Send him a letter! Many of us can’t as there is a comment zip code filter on many congressional email/feedback pages.
Call out the Senator for the Hypocrisy of busting the budget when pork is in his neck of the woods.
This reminds me of Lindsey Graham’s support of the DOE MUX project. A nuclear tech to nowhere. DOE doesn’t want it- The Russians (former partners) seem to be proceeding without it- but he fights for it nonetheless.
These days- GOP or DEM- more than ever it seems that Pork / Handouts are fine as long as the check goes to the good ole’ boy Federal contractors.
I was wondering if anyone has written their senator yet about this piece of legislation, and if so could they post it where others could use it as an example in writing their own senators. I have been trying to write mine for the last few days in an intelligible way and found it very difficult. It is especially hard to accurately reference a piece of legislation when a lot of it sounds like gobbldygook without a law degree.
I totally agree.
Is there anyone here that-
1) Has access to a jargonator ™
2) Might be willing to post something that each of us could personalize and send to their delegation?
Don’t try to go into depth or detail. Keep it simple and top-level. Most incoming mail won’t get read beyond the first paragraph anyway; get the key points in the first paragraph.
The gist should be that there’s language in the Senate CJS NASA Appropriation mandating cost-plus type accounting for NASA’s Commercial Cargo and Commercial Crew programs despite those being run on fixed-price contracts. This mandate will greatly increase costs and delay schedules in essential programs that have been till now models of cost-saving. It should be removed from the bill.
If you want, mention that delaying Commercial Crew means paying the Russians hundreds of millions more for their rockets (if they’ll even sell them to us) and maybe put in a few URLs to news coverage and other explanations after that. But get the main points in at the start.
Thanks much!
I agree with the short and simple approach.
Henry’s clear, well worded, no nonsense example works without any fiddlin’.
As for me, conveniently, our Congressman is Chaka Fattah (Democratic appropriator for NASA)- I’m pretty sure he’s already pro- Space X /fair competition… so that’s something.
He’ll get a version of this note anyhow.
Not sure if the PA Senators care much, but can’t hurt to try.
Would be interesting for someone from Alabama to send the above to Shelby and post his office’s response- Might be interesting to read how he sauces his pork.
And Shelby said to Musk its not apples to applies, and Musk replied yes it is. Our normal falcon launch is much Cheaper. And Shelby looking foolish ground his teeth and said under his breath I’ll fix this little so and so!!!
It is spite!!
No time to find the quote from the dod hearing but look at it. Shelby was ticked off
Shelby continues his fine tradition of political hack and total putz.
For those who missed it…
https://www.youtube.com/wat…
That’s an hour-twenty long. Anyone know where in all that the Musk-Shelby exchange happens?
OK, it’s between about 52 and 55 minutes in, and it’s not as personally confrontational as has been described.
It is confrontational, mind – Shelby and Musk are going at it hard on the question of cost-plus versus fixed-price.
The entire hearing is quite illuminating on the issues here. The SpaceX-ULA competition for DOD launch business is not precisely analogous, but there are a lot of parallels (and I suspect some spillover.)
Henry
Thanks for looking. The reason I watched this hearing was to see if Musk was getting himself into trouble. I recall Shelby presenting that question as a got you. And Musks response was no I have you.
After watching all of it. I suspect that if Spacex had not sued DOD and had just kept their head down, this far type language would not have been added at this time.
Yes, I missed this hearing at the time, but it does make it look as if one of Shelby’s motives here could be continuing his argument with SpaceX over DOD missions in a new arena.
Thanks Sir
Time to write your own Senator and Congressman , I do believe….
Shelby will continue to look foolish.
My take is even if it goes to a down-select to one, it’s still open to challenge no matter who gets it so NASA better have very clear criteria as to how they’re going to do the selection – which I believe they already have if COTS is anything to go by.
In addition, SpaceX has the ability to work smart so whatever additional paper requirements get added, you can bet your life that SpaceX will be able to meet those requirements. Remember all the paperwork they’re sending to AF for certification and they already have cost transparency on all their processes to it won’t be difficult for them to comply IMO.
Of course, it’s also open to them not to compete and do it on their own. Then compete for the final contracts anyway. Not only that but they only need FAA approval to launch, not operate in space so Bigelow contracts are sitting out there once SpaceX have the crew capability.
Just a few thoughts.
Cheers
Yes…after any award I’d bet a legal challenge is inevitable by one or more of the losing commercial crew companies. Remember that after the commercial cargo award their was a legal challenge by then PlanetSpace. That legal challenge read like a very finely rationalized treatise that was one part delusion and two-parts temper tantrum. The general complaint from back then could re-occur, which was to say that NASA having only so much money can not be the deciding factor in an award selection!
This is a tempest in a teacup. Even if the language in the bill stands, what’s the big deal? My wife works for a government contractor of about 950 people where she is in business management. Their accounting/finance department has maybe 12 folks and they are routinely able to provide certified pricing for their contracts. If they can do it I’m sure SpaceX can figure it out.
Yes, that is a possibility, if the office in charge gets legal and contractual on board with a very top-level interpretation of the requirement. This approach which has been mentioned by others as well. See: http://www.thespacereview.c…
From that view-“The following example illustrates the way to take the cost and details out of certified cost accounting. The Space Access Society posed a hypothetical situation: “Imagine the response you’d get, handing [FAR Table 15.2IIA which requires detailed cost accounting of each part] to a
car dealer while you’re haggling over price”. The dealer would hand the wag an invoice that shows one part, “the car”, the factory price and the dealer’s markup”
Still, you need a very cooperative team in legal, finance and contracts.
The approach proposed over at Spacereview alas won’t work; the FARs specify that any subcontract for over $700K is also subject to massively detailed cost accounting.
More generally, yes, if a particular cost-plus contract is for something routine and the government buyers are agreeable, the accounting requirements can be halfway tolerable.
Neither would likely be the case here.
Though even in whatagy’s example, I note that the additional reporting burden on the rest of the company isn’t mentioned. A major part of the burden of full cost-plus accounting is that EVERYBODY has to spend a significant slice of their time counting beans rather than producing them. It increases costs far beyond just the additional accounting-office payroll.
“When asked about the requirement, Shelby argued that it was necessary for transparency.”
Hey Shelby, how about ramming a little of that transparency thing down NASA’s throat while you are at it??
For starters, I’d like to see a detailed breakdown of how much each major element and instrument of JWST cost the taxpayers. And while you are at it, you can also tell us how many millions were spent by NASA on so-called Annual JWST Partners Workshops that just so happened to be held at fancy resorts across the country.
I’m not even going to ask about all the NASA managers who suddenly seem to find a critical reason to travel to Paris each year to sit in on a one hour discussion with ESA/Arianespace for the launch vehicle.
Check out the GAO reports on JWST if you want to get cost information. NASA’s budget documents also provide information on program costs, although not to the minute detail you appear to desire.
For anyone that may have missed it, here is Musk being interviewed by Bloomberg at the manned Dragon appearance at the Newseum in Washington on June 11th.
http://www.bloomberg.com/vi…
A bit more humble than in the past.
Keith apparently was there (as were many in Congress) Hope he posts his impressions of the craft & response(s) from attendees and staffers
Yes I saw a picture of Keith inside the Dragon flipping switches.
Well Mr. Musk Do I have to drive to Washington to see V2????
WHEN ARE YOU SENDING DRAGON V2 ON A USA GRAND TOUR SO ALL OF US CAN SEE IT???
May I suggest that on your way through the upstate of South Carolina that you have it visit Roper Mountion. That’s a place where many locals go to look through a telescope.
OR
Maybe Dragon V2 should visit all the Malls in the country to get Joe Public interested in outer Space again?
Better yet Joe Lunch box can be found at Walmart.
USA TAXPAYER