A Fraudulent Charter

TEA Party in Space Blog ^ | May 26, 2011

[anymouse]

The U.S. House Subcommittee on Space and Aeronautics held a hearing today entitled “NASA’s Commercial Cargo Providers: Are They Ready to Supply the Space Station in the Post-Shuttle Era?” Here is a link to the charter that was prepared for the committee by Ken Monroe. Mr. Monroe is one of the main staffers who serves the Space and Aeronautics subcommittee in the house. This is the same Ken Monroe who said NASA was run by a bunch of idiots. We all have opinions about NASA, congress, the president, and our bosses; however, how many would actually tweet something like that? Does this show sound judgment? This man is responsible for putting together reports for congressmen and women so that they may make informed and sound decisions.

This hearing was a setup. A setup to show just how “poorly” the COTS program has been performing. However, those who follow the United States space program know that the COTS providers are given small amounts of money as they achieve milestones. If either Orbital or SpaceX does not meet a milestone, they do not receive any taxpayer dollars. Moreover, both SpaceX and Orbital have shown that they can do more with less.

Mr. Monroe authored the charter for the hearing in which his personal bias’ was evident and clear. This is a disgusting example of manipulation and lying by omission. The methodology used to create the tables does not offer a fair and honest assessment of the costs associated with Commercial Cargo. Only in congress can you justify wasting 11.1 billion dollars and not have anything to show for it and at the same time insult the private sector for doing more with less.

If you believe the charter, you would believe that the NASA program of record is doing just fine and producing results while this “risky scheme” that is the private sector providing services is failing. Nothing could be further from the truth. This article will document the bias, half truths, and manipulation of the data contained inside the tables of the charter. However, if you read the charter you will discover more misrepresentations of the facts and I encourage you to do so.

Here is the first table in the charter. The numbers are accurate and show that the taxpayer has “invested” 1.2 billion dollars. What this chart does not show are two things that are very important to congress, the space industry, and the U.S. taxpayer.

The first “omission” is that every dollar paid to Orbital and SpaceX was earned. That is to say that the commercial partner met an objective (milestone) and was paid a set dollar amount agreed to by the commercial provider and NASA before the contract was signed. If the milestone is not met, the commercial provider does not get paid. The commercial partner will have to spend their own resources to fix the problem. Rocketplane Kistler was originally selected as a COTS commercial provider; however, after not meeting milestones, RpK was removed from the COTS contract and replaced with Orbital. RpK was not “too big to fail” because the contract and milestone economic model worked as intended. Both Gwynne Shotwell and Frank Culbertson testified that their companies have either matched the taxpayer contributions (SpaceX) or have significantly contributed to (Orbital) taxpayer funds. This means that these companies have bought in to what they are telling us.

Question – Have the NASA contractors matched the taxpayer contribution with the Constellation contracts, or even come close?

The second glaring omission was a comparison to the failed Constellation program during the same time frame. So here is a side by side, apples to apples, comparison of the cost of the two programs.

Congress sent 13.3 billion to their states and districts, a cleverly hidden earmark, to fund Constellation using cost plus contracts that use poor business practices, a poor economic model, and ultimately rewarded failure by awarding the same companies Space Senate Launch System contracts. Meanwhile, congress at the same time spending 500 million on a fixed cost contract that only paid the commercial providers money when they met milestones. Which one of these two programs is fiscally responsible, limited in government, and opens up the free market?

What did the American taxpayer get for their $13.3 billion dollar “investment” in Constellation?

- 9 “healthy centers” – This means “jobs”

- Very nice power point engineering

- Awesome CGI videos that make Pixar jealous

- The worlds largest model rocket test – Ares Ix

What did the American taxpayer get for their $500 million dollar investment in the commercial sector?

- Two private sector companies that provide over 1,900 private sector jobs

- Three new vehicles

- Falcon 1 - Falcon (formerly Falcon 9) - *Taurus II

- Five new engines

- Merlin 1 - Merlin 1b - Merlin 1d - Merlin Vacuum - Draco

- A new capsule - Dragon

- A new spacecraft - *Cygnus

* Taurus II and Cygnus will make their maiden flight in the late fall of 2011

Falcon 1, Falcon, and Dragon have all flown successfully. NASA has added, and rightfully so, additional milestones to both Orbital and SpaceX. NASA took the recommendation of the Augustine Committee to further mitigate the risk of COTS providers due to shuttle retirement rapidly approaching. Moreover, the cost for development for SpaceX’s vehicles, $390 million, have been independently verified by NASA. If NASA were to develop the Falcon launch system it would have cost between $1.7 billion and $4.0 billion dollars. Clearly Mr. Monroe and some in congress do not want a side by side, apples to apples, comparison of COTS and Constellation. Congress just wanted a photo op to beat down NASA and commercial providers and ask how come the Space Senate Launch System is not in full production yet?

Question to congress – if small, streamline companies have delays with small organizations, what kind of delays do you think an organization of over 18,200 civil servants and 48,000+ contractors will have?

This chart assumes NASA will pick up the additional servicing flights to the ISS. This is a fair assumption. What we have to do is compare and contrast this to the government sponsored program of record, the Space Senate Launch System. So here is a side by side, apples to apples, comparison of the projected cost of the two programs.

Again, there are two important factors. NASA is paying money to Orbital and SpaceX in 2011 to start building hardware for CRS missions that will launch in 2012. Baring unforeseen problems, this fall will see three COTS missions, two from Orbital and one from SpaceX. Cost to the U.S. taxpayer? $516.5 million dollars. Meanwhile, congress wants us to spend $2.75 billion dollars in 2011 alone on Constellation the Space Senate Launch System which isn’t even expected to fly until 2016. We do not have estimates on how much SLS will end up costing the U.S. taxpayer, but the cost will be DOUBLE what CRS and the private sector costs. Moreover, from 2012 on the private sector will be delivering cargo to the ISS. Finally, SLS does not have a cargo ship under development, only Orion the Multipurpose Crew Vehicle (MPCV) which carries four astronauts to SpaceX’s seven.

What is the better value here for the United States taxpayer?

Why is congress hell-bent on funding SLS? The answer is pork barrel spending by space states and districts. Congress appears not to want a functioning space program centered around the private sector. Instead, congress seems to want a dysfunctional jobs program commanded by a centralized government agency living off the legacy of an organization that today’s generation cannot relate to. Does anyone actually think SLS will not get at least 3 million a year in years 2014-2016?

This slide had a lot of people questioning the charter put together by the congressional staff, notably, Mr. Monroe. There are so many things wrong with this chart. Arguably the biggest question is where did the staff come up with a price of $3 billion dollars a year for four flights?

These numbers come from the NASA budgets that are available online. The average cost per flight is $1.27 billion per launch. If we take this cost and multiply it by four we get $5.08 billion dollars PER year. Again, this is just the cost of the flight. Congress needs to ask the staff, and particularly Mr. Monroe how he could ever come up with a figure of $750 million dollars per launch. What Mr. Monroe did was take the figure that United Space Alliance (USA) supplied to NASA in an attempt to commercialize shuttle operations based on two shuttle flights a year or $1.5 billion dollars. He then divided it by two which equals 750 million dollars per launch. Mr. Monroe makes another error by assuming he could simply double USA’s estimates and make four flights per year. Mr. Monroe conveniently forgets that USA would have drastically reduced the shuttle workforce and more than two flights a year, while possible, would have cost more.

Then there is the issue of cargo carried to the ISS by shuttle. The figure Mr. Monroe presentsa figure of 35,264 pounds per flight. What Mr. Monroe conviently forgets to tell the congressmen and women is that of the 35,264 pounds of “cargo” carried into orbit, not all of the cargo will be transferred to the ISS. As an example, you have the Multi-Purpose Logistics Module built by the Italian Space Agency.

Each empty MPLM is approximately 21 feet (6.4 m) long, 15 feet (4.6 m) in diameter, weighs 4,400 kilograms (9,700 lb), and can deliver up to nine metric tonnes of cargo to the ISS.

Mr. Monroe conveniently does not point out that the weight of the MLPM, 9,700 pounds, is included in the shuttle cargo weight. However, this is just a structure that occupants on the ISS can never use. Therefore we must subtract 9,700 pounds from each flight that would use an MLPM. Every orbiter is also equipped with the Orbiter Docking System. This is also considered part of the “payload” and weighs 4,000 pounds. Therefore we must subtract 4,000 pounds from each flight.

There are no more parts of the ISS on the ground that would need to be carried by the shuttle. For this calculation we will assume that the shuttle will use an MPLM and the Orbiter Docking System. The shuttle is now providing only 21,564 pounds of useful cargo per flight or 86,256 useful pounds of cargo to ISS per year. Remember, each flight of the space shuttle costs, in the real world, $1.27 billion dollars per flight or $5.08 billion dollars for four flights.

Using Mr. Monroe’s own formula of number of pounds of cargo divided by the cost of four missions equals $59,033.57 dollars per pound of useful cargo to the ISS. This is the economic reality that no one in congress, or Mr. Monroe, seems to or wants to grasp.

Meanwhile, congress finds the need to bring NASA, and the commercial providers, up on the Hill to testify why they are behind schedule and openly question if they will need a bail out. Finally, this last chart compares the hypothetical of Commercial Cargo against the pipe-dream Monroe shuttle cost and the economic reality cost of shuttle based on budget history. The numbers do not lie.

It should also be noted that Ms Shotwell testified that CRS flights conducted by SpaceX are not filled to capacity. Moreover, she testified that NASA bought a service and SpaceX would not charge by the pound but by the flight. This is an enormous cost savings to both NASA and the U.S. taxpayer.

Conclusions

The hearing held on May 26th, 2011 was unfortunate. Not because there are not serious questions that need to be answered by NASA, SpaceX, and Orbital; but because the bias, and blatantly doctoring of the numbers by the congressional staff, headed by Mr. Monroe took an opportunity away from forwarding the United States space program.

COTS and CRS are the future and we in the TEA Party should openly support them. They are fiscally responsible. The economic model of using fix cost contracting in conjunction with milestones assure that the American taxpayer is protected. If the commercial provider does not deliver they do not get paid. There are schedule delays but the economic impact is minimal when compared to NASA failures such as James Webb Space Telescope (currently ~$4 billion and three years behind schedule) and Constellation. They limit the power of government. The business model adopted by COTS and CRS of partnering SpaceX and Orbital with NASA as a team works. As Ms Shotwell testified to, when SpaceX had an issue, at their own expense, they reached out to Marshall Space Flight Center and Ames Research Center solve problems. Finally, COTS and CRS are opening up access to free markets. SpaceX is finally taking back market share in the launch business that was lost to the Russians and Europeans.

Mr. Monroe serves at the pleasure of the congress. It is very troubling to see this kind of bias and unprofessional behavior, a trend item for Mr. Monroe, exhibited by a paid federal bureaucrat. It would be wise of Chairman Hall, Chairman Palazzo, and Ranking Member Costello to review all of Mr. Monroe’s work for obvious bias and unprofessional behavior.

[anymouse]

[anymouse]

Space ping.

[cripplecreek]

Ditch the outer space treaty and really turn industry loose on space.