Background

On February 1, 2003, the Columbia Space Shuttle disintegrated over Texas, leading to the deaths of the seven crew members on board. The loss of Columbia led to the creation of the Columbia Accident Investigation Board (CAIB), whose analysis of the crash revealed that damage caused by a foam strike on the orbiter’s wing had allowed plasma into the internal structure of the shuttle, reducing its integrity and leading to disaster. In part as a result of the Columbia loss in 2003, the United States set out on a new policy in an effort to advance American human spaceflight after the planned retirement of the Shuttle, which is set to occur later this year.

The Onset of Wasteful Spending

NASA began to prepare for the eventual retirement of the Shuttle by, in part, launching the Constellation program, which as initially designed would develop a new Apollo-like spacecraft called Orion, and two new launch vehicles – Ares I for crew flights with the Orion and Ares V, a heavy-lift vehicle to perform lunar missions in conjunction with it, along with a lunar lander and earth departure stage. The new systems would be used to send U.S. astronauts to the International Space Station, the moon, and ultimately Mars and beyond. Unfortunately, Constellation was premised on the faulty notion that billions of dollars in sole-source, cost-plus contracts was an efficient use of taxpayers’ money. The program quickly began running billions of dollars over budget and years behind schedule. According to the blue-ribbon Review of U.S. Human Spaceflight Plans Committee, led by Norm Augustine in 2009, Constellation was “unsustainable.” The Augustine Report confirmed numerous other independent analyses of Constellation by the Congressional Budget Office (CBO), the Government Accountability Office (GAO), and private watchdog groups. Accordingly, it was officially terminated last fall in the NASA Authorization Act of 2010, though, unfortunately, NASA is forced by the Continuing Resolution to continue
spending hundreds of millions of dollars per month on the program until Congress passes a new appropriations bill.

Benefits of American Competitive Spaceflight and Commercial Crew

In addition to initiating the programs that would eventually become known as Constellation, President Bush, in his Vision for Space Exploration, also sought to facilitate the growth of the U.S. commercial spaceflight industry and inject free-market principles into U.S. space policy. Commercial crew and cargo transportation capabilities to low-Earth orbit, or LEO, would significantly enhance U.S. capacity to fully utilize the International Space Station and eliminate America’s reliance on Russia for transporting Americans to space—costs on the Russian Soyuz have already escalated to $58 million per seat. A domestic commercial crew capability would provide resiliency in our nation’s space transportation infrastructure, preventing a loss of space access when a single system fails, as occurred twice with the Shuttle. And a strengthened American competitive spaceflight industry would bolster American innovation and advancement in high-technology manufacturing, reduce costs to taxpayers for critical space launch services and missions, and reclaim America’s historic space dominance. Unless the U.S. fully develops a competitive, commercial crew capacity, our national space posture will continue to erode. American competitive, commercial crew would:

• Leverage Private Capital Investment. With private sector development, each dollar of government investment is leveraged by two additional nongovernment sources of capital: private investment and revenue from other markets. This has been demonstrated by NASA’s existing
  Commercial Orbital Transportation Services (COTS) program for commercial cargo to the International Space Station, in which NASA’s investment in the development of commercial space transportation capabilities is augmented both by private investment and by advance revenues from sales in other markets such as telecommunication satellite launches.

• Reduce Both Average And Marginal Costs. Commercial crew and cargo providers actively seek as many new markets as possible for their services, increasing the volume of flights and thus reducing the cost of access to space for all, including NASA. Markets for commercial spaceflight include scientific research flights, national security missions, commercial launches for satellites, private space travel, and others. And, a strengthened U.S. commercial spaceflight industry would increase the number of launches from the United States, which has lost out as foreign governments increasingly take over the market.
• Procurement Reform. American commercial crew providers rely on fixed-price contracts that are competitively bid rather than sole-sourced, with ongoing competition to provide multiple sources on a continual basis.
  This fundamental shift in how government does business has been successfully implemented on a small scale within NASA, DARPA, and other government agencies. Unlike the traditional cost-plus-fixed-fee contracts, in which contractors are reimbursed for labor and material with a set profit percentage regardless of program success, these firm-fixed-price agreements utilize pay for performance, in which the company is only paid upon the successful completion of performance milestones. This dramatically reduces NASA’s exposure to risk and incentivizes commercial providers to keep development costs as low as possible. In the COTS program, this has reduced costs by more than an order of magnitude over the traditional NASA approach.

• End Reliance on Russia. The way to space should not be through Moscow,
  and full utilization of the Commercial Crew program will reduce our
  dependence on Russia and prevent extra U.S. taxpayer dollars from being
  sent overseas. When the Shuttle retires, the U.S. will purchase seats on
  Russian Soyuz spacecraft at roughly $58 million per seat and rising.
  Because NASA is sole-sourcing this mission to Russia, these costs are
  guaranteed to continue to escalate over time. A robust U.S. commercial
  crew program would enable the U.S. to end this reliance on Russia within
  the next 2-3 years. According to the report of the Augustine panel in late
  2009, “[t]here is little doubt that the U.S. aerospace industry, from
  historical builders of human spacecraft to the new entrants, has the
  technical capability to build and operate a crew taxi to low-Earth orbit.”

• Create U.S. Jobs. Reliance on Russian Soyuz vehicles means that U.S. is
  outsourcing its space missions to Russia and creating jobs outside of
  America. But a full commercial crew policy will leverage U.S. private
  investment to create thousands of jobs in Florida, Nevada, Colorado,
  Virginia, Texas, California, Washington, and Alabama. According to an
  April 2010 Tauri Group study, full implementation of the Commercial
  Crew and Cargo Program would result in an average of 11,800 direct jobs
  per year over the next five years nationwide.