aws@vax3.iti.org (Allen W. Sherzer) (12/19/89)
Below is a statement read into the record on HR2674 by NSS.
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NOVEMBER 9, 1989
JIM BENNETT
AMERICAN ROCKET COMPANY
Dear Jim:
NSS has produced a statement for the subcommittee
to be inserted in the printed record. It is based on
the "Review of the STSPA by the NSS Legislative
Committee" as has been approved by the committee.
The Committee staff agreed that a statement of
public support for the Act was a good idea.
Scott Pace wrote both the "Review" and this
insertion. It is a statement of support for the
intent of the legislation while offering helpful
criticism.
If you think it appropriate, please mention the
fact that this statement has been submitted for the
record. You might want to mention that you had a
hand in developing it.
Thanks for your help, good luck with your
testimony, and stop by and see us before you leave
town!
Ad Astra,
Lori Garver
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STATEMENT OF
THE NATIONAL SPACE SOCIETY
ON THE BILL
H.R. 2674
SPACE TRANSPORTATION SERVICES PURCHASE ACT OF 1989
BEFORE THE
SUBCOMMITTEE ON SPACE, SCIENCE, AND APPLICATIONS
COMMITTEE ON SCIENCE, SPACE AND TECHNOLOGY
U.S. HOUSE OF REPRESENTATIVES
NOVEMBER 9, 1989
Review of the
"Space Transportation Services Purchase Act of l989"
by the National Space Society Legislative Committee
Summary
The NSS Legislative Committee has reviewed the Space
Transportation Services Purchase Act of l989 (HR 2674) and
supports its structure and intent. We welcome the opportunity to
participate in these hearings as a vital and constructive means
to hear from all persons concerned with the competitiveness of
the American launch industry and commercial space policy.
The National Space Society sees substantial support for the
intent of this legislation in Congress, the Administration,
industry, and among pro-space activists. There are several
portions of the bill which require clarification, however, to
fulfill the intent of its authors, support U.S. commercial
interests, and speed the development and settlement of space.
This review covers, in brief, the rationale for this legislation,
potential questions, and areas of concern that may arise from
these hearings.
Rationale
Current Federal Acquisition Regulations and Presidential
policy allow the purchase of commercial launch services, and such
services have already been used to a limited extent by the
Department of Defense. The major change affected by this
legislation is to require the use of commercial launch services
by the government, with some key exceptions for military and
shuttle-unique payloads.
The Space Transportation Services Purchase Act (STSPA) would
not only promote commercial launch industry, but would implement
policy options identified by the Office of Technology Assessment
in its l988 memorandum Reducing Launch Operations Costs - New
Technologies and Practices. The number one option for reducing
the operations costs of existing launch systems was for the
Congress to "require both NASA and the Air Force to purchase
launch services, rather than vehicles, from private industry."
The OTA went on to explain that "Under this form of purchase, the
Government treats launch service providers much as it treats
competitive commercial procurements from any other service
industry, and pays for the delivery of a payload to a specified
orbit. The launch service company provides the launch vehicles
and all supporting services, including launch operations.
Government officials work with the launch firm to assure that the
firm meets Government standards of manufacture and service.
However, they limit their involvement in the details of the
manufacturing and launch process. The launch firm, not the
Government, accepts the financial risk of a launch failure, and
guarantees a reflight or other compensation."
The National Space Society has consistently supported the
need to lower the cost of access to space in order to promote
human expansion into the solar system. A competitive commercial
launch industry that has incentives to reduce costs within
acceptable risks is a key element in meeting this need. In our
view, the STSPA has several important objectives:
1) attach strong Congressional support to existing
Presidential policy on commercial launch services;
2) increase private sector confidence in the government
market for commercial launch vehicles;
3) save money for the taxpayer through innovations in
traditional procurement practices; and
4) make the procurement of commercial launches a routine
activity as a precedent for future space services.
Potential Questions
1. Why encourage Congressional support for a Presidential
policy?
The commercial climate for the expendable launch
vehicle (ELV) industry has been greatly assisted by the l984
Commercial Space Launch Act - beyond what would have occurred
due to Presidential policy directives alone. Codifying executive
orders into legislation leaves little doubt as to the permanence
and seriousness of the established policy. This in turn
increases investor confidence in the government's commitment and
spurs the implementation of launch service contracts by
procurement offices. The extension of service purchase practices
to space transportation will bring greater consistency to
government activity in commercial space development.
2. What innovations are introduced into the procurement process?
The most important innovation is the shifting of
financial and oversight responsibility to the firms providing
launch services, and a reduction in Government reporting and
documentation requirements. While companies may still choose to
adhere to military and NASA qualification (milspec and S-spec)
requirements, they will not be required to prove that they do so
(save for range safety needs). This amounts to lowering barriers
to entry for new firms and opens opportunities for alternative
means of meeting space transportation needs. Not requiring cost
data for cases of competitive bids and fulfillment of the
contract is common practice for government purchases of many
commercially available products and services. The government
would retain, however, the option of requiring cost data for
cases of directed sole source bids. Such bids would still
require specific justification as is current practice under
Federal Acquisition Regulations (FARs).
3. Why is the Transportation Department involved in determining
exceptions to this Act?
The Transportation Department is the most appropriate
location for deciding whether a government payload should seek a
commercial contract. It has an existing statutory role, its
launch vehicle expertise is increasing with new licensing
activity, and it can serve as a neutral civil arbitrator as it
does not build payloads or launch vehicles. Payloads requiring
the unique services of government launch vehicles (e.g.,Spacehab)
are exempted as are national security payloads certified by the
Secretary of Defense.
Areas of Concern
Fair Trade
In 5(a), a further provision should be added for paragraph
5(a)(l) such that "A vehicle made in a particular foreign
country, or a vehicle made in the United States primarily of
components from a particular country, may be used to provide such
services if the U.S. Trade Representative certifies that a
general and mutual free-trade agreement for space goods and
services providing mutual and equal open markets exists between
that country and the United States."
The trade talks between the United States and other states
with space industries are crucial to the success of the U.S.
industry. The United States should not have its hands tied by
opening its government markets to them in advance of an agreement
(such as the one with Canada), or by permanently excluding those
markets. This added provision would also address concerns that
the language is overly protectionist by specifying the
conditions under which foreign firms would have access to the
U.S. Government launch market.
Determining Exceptions
4(b)(2) and (3) should be combined into a single clause
providing for an exclusion reading "The Secretary finds, after
requesting and reviewing proposals from commercial providers,
that such providers cannot provide equivalent service, or that
such service is unreasonably disadvantageous for technical or
financial reasons."
This exemption should be simple and precise, with a
relatively clear and objective process for determination.
Determinations by the Secretary of Defense or the Secretary of
Transportation should be sufficient for the purposes of this Act,
without requiring certification to the Space Council. The
exemption decision needs to be a fairly routine judgment made on
technical and/or economic grounds, not a continuing series of
policy decisions at senior levels. Of course, disputes may
always be taken to the Space Council by any of the members.
Sections 6(c) and (d) also contain language requiring Space
Council members to certify their compliance with limits on
expenditures for international activities and studies,
respectively.
Disputes
Section 5 should restore the Disputes section contained in
previous drafts. This would read "5(c) DISPUTES--The Secretary
shall establish a Space Transportation Services Appeals Board,
and shall support and oversee the activities of the same. Any
dispute regarding the interpretation of space transportation
services agreements between commercial providers and the United
States Government shall be resolved by this Board. The Board
shall also adjudicate disputes between commercial space
transportation providers and the United States Government
regarding agreements for provision of launch property and
services provided under terms of PL 98-575, as amended, and other
laws or executive orders."
The establishment of this Board would result, over time, in
the creation of a body of case law defining precisely what a
commercial space services procurement is. This will lay the
basis for future space service procurements such as space power
production and supplies of non-terrestrial materials. Without
this provision, the Defense Contract Board of Appeals, or its
NASA equivalent, would handle these cases. Those bodies are
steeped in the details of conventional procurements that they are
unlikely to allow for experimentation with new procurement
practices. New procurement approaches that substitute
competition and market forces for government oversight of
contracts is the heart of this Act and something the nation badly
needs. Furthermore, the creation of an Appeals Board avoids the
need to deal with some questions that are bound to arise but
probably cannot be adequately anticipated in legislation - for
example, the precise distinction between providing space
transportation services and engineering support services, or how
to handle delays, or even what are the valid criteria for
awarding or denying contracts. On this latter point, it should
be noted that the Act does not demand that the lowest bidder get
the contract, and properly so. Office of Management and Budget
(OMB) directives should guide these matters.
Grants
We are concerned that requiring all grantees to run a
government-style procurement in the traditional form of "full,
fair, and open competition" would severely limit the number and
type of researchers able to use these funds. Most small research
institutions and individual researchers would have a difficult
time dealing with the paperwork burden and associated
procedures. This particularly endangers the voucher plan studied
by NASA and the DOT last year, about which many researchers and
companies have been enthusiastic. At minimum, language should
be added to exempt a voucher plan for space researchers from the
"full, fair, and open competition" requirement. Report language
could refer to the existing NASA-DOT study carried out by
Resources for the Future as an example of the kind of plan
envisioned.
Use of Government Launch Property
In prior drafts of this Act there was a clause in Section 5
stating: "The use of United States Government launch property or
services by United States commercial providers under the
Commercial Space Launch Act of l984 (PL 98-575) as amended, shall
not be calculated as an offset to the price of launch services
supplied to the United States Government. This subsection shall
not prevent bidding providers from listing pricing options for
space transportation services conditioned on the availability of
Government- furnished equipment or services not otherwise used by
the provider."
The purpose of the first part of this clause was to separate
the selling of a launch service from the right to use government
launch property under PL 98-575. Launch sites and related
services are now made available to the commercial launch industry
on a direct cost reimbursable (DCR) basis. Launch companies get
this whether or not they launch any government payloads;
the public interest being served by a healthy launch industry.
This clause is to prevent a procurement official from saying "you
should calculate the contribution of this 'free' launch site into
your proposal." The second part of this clause is intended to
encourage creativity on the part of commercial providers in
proposing use of other government resources in responding to a
specific launch opportunity.
This concludes the statement submitted by the National Space
Society. On behalf of the more than 24,000 members of the
National Space Society, we wish to commend the subcommittee for
its interest in this issue of national competitiveness and
economic expansion.
Our membership strongly supports the significant role that
private enterprise plays in lowering the cost of access to space.
We encourage the lessening of barriers which will eventually lead
to the creation of a space-faring civilization which will
establish communities beyond the Earth.
With a nation-wide system of chapters and political
activists the National Space Society should be seen as clearly
supportive of the intent of this Act and will endeavor to see
that this legislation advances to become public law.
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| Allen W. Sherzer | Is the local cluster the result |
| aws@iti.org | of gerrymandering? |
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