This commentary originally appeared in the July 31, 2017 issue of SpaceNews Magazine.
I recently had the opportunity to participate in a great panel session discussing the role of commercial space in returning America to the moon. The panel was part of the International Space Development Conference, hosted by the National Space Society. The NSS crowd was enthusiastic and clearly many of them were excited by the visions of Elon Musk, Jeff Bezos and other NewSpace entrepreneurs. I share that enthusiasm and look forward to an active future in space that only a truly competitive market can bring. However, my recent service on President Donald Trump’s transition team at NASA has led me to understand that treating space policy as though it were a team sport will not get us there. The future is complex and challenging and we will need the amazing capabilities and scale of the traditional players to get there. In that spirit, I’d like to offer some unsolicited advice to friends in both camps.
It’s great that NASA appears to be surviving this year’s government budget cutting unscathed. The House Appropriations Committee in July recommended a nearly $19.9 billion budget for NASA for 2018, about $800 million more than the Trump administration requested and nearly $300 million more than Congress approved for 2017.
Assuming NASA ultimately gets the $19.9 billion, that isn’t the sort of increase that will take us back to the moon and get us to Mars via traditional methods. Doing bigger and bolder things with nominally fixed NASA budgets will require greater use of commercial tools like Other Transaction Authority (OTA) agreements and milestone-based prizes. The Trump administration clearly recognizes that and has called for sustaining America’s leadership in space via public-private partnerships.
Market incentives
Nobody can deny any longer that well-managed commercial partnerships deliver the goods. NASA’s Commercial Orbital Transportation Services (COTS) program, designed to produce options for International Space Station resupply, produced wondrous results. We got two great ISS resupply systems and something more. SpaceX’s aggressive pricing and launch cadence is recapturing a large portion of the international commercial launch business for America. Just as importantly, this effort spurred incumbent United Launch Alliance to reduce costs and develop innovative new designs. The visionary commercial plans that ULA CEO Tory Bruno has laid out are nothing short of revolutionary.
What makes a program truly “commercial” isn’t simply the nature of the company or how NASA or the Defense Department pays them; commercial is when we end up with a self-sustaining market after the program is complete. Competitive markets drive efficiency improvements that continue to reduce the space agency’s operating costs without additional capital investment. The $800 million outlay for COTS has unleashed forces that will save NASA, DoD and the National Reconnaissance Office, many billions of dollars over the next decade.
While that’s impressive, success in space also requires making better use of our incumbent players and improving our traditional contracting tools. There are many important science, exploration and defense missions that simply lack post-mission commercial potential. The search for life on Europa is a perfect example. It’s potentially the most game changing scientific investigation in history, but the distance to Jupiter’s icy moon and the challenging radiation environment on its surface make this a unique and extremely risky mission.
Not everything can be commercialized
There are no commercial analogs to this task and no market demand. The development process for the one-off Clipper orbiter and Europa lander is so fraught with unknowns that setting a fixed price and demanding matching private investment would only drive away vendors. Private investors are rightly focused on promising economic opportunities on more accessible worlds: the moon, Mars and near-Earth asteroids.
Europa is a mission we should do and we will be able to count on NASA’s Jet Propulsion Laboratory to design the vehicles and work with their traditional vendors to deliver the goods. JPL’s reputation is well earned and a major reason for their success has been the Federally Funded Research and Development Center (FFRDC) model they operate under with the California Institute of Technology. Cal Tech is able to recruit the brightest scientists and engineers and move them between programs in a way that traditional NASA centers, bound by tortuous federal rules and labor contracts, cannot. While FFRDC isn’t perfect for every application, it’s worth looking for additional applications of this model.
Many NewSpace advocates chose not only to promote commercial solutions but to also attack large traditional programs that compete for space funding. They have been particularly aggressive with NASA’s next-generation launch vehicle, the massive Space Launch System. As with most space projects, the SLS flight schedule keeps slipping (much like those commercial space tourism vehicles we are eagerly awaiting). The cost-plus contracting mechanism it enjoys has also allowed SLS to run over budget (like nearly all military aircraft in recent memory).
All that said, nothing in our current rocket livery can throw the Europa Clipper directly to Jupiter the way SLS could, saving years on gravity-assist visits to Venus and Earth. The Europa lander is going to be so big and requires so much fuel to slow down and land on a distant, airless moon that even ULA’s Delta 4 Heavy rocket apparently can’t do the job. So, while SLS is expensive, it has unique applications and provides America with unrivaled launch capacity. We can maximize our investment in SLS by utilizing it to its fullest capacity. Increasing the launch cadence and finding ways to utilize its facilities and personnel between launches could reduce the otherwise burdensome fixed costs of this massive project.
The commercial folks will rightly point out that really big heavy-lift vehicles from Blue Origin and SpaceX are in the works. SpaceX’s Falcon Heavy is set to fly this year. The traditionalist will then retort that it is also well behind schedule and that SpaceX’s promised 65-ton LEO lift capacity comes in at about half that of a fully configured SLS Block 2. The commercial folks will respond that SLS’s Exploratoration Upper Stage and the Advanced Boosters required to give the Block 2 all that power don’t exist yet; the Block 1 SLS uses an existing Delta 4 upper stage and five-segment boosters derived from the space shuttle’s solid rocket booster design. And, of course, the traditional folks have good explanations for that and so it goes.
This back and forth was a really fun conversation the first half dozen times, but at some point, it became a needless distraction and then unfortunate source of ugly conflict among Americans who all share a vision of humankind’s future in space. There is a way to get beyond this argument.
Teaching elephants to dance
The first step in solving a problem is admitting it exists and I’d ask the traditional players to stop dismissing the achievements of upstart NewSpace entrepreneurs. It’s obvious that they are facing serious, determined, brilliant and well-funded competitors. Companies like SpaceX, Virgin Orbit and Blue Origin are attracting the best and brightest young minds. Many of my finest students at the University of Southern California have turned down higher paying jobs from Google, Apple and big traditional space firms to work long hours under demanding conditions at these NewSpace startups. Stability, great benefits and generous retirement plans are no longer the source of competitive advantage in recruiting — inspiration is.
The execs at the traditional firms should all be required to read Lou Gerstner’s “Elephants Can Dance,” the story of how that visionary IBM chief executive reinvented a great American firm in the face of Silicon Valley disruption. History has repeatedly demonstrated that the worst possible strategy for incumbent firms facing market change is to live in denial, attempt to stop time and to attempt to defend their turf based on past achievements. This defensive posture produces a dangerous culture of entitlement and inevitably fails. When the Silicon Valley folks and their disruptive business model show up in your market, you must adapt; ask your taxi driver about Uber or your video rental store about Netflix. To survive and flourish during disruption incumbents must recapture the innovation that made their firms great, shake up management, reduce costs in meaningful ways, and show more vision. Traditional space already has the perfect model for all that in Tory Bruno, whose visionary new ULA is still a joint venture of Boeing and Lockheed Martin.
Fan boys and dinosaurs
For the commercial firms and their raucous fan boys, let me suggest that they stick to what is clearly working so well. Be humble when you succeed, quickly fix things when you fail and stop worrying about what you think the other team is doing wrong. We understand why you believe that you’re the young mammals of the Cretaceous Period and the traditional folks are the soon to be extinct dinosaurs. That may indeed be the case, but let me remind my friends that it was the environment that selected the dinosaurs out. Tyrannosaurus rex was not eaten by those little mammals, who wisely scurried from its path. So, please stop poking the dinosaurs, they may take my advice and evolve. I’ve seen an eagle swoop out of the sky and seize a rabbit; a stunning reminder to us mammals that the theropods never really vanished.
In the end, the American taxpayer expects our investment in space to deliver awesome science, bold achievements in human exploration, unbeatable national security and technological spinoffs that make their lives better. For 50 years, America’s space program and the amazing companies that built it have delivered on that promise. With the introduction of new blood, fresh ideas and more intense competition our future in space will only be brighter. Enough with the infighting. Together we can go!
Greg Autry researches the impact of government policy on emerging space industries and teaches in the Lloyd Greif Center for Entrepreneurial Studies at the University of Southern California. He recently served on the Presidential Transition Agency Review Team for NASA and held a temporary appointment as the White House liaison at NASA.
Greg Autry researches the impact of government policy on emerging space industries and teaches in the Lloyd Greif Center for Entrepreneurial Studies at the University of Southern California. He recently served on the Presidential Transition Agency Review Team for NASA and held a temporary appointment as the White House liaison at NASA.
