‘Unprecedented’ Budget Environment Drives Change across Space Industry

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HUNTSVILLE, Ala. — Declining U.S. federal budgets and the looming threat that things could get much worse before they get better are forcing government space agencies and contractors to rethink the way they do business, and according to some officials, that is not such a bad thing.

The budgetary uncertainty has caused hiring freezes, and some programs are being structured in ways that might offend the sensibilities of development-efficiency experts.

But adversity breeds innovation: As they struggle to cope, agencies and companies are finding themselves cooking up what they hope are fresh recipes for success.

The fiscal situation was front and center during the American Astronautical Society’s Wernher von Braun Memorial Symposium at the University of Alabama here Oct. 15-18, where government and industry officials agreed that downward pressure on spending is unlikely to ease any time soon. But what that ultimately means for the U.S. military and civil space sectors was a matter of some debate.

U.S. Air Force Maj. Gen. Susan Mashiko, deputy director of the National Reconnaissance Office (NRO), said budget increases used to be relatively easy to get whenever a new security threat emerged. “Those days are long gone,” she said. “The budget we face is scrutinized, right down to how many people are you sending to a symposium.”

 

A One-Two Punch

The Budget Control Act of 2011, enacted amid a debt-ceiling standoff that threatened to shut down the government, mandated $1 trillion in spending cuts over 10 years and tasked a so-called supercommittee to find ways to reduce the deficit by an additional $1.2 trillion over the same period. Because the supercommittee failed to produce a plan, across-the-board spending cuts of 7 to 9 percent are set to take effect in January, a process known as sequestration.

The U.S. aerospace industry has been warning for months that sequestration would be devastating to military and civil space programs alike.

“This is really unprecedented,” said Jim Crocker, vice president and general manager for civil space at Lockheed Martin Space Systems, Denver. “If we think the confusion that was caused by where we were last year with the lack of clarity had an impact on us, just multiply that by, what, a thousand times and see what that does to the nation … it’s really scary… it is a doomsday scenario.”

Fred Doyle, vice president for defense and intelligence at Boulder, Colo.-based Ball Aerospace & Technologies Corp., said budget uncertainty, more than anything else, is stymieing private-sector growth and preventing his company from hiring.

“Our leadership says they want to know what the business is going to look like in the 2015 time frame. We don’t know what it’s going to look like on April Fools Day when the CR expires,” Doyle said, referring to the six-month continuing resolution the U.S. Congress adopted in late September to keep federal agencies funded at current levels through March. “If we knew right now that we would have funding in April for the projects we have on contract, we would be hiring 300 people right now.”

While many here assume Congress and the White House will head off sequestration, either by striking a $1.2 trillion deficit-reduction deal or by kicking the can down the road, they also recognize that budgets will remain tight.

The NRO, which buys and operates the nation’s fleet of classified spy satellites, has already throttled back spending significantly, according to Mashiko.

“Between the Department [of Defense] and the intelligence community, we took a $450 billion cut,” she said. “And specific to the National Reconnaissance Office, those cuts that were allocated to the intelligence community, a third … came out of the National Reconnaissance Office.”

NASA, likewise, is feeling the pinch. After a decade of slow but fairly steady growth, the White House proposed in February to roll back the agency’s nearly $17.8 billion budget to its lowest level since 2008 and keep it there indefinitely. The slowdown comes as the agency works feverishly to finish and fly the $8.8 billion James Webb Space Telescope, foster privately operated commercial crew and cargo transportation services for the international space station and build a heavy-lift rocket capable of launching astronauts to deep space.

“If you look at the budget curve back in the days of Apollo, you had this big hump,” said NASA Associate Administrator Robert Lightfoot, the agency’s top-ranking civil servant. “We don’t have the big hump. We’re kind of flat. Not kind of flat. We’re flat.”

Since NASA has been barred by Congress from cutting its 18,000-strong civil service work force, the hunt for savings is prompting the agency to cancel missions, lay off contractors and stretch out the development timetables for priority programs — which, paradoxically, tends to drive up their cost.

Case in point: the Space Launch System, or SLS. Todd May, manager of the SLS Program Office at NASA’s Marshall Space Flight Center here, said the agency deliberately chose an SLS design that can be built for a steady $1.8 billion a year and avoid the budget spikes that are typical of big development efforts.

“Flat is the new up in the budget. It is a challenge when you are trying to develop the most powerful rocket ever built,” May said. “If you are a project manager, you know that the development curve wants to be a curve. … So if you stack a development curve on top of a development curve on top of a development curve, you get a very acute rise in cost,” he said, referring to the practice on big programs like SLS of developing several major subsystems simultaneously. “One of the things we came to very quickly is we could probably afford one development at a time,” he said.

By making use of surplus space shuttle main engines and leveraging previous work on the canceled Ares rocket development program, May and his team are able to do just that. As spending on five-segment solid-rocket boosters tapers off and development tests on the Apollo-heritage J-2X upper stage reach a good stopping point — both the solid booster and J-2X were integral components of the Ares program — May will be able to ramp up spending on the SLS rocket’s 8.4-meter diameter core stage.

The budget constraints facing the SLS team have their price. For example, the congressionally mandated rocket will not fly before late 2017 — a year later than lawmakers called for in the 2010 NASA Authorization Act — and the first crewed flight will not happen before 2021. What is more, to achieve the 130-metric-ton lift capability called for in the law, SLS will have to use a different booster and upper stage than the ones that will power the initial flights.

 

Strength through Adversity

“Gentlemen, we have run out of money; now we have to think.”

That quote, often attributed to Winston Churchill, was invoked by multiple panelists and participants here.

Mashiko said the NRO has spent the last 12 months coming up with “a more capable, resilient and affordable architecture. “Clearly, we couldn’t proceed ahead and do business as usual and still be able to provide the same capability and mission to our customers,” she said.

Charlie Lundquist, manager of the Orion Crew and Service Module project at NASA’s Johnson Space Center in Houston, said budget constraints are forcing NASA to rethink the way it manages multibillion-dollar projects. “Necessity is the mother of invention. We’ve been forced to do a lot of this because of the budget situation,” he said.

For one thing, NASA is pulling back on contractor oversight, something aerospace companies have wanted for years. “We’ve got a lot less people overseeing the contractors,” said May, noting that the SLS work force is a third smaller than the Ares program was the year before its cancellation. The leaner operation is leaning less on NASA tradition and, as May put it, “relying more on industry standards that are used today to make rockets that launch national security payloads.”

Charlie Precourt, the retired NASA astronaut who runs ATK’s Utah-based Space Launch Division, praised the agency for being open to new ideas. With the space shuttle no longer in service, ATK was free to scour its solid-motor manufacturing processes for efficiencies that would have been nonstarters in the midst of an operational program.

“Over the course of the year we came up with 450 changes to the manufacturing of the booster that were all approved by our NASA customer, and I would contend that five, 10 years ago, they wouldn’t even have been considered — or a few of them would be considered and approved along the way, gradually each year,” Precourt said.

By doing things like reducing from 47 to seven the number of times a motor segment moves from work station to work station and using ultrasound instead of X-rays for nozzle inspection, ATK was able to reduce the time it takes to produce a motor segment from 48 weeks to 26 weeks, he said.

Mike Hamel, chief of staff at Dulles, Va.-based Orbital Sciences Corp., stood out as perhaps the symposium’s only panelist to say he thinks the United States still spends plenty on space.

“It’s not a question of money to my mind, it’s how we are spending it,” said Hamel, a retired Air Force three-star general who ran the service’s space acquisition shop in Los Angeles. “We’ve got overly complex systems that we buy in too great of numbers … We’ve got to get to simpler individual systems, ones that are done on much shorter time scales.”

What this really means, Hammel said, is “being willing to accept 80-percent solutions for a fraction of the cost.”

Julie Van Kleeck, vice president of space and launch systems at Sacramento, Calif.-based Aerojet, said times are tough for aerospace companies and likely to get tougher. But where many of her colleagues see gloom and doom, she sees opportunity.

“I think actually it’s probably a good thing for everybody. It’s forcing everybody to step back, look at how we’re going to go forward, strengthen ourselves … find business models and ways of going forward that allow us to sustain during what’s probably going to be a more difficult fiscal time,” she said.

Aerojet, whose share of the U.S. rocket propulsion business runs third behind Pratt & Whitney Rocketdyne and ATK, is currently seeking to strengthen its portfolio by buying Rocketdyne from United Technologies Corp.

“There’s a lot of challenges, a lot of times where we’ll be wringing our hands and saying, ‘they’re going to cut the space budget’ … but I think there’s opportunity here, too,” she said. “I think we could have a bright future if we choose to.”

 

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