European Space Agency (ESA) Director General Jean-Jacques Dordain, who has proven adept at overcoming funding challenges to preserve programs he deems important, appears to have done it again with his plan to freeze spending over the next two years at 2009 levels. The aim is to ease financial pressure on ESA’s member governments during difficult economic times without forcing the agency to take out a loan to continue with its current slate of programs.
Mr. Dordain hopes to achieve these seemingly incompatible goals in part by changing the way ESA pays its contractors. He said ESA will halt the practice of paying contractors large sums of money up front; rather, payments would be stretched out and tied more closely to programmatic milestones.
These measures were required because some of ESA’s member states are finding themselves hard pressed to meet their financial obligations due to the global economic recession, now in its second year. ESA’s only other choice, if it is to avoid program cancellations, would have been to take out a loan, which of course would add to the agency’s costs in the long run. Contractors for various reasons would prefer to receive more up-front funding for their work, but aren’t likely to oppose the change too vociferously given that the likely alternative is less work to do.
But Mr. Dordain is probably reaching the limit of what he can do to avoid program cancellations barring some unforeseen cash infusion for ESA. Any further surprises, cost increases on major programs, for example, likely will force the tough decisions that so far he has been able to avoid. Such is the plight of a multinational agency that, in order to placate its 18 members, squeezes in as many programs as it can during its ruling council meetings and hopes that all can stay within their advertised cost — always a dicey proposition in the space business.
The recent experience with ESA’s BepiColombo mission to Mercury, whose costs have grown some 50 percent since it was approved, illustrates the difficulty of canceling a program once full-scale development has begun. After that overrun came to light, ESA officials pledged to be more rigorous in their cost analysis of new missions, beginning with those in the ongoing M-class competition.
A European scientific advisory panel recommended in January that ESA support continued development work on three of six proposed M-class missions, rejecting outright two of the others on budgetary grounds. ESA is expected to make its formal selections in February. The three likely finalists are all either near or above ESA’s 475 million-euro ($668 million) cost ceiling for M-class missions, meaning the agency’s promise of tougher scrutiny will soon be put to a test in which the margin for error is razor thin and the consequences of failure are painful.