PARIS — The European Space Agency (ESA) has received industry proposals for reforming the way ESA contracts for work as part of the Ariane 5 heavy-lift rocket program to assure that ESA is not paying more than necessary, ESA Launcher Director Antonio Fabrizi said Jan. 13.

In an interview, Fabrizi said the Procurement Process Review that began in 2011 is expected to be finished by mid-2012, in time for incorporation into a broader package of Ariane-related funding ESA will ask of its government ministers when they meet in November.

On a parallel track, the agency has begun canvassing European civil government, military and commercial satellite owners to assess what kind of launch service meets their expected requirements for a decade from now.

The assessments of these satellite owners will inform ESA’s proposal to ministers on what kind of rocket should succeed Ariane 5, and when.

“We want to verify the market’s requirements,” Fabrizi said. “Then we will incorporate that into a proposal for a next-generation launcher. We have no preconceived opinions, and we realize that asking users to predict what they will want 10 years from now is difficult and will require binoculars.”

ESA governments in 2008 provided initial funding for a program that, if given full approval in November, will increase the power of the current Ariane 5 with a new upper stage featuring a restartable engine. The goal of the program, called Ariane 5 Mid-life Evolution, or Ariane 5 ME, is to boost the rocket’s performance into geostationary transfer orbit — the destination of most telecommunications satellites — by 20 percent, with no increase in launcher production cost.

ESA has estimated that it will cost up to 1.5 billion euros ($2 billion) to complete the Ariane 5 ME program, including a demonstration launch around 2017. Fabrizi said the agency will receive firm cost proposals from industry on Ariane 5 ME by midyear, and that this too will be put before ESA ministers in November.

The current state of public budgets in Europe makes it unlikely that ESA ministers will approve substantial development of both Ariane 5 ME and a next-generation launcher. ESA’s role, Fabrizi said, is to provide the ministers with as much information as possible for them to make an informed choice. “Nobody is prejudging the outcome,” Fabrizi said.

The Procurement Process Review has only an indirect bearing on the Ariane 5 ME/next-generation rocket debate. ESA governments have been asking that the agency reduce the annual cost of operating the Ariane 5 rocket so that ESA can keep its Ariane 5 support program payments to a minimum.

The agency has agreed to offset certain Ariane 5 fixed costs incurred by the Arianespace commercial launch consortium with payments of up to 120 million euros per year for 2011 and 2012. The ministerial conference will decide whether this payment level should be maintained.

A second area in which ESA supports Ariane 5 is the Ariane 5 Research and Technology Accompaniment (ARTA) program, which is budgeted at about 100 million euros per year.

Ariane 5 has been operational for some 15 years and has racked up 46 consecutive launch successes since 2003. But as was true of the predecessor Ariane 4, Ariane 5 benefits from the ESA-paid ARTA program. ARTA’s goal is to verify that the Ariane rocket is “continuously in a durable qualified status” throughout the vehicle’s operational life, according to an ESA document summarizing the program.

ARTA funds occasional test firings of Ariane 5 stages, performs flight analysis, addresses issues related to component obsolescence, samples and tests Ariane 5 components and assists in investigations of component malfunction. ARTA is concerned with the Ariane 5 vehicle and its associated ground segment.

The Procurement Process Review was started to be sure that ESA is not paying more than it needs to for Ariane 5 equipment and testing.

Fabrizi said the outcome of the review should be a closer coordination between ESA, Arianespace and the Ariane 5 contractors of what things cost.

“Just to give one example: If I buy one sample of a component for ARTA-related testing, I do not want to pay more than Arianespace pays when it contracts for the same hardware,” Fabrizi said. “We have now received proposals from industry, and like all proposals these need to be negotiated.”

Fabrizi said ideas circulated in Europe that would have transformed Arianespace into a government agency, or called for ESA to become a shareholder of Arianespace, have now been set aside. A growing consensus exists, he said, that Ariane production and operations can be made less expensive for ESA governments with a modifications to the way the system runs now.

“This is really a 360-degree exercise” in looking at Europe’s future launcher direction, the likely market for launchers in the next decade and where savings could be made in Ariane 5 operations, Fabrizi said. “I don’t share the conclusions of those who say we can find only 1 or 2 percent savings without a radical change in the Ariane [contracting and work distribution] system. We are aiming toward a cost reduction of about 5 percent, and to me this is feasible.”

Peter B. de Selding was the Paris bureau chief for SpaceNews.