Space & Astronomy/Space and Astronomy (October 1993).iso/mac/TEXT_ZIP/spacedig/V13_7/V13_731.ZIP/V13_731

Internet Message Format | 1991-06-27 | 27KB

Return-path: <[e-mail]>
X-Andrew-Authenticated-as: 7997;andrew.cmu.edu;Ted Anderson
Received: from hogtown.andrew.cmu.edu via trymail for +dist+/afs/andrew.cmu.edu/usr11/tm2b/space/[e-mail] (->+dist+/afs/andrew.cmu.edu/usr11/tm2b/space/space.dl) (->ota+space.digests)
          ID </afs/andrew.cmu.edu/usr1/ota/Mailbox/ocOhZRW00WBw07RU5y>;
          Fri, 28 Jun 91 02:38:21 -0400 (EDT)
Message-ID: <[e-mail]>
Precedence: junk
Reply-To: [e-mail]
From: [e-mail]
To: [e-mail]
Date: Fri, 28 Jun 91 02:38:16 -0400 (EDT)
Subject: SPACE Digest V13 #731

SPACE Digest                                     Volume 13 : Issue 731

Today's Topics:
               Commercial Space News 8

Administrivia:

    Submissions to the SPACE Digest/sci.space should be mailed to
  [e-mail].  Other mail, esp. [un]subscription requests,
  should be sent to [e-mail], or, if urgent, to
             [e-mail]

----------------------------------------------------------------------

Date: 11 Jun 91 05:04:03 GMT
From: ucivax!dhw68k!ofa123![e-mail]  (Wales Larrison)
Subject: Commercial Space News 8

This is the eighth in an irregular series on developments in
commercial space ventures.  The commentaries included are my
thoughts on these developments.

1- NASA TO STUDY CIVIL APPLICATIONS OF SSTO
2- ATLAS CENTAUR FAILURE SERIOUSLY DAMAGES JAPANESE TV BROADCAST
   VENTURE
3- TELESAT CANADA PREPARES TO FILE FOR LOSS ON ANIK-E2 SATELLITE
4- SPACE INSURANCE SUFFERING THROUGH ANOTHER YEAR OF MAJOR LOSSES
5- ORBITAL SCIENCE's PEGASUS WINS AIR FORCE LAUNCH CONTRACT
6- GD WINS COMMERCIAL LAUNCH SERVICES CONTRACT FROM NASA
7- COMMERCIAL REMOTE SENSING SATELLITE WITH RESOLUTION OF 2 METERS?
8- FY92 NASA APPROPRIATION WILL AFFECT FUTURE COMMERCIAL VENTURES
9- OSC FILES FOR PREFERENTIAL TREATMENT FROM FCC ON ORBITCOMM
10- COURT CHALLENGE TO GOVERNMENT PROCESS FOR MAJOR SYSTEMS
    DEVELOPMENT
11- EDITORIAL MATTERS

NASA TO STUDY CIVIL APPLICATIONS OF SSTO
  [I've been asked by a couple of folks why I don't track the SSTO
program in this forum.  The SSTO program as it currently stands, is
run under current government procurement regulations for a
government agency, looking at government applications.  This article
is the first commercial crack in the effort.]
   The House Science, Space and Technology Committee has directed
NASA in FY 1992 to study SSTO and report on possible civil
applications of SSTO technology, particularly in the commercial
arena.  If this recommended language survives the rest of the
budgetary cycle, it may provide some insight into potential
commercial applications of this new technology
  The Single Stage to Orbit (SSTO) project being run by the
Strategic Defense Initiative Organization (SDIO) is looking at
conceptual designs for a SSTO vehicle based upon recent advances in
materials and propulsion.  The SSTO system is being designed for a
20,000 payload capability, and has the design goals of long life,
full reusability, and very short (less than 1 week) turnaround.  The
current Phase 1 study contracts, held by McDonnell-Douglas, General
Dynamics, Boeing, and Rockwell are terminating in this year in Phase
2 proposals, which were requested by the SDIO about 1 June.  If
funded, the Phase 2 effort will carry 1 or 2 of the contractors into
development of prototype hardware and initial component testing.
The goal of the program is to allow the early flight test of a
launch vehicle prototype by 1996.  Boeing is reportedly proposing a
horizontal takeoff/horizontal landing vehicle, Rockwell is proposing
a vertical takeoff/horizontal landing vehicle, and MDC and GD are
proposing vertical takeoff/vertical landing systems.
  [Commentary:  I can hear it now - "Why have those (deleted)
(deleted) at NASA look at anything commercial?  Give it to the
commercial sector!"  In general I agree with this, but the
technology involved in the SSTO is still to speculative to get
commercial companies to do it entirely on their own, and the
existing market is still 90% governmental.  If we look at the
industrial participants in the Phase 1 contract - all have very deep
interests in high speed transportation, ranging from NASP or NASP-
type vehicles, to high speed commercial aircraft, or to commercial
space launch vehicles.  I have seen and heard of very serious work
on potential commercial applications of NASP and SSTO vehicles by
these contractors, most of which are part of analyses being done
within them to determine if they want to stay in the SSTO game, or
to help sell funding for the program through Congress.  One firm has
even taken their SSTO concept and applications to VP Qualye.
   The Congressional direction for NASA should be seen in the light
of SDIO facing severe funding problems over the next several years.
They cannot continue the SSTO program to a flying prototype (costing
at least hundreds of millions) when their core programs of strategic
defense systems are being drastically cut.  A major sponsor of the
SSTO technology development program must be found - probably the DoD
or NASA - to continue funding and develop the test vehicle.  The
Congressional direction is primarily intended to force NASA to look
at the SSTO, possibly develop some interest within NASA for it, and
see if they can justify back to Congress a continuation of the
program under NASA's budget.
   NASA has been looking at similar vehicles for years - the Langley
Research Center work for "Shuttle II" and on another set of SSTO
concepts immediately jump into mind.  And NASA does have a fairly
good record of moving technology into commercial world (look at the
aircraft side of the house).  The Congressional direction, while not
perfect, is probably a good thing. It's definitely better than doing
nothing.  It would have been nicer, however, if it was accompanied
by funding for contract studies to commercial entities to continue
and expand commercial applications studies and build a bigger
constituency within private industry.]


ATLAS CENTAUR FAILURE SERIOUSLY DAMAGES JAPANESE TV BROADCAST
VENTURE
  [This article is a little dated, but the impacts linger on....]
  The recent failure of a RL10 cryogenic engines in the Centaur
upper stage of a General Dynamics Atlas-Centaur booster has
seriously damaged a Japanese venture to provide direct satellite
broadcast of TV signals to homes in Japan.  When one of the two RL10
engines made by Pratt & Whitney (a division of UTC) failed to start
on the Centaur the upper stage and payload tumbled out of control,
until the stage and payload was destroyed by the range safety
officer.  An insurance package of $112 M was carried by GE on the
launch to cover the launch and satellite.
  This was the first failure of a RL10 since 1963, and books a
failure against the second General Dynamics commercial launch.
  The satellite, the BS-3H, satellite was lost in the accident.
Built by General Electric's Astro-Space division, the BS-3H was
intended to shore up a Japanese satellite broadcasting program that
has been the victim of a chain of major problems since the
beginnings of this year.  The BS-2X satellite was lost last February
when an Ariane 44L booster failed, the first of the year.  An
existing satellite on orbit, the Yuri 3a, had been providing some
broadcast capability, but a recent solar flare event in April
damaged the satellite's solar panels, which required the shutdown of
one of the three television broadcast channels as not enough power
was being produced by the satellite.
  [Commentary: Japan has been in the forefront of demonstrating both
direct broadcast satellites and High Definition TV (HDTV) using
their satellite system.  This series of failures is a serious blow
to Japanese attempts to demonstrate and install an initial HDTV
direct broadcast system in Japan to shortcircuit US and European
HDTV and direct broadcast ventures.  Very much is riding on the
first launch of the H-2(?) rocket, which is planned to launch a
third replacement satellite using Japanese technology.
  Unfortunately, this series of failures has also fanned the
activities of "Buy Japanese" proponents in Japan.  The dependence of
Japanese space ventures upon other nation's technologies has been a
sore spot in some political circles in Japan, and this string of
failures has added fuel to the on-going movement to bring more space
technology under Japanese control.]

TELESAT CANADA PREPARES TO FILE FOR LOSS ON ANIK-E2 SATELLITE
  Telesat Canada is in the process of preparing a final filing for
insurance payment on its Anik-E2 communications satellite.  After a
successful launch last month into GEO, the satellite could not
deploy it's main broadcast antenna.  Without this main antenna, the
Anik satellite will not be able to carry out it's primary mission of
transmitting television signals to Canada.  After a month of trying
alternative methods of deploying the antenna without success,
preliminary information is that Telesat is preparing to file for
about $217M of the satellite's $260M cost from its insurers.  The
filing is expected by the end of this month, if last-ditch efforts
to free the antenna don't succeed.
  [Telesat really got skunked on this one.  They've tried every
trick in the book, including some at the end which had a very real
possibility of damaging the satellite to deploy that antenna.  But
no success.  And the insurance business takes another loss....]

SPACE INSURANCE SUFFERING THROUGH ANOTHER YEAR OF MAJOR LOSSES
   The space insurance business is looking at another year of major
losses as they have to absorb several serious spacecraft failures.
These include:  the Japanese B3-3H lost in launch, the Canadian Anik
GEO comsat which could not deploy its primary antenna on orbit, a
U.S. GEO comsat which lost power on much of its broadcast beams, the
BS-2 lost in launch, and the another broadcast satellite which had a
solar panel short out on orbit.
   Insurance rates had peaked at about 25-30% of the cost of the
satellite and launch in the mid-1980s when all three U.S. launch
firms and Arianespace encountered a string of launch failures, and
eight satellites were lost during launch or on-orbit commissioning.
Rates dropped back to about 18% in 1989, but after the Ariane launch
failure in February, they climbed back to at least 20%.
   The General Dynamics failure plus February's Ariane failure
leaves only McDonnell Douglas without a recent failure on their
launcher.  Before the Atlas failure, the three big U.S. launch firms
had success rates ranging from 95% to 98%.  Arianespace's rate
hovers around the mid-80s, although insurers look more closely at
recent launches rather than the overall rate.
   [Commentary: It should also be noted that the overall launch
premium is based also upon the frequency and size of recent payouts
in the insurance industry, as well as the reliability of an
individual launch vehicle.  If the financial coffers of the insurers
have been drained to pay for a string of recent failures, they will
charge a higher rate until they can recover from these losses, and
re-establish a pool of funds from which to pay future launches.
   Insurers of space systems have consistently shown a loss in
insuring them.  This has driven several firms out of the business,
and has severely restricted expansion in the space insurance area.
    Space businesses must compete in the commercial market with
terrestrial business ventures when it comes to obtaining finances.
Since the risks of space ventures (technical, political, and market
risks) are perceived as somewhat higher than other business areas,
it is very important that insurance is available for such ventures.
Without the insurance, most commercial investors will shy away from
space investments.  Another year of insurance losses on space
ventures can only be seen as a bad omen for the near-term financing
of commercial space ventures.]

ORBITAL SCIENCE's PEGASUS WINS AIR FORCE LAUNCH CONTRACT
   [Another dated article, but of some importance to OSC...]
   It was announced last month by OSC that the USAF had selected the
Pegasus air-launched space launch system to perform the initial
launch in the Air Force Small Launch Vehicle (AFSLV) program. This
single launch carries with it a contracted option for up to 39
additional launches, making it a potential plum contract for the
firm.
   However, final announcement and award of the contract by the USAF
is dependent upon the results of a formal bid protest filed by
Israel Aircraft Industries.  OSC claimed the protest should be
resolved by the end of May.  If the final award is made, the first
AFSLV launch is planned for late 1992.
   [Commentary:  This award to OSC is not unexpected - and pretty
much wipes Lockheed's small ELV business out.  However, the funds
for future launches is still in question, but it is a reasonable
guess that there will be at least several future launches under this
contract.]

GD WINS COMMERCIAL LAUNCH SERVICES CONTRACT FROM NASA
   General Dynamics Commercial Launch Services Company has won a
NASA commercial launch services contract for the Solar and
Heliospheric Observatory (SOHO) mission.  The contract, valued at
$112 M over 4 years, is planned to result in a July 1995 launch of
the satellite in July 1995.  The SOHO satellite will observe the
physical processes that form and heat the solar corona, and will
study the sun's interior structure.
   [Commentary:  No real surprises here - and while there was
Japanese and European participation in SOHO, it was not expected
that the satellite would go to Ariane, since NASA was footing the
majority of the launch services bill and is constrained by a "Buy
American" clause in their regulations.  GD's Atlas was the prime
candidate for the launch, due to the size of the satellite.]

COMMERCIAL REMOTE SENSING SATELLITE WITH RESOLUTION OF 2 METERS?
   The Institute for Technology Development Space Remote Sensing
Center (one of the NASA Centers for the Commercial Development of
Space (CCDS)) is examining market approaches for a new commercial
remote sensing satellite with potential resolution as precise as 2
meters. The CCDS is completing a market survey which is indicating
there is a much larger market to sell such data than previous
projections.
    This venture is still in the very embryonic stage, but the
approach being examined would be a similar venture to the COMET
program and would involve significant commercial money at risk to
develop the technology and satellite.  NASA would provide "seed
money" by acting as an anchor tenant (in this case for buying the
data), but the commercial firms would be expected to recoup their
investment through commercial sales- not via selling exclusively to
NASA.
  [Commentary.  In general, a good thing for the CCDS to look at.
Such a venture follows the SEAWIFS and COMET projects, and is a very
appropriate use of government money as "seed" capital to allow firms
to enter this market area.  There have been considerations of small
remote sensing satellites for the past decade, but they have all
died due to the high up-front capital costs and the lack of a up-
front identified market.  NASA can help overcome these market
barriers by acting as an anchor tenant and signing long-term
contracts for data.  And they have very properly written themselves
out of the business of operating the system or for fully controlling
the system and market.
  However, there should be a consideration of how this system will
affect the Landsat project, and EOS.  Landsat probably won't be
harmed by this, since much of the current discussions are focusing
on very specific market niches which are not currently served by
Landsat.  EOS may benefit from this effort if they would buy
commercial resources observation data to extend their data base.
  It is also interesting to note the CCDS is looking at possibly
providing data with resolution well beyond any currently available
commercial system.  The Landsat and Spot systems typically only
provide data with 60-100m resolution, while the Soviets will sell
selected data with a resolution of up to 15m.  The Soviet data
caused a minor flap, since such high resolution data had distinct
military uses, and there had been some discussions of limiting the
resolution of space data to avoid complications with military
applications.  In particular, this was focused on less developed
countries (such as Iraqi) which could use commercially available
data to plan and monitor future military operations.  2m resolution
data, depending upon its spectral band, could have significant
military uses, as well as commercial applications. ]

FY92 NASA APPROPRIATION WILL AFFECT FUTURE COMMERCIAL VENTURES
  [Commentary:  This language has snuck almost unnoticed through the
FY92 budgetary battles.]
  As part of the House bill which came to a vote last week on the
NASA funding for FY92, there was language included which would give
the House or Senate Appropriations committee veto power over any
future NASA purchases of commercial space services.
   "This action is recommended in order to protect the
constitutional prerogative of the committee and the Congress in
approving the commitment of funds prior to contracts being awarded
for such services," the committee stated. "...In effect, these
'service contracts' commit NASA and the federal government to pay
for services over future years without initial approval in the
appropriations process."  SpaceHab and COMET commercial ventures
were specifically mentioned.
  [Commentary:  With all of the attention focused onto the funding
battles for Space Station Freedom in the budget, this part of the
bill was not really noticed.  The concern expressed here by the
Congress is a very valid concern - commercial space services
contracts typically are multi-year in nature, and require payments
by the government over several years.  Since the Congress typically
only authorizes NASA (or any other government agency) to spend
dollars during a single year, specific multi-year funding provisions
must be made before NASA can enter into a multi-year commercial
contract.  Congress's objections center on the concern that such
contracts obligate future Congresses to spend money - and this
dilutes the authority of future, yet un-elected Congresses.  And
such practices, if taken to an extreme, can be used as a means by a
Federal agency to obligate future Congresses for their budget
outside of the Constitutionally-mandated budgetary process.
   However, this "veto" power given to Congress forces yet another
hurdle onto any commercial providers of space services - they not
only have to convince NASA to buy some commercial service, get
approval from a NASA field center and from NASA Headquarters, but
now they also have to sell both the House and Senate on buying this
service.  Furthermore, this may have to be done annually is multi-
year funding is not approved by Congress for their project.  This
will require more time and effort by the commercial firm, and will
add yet another element of uncertainty into the venture.
  One way around this is to put multi-year funding of specific
projects into the NASA budget.  For example, SEAWIFS or COMET
funding could be approved as "X dollars over Y years", and then the
contracting officer would be responsible for ensuring the commercial
contract would be negotiated to and performed within this period.
This does require a larger up-front commitment of NASA funds within
the NASA budget, and would require a set-aside of dollars as
commercial procurements.  This will have to be discussed in the next
budget cycle.]

OSC FILES FOR PREFERENTIAL TREATMENT FROM FCC ON ORBITCOMM
   OSC's Orbital Communications Corp. subsidiary has filed with the
FCC to obtain "pioneer's preference" for their OrbitComm system.
Under a new FCC policy which became effective on 13 May, the first
filer for a new communications service or technology could obtain an
accelerated approval and allocation of frequencies and bandwidth.
   [Commentary:  OSC is aggressively pushing this venture - and is
taking advantage of the appropriate federal regulations.  This is a
smart competitive move, and I am surprised that Motorola did not
file first with their Iridium system in this category.  I would
expect them to do so any day now.
   It is also good to note that this Federal policy is designed to
encourage investments in new technologies and to provide new
services.  This may give an boost to new commercial space
communications ventures.]

COURT CHALLENGE TO GOVERNMENT PROCESS FOR MAJOR SYSTEMS DEVELOPMENT
  [Some folks might think this is a little off track, but it might
have a significant impact on how the U.S. government develops and
buys major new systems.]
  General Dynamics Corp. (GDC) and McDonell Douglas Corp (MDC) have
filed a law suit directly challenging how the U.S. government,
particularly the Department of Defense (DoD), buys major new
systems. The two companies filed a complaint in U.S. Claims Court in
Washington last Friday which directly attacks several long-standing
development procedures used by the government. The suit is a fallout
of the cancellation of the US Navy's A-12 attack aircraft program in
January after the companies fell far behind schedule and projected
large cost overruns in the development effort.
  The suit asserts the DoD knew the A-12 specifications were
"unattainable" but ordered the contractor team to proceed.  It
alleges the Navy gave every assurance that where the companies
failed to meet certain specifications (including delivery dates and
aircraft weight) the requirements would be revised as long as the
Navy's operational needs were met.  The budget provided to the
project was well under what the government and the contractors
projected what it would take to develop the system, according to the
suit.
  It alleges the government's decision to proceed with a fixed-price
development contract forced the contractor to commit to its costs
long before it knew what it would take to build a complex piece of
hardware.  In the case of the A-12 the government instituted a
"demonstration and validation" program to help identify and
eliminate some of the risks, bu the suit alleges the Navy reduced
the scope of the effort by 80% over that originally proposed by the
contractors.  [Although not stated, the implication is that this
reduction is due to budgetary pressures to get this project funded
by Congress.]  As a result the contractors were not able to
realistically forecast the costs of the development program, the
suit claims, yet were held to their original cost estimates.
  [Commentary:  Boy doesn't this sound familiar.  Since both the DoD
and NASA follow the OMB A-109 procurement process for major systems
developments, this suit has ramifications for both organizations
which contract for major new space systems.
  Beginning a risky development program for a major piece of
aerospace hardware must be based upon a firm understanding of the
probable costs and risks associated with the effort.  In this case,
the A-12, there was a large amount of technical risk in the project
to meet the technical specifications - yet the government issued
this as a "fixed price" contract.  If the suit is correct (and this
has to be decided by the courts), cutting the dem/val test program
to explore the technical risks and their impacts on the program
while holding the contractors to their original cost estimates is
not proper.
  On the other hand, if a contractor ethically enters into a fixed
cost contract, then they should be willing to be held to such a
contract, unless the contracting agency significantly changes the
requirements upon them.  Here, the suit claims there was significant
pressure on them to adhere in form to the "fixed price" contract,
but with the hidden understanding they would not be held to their
specified requirements.
   This pressure, driven from the intensive political and budgetary
pressures of the government funding cycle is true of any future
governmental space development program.  We, as space activists,
have to be aware that these pressures may influence a contractor (or
contracting agency) to low-ball a bid, in expectation that some way
of covering future cost increases will be found.  Compare this
process to the Hubble Space Telescope, Space Shuttle, Space Station,
Titan-IV, and the NLS. Think of what it might mean to SEI....
   The results of this lawsuit may have very, very significant
ripples in future space systems development.  I know this isn't
really "commercial space news" but I believe significant changes in
how the government procures major new development projects will have
significant effects on the commercial space market - particularly as
we strive to convert more of the current 90% governmental market
into commercial services.  This suit indicates a major need for a
better means for handling the acceptance and consideration of
significant risks in new space systems developments, and how they
are funded from private or public coffers.]

EDITORIAL MATTERS
  Sorry about being so late in getting this one out, folks.  Things
at work got very hectic very suddenly, and my time to put this
together was cut very short.  There was a lot of stuff I left out -
a new stock offering, a new entry in the commercial launch services
arena, several other very interesting developments in several on-
going commercial competitions, and a couple of potential changes in
the export control laws governing satellites.  Maybe next time I'll
have time to include them ...

-------------------------------------------------------------------
Wales Larrison                            Space Technology Investor
"Business: The art of extracting money from another man's pocket
without resorting to violence." (Max Amsterdam)


--
Wales Larrison
Internet: [e-mail]
Compuserve: >internet:[e-mail]
--------------------------------------------------------------------------

------------------------------

End of SPACE Digest V13 #731
*******************