Main Engine Cut Off - T+97: SLS OIG Report, Air Force LSA Awards

Starting point is 00:00:00 Quite a week for space last week. This is Main Engine Cutoff. I am Anthony Colangelo. We had, let's see, we had a couple of telescopes into safe mode, one is now out of safe mode. We had a Mars rover back to science operations. We had some rocket drama of various sorts. And to top it off, we had a Soyuz with an in-flight abort with the crew now safe. That story is still developing a little bit. If you listen to headlines, if you're a headline subscriber, you might have heard me talk about the fact that I think it'll be a very quick investigation.

Starting point is 00:00:45 And it seems like that is going to be the case. You might have heard me talk about the fact that I think it'll be a very quick investigation, and it seems like that is going to be the case. So we will wait to talk about that a couple of more days to hear some of the initial reports from Russia on the MS-10 issue. I want to get into some rocket drama today. Let's start with SLS. I have some quick thoughts on this. I thought I'd have some more thoughts, some more lengthy thoughts on this. Famous last words.

Starting point is 00:01:04 But I spent the weekend thinking about it, reading some of this OIG report, and I'm not sure I have all that much to say. So to get you up to speed on this, the Office of Inspector General released a report on the SLS Stages Contract. This is the contract that NASA has with Boeing to produce the core stages of SLS and the exploration upper stage. And all in all, it is a pretty brutal report on the state of SLS. You know, two and a half times as long as I thought it would take. Way over budget, about double the budget of what they were planning. And overall, there's just some really nasty stuff in there about Boeing and about NASA's management of Boeing.

Starting point is 00:01:46 Certain instances when they think that they've awarded Boeing contract fees or award fees, incentive fees that they shouldn't have received. Instances of NASA contract officers issuing way more contracting amounts than they were really intended to. Really, overall, just a really scathing report on NASA and Boeing. And in the wake of that, once it was public, there were some statements from Boeing that were very dismissive of the report and talked about some of these things being internal NASA issues. So there's this sort of public jawing from NASA and Boeing that we haven't yet seen on the SLS front.

Starting point is 00:02:25 And I think that might be the sign of some of these cracks starting to show publicly. Whereas in the past, we got very buttoned up responses from NASA or Boeing. We're starting to see some of that come out to the forefront. And that's a notable occurrence. I think that's something to keep your eye on as we go on with the story. But, you know, we've been here before. We've been with an OIG report in hand, talking about how this report is so indicative of SLS overall, of how this is a real sign of where the program is at. And I don't know if this time is too much

Starting point is 00:03:00 different. This is a particularly rough report. And certainly there's plenty of firepower in here if anybody really wanted to go about breaking up this NASA program. But I've still yet to be convinced that the political will is there to use that firepower to do so. I'm still not quite sure on where that would come from, who would lead that charge, why they would lead that charge, why they would lead that charge, what they would be getting out of it. Certainly right now is a time in politics here in the US that SLS is going to get very little talk. Congress is in recess until the midterm elections, which are coming up in less than a month now. And those are looking like they're going to be fairly tumultuous. And there are some key senators that have a particular fondness for space, a particularly good position in the subcommittees

Starting point is 00:03:49 that decide how much money gets spent on space and where it gets spent. There are a couple that are in tighter races than we thought they would be. Senator Nelson in Florida, Senator Cruz in Texas. So there are some political shifts possible. Of course, those are areas that are very reliant on space. So even if they lost that race, you know, there's going to be another senator in that seat. And he or she is going to, well, I think it's he in both of those cases, but whoever gets there is going to be in the same position politically that Nelson Cruz and the like are right now. The main difference is what positions they hold on subcommittees, like I mentioned. Those are particularly powerful seats, but the interests of Florida are the interests of Florida. The interests of Texas are the interests of Texas. That is not really changing much day to day. And I've said this in the past, but what it's going to take for a major shift in NASA policy is an indication that the new way, whatever that may be, is just as lucrative as the old way for these politicians. Origin is going to be building a factory down in the Gulf states, you know, the center of NASA policy, the center of the smoky filled rooms, you know, talking about NASA contracts behind the

Starting point is 00:05:12 scenes. That is a very political move from Blue Origin and one that should not be looked at too lightly because that is a very good sign that they understand what's at stake there. They need to be a strong player in that area if they want to upset the current way that NASA is working, the current programs that are there, and in their view, build towards a better future. But until there's a sufficient replacement there, or really some incentive to change, I don't know what yet another OIG report does for SLS overall. I'm not sure who would take this and run to the Hill and try to lobby for a change here based on this report and all the others that they have in hand alone. There are reports that there are people in the White

Starting point is 00:05:57 House that really have it out for this program, and we'll see if and how they use this report and if and how they use their sway. But, you know, it's really, I don't yet see it there. And I don't see why they would do that or who would do it or when. But we will keep our eyes peeled. You know, like I said, this is going to be a tumultuous season for politics. I don't think SLS will be on any agendas until at least next year. But we'll see if anyone really takes this report and starts running with it. I think the first sign we would see is some public statements from politicians

Starting point is 00:06:30 on the record talking about this report, slipped into some news coverage somewhere. That's kind of the first sign that I would take to see if there was anything actually going to come from this report. But if you're interested in this, check out the report, read it. There's a great article by Eric Berger over at Ars Technica on this report. Take a look at all that and keep it in mind. But I think it's going to be a little while until this really goes anywhere of particular interest. I want to get into the Air Force funding of some new launch vehicles. But before I do, I need to say a very huge thank you to everyone that supports Main Engine Cutoff over at patreon.com slash Miko.

Starting point is 00:07:10 There are 221 of you supporting this show every single week. This episode of Main Engine Cutoff was produced by 35 executive producers. Chris, Pat, Matt, George, Brad, Ryan, Jameson, Nadeem, Peter, Donald, Lee, Jasper, Chris, Warren, Bob, Russell, John, Moritz, Tyler, Joel, Jan, David, Grant, Mike, David, Mintz, Eunice, Thank you so much for your support for making this episode possible.

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Starting point is 00:08:01 Miko. Thank you all so much. All right, some big news. We've been waiting on this news for a while now. The Air Force has selected three launch providers to develop new launch vehicles, or at least begin developing new launch vehicles. This is the Launch Service Agreement Awards from the Air Force. This was something that we've been talking about on and off for months. And most recently, I think it was in the Q&A episode that I predicted, talking about on and off for months. And most recently, I think it was in the Q&A episode that I predicted, I gave my thoughts on what I would predict the awardees to be, and I think I nailed it. So the awards here are ULA, they got $967 million for Vulcan Centaur, Northrop Grumman, $791.6 million for Omega, and Blue Origin, $500 million for New Glenn. Now I say all those award

Starting point is 00:08:44 amounts, but what you have to keep in mind is that these are incremental awards. So they each get $109 million now apiece. And this is incremental funding through 2024, and for some reason, three months longer for ULA to 2025. And you have to make it through certain phases to keep getting this funding until that point in time. So they'll get $109 million now to start developing these vehicles or continue developing these vehicles in certain cases. And then 12 months, 18 months down the line, I've saw some reports on this. There will be another round of kind of a filtering, I guess, where the Air Force would begin looking

Starting point is 00:09:21 at some of the details, figuring out who they want to push on to the next round of this program. And we'll talk about how all that might shake out in a little bit. So right off the bat, I just want to mention something to keep in mind. Blue Origin, you know, they've got the smallest award here, and that's not very surprising. They are well into development of New Glenn. They are, you know, building facilities, building a launch site. They test-fire engines. They are well into the of New Glenn. They are building facilities, building a launch site. They test-fired engines.

Starting point is 00:09:47 They are well into the development of this vehicle. So it's not surprising that they have the smallest amount of funding. And I think that says a lot in the direction of, without this funding, Blue Origin would build New Glenn anyway. And I don't think I could say the same for the other two launch providers. Without the funding, I don't think ULA develops Vulcan Sendar. Without the funding, I don't think Northrop Grumman develops Omega. And that's not a huge problem. I think that's just the realities. Some of these companies don't see a huge market

Starting point is 00:10:18 to put a ton of investment in and develop this vehicle. But if the Air Force needs a vehicle like this, and there's contracts on the line, and they can get a piece of that, then it's a viable thing that they can put their money into. Something that surprised me in this announcement was that, well, for ULA, we knew that they were going to be flying from the Atlas V pads. So they have a pad out at Cape Canaveral, and they have a pad out at Vandenberg, east and west coast. Omega, we know, is going to be flying from Launch Complex 39B down at Cape Canaveral. They have a piece of the Vehicle Assembly Building to use there. They have one of the bays. They have

Starting point is 00:10:57 a mobile launch platform that they're going to repurpose from shuttle era, and that would launch from 39B, notably where SLS is supposed to launch as well. In the past, Northrop Grumman, Orbital ATK at the time, had mentioned that they had an eye on a Vandenberg pad, potentially Space Launch Complex 6 out at Vandenberg, which is where the Delta 4 Heavy flies from right now. They have a couple of flights left out there, so that wouldn't really free up until 2023 at the moment, and that schedule could change. The Air Force could add Delta IV heavy flights if they need them before that time ends. So that's a thing that's up in the air, but they had mentioned that in the past. Blue Origin had never really talked up anything except their Cape Canaveral launch

Starting point is 00:11:40 site. And in this announcement, they announced that they would be pursuing a site out at Vandenberg as well. That's a very interesting thing to me. Obviously, the polar market is a pretty big market, especially if you're going after Air Force launches like this. But I don't know exactly which one they would get. Can they wait long enough to pursue Space Launch Complex 6 as well? And are they confident that they could win that? I think, you know, it's, we'll get into it in a bit, but I think it's unlikely that Omega and New Glenn win here, but I'll talk about that in a second. There could be other launch complexes out at Vandenberg that are now defunct that could be brought back and maybe repurposed for this. I don't know enough about the layout at Vandenberg,

Starting point is 00:12:23 what they've got going there now. There's a lot that we don't know about Vandenberg, but this is something I'm going to keep an eye on, on where they are going to develop that launch site, when they're going to develop that launch site. Is it going to be just used for Air Force missions, or do they think they're going to service a lot of missions out of the West Coast as well? Because that greatly complicates some of their production. They're going to be building these stages out in Florida. How do they get them to the West Coast? Kind of the inverse problem that SpaceX has with the BFR work that they're doing out in LA.

Starting point is 00:12:54 Are they going to barge it around through the Panama Canal? Are they going to use the same boat that does the launch recoveries to ship this from the East Coast to the West Coast and then have a fleet out there as well. There's a lot of questions there, and that's something I'm going to keep my eye on over the next couple of months, as I'm sure we'll hear a little bit more about that. Or maybe we won't. It's Blue Origin, after all. There's a chance we never hear anything about

Starting point is 00:13:18 that. But I thought that was a very interesting note that they are going to pursue a West Coast launch site. That's something that's pretty big when you think about New Glenn, not just for Air Force funding, but in the market as well, that they can compete for those polar orbits or, you know, sun synchronous orbits or whatever else they need to fly out of the West Coast. That is a big, big deal when you're talking about future commercial contracts for New Glenn as well. So let's talk about where this leads into the future with this Air Force program. These awards here are the development arm of the LSA program, the Launch Service Agreement program. This is the EELV program, the Evolved Expendable Launch Vehicle program. That is the

Starting point is 00:14:02 banner that this all flies under. And this is the development arm of Phase 2. Phase 2 is a collection of launches that are coming up in the 2020s. Right now, ULA and SpaceX are launching the Phase 1A missions. SpaceX has won a handful of missions as ULA. Those are still in the process of launching from now through the early 2020s, and Phase 2 would follow that as part of this program. Now, the Air Force intends to break down these Phase 2 launches, a batch of them. I don't know exactly how many are in that batch, but the batch of those launches, they expect to break down between two launch providers. That doesn't necessarily mean two of these three launch providers that have been awarded development funding. It means two of all available launch providers. So just

Starting point is 00:14:52 because SpaceX is left out of this development contract doesn't mean they couldn't have a shot at the phase two launches. All in all, SpaceX didn't need any development money for this program here. You know, they have vehicles that fit all of the requirements, except for some fairing requirements that the Air Force could possibly have. In the past, SpaceX has gotten money for vertical integration, which they have not yet built. The fairing issue with SpaceX, the small fairings, that's something that still is very murky. And I think, you I think there's really no

Starting point is 00:15:25 path forward for that. I would be very surprised if we heard anything about larger fairings on Falcon 9 or Heavy. So they didn't need development money. They have what the Air Force needs and wants, and that's fine. This program is about developing new capability for the Air Force, whether that's new launch vehicle, new types of launch vehicle, et cetera, et cetera. A lot of people would say, what about BFR? And I just think that isn't the right fit for this program, both timeline wise, but also, you know, what they're looking to develop is sufficiently different than what BFR, BFS is going to do. Could you have some of the same common goals? Sure. But I think the people making these decisions don't see that as viable of a route forward for this phase two project. So I think, you know, this is kind of what I expected here. SpaceX left

Starting point is 00:16:11 out of development money, but still in the running in a couple of interesting ways, which we'll get into. So somewhere down the line, whether it's a year, year and a half, two years from now, the Air Force will review all of the progress on these three development projects that they're working on here to figure out, you know, what would a typical launch price be for this launch vehicle? What kind of capabilities could it offer us? What kind of flexibility does it offer us? Does it fit our needs as a program? And then they would determine who to move forward with into the phase two launch contracts. So I think I've kind of had drifting thoughts on this overall.

Starting point is 00:16:50 Where I'm at now is that when you look at what these launch vehicles provide, as well as what SpaceX provides through Falcon 9 and Heavy, I see a couple of paths here. Number one, I think when you look at ULA with Vulcan Centaur and Omega, I see it unlikely that these two would win together. It seems likely to me that these two would shake out pretty close on price point for launch costs here. The fairing size are just about the same between Omega and Vulcan Centaur. The lift capability of the Omega Heavy and the Vulcan Centaur are similar. I think Vulcan Centaur edges it out on the higher end. So there's a lot of similarities there. So I think these two, it would really come

Starting point is 00:17:38 down to if one of their launch prices completely blows the Air Force out of the water and they're incredibly amazed as to how low it is, that would be the pick. So if something happens that Northrop Grumman figures out how to get the launch costs for Omega down to an amount in the $80 million range or something like that, something below the costs that we've heard ULA is shooting for for Vulcan Centaur, I think that could give it a chance. Otherwise, I think the Air Force is going to rely on ULA with Vulcan Centaur. I think that could give it a chance. Otherwise, I think the Air Force is going to rely on ULA with Vulcan Centaur, you know, namely because of that trust that ULA has built up with the Air Force over time, their history, the trust level there, the longstanding relationship that those two have had. That does come into account a little

Starting point is 00:18:21 bit here. So if it's a dead even shot between Vulcan Centaur and Omega, I think ULA gets the edge. If something happens that the price point on one is significantly lower than the other, then I could see the Air Force taking a shot with that launch provider. In either case, if the Air Force does not choose one of these concepts going forward, I would be absolutely amazed if the launch vehicle continued to be developed outside of any other, you know, development contracts, something like you could hypothetically have a world where NASA would have a program like this, that they say, we need this much payload to these orbits. Please pitch us your vehicles. And, you know, if Omega doesn't get selected for the Air Force,

Starting point is 00:19:00 but NASA has a program like that in this hypothetical cool future, I could see it going that way. But without anything like that, I think one of those two launch vehicles, whichever isn't picked, would kind of go by the wayside and we wouldn't hear much from it anymore. Much in the way that Antares, my notable least favorite launch vehicle, is kind of going by the wayside for Northrop Grumman now. I don't think if Cygnus wasn't picked in the commercial cargo program, I don't think Antares, it might have been developed, but I don't think it would have been kept active for very long once the commercial demand was not there for that launch vehicle. So then when it comes down to Blue Origin going with somebody in the development program or going with SpaceX, who is in the program now. Originally, my default

Starting point is 00:19:46 position was kind of ULA and SpaceX just because that's what we have now and that's our starting point. But as I thought about it more, I started to think about the fact that New Glenn offers significant, significant advantages over Falcon Heavy Launch even in terms of payload, both size, Falcon Heavy launch even, in terms of payload, both size, physically, like volume and mass. The huge fairing and the huge lift capacity for that launch vehicle to GTO is quite significant. And I think that offers an incredible, incredible, unique capability that only New Glenn can offer to the Air Force. So if they have some payloads in mind that could use seven meter fairing, could use a really long fairing, could use 13 tons to GTO, I could really see them going with that for the phase two launches. And I think that will be the case because they do offer, like I said, very unique capabilities there over what SpaceX offers now.

Starting point is 00:20:43 You got to remember the way SpaceX lists their payload capabilities on their website. They list expendable capability with a reusable price. So it's not exactly straight up on their website. You'd have to pay that expendable premium to get the performance that is listed on the site. Whereas with New Glenn, 45 metric tons to LEO, 13 metric tons to GTO. Those are their standard launch, you know, recovering the first stage standard launch. Those are the performance benefits. And then in addition to that, you have this giant fairing, seven meters to fill. So there is a significant advantage there to New Glenn, something that you could see the Air Force

Starting point is 00:21:25 and some sort of Department of Defense agencies taking advantage of for this program. So I would be downright shocked if New Glenn was not picked for the launches in phase two. You know, they're included in this development program. I think the Air Force would want to see what they could do with that kind of capability. And it's important to remember that these launches, these phase two EELV launches, are not the only way that DOD launches, Department of Defense launches, get contract. There are a lot of other ways to go about this, like Rapid Capabilities Office, the Rocket Systems Launch Program. There are other programs out there that go about acquiring launches for DoD payloads. And you think for SpaceX, you think about the NRO launch they've had, the X-37B that they've launched once.

Starting point is 00:22:11 There are instances, Zuma, I think was a good example of that. There are instances in which SpaceX has won contracts to launch Department of Defense payloads outside of this structure entirely. And notably, they have yet to launch a payload that was part of this EELV program. We're still waiting on some GPS launches. We're still waiting on that Falcon Heavy launch. So they've launched quite a few more DoD payloads outside of this EELV program than within it yet. So, you know, me saying I don't think they're going to win the phase two launch contract doesn't mean SpaceX is never going to fly DoD payloads. There are a lot of other ways that you can go about acquiring those. And we're undergoing a major shakeup, or it looks like we're undergoing a major shakeup of the way that the Air Force space sector is structured. And part of that would

Starting point is 00:23:00 be, I expect, if it goes through a new acquisitions arm of some sort, that maybe this all gets shaken up a bit and we see a little bit more usage of these extra EELV acquisitions in the future. So that's something important to keep in mind when you're thinking about this. SpaceX doesn't have to be in this program to launch DoD payloads. So, you know, the Air Force, when they're trying to develop new launch systems here, why include SpaceX if you know, hey, if we need to launch DoD payloads. So, you know, the Air Force, when they're trying to develop new launch systems here, why include SpaceX? If you know, hey, if we need to launch on them, something low cost, something quick, we can do that outside of this program. But we want to develop new launch fields here. We want to make sure they have launches to get funded, to get built, to get flown, to get tested, to get certified. I think this is a great example

Starting point is 00:23:42 of, you know, expanding the market. Things I wish NASA would have done in certain programs is expand the market beyond the typical players that are there right now, because in the end, that provides such a benefit to the industry overall that you can take advantage of in the future, that it is a better decision for the future if what you care about is building out this infrastructure, this industry to take advantage of in the future. I think that is a much more sustainable route forward. So, you know, don't spend this money on propping up players that exist currently or launch vehicles that exist currently. Expand the market a bit, expand the competitive nature of the market,

Starting point is 00:24:20 and then take advantage of that in different ways in the future. So we're going to be following along the development of these vehicles very closely. But, you know, you can go back to this time when we are a couple of years down the line and we hear who's winning. I think it'll be Vulcan Centaur, New Glenn winning in phase two. And I think we would see a handful of launches outside of the EELV infrastructure being awarded to SpaceX over the next couple of years. Mark me down for that and come back to this moment if I'm wrong or if I'm right. So we will see which way it goes. If you've got any thoughts on these awards, if you want to send them my way, anthonyatmanageandcutoff.com is the email or on Twitter at wehavemiko. And don't forget, I'll remind you early this time, Q&A episode for October. We're about two weeks away

Starting point is 00:25:04 from that. So if you've got any questions you want to hear me talk about, any topics you want to hear me cover, send them in to either the email or the Twitter, and I will put you on the list for the October Q&A. For now, that is it. Once again, thank you to everyone supporting Managing Cutoff over at patreon.com slash Miko, and I will talk to you soon.

Main Engine Cut Off - T+97: SLS OIG Report, Air Force LSA Awards

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