Space Access Update #95 08/27/00 
                Copyright 2000 by Space Access Society 
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Labor Day weekend is almost upon us - as soon as it's over, Congress 
comes back to DC for its last major session before the election.  It's 
a good time to take a look around and see where things stand.  
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Contents:

 - "Space Launch Initiative" Funding Decision Now Due In September,
    SAS Still Opposed To "RLV Competition" Portion Of SLI Funding 
    - Senate HUD/VA Appropriation Markup Is Key 
    - X-33 Tank Report Out; Who Pays Still Unresolved 
    - X-34 Now Also Faces Major Additional Delays, Cost Increases 

 - Startup Launch Companies Roundup 

 - Space Access '01 Conference Info (April 26-28 2000, Scottsdale AZ) 
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  Senate Markup Of "Space Launch Initiative" Funding Due In September 


The Senate HUD/VA/Independent Agencies (NASA) Appropriators never did 
get around to "marking up" their funding bill before the August 
Congressional break.  You may recall that the House Appropriators, in 
what was at the time most likely a tactical budgetary move, have 
already zeroed the entire NASA "Space Launch Initiative" request.  The 
Senate's markup will thus be critical for NASA's chances of getting 
the money they want to start SLI - any cuts the Senate Appropriators 
make will very likely carry through to the final funding bill. 

The Senate will be back in session starting Tuesday September 5th, and 
they could get to marking up the HUD/VA/IA Appropriation (which 
includes NASA funding) anytime between then and early October, when 
the Congress shuts down again till after the November election. 

"SLI" actually covers a grab-bag of reusable launch projects, ongoing 
(including X-33, X-34, and X-37) and proposed (Alternative Access, 
NASA-Unique Systems, and the biggest single item at half the overall 
$290 million FY'01 SLI request, "RLV Competition & Risk Reduction.") 

We recommended at the start of the summer and we continue to recommend 
that you ask your Senators to zero the $145 million new-start "RLV 
Competition And Risk Reduction" portion of NASA SLI, because we 
believe that as currently set up, that part of SLI would do more harm 
than good to the US space launch industry.  

(Members of the Senate Appropriations or Commerce committees are 
especially worth contacting, as are Representatives on the House 
HUD/VA Appropriations Subcommittee and the House Space Subcommittee.  
Check www.vote-smart.org for info on your Senators and Representative 
- letters, faxes, and phone calls are best - be polite, be concise, 
and be specific about what you want them to do, "zero the $145 million 
NASA budget line for RLV Competiton & Risk Reduction".) 

Our position is that some of the fundamental assumptions behind NASA 
SLI are incorrect - in particular the assumption that NASA internal 
launch needs and US commercial launch needs can and should be shotgun-
wedding "converged - and that SLI as-is is thus almost certain to 
produce no useful result for the $4.5 billion over five years NASA is 
requesting.  

In broad form, our proposed fix is to divide the program in two, 
firmly separating NASA support for their own agency launch needs from 
NASA support for commercial launch needs.  To date, however, NASA has 
shown no sign of modifying their position on mandating "convergence". 

(See our Space Access Update #94 for details, at 
http://www.space-access.org/updates/sau94.html) 

   Recent Developments 

What we've seen over the summer has only tended to confirm our 
negative view of SLI's prospects. 

   NRA 8-27 SLI Study Contracts 

In their initial SLI study contract awards, NASA rejected several 
bidders who wanted to allow for significantly higher future launch 
traffic than NASA's preferred model, NASA launches plus a slice of 
existing commercial traffic.  Limiting SLI studies from the start to a 
conservative traffic model means automatic exclusion (as "not cost-
effective") of any system element providing for the possibility of 
radically lower costs at high launch rates.  This in turn means that 
no product of SLI will be capable of taking launch costs down past the 
current "flat" diminishing-revenue region of the demand curve, down to 
where reduced costs finally begin radically expanding market size and 
revenues.  Such an approach to SLI makes it very unlikely genuine 
commercial financing will be available to build the resulting designs. 

   X-33 

The long-overdue X-33 tank failure report finally did come out after 
various news media started noticing its absence.  The gist of the 
report is that multiple things were known to be wrong with the tanks, 
but nobody talked to anybody else about any of the problems, but it's 
not actually anybody's fault.  

The X-33 project is now over a year late, nobody thinks it could 
possibly fly in less than two additional years, and NASA and Lockheed-
Martin still haven't agreed on who will pay the additional hundreds of 
millions needed.  There's considerable Congressional pressure to hold 
Lockheed-Martin's feet to the fire - the original cooperative 
agreement limits NASA's direct contribution to $941 million, with 
Lockheed-Martin's sole choice being to pay for overruns or bail out of 
the project and shut it down.  Elements within NASA are talking about 
finding ways to slip Lockheed-Martin more money via early payment of 
performance bonuses (despite non-performance) or via new auxiliary 
contracts for "upgrades" to the baseline X-33.  

Our position is that the X-33 projects's ongoing display of bad 
management has become egregious enough that Congress should refuse to 
fund any such additional NASA payments for the project.  If as seems 
quite possible Congress agrees with us, Lockheed-Martin will have to 
choose between digging up the cash to complete the project, or bailing 
out and shutting X-33 down.  Either way, we'd be very surprised to see 
any decisive action until after the election.  

Meanwhile, NASA wants three times what they've spent on Reusable 
Launch Vehicle work over the last five years (with no flight tests in 
sight yet) for their new SLI over the next five years.  Given the X-33 
record thus far plus NASA's repeated failure to resolve its problems, 
we are not filled with confidence that this SLI money would be well 
spent, absent radical changes in NASA's SLI approach. 

   X-34 

In an additional blow to confidence in NASA's abilities to manage SLI, 
X-34 too is now looking at up to two years additional delay (X-34 is 
also well over a year late already) plus major cost increases.  Three 
factors are at work here: 

   * In the wake of the recent spectacular Mars mission failures, NASA 
has gone back over its programs looking for ways to prevent more high-
visibility setbacks.  In general, this involves imposing an additional 
layer of NASA management, which costs; hence the current fuss over 
rising expenses reducing the number of NASA science missions planned.  
In X-34's case, it also involves a specific change of approach: Till 
now, the program was prepared to risk losing one of the three X-34 
airframes during flight test.  This has now been defined as 
unacceptable.  The changes this implies are not cheap.   

     X-34 avionics were formerly single-string and are now being 
redesigned for redundancy, not generally considered cost-effective in 
an experimental testbed.  X-34 flight was originally going to be 
autonomous launch-and-forget and will likely now be human-supervised, 
probably a good idea given the poor track record of experimental 
fully-autonomous vehicles, but also costing additional time and money. 

   * The NASA-developed "Fastrac" engine that NASA insists on for X-34 
is having problems.  (NASA has insisted - we understand that the X-34 
contractor, Orbital Sciences, wanted $20 million for an existing 
Russian engine a while back, but NASA said it cost too much.  NASA 
however soon managed to find $25 million more for the already troubled 
Fastrac development effort.)  First powered flight of the X-34 was 
scheduled for last year, yet no flight-weight version of the Fastrac 
engine has yet been tested.  We've heard of problems with the low-cost 
propellant pump, a central element of the engine.  NASA is now 
admitting that a few months delay and some additional cost is likely.  

   * Some of the blame does go to OSC; they've been having teething 
troubles with various parts of the X-34.  The propellant tank design 
was a problem for a while (since solved we're told) and the first X-34 
airframe had significant electrical problems the first time it was 
interfaced with the carrier aircraft; we understand it has since gone 
to NASA Dryden for rewiring and ground-tow testing.

   Conclusions 

We think that completing X-33 should be left up to Lockheed-Martin - 
if they believe it's truly a major step toward a useful commercial 
RLV, they should be able to find the money and talent to finish it.

X-34 should also be completed and flown, but NASA should immediately 
fund OSC in aquiring the Russian engine they wanted as insurance 
against further Fastrac problems, and NASA should back off the absurd 
and unaffordable "no conspicuous failure is acceptable" position.  
This is an experimental vehicle project with three copies of the 
vehicle; a reasonable level of risk of damage to or loss of one of the 
vehicles is a good tradeoff for lower cost and quicker results. 

SLI, as we've been saying all year, should be split into NASA-specific 
and US commercial support projects, with a solid firewall between the 
commercial support project and influence by the major NASA launch 
consumer centers, lest they once again bend all NASA efforts toward 
solving their Shuttle-replacement problem at expense of practical 
engineering support for the US launch industry. 

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                            Startup Roundup 


On a somewhat happier note, we're now reasonably sure that all the 
various low-cost launch startups we follow will survive the year in 
some form or another - a better outlook than we saw a couple months 
ago.  The general trend, mind, is toward providing specialty 
engineering and away from immediate low-cost launcher projects - the 
current launch market outlook makes it extremely difficult for new 
launcher business plans to "close".  But market projections and 
investment outlooks are cyclical.  The current post-Iridium low will 
eventually pass, and it's important that there be competent people 
willing to take chances on radically cheaper launch still able to do 
so when the opportunities come around again.  Hang in there, guys. 

In no particular order... 

Kistler bid on a preliminary study contract for NASA's Alternative 
Access (to Station) program, and was one of four winners.  The total 
amount of the contract is only a couple hundred thousand - their main 
motive is formally establishing that their under-development "K-1" 
two-stage reusable vehicle can do Station resupply.  

Rotary Rocket is still alive and still answering their phones.  As we 
understand it, they currently retain a handful of administrative and 
marketing staff.  No Roton work is going on; our impression is that 
Rotary's main current focus is securing funding to resume development.  
We'd be surprised to see that happen before the cheap launch 
investment climate climbs out of its current trough; we wish them the 
patience to outwait the downturn, or skill and luck to beat it. 

Gary Hudson and Bevin McKinney meanwhile have revived their old rocket 
engineering company, HMX, and have won a study contract from NASA 
Alternative Access.  Gary Hudson has left Rotary, but he has not left 
the rocket business, a good thing in our opinion.  Gary tells us he's 
decided he enjoys engineering a lot more than fundraising, that his 
new approach is less panning for gold, more selling bluejeans to the 
miners, and that HMX has a couple irons in the fire besides NASA AA. 

Pioneer Rocketplane bid on both NASA SLI (NRA 8-27) and on Alternative 
Access, but didn't win either, which we think shows considerable lack 
of vision on NASA's part.  Pioneer did recently get a $200K grant from 
the state of California (Kelly and JP Aerospace also got grants from 
this program.) 

Universal Space Lines bid on NASA SLI and lost, then didn't bid on AA.  
Much of the USL group of companies' current efforts are focussed on 
their Universal Space Network spacecraft tracking and communications 
operation, which has, unlike the low-cost launch business lately, 
attracted substantial commercial investment.  USL's Jess Sponable and 
Bill Gaubatz meanwhile have a compact low-cost DC-X followon proposal 
called MSX they've been shopping around - we wish them success in 
finding a suitable sponsor for MSX, it looks like a good project. 

Space Access LLC won a small NASA SLI study contract.  They've been 
making a bit of a stir trying to play off central Florida versus the 
Texas gulf coast in an effort to generate Congressional support for 
loan guarantees for their vehicle development.  They seem to have had 
some luck with the local delegations, but so far Congress as a whole 
isn't going for it. 

Kelly Space & Technology's recent efforts at working with NASA in the 
STAS studies seem to have paid off; they've won a $3 million SLI study 
contract, second only to Boeing and Lockheed-Martin's $4.5 million 
awards, and twice the size of Orbital Sciences' $1.5 million contract. 
Mind, we are not wildly optimistic that this will ever lead to a 
significant hardware contract for Kelly under SLI, at least not as SLI 
is currently constituted.  Nevertheless, one of the startups is 
getting "a cup of coffee in the majors" - congratulations! 

Andrews Space & Technology has won study contracts in the two hundred 
thousand dollar range on both SLI and AA. 

Microcosm, best known for their work on low-cost industrial-production 
modular expendable rockets, was the fourth NASA Alternative Access 
winner.  The total divided up among the four was a bit over nine 
hundred thousand dollars.  These AA contracts were done as a formal 
small-business setaside, but NASA has also made awards to existing 
major contractors to study the same mission, short leadtime delivery 
of small payloads to Station.  We strongly advocate that NASA maintain 
small business involvement through the actual development and payload 
delivery contract phases. 

XCOR Aerospace, live-fire demonstrating their prototype small rocket 
motor in the conference hall (with all legal bases touched) at last 
spring's Space Access '00 conference, generated significant investor 
interest.  XCOR has since secured a round of financing and is hard at 
work on product development, after a well-received visit to the 
Oshkosh experimental aircraft fly-in this summer. 

   Space Access '01 Conference Info 

And speaking of our annual Space Access conference, Space Access '01 
will again be at the Holiday Inn Old Town in the heart of downtown 
Scottsdale Arizona twenty minutes from the Phoenix airport, intro 
sessions Thursday evening April 26th 2001, main sessions all day and 
evening Friday the 27th and Saturday the 28th, 800 695-6995 for room 
reservations, mention "space access" for our $72 rate.  Conference 
advance registration is $80 postmarked through Saturday September 9th, 
$100 thereafter, $120 at the door, mail checks (sorry, no credit 
cards) along with your name, address, and the organization name (if 
any) you want on your conference badge, to: Space Access Society, 4855 
E Warner Rd #24-150, Phoenix AZ 85044. 

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Space Access Society's sole purpose is to promote radical reductions 
in the cost of reaching space.  You may redistribute this Update in 
any medium you choose, as long as you do it unedited in its entirety. 
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 Space Access Society 
 http://www.space-access.org 
 space.access@space-access.org 

 "Reach low orbit and you're halfway to anywhere in the Solar System" 
                                        - Robert A. Heinlein