NASA and the United Launch Alliance (ULA) will announce a new commercial crew agreement on Monday, July 18, 2011.

ULA is jointly owned by Boeing and Lockheed Martin and offers launch services on the Delta IV and Atlas V families of launch vehicles. It won one of the awards in NASA’s first CCDev competition in 2010.

NASA issued a press release today that there will be press conference on Monday at 11:00 am Mountain Time (1:00 pm EDT) at ULA’s Colorado headquarters to announce a new agreement. The press release did not indicate if the press conference would be streamed live or not, but if so it will probably be at http://www.nasa.gov/newsaudio.

The American Institute of Aeronautics and Astronautics (AIAA) issued a statement following the final launch of the space shuttle program asserting that it did not signal the end of NASA or the end of U.S. aerospace leadership.

The statement from AIAA’s Public Policy Committee says in part:

“The launch of space shuttle Atlantis on 8 July closes an important epoch in American science, but does not signal the end of the National Aeronautics and Space Administration [NASA]. Nor, does the launch of Atlantis signal the end of American leadership in aerospace. Today, the United States is better positioned to continue leading the world in space exploration, understanding our planet’s environment, and making discoveries which benefit all of humankind. Just as in aviation, where in one hundred years we have seen the creation of hundreds of thousands jobs in small and large businesses across America selling products globally, in the next fifty years we will see the same in the field of space exploration.”

AIAA Executive Director Bob Dickman acknowledged in a separate statement that the Atlantis launch evokes “mixed feelings,” but that “we recognize the promise of a bright future in which industry and commerce will play a greater role as we work together to build on the shuttle’s legacy engineering and science achievements.”

Just one day after NASA issued a newsletter trumpeting the success of its Commercial Crew Development 2 (CCDev2) effort, NASA’s Office of Inspector General (OIG) issued a cautionary report about the challenges NASA faces in the commercial crew arena.

Crediting NASA with making “sustained progress” on commercial crew over the past two years, the OIG said that the agency faces “multiple challenges and risks as it expands its Commercial Crew Transportation program.” The OIG identified the following challenges and risks:

• Modifying NASA’s existing safety and human-rating requirements for commercially developed systems
• Selecting an acquisition strategy for commercial crew transportation services
• Establishing the appropriate insight/oversight model for commercial partner vehicle development
• Relying on an emerging industry and uncertain market conditions to achieve cost savings, and
• Managing the relationship among commercial partners, the FAA, and NASA

The report does not make specific recommendations to NASA for corrective actions, but advises the agency to pay attention to the challenges it highlights. According to the report, the NASA Associate Administrator for Exploration Systems concurred and assured the OIG that no decision has yet been made on an acquisition strategy for this program.

In the newsletter released yesterday, NASA reviewed the milesones that have been met by the four companies that received CCDev2 awards — Blue Origin, Boeing, Sierra Nevada, and SpaceX.

NASA issued what it describes as the first in a bimonthly series of newsletters reporting on the “return on investment” for the Commercial Crew Development 2 (CCDev2) program. NASA issued awards to several companies in two rounds of bids — CCDev1 in 2010 and CCDev2 in 2011.

The newsletter reviews milestone achievements met by the CCDEV2 awardees: Boeing, Blue Origin, SpaceX and Sierra Nevada. The program is designed to fund companies that are attempting to develop commercial crew capabilities. NASA says that all four companies have met their milestones so far.

The controversial proposal by LightSquared to operate a satellite-terrestrial wireless mobile broadband communications system that might interfere with Global Positioning System (GPS) receivers encountered rough sledding in Congress on two fronts last week.

Two subcommittees of the House Transportation and Infrastructure (HT&I) committee held a hearing on June 23 where LightSquared opponents offered dramatic testimony about what would happen to GPS users if the terrestrial segment of the system is allowed to operate. The next day, the House Appropriations Committee acted to prevent the Federal Communications Commission (FCC) from allowing the company to proceed until the GPS interference issues are resolved.

The FCC granted a provisional license to LightSquared on January 26. It required the company to work with the GPS community to determine the extent of interference and report back by June 15. The FCC granted the company’s recent request for a two-week extension; the report is now due on Friday, July 1. The license prohibits the company from commercial operations of its terrestrial network until the interference issues are settled.

At the hearing, aviation interests in particular lambasted the FCC for granting a provisional license at all. RTCA, Inc., which functions as a federal advisory committee to the Federal Aviation Administration (FAA), did a study that determined that LightSquared’s plans to use three spectrum deployment phases would be “incompatible with the current aviation use of GPS,” although use of a single lower channel could be acceptable.

The government’s National Space-Based PNT Systems Engineering Forum (NPEF) issued a separate report in mid-June recommending that the FCC rescind the license.

At the hearing, a LightSquared Vice President, Jeffrey Carlisle, defended his company’s plan. He assured lawmakers that the company “has no intention of conducting its operations in a way that interferes with government or commercial aviation or maritime operations in the United States…” The system involves the use of a geostationary satellite – SkyTerra, launched last fall – and 40,000 terrestrial cellular base stations. Users can use the satellite, the base stations, or both, depending on their needs. SkyTerra Communications, Inc. was purchased by Harbinger Capital Partners, a hedge fund and major investor in Lightsquared, earlier in 2010. LightSquared’s supporters praise the company’s promise as a mobile wireless broadband provider.

The House Appropriations Committee, however, was not persuaded. The day after the hearing, it adopted an amendment to the FY2012 Financial Services Appropriations bill that would prohibit the FCC from spending funds to remove the conditions it placed on the license or to otherwise permit LightSquared to proceed until the FCC has resolved the GPS interference issues. The Financial Services appropriations bill includes the FCC. The amendment was offered by Rep. Steve Austria (R-OH) and Rep. Kevin Yoder (R-KS) and adopted by voice vote.

At a Secure World Foundation meeting on June 16, Peter Marquez, who oversaw development of President Obama’s National Space Policy when he was on the staff of the National Security Council, and Andrew Palowitch from the Air Force/National Reconnaissance Office Space Protection Office, expressed exasperation at the FCC for granting the license as well. Marquez, who now works for Orbital Sciences Corp. and is a member of the NPEF’s parent advisory committee, said the issue is consuming an inordinate amount of time at the White House and elsewhere in the Obama Administration. The National Space Policy reaffirms the U.S. Government’s commitment to GPS services and interference mitigation for GPS and similar systems.

The California Space Authority ceased operations yesterday according to the Santa Maria Times. CSA was headquarted in Santa Maria, CA, which is near Vandenberg Air Force Base. According to its website, CSA’s purpose was to “retain, grow and create California space enterprise.”

Recently CSA was focussing on building a $220 million California Space Center for educational and tourism purposes. The most recent plan was to build it in nearby Lompoc, CA, and the mayor of Lompoc told the newspaper that he plans to continue that effort without the CSA.

Financial troubles apparently were the root cause of the decision to dissolve the CSA. Many staff had been laid off already, and the Executive Director, former congresswoman Andrea Seastrand, and Deputy Director Janice Dunn, had voluntarily cut their salaries in half, according to the Times.

Representatives of the two companies under contract to provide commercial cargo services to keep the International Space Station (ISS) operating after the shuttle program ends and a top NASA official reassured a congressional subcommittee this morning that they would be ready soon.

Gwynne Shotwell, President of SpaceX, and Frank Culbertson, Senior Vice President of Orbital Sciences Corp., each told the Subcommittee on Space and Aeronautics of the House Science, Space and Technology Committee that they are confident they can meet their current schedules. Most of the development work is completed, they said, and test flights of their launch vehicles (Falcon 9 and Taurus 2) and capsules (Dragon and Cygnus) are due to be finished by the end of 2011. Cargo services will begin in 2012, they asserted.

NASA’s Associate Administrator for Space Operations, Bill Gerstenmaier, also expressed confidence in the companies’ abilities to meet the schedules. He added, however, that NASA anticipates delays could happen. Consequently, through pre-positioning spares on the ISS, the orbiting facility could operate for as long as a year after the last shuttle leaves later this summer with minimum resupply requirements, Gerstenmaier said. The space shuttle Endeavour is currently docked to the ISS; only one more shuttle flight, Atlantis (STS-135), remains on the manifest. It is currently scheduled to launch on July 8.

A hearing charter prepared in advance by committee staff shows that on a per pound to orbit basis, it will cost more to use commercial cargo services than launching on the space shuttle or Russia’s Progress automated spacecraft. When asked by one of the subcommittee members if those figures were accurate, Gerstenmaier said he would have to look at the numbers carefully and respond at a later time.

Whether the companies and NASA were persuasive was not immediately evident. In press releases immediately after the hearing, Republicans and Democrats sounded perhaps slightly less skeptical than previously, but made clear they will continue to scrutinize the commercial cargo program. The Republicans went further to say that this was just the first in a series of hearings “to provide close oversight of commercial space launch capabilities.”

A webcast of the hearing is available on the committee’s website.

Data contained in the charter for today’s House Science, Space and Technology subcommittee hearing on commercial cargo show that on a cost per pound basis, commercial cargo will cost more than cargo delivered to the International Space Station (ISS) by either the U.S. space shuttle or Russia’s Progress automated cargo spacecraft. The hearing is set to begin at 10:00 am this morning.

The hearing charter, prepared by committee staff, contains a table showing that the Commercial Resupply Services (CRS) NASA is purchasing from SpaceX and Orbital Sciences Corp. will cost $26,700 per pound to ISS. By comparison, the cost for launch on the shuttle is $21,268 and on Russia’s Progress is $18,149. The table explains the assumptions that went into those calculations, including the fact that they do not include development costs, are considered proprietary information by the companies, and the shuttle costs assume four flights per year with a capability to deliver 16 metric tons to the ISS at a total annual program cost of $3 billion. The document notes further that the costs for CRS would be higher if they were calculated the same way the shuttle costs were derived, by dividing the total CRS program cost by the mass delivered to the ISS. That cost would be $39,700 per pound.

Other figures in the charter show that NASA will have spent $1.254 billion on commercial cargo by the end of FY2011 and its budget projections call for spending just over $5 billion for CRS between FY2011 and FY2016.

Committee staff also point out in the document that NASA was not supposed to sign contracts for any CRS until the companies had demonstrated their commercially-developed capabilities, but NASA has signed such contracts anyway and is using them to make progress payments to the companies. That means NASA “assumed significantly more risk for ensuring the success of the cargo providers,” according to the document.

One question raised in the document is what the path of the commercial cargo program portends for commercial crew. Committee and subcommittee members have expressed deep skepticism about whether the commercial sector is ready to provide crew transportation services to ISS ever since President Obama proposed shifting that responsibility from NASA to the commercial sector last year. Committee staff state in the charter that:

“By purchasing CRS years before the COTS systems had been demonstrated, NASA assumed significantly more risk for ensuring the success of the cargo providers. NASA has indicated that they are ‘too important to fail.’ This concept has important policy and budgetary implications for future commercialization proposals such as the Administration’s proposed commercial crew efforts. Administrator Bolden has repeatedly told Congress that NASA would do ‘whatever it takes’ to make these ventures succeed. According to briefings provided to Committee staff, ‘NASA is depending on our commercial cargo partners. We need their COTS development efforts to succeed so that they can begin providing cargo resupply to the International Space Station…’ Legitimate questions have been raised about this approach since it differs from what was originally intended to be a merit-based and market-based competition.”

The hearing is in 2318 Rayburn House Office Building. Witnesses are NASA’s Associate Administrator for Space Operations, Bill Gerstenmaier; GAO’s Cristina Chaplain; SpaceX’s President Gwynne Shotwell; and Orbital’s Senior Vice President and Deputy General Manager (and former astronaut) Frank Culbertson.

NASA has submitted its market assessment for commercial crew and cargo systems. It was prepared in response to a requirement in the 2010 NASA Authorization Act.

George Nield, director of the Federal Aviation Administration’s (FAA’s) Office of Commercial Space Transportation, defended his office’s request for a 74% budget increase at a hearing today. Nield fielded numerous questions – some surprisingly antagonistic – from members of the Space and Aeronautics subcommittee of the House Science, Space and Technology Committee.

According to Nield, the office is requesting $26.6 million for FY2012, of which $15.8 million is to pay for 103 full time employees and $10.8 million is for “non-pay” activities. That compares to $15.2 million and 71 full time employees in FY2010 (the same level at which it is funded for FY2011) according to the FAA’s FY2012 budget submission. Nield defended the increase by saying that his office anticipates a ten-fold increase in the number of commercial launches in FY2012 and his office’s responsibilities are expanding as the industry expands. He also pointed to new initiatives to stimulate the industry, including $5 million and 50 employee positions for a Commercial Spaceflight Technical Center at NASA’s Kennedy Space Center, and $5 million for a “prize” program for the first non-governmental team to develop and demonstrate the ability to launch a 1 kilogram cubesat to orbit using a partially reusable system. His office also plans to continue funding the Center of Excellence for Commercial Space Transportation at New Mexico State University, Las Cruces.

The Government Accountability Office’s (GAO’s) Gerald Dillingham noted that the request is a 74 percent budget increase compared to FY2010, and the number of employees would increase by 45 percent. Dillingham said in his opening statement that he agreed the request is “reasonable,” but that Congress should give it careful consideration given today’s budget constraints.

Several members of the subcommittee questioned the increase, including Rep. Sandy Adams (R-FL), whose district includes Kennedy Space Center. She lambasted Nield for requesting such a large increase in these difficult budget times. She asked how creating a regulatory regime for commercial human spaceflight based on a lot of unknowns would be helpful. Nield replied that industry leaders are asking for it because they want a “consistent and compatible set of results” that will satisfy both NASA and FAA requirements. Later, ending a harsh interrogation of Nield over how long it took his office to issue the first reentry license and after getting GAO’s Dillingham to reverse himself and say that he did not believe the increase was necessary, she lectured Nield that a “74 percent increase in a time of economic restraint … you’re asking us to increase your budget for what-if. I have great concern about that. I just want you to know that.”

Other members focused on the perennial question of whether there is a conflict of interest between the office’s dual role as both a regulator and promoter of commercial space launch and reentry services. Rep. Donna Edwards (D-MD) and others noted that originally the FAA had a similar dual role for aviation, but as the years passed the two roles became contradictory and Congress removed the facilitator role so the FAA could focus on safety. Dillingham suggested that the Department of Commerce might one day take on promoting the commercial space launch industry while the FAA focuses on regulation. He said, however, that GAO did not see any conflicts of interest in its most recent review of the office a few years ago.

George Washington University Professor Henry Hertzfeld went further in discussing potential conflicts of interest, noting that originally the office regulated only expendable launch vehicles (ELVs). Today it regulates several competing modes of transportation — ELVs, reusable launch vehicles (RLVs), suborbital launch vehicles, and perhaps unmanned aerial vehicles (UAVs), he said. He sees a potential conflict of interest among those responsibilities as well. However, he said there were no complaints from industry yet about the dual role, and one measure for determining when it is time to review the issue would be when such complaints arise. He agreed with Dillingham that the time is not yet ripe for Congress to reconsider the office’s mandate, but that someday other agencies might be charged with promoting the industry to “preserve the integrity of the regulatory process.”

Regulating the safety of commercial human spaceflight was also a focus of attention. The 2004 Commercial Space Launch Act Amendments directed that the FAA take no action to regulate the safety of passengers on commercial human spaceflight missions for eight years after the law was enacted. That time period will expire in 2012. Instead, “informed consent” is all that is required – the commercial operator must tell passengers what the risks are, but it is up to the passenger to decide whether or not to board the craft. When the Act was passed, commercial human spaceflight was expected to occur within a few years and after eight years there would be sufficient experience to inform regulatory efforts. No such flights have yet occurred, however, so the question is whether the time period should be extended. The FAA Reauthorization Act that passed the House on April 1 (H.R. 658) contains a provision (sec. 1301) that would prohibit such regulations until eight years after the “first licensed launch of a spaceflight participant” instead of after enactment of the law.

GAO’s Dillingham said that he did not know how eight years was selected in the first place, and did not think that a specific number of years is appropriate. Instead, such regulations should develop as the industry matures, he said, stressing that regulations should not be made in times of crisis, such as after an accident: “We’re for incrementalism.” Hertzfeld agreed, arguing that it is a matter of the maturity of the industry. He also alerted the committee that some states are developing their own passenger waivers of liability for commercial human spaceflight, including Florida, Virginia, New Mexico, and Texas, and each law is worded differently. “Federal preemption on this issue might be warranted,” he said, “to prevent competition among states on an issue that involves interstate commerce and may adversely affect safety decisions” by the companies.

Nield pointed out that his office is holding a meeting at the end of this month in Florida to solicit input from the public about how to approach regulating commercial orbital human spaceflight. (The meeting is on May 26 — see our calendar for a link to the announcement.)

A webcast and statements are available on the subcommittee’s website.