Question 8: Is private sector funding of a fifth orbiter an acceptable alternative to NASA? What is the status of your negotiations with Spacetran?

Answer 8: NASA feels that there are benefits to both the Government and the private sector which can be derived from such endeavors. NASA is also aware that it must carefully evaluate both the potential benefits and the problems for both sectors in the process of making a determination on the merits of each specific proposal. Concepts such as this one are, in principle, consistent with the national policy of increasing private sector involvement and investment in space activities.

NASA has held a series of discussions with the Space Transportation Company with an objective of exploring and gaining a better understanding of the concept proposed. The Space Transportation Company has indicated that, on the basis of these discussions and the FY 1984 budget, it is preparing a revised and more complete submission to NASA. We hope to be able to complete a thorough evaluation of this revised proposal after its submission by the Space Transportation Company.

EXPENDABLE LAUNCH VEHICLES

Question 9: Your testimony indicates that your "plans make it possible to meet the commitment to launch payloads which we and those depending on us, have planned for at least through the remainder of the decade." When do you plan to cease the procurement of the expendable launch vehicles (ELV's)?

Answer 9: Expendable launch vehicles under NASA control consist of the Scout, Delta, and Atlas Centaur. These vehicles are planned to be phased out of USG use after all firm launch commitments, currently under contract, are satisfied. These launch commitments extend into calendar year 1986 for Delta and 1987 for Atlas Centaur. To satisfy these commitments, procurement of the launch vehicle hardware has been placed on contract for delivery in the near future or the hardware is already built and is in the NASA inventory. Attached is a status of the Expendable Launch Vehicle inventory as of December 31, 1982. (Table A)

Question 10:

a. Is there any concern that abandoning ELV's and relying totally on the Space Shuttle would leave NASA particularly vulnerable to the loss of an orbiter or critical spare parts?

b. Might elimination

of the ELV's have an

negative impact on commercialization of Shuttle launch services?

Answer 10:

a. No, we believe that a Shuttle fleet of four operationally proven orbiters will provide a capability to cover the Nation's space needs and have sufficient capacity to provide support for commercial and foreign needs. Based on our experience with launch systems and aircraft, we do not anticipate any long periods (exceeding three to six months) of down time for an orbiter.

b. Elimination of Government operation of the current stable of expendable launch vehicle should not have a negative impact on commercialization of Shuttle launch services. In fact, the elimination of ELV's, if they are eliminated as Government owned and operated and reestablished as private commercially owned and operated endeavors, may well be a test bed for commercialization of the Space Shuttle; much of the experience gained from ELV commercial ventures would have the potential for applicability to commercialization of the Space Shuttle.

UPPER STAGE

Question 11: Is there any planning going on at NASA or between NASA and DOD for a higher energy upper stage than Centaur? Have both civilian and defense applications been identified?

Answer 11:

NASA is planning to initiate preliminary studies of a high-performance, reusable orbit transfer vehicle. Two parallel, competitive studies are contemplated. Many potential applications have been identified, particularly with respect to commercial satellites and platforms. We are working with the DOD to keep them advised of and involved in our planning studies.

SHUTTLE PRICING POLICY

Question 12: DOD, in its testimony before this Subcommittee, said the DOD reimbursement will be the same price per launch as that of commercial users for equivalent service, excluding manpower charges which will be traded between the Air Force and NASA.

rate

Is the difference between the commercial ($38 million in FY 1975 dollars) and the DOD rate ($29.8 in FY 1975 dollars) consumed entirely by the difference in manpower charges? If not, what other charges are included in this difference?

Answer 12: Under the agreement between NASA and the DOD, the DOD pays for items termed "Materials and Services" which include: orbiter hardware spares, crew equipment, main engines, solid rocket boosters, external tanks, and contract administration. These items are included in the DOD price of $29.8 million (FY 1975 dollars). The remaining cost items are exchanged between the agencies. The difference between the charges to the DOD and commercial customers, consists largely of the manpower charges for launch and flight, but also includes propellants and ground support equipment spares. Under the agreement, NASA will fund for propellant and ground spares for Kennedy Space Center; DOD will fund for propellants and ground spares at Vandenberg. In addition, the commercial price of $38 million includes a $4 million contingency charge that is not incorporated into the DOD price.

Question 13: Please provide a comparable current cost-per-flight estimate for the first 12 years of Shuttle Operations comparing it to the June 1976 and September 1980 estimates. State the total number of flights upon which this estimate is based and the number of flights from each launch location.

Answer 13: A comparison of the flights planned for the first twelve years of Shuttle Operations from the east coast and west coast launch sites is as follows:

For east coast launches, the estimated cost per flight over the mission model is as follows:

These cost estimates include allocations of some support costs and center overhead costs. The current estimates result from an analysis done in 1982 in support of the pricing policy reviews.

Question 14: Does NASA's Space Shuttle pricing policy provide for recoupment of the Government's capital investment in the orbiter fleet, equipment, and facilities?

Answer 14: The NASA pricing policy established in 1977 for non-U.S. Government launches in the first

three years of operations included, which provided for a use fee which is applied to commercial and foreign customers, share of the depreciation of facilities and equipment and the amortization of the investment in the orbiter fleet. The pricing policy for launches in FY 1986-1988 is now based on out-of-pocket costs and, therefore, does not include such a use fee.

Question 15: How does the $16 million (1975 dollars) price for DOD launches in FY 1984 and FY 1985 compare to the estimated cost per flight for DOD launches in those years.

Answer 15: The original memorandum of agreement between the Department of Defense and NASA specified that the DOD would reimburse NASA $12.2 million (in 1975 dollars) for the average materials and services costs incurred in support of a dedicated mission during the first six years of Shuttle operations. This value for materials and services is also incorporated into the present $18.0 million (in 1975 dollars) standard Shuttle launch services charge which other U.S. Government, commercial and foreign customers are paying for launches in the FY 1983-1985 period.

The current memorandum of agreement between DOD and NASA calls for the DOD to reimburse NASA $16.0 million for materials and services costs for launches through FY 1985 and $29.8 million (both in 1975 dollars) for launches during FY 1986-1988. This significant departure from the original memorandum of agreement took into consideration not only the increase in the average materials and services costs but also the change in Shuttle flight planning from a very rapid build-up in flight rate to a more gradual build-up. Thus, the current average materials and services costs for FY 1983-1985 of approximately $47 million (in 1975 dollars) is strongly influenced by the relatively low production rates and consequent lack of near-term economics of scale.

It should also be noted that the DOD is the only customer during this FY 1983-1985 period whose price has been increased in partial compensation for the increase in the Shuttle cost per flight.

Question 16: How does the $29.8 million (1975 dollars) price for DOD launches in FY 1986-1988 compare to the estimated cost per flight for DOD launches in those years?

Answer 16:

The estimated average cost of a Shuttle flight within the FY 1986 through FY 1988 period is $55.5 million (FY 1975 dollars). The cost includes all materials, services, direct manpower and allocations of support manpower required for a dedicated KSC Shuttle launch. The current memorandum

of agreement between the DOD and NASA includes a general principle that each portion in the National Space Transportation System will provide, at no charge, the manpower necessary to operate the Shuttle related facilities for which they are responsible. The $29.8 million (FY 1975 dollars) price for DOD launches in this timeframe represents the estimated recovery of materials and services not included in this exchange of support agreement.

Question 17:

Will DOD reimbursement for launches through FY 1988 be equal to or exceed the estimated launch costs? If not, how much funding support must NASA provide through FY 1988 for DOD launches?

Answer 17: A key premise of the pricing policy is recognition of their multi-billion dollar commitment to the national Shuttle capability. Accordingly, NASA and the DOD do not reimburse one another for manpower related to providing an operations capability at the STS facilities. DOD will reimburse NASA for all the materials and services costs for launches through 1988. The manpower costs for their launches will not be reimbursed in accordance with the recently signed memorandum of understanding. The pricing policy established for FY 1985-1988 reflects full recovery of the estimated materials and service costs.

Question 18: Will NASA be permitted to adjust the DOD price in FY 1989 and beyond to recoup prior losses from DOD?

Answer 18: An updated pricing policy will be developed for FY 1989 and beyond, probably during FY 1985. NASA does not intend to recoup prior losses from the DOD. The current pricing policy for FY 1985-1988 is based on full recoupment of the currently estimated costs applicable to DOD flights. The NASA/DOD Reimbursement Policy Memorandum of Agreement is based on recognition of DOD as a unique contributing partner to the national Shuttle capability. NASA does not view DOD flights as being flown at a loss to NASA. Considering that DOD has committed over $15 billion to the Shuttle and its related activities through FY 1988, the DOD has made a significant contribution to the national Shuttle capability.

Recognition of DOD's partnership is a key element of the new pricing policy.

Question 19: What is NASA's estimate as to when the DOD launch price will equal the actual DOD launch costs?

Answer 19: The launch price for FY 1985 through 1988 equals the estimated cost of those materials and