SENIOR INTERAGENCY GROUP (SPACE) SPACE LAUNCH POLICY WORKING GROUP ISSUE PAPER ON FY84 BUDGET ISSUES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B00181R001701620011-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 23, 2016
• Document Release Date: February 28, 2012
• Sequence Number: 11
• Content Type: MISC

Declassified and Approved For Release 2012/02/28: CIA-RDP92B00181 R001701620011-2
SENIOR INTERAGENCY GROUP (SPACE)
SPACE LAUNCH POLICY WORKING GROUP
ISSUE PAPER
ON
FY84 BUDGET ISSUES
ISSUE: Should Orbiter production capability, in the form of the
initiation of a fifth Orbiter, be supported in the FY84
budget?
By 1969, NASA had adopted a program plan to develop a manned Space
Transportation System (STS) based largely on reuseable components;
this system was conceived to provide cost-effective, routine, manned
access to space. Economics and politics, as well as technology,
were all critical factors in the decision process that led to
President Nixon's approval of the STS development in 1972.
As a part of this decision, all Expendable Launch Vehicles (ELV's),
with the exceptions of the Scout and Saturn V vehicles, were to be
phased out. The cost effectiveness of the STS was predicated on
maximum utilization of the Shuttle over its operational life.
The question of the number of Orbiters required for an effective STS
fleet was the subject of intense scrutiny by NASA, Congress, and
various Administrations for most of the 1970's. Original planning
envisioned a five Orbiter fleet. The estimates of STS demand and
the numbers of Orbiters to fulfill a given demand have fluctuated
continuously throughout the program. These fluctuations have lead
to a series of reviews of the question of fleet size.
In preparation for the FY 1977 budget, the Office of Management and
Budget (OMB) undertook a review of the STS mission model and studied
how many Orbiters beyond the first two were needed. To support the
OMB review, NASA and the DOD jointly reviewed the requirements for
Orbiters and issued a position statement that five Orbiters were
essential to meet National requirements. Following the OMB review,
the Administration did decide that five Orbiters were essential to
the Space Transportation System.
In 1977, under the Carter Administration, the question of the number
of Orbiters was studied again by OMB. The resulting Administration's
position was that only funding for a four-Orbiter fleet would be
requested by NASA. During subsequent consideration of the fifth
Orbiter question in 1978, the Congress decided that (1) a five
Orbiter fleet was an option which should be kept open, and that (2)
interrupting production of Orbiters between the fourth and fifth
Orbiter would have cost penalties. In February 1980, NASA testified
before Congress that, due to slips in all parts of the STS program,
a delay in fifth Orbiter funding until FY 1982 would probably nct
cause substantial penalties. As.a result of fifth Orbiter funding
deletion from subsequent NASA budgets, the production start has
become an FY 1984 budget issue.
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The STS was conceived, developed and supported to universally service
the U.S. military and civil government needs, the U.S. and foreign
commercial needs, as well as selected foreign government needs. The
commercial and foreign -government flights were a critical factor in the
economic analysis that showed the STS was a cost effective alternative
to our proven and established ELV capability.
This concept was based upon U.S. policy of providing launching services
to commercial and foreign entities in keeping with:
The National Aeronautics and Space Act - which provides
NASA the authority to provide such services,
The COMSAT Act which requires NASA to provide such ser-
vices to COMSAT upon request, and
The President's Launch Assistance Policy of 1972 - which
states that the U.S. would provide, on a non-discriminatory,
cooperative or reimbursable basis, satellite launch
assistance to other countries or international organiza-
tions.
The current policies, National Space Policy (NSDD-42) and Space
Assistance and Cooperation Policy (USDD-50) reaffirm these previous
policies. The National Space Policy directs that the STS will be the
primary U.S. government launch system and that U.S. Government ELV's
.will be maintained until the capabilities of the STS are sufficient to
meet its needs and obligations. Implementation of these policies
through the use of existing U.S. Government launch capabilities to serve
these customers has generated, to date, approximately $2.4 billion
dollars in launch service revenues ($1.0 billion from overseas).
The fourth Orbiter is currently scheduled for December 1984 delivery.
Unless a decision is made to continue Orbiter production in FY 84, the
production facilities, personnel, subcontractors and vendors will be
released.
The sale of STS services to foreign and commercial customers was a
critical factor in the economic analysis that concluded that the STS
would be cheaper than?ELV's for the U.S. Gvernment in the long run.
If this principle is violated, the economic viability of the STS as
the sole U.S. Government launch system is in question. Abandoning
the reimbursable market would constitute an abrupt change in policy
and would place the entire burden of STS operations on the U.S.
Government. This change, or any commercialization options that
result in increased operations cost to the U.S. Government should be
avoided.
For this study, conservative STS capability projections were made
and compared to the STS manifest over the period FY83-88 to evaluate
the adequacy of a four orbiter fleet to meet that demand. Based on
four test flights and one operational flight, the projections are
subject to a great many uncertainties. Nevertheless, their analysis
shows that a four Orbiter fleet only marginally satisfies the
manifest. Should an orbiter be lost, a three orbiter fleet cannot
satisfy the STS manifest. Many highly probable, but unquantifiable,
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factors were considered, but not included, in this comparison.
Consequently, operations under the optimistic conditions assumed for
this study are highly unlikely; prolonged operations with four orbiters
is considered to be high risk until more definitive estimates of
capabilities and demand are available.
Permitting the orbiter production capability to lapse at this time
introduces additional risk into the program. Accidents or anomalies
that require substantial rework of an individual orbiter or all four
initial orbiters will certainly be prolonged as venders, sub-
contractors, tooling and facilities are reinitiated and requalified.
The expense to reopen and requalify selected vendors, subcontractors,
and facilities will certainly be large.
The NASA FY 84 budget request includes the funding to produce and
deliver a fifth Orbiter. The fifth Orbiter funding is an issue in the
preparation of the President's FY 84 budget request. This request, in
fact, represents decisions of NASA management that production of the
fifth Orbiter is the most practical and supportable alternative from
available options.
These options can be grouped into four general categories--close out
Orbiter production, maintain Orbiter production capability, continuing
full Orbiter production, or start a Block II Orbiter definition.
I. Close Out Orbiter Production - This option offers near term budget
reductions on the order of $200-300M per year. However, a decision
to abandon production capability should be a last resort when the
Orbiter is projected to be the longest lead time item and the
critical path to STS operations. With only four test flights and
one operational flight as the experience base for projections of
system turnaround time, availability, reliability, maintainability:
and attrition, a realistic assessment of flight operations
through 90 flights (end of FY 87) is extremely subjective.
This option also limits the capability to perform major Orbiter
repairs/maintenance due to the startup and recertification of
people and facilities before work or major structural components
could be accomplished. This has potentially serious impacts on
repairs or modifications to major assemblies such as wings,
mid-bodies, crew module, or vertical stablizers.
In addition, once a subsequent decision is made to produce
additional Orbiters, the startup and recertification time is
added to the production time. An Orbiter can currently be
delivered in approximately 5 years. Conservatively 6 to 7
years would be required once the production base is abandoned.
Startup and recertification costs would be added to the costs
of identifying and establishing numerous vendors and sub-
contractors.
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IV. Initiation of a Block II Orbiter - Without a detailed study,
this option is conservatively estimated to require 7 to 9 years
from initiation to delivery. This option also does not, of
itself, maintain orbiter production capability which would
conceivably lapse during the definition and design phase. This
option also requires a commitment based on ext.remely limited
operational experience; the ability to accurately define the
requirements and improvements of a BLock II design based on this
data is questionable. Since little or no serious study has
been accomplished on this option, the technical and financial
risks are judged to be very high.
CONCLUSIONS:
National Space Policy directs maintaining U.S. world leadership in
space transportation. Maintaining world leadership requires continued,
rather than periodic, commitments. These commitments require fiscal
backing to implement U.S. policies. Without budget commitments,
such policy statements are meaningless.
The U.S. cannot abandon its highly successful ELV capability, transi-
intentions of remaining a world leader in space transportation.
V With onl
fiv
STS fli
ht
d
y
e
g
s we
o not have adequate data to make
reasoned and confident decisions on orbiter fleet size. We need
more experience to firmly assess such critical factors as turnaround
time, system availability, maintenance, attrition, and demand.
/,~~1"rudenc d sound management demands maintaining all STS production
44~~'"' capa ilities unti we have solid assessments of the critical factors
above.
To prematurely constrain ourselves to a four Orbiter fleet in the
face of these many uncertainties will only erode confidence in the
STS as a viable, dependable approach to space transportation.
Foreign nations' perception of the U.S. as an unreliable source of
launch services will be reinforced; we must offer them a service
that is available and reliable to meet their needs as they, not we,
perceive them. Both U.S. and foreign commercial customers will also
view the STS as a high risA(approach to obtaining a firm launch date.
The business community is primarily concerned with schedules; signi-
ficant launch delays translate rapidly into large economic penalties.
Any perception of the U.S. turning away from its commitment to a
fully exploitable STS as we have always stated, will accelerate
the transition of foreign and commercial customers from STS planning
to other options. The only other launch service options realistically
available will be provided by the French, the Soviets, and, potentially,
the Japanese.
Turning Western and third world countries as well as commercial
customers away from the U.S. is counter to all U.S. policy and interests
The development of the STS was undertaken to meet the "demand" of
the entire mission model, including the sale of STS s vices to
commercial and foreign customers. This was a criticf ctor in
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II. Maintain Orbiter Production Capability - Two major approaches
are available under this option:
A. Sustain Sub-tie'r Production Capabilities/Subsystem
Deliverables
This approach would maintain the qualified Orbiter
vendors and sub-tier subcontractors and effectively
sustain the capability to product critical com-
ponents and subsystems. It would not maintain
major subcontractors or prime production capability,
i.e., major structural assemblies.
B. Sustain All Production Capability/Major Assembly
Deliverables
This option would maintain the critical vendors,
sub-tier and prime subcontractors, as well as
the prime contractors' production capabilities.
The product of this effort would be the delivery
of major system assemblies as modular spares,
i.e., wings, mid-bodies, crew module, etc. An
additional advantage of this option is the con-
tinuity of the generic production base required
to respond to major repairs or structural main-
tenance requirements. It would not produce an
assembled Orbiter.
III.Continue Full Orbiter Production - Two approaches to
this option are:
A. Produce a Fifth Orbiter
This option clearly maintains all orbiter production
skills and facilities. In addition, this approach
also provides the ability to utilize the major
assemblies of the fifth Orbiter as modular spares
if required; this production capability also provides
the ability to respond to major repairs and structural
maintenance requirements.
B. Initiate Another Block Buy of Orbiters
This option also maintains the full range of Orbiter
production skills and facilities while offering the
most robust program. In effect, this option provides
for a "full pipeline" of components, subassemblies,
as well as major assemblies. This ensures a flexible
and responsive repair and maintenance capability.
While the block buy concept offers the economic
advantage of quantity production, the cost savings do
not presently appear to be commensurate with the
associated large financial commitments. Selection
of this option at this time also requires a commitment
to maximum STS capacity before accurate demand and
capability assessments can be made.
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the economic analysis that concluded that the STS would be cheaper
to the-U.S. Government than the existing expendable systems. if
this principle is violated, then the economic viability of the STS
as the sole U.S. Government launch system is in doubt. Abandoning,
partially or fully, the commercial and foreign market would increase
the STS operating burden of the U.S. Government. Any options that
result in increased operations costs to the U.S. Government should
be avoided.
The STS should be exploited as it was conceived and designed; the
system should be aggressively optimized (i.e., make it fully
operational and cost effective) and marketed to serve our best
interests--be they economic, political, or national security. Only
in this way can we offset the financial commitments already made.
For the U.S. Government to turn only to its own needs at this time
is directly counter to all U.S. interests and will increase the costs
to the U.S. dove nment users .
While a decision at this time to allow the Orbiter production capability
to lapse is considered inappropriate because of the many uncertainties
precluding definitive analysis, a decision to proceed much beyond a
fifth Orbiter commitment is inappropriate for the same reasons.
A balanced, low-risk option should be selected that preserves our
basic capabilities, assures maximum insensitivity to errors in
projecting system capabilities, as well as demand, and maintain our
most flexible options for more careful consideration when firm data
is available.
RECOMMENDATIONS:
Based on the conclusions of this study, we recommend continuing the
Orbiter production base. FY84 funding should be supported or the
production of the fifth Orbiter.
This will productively maintain the production capability and will
deliver an orbiter in FY88, if before that time firm data leads to
the conclusions that a four Orbiter fleet is adequate, the unassembled
components could be used as modular spares (wings, mid-bodies,
crew modules, etc.) and none of the investment is wasted.,,P&
On the other hand, if we conclude that the demand dictates follow-on
Orbiters, the production base is in place to support that decision
under the most efficient conditions.
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