[Senate Hearing 113-277]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-277
 
                        PARTNERSHIPS TO ADVANCE 
                         THE BUSINESS OF SPACE 

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON SCIENCE AND SPACE

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 16, 2013

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation


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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California            JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           ROY BLUNT, Missouri
FRANK R. LAUTENBERG, New Jersey      MARCO RUBIO, Florida
MARK PRYOR, Arkansas                 KELLY AYOTTE, New Hampshire
CLAIRE McCASKILL, Missouri           DEAN HELLER, Nevada
AMY KLOBUCHAR, Minnesota             DAN COATS, Indiana
MARK WARNER, Virginia                TIM SCOTT, South Carolina
MARK BEGICH, Alaska                  TED CRUZ, Texas
RICHARD BLUMENTHAL, Connecticut      DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii                 RON JOHNSON, Wisconsin
WILLIAM COWAN, Massachusetts
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                     John Williams, General Counsel
              David Schwietert, Republican Staff Director
              Nick Rossi, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator
                                 ------                                

                   SUBCOMMITTEE ON SCIENCE AND SPACE

BILL NELSON, Florida, Chairman       TED CRUZ, Texas, Ranking Member
BARBARA BOXER, California            ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 MARCO RUBIO, Florida
AMY KLOBUCHAR, Minnesota             DEAN HELLER, Nevada
MARK WARNER, Virginia                DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut      RON JOHNSON, Wisconsin
WILLIAM COWAN, Massachusetts



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 16, 2013.....................................     1
Statement of Senator Nelson......................................     1
    Prepared statement...........................................     3
Statement of Senator Coats.......................................     1
Statement of Senator Cruz........................................     2

                               Witnesses

N. Wayne Hale, Jr., Director of Human Spaceflight, Special 
  Aerospace Services, NASA Flight Director and Program Manager 
  (Ret.).........................................................     4
    Prepared statement...........................................     6
Patti Grace Smith, Principal, Patti Grace Smith Consulting, LLC..     8
    Prepared statement...........................................    10
Captain Michael Lopez-Alegria, USN (Ret.), President, Commercial 
  Spaceflight Federation.........................................    14
    Prepared statement...........................................    15
Dr. Steven H. Collicott, Professor, Purdue University School of 
  Aeronautics and Astronautics...................................    22
    Prepared statement...........................................    24

                                Appendix

Response to written questions submitted by Hon. Bill Nelson to:
    N. Wayne Hale, Jr............................................    39
    Patti Grace Smith............................................    41
    Captain Michael Lopez-Alegria................................    42
    Dr. Steven H. Collicott......................................    44


                        PARTNERSHIPS TO ADVANCE 
                         THE BUSINESS OF SPACE

                              ----------                              


                         THURSDAY, MAY 16, 2013

                               U.S. Senate,
                 Subcommittee on Science and Space,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:06 a.m. in 
room 253, Russell Senate Office Building, Hon. Bill Nelson, 
Chairman of the Subcommittee, presiding.

            OPENING STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Good morning. As an accommodation to the 
Senator from Indiana, who wants to make a special introduction, 
Senator Cruz and I will turn to him first.

                 STATEMENT OF HON. DAN COATS, 
                   U.S. SENATOR FROM INDIANA

    Senator Coats. Mr. Chairman and Senator Cruz, I thank you 
for the privilege of doing this. I commend both you and Senator 
Cruz for your leadership on this.
    It's a real pleasure for me to introduce a distinguished 
constituent from Purdue University, Steven Collicott. Dr. 
Steven Collicott is an expert in his field. He received his 
undergraduate degree from the University of Michigan and his 
Master's from Stanford, but joined the Purdue faculty in West 
Lafayette, Indiana in 1991, where he is a Professor in the 
School of Aeronautics and Astronautics.
    As you know, Mr. Chairman, our Aero-Astro program at Purdue 
is fairly well-known. Twenty-two astronauts have come out of 
Purdue and flown, maybe one of them with you on your flight. 
I'm not so sure about that.
    Senator Nelson. Do you know the institution that has 
produced more than any other university?
    Senator Coats. I'd love to say it was Purdue, but I think 
you are probably going to name some university in Florida.
    Senator Nelson. No. It is actually the Naval Academy.
    Senator Coats. Oh, really? OK. That makes sense. The 
ultimate in flying assignments.
    But such notables as Gus Grissom and Neil Armstrong and 
many, many others have come out of the Purdue program. Dr. 
Collicott has led a team of students in providing an 
experimental project that will be operated on the International 
Space Station and a number of other distinguished 
accomplishments. So I want to just welcome him here today.
    I would love to stay, but other Subcommittees have made 
other callings, so I have to excuse myself on that. But I thank 
you for the opportunity to introduce Dr. Collicott.
    Senator Nelson. Thank you so much.
    Senator Cruz?

                  STATEMENT OF HON. TED CRUZ, 
                    U.S. SENATOR FROM TEXAS

    Senator Cruz. Well, thank you, Mr. Chairman. Thank you to 
each of the witnesses who are here today. I thank you, Mr. 
Chairman, for the opportunity for us to have this hearing and 
to get to know more about the exciting potential for advancing 
our space-related knowledge and achievement by taking advantage 
of the competitive forces and creative drive of the private 
sector.
    Our economy has a great stake in the space race. Last year, 
78 orbital launches were conducted worldwide, 20 of which were 
commercial launches. And those 20 launches generated more than 
$2.4 billion in revenues, of which an estimated $108 million 
was attributed to U.S. launches. Activity in the space industry 
creates good, high-tech jobs now, and it inspires our next 
generation of leaders as well.
    For years, the U.S. Government has worked as a partner with 
the commercial space industry, and the NASA Authorization Act 
of 2010 set in place a productive balance between the two that 
continues to bear fruit.
    Today, I look forward to hearing from our panel about how 
we can achieve even greater efficiencies from that balance and 
how we can encourage more significant investment from the 
commercial space industry and what legal and regulatory 
challenges are presented by its future development.
    Thank you, Mr. Chairman.
    Senator Nelson. Thank you.
    As you can see, we run things a little differently on this 
committee. We are a little more informal. But when it gets to 
the subject of commercial space, it becomes extremely 
important. It becomes extremely important that we get American 
vehicles flying Americans back up to the Space Station. It's 
extremely important that we have vehicles that are designed to 
be as safe as possible, as the new generation of rockets are 
being designed. It was certainly an admonition of the Gehman 
Commission that investigated the last Space Shuttle disaster 
that said that once you have completed the Space Station with 
the Space Shuttle, you shut it down and you replace it with a 
safer rocket. Of course, that is being designed right now.
    We see the new applications of commercial activity in 
space, and although we have always had--basically, it has been 
the contractors that have produced the hardware and the systems 
under NASA's direction that has given us this extraordinarily 
successful program. It now enters a new dimension of commercial 
space.
    I just came from a meeting with the President's nominee for 
the Department of Transportation, and we discussed how it is 
very important that the Office of Commercial Space 
Transportation in the Department of Transportation understands 
that they should never get into these stovepipes that are so 
typical in government, where turf becomes more important than 
the mission, and then the turf battles and all the little 
jealousies occur.
    And the Department of Transportation, I shared with the 
nominee, should do what their mission is, which is to handle 
administratively and let NASA do what NASA does best and not 
try to compete with each other.
    Now, we are going to be doing a NASA authorization bill 
this year, and we also plan to update the Commercial Space 
Launch Act. So we are going to be using these hearings to help 
us develop the policy that will continue to guide our space 
community toward the goal of exploring the heavens.
    So there is a lot to discuss, suborbital space, and I am 
going to insert in the record my comments.
    [The prepared statement of Senator Nelson follows:]

   Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
    Good morning! Thank you all for being here today for the third 
Science and Space Subcommittee hearing of this Congress. In today's 
hearing, we will hear about private sector partnerships with the 
Federal Government on suborbital and orbital space flight and the 
opportunities these capabilities afford this nation in advancing the 
space industry.
    As you may know, we will be reauthorizing NASA this year and 
updating the Commercial Space Launch Act (CSLA). We will be using these 
hearings to help develop the policy that will continue to guide the 
space community toward our goal of getting people to Mars. And we 
cannot reach this goal without the likes of the private and civil 
investments.
    We've discussed orbital space flight in our previous hearings, but 
it is worth again mentioning just how promising the future is for the 
U.S. space industry. Since the last Authorization of NASA we have seen 
a lot of progress. Less than a month ago, we witnessed a successful 
test launch of a new rocket that will soon deliver cargo to the 
International Space Station, setting the stage now for two companies to 
conduct cargo resupply missions to the International Space Station. The 
second company has successfully completed two cargo delivery missions 
to the ISS.
    NASA and its industry partners are also actively developing a 
commercial crew capability that will allow U.S. providers to once again 
send NASA astronauts to the space station. The Russians are our 
partners on the ISS, and we thank them for their safe delivery and 
return of NASA astronaut Tom Marshburn just this past Monday, among the 
two others, but we need our own capability as well.
    Of course, NASA is also charged with building and flying the heavy-
lift Space Launch System and the Orion capsule, which will take humans 
farther into space than ever before.
    When it comes to sub-orbital space flight, I think many people are 
at least familiar with this market, in part because of some of the 
recent successes that have been publicized.
    But sub-orbital space offers more than just a few minutes of 
weightlessness for those who can afford it. Sub-orbital space flight is 
also well suited to scientific research and education and can provide 
students and researchers with new opportunities for studying the Earth 
and for conducting short-duration experiments in micro-gravity.
    We all know challenges exist, but the key to success here is 
balance; not just a balance between public and private space endeavors 
but also between competition and cooperation. As was said at our last 
hearing, we cannot continue to go forward with the ``or'' mentality. 
Helping to make the private space industry successful will help to send 
humans beyond low-Earth orbit again--and vice versa.
    As we move toward updating space policy, we also need to look at 
the role of the Federal Aviation Administration's Office of Commercial 
Space Transportation in developing appropriate safety regulations for 
private space flight. We need to strike a balance here as well so that 
both government and industry can ensure safety without stifling 
innovation. Customer safety is a valuable component of the industry's 
success and if we wait too long to address this issue, an accident may 
compromise the whole industry.
    With these issues in mind, I look forward to continuing to work 
with the private U.S. space industry as it is a vital part of our 
future space program. So, it is my pleasure to welcome all of our 
witnesses.
    Mr. Wayne Hale, Jr. comes to us as the Director of Human 
Spaceflight for Special Aerospace Services. He is a retired NASA 
engineer who has held positions including NASA Flight Director and 
Space Shuttle Program Manager. Mr. Hale will discuss how commercial 
space efforts contribute toward national space exploration goals and 
the Government's role in supporting private space sector growth.
    Ms. Patti Grace Smith is an Aerospace Consultant and Advisor. She 
has extensive experience in the U.S. space sector both as former 
Associate Administrator of FAA's Office of Commercial Space 
Transportation and as the current Chair of the NASA Advisory Council's 
Commercial Space Committee. Ms. Smith will address the Federal policies 
needs and recommendations affecting the private space industry and ways 
to maximize collaborations between the FAA, NASA, and private space 
ventures.
    Captain Michael Lopez-Alegria is the President of the Commercial 
Spaceflight Federation. Captain Lopez-Alegria, a former NASA 
astronaut--and veteran of four space flights and Commander of ISS 
Expedition 14--now works to promote commercial spaceflight. He will 
provide an overview of the progress and plans of the commercial 
spaceflight industry as well as policy recommendations to support their 
efforts.
    I now would like to welcome my colleague and member of this 
Subcommittee, Senator Coats of Indiana, to introduce our final witness 
from his home state.

    Senator Nelson. Let me introduce our panel members.
    Wayne Hale comes to us as Director of Human Spaceflight for 
Special Aerospace Services. He is retired from NASA. He has 
held positions including NASA Flight Director and Space Shuttle 
Program Manager. Mr. Hale is going to discuss how commercial 
space efforts contribute toward national space exploration 
goals and the government's role in supporting the private space 
sector growth.
    Ms. Patti Grace Smith is an Aerospace Consultant and 
Advisor. She has extensive experience in the U.S. space sector 
both as a former Associate Administrator of FAA's Office of 
Commercial Space and as the current Chair of the NASA Advisory 
Council's Commercial Space Committee. She will address the 
Federal policies, needs, and recommendations affecting the 
private space industry and the ways to maximize collaborations 
between FAA, NASA, and private space ventures.
    Captain Michael Lopez-Alegria is President of the 
Commercial Spaceflight Federation. A NASA astronaut, a veteran 
of four space flights, Commander of ISS Expedition 14, now he 
works to promote commercial spaceflight. He will provide an 
overview of the progress and plans of the commercial 
spaceflight industry, as well as policy recommendations.
    Dr. Collicott we have already had introduced by the Senator 
from Indiana.
    So thank you for being here and bringing your expertise to 
the discussion.
    So, with that, Mr. Hale, we're going to put your written 
testimony in the record. If you will summarize it within about 
5 minutes, and we will just go down the line. Thank you so 
much.

STATEMENT OF N. WAYNE HALE, JR., DIRECTOR OF HUMAN SPACEFLIGHT, 
 SPECIAL AEROSPACE SERVICES, NASA FLIGHT DIRECTOR AND PROGRAM 
                         MANAGER (RET.)

    Mr. Hale. Thank you, Chairman, Senator Nelson. And thank 
you, Ranking Member, Senator Cruz, and the entire committee, 
for inviting me to testify on this important matter.
    In the interest of full disclosure, you should note that I 
spent most of my professional life working at NASA in the Space 
Shuttle Program. As a matter of fact, Senator Nelson, I was in 
Mission Control during your flight just a few years ago. During 
those many years, I have seen NASA at its very best and at its 
worst. The hard-working dedication of NASA personnel is 
phenomenal, and their talent and creativity are second to none. 
However, their endeavors have frequently been stymied due to 
the inherent bureaucratic inefficiencies of government work and 
the frequent shifts in priorities and funding that whipsaw 
space initiatives.
    My last NASA assignment was to define the management 
philosophy for the new Commercial Crew Program. After leaving 
NASA, my work has continued as a consultant. My company, 
Special Aerospace Services, advises entities involved in the 
commercial crew and commercial space cargo enterprises, and I 
have volunteered my time to work with the Commercial 
Spaceflight Federation to establish industry standards for this 
fledgling community. So the Committee can see that I am hardly 
a disinterested party.
    In space today, the most singularly vexing problem is the 
high cost of getting to low-Earth orbit. As Robert Heinlein 
once observed, ``When you are in Earth orbit, you are halfway 
to anywhere in the universe,'' which accurately reflects the 
physics of the situation. Today, getting that first step to the 
universe is very costly.
    Hundreds of potential business opportunities and the 
limitless resources of the solar system have floundered on the 
high cost of transportation to low-Earth orbit. Asteroid 
mining, energy production, and zero-gravity manufacturing are 
all within our grasp technologically but will not be profitable 
businesses until reliable and reasonably affordable 
transportation systems are in place.
    However, these new transportation systems to low-Earth 
orbit have very high development costs. So we are in a chicken-
or-the-egg paradox. Space business needs low-cost 
transportation to become profitable, while potential private 
transportation services need established businesses to justify 
the cost of their construction.
    This is not the first time America has been in this 
situation. Both the early railroads and the fledgling air 
transportation industries found themselves becalmed in similar 
straits. The Federal taxpayer stepped in to provide critical 
resources to help those industries develop. These Federal 
investments paid back myriadfold in tax revenues when the new 
industries caught fire.
    The history of spaceflight has been marked with the goal of 
decreasing the cost of transportation to low earth orbit. In 
the last decade, the United States has embarked on a bold new 
experiment to turn over the creative reins of spacecraft 
development to nimble, flexible, creative private commercial 
firms. Bolstered with a modicum of taxpayer resources, these 
businesses have leveraged private investment to develop new, 
much cheaper transportation systems.
    We see the first fruits of success today with the cargo-
carrying craft SpaceX's Falcon and Dragon and Orbital Science's 
Antares and Cygnus. These cargo-carrying, privately developed 
vehicles are starting to supply our government outpost, the 
International Space Station. In future years, the Boeing CST-
100 and Sierra Nevada Dream Chaser, both flying on the proven 
ULA Atlas V rocket, will be added to the fleet to carry human 
beings, as well as cargo.
    Poised on the cusp of these new systems, America runs the 
risk of being penny wise and pound foolish as we make the same 
mistake that doomed the Space Shuttle to much higher cost 
operations, starving spacecraft development programs in the 
name of saving a few pennies for today's budget bottom line, 
resulting in compromised systems that, if they fly at all, will 
not be cheap enough to enable business in space.
    Regarding NASA's deep space exploration plans, the 
commercial systems will enable deep space exploration 
initiatives in substantial ways. First, the International Space 
Station is our test laboratory for the critical technologies 
and systems that deep space exploration will need. Commercial 
transportation of cargo and crews to the ISS directly support 
deep space systems development.
    As deep space exploration proceeds, commercial crew and 
cargo vehicles will likely be called on to aid with assembly 
and fuel delivery to low earth orbit. Cost-effective commercial 
transportation to low earth orbit can make a vital difference 
in equipping the space fleet. The two efforts go hand-in-hand. 
Funding equity between the two programs is necessary to ensure 
the timely success of both.
    I urge Congress to fully fund both of these vital 
activities. They will allow America and American industries to 
lead in the exploration and development of human activity in 
our solar system. Paraphrasing John F. Kennedy, there is no 
project that is so important for the long-term success of 
humankind, and I hope that those historians of the future will 
record that at this crossroads of history, a creative, 
enterprising, farsighted nation called America led that way.
    I look forward to your questions.
    [The prepared statement of Mr. Hale follows:]

      Prepared Statement of N. Wayne Hale, Jr., Director of Human 
   Spaceflight, Special Aerospace Services, NASA Flight Director and 
                         Program Manager (Ret.)
    I thank the Committee for inviting me to testify concerning the 
growth of the space industry including the private sector space 
transportation.
    In the interest of full disclosure, I am hardly a disinterested 
party in this topic. I am and have always been a passionate believer 
that space exploration and the industries that may derive from it will 
benefit humanity in ways beyond our imagining. I have spent most of my 
professional life working in the large government space programs of the 
Space Shuttle and the International Space Station. During those years I 
have seen NASA at its very best and at its worst. The hard working 
dedication of my colleagues at NASA personnel is nothing short of 
phenomenal, and their talent and creativity is second to none. However, 
their endeavors have frequently been stymied due to the inherent 
bureaucratic inefficiencies of government work and the frequent shifts 
in priorities and funding that whipsaw most space initiatives. This has 
led me to believe there must be a better way to develop and operate 
space systems.
    In my last assignment before retirement from government service, I 
worked with Frank Bauer, the Chief Engineer of the Exploration Systems 
Directorate, to define the management philosophy, protocols, and 
processes for the then new Commercial Crew Program within NASA. After 
my retirement, my work has continued as a consultant. My company, 
Special Aerospace Services, and I are paid advisors to a number of 
entities involved in the commercial crew and commercial space cargo 
enterprises. And I have volunteered my time to work with the Commercial 
Spaceflight Federation to establish safety, management, and engineering 
standards for all the members of this fledgling industry. So the 
Committee can see that I am hardly a disinterested party and should 
weigh my testimony as such.
    Establishing good, effective safety, engineering, and management 
standards in a voluntary industry association is the hallmark of any 
reputable and mature industry. I am pleased to report that the CSF is 
making good progress in setting up voluntary processes which will 
ensure public safety and promote general success in this difficult 
business. Industry group standards can alleviate the need for 
government regulations by allowing the members of a trade association 
to tailor best practices specifically for their industry. Evolution of 
these industry standards inevitably proceeds more rapidly than the 
development of government regulations and can therefore take rapid 
advantage of best practices as they emerge.
    The most singularly vexing problem with space flight is the high 
cost of getting to low-Earth orbit. As the noted science fiction writer 
Robert Heinlein once observed, ``when you are in earth orbit you are 
half way to anywhere in the universe'' which accurately reflects the 
physics of the situation.
    The lack of low cost transportation to that point located just 
above the earth's atmosphere and moving at 17,500 mph forward velocity 
has prevented potential space entrepreneurs more than any other factor. 
Hundreds of potential business opportunities in the limitless resources 
of the solar system have floundered on the high cost of transportation 
to low-Earth orbit. Asteroid mining, energy production, zero gravity 
manufacturing are all within our grasp technologically but will not be 
profitable until reliable and reasonably affordable transportation 
systems are in place.
    New systems for transportation to low-Earth orbit have enormously 
high development costs. Private investors, with a few exceptions, are 
loath to provide the capital needed to develop low-Earth orbit 
transportation without clear and immediate business ready to purchase 
tickets.
    So we are in a ``chicken or the egg'' paradox. Space business needs 
low cost transportation to become profitable, while potential private 
transportation services need established business to justify the cost 
of construction. This is not the first time that America has been in 
this situation. Both the early railroads and fledgling air 
transportation industries found themselves becalmed in similar straits. 
In both these cases, and others, the Federal taxpayers stepped in to 
provide critical resources to help new industries develop. Those 
investments have been paid back myriad-fold in tax revenues when the 
new industries caught fire and provided transportation systems that 
were the envy of the world.
    NASA and its predecessor agency the NACA provided needed 
aeronautical research to make air transportation as inexpensive and 
safe as we find it today. The Federal investment in aeronautics 
development has paid off handsomely in the development of a multi-
billion dollar industry. Indeed, one of the largest sectors of net 
exports in the American economy is aerospace with billion dollar sales 
a common occurrence.
    The history of space flight--after the first early steps to 
demonstrate that space flight was even possible--has been marked with 
the goal of decreasing the cost of transportation to low-Earth orbit. 
In my home I have an entire shelf of books populated by volumes of 
studies and proposals from a multitude of thinkers spread over decades 
on that subject: how to provide reliable safe space transportation on 
the cheap.
    The space system that consumed much of my professional career, the 
Space Shuttle, was established to achieve just such a low cost goal. 
But the technologies of the 1970s, harnessed to a risk adverse 
government apparatus resulted in a system that was only slightly less 
expensive than those which went before.
    In the last decade, the United States embarked on a bold new 
experiment to turn over the creative reins of spacecraft development to 
entrepreneurial, nimble, flexible, creative private commercial teams. 
Bolstered with a modicum of taxpayer resources, these businesses have 
leveraged private investment to create the critical mass to develop 
new, much cheaper transportation systems. We see the first fruits of 
success today with cargo carrying craft: the SpaceX Falcon and Dragon, 
and the Orbital Antares and Cygnus. These cargo carrying privately 
developed vehicles are starting to supply our government outpost, the 
International Space Station. In future years others, the Boeing CST-100 
and the Sierra Nevada Dream Chaser will be added to the fleet to carry 
human beings as well as cargo.
    Poised on the cusp of these new systems, we run the risk of being 
penny wise and pound foolish as we make the same mistake that doomed 
the Space Shuttle to much higher cost operations: starving a spacecraft 
development program in the name of saving a few pennies for today's 
budget bottom line resulting in the compromised systems that, if they 
fly at all, will not be cheap enough to enable business in space.
    This is not to devalue the development of truly deep space 
exploration systems by the government. Those high risk, high cost 
systems payback over such are long term that they would never be funded 
by private investment. But, like the expenses incurred by Lewis and 
Clark, Captain Zebulon Pike, and a host of other government expeditions 
in our history, the payback from exploration will be enormous for both 
the country and for all of humanity. Just at a more distant point in 
the future than business spreadsheets normally run. The SLS and the 
MPCV should be developed in conjunction with the commercial low-Earth 
orbit transportation systems. Flying to cis-lunar space to inspect a 
captured asteroid is an engineering and operations test worthy of a 
first deep space mission. But that mission can only be a first step. 
More should follow.
    The commercial systems will enable the deep space exploration 
initiative in substantial ways. First of all because the ISS is our 
space test laboratory for the technologies and systems that deep space 
exploration will need. Operation in space, aboard the ISS, is the most 
effective means to wring out life support, communications, propulsion, 
and other technologies. Commercial transportation of cargo and crews to 
the ISS directly support deep space systems development. As deep space 
exploration proceeds, commercial cargo and crew vehicles will likely be 
called upon to aid with assembly and fuel delivery to low-Earth orbit 
where we will finalize preparations to head into the vasty deep. Cost 
effective commercial transportation to low-Earth orbit can make a vital 
difference in equipping the deep space fleet.
    So the two efforts go hand in hand. Funding equity between the two 
programs is necessary to ensure the timely success of both. Currently, 
the commercial space effort stands uncomfortably close to the brink of 
financial starvation. Deep space transportation development is being 
stretched out by similar restrictions. Business is looking to see if 
the government is serious about providing the critical support or 
whether this effort will be wasted as so many earlier government 
programs which withered away on the very cusp of success: National 
Launch System, Orbital Space Plane, and others.
    I urge the Congress to fully fund these vital activities, both the 
commercial crew program and the exploration systems. They will allow 
America and American industry to lead in the exploration and 
development of human activity in our solar system. When the historians 
of the future look back on our era, they will recognize the movement of 
humanity from planet earth into the solar system as the pivotal event 
of our times. There is no project that is so important for the long 
term success of humankind. I would hope that those historians record 
that at this crossroad of history that a creative, enterprising, 
farsighted nation called America led the way.
    The prizes both economic and historic are too great to bypass. If 
America does not lead in these enterprises, somebody else will. And the 
leader will reap the greatest rewards both in the near term and in the 
longer term.
    For all our limitations, America is a very rich country. There are 
many things which America needs to do for the present moment: provide 
for a strong military to protect us in a dangerous world, educate our 
children, care for our elderly and infirm, revitalize our 
transportation infrastructure of roads, bridges, airports, and more. 
All of these activities are of vital importance today. Space 
exploration is about the future. Space exploration is possibly the only 
line item in the Federal budget that is all about the future. Currently 
we spend one half of one percent of our Nation's treasure on the 
future. Isn't the future worth that investment?

    Senator Nelson. Thank you, Mr. Hale.
    Ms. Smith?

          STATEMENT OF PATTI GRACE SMITH, PRINCIPAL, 
               PATTI GRACE SMITH CONSULTING, LLC

    Ms. Smith. Mr. Chairman, Senator Cruz, and members of the 
Subcommittee, thank you for inviting me to be a part of this 
hearing. As a former Associate Administrator for Commercial 
Space Transportation, and as a current participant in the 
commercial space industry, I appreciate very much the 
opportunity to comment on partnerships to advance the business 
of space.
    These are milestone times for commercial space 
transportation. They are times that call for a balanced 
approach, a balanced approach, to make sure we know how we got 
here, where we are, where we are going, and how to best 
integrate the strengths, accomplishments, and lessons of the 
pioneers of American spaceflight and the pioneers of new space.
    Longstanding promises of commercial spaceflight are turning 
into visible results. SpaceX is servicing the International 
Space Station. Boeing recently performed a successful test of 
an integrated test article. Orbital Sciences has orbited a 
payload. Virgin Galactic has test-dropped its space passenger 
vehicle, all remarkable achievements that some did not expect. 
Sierra Nevada recently successfully completed the integrated 
system safety analysis review. And the list of new developers 
goes on and on. XCOR, Masten, Blue Origin and Armadillo 
Aerospace, each determined, each hopeful and relentless, each 
focused on safety, and all making steady progress. The Atlas 
rocket continues to deliver mission excellence and reliability 
with unparalleled success.
    For years, the commercial space industry contended with 
skepticism. Now it must deal with the effects of enthusiasm. 
Both can be equally daunting. There is a risk that new 
enthusiasts with the best of intentions will try to change 
industry aims just as commercial space reaches its target. I 
hope that will not happen.
    That is why this is a time for special discernment. When 
Congress approved the Commercial Space Act of 1984, one of the 
elements was the Office of Commercial Space Transportation, or 
AST, that in 1996 found a home at the FAA. That decision made 
it possible for early commercial space leadership to observe 
and absorb lessons that helped AST guide an industry from the 
nursery to emerging maturity.
    In the 1984 Act, Congress passed legislation that created a 
flexible, open venue that invited opportunity rather than 
proscribing innovation, while permitting no compromise on 
safety. Over the years, entrepreneurs and regulators have 
worked hard to keep finding better, safer ways to conduct space 
flight. Congress established what became a model for space 
efforts in countries worldwide. The co-existence of both air 
and space in the FAA has forced any and all issues of how 
things might work out on the table.
    My observation is that since before the relocation of space 
in the FAA, as it was formerly located in the Office of the 
Secretary, aviation never had to really consider it or any 
other new entity in its airspace. AST's presence has forced the 
conversation and a greater awareness of that thing we call the 
NAS, the National Airspace System, which is a national asset 
belonging to the nation, and we share it as we do all other 
things national.
    Therefore, for the near term, I strongly favor keeping the 
Office of Commercial Space Transportation within the FAA as 
more launch manifests develop. Once that happens and space 
launch and space activities become a regular occurrence, a 
regular user in the NAS, Congress should move with deliberate 
speed to move AST to the Department of Transportation to take 
its rightful, its logical place as another transportation mode, 
as all other modes of transportation.
    I firmly believe that this is what former Secretary 
Elizabeth Dole had in mind when she proposed to President 
Reagan that commercial space reside in the Department of 
Transportation during its infancy, and what former FAA 
Administrator David Henson had in mind when he announced to all 
of the FAA management team the day commercial space arrived at 
the FAA, and I quote, ``It will be a line of business, 
different but equal, to all other lines of business. We, the 
FAA, will enable this industry to develop to a level of 
robustness and routine to fulfill the dream of space as 
transportation.'' That is still the dream, and we are closer to 
fulfilling it than ever before.
    I believe AST should continue to supervise and solely 
regulate suborbital commercial launch operations, including 
those associated with rocket launches of either humans or 
cargo. The FAA's Office of Commercial Space Transportation 
licenses the launch system as a whole, but the FAA's Office of 
Aviation Safety certifies the carrier aircraft when it is 
flying alone, even when the aircraft is operating in support of 
launch-related activities.
    And my final point is that I strongly support extending 
indemnification as a recommendation at a minimum of 10 years.
    I'll be happy to answer questions at the appropriate time. 
Thank you.
    [The prepared statement of Ms. Smith follows:]

          Prepared Statement of Patti Grace Smith, Principal, 
                   Patti Grace Smith Consulting, LLC
    Mr. Chairman, Senator Cruz, and members of the Subcommittee, thank 
you for inviting me to participate in this morning's hearing. My name 
is Patti Grace Smith and I am the Principal in Patti Grace Smith 
Consulting. As a former Associate Administrator of the Office of 
Commercial Space Transportation at the Federal Aviation Administration, 
and as a currently active participant in the commercial space industry, 
I welcome the opportunity to comment on the state of commercial space 
flight.
The Emergence of Commercial Space Flight
    These are milestone times for commercial space transportation. 
These are times for a balanced approach that looks at where we have 
been and why; where we are today and why; and where we would like to 
go. I prefer an approach that considers all space capabilities, both 
early and new; that values the long--standing contributors who have 
consistently delivered unparalleled results for our nation; and 
similarly values the significant accomplishments of new entrants. Plans 
for SLS and commercial crew and cargo, it seems to me, reflect that 
sort of balanced approach. As an Alabamian, I am proud to say that 
commercial launch vehicles built in Decatur are a reality, with new 
ones built every year.
    Today long-standing promises are turning into visible results. 
SpaceX, launching from Florida, has serviced the International Space 
Station. Orbital Sciences' Antares rocket has successfully orbited a 
payload from its launch site at Wallop's Island, Virginia. Virgin 
Galactic has test-dropped its space passenger vehicle over California 
as it moves closer to regular operations from New Mexico. And the Atlas 
V rocket is still the most reliable launch vehicle, delivering mission 
success one launch at a time.
    These are remarkable achievements by the private sector. Yet some 
observers believe they are overdue when compared to America's earlier 
space performance. For example, President Kennedy in 1961 pledged to 
land a man on the moon and return him safely to Earth by the end of the 
decade. It took roughly 2,800 days for NASA by the time they did it in 
1969. To accomplish the moon landing within this aggressive timeframe, 
NASA leveraged the contemporaneous capabilities of the private sector, 
working with industry to execute NASA's mission. NASA was the 
unquestioned leader, bringing the will, technical expertise, 
integration, and resources to the task.
    Still, the commercial sector has delivered convincingly, as well. 
Today, the commercial sector is demonstrating not just technical 
accomplishments, but vision and the willingness to take financial risks 
to move our relationship with space forward. On the independent 
initiative of private enterprise, it was also roughly 2,800 days 
between October of 2004 when SpaceShipOne captured the Ansari X-Prize 
and May of 2012 when the SpaceX Falcon 9 docked with the International 
Space Station, the first for a commercial launch vehicle in the history 
of the Nation. Many said it couldn't be done. But SpaceX delivered, a 
remarkable accomplishment fully consistent with the proud tradition of 
American space flight.
    Commercial space flight has advanced at its own measured pace 
during some of the darkest economic times in memory. The private sector 
has moved forward in large part by fully embracing the precepts of 
safety. To that end, after the headlines and spotlights of the X-Prize 
success came more science, more engineering, more self-examination and 
a preference for caution and methodical process. ``Test and develop, 
test and develop, and do not fly until you are ready to fly'' became 
the order of the day.
    The time was well spent. As circumstances have changed and budgets 
have tightened, NASA has returned to its core mission of research and 
development, and technology demonstration. NASA is looking now to the 
Commercial Spaceflight industry for vital services. And the industry is 
delivering.
    For years--for challenging years--the commercial space industry has 
contended with skepticism. Now it must deal with the effects of 
enthusiasm. Both of those can be equally daunting. Skeptics used to say 
the industry couldn't do it. Now there's the risk of new enthusiasts 
saying ``do it this way, do it that way, or the industry needs to 
change its aim'' just as commercial space reaches its target.
    That's why I believe this is a key moment for special discernment 
when we must see clearly how commercial space flight got to where it is 
and how those responsible for it need to proceed and be supported.
The Office of Commercial Space Transportation (AST)
    Congress took a major leap of faith with passage of the Commercial 
Space Act of 1984, legislating a framework when, practically speaking, 
there was so little real data on which to base choices. Fortunately, 
Congress produced a flexible, open venue that invited opportunity 
rather than proscribing innovation. This open venue will yield 
unparalleled benefits in due time and it all began with an Act of 
Congress.
    A visionary product of the 1984 legislation was the Office of 
Commercial Space Transportation (AST). It began life in the Office of 
the Secretary of Transportation. It migrated successfully to a new 
status as one of the FAA's major lines of business. It was a fortunate 
turn of events. It enabled the early AST leadership to observe and 
absorb established safety practices and to build on them as it has 
helped guide an industry from the nursery to emerging maturity.
    The industry and the office continue to evolve. An increasing 
number of tests and accelerating data collection will provide a clearer 
picture of what future regulatory steps may be in order. Scientist and 
regulator alike will learn more as manifests for operational flights 
become more robust and trips to suborbital space become regularly 
scheduled flights. Commercial spaceports operating as national assets 
will connect other launch sites as part of a transport and national 
security resource. Commercial space transportation will take its 
rightful place as a respected, recognized and, indeed, required part of 
our national transport grid. We are in an enriching learning 
environment where the growth in information will help us do better what 
we have already done well.
    AST has proven itself a balanced advocate but firm regulator. I am 
not suggesting that the way things are, is entirely comfortable or 
ideal for either the regulator or the entrepreneur. Yet healthy tension 
and constructive disagreement are valuable commodities in a risk-
persistent environment like rocket flight. And all parties have managed 
well.
    Neither entrepreneur nor regulator has a monopoly on knowing what's 
best in every case. So they have worked hard--together--to keep finding 
out what's best. And that's proven to be the genius of the commercial 
space flight regime Congress established. In fact, the legislative/
regulatory model now in place has worked to the credit of the industry, 
to the credit of the regulators and to the envy of space efforts in 
countries around the world.
Therefore, on any list of policy proposals:
    I would unreservedly favor keeping the Office of Commercial Space 
Transportation within the FAA, for the near term, while a more robust 
launch manifest emerges. Although the Commercial Space Launch Act was 
approved at a time when hard data was scarce, the Act allowed the 
industry to establish itself. In 1984, despite limited data, we had 
little choice. Now we do.
    Since we are still moving toward regularly scheduled launches in 
private human spaceflight, I believe we should take advantage of the 
pending opportunity to allow performance data to guide our way and 
inform our judgment. The Office of Commercial Space Transportation 
(AST) located with the Federal Aviation Administration is, I believe, 
in the best position to gather essential data on which Congress can 
base future choices.
    At the same time, I believe Congress may be the best place to 
resolve jurisdictional questions surrounding hybrid space vehicles, 
those vehicles that have both space and aviation--like elements. These 
vehicles are designed for placing payloads or humans on either 
suborbital or orbital trajectories. They are built by a few companies 
in low volumes. Vehicle type and production certification is 
prohibitive in terms of cost and performance. Congress could address 
the issue, and then assign responsibilities to a supervising regulatory 
agency, the FAA.
Sub-orbital Launch Operations
    I would propose that AST continue to supervise and solely regulate 
sub-orbital commercial launch operations. That would extend to any and 
all activities associated with rocket launches of either humans or 
cargo. This is especially important for launch operators like Virgin 
Galactic and other similar air-launched systems. The FAA's Office of 
Commercial Space Transportation licenses the launch system as a whole, 
but the FAA's Office of Aviation Safety (AVS) certificates the carrier 
aircraft when the aircraft is flying alone--even when that aircraft is 
operating in support of launch-related activities. This inefficient 
``dual license'' requirement should be reconsidered. Managing two 
regulatory regimes for nearly similar operations risks introducing 
inconsistencies and gaps between regulation which could affect safety.
    A related issue is the automatic revocation of an experimental 
permit upon issuance of a license. This ``permit invalidation'' 
inhibits smooth, rapid improvements in safety and capability. The CSLA 
should allow experimental permits to be valid for a particular design 
of a reusable suborbital rocket after a launch license has been issued 
for launch or reentry of a rocket of that design. Failure to resolve 
this issue produces cost, time lost, and uncertainty. Resolving this 
issue is a specific step Congress can take to assist the industry's 
growth and development.
Strengthen ``informed consent''
    While the Commercial Space Launch Act requires the licensees obtain 
informed consent from their spaceflight participant customers, it is 
silent on the issue of potential claims from participants in the event 
of a flight incident or accident. I recommend that the statue should 
allow for agreements not to sue, to include participants. These would 
be agreements under which all parties agree not to sue each other for 
any harm they may suffer, known as reciprocal waivers of claim.
    Launch Site Safety
        Safety governs the future of space operations. It is at the 
        core of both the work AST does, and the success of the 
        commercial space flight industry. To that end, in September of 
        2007, the Air Force and the FAA entered into a Memorandum of 
        Agreement on Safety for Space Transportation and Range 
        Activities. It took years to work it out. But it has proven 
        itself a useful, necessary and key instrument for enhancing 
        safety on the ranges and understanding among the parties. It 
        has made operations easier for new launch entrants at Federal 
        launch sites. It has produced common standards for launch 
        operations among the Federal and non-federal/commercial launch 
        sites.
    Memorandum of Understanding
        Among other Memoranda of Agreement, there is also a Memorandum 
        of Understanding among the National Transportation Safety 
        Board, the Air Force and the Federal Aviation Administration 
        regarding space launch accidents. Although fortunately there 
        has been no occasion to call it into operation, it is, as I see 
        it, the kind of guiding document that will make it possible for 
        all the overseeing parties to work effectively together if the 
        need arises. At this point, I believe no adjustments are in 
        order.
    Indemnification
        On another subject, I strongly favor extending indemnification 
        provisions for a minimum of ten years. The current one-year 
        extension breeds uncertainty in the same way that a series of 
        one-year contracts in the sports world undermines confidence 
        that a long-term contract inspires. The indemnification 
        provision is a recommendation that Congress is not obliged to 
        follow. But it sends a powerful message that says to the rest 
        of the world: ``The United States supports our commercial space 
        industry and is willing to share the risk.'' Indemnification 
        provides our domestic commercial space industry much-needed 
        leverage in competing for business with state-sponsored launch 
        efforts in other countries. The absence of the risk-sharing 
        approach--or lack of assurance about its future--would create 
        doubt and instability in the launch industry.
Creative approaches to acquisition
    Space Act Agreements (SAAs) are an important public-private firm-
fixed price approach to space system development. NASA's use of Space 
Act Agreements (SAAs) demonstrates NASA's willingness to proactively 
engage the private sector to identify potential opportunities for 
commercial space companies to meet NASA's needs and requirements. They 
dramatically reduce NASA's exposure to risk and incentivize commercial 
providers to keep development costs as low as possible while 
maintaining the highest standards for safety. Space Act Agreements 
often are not funded--rather, they result in monies flowing to the USG 
from partners using (and paying for the use of) NASA facilities and 
services. SAAs allow the USG to write any requirements that may be 
desired into the agreement.
    The work products are already demonstrating contributions to NASA's 
beyond LEO human exploration missions in ways that will reduce costs 
while enhancing capabilities. For example, Bigelow Aerospace's SAA will 
help commercial space achieve escape velocity from low-Earth Orbit. In 
fact, on next Thursday, May 23, NASA Associate Administrator Bill 
Gerstenmaier and Robert Bigelow will participate in a kick-off briefing 
on Capitol Hill to describe the SAA and answer any questions that 
Members or Hill staff may have.
Nationally Integrated Space Capabilities
    There are now eight FAA-licensed launch sites in the United States, 
with others under discussion. I believe we should explore ways to 
facilitate NASA's use of these sites as a matter of economy, 
convenience and safety. NASA currently makes available services to 
orbital and suborbital companies and it seems reasonable to return the 
courtesy.
    The integration of assets and capabilities also helps address the 
matter of what commercial launch sites are up to when they are not 
launching rockets, their intended core business. I believe it would be 
extremely worthwhile for Congress to require that the Federal Aviation 
Administration, NASA and the Air Force explore the value of involving 
privately operated commercial spaceports as part of a national network 
to meet overall American space flight needs.
    On-Orbit Authority
        I agree with the DOT/FAA Commercial Space Transportation 
        Advisory Committee (COMSTAC) that on-orbit authority needs to 
        be discussed. Currently, uncertainty surrounds jurisdiction and 
        regulatory questions of on--orbit operations involving space 
        transportation. A thorough look should address questions like: 
        Specifically, what are the safety hazards and needs posed by 
        spacecraft while operating in the National Airspace System 
        (NAS)? How should the U.S. Government handle on-orbit 
        authority? What is the need for on--orbit authority and does 
        the FAA play a role in satisfying that need? FAA/AST should 
        examine ``space traffic coordination'' and create scenarios and 
        analysis exploring the issue. AST should simulate and model 
        with the FAA's Next Generation Airspace effort how the 
        integration of regularly scheduled space traffic would look in 
        the NAS. FAA/AST should begin infrastructure studies to 
        identify monitoring requirements for on-orbit activities to the 
        extent required for space traffic coordination.
    NASA's Educational Programs
        Finally, I am very concerned about the cuts to NASA's 
        educational program at a time when NASA is on a different 
        trajectory and with a vision different from any before. Like 
        every other sector of the space industry, commercial space is 
        dependent on America's ability to produce and equip with a 
        specific set of technical skills and capabilities the next 
        generation of space professionals. It is vital work that needs 
        to begin early in a student's educational journey. These skills 
        and capabilities derive from the STEM disciplines that can 
        support space operations today, and those that young minds can 
        dream and create for the future. No one teaches what NASA does 
        like NASA. I recommend that Congress take another look at the 
        benefits of STEM education and reconsider the enormous 
        investment value of NASA's education program.
Going Forward
    The FAA's Office of Commercial Space Transportation has performed 
pioneering service in a comparatively new and still evolving industry. 
It has worked effectively with the Air Force and with NASA and with the 
industry itself. And while forging a regulatory framework, it has been 
an active, open and attentive companion to seasoned talent in its own 
environment. I'm talking about NASA. Its work in human exploration and 
crew and cargo transport is unparalleled. Those of us in the space 
industry understand that NASA remains a living legend, changing, 
improving, adapting to new science and exploration.
    In fact, the United States' diverse spaceflight talent is a major 
asset that we are fortunate to maintain. Other nations have put objects 
into space. Other nations have put humans into space. Some have 
conducted commercial space launches. But no other nation has done all 
these things using the resources and genius of both the public treasury 
and private investment. With safety as its imperative, the United 
States has shown to the world the ability to integrate space 
initiatives.
    No other nation has done that. No other nation has performed space 
flight as well as we have. And I'm proud to say, we're getting even 
better at it. We are stronger than ever. We have only just begun.
    Thank you.

    Senator Nelson. Thank you, Ms. Smith.
    Captain?

    STATEMENT OF CAPTAIN MICHAEL LOPEZ-ALEGRIA, USN (RET.), 
          PRESIDENT, COMMERCIAL SPACEFLIGHT FEDERATION

    Captain Lopez-Alegria. Chairman Nelson and Ranking Member 
Cruz, good morning again. I want to say it's an honor to be 
seated at this table with my colleagues, and thanks for the 
opportunity to share some thoughts on partnerships to advance 
the business of space with you.
    About a year ago, after 20 years and over 4,000 orbits of 
the Earth, I decided to leave what was arguably a pretty good 
job as a NASA astronaut to come here, and I did that because 
this is really important. I truly believe that commercial space 
flight is important to the future of our human exploration of 
space in this country. We're about to restore an imperative 
national capability, to democratize access to space, and to 
build an industry that I'm convinced will lead the world, and 
frankly, I can't think of a more honorable calling than to be 
part of it.
    The Commercial Spaceflight Federation represents over 40 
companies across the country that are working to make 
commercial spaceflight a reality. Their spheres of influence 
range from near space with science and technology payloads on 
high-tech and very high-altitude balloons, to suborbit, low-
Earth orbit and beyond.
    The era of commercial human spaceflight began with the 
fantastic achievements of the SpaceShipOne team that won the 
Ansari X Prize back in 2004 by sending a piloted, reusable 
vehicle to an altitude of over 100 kilometers twice in the span 
of 5 days.
    In recent weeks, there have been even more exciting 
accomplishments that point to the beginning of commercial 
suborbital operations within the next year. One was a testing 
by XCOR of a piston pump-powered rocket motor. This technology 
represents a giant leap in the quest for a propulsion system 
whose reusability approaches that of a commercial jet.
    And another milestone that was mentioned before is a test 
flight by Scaled Composites of SpaceShipTwo, a larger version 
of its predecessor, for Virgin Galactic. Its rocket motor, 
developed by the Sierra Nevada Corporation, was ignited for the 
first time in flight after being released from its mother ship 
at almost 50,000 feet altitude.
    But as impressive as these vehicles are, there is a big 
difference between suborbital vehicles and orbital vehicles. In 
space, getting there is all about speed, and to get to 100 
kilometers altitude, you need to go about Mach 3. To get to 
orbit, you need to go about Mach 25, and you can appreciate 
that there is a pretty big difference there, and that's the 
reason that until recently orbit has been the domain of nation-
states and their agencies.
    However, in addition to ULA--United Launch Alliance's--
incredible record of successful launches recently, Space 
Exploration Technologies and Orbital Science Corporation, in 
the context of NASA's COTS program, have demonstrated the 
ability to achieve orbital space flight. And, in fact, SpaceX 
has now twice delivered cargo and returned it under NASA's CRS 
contract from the International Space Station.
    This space station represents not only an investment of 
tens of billions of dollars but is also an unparalleled 
research facility where scientists and other researchers from 
around the world can conduct experiments in an environment that 
is not duplicable anywhere, on or off the planet. We strongly 
encourage the Congress to extend the utilization of ISS to its 
design life limit of 2028.
    I went to the ISS for the third time back in 2006, but 
unlike the first two times, I wasn't on the Space Shuttle. I, 
in fact, rode a Soviet-designed rocket and capsule called 
Soyuz. Since the retirement of the Shuttle, it's been the only 
mode of transport available to U.S. astronauts. But building on 
the success of the commercial cargo programs, NASA is engaged 
in development of commercial crew system that has already 
created thousands of high-tech jobs across America.
    At the same time, using innovative Space Act agreement 
transaction authorities, it has achieved progress far in excess 
of that likely to have been accomplished in a traditional 
development contract, yet while saving the taxpayer 
considerable money.
    But funding levels below those proposed by NASA have 
resulted in a delay in operational capability and, as we know, 
every year that we can't launch American astronauts into space 
on American rockets is another year of sending over $450 
million to Russia. It's imperative that we execute this program 
vigorously, which implies, among other things, full funding or 
funding at the highest possible levels.
    History is littered with examples of empires that failed to 
adapt to changing times and were thus dethroned by others who 
did. Our world is very different from the heyday of NASA 
budgets that commanded 4.5 percent of Federal spending. But by 
intelligently partnering with the private sector, our space 
agency and, indeed, our Nation can continue to lead the world 
in mankind's greatest endeavor.
    I look forward to discussing with you some of the policy 
details that are addressed in my written testimony, and I hope 
that my comments today will help materially contribute to your 
formulation and ultimate passage of legislation. Thank you.
    [The prepared statement of Captain Lopez-Alegria follows:]

   Prepared Statement of Captain Michael Lopez-Alegria, USN (Ret.), 
              President, Commercial Spaceflight Federation
    Chairman Nelson, Ranking Member Cruz, and Members of the 
Subcommittee, thank you for holding this hearing and for the 
opportunity to testify as President of the Commercial Spaceflight 
Federation.
    The Federal Government has worked with the American space industry 
in innumerable capacities since the dawn of the space program. 
Companies like Boeing, Aerojet and the David Clark Company have worked 
with the Department of Defense (DOD), NASA and NASA's predecessor NACA 
since the 1940s to develop many of the spaceflight systems that took 
our astronauts to orbit and then to the Moon. In the 1980s, the first 
wave of space privatization occurred, giving birth to a number of new 
companies and a fast-growing commercial satellite industry that reached 
almost $180 billion in revenue by 2011. The Commercial Space 
Transportation office, now at the Federal Aviation Administration, was 
also established in the 1980s, to regulate and promote the commercial 
space launch industry. Many of the advancements that followed 
privatization have been in turn deployed for government purposes, 
proving the value of enlisting industry as an active partner in 
government space endeavors.
    In the last few years, the industry has undergone significant 
growth in revenue, employees and capability. Much of its success has 
been based on the tremendous support that NASA has provided in 
developing and providing technologies, supporting development of space 
systems and buying services from commercial providers. This partnership 
between the private sector and NASA has helped create an industry that 
can provide services to both NASA and private customers, while creating 
jobs all over America.
    Under the old paradigm for public-private partnership, NASA 
engineers would design space systems and then offer portions under 
cost-plus contracts for competitive bidding. This has been a successful 
method for building one-of-a-kind systems at the cutting edge of 
technology that can accomplish missions never before attempted. 
However, as our presence in space has expanded, it has become clear 
that there are wide variety of necessary systems and services that do 
not fit that template.
    The new paradigm, which has emerged to complement but not replace 
the old, has been referred to as commercial procurement. It changes the 
role of government, so that it is a customer and involved participant 
in developing space systems, but not the designer, builder, operator or 
sole customer. This approach has proven highly successful in reducing 
the cost of maintaining critical space infrastructure in the pioneering 
Commercial Orbital Transportation System (COTS) and Commercial Resupply 
Services (CRS) programs, while promoting the development of systems 
that can also be used for commercial purposes. The model is a 
refinement of one that NASA and the DOD used in the 1990s to develop 
launch vehicles still in use today.
    Meanwhile, completely commercial space activities are thriving as 
well. American orbital launch providers have become more competitive on 
the world market, bringing high-tech jobs back to America. Suborbital 
providers are building and testing vehicles that will tap a worldwide 
market for space tourism and fulfill scientists' need for more frequent 
and inexpensive access to space. Other companies are developing 
technologies to mine asteroids for valuable resources, visit the Moon, 
and disaggregate large satellites into small satellite constellations.
Orbital
    A year ago, SpaceX launched its first mission to the International 
Space Station (ISS). Coming less than a year after the retirement of 
the Space Shuttle, the launch captured the imagination of the American 
people, strengthened the ISS program, and ushered in a new era of 
spaceflight cooperation. Of course, one competitor is not enough for a 
competitive marketplace, and just last month, Orbital Sciences 
Corporation completed a test flight that took the company one step 
closer to ISS. These companies are replacing some of the capabilities 
lost with the retirement of the Space Shuttle and ensuring that the 
investment and jobs involved in resupplying the ISS are staying in 
America.
    Unlike most other government programs, which tend to increase in 
cost over time, NASA's Commercial Cargo Program (CCP) has the potential 
for cost reductions. The vehicles and rockets providing cargo services 
can also be available for commercial satellite launches, NASA crew 
launches and other commercial markets. In this way the fixed costs of 
development and manufacturing infrastructure will be spread over 
multiple customers, lowering the cost of the flights for NASA.
    Meanwhile, NASA has been working with the companies competing to 
fly astronauts to the ISS. The Boeing Corporation recently performed 
force and moment wind tunnel testing of an integrated test article 
including both the CST-100 capsule and the launch vehicle adapter. 
Sierra Nevada Corporation has recently completed its integrated system 
safety analysis review, demonstrating the safety and reliability plans 
for the major components of its Dream Chaser crew transportation 
system. SpaceX conducted its Ground and Ascent Preliminary Design 
Review and continues to do qualification testing of its Falcon 9 
``version 1.1'' launch vehicle.
    Other companies are also working with NASA to develop orbital 
launch systems, including Blue Origin, who, under the Commercial Crew 
Development program, performed a successful pad abort test and tested 
components of a new 100,000-pound American rocket engine at NASA's 
Stennis Space Center. That engine is now undergoing evaluation at Blue 
Origin's West Texas facility.
Suborbital
    While many companies are developing and flying orbital launch 
vehicles, we have seen a steady stream of progress in the suborbital 
arena, where reusable vehicles offer the possibility of high flight 
volume. Companies such as Armadillo Aerospace, Blue Origin, Masten 
Space Systems, Virgin Galactic and XCOR Aerospace are competing to 
offer flights for private individuals, researchers and experimental 
equipment to altitudes above 100 kilometers.
    Virgin Galactic has performed many glide tests over the last year, 
and in April accomplished the first powered flight of its SpaceShipTwo 
vehicle, breaking the sound barrier and kicking off a busy year of 
flight-testing. XCOR is building a liquid rocket-powered vehicle that 
will be capable of aircraft-like operations. In March, the company 
performed a 67 second test firing of an engine mated to the vehicle 
fuselage, the first firing of a fully piston-pump-powered rocket 
engine. Also in March, Masten Space Systems completed the latest in a 
series of unmanned vertical-takeoff vertical-landing flights for Draper 
Labs to test autonomous control systems for use on vehicles that will 
land on the Moon or Mars. Finally, late last year, Armadillo Aerospace 
conducted a series of flights, including the first FAA-licensed flight 
from Spaceport America in New Mexico by an unmanned liquid propellant 
sounding rocket with a steerable parachute recovery system.
    Each month brings new accomplishments among a set of companies 
competing for a robust market for research, space tourism and other 
applications. A recent study by analysts at the Tauri Group showed a 
demand for hundreds of suborbital flights a year for a broad array of 
purposes. In fact, because of the operational benefits of reusable 
vehicles, suborbital reusable capabilities could be a disruptive 
technology that creates entirely new markets. The personal computer, 
although less powerful than a room-sized mainframe, was infinitely more 
useful simply because of its easier operation and came to dominate the 
market not by replacing supercomputers, but rather by demonstrating the 
market was much larger than anyone had anticipated.
    The development of reusable suborbital vehicles is a truly American 
phenomenon, and one that is creating high-tech jobs in Florida, Texas, 
California, New Mexico, Colorado, Washington and many other states 
across the country. Many states and local communities are modifying 
existing airports to accommodate horizontal and vertical launch 
suborbital vehicles or building new spaceports to bring home the 
benefits of the suborbital revolution.
    NASA has been admirably forward-looking in creating the Flight 
Opportunities Program to purchase commercial reusable suborbital 
flights for technology demonstration and development and for other 
purposes. By being an anchor customer for services, the program 
provides significant incentives for private investment while only 
paying for services rendered. The program issues calls for proposals to 
fly technology payloads and has seen impressive interest from the 
research and technology development communities, indicating a pent-up 
demand for inexpensive, regular access to the space environment.
Other Commercial Space Activities
    Over the last few years, as the suborbital and orbital arenas have 
become competitive industries in search of near-term markets, new 
businesses have arisen to support and take advantage of new 
developments and push the envelope of space economic activity farther. 
A web of suppliers and service providers, some traditional aerospace 
firms and some from other sectors that have only recently become 
involved in space activities, support each of the companies developing 
orbital or suborbital vehicles.
    Many states have developed or are developing commercial spaceports, 
including New Mexico, Florida, Texas, Oklahoma, Virginia, Alaska, 
Colorado and California. Testing and training facilities are providing 
venues to test equipment and train crew and spaceflight participants in 
the types of environments they will experience. Companies around the 
country are supplying spacecraft parts and subsystems, ranging from 
screws and fasteners to environmental control systems, engines and 
spacesuits.
    Meanwhile, new companies have arisen that are pursuing business 
plans using new ways to access space to build novel businesses. Several 
companies are building and launching small communications and remote 
sensing satellites that promise to make existing and new satellite 
applications more available and more robust. Other companies are 
building platforms that can host scientists and individuals in orbit. 
Finally, commercial space has targeted asteroids and the Moon through 
the efforts of companies like Planetary Resources, Moon Express and 
Golden Spike. All in all, it is an exciting time for commercial space 
as early investments bear fruit and a second generation of companies 
builds on the accomplishments of the first.
NASA Programs
    While purely commercial activities are a vital and rapidly growing 
part of the demand for launch services, NASA has expanded that demand 
to include delivery of cargo and crew to the ISS. The success of NASA's 
commercial cargo and crew programs has been encouraging. Unfortunately, 
use of the term ``commercial'' has become the subject of some 
disagreement. All programs have some commercial aspects; the companies 
that built vehicles in the Apollo and Space Shuttle programs were 
selling goods or services, and were therefore commercial enterprises. 
Rather than being ``commercial'' or not, all programs fall somewhere on 
a continuum of development and procurement practices. It is our view 
that those that display the following characteristics are closer to the 
``commercial'' end of the spectrum:

        Full and open competition. Fair and open competition is a 
        fundamental principle that has driven the economic engines of 
        the free world that now dominate the global economy. This 
        concept is eminently applicable to the acquisition of space 
        systems and services to limit cost, incentivize efficiency, and 
        promote innovation. Too often in the past, NASA programs have 
        ended the competition with a prime contract award near the 
        beginning of the program. Maintaining competition through all 
        major procurements in a program is essential, and the DOD has 
        thusly used competition in many of its major aircraft 
        procurements. So far, NASA's commercial cargo and crew programs 
        have used multi-stage competition to preserve the competition 
        throughout the life of the program, while still providing 
        enough business to the industry partners to justify their 
        investment. It is clear from independent analyses that the COTS 
        program saved money as compared to the traditional development 
        cost of a single system, even though NASA's investment was 
        split between two companies. In addition to desired cost 
        containment effects, competition provides critical redundancy-
        both technical and programmatic-that allows the program to 
        remain robust much later in the programmatic cycle than is 
        afforded by an early down-select to one provider. In planning 
        any program, we suggest that the Congress and NASA put a high 
        premium on preserving competition.

        Milestone-based fixed-price payments. The COTS program has 
        shown how much NASA can accomplish when using its Other 
        Transaction Authority to put in place milestone-based Space Act 
        Agreements. In the absence of a firm-fixed-price contract or 
        agreement, the objectives of the contractor and agency can be 
        misaligned. Without performance incentives, the contractor has 
        little motivation to create efficiencies and lower the project 
        cost, and absent fixed-price milestones, the agency is free to 
        add requirements or change its mind midway through the program, 
        raising the price of the program for the taxpayer. While not 
        all systems can be developed on fixed-price contracts or 
        agreements, in general, the more freedom to change the price, 
        the more expensive the product will be in the end. Selecting 
        the right firm, fixed-price instrument is also critical to 
        achieving cost effectiveness. Where NASA is actually acquiring 
        goods or services, a Federal Acquisition Regulations (FAR) 
        contract should likely be used. However, FAR contracts, even 
        firm, fixed-price, limit flexibility and are subject to cost 
        increases when the government directs changes. NASA has been 
        very innovative in using funded Space Act Agreements in the 
        crew and cargo programs to take advantage of their low overhead 
        and flexibility to achieve cost effectiveness. Since NASA is 
        only ``buying'' the certification of these transportation 
        systems, using a FAR contract only for the certification data 
        keep costs to a minimum while ensuring NASA oversight and 
        verification of performance and safety.

        Well-defined and well-communicated requirements and standards. 
        Proper program design is required to keep any program on 
        schedule and on budget. The Government Accountability Office 
        (GAO) has analyzed failing programs and provided appropriate 
        guidelines to many agencies to help them manage programs more 
        effectively. Unfortunately, one of the most damaging forms of 
        mismanagement-requirements creep-is still a problem. In one 
        example discussed by the GAO, the addition of new requirements 
        late in the development cycle helped double the cost of a GPS-
        related DOD program.

        The degree to which a customer can be specific about its 
        requirements, and that it can define those requirements sooner 
        rather than later, is of great benefit to the cost 
        effectiveness of a program. Defining program requirements, 
        standards and milestones early is difficult, and some 
        flexibility is always required as engineering developments may 
        necessitate a modified or alternative requirement or standard. 
        In its Commercial Crew Program, NASA is seeking to strike the 
        right balance through an iterative process with industry 
        partners in the first phase of the Certification Products 
        Contracts. This process must continue apace to avoid costly, 
        late changes to requirements. By facing these issues early, 
        NASA is following the best practices outlined by the GAO and 
        other experts. The processes pioneered by the commercial crew 
        and cargo programs show great promise and should be practiced 
        more widely at NASA.

        Anticipation of other customers. The nation's recent economic 
        difficulties mean NASA's budget has been smaller than the 
        funding profile laid out in the NASA Authorization Act of 2010. 
        Meanwhile, NASA's missions have stayed fixed or grown. In order 
        for NASA to accomplish the remarkable things we all expect of 
        it, the agency must be able to reduce the fixed costs 
        associated with maintaining the Nation's current space 
        capabilities. Unfortunately, some capabilities required for 
        NASA's mission are unique, and for those NASA bears all the 
        fixed costs of development and maintenance. Whenever possible, 
        NASA should avoid this situation by developing and using 
        services that also have other customers, allowing NASA to 
        insist that commercial partners invest their own funds as well.

    In the case of crew and cargo transportation to ISS, the 
capabilities developed by industry in partnership with NASA will also 
provide services to a diverse set of markets, including commercial 
satellite launch, space tourism, sovereign space exploration and 
utilization, future NASA missions and others.
    By implementing lessons learned from past and ongoing commercial 
programs, NASA can ensure that its investment is used in the most 
efficient way possible. NASA's Commercial Crew Program is currently the 
most high-profile commercial space program in development. Its success 
is important to the commercial space industry, but even more important 
to our Nation. In difficult economic times, extending the period that 
American jobs are taken by Russian rocket companies is a mistake. The 
success of the Commercial Crew Program will mean that we are no longer 
dependent on Russian vehicles to transport our astronauts to the ISS. 
Meanwhile, it has already helped create thousands of jobs in the 
American space industry and will create many more as it comes to 
maturity.
    The success of the program to date is due to the highly innovative 
teams at the competing companies, the skilled technical team at NASA 
and the commitment by NASA to commercial agreements and a minimum of 
unnecessary overhead. In the current phase of development, the 
Commercial Crew Integrated Capacity (CCiCap) program, NASA has 
undertaken an inventive two-pronged approach that reflects the two 
related, but different, goals of the program: Help industry create a 
competitive marketplace for crew delivery services to low-Earth orbit, 
and secure crew delivery services for NASA that satisfy its demanding 
requirements. Under this approach, the development of the systems is 
primarily performed under milestone-based Space Act Agreements that 
keep costs to a minimum while still providing NASA the insight needed 
to ensure the vehicles are safe for crew transport. Meanwhile, NASA is 
pursuing a parallel certification process under a traditional, fixed-
price Federal Acquisition Regulation-based contract that will make 
certain that any other information NASA needs to ensure the safety of 
its astronauts is provided. In this way, the two transaction 
authorities are used for precisely the reasons they were created: Space 
Act Agreements to partner with industry to develop new capabilities 
that are relevant to both the government's needs and existing and 
emerging commercial markets, and FAR-based contracts to secure a 
service for NASA to use.
    Despite seeking and receiving proposals--called optional milestones 
under CCiCap-from the participating companies that would allow them to 
proceed all the way to first crewed flight, NASA has indicated that it 
is planning to move the entire program to FAR-based contracts at the 
end of the current phase, just over a year from now. The transition 
away from the two-pronged approach may impose an increase in complexity 
and red tape on industry partners, which could result in growth in cost 
and schedule. Another approach would be to exercise the optional 
milestones under existing or revised Space Act Agreements while 
modifying the current FAR-based certification contracts. In this way, 
NASA maintains oversight, controls risk, verifies safety and will get 
the safe, reliable and cost-effective ISS crew transport it needs in a 
timely and affordable manner.
    The ISS is the crown jewel of our human space enterprise. To quote 
Astronaut Chris Hadfield, who just returned from commanding ISS, ``We 
are leaving Earth permanently. It is a huge historic step and we are 
trying to do it right and it takes time, it takes patience and it takes 
tenacity--and we're going to do it.'' ISS touches all aspects of why we 
go into space--exploration, science, inspiration and commerce. NASA 
will soon have astronauts flying on ISS for over a year, providing 
critical information about the long-term effects of weightlessness for 
astronauts going to Mars. Science experiments like the Alpha Magnetic 
Spectrometer are peering into the mysteries of dark matter. And, 
equally exciting, ISS is creating a marketplace of space users--whether 
it's small scale projects, like NanoRack's MixStix, a small test-tube 
experiment platform, or very large projects like Bigelow Aerospace's 
BEAM module, ISS is the proving ground for orbital space commerce. 
These activities will drive the demand for space access and perhaps new 
installations in Earth orbit. We strongly urge the Congress to extend 
utilization of the ISS to its design-life limit of 2028.
    As NASA plans for exploration beyond earth orbit, we should also 
keep the lessons of the commercial programs in mind. Where NASA's 
purposes overlap with those of commercial entities, non-profits, other 
government agencies, and other governments, it should pursue approaches 
that take maximum advantage of those resources by engaging early and on 
multiple levels. NASA should include the private sector in planning 
exercises to ensure that overlapping purposes are recognized and 
pursued. As partners, NASA and industry can ensure a sustained American 
human presence beyond low-Earth orbit, and expand commercial, 
scientific and exploration opportunities throughout the Solar System.
    The commercial spaceflight industry has competencies that can 
augment and complement NASA's for spaceflight beyond low-Earth orbit. 
For example, commercial spaceflight companies are working to identify, 
track, analyze, and eventually interact with near-Earth asteroids, 
complementing NASA's own efforts. Congress has an opportunity to 
leverage this innovative private-sector activity; the same skills and 
technology that enable asteroid mining, for example, enable defense 
from potentially hazardous asteroids and a NASA asteroid retrieval 
mission. The same technologies that allow Google Lunar X PRIZE 
companies to develop robotic spacecraft on the Moon will help NASA to 
accomplish its goals for lunar exploration. Congress should consider 
inexpensive ways to promote commercial activity in deep space, so that 
these companies and their investors can help accomplish national 
objectives and maintain U.S. leadership in a new industry. In the 
meantime, Congress should make it clear to the State Department that 
international negotiations about space resources must take U.S. 
private-sector activities into account.
    Other companies like those that have been involved in NASA's 
commercial crew and cargo programs could modify their vehicles to 
provide cargo supply to a mission beyond low-Earth orbit. We urge NASA 
to adopt the highly successful COTS/CRS model, particularly the use of 
Space Act Agreements, wherever possible in the development of 
exploration capabilities that could have synergy with commercial 
activities, thereby reducing the cost and enhancing the safety of these 
systems. In other parts of NASA's mission, such as the dedicated or 
secondary launch of small satellites, commercial terms should also be 
the rule. We welcome further conversation on how the commercial space 
industry can enable NASA to reach farther and do more.
Federal Regulations
    With the Commercial Space Launch Act of 1984, Congress established 
an office within the Department of Transportation to license and 
promote commercial launch activities. In the 1990s, the Office of 
Commercial Space Transportation was moved into the Federal Aviation 
Administration and was also given the authority to license reentry 
operations. From the beginning, the office's mandate was to ensure the 
safety of the uninvolved public (often called third parties), and since 
1988 part of that task has been to ensure that an appropriate level of 
financial responsibility was established for licensed companies so that 
there would be funds available to pay any claims in the event of damage 
to the uninvolved public or the Federal Government.
    Since it has been several years since the last full reauthorization 
of this agency, there are a number of course corrections that we feel 
are warranted to streamline the regulatory process and ensure the safe 
and beneficial development of the industry.
    In 1988 Congress set up a ``risk sharing regime'' to deal with 
potential harm to uninvolved third parties. This regime requires that 
license applicants meet a stringent financial responsibility 
requirement by compelling them to purchase insurance or demonstrate 
sufficient financial resources to cover third-party damage claims up to 
the amount that could be caused by a 1-in-10 million probability launch 
accident. Importantly, the Federal Government is in fact protected from 
claims up to this Maximum Probable Loss (MPL) by the company's 
insurance or assets. In the extremely unlikely event of an accident 
that caused damage above the MPL, the Federal Government agreed to seek 
an expedited appropriation to cover damage above the insured amount.
    In fact, because of the tiny chance of an accident costing more 
than the MPL, the risk-sharing regime is scored as having no 
significant cost by the Congressional Budget Office and has been 
renewed many times by Congress since 1988. According to our 
calculations, the regime has an actuarial cost of less than $10 per 
launch. The insurance policy that a launch company purchases to protect 
the public and the government typically costs many orders of magnitude 
more.
    Last year, Congress only renewed the regime for one year at the end 
of the previous Congress, and it will expire again at the end of 2013. 
In view of the powerful protection that the risk-sharing regime 
provides to the Federal Government as well as industry, we strongly 
urge Congress to extend it indefinitely.
    While the chance of damage to uninvolved people on the ground is 
small, spaceflight is an inherently dangerous business for those of us 
who fly. No one should board a launch vehicle believing that it is 
perfectly safe. In 2004, as commercial human spaceflight moved from the 
drawing board to the skies above Mojave, Congress passed a law 
declaring that customers of commercial human spaceflight launches were 
not passengers, but rather active ``spaceflight participants.'' Along 
with this declaration came a requirement that any company launching a 
participant into space must fully inform them that the Federal 
Government does not certify spaceflight vehicles to be safe, of the 
risks of spaceflight in general, and of the specific safety record of 
their vehicle type. I am pleased to report that the Commercial 
Spaceflight Federation is currently developing an industry consensus 
standard practice for informing participants of these risks so that 
they are fully aware of the hazards.
    Because of the risks of spaceflight, Congress understood that 
litigation could arise in the event of an accident, and because of the 
many different companies and individuals involved in any spaceflight, 
that litigation could be extended and complicated, imposing large costs 
on all parties involved. In order to avoid this situation, the 
Commercial Space Launch Act includes a requirement that the parties 
involved in a spaceflight (including customers) sign reciprocal waivers 
of claims with each other. All parties were included in this 
requirement except spaceflight participants, which raises the specter 
of protracted and complicated litigation. We therefore ask that 
Congress include spaceflight participants in the waiver of claims 
structure, knowing that the waivers do not excuse gross negligence or 
intentional action. We also ask that Congress clarify that Federal law 
controls any space launch activity, including the enforceability of 
waivers granted by spaceflight participants, and that these questions 
be under the sole jurisdiction of the Federal Courts, to avoid having 
conflicting law in different jurisdictions on matters that are 
fundamentally Federal in nature.
    In the Commercial Space Launch Amendments Act of 2004 Congress 
recognized that human commercial spaceflight was a new and innovative 
business and that improvident regulation could easily stifle it. In 
that act, Congress established the principle that the Office of 
Commercial Space Transportation could continue to issue regulations to 
protect the uninvolved public without restriction, but should initially 
only issue regulations aimed at the safety of crew and spaceflight 
participants based on specific flight incidents that led or could have 
led to injury or death. This regime has provided regulatory stability, 
while enabling the industry to find inventive solutions to challenging 
technical problems. Though a sunset date was inserted in the 2004 bill, 
that date was extended in 2012 to the end of 2015. We ask that this 
extension be continued, as the general principle of flight-data-based 
regulation is important to allow the types of innovation that will 
improve safety in the long run.
    Another correction would ensure that vehicles could continue to be 
tested after they are licensed, in appropriate circumstances. Current 
law forbids issuing an experimental permit for an individual reusable 
spacecraft after a launch license has been issued for a launch or 
reentry of a rocket of that design, meaning that further testing of the 
vehicle class could be limited. A technical fix would allow companies 
more flexibility to improve safety and increase performance. It would 
also enable flight-testing of new vehicles as they enter service, 
something required as the industry matures into operating fleets of 
vehicles.
    Finally, air-launched or hybrid vehicles are currently regulated by 
two branches of the FAA depending on the particular activity taking 
place, a situation that the Commercial Space Launch Act tried very hard 
to prevent. FAA's Office of Commercial Space Transportation regulates 
an entire hybrid system on launch day, but FAA's Office of Aviation 
Safety regulates the launch platform and spaceship separately if other 
activities, such as repositioning and testing are pursued. Having two 
separate regulators thwarts congressional intent, adds to the cost and 
time burden of compliance, and creates the potential for regulatory 
gaps and conflicts that could potentially have a negative impact on 
safety. We are currently pursuing a solution within the FAA, but a 
legislative solution may be necessary.
Conclusion
    It is said that some of the greatest companies in American history 
were formed during recessions. Adversity can sometimes bring the best 
out of government programs as well as people, breeding innovation that 
seeds the next great round of exploration. I hope that as you consider 
legislation later this year, you think of the commercial space industry 
as a resource that can help NASA achieve its ever-more-difficult 
missions and bring a new energy to the scientists, engineers, dreamers 
and policy-makers who see space as a vital component of our next 
economic boom. Please let me know of any way in which the Commercial 
Spaceflight Federation can help.

    Senator Nelson. Thank you, Captain.
    Dr. Collicott?

        STATEMENT OF DR. STEVEN H. COLLICOTT, PROFESSOR,

            PURDUE UNIVERSITY SCHOOL OF AERONAUTICS

                        AND ASTRONAUTICS

    Mr. Collicott. Thank you, Chairman Nelson and Ranking 
Member Cruz, and the Committee. I'm pleased to be here and to 
address this committee.
    I'm going to speak on the role of the private suborbital 
space industry, on research and education. A little bit first, 
I'm a Professor in the School of Aeronautics and Astronautics 
at Purdue University in the College of Engineering. Purdue is 
the home of 23 astronauts. In my position, I have been teaching 
and researching topics in fluid dynamics for 23 years. My 
research explores the basic fluid physics for improving things 
like pulmonary health, fuel efficiency in transportation, 
communication satellite lifetime, jet engine cooling and 
lubrication, and similar. It's a nice job.
    I am active in spaceflight research. In this sense, I am a 
member of the Suborbital Applications Researchers Group, 
working with Commercial Spaceflight Federation. We're a group 
of volunteer researchers to promote research uses in this new 
industry. I serve on the Scientific Advisory Board of CASIS, 
the Center for the Advancement of Science in Space. I am 
principal investigator of the Fluids Education Experiment, 
scheduled to be launched to Space Station in 2014.
    I am building payloads to fly with suborbital companies: 
Armadillo and Blue Origin, Masten and XCOR and Virgin Galactic, 
plus a high-altitude balloon company, Near Space. I have worked 
through experiment design, payload integration, and launch 
operations even with some of these companies, and I've seen 
firsthand how this privately financed, uniquely American 
industry is poised to deliver remarkable new scientific 
research capabilities.
    Researchers need to begin now to have experiments ready to 
exploit these new capabilities for science that can impact our 
lives here on Earth. Already, my student-built payloads have 
flown with an expensive German payload on Armadillo test 
flights.
    Now, three minutes of high-quality micro-gravity test time 
is ideal for a number of physical sciences, and others, which 
to look up or down from these vehicles with telescopes and 
other instruments for unique observations. Various biological, 
life sciences and physiological researchers have well-justified 
plans for studies from the small-scale, like cellular signaling 
mechanisms, to the large, that is up to many dozens of human 
subjects.
    Our own atmosphere is so poorly studied in the mesosphere 
and lower thermosphere that little is known. It's even 
difficult to find an expert in this part of the atmosphere. Yet 
this region, which is above all the balloon flights and below 
all the orbits, is where these new rockets will fly and coast 
on every mission, thus enabling many novel studies of this 
region, which is already felt to be important to carbon 
transport in our atmosphere.
    All these and other fields of science can benefit from 
launching quickly, repeatedly, and affordably on the new 
vehicles.
    Already, this industry is impacting education. I teach a 
zero-gravity flight experiment class at Purdue every semester, 
building experiments for launches with several of these 
companies, and also now a payload for a NASA Flight 
Opportunities Program launch. Thus universities are beginning 
to be involved, too.
    For high schools, an automated student payload is easily 
affordable and would be just the next step in high school 
robotics. Thus, we can couple right into a phenomenal and 
popular hands-on, project-based, STEM education program that 
already exists nationwide in our high schools.
    I see every semester how Purdue students are pulled into 
the experiment program, become inspired by the reality of 
science and engineering, and make early career decisions or 
choices to pursue excellence in STEM topics.
    People, perhaps you, often ask me for one good reason why 
these new rockets will be important, just one good reason. 
Let's try this one: these rockets will provide new research 
capabilities of value to numerous fields of science, and this 
will produce advances not otherwise possible.
    Why not a second good reason? These rockets will fly from 
numerous locations and on short notice, so transient and one-
time events in astronomy, planetary science, Earth observation 
and atmospheric research can be captured.
    I can continue. These rockets will fly a research payload 
for a small fraction of the cost of traditional rockets. They 
will fly a research payload to space more gently than 
traditional rockets, thus more sensitive instruments can be 
flown, and also cheaper off-the-shelf instruments can be used.
    Some of these rockets will fly the researcher with the 
experiment, which is really very common in most experimental 
sciences.
    These rockets will be reusable, thus driving down the cost.
    These rockets are developed with private financing, so 
research agencies pay only for the flights they need.
    The great accessibility of these rockets will enable a 
great number of spaceflight technologies to be tested and 
advanced inexpensively in space, accelerating NASA's 
exploration mission and strengthening the American companies 
that produce spaceflight systems for NASA.
    These new rockets will enable a great mass of small robotic 
student experiments from all ages of students.
    High school space experiments? You bet. That's exactly what 
we're talking about with these rockets.
    Undergraduate and graduate students in engineering and 
sciences can design, build and perform original space 
experiments within a year, within a school year.
    It's interesting to note that numerous science leaders 
today began their careers as graduate students in balloon and 
traditional sounding rocket experiments.
    So that's 10 good reasons I see for using these vehicles. 
They're good science reasons, they're good education reasons, 
and I think they're good value-for-dollar reasons, too.
    We should use traditional rockets when their capabilities 
are required, but most research and education, or much research 
and education will make tremendous gains on the new vehicles.
    I urge you, Senators, to help us jump into using this 
emerging United States industry broadly for science and STEM 
education.
    This does require some money, and it needs continuity and 
leadership. A multi-agency, multi-year program would be ideal.
    Now is the time to begin to create the impacts we desire 
from this industry.
    I thank you for your attention and will do my best to 
answer questions for you.
    [The prepared statement of Mr. Collicott follows:]

   Prepared Statement of Dr. Steven H. Collicott, Professor, Purdue 
           University School of Aeronautics and Astronautics
Introduction
    Chairman Nelson, Ranking Member Cruz, and Members of the 
Subcommittee: Thank you for the opportunity to provide testimony to 
this subcommittee on the important role that commercial space, 
particularly commercial reusable suborbital vehicles, are beginning to 
play in my research, the research of my colleagues across the country 
in numerous fields, and the development of new technologies at NASA and 
elsewhere.
    I believe that we are beginning an era of low-cost, routine space 
access that will offer incredible new opportunities for the research 
community. Reusable commercial suborbital vehicles will allow 
researchers to fly payloads often, conduct more experiments and collect 
more data, for the price of one traditional launch vehicle. Payloads 
will have a gentler ride to space, resulting in reduced payload 
development cost and the opportunity to fly experiments that were 
prohibitively difficult to fly before. With short lead times, there 
will be opportunities to launch coincident with terrestrial and 
astronomical phenomena, providing astronomers and earth scientists 
telescope observation prospects from the edge of space. Some of the 
platforms will also fly researchers alongside their payloads, an 
exciting new addition to space-based research that will provide 
flexibility that can only come from having an investigator in the loop, 
and reduce the need for expensive and error-prone automation. Like 
researchers on ocean-going vessels, in Antarctica, and on research 
aircraft, space-based researchers will be able to more effectively 
conduct their experiments when they fly with them to adapt to discovery 
and to acquire in situ data.
    The availability of reusable suborbital vehicles with other 
existing platforms, like parabolic flights and the International Space 
Station (ISS), will allow researchers to benefit from a full suite of 
micro-gravity and space environments. I am tremendously excited about 
these upcoming opportunities for my own research. I have performed 
microgravity fluids experiments at drop towers, led my students on more 
than thirty parabolic aircraft experiments, and designed two of the six 
tests performed in the successful Capillary Flow Experiment onboard the 
International Space Station. I have also flown research on several test 
flights of new suborbital vehicles, serve as a member of the Suborbital 
Applications Researcher's Group, and am now a member of the Scientific 
Advisory Board for the Center for the Advancement of Science in Space 
(CASIS). The full ladder of microgravity platforms is important for a 
broad swath of researchers, as it allows us to test equipment, improve 
experimental design, and gather data at one rung before moving up to 
the next rung in microgravity duration and expense.
Industry Progress
    The suborbital industry has reached many milestones recently, and I 
expect multiple providers will be flying participants and payloads 
within the next few years. In the last eight months alone:

        Blue Origin successfully tested their suborbital crew capsule 
        escape system, which in the event of a pad abort will rocket 
        the crew away from the launch pad, demonstrating one of the key 
        safety systems being developed for their vehicle.

        Armadillo Aerospace launched two flight tests of their liquid-
        engine reusable sounding rocket, STIG-B, marking the first FAA 
        licensed launch out of Spaceport America's vertical launch 
        facility. Both of these flights carried payloads developed by 
        my students at Purdue University.

        XCOR Aerospace performed the first firing of a full piston-
        pump-powered rocket engine, which will allow their vehicle to 
        fly inexpensively multiple times a day, with aircraft-like 
        operations.

        Masten Space Systems achieved a record altitude with Xombie, 
        their precision vertical take-off, vertical landing vehicle. In 
        March, Xombie reached an altitude of nearly 500 meters, testing 
        guidance, navigation, and control systems that could be used on 
        future missions to Mars or other destinations.

        Virgin Galactic and Scaled Composites completed the 24th glide 
        test of SpaceShipTwo and a week thereafter conducted the first 
        powered flight test. After being released at an altitude of 
        47,000 ft by WhiteKnightTwo, SpaceShipTwo ignited its hybrid 
        rocket motor to achieve an altitude of 55,000 ft and a velocity 
        of Mach 1.2 before gliding to a landing at the Mojave Air & 
        Space Port.

    With this kind of progress by suborbital companies, the first wave 
of licensed flights carrying participants and payloads are expected to 
begin soon. In addition, research payload development takes several 
years, and to fully exploit the new capabilities that these vehicles 
will provide, we must put in place programs now to create a pipeline of 
science and research payloads. NASA has taken steps to begin to benefit 
from commercial, reusable suborbital vehicles, but there is still much 
more that can be done in and out of NASA to take full advantage of all 
the opportunities these vehicles create.
NASA Programs--Flight Opportunities, and Payload Development
    In 2011, NASA created the Flight Opportunities Program (FOP) within 
its Space Technology Mission Directorate to use commercial suborbital 
rockets, balloons, and parabolic aircraft for technology development. 
By serving as an anchor customer for research flights to space, FOP is 
enabling companies to raise private investment, fostering the 
development of reusable suborbital vehicles, with the goal of creating 
routine, cost-effective and enduring space flight research platforms. 
The program only pays for flights flown, placing development expenses 
on the vehicle providers and their investors. Through FOP 
solicitations, researchers are able to fly technology payloads to 
space, raising the Technology Readiness Level (TRL) of technology 
needed by NASA, demonstrating an application in a relevant environment, 
or testing instruments and experiments in microgravity before they take 
a costly trip to orbit.
    Earlier this year, Near Space Corporation, a company that provides 
high-altitude balloon systems, flew a payload for the New Mexico 
Institute of Mining and Technology (NMT) through the Flight 
Opportunities Program. NMT was testing a monitoring system to determine 
structural integrity for space vehicles, which is important for 
reusable spacecraft re-entering the atmosphere. NASA will be able to 
use tested technologies like these in future orbital and suborbital 
missions. Next month, Near Space is scheduled to fly the first upper-
stratospheric low-gravity aircraft flights with their balloon-launched 
glider in a flight test program that I am involved in through NASA's 
FOP.
    By flying payloads like these, FOP can rapidly refresh NASA's 
technology base and promote investment by the private sector by 
supporting the early adopters of new technology. We researchers who fly 
early will provide the proofs of concept that pave the way for those 
who fly later. However, currently the pool of researchers that can get 
NASA funding for reusable suborbital flights is limited, as FOP 
solicits only technology payloads. For researchers such as myself, and 
many of my colleagues creating science payloads, the solicitations 
through NASA to fund our payload development and fly on these vehicles 
are few and far between. I encourage the use of broader science-
oriented solicitations for suborbital vehicles, so that NASA will reap 
the full benefits from both the science and technology areas, and to 
encourage early adopters from a broader range of disciplines. 
Additionally, along with drop towers and parabolic flights, these 
vehicles allow researchers to gather the data necessary at a lower rung 
before moving up the ladder to experiments on orbit. Gathering initial 
data on readily available platforms will allow more researchers to 
confidently send their experiments to an extended micro-gravity 
environment, reducing risk and increasing utilization of valuable on-
orbit tools such as the International Space Station.
    The Principal Investigator for the very successful German Capillary 
Channel Flow experiment in ISS tells me that drop tower experiments and 
traditional ESA sounding-rocket flights were critical steps for his 
team to be able to design the experiment to operate so well in orbit. 
My Purdue colleague who is Principal Investigator for the Critical Heat 
Flux Experiment being built for the ISS tells me that his parabolic 
aircraft flight research history in flow boiling is why he was able to 
conceive and design the experiment, propose it in a NASA competition, 
and win.
    Furthermore, the new era of affordable and frequent access to space 
is accessible to any Federal agency with research, technology, or 
testing needs. Spaceflight research need not be a NASA-only endeavor 
when this uniquely American industry hits its stride.
Scientific Applications of Suborbital Flights
    Though there are limited funding opportunities for suborbital 
scientists, exciting research is already in development. In many cases, 
payloads are funded by a patchwork of internal funds and small grants, 
so the current research is just skimming the surface of the pool of 
interested researchers. If more science payloads are funded, scientists 
will be able to dive deeper into their respective subjects, and produce 
results that are broadly applicable on Earth and in space.
    I specialize in two-phase fluid dynamics research, and micro-
gravity is a powerful tool for exploring Earth-bound applications and 
is obviously vital for spaceflight topics. My research involves the 
observation of fluid behavior free of gravity-induced effects such as 
sedimentation and buoyancy-induced convection. For example, in 2014 I 
will be launching to ISS the ``Fluids Education Experiment'' on the 
existence and stability of equilibrium capillary states. This research 
grows from computational research I did with researchers at a Centers 
for Disease Control laboratory a decade ago, where we investigated how 
minute water droplets can obstruct lung passages. Some of my other 
efforts seek to advance the ability of engineers to control and gauge 
the liquid rocket fuel in commercial communication satellites. A Purdue 
colleague's research into boiling and condensation processes, as used 
in refrigeration, is important to both expanding our spaceflight 
capabilities and to improving such systems on Earth.
    Many other researchers with different areas of interest are excited 
to use suborbital capabilities as well:

        Aeronomy and Mesospheric Science: Suborbital vehicles will be 
        able to reach an area of the atmosphere that was only 
        previously attainable through non-reusable and costly sounding 
        rockets. This portion of the atmosphere, too high for balloons 
        and too low for orbiting satellites, is sometimes called the 
        ``ignorosphere,'' and will now be accessible for in-situ high-
        altitude atmospheric research and to observe radiation from 
        solar or astronomical sources that is blocked by the lower 
        atmosphere.

        Human Physiology: The three to five minutes of microgravity 
        provided by suborbital vehicles, including transitions to and 
        from high-g's, could provide new insight for some kinds of 
        physiology research. In-situ monitoring may be available for 
        numerous parameters such as heart rate, cardiac stroke volume, 
        arterial blood pressure, oxygen saturation, regional blood 
        volume, brain activity, eye movements, and spacecraft reference 
        data. While enabling as much of the public as possible to have 
        a chance to fly to space, this research may also produce 
        insights on how to better research human conditions on the 
        ground.

        Fundamental Molecular Biology: One basic read-out of an 
        organism's response to environmental stimulus is the changes in 
        gene expression that the stimulus evokes. This response can be 
        very rapid, and the signal transduction and initiation of gene 
        expression can occur within minutes of perception. This type of 
        response at the molecular level has been characterized in the 
        stable, sustained microgravity environment of the space station 
        and Space Shuttle, but the gene expression profiles associated 
        with the transition from an environment with gravity to one 
        without has yet to be examined. Thus, molecular biology 
        experiments (which can be configured for rapid fixation by crew 
        or citizen scientist) conducted on suborbital vehicles 
        represents true, unexplored territory that can provide insight 
        into the fundamental processes that underlie the initiation of 
        novel stress responses.

        Fundamental Physics of Particle Interactions: Suborbital 
        flights offer sufficient time in microgravity to obtain 
        physically important results on the interactions of regolith, 
        dust and other small particles. The flexibility, re-flight 
        possibility and cost of reusable suborbital flights will allow 
        scientists to investigate the basic forces affecting a wide 
        array of granular materials in a host of environments with 
        applications to mining, pharmaceutical powders, food 
        processing, and the ceramics-bricks-cement industries.

        Pharmaceuticals: Through the study of protein structure and 
        function in the human body, scientists can better develop drugs 
        to interact with them, and create effective treatments. 
        Typically longer term exposure to micro-gravity is ideal for 
        protein crystal growth, but results have been obtained in 
        sounding rockets with an exposure of just 30 seconds to micro-
        gravity. Mitsubishi Heavy Industries is planning to use XCOR's 
        Lynx vehicle to perform drug discovery research on mice that 
        have already gone through multiple parabolic flights.

        Large Population Medical Research: The large population of 
        spaceflight participants with varying medical histories offers 
        new avenues for research. They will help scientists build a 
        database to compare the response to spaceflight of people of 
        varying levels of fitness, including smoking, alcohol use, 
        stress & behavior, BMI, high cholesterol, low cholesterol, and 
        physical inactivity. The effect of various medicines in 
        microgravity can also be studied among the broad population and 
        in specific subgroups.

    With the research that can be conducted on these platforms comes an 
equally large potential for discoveries, products, and markets. For 
example, I have worked with my University to organize funding that will 
allow Indiana companies access to a suborbital flight for industrial 
research.
    Of course, as with any scientific technique, much of the value of 
reusable suborbital flights may lie in areas that we do not anticipate. 
By opening up a new regime of research, we set the stage for 
discoveries that we cannot yet contemplate. Some scientists and policy-
makers portray reusable suborbital vehicles as less useful because they 
offer flights that are shorter than orbital flights, more expensive 
than parabolic aircraft, and that reach lower altitudes than 
traditional expendable sounding rockets. These are similar to the 
objections many had to the first desktop computers, which were slower 
and less powerful than mainframes of that era. Yet, a new way of 
operation allowed our desktop computers to become vital to everyday 
life, even as they shrunk over time to become the mobile device you 
carry today. Similarly, judging reusable suborbital by the standards of 
the current orbital, sounding rocket and aircraft paradigm is beside 
the point.
    These vehicles will create routine, cost-effective space access, an 
improvement over our current space transportation capabilities in a 
unique direction. Research, after all, is not a linear path from 
discovery to discovery, or about building an ideal high-precision 
experimental setup and measuring the results once. It is rather about 
exploring ideas, some likely to be fruitful and some improbable, and 
learning about and testing a wide array of phenomena. History teaches 
us of numerous accidental discoveries that led to great things. By 
accelerating the design, build, test, fly cycle that is at the center 
of space research, we allow researchers to explore far more 
intellectual space than they could otherwise approach.
STEM Opportunities
    Reusable suborbital vehicles offer exciting new opportunities for 
Science, Technology, Engineering, and Mathematics (STEM) education and 
public outreach. The American space program has been an inspiration to 
the generations that are building these vehicles and conducting 
research. Suborbital reusable vehicles have the capability to do the 
same for a new generation, by allowing orders of magnitude more 
students access to space. These vehicles, and the research and 
technology that will be conducted on them, will inspire the next-
generation of scientists and engineers and provide hands-on experience 
in the entire design-build-test process.
    At Purdue University, I created and teach today a hands-on team-
based project course for undergraduate students, ``Zero-Gravity Flight 
Experiments.'' In this course, student-led teams design and propose an 
experiment to fly on a parabolic aircraft flight campaign, run by NASA. 
Students experience the entire process from proposal through building, 
testing, and flying, to data analysis and reporting. In the past few 
years, through a partnership with Armadillo Aerospace, I was able to 
expand the scope of this class to reusable suborbital vehicles, and 
more recently, the International Space Station. Student teams are now 
learning to design and build, and then work with suborbital vehicle 
providers to integrate their payload. With new suborbital vehicles 
arriving soon, I see endless possibilities for students to get the kind 
of hands-on experience highly valued by employers and academics.
    Currently, space research is often limited by the dilatory cycle of 
launches--when one experiment finds a new phenomenon, the follow-up 
might take years to fly. The period from idea generation through grant 
application, experiment design, assembly and flight, can take more time 
than a graduate student spends in school. Because of this, many 
students only work on a small part of a larger project, a practice that 
does not lead smoothly to creating the next generation of principal 
investigators. Removing the wait to get on a space flight manifest 
allows students to conduct entire research projects and complete theses 
in space-based research within the time-frame of a degree. A 
surprisingly large number of the leaders in planetary science, 
astrophysics and other areas of NASA science, including the current 
Science Mission Directorate Associate Administrator John Grunsfeld, 
began their careers by leading small investigations on balloons and 
sounding rockets. Suborbital reusable flights offer a way to accelerate 
that process and give even more students the leadership experience that 
can be vital for further scientific success.
    However, university research and education is just the beginning--a 
much younger generation will be able reap the benefits of these 
vehicles as well. From flying class-built payloads to flying teachers 
themselves, a new curriculum to inspire kids to pursue jobs in STEM 
fields can be built around flights that take place during a semester or 
a school year. In a study done by Change the Equation last year, the 
number of STEM job openings outnumbered unemployed people by almost two 
to one in certain STEM areas. Senior alums in the aerospace industry 
speak to me of their aging work force. Last weekend Purdue graduated 
108 students with aerospace engineering Bachelor of Science degrees, 
and about 90 percent are already placed into jobs, graduate school, or 
military service. Our graduates are in demand. We all must utilize 
tools that can provide hands-on training and keep students interested 
in STEM topics and research if we are to keep our workforce 
competitive.
Conclusion
    As I look around the country, I see a new and uniquely American 
industry, featuring many of my best former students, making progress 
toward routine flights of participants and payloads. The rocket science 
they are doing does not always perform on schedule, for it is both 
novel and challenging, but the trend is clear. New vehicles are 
entering the market as operational research platforms soon and this 
will mark a new chapter for U.S. innovation, science, and exploration.
    I am honored to have had the opportunity to provide testimony for 
this hearing, and I look forward to answering any questions you have. 
The suborbital research community is excited about the possibilities 
reusable suborbital capabilities will bring to the table, and we 
believe that excitement will spread quickly to a broader community as 
we embark on this journey of discovery.

    Senator Nelson. Thank you all.
    Senator Cruz?
    Senator Cruz. Thank you, Mr. Chairman, and I thank each of 
the witnesses who testified today for your expertise and your 
illuminating comments.
    I want to begin by talking about the U.S. share of 
commercial launch right now. In 2012, as I understand it, there 
was roughly $2.4 billion in commercial launch revenues, and 
only about $108 million of that was attributed to the United 
States, and I'd like to ask each of the members of the panel 
why you believe that's the case and what can be done to 
increase the U.S. share of that business.
    Mr. Hale. Senator Cruz, I would offer for your 
consideration much of the difficulty in marketing U.S. launch 
systems abroad stems from the ITAR regulations which restrict 
the use of U.S. technology, for good reasons, to prevent 
missile technology from falling into the hands of foreign 
states that could use it for bad purposes. But what we have 
seen is that this caused other nations to develop their launch 
systems and, in fact, take away much of the business.
    I had an opportunity to travel to India for NASA in my last 
year there, and we talked with the Indian space agency 
officials, and they thanked us very profusely for ITAR because 
that prodded them to build their own indigenous launch 
vehicles, and they use them to launch satellites today, and 
they are commercially available, and we see that around the 
world.
    So I am not an expert on how to solve this regulatory 
problem, but I would offer for your consideration that that is 
a major factor in making U.S. satellite launches non-
competitive worldwide.
    Ms. Smith. Yes, Senator Cruz. Financing continues to be a 
barrier, a difficulty for companies who intend to do space 
launch, launch rockets. It has been and continues to be a 
problem. I think what Mr. Hale just said with regard to ITAR is 
a big one, although we are seeing some improvements in the 
export control area. But other launching states have taken full 
advantage of that by advertising a place to do ITAR-free 
launches of satellites, which works to the disadvantage of the 
U.S.
    This has much to do with why I so strongly recommended the 
continuation of indemnification. At a minimum of 10 years on a 
permanent basis would be excellent. I think that it is 
important for all of us to recognize that indemnification is 
the one thing that the U.S. industry has as it enters into 
negotiations for launch with other competing launching states, 
that it can say its government stands behind it in risk-sharing 
mode. It's not an automatic provision. It is a recommendation 
to Congress for an emergency appropriation above what is 
required by the company to purchase in terms of insurance, and 
it's a protection for the government.
    So I think that it will be really, really important for us 
to give as full consideration as possible to that, and that 
indemnification continue as a way of fostering the opportunity 
to increase market share.
    Captain Lopez-Alegria. Senator Cruz, I don't really have 
much substantive to add to the argument, but the observation is 
that this is a global marketplace, and to the extent that you 
can compete, you're going to be better at market share. So the 
things that Mr. Hale and Ms. Smith have identified, which are 
ITAR regulation or ITAR reform and an extension of 
indemnification to provide a more level playing field for our 
providers vis-a-vis the foreign competitors, I think is key.
    Mr. Collicott. Thank you, Senator Cruz. I don't work in 
that end of the business. I shouldn't speak as an expert here. 
I do speak to a lot of people and work with this in industry, 
and I would say that that exposure leads me to give you more 
confidence in what the other people have said.
    Senator Cruz. Very good, and let me ask a follow-up 
question, in particular Mr. Hale and Ms. Smith, which is what 
do you all see as the most significant legal or regulatory 
obstacles to the continued expansion of commercial launch 
operations?
    Mr. Hale. I would have to side with Ms. Smith that I think 
one of the greatest things that would be of benefit to this 
commercial enterprise is continued indemnification. The high 
cost of insurance and, frankly, the uncertainties in the 
American legal system are of great concern to investors, and as 
we look forward to private industry providing lower-cost launch 
systems that will be competitive in the world market, we must 
find a way to ensure that they are reasonably protected in 
these areas.
    Ms. Smith. Let me speak first to the question from the 
suborbital sector side. We have an oddity of sorts in the FAA 
in that we have a line of business that has statutory authority 
to license, regulate, and promote the U.S. commercial launch 
industry, responsible as a one-stop shop to do that licensing, 
regulating and promoting. We have hybrid launch vehicles, 
vehicles that have aviation elements as well as space elements.
    And the question is, as often arises in a regulatory agency 
where you have differing industries, who has responsibility 
when it is operating as anything other than a launch vehicle? I 
think that that is an issue that only Congress can resolve 
legislatively by amending the Act to make it clear that the 
reasoning, the motivation behind allocating that responsibility 
to the Office of Commercial Space Transportation still holds. 
It is very important to those launch operators in that it 
causes increased cost when they have to travel between two 
regulatory authorities. It could also cause inconsistencies 
when it comes to safety.
    This clarification is extremely important in order to 
further that industry and not delay its business plans and its 
launch plans as companies move forward to become a part of a 
full-fledged industry sector.
    I think that to the extent that commercial space has 
evolved over time, it's a cyclical industry. It has had several 
fits and starts, but it has continued with the passion and the 
intent to move forward to become 1 day a full-fledged line of 
transportation, a form of transportation.
    So I think to the extent that things like indemnification, 
things like resolving any regulatory tangles, continuing the 
opportunity through the flexibility that is allowed in the 
statute for these vehicle operators to test and develop, do 
more testing and development, collect sufficient data to move 
forward, is extremely important and one that I would encourage.
    Senator Cruz. Very good. Thank you, and thank you, Mr. 
Chairman.
    Senator Nelson. Thank you, Senator Cruz.
    I certainly agree with you all on indemnification. I had to 
get down on my knees and beg to finally get indemnification 
extended for just 1 year, and this is no way to run a railroad. 
Businesses can't plan on this. So we need a multi-year 
education--and I agree with you, Ms. Smith, that we need to 
have it much longer.
    Now, on ITAR, basically we've got a political problem. You 
need to do business in an ideal world, as you all say, in the 
international arena, but those who would do ill to the ideals 
and the policies of this country, you've just got to be 
realists about it. So as we plan our commercial space ventures, 
that's the reality of the world.
    I hope we can solve the insurance problem of 
indemnification with a multi-year extension, and do that in 
this upcoming NASA authorization bill. On saying that we are 
going to do business with somebody who is doing business with 
one of the political enemies of the United States is going to 
be a much harder task.
    Captain, you are so right on in pointing out the huge 
difference between Mach 3 and Mach 25. But right now, as you 
pointed out, the space tourism market is with regard to Mach 3, 
to get up to suborbit, have a few minutes of weightlessness, 
and then come right back. What kind of revenues do you see 
being generated from this space tourism kind of experience over 
the next few years?
    Captain Lopez-Alegria. Thanks, Chairman, for the question. 
I should refer you to a study that was done by the Tauri group 
that was released last year, commissioned by the FAA and by 
Space Florida. I think it came out last summer. If memory 
serves, there were some very, I would say, conservative 
assumptions predicted that the market over the next decade 
would be about $600 million. But that was, again, a pretty 
suppressed view. They had a growth scenario where the revenue 
was much, much higher than that.
    Now, that is for the entire suborbital industry, of which 
they determined that 80 percent or so was driven by tourism, 
about 10 percent by research, and the remaining 10 percent was 
divided into six different other, smaller markets.
    Senator Nelson. And so right now the cost for a tourist to 
go in one of these up to the edge of space where they can see 
the curvature of the Earth, a couple of minutes of zero-G and 
then return, the cost is what? A few hundred thousand dollars 
per seat?
    Captain Lopez-Alegria. I think the lowest price that I have 
seen is a little less than $100,000, and the high end is around 
$200,000.
    Senator Nelson. And so realistically over time, will that 
cost come down per seat?
    Captain Lopez-Alegria. Absolutely. I mean, I think the 
providers are counting on that, and this technology that I 
mentioned that XCOR demonstrated will make their vehicle be a 
lot like an airplane where you land it, the fuel is non-toxic, 
it is basically jet fuel. You put the hose on the airplane, you 
gas it up, and you go again. So they could fly several times a 
day, and clearly the more times you fly, the more you amortize 
your fixed costs, and the cost per seat will come down.
    Senator Nelson. So then it is realistic to expect that it's 
going to get to the point where universities could buy a seat 
to send Dr. Collicott's students.
    Captain Lopez-Alegria. I would point out that, in fact, 
they already have. Universities and other research groups have 
purchased some seats, and I would expect that only to increase 
as the price comes down, as you say.
    Senator Nelson. That's pretty exciting, isn't it, Dr. 
Collicott, that you might send your class to space, to the edge 
of space, go Mach 3, a couple of minutes of zero-G, and then 
come back?
    Mr. Collicott. Yes, it is, Chairman. It's no secret, Purdue 
has a downpayment on a spot on a Virgin Galactic science 
flight. I'm not going to fly. We are anticipating 200 pounds of 
automated payload to advance a high-tech Indiana industry. 
Certainly, when word got out, a large number of graduate 
students came to my office interested in the opportunity, and 
we even had good discussions with risk management at Purdue 
about the feasibility. It seemed to me that to them it was just 
a new technology to an old question. We need to go do research, 
we need to go do activities, whether it is research in 
Antarctica or wherever.
    So to me it was really reassuring that it's not entirely 
new news, and I do look forward to the day when a potential 
Ph.D. student walks into my office and says, well, Professor, I 
flew in space for my Master's degree; what do you have to 
offer?
    Senator Nelson. Well, maybe at that point we've got orbital 
hotels or laboratories that would enable a student to go into 
orbit by going Mach 25.
    But tell me, Ms. Smith, do you think that the FAA and NASA 
working together can handle all the regulations of this 
exploding potential new business of space tourism?
    Ms. Smith. That's a good question, Senator, Mr. Chairman, 
and I would say that absolutely, yes, making the distinction 
that the FAA is a regulatory agency. NASA is not. But 
certainly, NASA's experience in human spaceflight is 
tremendous. I don't think that the amount of experience, the 
lessons learned, the varied experience that NASA has exists 
anyplace else the way that it does in NASA.
    So the FAA right now, the Commercial Space Transportation 
Office, has had the majority of experience in dealing with 
commercial operators. That's its business and that's what it 
has been doing.
    Partnering with NASA going forward to launch members of the 
public to suborbital space and ultimately to space one day, 
orbital space, I think it is a natural kind of partnership that 
exists and will link itself together very, very closely as we 
go forward to actually have operational flights that take 
people to and from suborbit. So, yes, I do think so.
    Senator Nelson. By the way, one of you mentioned that the 
life of the International Space Station ought to be extended to 
its expected design life in the late 2020s, and I certainly 
agree. You remember when this thing started out, we had just 
gotten it put together, and it was going to cease to exist 
after 2016. We got that extended to 2020, and I'm hoping that 
as the Station starts to show its value, particularly with some 
of these promising new drugs that are being developed in their 
initial research stages, something that the average person on 
the street can identify with as to the value of what's 
happening on board the Space Station, I'm hoping that 
incentives like that will enable us, then, to go ahead in the 
authorization, to get it extended in its life.
    I want to ask Dr. Collicott, getting back to suborbital 
space, to what degree has your suborbital research 
opportunities encouraged your students to pursue careers in 
aerospace?
    Mr. Collicott. Thank you, Chairman. Certainly, they choose 
to come to our Department of Aeronautics and Astronautics 
because that is already in their mind. So what I think I see is 
that just when they get involved in these long-term, team-
based, multidisciplinary, hands-on original projects, I think 
they start to see how much good work they can do and their 
interactions with the companies, be it FAA or Spaceports or 
whomever, it really helps open their eyes to the industry, the 
reality of the industry they are heading into, and I think it 
gives them great encouragement that the great achievements in 
aerospace are within their reach, that they can be part of the 
teams that achieve these great things.
    So I see it as a great strengthening of their perhaps 
childhood dream or their childhood hope to get into aerospace.
    Senator Nelson. Do your students come to you thinking that 
the space program is over because of the mental image of the 
shutdown of the Space Shuttle?
    Mr. Collicott. I am very fortunate in my job at Purdue that 
many of our students, most of our students come in pretty well-
informed and are aware that NASA is still in business, we still 
fly Americans in space, the Space Station is still operational. 
It's really more of the thoughts that you mentioned. I really 
see it more as I'm going around town or around the country 
talking to the general public.
    Senator Nelson. Well, that is a fact, and what we are going 
to see is that as the Mars program starts to kick in, and we 
will start to see the first evidence of that next year as the 
Orion capsule is flight tested, then that awareness of the 
human space program will return. Then, of course, whenever we 
can get Americans flying on American vehicles up to the Space 
Station, combine that with what's happening on the surface of 
Mars right now, and I think you are going to begin to get a 
gradual re-recognition of America's role in space.
    Senator Cruz?
    Senator Cruz. Thank you, Mr. Chairman.
    I'd like to address a question primarily to Ms. Smith and 
Mr. Hale, but would welcome comments from any members of the 
panel.
    As you know, the FAA is currently under a moratorium on 
issuing regulations regarding certain aspects of commercial 
spaceflight. What I would like to ask you is if you can 
elaborate on your views as to the importance of that moratorium 
and whether it should be extended, and in what regards.
    Ms. Smith. Since I was at the FAA when the 2004 Act was 
first passed, we had a very, very clear sense then, and I think 
now, that even while the moratorium was in place, if we had an 
unfortunate circumstance, if we observed something that was not 
safe, then we would be obligated to step up our oversight, to 
begin regulating, to recommend to Congress that we take a 
different approach if that were to happen.
    In the interim, I think the reason for the moratorium was 
to allow the time for vehicle developers to test and develop, 
to continue to collect data, to try things to see if they work, 
all operating under the broad rubric of safety, which is the 
mantra in the commercial space launch industry.
    I think that things have not materialized as quickly as 
perhaps Congress contemplated at the time, and we have yet to 
have those first flights, operational flights taking people to 
and from suborbital space that would allow the collection of 
data.
    However, every one of the vehicle developers that are in 
this market are testing, collecting data all the time, testing 
and developing, and they continue to maintain a position that 
says that they will fly when they are ready to fly, not before. 
So I think to the extent that the moratorium would be extended, 
I would say 8 years beyond the first operational flight with 
humans on the vehicle.
    Mr. Hale. Senator Cruz, I'm mindful of the fact that the 
FAA does, in fact, provide regulations for suborbital flight 
today, but they are regulations to protect the public. So the 
FAA has an extensive licensing process to ensure that these 
suborbital operators are protecting the non-involved public and 
property, and that is a very important aspect of their work.
    The other aspect of this is that everyone recognizes that 
in these early days, that this is an experimental, high-risk 
situation, and the spaceflight participants, the space tourists 
if you will, that are going to participate in this need to be 
fully informed of the risks that are involved when they take on 
this high-risk endeavor.
    People in America today can take on many high-risk 
endeavors, backcountry skiing, scuba diving in certain places. 
There are all kinds of high-risk endeavors that the Federal 
Government does not regulate but to which we try to make sure 
the participants are fully informed of the hazards, and that I 
think is the basis for the current moratorium that these 
participants coming from fields, not first necessarily in 
aerospace, can be informed of what it is they are really 
signing up for and have informed consent. That is a very 
important part of the so-called moratorium.
    And the other part of it I think also is that the Federal 
Aviation Administration is struggling with exactly how to write 
regulations for this new industry, and some experience in 
watching how the industry performs would be very helpful to the 
FAA as they consider what regulations might be required. To go 
out and write regulations in advance of operations I think 
would be a very onerous thing to the industry and probably not 
efficient from the government standpoint.
    Senator Cruz. Thank you.
    Now I would like to ask a question of Captain Lopez-
Alegria, which is that many of the concerns that we hear about 
commercial space have to do with the prospects of actual 
markets that will be able to sustain private sector efforts 
over and above the provision of services to the government. Can 
you share your views regarding the potential commercial space 
markets outside of the U.S. Government?
    Captain Lopez-Alegria. Yes. May I just add on to what the--
--
    Senator Cruz. Absolutely, please.
    Captain Lopez-Alegria. First of all, I would agree with 
both Wayne and Patti about what they said. First of all, the 
FAA is certainly regulating third-party safety right now, and 
also the reason that this learning period was put into place 
was to allow industry to innovate so we wouldn't stifle things, 
cutoff solutions to technical problems before their time.
    But just from a philosophical standpoint, while I think 
eight years is a good number, which is a number that they 
picked in 2004, I wonder whether this industry needs to have 
that learning period removed, ever. I know that sounds a little 
drastic, but let me just walk you through that.
    So, as Wayne mentioned, scuba diving, bungee jumping, there 
are a lot of things that people do that most others would 
consider high risk, and I would be happy to see regulation in 
the commercial spaceflight industry when the commercial 
spaceflight industry looks like the commercial aviation 
industry. When it is that routine, when you can get on an 
airplane just like it's a taxi or any other mode of 
transportation, I think regulation is appropriate then. That, 
to me, seems a long way off.
    So I would just put out there as a stake in the ground that 
this is something that, as long as people can operate under 
informed consent and be well-informed of those risks, that we 
ought to let that work in that sort of more free and 
enterprising environment.
    So on the question of orbital markets----
    Senator Cruz. And can you elaborate for a bit more on the 
deleterious impact that you think it would have if the 
moratorium were to expire on a sooner timeframe?
    Captain Lopez-Alegria. I think there are two things. First, 
while the industry is still in development, the degree to which 
companies can choose to use a hybrid rocket motor or a liquid 
rocket motor or some other kind of rocket motor, they ought to 
be able to choose that and not have the FAA or anybody else 
say, ``You need to use a liquid rocket motor because that's 
what NASA has been using on their vehicles,'' or something like 
that. So one is the reduction of the set of options available 
to solve technical problems.
    And the second is that in the absence of regulation, people 
can exercise their own judgment to inform themselves of what 
the risks are, and I do want to mention that Mr. Hale is 
chairing our committee within the commercial spaceflight 
industry of developing standards, and one of the standards is 
to define exactly what that piece of paper should say that the 
customer spaceflight participant would have to read before he 
gets on the rocket and signs his informed consent.
    But to the extent that we have industries that have 
commerce based on people that are willing to do those things as 
long as they're informed, and that the government protect 
people who are not second parties to that, then I think it is 
more in keeping with our philosophy of free and open markets.
    Senator Cruz. OK. And if you had some comments on the 
additional----
    Captain Lopez-Alegria. Right. So, back to the orbit. I wish 
I could point to a study like the Tauri Group study on the 
suborbital side, and I can't. I will just make the following 
observation. I flew in 2006 with a so-called spaceflight 
participant, a tourist that went up to the ISS on a Soyuz seat, 
and I flew home in 2007 with another one that had flown up in 
the meantime, and every single excess Soyuz seat has been sold, 
with unsatisfied demand.
    So clearly, there is a market out there. Now, are there as 
many people that can pay that kind of price as can pay the 
suborbital price? Clearly not. But the idea is that once you 
start filling excess capacity with non-government, or at least 
non-U.S. Government so they can be sovereign government clients 
or they could be private research firms or they could be 
universities, or they could be just private citizens that could 
either take three of the seven seats that are on all of these 
commercial crew vehicles to the ISS, use the national lab 
facilities that are up there that are dedicated to private and 
academic research to come up with some ``Aha'' moment, decide 
that, hey, I'd like to be able to do this on a bigger scale, go 
contract with Bigelow, get an inflatable habitat, have your own 
transportation, that's how the market is going to start. I just 
can't say when.
    Senator Cruz. Very good. Thank you.
    Thank you, Mr. Chairman.
    Senator Nelson. Well, that was my question: When?
    Captain Lopez-Alegria. It's hard to--I think even the folks 
who did the suborbital market would say it's hard to predict 
markets that don't exist yet. But all I can say, like the 
famous movie quote, is I think the answer is build it and they 
will come.
    Mr. Hale. Senator Nelson, if I could just add on to that, 
it is imperative that we provide low-cost--or have the 
capability to have low-cost transportation to low-Earth orbit. 
We see a plethora of business opportunities that are proposed 
and discussed in serious matters in space, and they are all 
currently coming up against this cost of transportation to low-
Earth orbit. And if, in fact, we build this industry that 
provides much lower cost to low-Earth orbit, there are huge 
numbers of businesses out there that would like to take 
advantage of it.
    I think it's very difficult to put that in an academic 
study and qualify that in the ways that the folks like to see 
these things footnoted. But just from the amount of literature 
and the number of people that are proposing businesses in 
space, there is a huge demand for transportation. The question 
is how low can we make the cost for reliable and safe 
transportation, and I think American private enterprise, that's 
their mission, is to develop low-cost capabilities that make 
money.
    Senator Nelson. In your opening comments, you talked about 
how you could blend commercial space opportunities with NASA's 
plans for deep space exploration, and you stated you could get 
components and fuel and so forth up cheaper through the 
commercial space ventures, and that would supply, then, the 
NASA deep space ventures. Do you want to expand on that, or 
does anyone on the panel want to expand on that cooperation?
    Mr. Hale. Thank you for that question, Senator Nelson. I 
think it's very important to consider this opportunity. In the 
first part of my statement of commercial space supporting the 
deep space exploration initiatives that NASA has in their 
future is with the International Space Station. I mean, there 
are many people today that are anxious to go on long duration 
deep space missions, and that is clearly the future of where 
NASA is going to go because the government's role truly is to 
push back the frontier where probably the return on investment 
is a longer term than the business spreadsheets like for it to 
be.
    Those long duration missions require different kinds of 
technology than we have previously seen, but they're being 
tested and tried out today on the International Space Station. 
It doesn't sound very glamorous, but every time I read in the 
Space Station Report that the processor assembly has broken 
down and the crew has to go fix it, that's another step on the 
learning curve to building a good closed-loop environmental 
control system that you're going to need to go on a month-long 
mission to an asteroid or a three-year-long mission to Mars.
    Those kinds of technologies, even though we try to test 
them on the ground, they really aren't proven until they've 
flown in space and you get to see what an actual operation in 
space does to those engineering systems. That's vitally 
important.
    So keeping the International Space Station going as a test 
bed, supplying it with cargo and crews, vitally important, and 
that is exactly what the cargo resupply services contract is 
all about, that's exactly what the commercial crew program 
office is trying to provide.
    Having said that, there are many ways to explore deep 
space. The current plan that NASA is developing with the space 
launch system and the multi-purpose crew vehicle, the Orion 
capsule, I think are aimed toward those deep space 
opportunities. But every mission study that I have seen to go 
to the moon, to Mars, requires a huge amount of logistics. If 
you want to go back to do anything other than flags and 
footprints, you need logistics. I think it was General 
Schwarzkopf that said that armchair generals study tactics, and 
real Generals study logistics.
    Getting mass to low-Earth orbit is halfway to anywhere in 
the universe, and if we can supply equipment, fuel, even crews 
cheaply to low-Earth orbit, that has got to be a vital link in 
ensuring that whatever deep space capabilities we go from low-
Earth orbit in pursuit of, we have the material that we need to 
make them successful. So low-cost transportation enables all of 
that. That's what we're all about in the commercial space 
enterprises.
    Senator Nelson. I agree with you. Why do you think it's 
been so hard to change the mentality in our American space 
program to get to that point that eventually that's what will 
happen? The commercial program will collaborate, supplement, 
enhance the NASA deep space program. Why has it been so hard to 
get there?
    Mr. Hale. People in my generation grew up with Apollo, 
Senator, and that has been our model for how space exploration 
should be done. And the situation and the world geopolitics in 
the 1960s, that was the only way to carry out such a model. 
That could work today, but it would require a huge expenditure 
of taxpayer money. I'm sure that given 4 or 5 percent of the 
Federal budget, NASA could completely do that job.
    But knowing that the United States consensus on how much of 
their national treasure we are willing to devote to space 
exploration is about one-half of 1 percent of the Federal 
budget--that's the consensus; that's where it's been for more 
than two decades--we need to see how we can leverage that to do 
those great things, and it can't all be done by NASA. It's 
going to take commercial advocacy, commercial efforts.
    You know, most of the immigrants that came to the United 
States did not come--some of them did for political or 
religious reasons, but most people came here to make money, for 
economic reasons. And having an economic reason to go into 
space will become a self-igniting source of future development 
and transportation. The United States Government buys airline 
tickets to fly people around. It does not operate their own 
airline, by and large, so on and so forth. That's the way space 
exploration, space travel needs to evolve as well.
    Senator Nelson. Anybody else want to comment on that? The 
question is why has it been so hard for the American space 
program to change to accept the fact that the commercial space 
program can be complementary to deep space exploration?
    Ms. Smith. I think that for many, many years, since the 
Commercial Space Launch Act of 1984, space was seen by many 
people who were not as passionate as we all are, we space 
enthusiasts and committed people to the evolution of this 
industry, many people simply did not think that it would 
happen. They saw space as in the domain of the Government 
exclusively and did not understand the role of private 
enterprise in fostering the goals of space.
    I think from that point, it often goes to where we sit is 
what we know. So NASA, as the vanguard of space for the 
country, the agency principally responsible for space 
exploration, continued to feel that, and enjoy a reputation as 
it does now, as the premiere agency for space. I can tell you 
that even though the FAA was solely responsible for commercial 
space transportation, any time a rocket launched, people 
associated it with NASA.
    That has changed over time. That is changing every day. And 
I think that the kind of partnership that NASA has helped 
foster with the commercial industry through Space Act 
agreements, the CCIPT program, those things will continue to 
represent to the American public what is possible through 
commercial space transportation as the government helps enable 
that.
    So I think that is a part of the reason. I think another 
part of the reason is that people just simply hadn't seen it. 
Something changed in the landscape in 2004 with the launch of 
SpaceShipOne. Standing there at the flight line, looking at 
people who had traveled there from all over the country and the 
world to see this historic flight, to witness it, to be a part 
of it, as many of them had when the first Shuttle launch took 
place, was an astounding thing to see, and people then saw that 
as a real possibility, that we can do this commercially, that 
we can contribute to the nation's space story in a viable way.
    So I think as we go forward and as commercial space becomes 
more a reality, meeting NASA requirements in terms of crew and 
cargo to the ISS, spawning other destinations in space, 
inflatables like Bigelow Aerospace; I think that what some 
perceive as a ``space gap,'' that reason for not moving as 
quickly as we could have will change.
    Senator Nelson. Anybody else?
    [No response.]
    Senator Nelson. Well, of course, one of the questions that 
Senator Cruz and I have to deal with as we get ready for this 
NASA authorization bill is the continued amount of money that 
will go into the commercial crew program. And, of course, I 
think the atmosphere is getting better because of the successes 
that we've seen, the successes that we've seen with regard to 
the commercial rockets and the commercial cargo. But in the 
past, it sure has been difficult to get people to recognize 
what a lot of you all are talking about.
    Any closing comments from any of you all?
    [No response.]
    Senator Nelson. Well, it's been most illuminating. Thank 
you.
    The meeting is adjourned.
    [Whereupon, at 11:23 a.m., the hearing was adjourned.]
                            A P P E N D I X

    Response to Written Questions Submitted by Hon. Bill Nelson to 
                           N. Wayne Hale, Jr.
    Question 1. Your written testimony implies that decreasing funding 
for spacecraft development ultimately results in less reliable and more 
expensive services in the future. Based on your experience with the 
Shuttle program, how might budget cuts in the Commercial Crew Program 
increase future costs?
    Answer. A well run and effective development program starts with 
requirements and promptly develops a resource loaded schedule which can 
be optimized to ensure the design and development proceeds as 
efficiently as possible and which ensures the vehicle meets all 
requirements.
    When annual budgets are lowered, frequently there is pressure to 
decrease the emphasis to meet all requirements resulting in a final 
design which is more or less deficient from the original intent.
    More often, decreased annual budgets stretch out the design and 
development phase meaning that the workforce stays assigned to the 
project for a longer time than anticipated which drives up the overall 
cost. Along with the schedule delay, the work must be replanned and 
rephrased which can lead to inefficiencies, again increasing total 
program cost. And there is always the risk during a replanning process 
that significant items might be inadvertently dropped again ultimately 
leading to a design which lacks some of the features desired in the 
initial requirements.
    In almost every case when annual budgets are decreased, there is 
increased pressure to eliminate engineering tests and analysis in the 
near term. Without those tests and analysis--or even if they are 
delayed--design solutions which ultimately are found to be unworkable 
are pursued in the interim, again resulting in overall waste and 
increasing program cost.
    In extreme cases, reduction in annual budgets cause reductions in 
the safety workforce which means that less reliable or less safe design 
solutions come to fruition and cannot be re-engineered to meet higher 
reliability or safety goals. A principle example from the Space Shuttle 
development was the decision early on--partially due to the development 
budget cap--not to provide crew escape provisions. All efforts later in 
the program (e.g., post-Challenger) provided mere band aide solutions 
because the basic design was not amenable to a comprehensive crew 
escape solution.
    Continuing the Space Shuttle analogy, the budget development cap in 
the 1970s required the early design to be more costly per launch to 
stay within the cap. A more generous investment at the outset could 
easily have paid for itself in a vehicle which was less costly per 
launch: for example by providing for liquid fueled boosters--more 
costly to develop but less costly per launch than the solid rocket 
boosters which were selected.

    Question 2. In your testimony, you mention having witnessed the 
negative effects of bureaucratic inefficiency and of shifting 
priorities on the Shuttle program. Based on this experience, what 
lessons learned should be applied in developing both government and 
private sector space transportation?
    Answer. The Space Shuttle was developed as a government-led 
activity; in actuality government civil servants made all the critical 
decisions regarding design options, development testing, and operating 
procedures. While the NASA civil service human spaceflight workforce 
was very talented and highly motivated, it became increasingly 
bureaucratic over time. Even minor decision required multiple board 
presentations and could be tagged by technical authorities for further 
review. This greatly impacted program schedules.
    Additionally, technical authorities increasingly became more 
conservative requiring extraordinary proof in many instances that 
commonly accepted practices in the aerospace industry were adequate. 
The technical authorities, at times, were only lightly motivated to 
actually operate the vehicles and were highly motivated to ensure that 
no untoward events occurred on their watch. There is always a balance 
of risk and reward when operating a highly complex, high performance 
vehicle, and in many cases the balance tilted strongly toward 
additional safeguards. Much of this was of little added value. While 
safety is always the primary consideration in any operation, addition 
of analysis and testing which did not add value to the process 
frequently caused delays and increased cost.
    The Space Shuttle program was burdened with widely changing 
requirements; initially built to replace virtually all expendable U.S. 
launchers, flying secure payloads for the national security community, 
etc., it was restricted from commercial launches and also from most 
security payloads. Considerable expense to develop launch capability 
for polar flights from West Coast launch sites was wasted. The 
potential to recoup money from commercial launches was eliminated. It 
should also be noted that moving from Space Station Freedom 
construction in a low inclination orbit to the building of the ISS in a 
high inclination orbit caused significant redesign and rework of the 
shuttle elements to achieve that geopolitically motivated goal. All of 
these decisions were made for good reasons but the result was increased 
cost and inefficiency vs. the original design intent of the Space 
Shuttle.
    Commercial crew transportation is being developed with the intent 
to be widely capable of various missions and the government needs to be 
very careful not to restrict those capabilities by onerous and 
restrictive requirements.

    Question 3. In your estimation, what steps should NASA take to 
minimize any long-term increases in the cost per seat of private sector 
transportation to ISS?
    Answer. The single most effective way to insure low cost 
transportation of government crews to the International Space Station 
is to allow for the development of a robust transportation industry to 
low-Earth orbit. If commercial crew transportation business is limited 
to merely supplying the International Space Station, the costs will be 
high and probably escalate over time. If the government, through the 
commercial crew program, provides the impetus for a vibrant new 
industry then costs will be low and probably decrease over time.
    Developing a vibrant commercial crew transportation industry 
requires nuanced incentives from the government. Already the seed money 
for the program is allowing development of new vehicles. A light hand 
regarding early regulation is required for the developing industry to 
grow. Over burdening requirements can stifle development. Currently the 
NASA 1100 series of requirements for commercial crew is vastly more 
restrictive than what was envisioned at the start of the program. Those 
documents represent much of the old school of thinking in the NASA 
civil service workforce and have already suppressed innovative design 
solutions to some degree. Using the NASA requirements documents as a 
basis for FAA regulations, for example, would prove fatal to the 
fledgling industry and must be avoided.
    Space transportation is a high risk activity and must be recognized 
for what it is. No amount of government restriction, requirement, or 
regulation will make it as safe as commercial air transportation in the 
near term and that fact must be recognized. Over time, with increased 
commercial success, increasing standards and gradual government 
regulation can improve safety; but the important element to improve 
safety and efficiency is to allow multiple commercial organizations to 
build multiple innovative vehicles to mature the state of practice in 
the engineering which will underlie the new industry.

    Question 4. Given the technical differences between sub-orbital and 
orbital spaceflight, what policy differentiations should Congress 
consider when amending the Commercial Space Launch Act?
    Answer. The suborbital market is nearer to commercial success in 
terms of space tourism and short duration microgravity research. The 
costs are much lower for suborbital spaceflight than for orbital 
spaceflight. Ultimately, orbital spaceflight has much higher potential 
for both tourism and research but the costs must be significantly 
lowered which will be a long-term proposition.
    The energies involved and the hazard potential of orbital 
spaceflight are significantly greater than suborbital spaceflight. 
Protection of the public requires much greater attention for orbital 
vehicles than for suborbital ones.
    Neither industry--commercial suborbital space or commercial orbital 
space--has yet had commercial success. At the current time, the light 
hand that is levied by the FAA on both types of commercial space access 
is appropriate and should be continued until the industries reach a 
level of commercial viability.
    Given the relatively low cost of entry for suborbital spaceflight, 
it is still of great concern for the success of the industry that the 
government not act to increase those costs. When multiple vehicles are 
flying with commercial success, it may be appropriate to increase 
government oversight. At the current time, however, no increased 
scrutiny is necessary.
    Orbital spaceflight due to the potential for more hazard, will 
require an increased level of government activity. However, given the 
already significant costs of orbital spaceflight, the government can 
achieve safety goals that only increase launch costs incrementally. 
Again, current levels of FAA regulation appear appropriate.

    Question 5. In your estimation, should sub-orbital space flight be 
regulated as aviation or as a space endeavor? What technical and policy 
considerations lead to this conclusion?
    Answer. Suborbital spaceflight is much more technically challenging 
than commercial aviation. Until a basis for the industry is 
established, additional regulation will be counter productive.
    During the early years of aviation, when safety was low by today's 
standards, the greatest increase in safe practices and designs came 
from the development of multiple vehicles and their operation. Learning 
proceeded from practice. Government regulation followed.
    Today's government safety regulations on commercial air travel are 
entirely justified for a mature industry. That same level of regulation 
cannot be appropriately developed for commercial suborbital space 
travel because the body of practice has not developed to an equivalent 
level. Establishing new government regulation for the suborbital 
spaceflight enterprise would be speculative based on aircraft practices 
which are not readily correlated. New regulations at this stage could 
be counterproductive to safety. New regulations at this stage would 
certainly inhibit the establishment of an industry.
    In summary, the state of engineering practice for suborbital 
spaceflight is not mature enough to delineate new government 
regulations. It is only through the practice of developing new vehicles 
and testing them through operations that such practices will develop. 
After those practices develop, as they have in other mature industries, 
appropriate regulation becomes possible.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                           Patti Grace Smith
    Question 1. Given the technical differences between sub-orbital and 
orbital spaceflight, what policy differentiations should Congress 
consider when amending the Commercial Space Launch Act?
    Answer. Certainly no one would argue that the challenge is not 
greater when considering the operations of an orbital vehicle versus a 
suborbital one. If the vehicle is designed to carry humans, for certain 
additional safety requirements will need to be required. The 
Experimental Permit provision of the CSLA of 2004 is a great benchmark 
for the development of both suborbital and orbital vehicles that plan 
to carry humans to and from space.
    For both suborbital and orbital flights, I would recommend cross-
waivers among all parties be included in the license for the launch 
activity. Congress should clearly assert that only Federal courts may 
decide legal cases regarding an element of the Federal license, 
including the legal validity of any waiver of claims signed by a 
spaceflight participant, once the participant has acknowledged that he 
or she is aware of the risks and decides to go anyway.
    Requirements for orbital flight are known throughout NASA's 100 
series of documents and SSP 50808. SSP 50808 was established as the 
standard for any ISS mission. Further commercial crew development will 
be at Critical Design Review level by the time of phase II of the 
CCiCap program--and therefore key design requirements should already be 
known and understood. For NASA crew flights, a legislative 
clarification is necessary to ensure indemnification is applicable for 
these flights, whether through NASA Authorization or an FAA-issued 
license.

    Question 2. In your estimation, should suborbital spaceflight be 
regulated as aviation or as a space endeavor? What technical and policy 
considerations lead to this conclusion?
    Answer. Suborbital spaceflight should be regulated as a space 
endeavor. There is no one-to-one comparison between air and space, 
though similarities do exist. However, space flight is a unique 
enterprise.
    As legislation has evolved over time, it has acknowledged the 
evolutionary nature of space. It has allowed for a regulatory approach 
that has recognized its uniqueness, rather than risk the tendency to 
over-regulate before it really gets off the ground. Clearly, this 
approach has given commercial space the opportunity it has needed 
without compromising the safety of the uninvolved public. It has never 
had to call upon its risk-sharing regime, indemnification, given that 
there have been no accidents that resulted in loss of life or 
significant property damage.
    The beginning days of aviation saw many accidents as it developed 
into the mature industry it is today. Space is growing and evolving and 
will one day join the ranks of mature transportation. But until that 
time, Congress should continue to support the one-stop shop approach 
the industry has enjoyed with the passage of the CSLA of 1984. FAA/AST 
should be designated as that one stop within the FAA where commercial 
space launches and launch related activities begin and end. The FAA is 
well equipped with numerous other resources AST can collaborate with to 
arrive at the right solution. That end solution should be the sole 
responsibility of AST. To allow a ``dual license'' approach, e.g., AST 
and AVS, places increased burdens on the limited resources of 
entrepreneurial companies and is likely to result in unintended 
consequences. Perhaps most importantly, managing to two regulatory 
regimes for nearly similar operation risks introduces inconsistencies 
and gaps between regulations which could impact safety.
    Areas in need of specific CSLA language modifications:

   Recommend CSLA language be modified to specifically include 
        spaceflight participants in third party indemnification.

   Recommend a legislative clarification to ensure 
        indemnification is applicable to NASA crewed flights.

   Recommend Congress adopt the definition of ``hybrid Launch 
        vehicle'' as a system designed for the purpose of placing 
        payloads or humans on suborbital or orbital space trajectories. 
        Vehicle type and production certification is prohibitive in 
        terms of cost and vehicle performance, as these hybrid launch 
        systems are designed to carry payloads into space.

    Question 3. Currently, the FCC has limited authority to regulate 
on-orbit activities while the FAA does not, which means that companies 
must often work with multiple agencies to obtain the licenses they need 
to launch and test spacecraft. How might the Federal government bring 
these various functions together to ensure safe future operations while 
making it easier for companies to fly?
    Answer. Currently, I am not aware of the absence of ``on-orbit'' 
authority being an impediment to commercial space flight. The DOT/FAA's 
Commercial Space Advisory Committee (COMSTAC) in responding to a 
question as to whether there was a need for on-orbit authority, stated 
the following: ``A need for on-orbit authority was identified in order 
to facilitate space traffic coordination. No other justification was 
identified for such on-orbit authority by this group at this time''. I 
concur with their finding and believe that it is an area that should 
continue to be studied and that COMSTAC is the appropriate entity to do 
so.
    As far as the FCC is concerned, I believe that their statutory 
authority has to do with communications, not transportation. 
Transportation issues and regulations are best left to the DOT, and in 
this case, the FAA.

    Question 4. The Commercial Space Launch Act tasks the Department of 
Transportation with both regulating and promoting commercial space 
transportation activity. The Federal Aviation Administration had 
similar direction for the aviation industry. Is this dual role 
appropriate for the FAA Office of Commercial Space Transportation?
    Answer. Absolutely. The FAA/AST has done a superb job in keeping 
the two roles de-conflicted. While the office does an admirable job in 
promoting the commercial space industry, it does so without 
compromising its safety related, regulatory, responsibilities.

    Question 5. How, if at all, would you suggest that Congress alter 
these responsibilities when considering new legislation?
    Answer. I see no need to alter these responsibilities at this time.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                     Captain Michael Lopez-Alegria
    Question 1. Your testimony states that the commercial industry's 
success has been based on ``the tremendous support that NASA has 
provided in developing and providing technologies.'' Congress has 
supported NASA's Commercial Crew Program by increasing the budgetary 
commitment from $50 million in 2009 to over $500 million today. What 
are some specific achievements that have resulted from this 
collaboration? How would you characterize the economic impact of the 
private space transportation industry?
    Answer. The Commercial Crew Program is now about halfway through 
its development stage, with three companies finalizing their design and 
building hardware for systems that can transport astronauts, NASA and 
private, to the International Space Station and other destinations in 
low-Earth orbit. Each of the companies has passed vital milestones, 
including testing components and subsystems and passing design reviews. 
In parallel with these development efforts, NASA and its industry 
partner companies are certifying the vehicles to carry astronauts, a 
safety process that has never before been undertaken.
    The commercial spaceflight industry has over $2 billion in private 
investment, and has created many thousands of high-tech jobs across the 
country. It has energized our nation's space enterprise and inspired 
the next generation of scientists, engineers, explorers and 
entrepreneurs. It is providing new, more affordable opportunities for 
scientific and industrial research, information technology innovation 
and new space-related goods and services yet to be imagined. I believe 
that commercial spaceflight will continue to grow in capability and 
beneficial economic impact, and secure America's place as the world 
leader in space.

    Question 2. Given that any single private space transportation 
catastrophe would negatively affect the whole industry, establishing 
guidance for safety and mission assurance is critical. What are the 
major areas requiring standards development? By what process will the 
Commercial Spaceflight Federation seek to address them? What is the 
Commercial Spaceflight Federation's timeline for reaching consensus on 
voluntary safety standards for commercial human space flight?
    Answer. The commercial spaceflight industry considers safety a 
critical priority, knowing that our customers, both private and 
government, expect and deserve the safest, most capable vehicles 
possible. We are committed as an industry to achieving ever-increasing 
levels of safety as we continue to innovate and grow.
    Standards development is an important part of CSF's efforts to 
improve safety. We have created a formal process for approving 
standards and have five standards currently in various stages of that 
process. Our full membership will be voting on approval of our first 
official standard shortly. We are working not only with the FAA's 
Office of Commercial Space Transportation, but also the National 
Institute of Standards and Technology, as well as other established 
standards bodies, to ensure that our process is effective and 
appropriate.
    The spaceflight environment is inherently dangerous, and different 
vehicle developers may attempt to deal with those dangers in different 
ways. Innovation in safety systems is also an important determinant of 
future safety. Therefore, we are beginning with areas in which 
standards can have broad applicability, including propellant handling, 
test notification procedures and landing gear. As the Committee is 
aware, we have actively consulted with the FAA on further high-priority 
topics for standards development, based on their data and experience. 
Going forward, we expect the typical standard to be developed over the 
course of three to six months and for standards to be updated as 
needed.
    Many industries only develop standards once they have emerged fully 
and have a track record of operations on which to base them. Because 
our members' companies are in an inherently dangerous business and 
because of the public nature of much of what they do, we have begun our 
standards development process now, before the first flights for hire of 
manned commercial space vehicles, and expect to continue it in parallel 
as our industry evolves.
    The reality is that due to the very nature of the business, and 
despite our commitment to safety, there will be accidents. Our goal, 
which I know is shared by the Committee, is to anticipate and avoid 
problems as well as we can, learn from our mistakes (small as well as 
large) that we do make, and continuously improve safety throughout the 
industry, for all of our customers--private and government.

    Question 3. Given the technical differences between sub-orbital and 
orbital spaceflight, what policy differentiations should Congress 
consider when amending the Commercial Space Launch Act?
    Answer. Although there are clearly some policy issues that impact 
suborbital and orbital spaceflight differently, we do not currently see 
a need to treat vehicles differently under the Commercial Space Launch 
Act.

    Question 4. In your estimation, should sub-orbital space flight be 
regulated as aviation or as a space endeavor? What technical and policy 
considerations lead to this conclusion?
    Answer. We believe that suborbital spaceflight should generally be 
regulated as spaceflight, because to do otherwise would a detriment to 
both aviation and spaceflight regulation. Suborbital spacecraft are 
different in character and function from commercial or private aircraft 
and will not initially be as safe as certified aircraft due to the 
maturity of the technologies, the flight environment in which they 
operate, and limited history of suborbital operations. The Commercial 
Space Launch Act appropriately classifies suborbital launches as space 
launches and the paying customers aboard as spaceflight participants, 
not passengers. To do otherwise would improperly burden an emerging 
industry with regulations designed for a mature one and could mislead 
the public as to the overall safety of spaceflight.
    However, there are certain aspects of spaceflight in which the 
appropriate regulatory regime is very similar to aircraft. For example, 
suborbital spacecraft will need access to airspace, much like aircraft, 
and access to communications frequencies used by air traffic control to 
operate safely in the airspace. These issues are currently resolved 
effectively through local, regional and national authorities 
responsible for their use, including the Federal Communications 
Commission and appropriate portions of the FAA.

    Question 5. In 1995, the Office of Commercial Space Transportation 
was transferred from the Secretary of Transportation to the FAA. Do you 
feel this is the proper location for this Office?
    Answer. CSF does not currently have a position on this question. I 
would note for the record that this transfer was taken by 
administrative action and not an Act of Congress, and that the 
Secretary still retains the statutory authority and responsibility to 
regulate and promote our industry.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                        Dr. Steven H. Collicott
    Question 1. Drawing on your extensive experience working with NASA, 
how would you describe the role of the NASA Flight Opportunities 
Program in promoting the suborbital research market? Would you suggest 
any program changes to facilitate more research?
    Answer. Thank you, Senator, for the question. There are two parts 
to this question, and I'll address these parts in order.
    I see the NASA Flight Opportunities Program as having several roles 
in promoting the suborbital research market. In one sense, NASA FOP is 
aiding the growth of the industry by serving as a dependable initial 
customer of research flights. It is nice that they are not the only 
customer, and it is great that they are the dominant multi-year 
customer. This aids in bringing stability to the new privately-funded 
industry and to the marketplace, which benefits all researchers and 
American industry and jobs. Another role that NASA FOP is playing is 
that of making researchers aware of the research opportunities in this 
emerging U.S. industry. Through their Announcements of Flight 
Opportunities, broadcast effectively through NSPIRES and e-mails, the 
research community sees NASA FOP demonstrating leadership in research. 
Thus, I see that NASA FOP is advancing space flight technology and is 
aiding the sub-orbital industry in cost-effective ways.
    To date, NASA FOP has concentrated on advancing space flight 
technology by buying flights, which is a great start. Researchers hope 
this initial program will rapidly grow into a broader mix of NASA-
funded technology and science missions to address NASA's unique needs 
in both science and technology issues. Keep in mind that no other 
agency is going to spend their money to address NASA's needs.
    The second part of the question opens up the topic of the 
continuation and future of FOP. I advocate for increased and broadened 
funding for the use of these vehicles by many programs within NASA. 
Why? Why should NASA spend money in this area? The answer is because 
this emerging industry provides a product that is ideal for advancing 
many scientific and technological programs important to NASA's mission 
and there is no other cost effective option. It's a simple business 
case; it's not scientists looking for a handout.
    Programs throughout NASA can collaborate with FOP to advance 
science and technology and drive NASA towards mission successes. For 
example, expert researchers I talk to would see the following, in no 
certain order:

   Basic research experiments on granular mechanics in micro-
        g--asteroid surface-related microgravity geology. This will 
        lead to understanding the geologic properties and processes of 
        the surfaces of small near-Earth asteroids. This will support 
        NASA's interests in robotic and human exploration of asteroids 
        and the development of techniques and technologies for 
        protecting Earth from the impact of hazardous near-Earth 
        asteroids. Coordinating science funding for hardware and 
        personnel with FOP flights will be a powerful step.

   Many aspects of capillary fluid dynamics affect life on 
        Earth and space plus spaceflight technology. Partnering of the 
        Space Life and Physical Sciences Research and Applications 
        Division with Flight Opportunities Program would create a means 
        to fund the research and the early-technology development 
        required for success in future space exploration and with 
        beneficial spin-offs to Earth-bound topics like micro-devices, 
        fuel cells, and miniaturized medical instruments. Presently 
        funding for such experiments is exceedingly limited and neither 
        the research nor the experiment hardware is funded by FOP. 
        Rapid development of experiments much cheaper than ISS 
        experiments will be enabled by such collaborations and will 
        benefit both NASA and life on Earth.

   As mentioned in earlier testimony, research into the 
        Mesosphere and lower Thermosphere of our own atmosphere can 
        benefit tremendously through the cost-effective use of these 
        new vehicles. These flights will be frequent and will be higher 
        than any balloon and lower than any satellite, and thus, the 
        obvious choice for lofting many different instruments 
        repeatedly into the mesosphere and lower thermosphere. Initial 
        efforts should include: measurements of the chemistry of the 
        mesopause region around 90km altitude to determine isotopic 
        composition and changes in gases such as CO2 and 
        hydrogen compounds, studies of the energetics of the mesopause 
        region, particularly radiative transfer involving 
        CO2, and investigations of winds and densities in 
        the mesosphere and thermosphere using both in-situ and remote 
        sensing methods. Experts at several NASA bases study various 
        parts of the atmosphere, so it is not clear to me, an outsider, 
        which people in NASA are best to lead this important effort.

   A basic read-out of an organism's response to its 
        environment is the changes in gene expression that the stimulus 
        evokes. This response can be very rapid, and the signal 
        transduction and initiation of gene expression can occur within 
        minutes of perception. This type of response at the molecular 
        level has been characterized in the stable, sustained 
        microgravity environment of the space station and Space 
        Shuttle, but the gene expression profiles associated with the 
        transition from an environment with gravity to one without has 
        yet to be examined. Thus, molecular biology experiments 
        conducted on suborbital vehicles represents true, unexplored 
        territory that can provide insight into the fundamental 
        processes that underlie the initiation of novel stress 
        responses. The funding of fundamental science leads to the 
        development of new insights and technologies that drives 
        everything from pharmaceutical development to agricultural 
        advancements. This application of suborbital vehicles enhances 
        the success rate, and decreases the cost of deploying 
        experiments to the ISS, and is a hugely valuable tool for 
        enhanced science return in the space biology research 
        community. It is also a valuable tool in the support of 
        Florida's prominence in the spaceflight and space tourism 
        industry. Kennedy Space Center is expanding their services to 
        potentially include a suborbital provide and already caters to 
        researchers and tourists who wish to use high performance 
        aircraft to vet the hardware, science and people prior 
        suborbital vehicle deployment

    I also want to emphasize that not just NASA but also NSF, FAA, DoD, 
DoE, NIST, NOAA, DARPA, etc. should be looking now for how to exploit 
this new U.S. flight capability to uniquely and powerfully advance our 
Nation's science capabilities and their own programs. In the years 
ahead, NASA will be one customer of the new industry, not because it is 
in any way obligated to be a customer, but because the industry 
provides a product that NASA needs to address science and technology in 
a way to deliver on NASA's mission. The other agencies, plus other 
industries and educational entities, will also be customers for the 
same reason. This I see as the future of NASA involvement in the U.S. 
commercial sub-orbital industry. Is it best for this to be achieved 
through FOP, an evolved FOP, new programs, or standard purchasing 
methods as for other products and services NASA needs? That's not 
something I'm an expert in, so I can't say, but I will be pleased to 
work with NASA in any of these ways.
    I thank you for the opportunity to answer this important question 
at length and I appreciate your interest in what a growing community of 
researchers see as an important part of NANSA's future.

                                  
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