[Senate Hearing 113-596]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 113-596
 
                          ASSURED ACCESS TO SPACE

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

                               JOINT HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON STRATEGIC FORCES

                                 OF THE

                    COMMITTEE ON ARMED SERVICES AND
           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 16, 2014

                               __________

         Printed for the use of the Committee on Armed Services
         
         
         
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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
BILL NELSON, Florida                 JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri           JEFF SESSIONS, Alabama
MARK UDALL, Colorado                 SAXBY CHAMBLISS, Georgia
KAY R. HAGAN, North Carolina         ROGER F. WICKER, Mississippi
JOE MANCHIN III, West Virginia       KELLY AYOTTE, New Hampshire
JEANNE SHAHEEN, New Hampshire        DEB FISCHER, Nebraska
KIRSTEN E. GILLIBRAND, New York      LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut      DAVID VITTER, Louisiana
JOE DONNELLY, Indiana                ROY BLUNT, Missouri
MAZIE K. HIRONO, Hawaii              MIKE LEE, Utah
TIM KAINE, Virginia                  TED CRUZ, Texas
ANGUS KING, Maine

                    Peter K. Levine, Staff Director

                John A. Bonsell, Minority Staff Director

                                 ______

                    Subcommittee on Strategic Forces

                     MARK UDALL, Colorado, Chairman

JACK REED, Rhode Island              JEFF SESSIONS, Alabama
CLAIRE McCASKILL, Missouri           DEB FISCHER, Nebraska
JOE DONNELLY, Indiana                DAVID VITTER, Louisiana
ANGUS KING, Maine                    MIKE LEE, Utah

                                 ______

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

            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
MARK PRYOR, Arkansas                 MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri           KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota             DEAN HELLER, Nevada
MARK BEGICH, Alaska                  DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut      TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii                 TED CRUZ, Texas
EDWARD MARKEY, Massachusetts         DEB FISCHER, Nebraska
CORY BOOKER, New Jersey              RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana

                    Ellen L. Doneski, 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

                                  (ii)

  

                            C O N T E N T S

                               __________

                             july 16, 2014

                                                                   Page

Assured Access to Space..........................................     1

Estevez, Hon. Alan F., Principal Deputy Under Secretary of 
  Defense for Acquisition, Technology, and Logistics.............     5
Shelton, Gen. William L., USAF, Commander, Air Force Space 
  Command........................................................     9
Lightfoot, Robert M., Jr., Associate Administrator, National 
  Aeronautics and Space Administration...........................    12
Chaplain, Cristina T., Director, Acquisition and Sourcing 
  Management, Government Accountability Office...................    15
Mitchell, Maj. Gen. Howard J., USAF (Ret.), Vice President, 
  Program Assessments, The Aerospace Corporation.................    20
Dumbacher, Daniel L., Professor of Practice, Department of 
  Aeronautics and Aerospace Engineering, Purdue University.......    22
Kim, Dr. Yool, Senior Engineer, The Rand Corporation.............    25
Questions for the Record.........................................    56

                                 (iii)


                        ASSURED ACCESS TO SPACE

                              ----------                              


                        WEDNESDAY, JULY 16, 2014

                       U.S. Senate,        
      Subcommittee on Strategic Forces,    
               Committee on Armed Services;
                         and Committee on Commerce,
                               Science, and Transportation,
                                                    Washington, DC.
    The committees met, pursuant to notice, at 9:29 a.m. in 
room SH-216, Hart Senate Office Building, Senator Bill Nelson 
(chairman of the subcommittee) presiding.
    Committee members present: Senators Nelson, Udall, 
Donnelly, Kaine, King, McCain, Sessions, Wicker, Lee, and Cruz.

            OPENING STATEMENT OF SENATOR BILL NELSON

    Senator Nelson. Good morning. As Senator Udall and Senators 
Sessions and Cruz arrive, I will recognize them. I want to get 
this going because we are facing a couple of votes this 
morning. We are going to have to play this by ear. We will try 
to keep the hearing going.
    It was 45 years ago today that Apollo 11 launched. Most 
everybody that is a certain age and older in this room will 
remember exactly where they were on that day, and 4 days later, 
of course, Armstrong and Collins became the first men to set 
foot on the moon.
    In the decades since, space technology has become vital to 
our Nation's security, economy, and standard of living. 
Therefore, it is appropriate that we are holding this hearing 
to discuss reliable domestic space access, and that is the 
bottom line of what we are trying to achieve is the goal of 
assured access to space by American vehicles for both unmanned 
and manned payloads.
    Obviously, the tensions with Russia as a result of the 
Ukraine crisis have forced us to rethink part of the 
relationships that have built up and that is despite decades of 
cooperation, first with the Soviets. Of course, just remember 
in the midst of the Cold War, an American spacecraft and a 
Soviet spacecraft rendezvoused, docked, and the crews lived 
together for 9 days in space. Those crews are good personal 
friends, and the personal relationship, as exhibited by Tom 
Stafford and Alexi Leonov, to this day is something to behold.
    But when that Cold War ended, we were rightly concerned 
that a lot of those weapons were going to get into the wrong 
hands, that a lot of that technology was going to get into the 
wrong hands. To keep a lot of those former Soviet, now Russian, 
engineers working, there was this extraordinarily successful 
program of the Nunn-Lugar effort to go in to gather up those 
nuclear weapons and simultaneously to support the Russian 
aerospace industry and to buy this incredible engine, the RD-
180. Today, those engines play a significant role in meeting 
our Nation's launch requirements. We have already launched four 
missions this year alone using that engine.
    Now it is time that we have to consider an alternative. 
Several of us on the Senate Armed Services Committee (SASC) put 
$100 million into the National Defense Authorization Act (NDAA) 
to get that process started in this coming fiscal year. We want 
to make sure that the taxpayers' money is well spent, and so it 
is important that we consider the launch needs with the goal in 
mind that we want assured access to space. This is, obviously, 
not going to just affect the Department of Defense (DOD), 
although the national security activities are paramount. It 
clearly is going to involve commercial space activities as well 
and the question of preserving an industrial base.
    The two committees represented on this dais have asked 
officials from DOD and the National Aeronautics and Space 
Administration (NASA), along with many others, to come and 
discuss this issue of U.S. assured access to space. NASA has no 
stated need for a new engine and is already building its own 
space launch system (SLS). However, NASA, obviously, has 
extensive experience in building launch systems and is getting 
great experience in public/private partnerships. We are going 
to hear from all of these people.
    Now, I am going to short circuit my remarks because we are 
racing against the clock. We have a 10:15 a.m. vote and then a 
12:20 p.m. vote. I am going to call on the chairman of the 
Strategic Forces Subcommittee of the SASC and the ranking 
members to give some brief opening remarks, and then we will 
get into the panel. Your written comments are entered as a part 
of the record. I am going to ask you to keep it to about 3 
minutes each so that we can then get into questions.
    Senator Udall.

                STATEMENT OF SENATOR MARK UDALL

    Senator Udall. Thank you, Senator Nelson.
    In the spirit of Senator Nelson's comments, let me 
introduce my statement into the record and then make a couple 
of comments on procedure. Given the number of witnesses and 
possible member attendance, I would propose to my colleagues 
that we use 5-minute rounds of questions.
    As Senator Nelson pointed out, according to the floor 
staff, we have a vote at approximately 10:15 a.m. and another 
at 12:20 p.m. That being the case, I would like to ask that 
some of my colleagues remain to continue the hearing during the 
10:15 a.m. vote while others vote and come back to switch 
places with them so that they may also go vote. Then we can 
repeat that procedure for the 12:20 p.m. vote, if it is needed.
    Again, I share Senator Nelson's sentiments. It is a very 
important hearing. I want to thank all of our witnesses for 
being here today.
    [The prepared statement of Senator Udall follows:]
              Prepared Statement by Senator Mark E. Udall
    Thank you, Senator Nelson.
    [I would like to recommend for questions we use early bird rule 
that we use in the Armed Service Committee which is the order of 
seniority for those present when the gavel falls and order of arrival 
thereafter.]
    I'm proud to join you this morning as we co-chair this joint 
hearing between the Subcommittee on Strategic Forces of the Senate 
Armed Services Committee and the Senate Committee on Commerce, Science 
and Transportation. Today, our committees will hear testimony regarding 
the effort to maintain assured access to space for civil and military 
missions. The fact that both committees have such a strong interest in 
this subject demonstrates how vitally important assured access to space 
is for our economy, our national security--as well as for our 
communications, weather forecasts, networks, and scientific efforts.
    In light of that reality, we are here to address a number of issues 
that affect our ability to deliver payloads into orbit. In the interest 
of time, I'll mention just two of these issues.
    First is the ongoing effort to introduce competition into the 
launch market. Having additional certified competitors in the 
marketplace will help to lower the cost of delivering payloads into 
space and will help to drive innovation. We must also ensure that those 
providers are able to meet the technical requirements necessary to 
provide mission assurance. The United States makes significant 
investments in our space-based assets, and we must be absolutely 
confident that they reach the proper orbit safely.
    Second, we should address the recent developments with Russia and 
our reliance on the Russian-built liquid rocket engines used on the 
Atlas Five medium lift vehicle. Atlas is a proven workhorse with a 
tremendous record of success for civilian and military lift. Since the 
1990s, U.S. policy has been to stockpile the Russian engine rather than 
develop a domestic engine. We are now re-evaluating that policy, and I 
hope the witnesses today can give their views on how to best meet our 
national needs.
    Finally, I'd like to thank all the witnesses for taking the time 
today to testify. They are experts in their respective fields, and I am 
looking forward to hearing their views. In particular, I would like to 
recognize General Shelton, who will retire next month after 38 years in 
uniform. General, you've been a tireless advocate for a responsible and 
effective national security space policy-- and you've been a great 
member of the Colorado Springs community. I wish you nothing but the 
best in your well-earned retirement.
    With that, I'll turn to Senator Sessions for his opening statement.

    Senator Nelson. Senator Sessions?

               STATEMENT OF SENATOR JEFF SESSIONS

    Senator Sessions. Thank you, Senator Nelson, for your 
observations and your opening statement.
    We are dealing with an important issue. It was not long ago 
that Russian Deputy Prime Minister Dmitryi Rogozin stated this, 
``After analyzing the sanctions against our space industry, I 
suggest the USA to bring their astronauts to the International 
Space Station using a trampoline.''
    We do not have assured access to space, as Senator Nelson 
has raised, and we have to have that. I wish we were not in 
this situation. I wish we could have avoided it. We are not and 
we need to make some changes.
    The House of Representatives has proposed legislation and 
identified $220 million in their authorization in 
appropriations committees to deal with the problem of 
developing a new rocket engine, which we can do. I am very 
confident about that. I believe the price is going to be within 
our reach. Our committee has recommended $120 million. We need 
to work on that. We need to see if NASA, Mr. Lightfoot, can 
contribute in this process.
    Mr. Chairman, thank you for having the hearing. It is good 
for us to be together. There are going to be some complexities, 
but I believe both houses of Congress have already laid out 
proposals that could work. We have an excellent panel to help 
us make the right decision as we go forward. Thank you.
    Senator Nelson. Thank you, Senator Sessions.
    Senator Cruz.

                 STATEMENT OF SENATOR TED CRUZ

    Senator Cruz. Thank you very much, Mr. Chairman.
    I would like to begin by thanking the members of this panel 
for your service to this country and your efforts to ensure 
that the United States maintains a strong and capable space 
presence. The breadth of experience represented by this panel 
is impressive, and I appreciate your individual contributions 
towards America's national security.
    I also want to thank members of the SASC and the Commerce 
Committee for recognizing the need to hold a hearing on this 
issue and its impact on our country's access to space. It 
remains a simple reality that we need to work closely with the 
international community to guarantee that the International 
Space Station (ISS), its mission, and its crew are positively 
impacted by the decisions made here in Congress. Our astronauts 
and their peers are relying on a stable partnership to ensure 
their success.
    The block purchase of 36 Evolved Expendable Launch Vehicle 
(EELV) cores last year may have made economic sense during the 
global environment at that time and resulted in a meaningful 
savings, $4.4 billion, to the American taxpayers.
    Although well-intentioned, the unintended consequences of 
relying on a foreign supplier for critical national security 
equipment is now strikingly apparent. The United States is 
scrambling to maintain access to space and has no immediate 
options if the current supplier in Russia decides to cease 
export or if geopolitical circumstances dictate that the United 
States is no longer able to engage in a partnership with its 
supplier.
    When the United States decided to utilize a foreign engine, 
RD-180, to boost our rockets into space, it was also agreed 
that production of that engine would ultimately occur in the 
United States. For whatever reason, whether it was for economic 
reasons or inattention, this never occurred. We find ourselves 
in this position as a result of our own inaction.
    The United States must now respond decisively and provide 
the domestic capacity to launch both crew and cargo into space. 
The cost estimates for the design, construction, testing, and 
certification of a new multi-core engine are staggering in 
today's climate of limited financial resources. But we simply 
cannot rely on the vicissitudes of a foreign supplier in a 
foreign nation for our national security, and therefore we must 
do what it will take to reduce our reliance on foreign engines.
    I look forward to hearing your suggestions, hearing your 
expertise as we work together on how best to alleviate this 
issue and defend the interest of the United States.
    Thank you, Mr. Chairman.
    Senator Nelson. Thank you, Senator Cruz.
    Senators, rather than calling on you now, what I will do is 
I will forego my questions so we can get directly to you after 
we have heard from the witnesses.
    We have the Honorable Alan F. Estevez, Principal Deputy 
Under Secretary of Defense for Acquisition, Technology, and 
Logistics. His testimony is going to focus on the current 
launch portfolio and the efforts to encourage competition and 
the options.
    Next, U.S. Air Force General William L. Shelton, Commander 
of Air Force Space Command. He will touch on the requirements 
for launching national security payloads, as well as the 
challenges presented with the RD-180.
    Then, Mr. Robert M. Lightfoot, Jr., NASA Associate 
Administrator. He will talk about NASA's launch requirements.
    On the second panel, we have Ms. Cristina T. Chaplain, 
Director of Acquisition and Sourcing Management at the 
Government Accountability Office (GAO). She will discuss the 
efforts to encourage competition among the government's launch 
services.
    Next, Retired U.S. Air Force Major General Howard J. 
Mitchell, Vice President for Program Assessments at The 
Aerospace Corporation.
    Next, Mr. Daniel L. Dumbacher, formerly NASA's Deputy 
Associate Administrator for Exploration Systems Development, 
now at Purdue.
    Finally, Dr. Yool Kim, Senior Engineer at the RAND 
Corporation, will draw on assessment of risk related to the RD-
180.
    I welcome all of you on behalf of the Senate, and we will 
start with you. I know it is compressed to get 3 minutes, but 
because of the interruption of votes today, it is of necessity 
and we want to get to questions. Mr. Estevez?

   STATEMENT OF HON. ALAN F. ESTEVEZ, PRINCIPAL DEPUTY UNDER 
 SECRETARY OF DEFENSE FOR ACQUISITION, TECHNOLOGY AND LOGISTICS

    Mr. Estevez. Thank you, Senator Nelson.
    Chairmen Nelson and Udall, Ranking Members Sessions and 
Cruz, distinguished members of the committee, I appreciate the 
opportunity to testify about assuring space access. I want to 
thank the committees for your providing support for our space-
based capabilities. My written testimony has more detail, as 
you noted, and I ask that it be admitted to the record.
    Defense space capabilities are central to our national 
security. Our assured access to space provides leaders and our 
men and women in uniform with unprecedented advantages in 
decisionmaking, military operations, and homeland security.
    Since 2002, DOD has conducted 72 successful EELV missions 
after refocusing on the importance of mission assurance 
following a string of failures in the 1990s.
    To address concerns over the escalating costs of our 
national security space launch program, DOD restructured the 
EELV program in 2012. The restructured program balances 
efficient procurement of launch services, maintains the focus 
on mission assurance, and reintroduces competition into the 
EELV program. The restructured program also enabled the Air 
Force to award the contract for multiple launch services over a 
5-year period. The contract helped stabilize the U.S. launch 
industrial base and saves the DOD and taxpayers more than $4.4 
billion.
    To facilitate competition going forward, the program is 
working with multiple potential new entrants launch service 
providers to successfully complete the new entrant 
certification process. The first new entrants could be 
certified later this year.
    Years ago, we chose to utilize the Atlas V with the Russian 
RD-180 engine as a cost-effective way to meet space launch 
needs. However, the United States is not dependent on Russian 
technology to launch our critical space assets. The Delta IV 
launch vehicle has a domestically produced propulsion system 
that is capable of lifting all national security payloads. Once 
certified, new entrants are also expected to be able to lift a 
portion of the national security manifest using domestically 
produced propulsion systems. Today the Atlas V contractor, 
United Launch Alliance (ULA), maintains a reserve stock of RD-
180 engines in the United States and will support launches 
through late fiscal year 2016. Nevertheless, the long-term U.S. 
national security interests would be enhanced by shifting from 
the RD-180 to next generation U.S. engines in the most 
efficient and affordable manner.
    The goal of DOD continues to be making space lift more 
affordable while reaching the advantages of competition. We 
have implemented the principles of better buying power, saving 
$4.4 billion, and have set in motion a sound strategy to foster 
future competition. In addition, DOD will continue to work with 
our interagency partners in creating an affordable, low-risk 
plan to reduce the Nation's reliance on Russian-manufactured 
propulsion systems.
    Thank you for the opportunity to discuss our Nation's space 
launch capability. I look forward to your questions.
    [The prepared statement of Mr. Estevez follows:]
                 Prepared Statement by Mr. Alan Estevez
    Chairmen Udall and Nelson, Ranking Members Sessions and Cruz, and 
distinguished members of the committees, I appreciate the opportunity 
to testify to you about assuring space access.
                              introduction
    Defense space capabilities are central to our national security. 
Our assured access to space provides national security decision-makers 
with unfettered global access and unprecedented advantages in national 
decision-making, military operations, and homeland security. We cannot 
achieve this without an efficient and reliable space launch capability. 
The nation requires robust, responsive, and resilient space 
transportation capabilities that enable and advance our space 
operations.
                   reducing the cost of space launch
    The Evolved Expendable Launch Vehicle (EELV) program has provided 
launch services for critical national security payloads since 2002 with 
an unprecedented record of success. The Air Force and the Office of the 
Secretary of Defense took steps in 2012 to significantly restructure 
the EELV program based on a significant concern over the escalating 
cost of domestic space launch. Our goal was to maintain this critical 
capability through a more cost effective and efficient execution of the 
program. The Air Force devised a strategy that balances efficient 
procurement of launch services, maintains mission assurance, and 
reintroduces competition into the EELV program. The strategy was 
structured to allow for competition between the United Launch Alliance 
(ULA) and certified New Entrants as early as possible. As a direct 
result of this strategy and our concerted efforts to apply Better 
Buying Power principles to the program, in December of last year, we 
successfully negotiated and awarded a contract for launch services over 
5 years with ULA for the procurement of 36 EELV cores. A core is 
generally one launch vehicle, with the exception of the Delta IV Heavy, 
which requires three cores. This contract award has had two significant 
impacts: (1) it effectively stabilizes the U.S. launch industrial base; 
and (2) saves the DOD and taxpayers more than $4.4 billion when 
compared to the fiscal year 2012 President's budget baseline.
    Since restructuring the program, we have stopped the burgeoning 
cost of maintaining a domestic launch capability, without sacrificing 
the rigor required to maintain mission success, thus concurrently 
achieving the program's two most important goals. At the same time, the 
Department is encouraged by the potential for competition to include 
capable and certified New Entrant launch providers in the years to 
come.
                              competition
    The Under Secretary of Defense for Acquisition, Technology, and 
Logistics approved the Air Force's strategy to reintroduce competition 
into the EELV program on November 27, 2012. To facilitate competition, 
the program is working with multiple potential launch service 
providers, such as Space Exploration Technologies Corporation (SpaceX) 
and Orbital Sciences Corporation, to successfully complete the New 
Entrant Certification process. The Air Force received the first 
Statement of Intent (SOI) from SpaceX on February 7, 2012, and it was 
revised in August 2012. Subsequently, the first New Entrant Assessment 
Certification Plan was developed by SpaceX for the Falcon 9 v1.1 launch 
system and was documented in a joint Air Force/SpaceX Cooperative 
Research and Development Agreement signed on June 7, 2013. SOIs have 
also been received and initially assessed for the Orbital Sciences 
Corporation Antares launch vehicle and the SpaceX Falcon Heavy variant.
    The Air Force competitively procured launch services from SpaceX 
for the joint National Aeronautics and Space Administration (NASA)/
National Oceanic and Atmospheric Administration (NOAA) Deep Space 
Climate Observatory payload and a Space Test Program mission, STP-2 on 
November 30, 2012, through the Orbital Suborbital Program OSP-3 (non-
EELV) contract. These missions allow the New Entrants to provide launch 
services for lower risk missions to the government while gaining 
operational experience and exposing them to the Government's Mission 
Assurance processes. This experience positions a new Entrant, once 
certified, to compete more effectively for future EELV-class National 
Security Space (NSS) missions.
    Based on the current New Entrant certification schedule, we expect 
that the SpaceX Falcon 9 v1.1 could be certified to lift NSS missions 
as early as late 2014. In the meantime, SpaceX will continue to prove 
its capabilities through a combination of launch operations for NASA 
and commercial customers along with the launch services already awarded 
for the more risk tolerant NASA/NOAA Deep Space Climate Observatory and 
STP-2 missions. The Air Force and National Reconnaissance Office have 
also issued leading edge integration contracts to SpaceX for several 
NSS missions in advance of their actual certification. These contracts 
are just one more active step the Department is taking to ensure that 
once a New Entrant, such as SpaceX, is certified as an EELV provider, 
they will be prepared to compete for NSS launch services. The Air Force 
is also working with other potential new entrants, such as Orbital 
Sciences Corporation, that are in various stages of the certification 
process. In support of the Department's effort to aggressively 
introduce competition at the earliest opportunity, we have included a 
request to realign $100 million in the fiscal year 2014 Omnibus 
Reprogramming for additional competitive launch procurement in fiscal 
year 2015.
                           mission assurance
    The Department of Defense has conducted 72 successful EELV missions 
since 2002, after refocusing on the importance of Mission Assurance 
following a string of failures in the late 1990s. The Department 
intends to retain this focus on Mission Assurance as we reintroduce 
competition into the Department's EELV program and evaluate the options 
for future rocket propulsion. In cooperation with each of the 
prospective EELV New Entrants, we are implementing a multi-step 
certification process designed to ensure all new launch service 
providers meet the existing high U.S. Government levels of design and 
operational reliability prior to awarding a NSS launch service 
certification. The Mission Assurance process has evolved over the last 
15 years into a flexible and efficient process that is tailored to a 
particular set of mission requirements based on the risk tolerance of 
the payload to be launched. We intend to continue to evolve this 
process as new entrants are on-ramped into the EELV program.
                use of the russian rd-180 rocket engine
    The United States is not dependent or reliant on Russian technology 
to launch our critical space assets. The Delta IV launch vehicle has a 
domestically produced propulsion system that is capable of lifting all 
national security payloads. Additionally, once certified, New Entrants 
are expected to be able to lift a large portion of the NSS manifest. 
The ultimate goal is the entire manifest being competed using 
domestically produced propulsion systems.
    Approximately 18 years ago, we chose to utilize the Atlas V with 
the Russian RD-180 engine as a cost effective way to meet the National 
Space Transportation Policy Assured Access to Space policy.
    As a result of the recent Russian aggressive action in the Ukraine, 
we have begun to reevaluate our utilization of the Russian manufactured 
RD-180 rocket engine. The RD-180 rocket engine is used to power the 
Atlas V first stage and provides access to space for critical national 
security space payloads. There were sound policy and cost saving 
reasons for the original decision to allow the incorporation of this 
engine into a U.S. launch vehicle. One of the considerations explicitly 
addressed at the time of that decision--and periodically since that 
time--was the risk associated with utilizing a non-U.S.-manufactured 
article for a critical national security capability. Recent events have 
renewed our existing concerns with this practice.
    The Department believes the Nation needs to eliminate our 
utilization of Russian propulsion systems in the most efficient and 
affordable manner possible. This requires evaluation of a range of 
alternatives. For this reason, and because the possibility of an engine 
supply interruption continues to exist, the Department initiated a 
review of the options available in order to mitigate a supply 
interruption, should it occur. The study included evaluating both 
immediate- and longer-term responses to a potential interruption of 
supply; including re-manifesting of missions to the Delta IV launch 
vehicle, evaluating the options for developing a new domestically 
produced engine, as well as the possible utilization of EELV New 
Entrants to supplement existing government space lift capability. The 
Department continues to evaluate the range of mitigation measures for 
the longer term. The study clearly identified that any deviation from 
the current program of record will require a significant near-term 
investment. As an initial step, the Department has requested $40 
million be reprogrammed to initiate engine risk reduction activities. 
Today, the incumbent contractor, ULA, maintains a Reserve stock of 
engines in the United States. Currently there are 15 in stock, with an 
expected delivery of 5 more before the end of the year, which will 
support launches through late fiscal year 2016. In addition, as noted 
above, we have maintained an alternative domestic capability with the 
Delta IV variant of the EELV to launch national security payloads. That 
capability will be increased and diversified as new U.S. providers are 
certified to launch national security payloads. Nevertheless, the long-
term U.S. national security interests, and those of significant 
elements of our space industrial base, would be enhanced by shifting to 
next generation U.S. developed engines.
                               conclusion
    The goal of the Department has been, and continues to be, to 
stabilize the EELV program to make spacelift more affordable while 
leveraging the advantages of competition. We have accomplished this 
goal by implementing the principles of Better Buying Power, saving over 
$4.4 billion for the taxpayer since the fiscal year 2012 President's 
budget, and setting in motion a sound strategy to foster future 
competition. We will continue to stress the importance of mission 
assurance that has already resulted in 72 straight successful EELV 
launches.
    The continued use of Russian manufactured propulsion systems has 
been and continues to be a difficult question. The Department will 
continue to work with its partners in creating an affordable and 
technically low-risk plan to reduce the Nation's use of Russian 
manufactured rocket propulsion systems. Once we have formalized our 
preferred approach, we will be happy to return and share it with you 
and your staff.
    Thank you again for this opportunity to discuss the Nation's space 
launch capability. I look forward to answering your questions.
    Senator Nelson. Thank you.
    General Shelton?

  STATEMENT OF GEN. WILLIAM L. SHELTON, USAF, COMMANDER, AIR 
                      FORCE SPACE COMMAND

    General Shelton. Chairman Nelson, Chairman Udall, Senator 
Cruz, Senator Sessions, and distinguished members of both 
committees, it is a pleasure to represent Air Force Space 
Command here today.
    It is also my privilege to appear with distinguished 
colleagues on the panel.
    The Air Force's space capabilities are foundational to the 
joint warfighter and the Nation's capabilities who collectively 
rely on these systems across the range of civil and military 
operations. It is critical then that we ensure space services 
continue to be available at the times and places of our 
choosing, even in an increasingly challenged space domain. 
Ensuring these space services continue to be available starts 
with assured access to space.
    Our ultimate objective is to safely and reliably place 
national security payloads on a schedule determined by the 
needs of the national security space enterprise. We are proud 
to have established an unprecedented launch success record with 
our EELV program by placing an uncompromising premium on 
mission assurance.
    Additionally, we have worked hard to reduce costs in our 
acquisition strategy with our current provider, ULA, and by 
progressively introducing competition into the launch business. 
But we must continue to insist on thorough, system engineering-
based mission assurance processes. The loss of even one 
national security payload, both in terms of financial loss and 
operational impact, would make our mission insurance costs look 
like very cheap insurance. To make sure we sustain our 
incredible track record of success, we will continue to treat 
each and every launch as if it is our first.
    Commensurate with the EELV's success, the commercial space 
launch industry has made substantial progress over the last 
year, including successful launches by Orbital Sciences and 
SpaceX. As a result, we are managing change in the EELV program 
from a single-provider environment to a multi-provider 
environment through a disciplined certification process. 
Through this process, we will continue to carefully and 
conservatively manage the introduction of full and open 
competition to ensure planned and future missions are delivered 
safely, successfully, and on schedule.
    I thank you for your support, and I look forward to working 
with Congress to provide resilient, capable, and affordable 
space capabilities for the joint force and for the Nation. 
Thank you.
    [The prepared statement of General Shelton follows:]
          Prepared Statement by Gen. William L. Shelton, USAF
                              introduction
    The Air Force's space capabilities--and the airmen who operate 
them--are foundational to our Nation's ability to deter aggression and 
effect global impact across the entire range of civil and military 
operations, from humanitarian and disaster relief through major combat. 
Our military satellites provide mission-critical global access, 
persistence and awareness for our national security and have become 
vital to the global community and world economy as well. Space assets 
have been a key element of warfighting for over 30 years, providing a 
unique vantage to observe activity around the globe, relay terrestrial 
communications, and provide precision position information.
    The challenge before us, then, is to ensure space services continue 
to be available, at the times and places of our choosing, even in an 
increasingly challenging space domain. The first step in this process 
is to assure our ability to provide safe, reliable, and available 
access to space for national security payloads. We have established an 
unprecedented launch success record by placing an uncompromising 
premium on mission assurance. Not that many years ago, we took our 
collective eyes off mission assurance and paid dearly for it. The loss 
of even one national security payload-both in terms of financial loss 
and operational impact-would make our mission assurance costs look like 
very cheap insurance. Therefore, we will continue to place emphasis on 
tough mission assurance principles to do all that is humanly possible 
to guard against launch failure.
             the evolved expendable launch vehicle program
    By 2010, the Evolved Expendable Launch Vehicle (EELV) program 
predicted significant cost growth. Mainly, this was due to the sharply 
rising price of launch vehicle propulsion systems due to excess 
industrial capacity and resulting infrastructure costs in the wake of 
the retirement of the Space Shuttle program. Another cosi driver was 
the established practice of procuring launches individually, driving 
business uncertainty to the U.S. domestic launch industrial base, and 
particularly, the rocket propulsion industry. In response, working with 
the Secretary of Defense and Congress, the Air Force initiated a 36-
core block buy with United Launch Alliance (ULA)--the single certified 
industry provider at the time--but also documented a plan to expand the 
program's provider base through the carefully managed introduction of 
competition. This approach reserves missions for future competition, 
while focusing on maintaining a full spectrum national security launch 
manifest.
    The Air Force has intensified attention on the business aspects of 
the EELV program to control costs while maintaining a 100 percent 
mission success rate since 1999. This year's budget reduces the program 
by $1.2 billion. Combined with prior-year Air Force reductions and 
savings for the National Reconnaissance Office, we have reduced the 
total program by $4.4 billion from the baseline in the fiscal year 2012 
budget.
                  competitive new entrant environment
    The commercial space launch industry has made substantial progress 
over the last year, including successful launches by Orbital Sciences 
and SpaceX. As a result, we are managing change in the EELV program 
from a single-provider environment to a multi-provider environment 
through a certification process. When industry entrants seek to compete 
for Department of Defense (DOD) launches, they understand and agree to 
a set of statutory and regulatory requirements that every DOD program 
contractor is required to fulfill to enter into competition. The 
certification process ensures all prospective industry entrants meet 
the program's baseline technical requirements, which include 
accommodation for existing payload designs, ability to launch to 
specific orbits, and desired launch dates (for projected missions). All 
requirements that are part of the certification process are validated 
through the DOD requirements process. This ensures Department oversight 
of processes and program costs, and helps to minimize mission risk.
    Our launch acquisition strategy aims to take advantage of the 
competition made possible by capable new entrants, once certified 
according to the approved new entrant certification process. Planning 
space missions involves a significant investment in both financial and 
personnel resources over multiple years. The certification strategy, 
jointly developed by the Air Force, National Aeronautics and Space 
Administration (NASA), and the National Reconnaissance Office (NRO), 
ensures that once certified, new entrants to the market have earned 
Department confidence of meeting current and future mission needs. The 
phased introduction of competition through deliberate certification is 
the approach chosen to help lower launch costs while maintaining a 
laserlike focus on mission assurance. We are also striving to encourage 
a stable and reliable industrial base to ensure continued assured space 
access.
    In Phase 1 of the current EELV program, the Air Force, alongside 
our NRO and Navy partners, agreed to acquire 36 cores from ULA over a 
period of 5 years (between fiscal years 2013-2017) [note: one core 
means one launch vehicle, with the exception of the Delta IV Heavy, 
which is three cores]. The contract provides a stable business base to 
our current provider, as well as the ability to conduct economic order 
quantities with their subcontractors. It is important to note that the 
scope of the 36-core buy was set by our assessment of which cores and 
missions we would have to buy from ULA. In executing the block buy, we 
reserved as many missions as possible for competition between certified 
providers.
    While increases in satellite service-life and budget realities have 
reduced the previously planned number of missions viable for 
competition, Air Force efforts to foster a robust competitive 
environment have not flagged. It remains our intent to make as many 
launches as possible available for competition during Phase 1A and 
beyond.
    Phase 2 introduces a wider variety of competition options, and 
reflects an environment in which every DOD launch is competed between 
certified launch providers. Air Force Space Command's Space and Missile 
Systems Center continues to refine this acquisition strategy while 
looking forward to Phase 3 in the 2023-2030 timeframe. Although the 
only certified launch provider today is ULA, the Air Force has 
committed considerable budget and manpower resources to facilitate new 
entrant certification. Through this process, we will continue to 
carefully and conservatively manage the introduction of competition to 
ensure that planned and future missions are delivered safely, 
successfully, and on schedule.
                 foreign engine reliance and mitigation
    In addition to efforts to certify other vehicle families, the Air 
Force recently completed an RD-180 Availability Risk Mitigation Study 
at the request of the Secretary of Defense. This study found that an 
RD-180 production loss or interruption would have significant impact on 
our ability to reliably launch the current manifest of national 
security payloads on a schedule of our choosing. While the study does 
evaluate a number of near-term (fiscal year 2014-2017) options to 
mitigate RD-180 supply disruption--including options to use the RD-180 
inventory stockpile, adjust the currently planned manifest to use of 
alternate launch vehicles, increase alternative launch vehicle 
production rates, and/or even re-sequence or delay some missions--no 
option is risk-free, and certainly not cost-free. A prolonged 
interruption would result in increased risk for our national security 
space posture due to unavoidable delays. Options are limited in part to 
the current state of new entrants in the certification process; in 
other words, the lack of certified additional vehicles at this time. 
There is also risk and cost associated with the engineering and lead-
time necessary to transfer existing Atlas V missions--those using the 
RD-180--to the more expensive Delta IV launch vehicle as well. The 
current inventory of RD-180 engines is expected to last up to 2 years 
in the event of supply disruption, while sustaining the manifest.
    While DOD and the Air Force conlinue to evaluate the range of 
potential mitigation measures, the Air Force has already begun work to 
ensure our near-term launch requirements continue with minimal 
disruption should RD-180 engine availability become an issue. We are 
developing both near- and far-term strategies to explore alternatives, 
and place at a premium the continued exploration of both competition 
and public-private partnerships to drive innovation, stimulate the 
industrial base, and reduce costs.
    While the RD-180 has served us well, current uncertainty highlights 
the need to consider other options for assured access to space. If 
deemed a national priority, a sustained focus on rocket propulsion 
technology would allow the United States to operate within a broader 
trade space, helping mitigate disruptive events affecting external 
supply lines. A domestically produced new engine program would 
revitalize the liquid rocket propulsion industrial base, end reliance 
on a foreign supplier, and aid the competitive outlook for the entire 
domestic launch industry. Such an undertaking would be a multi-year 
effort, however, and would require significant congressional support to 
maintain adequate funding in future years.
                               conclusion
    Air Force payloads provide foundational space capabilities to the 
Joint Warfighter and the Nation, who collectively rely on these systems 
across a range of civil and military operations. We are committed to 
sustaining the highest levels of mission assurance, and our ultimate 
objective is to safely and reliably launch national security payloads 
on a schedule determined by the needs of the national security space 
enterprise.
    We have an incredible track record of success, but to ensure we 
maintain this record, we will continue to treat each and every launch 
as if it is our first. We thank the committees for their support and 
look forward to our continued partnership to provide resilient, 
capable, and affordable space capabilities for the Joint Force and the 
Nation.
    Senator Nelson. Thank you.
    Mr. Lightfoot?

STATEMENT OF ROBERT M. LIGHTFOOT, JR., ASSOCIATE ADMINISTRATOR, 
         NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

    Mr. Lightfoot. Thank you, Chairman Nelson, Chairman Udall, 
and other distinguished committee members. I appreciate the 
opportunity to testify before you on NASA's plans for ensuring 
access to space. My written testimony has been submitted for 
the record.
    NASA has embarked on an ambitious path to send humans to 
Mars. This path includes conducting research aboard the ISS, 
developing the SLS, Orion crew vehicle, and testing our new 
capabilities in the proving ground of cis-lunar space. We 
continue to do this with the cooperation from my international 
partner community.
    As a critical element in this long-term exploration 
strategy, expanding commercial access to low earth orbit (LEO) 
and extensive utilization of the ISS are among NASA's highest 
priorities. We will rely on and partner with U.S. industry and 
international partners for access to ISS while seeking to 
encourage innovation and to maintain a competitive environment 
for these services.
    NASA continues to make strong progress on the SLS, an 
exploration class heavy-lift launch vehicle designed for 
missions far beyond LEO. The SLS will begin with a lift 
capability of 70 metric tons, evolving to 105 metric tons, and 
eventually up to 130 metric tons. Near-term human exploration 
missions will benefit most from an enhanced upper stage. 
Increased booster thrust performance is not required until NASA 
undertakes more significant human missions such as landing on 
the surface of Mars. Our current needs do not require or have a 
need for a new LOX/hydrocarbon booster engine risk reduction or 
development effort at this time.
    Through fiscal year 2020, NASA has plans to launch over 18 
science missions of various size classes. We anticipate that 
our commercial launch service providers will add additional 
launch vehicles to our NASA launch services contract at some 
point in the near future.
    NASA currently plans to launch payloads on six commercially 
provided Atlas V rockets which rely on the Russian-supplied RD-
180 engines. Should the supply of these engines be disrupted, 
an interagency discussion would be required in order to 
allocate the available remaining RD-180s among national 
security and NASA considerations. Other launch vehicles would 
need to be considered using the appropriate procurement 
processes that we have in place.
    NASA continues to work with our partners in DOD as it 
assesses approaches that could increase production rates and 
potentially reduce costs for launch systems that do not rely on 
the RD-180. We are committed to working with our partners to 
provider safe, reliable, and cost-effective access to space.
    Mr. Chairman, thank you again for the opportunity to appear 
today, and I would be happy to respond to any questions you may 
have.
    [The prepared statement of Mr. Lightfoot follows:]
               Prepared Statement by Mr. Robert Lightfoot
    Mr. Chairman, thank you for this opportunity to testify before you 
on National Aeronautics and Space Administration's (NASA) plans for 
access to space. NASA's requirements for access to space are driven by 
the agency's broader goal to expand the frontiers of science and human 
exploration of space. As part of the overall strategy to meet this 
goal, and consistent with the national consensus described by the NASA 
Authorization Act of 2010, the Agency is pursuing a stepping-stone 
approach to the human exploration of space leading to human missions to 
Mars in the 2030s. As key steps along this path to Mars, NASA will 
continue research aboard the International Space Station (ISS), develop 
the Space Launch System (SLS) and Orion crew vehicle, and test our new 
capabilities in the proving ground of cis-lunar space.
    As a critical element in this long-term exploration strategy, and 
also supported by existing policy and law, expanding commercial access 
to low-earth orbit (LEO) and commercial, exploration, and scientific 
utilization of the ISS remain among NASA's highest priorities. With the 
administration's commitment to the extension of ISS operations through 
2024, NASA looks forward to expanded research opportunities and 
commercial transportation of both cargo and crew to and from ISS. 
Currently, two American companies are launching cargo to the ISS from 
U.S. soil. This summer, NASA will complete a commercial crew 
competition and we will select one or more commercial companies to 
develop the capability to launch American astronauts from American soil 
by the end of 2017. Competition is a key to controlling costs over the 
long-term as well as to improving the level of safety and NASA will 
seek to maintain competition to the degree feasible.
    NASA is developing the next generation of scientific missions in 
pursuit of our Nation's space and Earth science goals. Through fiscal 
year 2020, NASA has plans to launch over 18 science missions of various 
size classes on a variety of launch vehicles.
                  space access beyond low-earth orbit
    The SLS is an exploration-class, heavy-lift launch vehicle that 
will transport the Orion crew vehicle, as well as cargo and other 
systems, and is uniquely designed for missions beyond LEO. SLS will 
begin with a lift capability of 70 metric tons, evolving to 105 metric 
tons and eventually up to 130 metric tons, based on future mission 
requirements. The evolution of the SLS lift capability fulfills 
specific, important roles within the Nation's and the emerging global 
exploration architecture, enabling human exploration missions to Mars 
and similarly challenging expeditions.
    Our analysis indicates that near-term human exploration missions 
will benefit most from increased ``in-space'' performance from an 
enhanced upper stage. Increased booster thrust performance will further 
supplement that capability, but it is not required until NASA 
undertakes human missions to even more challenging deep-space 
destinations such as the surface of Mars. NASA is committed to evolving 
the SLS vehicle system capability with an enhanced upper stage and/or 
advanced booster (solid or liquid) in the future, but our current needs 
do not require funding for a new liquid-oxygen/hydrocarbon booster 
engine risk reduction or development effort at this time. We plan to 
use our remaining risk reduction funding in fiscal year 2015 and beyond 
to conduct enhanced liquid hydrogen fueled upper stage work. The 
results of our investments in risk reduction will be available to, and 
can be leveraged by, other interested Government organizations.
    Although NASA's expected mission needs do not require a new booster 
engine at this time, we will monitor the development actions of our 
sister agencies to understand how their work could support future NASA 
requirements. We continue to work with DOD to assess the overall U.S. 
launch posture and are reviewing how NASA's unique facilities and 
expertise and experience might best contribute to future development 
efforts.
               access to the international space station
    Under NASA's Commercial Resupply Services (CRS) contracts, Space 
Exploration Technologies (SpaceX) has been selected to provide 12 cargo 
flights to the ISS, and Orbital Sciences Corporation (Orbital) has been 
selected to provide 8 flights. Counting demonstration flights and CRS 
resupply flights, SpaceX has now completed three cargo missions to the 
ISS, successfully delivering cargo and returning scientific samples to 
Earth, with the fourth mission expected to launch in the third quarter 
of this year. Orbital Sciences Corporation has completed their 
demonstration mission to the ISS and their first contract mission under 
CRS to deliver crew supplies, research and other cargo onboard the 
Cygnus spacecraft. Orbital launched its second ISS resupply mission 
just last week. NASA continues to work with its commercial partners to 
develop a U.S. commercial capability for human spaceflight, and remains 
committed to its goal of launching American astronauts from U.S. soil 
by the end of 2017. 2014 will be a pivotal year for NASA's Commercial 
Crew Program (CCP), as the Agency is preparing to announce one or more 
awards in August/September for Commercial Crew Transportation 
Capability contracts that will include operational crewed flights to 
the ISS. In addition to helping NASA meet mission requirements, a 
number of lessons learned and other experiences are being gained 
through these public-private ventures.
           space access for other nasa and national missions
    NASA's Launch Services Program (LSP) within the Human Exploration 
and Operations Mission Directorate supports the Agency's diverse 
scientific mission portfolio by working diligently to match spacecraft 
with the right industry launch vehicles for optimal mission success and 
Government efficiency.
    NASA Launch Services (NLS) contracts are the primary contractual 
mechanisms LSP uses to acquire commercial launch services to place 
NASA-owned and NASA-sponsored robotic missions, payloads, and/or 
spacecraft into orbit. The current series of NASA Launch Service 
contracts, known as NLS II contracts, are Firm Fixed Price, Indefinite 
Delivery/Indefinite Quantity, Federal Acquisition Regulation, Part 12, 
type contracts. NLS II has an ordering period through June 2020, with a 
period of performance through December 2022. In order to compete for 
task orders to launch NASA science payloads, commercial launch service 
companies must first be qualified to receive a contract under NLS II. 
Task orders are competed across the NLS II contract holders for the 
launch of a specific NASA mission.
    NASA has in its portfolio a variety of domestic launch vehicles 
which will carry out various missions launching new and exciting 
payloads to study the Earth and the solar system, all the while 
maintaining our state-of-the-art Space Communications and Navigation 
network. The portfolio of rockets available to the Agency through the 
NASA Launch Services contract managed by LSP includes the United-
LaunchAlliance-provided Atlas V and Delta II; the SpaceX provided 
Falcon 9 v1.1; the Orbital-provided Antares 120, Antares 130, Minotaur-
C (formerly known as the Taurus XL) and Pegasus XL; and the Lockheed 
Martin Athena IIc and Athena Ic. In addition, LSP anticipates that our 
commercial launch service providers will add additional launch vehicles 
(such as the Delta IV and the Delta IV Heavy) and new launch vehicles 
(such as the Falcon Heavy) to our NASA Launch Services contracts at 
some point in the near future so those commercial launch services can 
compete to launch NASA's missions.
                   future booster engine requirements
    Recent geopolitical events have highlighted the dependence of some 
U.S. launch vehicles upon Russian-supplied RD-180 liquid oxygen/
hydrocarbon engines. However, NASA anticipates that available 
alternative launch vehicles could effectively substitute for NASA 
launches now planned utilizing the RD-180 engine, and is working with 
our Department of Defense partners to assess all manifest options and 
cost impacts should that become necessary.
    As has been described above, NASA does not have a current 
requirement for a liquid-oxygen/hydrocarbon engine in support of the 
SLS now in development at this time. With respect to CRS for the ISS, 
CCP, and LSP supporting the launch of our Agency and other civil-sector 
satellites, NASA expects commercial providers to propose and provide 
launch solutions that are consistent with national policy, and for our 
commercial cargo and satellite launch service providers to meet their 
contractual commitments.
    NASA currently plans to launch payloads on six commercially 
provided Atlas V rockets which rely on Russian supplied RD-180 engines. 
Should the supply of these engines be disrupted, an interagency 
discussion would be required in order to allocate the available 
remaining RD-180 engines among national security and NASA missions. 
Other launch vehicles would need to be considered using appropriate 
procurement procedures, which would add time to the launch process. 
This process would entail significant fiscal impacts caused by the 
program delays required in order to make the necessary mission-to-
launch vehicle assignment changes. However, any Government-funded 
program to develop an engine to replace the RD-180 would also require a 
substantial investment of funds over a significant period of time. NASA 
will advise DOD efforts to initiate rocket engine risk reduction 
activities that could lead to a possible development effort. NASA will 
also continue to work with the DOD on ongoing strategic assessments of 
the overall U.S. space propulsion and transportation industrial base 
and believes such assessments should be completed before any decision 
is made to fund a new engine. This includes considering approaches that 
could concentrate on improving current system production rates and 
reduce per unit costs while maintaining high reliability and increasing 
competition, as well as considering the significant investments that 
the Nation has made (and the international leadership we have carefully 
developed and maintained) over the past several decades in key 
propulsion technologies, such as liquid hydrogen and solid propulsion.
    In summary, NASA relies on an array of vehicles to access space. 
The Agency is developing a uniquely capable heavy-lift launch vehicle, 
has contracts with commercial partners for cargo services in support of 
the ISS, is working with commercial partners to develop a commercially-
provided crew capability for LEO, and has contracts with commercial 
providers for the launch of scientific and other civil payloads. NASA 
recognizes the threat posed by a potential disruption in the supply of 
the RD-180 engine and we are moving forward to work with other 
Government agencies on options to address this threat. We continue to 
work with the DOD as it assesses approaches that could increase 
production rates and potentially reduce costs for launch systems that 
do not rely on the RD-180 engine. Mr. Chairman, thank you for the 
opportunity to appear before you today. I would be happy to respond to 
any questions you may have.

    Senator Nelson. Thank you.
    Ms. Chaplain?

 STATEMENT OF CRISTINA T. CHAPLAIN, DIRECTOR, ACQUISITION AND 
     SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Chaplain. Chairman Udall, Chairman Nelson, Ranking 
Member Cruz, Ranking Member Sessions, and distinguished members 
of the committees, thank you for inviting me to participate in 
today's hearing.
    I would just like to make three points about our relevant 
work.
    First, as our testimony indicates, in the past we have 
highlighted deficiencies in the management and oversight of the 
EELV, as well as gaps in knowledge needed for the block buy 
that is now in place. Both DOD and Congress have taken 
significant steps to rectify the problems we identified. For 
instance, DOD undertook rigorous efforts to obtain greater 
insight into program costs in advance of its contract 
negotiations with ULA. It took steps to reinstitute oversight 
reporting for the program, and it completed a new cost 
estimate. Over time, DOD has also come to recognize the value 
of competition for the EELV program, noting that with no threat 
of competition DOD was in a poor negotiating position.
    Second, with respect to the current competition, we have 
reported on the benefits and the challenges associated with how 
DOD could run the competition, but we did not recommend a 
specific approach as that decision should be made by DOD based 
on its requirements and resources. Important factors include 
the need to maintain a high degree of reliability, as the 
satellites being launched are expensive and vital to national 
security, the need for flexibility in launch scheduling, the 
importance of retaining cost and pricing data, the need to keep 
costs down, and considerations about the government's future 
demand for launch services.
    Third, my testimony identifies best practices that should 
be adopted in future rocket engine or launch vehicle 
development efforts. The one I would like to stress here is the 
need for decisions to be made with a government-wide 
perspective and a long-term perspective. Our work has shown 
that defense and civilian government agencies together expect 
to require nearly $44 billion for the next 5 years for launch 
activities. At the same time, our past work has found that 
launch acquisitions and activities have not always been well-
coordinated, though DOD and NASA have made progress on that 
front since then. Concerns have also been raised in various 
studies about the lack of strategic planning and investment for 
future technologies. Further, industry is at a crossroad with 
new vendors emerging and certain strategic capabilities and 
less demand by the government. The bottom line is that any new 
launch vehicle effort is likely to have impacts that reach 
beyond DOD and the EELV program and should be carefully 
considered in a government-wide and long-term context.
    This concludes my statement. I look forward to answering 
your questions.
    [The prepared statement of Ms. Chaplain follows:]
              Prepared Statement by Ms. Cristina Chaplain
    Chairmen Rockefeller and Udall, Ranking Members Thune and Sessions, 
and members of the committee and subcommittee:
    Thank you for inviting me to testify on the current and future 
state of the U.S. launch enterprise. The Evolved Expendable Launch 
Vehicle (EELV) program is the primary provider of launch vehicles for 
U.S. military and intelligence satellites. Today I will discuss: (1) 
highlights of Government Accountability Office's (GAO) past work on 
EELV; and (2) how acquisition best practices would benefit future 
engine development efforts. In general, our past work has highlighted a 
need for stronger management and oversight for EELV as well as more 
knowledge about pricing, costs and the industrial base for the block 
buy. DOD and Congress have implemented many positive actions to address 
our recommendations. For future efforts, adopting best practices early 
could help stem cost and schedule growth and other problems.
    My testimony is based on the body of work we have performed on the 
EELV program and acquisition best practices in recent years and related 
reports issued from September 2008 to March 2014. In this body of work 
we interviewed DOD and industry officials, conducted contract reviews, 
assessed knowledge of the industrial base, and analyzed program 
acquisition strategies, among other things. Our prior reports each 
include a detailed description of our scope and methodology. All work 
on which this testimony is based was performed in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives.
    The Department of Defense (DOD) expects to spend about $9.5 billion 
over the next 5 years acquiring launch hardware and services through 
the program, during which time it will also be working to certify new 
launch providers. This investment represents a significant amount of 
what the entire U.S. Government expects to spend on launch activities--
including new development, acquisition of launch hardware and services, 
and operations and maintenance of launch ranges--for the same period. 
The United Launch Alliance (ULA) is currently the sole provider of 
launch services through the EELV program. However, DOD, the National 
Aeronautics and Space Administration (NASA), and the National 
Reconnaissance Office (NRO) are working to certify new launch providers 
who can compete with ULA for launch contracts.
                    highlights of gao's work on eelv
    Because of the importance of the national security space launch 
enterprise, we have been asked to look at many aspects of the EELV 
program over the last 10 years. Our work has examined management and 
oversight for EELV, as well as the ``block buy'' acquisition approach. 
The block buy approach, finalized in December 2013, commits the 
department to an acquisition that spans 5 years, in contrast with the 
prior practice of acquiring launch vehicles one or two at a time, with 
the aim of stabilizing the launch industrial base and enabling the 
government to achieve savings. Additionally, we have assessed the 
status of the launch vehicle certification process for new entrants. 
DOD and Congress have taken numerous actions to address our prior 
recommendations which have resulted in financial and oversight 
benefits. Highlights of our work over the years follow.
2008
    We reported that when DOD moved the EELV program from the research 
and development phase to the sustainment phase in the previous year, 
DOD eliminated various reporting requirements that would have provided 
useful oversight to program officials and Congress.\1\ For example, the 
EELV program was no longer required to produce data that could have 
shed light on the effects the joint venture between Lockheed Martin and 
Boeing companies (later known as ULA) was having on the program, 
programmatic cost increases and causes, and other technical 
vulnerabilities that existed within the program. Furthermore, because 
the program was now in the sustainment phase, a new independent life-
cycle cost estimate was not required for the program; as a result, DOD 
would not be able to rely on its estimate for making long-term 
investment planning decisions. According to DOD officials, the life-
cycle cost estimate for the program at the time was not realistic. Our 
recommendations to strengthen oversight reporting gained attention in 
2011 following concerns about rising program cost estimates and at that 
time, Congress required the Secretary of Defense to redesignate the 
EELV program as a major defense acquisition program, thereby removing 
it from the sustainment phase and reinstating previous reporting 
requirements. DOD also developed a new program cost estimate, which 
allows for greater oversight of the program for both Congress and DOD.
---------------------------------------------------------------------------
    \1\ GAO, Space Acquisitions: Uncerlainties in the Evolved 
Expendable Launch Vehicle Program Pose Management and Oversight 
Challenges, GA0-08-1039 (Washington, DC: Sept. 26, 2008).
---------------------------------------------------------------------------
2011
    We reported that the block buy acquisition approach may be based on 
incomplete information and although DOD was still gathering data as it 
finalized the new acquisition strategy, some critical knowledge gaps 
remained.\2\ Specifically, DOD analysis on the health of the U.S. 
launch industrial base was minimal, and officials continued to rely on 
contractor data and analyses in lieu of conducting independent 
analyses. Additionally, some subcontractor data needed to negotiate 
fair and reasonable prices were lacking, according to Defense Contract 
Audit Agency reports, and some data requirements were waived in 2007 in 
exchange for lower prices. DOD also had little insight into the 
sufficiency or excess of mission assurance activities, which comprise 
the many steps taken by the government and contractors to ensure launch 
success. Though the level and cost of mission and quality assurance 
employed today is sometimes criticized as excessive, it has also 
resulted in more than 80 consecutive successful launches. We also 
reported that the expected block buy may commit the government to buy 
more booster cores than it needs, and could result in a surplus of 
hardware requiring storage and potentially rework if stored for 
extended periods.\3\ Further, while DOD was gaining insight into the 
rise in some engine prices, expected at that time to increase 
dramatically, it was unclear how the knowledge DOD was gaining would 
inform the expected acquisition approach or subsequent negotiations.
---------------------------------------------------------------------------
    \2\ GAO, Evolved Expendable Launch Vehicle: DOD Needs to Ensure New 
Acquisition Strategy Is Based on Sufficient Information, GA0-11-641 
(Washington, DC: Sept. 15, 2011 ).
    \3\ The booster core is the main body of a launch vehicle.
---------------------------------------------------------------------------
    We reported that broader issues existed as well, regarding the U.S. 
Government's acquisition of, and future planning for, launch services--
issues which we recommended be addressed, given that they could reduce 
launch costs and assure future launch requirements are met. For 
example, we recommended that Federal agencies--like the Air Force, NRO, 
and NASA--more closely coordinate their acquisitions of launch 
services. Planning was also needed for technology development focused 
on the next generation of launch technologies, particularly with 
respect to engines, for which the United States remains partially 
reliant on foreign suppliers. Congress responded to our work by 
legislating that DOD explain how it would address the deficiencies we 
found.
2012
    We reported that DOD had numerous efforts underway to address the 
knowledge gaps and data deficiencies identified in our 2011 report.\4\ 
Of the seven recommendations we made to the Secretary of Defense, two 
had been completely addressed, four were partially addressed and one 
had no action taken. That recommendation was aimed at bolstering 
planning for the next generation of launch technologies. Since GAO's 
2011 report, DOD had completed or obtained independent cost estimates 
for two EELV engines and completed a study of the liquid rocket engine 
industrial base. Officials from DOD, NASA, and the NRO initiated 
several assessments to obtain needed information, and worked closely to 
finalize new launch provider certification criteria for national 
security space launches. Conversely, we reported that more action was 
needed to ensure that launch mission assurance activities were not 
excessive, to identify opportunities to leverage the government's 
buying power through increased efficiencies in launch acquisitions, and 
to strategically address longer-term technology investments.
---------------------------------------------------------------------------
    \4\ GAO, Evolved Expendable Launch Vehicle: DOD Is Addressing 
Knowledge Gaps in Its New Acquisition Strategy, GA0-12-822 (Washington, 
DC: July 26, 2012).
---------------------------------------------------------------------------
2013
    We reported on the status of DOD's efforts to certify new entrants 
for EELV acquisitions.\5\ While potential new entrants stated that they 
were generally satisfied with the Air Force's efforts to implement the 
process, they identified several challenges to certification, as well 
as perceived advantages afforded to the incumbent launch provider, ULA. 
For example, new entrants stated that they faced difficulty in securing 
enough launch opportunities to become certified. During our review, the 
Under Secretary of Defense for Acquisition, Technology, and Logistics 
directed the Air Force to make available up to 14 launches for 
competition to new entrants, provided they demonstrate the required 
number of successful launches and provide the associated data in time 
to compete. Additionally, new entrants considered some Air Force 
requirements to be overly restrictive; for example, new entrants must 
be able to launch a minimum of 20,000 pounds to low earth orbit from 
specific Air Force launch sites (versus facilities the new entrants 
currently use.) The Air Force stated that 20,000 pounds represents the 
low end of current EELV lift requirements, and that alternate launch 
sites are not equipped to support DOD's national security space 
launches. Further, new entrants noted that the incumbent provider 
receives ongoing infrastructure and development funding from the 
government, an advantage not afforded to the new entrants, and that 
historical criteria for competition in the EELV program were more 
lenient. The Air Force acknowledged that criteria for competition are 
different, and reflective of the differences in the current acquisition 
environment.
---------------------------------------------------------------------------
    \5\ GAO, Launch Services New Entrant Cerlification Guide, GA0-13-
317R (Washington, DC: Feb. 7, 2013).
---------------------------------------------------------------------------
2014
    We reported and testified that DOD's new contract with ULA 
(sometimes referred to as the ``block buy'') represented a significant 
effort on the part of DOD to negotiate better launch prices through its 
improved knowledge of contractor costs, and that DOD officials expected 
the new contract to realize significant savings, primarily through 
stable unit pricing for all launch vehicles.\6\ At the time of our 
review, DOD was leading the broader competition for up to 14 launches, 
expected to begin in fiscal year 2015. In advance of the upcoming 
competition, DOD was considering several approaches to how it would 
require competitive proposals to be structured. Our report did not 
recommend an approach. However, we identified the pros and cons of two 
different ends of the spectrum of choices, one being a commercial-like 
approach and the other being similar to the current approach (a 
combination of cost-plus and fixed price contracts). If DOD required 
offers be structured similar to the way DOD currently contracts with 
ULA, there could be benefits to DOD and ULA as both are familiar with 
this approach, but potential burdens to new entrants, which would have 
to change current business practices. Alternatively, if DOD implemented 
a commercial approach to the proposals, new entrants would potentially 
benefit from being able to maintain their current efficient business 
practices, but DOD could lose insight into contractor cost or pricing, 
as this type of data is not typically required by the Federal 
Acquisition Regulation under a commercial item acquisition. DOD could 
also require a combination of elements from each of these approaches, 
or develop new contract requirements for this competition.
---------------------------------------------------------------------------
    \6\ GAO, The Air Force's Evolved Expendable Launch Vehicle 
Competitive Procurement, GA0-14-377R (Washington, DC: Mar, 4, 2014) and 
GAO, Evolved Expendable Launch Vehicle: Introducing Competition into 
National Security Space Launch Acquisitions, GA0-14-259T (Washington, 
DC: Mar. 5, 2014).
---------------------------------------------------------------------------
     best practices would benefit future engine development efforts
    ULA's Atlas 5 launch vehicle uses the RD-180 engine produced by the 
Russian company NPO Energomash. DOD and Congress are currently weighing 
the need to reduce U.S. reliance on rocket engines produced in Russia 
and the costs and benefits to produce a similar engine domestically. 
The RD-180 engine has performed extremely well for some of the Nation's 
most sensitive national security satellites, such as those used for 
missile warning and protected communications. Moreover, the manufacture 
process of the RD-180 is one that cannot be easily replicated. In 
addition, the most effective way to design a launch capability is to 
design all components in coordination to optimize capabilities needed 
to meet mission requirements. In other words, replacing the RD-180 
could require the development of a new launch vehicle and potentially 
new launch infrastructure.
    Space launch vehicle development efforts are high risk from 
technical, programmatic, and oversight perspectives. The technical risk 
is inherent. For a variety of reasons, including the environment in 
which they must operate, a vehicle's technologies and design are 
complex and there is little to no room for error in the fabrication and 
integration process. Managing the development process is complex for 
reasons that go well beyond technology and design. For instance, at the 
strategic level, because launch vehicle programs can span many years 
and be very costly, programs often face difficulties securing and 
sustaining funding commitments and support. At the program level, if 
the lines of communication between engineers, managers, and senior 
leaders are not clear, risks that pose significant threats could go 
unrecognized and unmitigated. If there are pressures to deliver a 
capability within a short period of time, programs may be incentivized 
to overlap development and production activities or delete tests, which 
could result in late discovery of significant technical problems that 
require more money and ultimately much more time to address. For these 
reasons, it is imperative that any future development effort adopt 
disciplined practices and lessons learned from past programs. I would 
like to highlight a few practices that would especially benefit a 
launch vehicle development effort.
    First, decisions on what type of new program to pursue should be 
made with a government-wide and long-term perspective. Our prior work 
has shown that defense and civilian government agencies together expect 
to require significant funding, nearly $44 billion in then-year dollars 
(that factor in anticipated future inflation), for launch-related 
activities from fiscal years 2014 through 2018.\7\ At the same time, 
our past work has found that launch acquisitions and activities have 
not been well coordinated, though DOD and NASA have since made 
improvements.\8\ Concerns have also been raised in various studies 
about the lack of strategic planning and investment for future launch 
technologies. Further, the industry is at a crossroads. For example, 
the government has a decreased requirement for solid rocket motors, yet 
for strategic reasons some amount of capability needs to be sustained 
and exercised. The emergence of Space Exploration Technologies, Corp. 
(SpaceX) and other vendors that can potentially compete for launch 
acquisitions is another trend that benefits from coordination and 
planning that takes a government-wide perspective. The bottom line is 
that any new launch vehicle effort is likely to have effects that reach 
beyond DOD and the EELV program and should be carefully considered in a 
long-term, government-wide context.
---------------------------------------------------------------------------
    \7\ GAO, Defense and Civilian Agencies Request Significant Funding 
for Launch-Related Activities, GA0-13-802R (Washington, DC: Sept. 9, 
2013).
    \8\ GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, GA0-
12-342SP (Washington, DC: Feb. 28, 2012).
---------------------------------------------------------------------------
    Second, requirements and resources (for example, time, money, and 
people) need to be matched at program start. This is the first of three 
key knowledge points we have identified as best practices. In the past, 
we have found that recent launch programs, such as NASA's Constellation 
program and Commercial Crew Program, have not had sufficient funding to 
match demanding requirements.\9\ Funding gaps can cause programs to 
delay or delete important activities and thereby increase risks and can 
limit the extent to which competition can be sustained. Realistic cost 
estimates and assessments of technical risk are particularly important 
at program start. Space programs have historically been optimistic in 
estimating costs (although recently DOD and NASA have been making 
strides to produce more realistic estimates). The commitment to more 
realistic, higher confidence cost estimates would be a great benefit to 
any new launch vehicle development program and enable Congress to 
ensure its commitment is based on sound knowledge. We have also found 
that imposing overly ambitious deadlines can cause an array of 
problems. For instance, they may force programs to overlap design 
activities with testing and production.\10\ The many setbacks 
experienced by the Missile Defense Agency's ground-based midcourse 
defense system, for example, are rooted in schedule pressures that 
drove concurrent development.\11\ Even if the need for a new engine is 
determined to be compelling, the government is better off allowing 
adequate time for disciplined engineering processes to be followed.
---------------------------------------------------------------------------
    \9\ GAO, NASA: Constellation Program Cost and Schedule Will Remain 
Uncertain Until a Sound Business Case Is Established, GA0-09-844 
(Washington, DC: Aug., 26, 2009) and GAO, NASA: Actions Needed to 
Improve Transparency and Assess Long-Term Affordability of Human 
Exploration Programs, GA0-14-385 (Washington, DC: May 8, 2014).
    \10\ GAO, Missile Defense: Mixed Progress in Achieving Acquisition 
Goals and Improving Accountability, GA0-14-351 (Washington, DC: Apr. 1, 
2014).
    \11\ GA0-14-351. In 2004 we found that the Missile Defense Agency 
(MDA) committed to a highly concurrent development, production, and 
fielding ground-based midcourse (GMD) interceptors. Because MDA moved 
forward with interceptor production before completing its flight 
testing program, test failures have exacerbated disruptions to the 
program. For example, because the program has delivered approximately 
three-fourths of the interceptors for fielding, the program faced 
difficult and costly decisions on how it will implement corrections 
from prior test failures. Also, the program has had to add tests that 
were previously not planned and delay tests that are necessary to 
understand the system's capabilities and limitations. As a result of 
these development challenges, the GMD program will likely continue to 
experience delays, disruptions, and cost growth.
---------------------------------------------------------------------------
    Third, the program itself should adopt knowledge-based practices 
during execution. The program should also use quantifiable data and 
demonstrable knowledge to make go/no-go decisions, covering critical 
facets of the program such as cost, schedule, technology readiness, 
design readiness, production readiness, and relationships with 
suppliers. Our work on the second and third knowledge points during 
execution (design stability and production process maturity) has tied 
the use of such metrics to improved outcomes. In addition, the program 
should place a high priority on quality, for example, holding suppliers 
accountable to deliver high-quality parts for their products through 
such activities as regular supplier audits and performance evaluations 
of quality and delivery, among other things. Prior to EELV, DOD 
experienced a string of launch failures in the 1990s due in large part 
to quality problems.
    This concludes my statement. I am happy to answer questions related 
to our work on EELV and acquisition best practices.

    Senator Nelson. Thank you.
    General Mitchell?

 STATEMENT OF MAJ. GEN. HOWARD J. MITCHELL, USAF (RET.), VICE 
   PRESIDENT, PROGRAM ASSESSMENTS, THE AEROSPACE CORPORATION

    Mr. Mitchell. Chairman Nelson, Chairman Udall, thank you 
for this opportunity to speak and I also thank the rest of the 
members that are attending the hearing.
    I was asked to do a study on the RD-180 mitigation study. I 
recently chaired that under a terms of reference that was 
signed by the Assistant Secretary of the Air Force for 
Acquisition. I have provided the committee a version of that 
briefing for the record, as well as my opening comments.
    I will just hit the four major areas that the study 
identified.
    First, a disruption of the RD-180 engine could have 
significant impact on the United States' ability to launch DOD, 
Intelligence Community, NASA, National Oceanic and Atmospheric 
Administration, and commercial satellites scheduled to launch 
on Atlas V through 2020. Neither the Delta IV nor new entrants 
can help mitigate that impact until 2017 and beyond.
    Second, there are several upcoming events that bear 
monitoring as they can provide indications of the Russians' 
intent and the United States' intent.
    Third, the current Air Force strategy for competition can 
be adversely affected should the Atlas not be available for 
competition.
    Fourth, in the 2022-2023 timeframe with appropriate near-
term funding for technology maturation, the Nation could have 
new launch capabilities based on liquid oxygen/hydrogen engine 
technology that do not rely on foreign sources.
    I look forward to answering any questions you might have.
    [The prepared statement of Mr. Mitchell follows:]
Prepared Statement by Major General Howard ``Mitch'' J. Mitchell, USAF 
                                 (Ret.)
    Co-chairs, thank you and good morning. Members of the committees, 
good morning, and thanks for the opportunity to discuss the RD-180 
Mitigation Study that I recently chaired under a Terms of Reference 
signed by the Assistant Secretary of the Air Force (Acquisition). I 
have provided the committees with a version of the briefing that has 
been previously released to the committees and the contractors that 
supported the study.
    The Terms of References requested that the effects of the potential 
non-availability of Russian built RD-180 be examined and that the worst 
case scenario, as well as others, be presented along with near-term and 
far-term recommendations for mitigation. The Study panel was also asked 
to look at implications for other than the Department of Defense (DOD) 
users, impacts to the industrial base, costs, et cetera.
    The major findings of the study fall in four categories; (1) a 
disruption of RD-180 engines would have a significant impact on the 
United States' ability to launch, DOD, Intelligence Community, National 
Aeronautics and Space Administration (NASA), National Oceanic and 
Atmospheric Administration (NOAA), and commercial satellites scheduled 
to launch on Atlas V through 2020; and that neither Delta IV or New 
Entrants can mitigate the impact until 2017 and beyond; (2) there are 
several upcoming events that bear monitoring as they can provide 
indications of the Russian, and United States, intents; (3) that the 
current Air Force strategy for competition can be adversely affected 
should the Atlas not be available for competition; and (4) that in the 
2022-2023 timeframe with appropriate near-term funding for technology 
maturation, the Nation could have new launch capabilities based on 
Liquid Oxygen/Hydrocarbon engine technology.
    The committees asked that I address the following topics:

(1)  Discuss the government-wide implication of the various scenarios 
we investigated.

    - The worst case scenario we examined was that the recent Atlas V 
launch, May 22, 2014, would be the last RD-180 launch due to Russian 
actions, congressional actions, court actions or a catastrophic failure 
that the Russians would not assist in resolving. While it does not 
appear that any of the above is occurring, it is the worst case 
scenario.

     i.  The Government-wide implications of this scenario are 2-3 year 
delays in satellite launches and several billion dollars in cost.
     ii.  A second implication is that the launch order of the 
satellites would need to be addressed in an interagency process and 
would affect the DOD, Intelligence Community, NASA, NOAA, and 
commercial missions.
    iii.  Third, the planned Evolved Expendable Launch Vehicle (EELV) 
competition would be adversely affected because the Atlas V would not 
be available, and the Delta IV production could not be ramped up fast 
enough to provide addition launch system to compete (all Delta IVs 
would be needed to recover from the launch delays).

    - The second scenario we examined was that the RD-180 engines in 
stock would be allowed to fly out in the current order, but no 
additional RD-180s could be used.

    i.  This scenario results in fewer launch delays for a shorter 
period, but is not the optimal use of RD-180 engines due to the fact 
that some Atlas V missions would be driven to fly on a Delta IV Heavy, 
which is a much more expensive alternative.

    - The third scenario we examined was that the RD-180 engines in 
stock would be allowed to fly out in an optimum launch order but no 
additional RD-180s could be used.

     i.  This scenario results in fewer launch delays for a shorter 
period, and is the optimal use of RD-180.
    ii.  Additionally, the launch order of the satellites would need to 
be addressed in an interagency process and would affect the DOD, 
Intelligence Community, NASA, NOAA, and commercial missions.

(2)  Options for pursuing a domestic propulsion system.

    - The Study team recommended that the Government invest in critical 
technologies needed to mature Liquid Oxygen/Hydrocarbon engines and 
make that technology available to industry.

     i.  A decision on Engineering and Manufacturing Development would 
not need to be made until fiscal year 2017, but funding would have to 
be laid in during the fiscal year 2016 POM development.
    ii.  Other options exist depending on the viability (i.e., does the 
business case close) of the Industrial Base--the Study did not have 
time to delve into an Acquisition Strategy, but did acknowledge that 
public-private partnership should be pursued.

(3)  Overview of potential commercial partners for launch system 
development.

    - We were briefed by all the contractors in the engine and launch 
system business and feel that a healthy environment would exist for 
competition. It was not clear how much Government funding and/or 
oversight would be necessary.
    - We did provide a worst case estimate of how much the development 
of a totally new launch system would cost, but if the program was 
tailored after the original EELV program the costs could be 
substantially less. However, we did not have time to investigate this 
further than the worst case.

(4)  Discuss any other relevant issues.

    - The only other issue I would like to briefly discuss is that the 
development of a Liquid Hydrogen/Hydrocarbon engine is a national 
decision to reverse a decision we made when the Government agreed to 
allow the RD-180 engine to be used on the Atlas V.

     i.  The Government essentially decided to outsource large (1 
million pounds of thrust at altitude) Liquid Oxygen/Kerosene engine 
procurement and significantly scale back U.S. technology investment.
    ii.  Having an entire suite of propulsion options (Solid Rocket 
Motors, Liquid Oxygen/Liquid Hydrogen, Liquid Hydrogen/Hydrocarbon) for 
future launch vehicle development available allows the designers to 
optimize the launch system design for the mission requirements. The 
missions that the EELV is designed for are very different than the 
mission requirements that the Space Launch System is being designed to 
meet.

    Senator Nelson. Thank you, General.
    Mr. Dumbacher?

   STATEMENT OF DANIEL L. DUMBACHER, PROFESSOR OF PRACTICE, 
  DEPARTMENT OF AERONAUTICS AND AEROSPACE ENGINEERING, PURDUE 
                           UNIVERSITY

    Mr. Dumbacher. Chairman Nelson, Chairman Udall, and members 
of today's respective committees, thank you for the opportunity 
to discuss the current state of the U.S. launch enterprise.
    The United States' ability to achieve and go beyond LEO is 
essential for our Nation's defense, commercial, and space 
exploration enterprises.
    Leaving the surface of the Earth and attaining orbital 
velocity at 17,500 miles per hour is a complex systems 
challenge. Factors key to achieving this task are mission 
requirements, technical performance, development risk and cost, 
operations cost, schedule, industrial base, and yes, even 
political concerns, which all must be addressed with multiple 
stakeholders.
    In the early phase of a rocket launch, thrust is more 
important to initially overcome the Earth's gravity than 
propulsion efficiency. However, as the vehicle progresses to 
higher altitudes and climbs out of the Earth's gravity well, 
propulsion efficiency becomes more important, even as thrust 
remains an important technical parameter.
    When NASA was preparing to go to the moon in the 1960s, it 
determined that large amounts of thrust were needed for the 
first 2\1/2\ minutes of flight to put the Apollo spacecraft and 
lunar lander on the surface of the moon. To meet the mission 
need, NASA recognized that much development and testing effort 
of liquid oxygen/kerosene systems was required and therefore 
restarted the Air Force's E-1 development from the 1950s as the 
F-1 program.
    During the development of the Space Shuttle, NASA 
determined that it had a lower payload delivery requirement and 
constrained budgets. The development cost estimates for the 
shuttle's solid booster were lower than competing booster 
liquid systems. Many of the same challenges were again 
considered by NASA during the planning and development process 
for the SLS. NASA assessed many launch configurations, weighing 
the pros and cons of each. Again, technical performance, 
challenges associated with limited budgets, the need to launch 
the first flight as early as possible, and impacts to the 
propulsion industrial base weighed heavily on NASA's 
decisionmaking.
    Ultimately for the SLS, NASA determined that using the 
solid boosters based on shuttle and constellation experience 
minimized the upfront development costs, reduced the 
development risks, and most likely would result in a more 
timely first flight of the SLS. NASA also chose to utilize over 
40 years of investment in large liquid oxygen/liquid hydrogen 
engines to minimize development cost and risk.
    Following the Apollo program, the U.S. Government 
dramatically limited its hydrocarbon investments and focused on 
utilizing solid propulsion systems and liquid oxygen/liquid 
hydrogen systems. The United States leads the world in these 
propulsion systems. However, we need to reduce the costs of 
these systems. In my opinion, the United States should build 
upon its long investment in solid and liquid oxygen/liquid 
hydrogen propulsion systems and allow the marketplace to 
provide viable choices for use by NASA and DOD. Competition 
will incentivize industry to develop efficient management 
models, use the new technologies that will reduce costs, and 
continue to search for and develop technologies necessary to 
reduce development and operations costs.
    Thank you for allowing me to appear before you today. More 
details are included in the submitted written testimony. I will 
be happy to answer your questions.
    [The prepared statement of Mr. Dumbacher follows:]
             Prepared Statement by Mr. Daniel L. Dumbacher
    Chairman Nelson, Chairman Udall, and members of today's respective 
committees, thank you for the opportunity to discuss the current state 
of the U.S. launch enterprise on this, the 45th Anniversary of Apollo 
11's launch to the Moon.
    The United States' ability to achieve, and go beyond, low-Earth 
orbit is essential for our Nation's defense, commercial, and space 
exploration enterprises. The U.S. rocket propulsion industry, including 
solid and liquid propulsion, as well as launch vehicle design, 
development and operations, is critical to applications such as 
strategic and tactical systems and serves as our highway to space.
    Throughout my 30-year career in the launch vehicle and propulsion 
business, ranging from my experience with the National Aeronautics and 
Space Administration (NASA) prior to the first Space Shuttle flight, to 
my efforts in helping to lead NASA's current development efforts of the 
Space Launch System and the Orion crew capsule, I have learned several 
significant lessons. One key lesson is that leaving the surface of the 
Earth and attaining orbital velocity at 17,500 miles per hour is a 
complex system challenge that continues to test the best of American 
ingenuity. Some of the many factors key to achieving this task are: 
technical performance, development risk, development cost, operations 
cost, schedule, industrial base, and yes, even political concerns--all 
must be assessed with multiple stakeholders. All of these factors must 
be considered alongside the extremely complex technical interactions 
and challenges.
    From the technical perspective, all systems must work together to 
achieve orbital velocity. For example, in designing a launch vehicle, 
the design team must integrate propulsion systems with propellant 
tanks, structures, launch loads environments, thermal environments, 
computers and software, and the logistics of getting the many 
subsystems from suppliers to assembly facilities and launch facilities. 
All of these factors affect the technical design of a launch vehicle, 
in addition to the budget and schedule requirements. I'd like to focus 
my testimony today on launch systems, propulsion systems, and why 
certain design decisions were made for past and current vehicles.
    In assessing design options, there are phases of the launch ascent 
to orbit where different propulsion systems better serve the needs of a 
particular launch vehicle, in a particular phase of flight, for a 
specific mission. For example, in the early phase of a rocket launch, 
thrust is more important to initially overcome the Earth's gravity than 
propulsion efficiency. However, as the vehicle progresses to higher 
altitudes, and climbs out of the Earth's gravity well, propulsion 
efficiency becomes more important, even as thrust remains an important 
technical parameter. This is the fundamental reason that Apollo's 
Saturn V used liquid oxygen and kerosene. It is also the reason the 
Space Shuttle used solid propulsion for the initial 2 minutes of flight 
in parallel with the liquid oxygen/liquid hydrogen Space Shuttle Main 
Engines (RS-25). The point being that for initial phases of a launch, 
solid and liquid oxygen/ kerosene systems perform the necessary 
functions, and liquid oxygen/liquid hydrogen serve the needs better for 
upper stages and in space stages, appropriate to the mission.
    So the question is, why are different launch systems needed? For 
example, why did the Saturn V use liquid oxygen/kerosene, and the Space 
Shuttle use solid propulsion? Why has NASA chosen the current Space 
Launch System configuration? Mission requirements drive the process. 
When NASA was preparing to go to the Moon in the 1960s, it determined 
that large amounts of thrust (7.5 million lbs. at liftoff) were needed 
for the first 2.5 minutes of flight, to put the Apollo spacecraft and 
lunar lander on the surface of the Moon. To meet the mission need, NASA 
recognized that much development and testing effort of liquid oxygen/
kerosene systems was required, and therefore restarted the Air Force's 
E-1 development from the 1950s as the F-1 program.
    In comparison, during development of the Space Shuttle, NASA 
determined that it had a lower payload delivery requirement and less 
need for large liquid oxygen/kerosene systems. This decision was 
certainly influenced, as are most policy decisions, by constrained 
budgets. This meant building the safest and most capable system 
possible, based on specific mission requirements, within budget limits. 
When NASA was developing the Space Shuttle, solid propulsion was being 
used by the Titan system and other Defense Department strategic 
systems. Therefore, NASA determined that these solid systems could be 
scaled up to meet the Shuttle requirements, thus allowing the Agency to 
take advantage of an existing solid propulsion industrial base to help 
reduce development and lifecycle cost. The development cost estimates 
for the Shuttle's solid booster were approximately $1 billion, (in 
early 1970 dollars) which was lower than competing liquid propulsion 
systems. While NASA also recognized that operations costs for the 
solids would be larger over the life of the Space Shuttle Program, the 
trade-off was that near-term development costs were more manageable, 
and near-term budgets were likely more achievable, given that upfront 
development costs would be less.
    Recently, many of the same challenges weighed during the Apollo and 
Shuttle development eras, were again considered by NASA during the 
planning and development process for the new Space Launch System. When 
beginning to design what would become the Space Launch System, NASA 
looked at many launch configurations, weighing the pros and cons of 
each. Again, technical performance, challenges associated with limited 
budgets, the need to launch the first flight as early as possible, and 
impacts to the propulsion industrial base weighed heavily in NASA's 
decisionmaking.
    Ultimately, for the Space Launch System, NASA determined that using 
the solid boosters, based on Space Shuttle experience and 
Constellation/Ares development of the five-segment booster, minimized 
the upfront development costs, reduced the development risks, and most 
likely would result in a more timely first flight of the Space Launch 
System. NASA had also demonstrated, over 110 Space Shuttle flights, 
that solid propulsion issues resulting in the Challenger disaster had 
been addressed. In addition, NASA chose to utilize over 40 years of 
investment in large liquid oxygen/liquid hydrogen engines, and 16 
available RS-25s from the Space Shuttle Program, to minimize 
development cost and risk. As NASA proceeds through the Space Launch 
System evolution from the 70 metric ton (mt) to the 130 mt system, 
operations costs are an important factor. NASA's plan is to conduct a 
full and open competition for the booster system development, between 
solid and liquid systems, for the 130 mt vehicle. This competition will 
be requirements-driven, with NASA making proposed development and 
operations costs a key decision criteria in terms of which companies 
will be ultimately selected to do the work.
    Following the Apollo Program, the U.S. Government focused on 
utilizing solid propulsion systems and liquid oxygen/liquid hydrogen 
systems, limiting its hydrocarbon investments. The U.S. aerospace base 
reacted by focusing its investments in these areas. Major investment 
decisions made by owners of key propulsion systems affect other users. 
For example, the RS-68 used today on the Delta IV shares a significant 
amount of its supply chain with the Shuttle's RS-25, and therefore, 
increased use of the RS-68 will have the favorable effect of reducing 
per unit costs on the RS-25. Another example would be the 
interdependency of the NASA solid propulsion use and supply chain with 
the U.S. Navy's Strategic Missile D-5 fleet and most Defense tactical 
systems.
    It is clear that cost growth associated with access to space and 
propulsion is a major threat to the competitive U.S. launch posture. 
Therefore, it is essential that the U.S. rocket propulsion industry 
directly and aggressively address launch system costs, working to drive 
down the cost to develop and operate launch vehicles and propulsion 
systems.
    The question in front of us now, in my opinion, is how do we best 
utilize this Nation's precious financial resources to address the U.S. 
launch and propulsion needs? I would submit that focusing our attention 
on reducing operations costs of propulsion systems will have the most 
significant, long-term, beneficial outcome for the Nation, thus 
improving the United States' ability to get to space and assure long-
term U.S. launch competitiveness. We also need to address concerns of 
skill atrophy as our current aerospace workforce ages or changes 
careers. In my opinion, these challenges are best addressed with 
technology investments directed toward addressing the operations costs, 
and do not require full development programs. Investments in new 
manufacturing techniques such as selective laser melting, 3-D printing, 
and building and testing the hardware developed with these technologies 
are critical to furthering the technology and retaining the needed 
skill base. Use of more efficient government/industry management 
models, designs meant to reduce operations costs, along with the new 
manufacturing technologies are also needed.
    In conclusion, our national competitive spirit and history of 
ingenuity has proven, and will continue to prove, to be the best tool 
to reduce costs while maintaining, and even improving, services and 
products. The United States should build upon its long investment in 
solid and liquid oxygen/liquid hydrogen propulsion systems, and allow 
the marketplace to provide viable choices for use by NASA and the 
Department of Defense. Competition will incentivize industry to develop 
efficient management models, use the new technologies that will reduce 
costs, and continue to search for and develop technologies necessary to 
reduce development and operations costs.
    Thank you for allowing me to appear before you today to share my 
testimony, and I would be happy to take your questions.

    Senator Nelson. Thank you.
    Dr. Kim?

     STATEMENT OF DR. YOOL KIM, SENIOR ENGINEER, THE RAND 
                          CORPORATION

    Dr. Kim. Mr. Chairmen, ranking members, and distinguished 
committee and subcommittee members, thank you for the 
opportunity to testify before you today on this important 
issue.
    Today, I will focus on the conclusions of a RAND study 
mandated by Congress on the national security implications of 
continuing to use foreign components for launch vehicles under 
the EELV program. I will discuss risks of using foreign 
components under the EELV program and the potential effects on 
the U.S. space launch capability and national security space 
missions if an interruption in the supply of those components 
should occur.
    The Atlas V and the Delta IV launch vehicles in the EELV 
program have several major foreign components or subsystems and 
many more lower tier components from countries all over the 
world. The risk of potential supply interruption of most 
foreign components in the EELV program is low and manageable.
    The foreign component of most concern is the Russian RD-180 
engine, the primary booster of the Atlas V launch vehicle. The 
RD-180 engine supplier poses a moderate risk of a supply 
interruption primarily related to the political concerns with 
Russia, although the supplier has strong financial incentives 
to continue deliveries to ULA. The RD-180 engine is the most 
critical component in terms of costs, schedule, and the 
technical difficulty associated with developing an alternative 
engine source. An interruption in the RD-180 engine supply 
would cause a significant disruption in EELV launch operations 
because a large number of Atlas V launches are scheduled in the 
next few years, and a significant effort would have to be made 
to mitigate the disruption.
    Should a long-term interruption in the RD-180 engine supply 
occur, risks to the U.S. space launch capability could be 
mitigated by using the stockpile of RD-180 engines that ULA 
maintains and by moving some satellites carried on the Atlas V 
to Delta IV until a new entrant launch vehicle from a different 
launch service provider or a re-engined Atlas V becomes 
available. However, the mitigation efforts have significant 
costs implications and relying on a single launch vehicle would 
pose a higher risk to U.S. access to space. More details on the 
mitigation approach and remaining risks are described in my 
written testimony.
    Although some national security space satellites are likely 
to be delayed during disruption, the risk will be low for most 
national security space missions if national security space 
satellites are given priority in use of the RD-180 engine 
stockpile, particularly for the launch of the critical 
satellites on Atlas V. However, many variables will influence 
the mitigation approach which should be based on a 
consideration of the tradeoffs regarding the cost and schedule 
and the mission risks of different options.
    Again, thank you for inviting me here today to testify on 
this very important national issue. I look forward to your 
questions.
    [The prepared statement of Dr. Kim follows:]
                 Prepared Statement by Dr. Yool Kim \1\
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    \1\ The opinions and conclusions expressed in this testimony are 
the author's alone and should not be interpreted as representing those 
of RAND or any of the sponsors of its research. This product is part of 
the RAND Corporation testimony series. RAND testimonies record 
testimony presented by RAND associates to Federal, State, or local 
legislative committees; government-appointed commissions and panels; 
and private review and oversight bodies. The RAND Corporation is a 
nonprofit research organization providing objective analysis and 
effective solutions that address the challenges facing the public and 
private sectors around the world. RAND's publications do not 
necessarily reflect the opinions of its research clients and sponsors.
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  risks and mitigation options regarding use of foreign components in 
                        u.s. launch vehicles \2\
---------------------------------------------------------------------------
    \2\ This testimony is available for free download at http://
www.rand.org/pubs/testimonies/CT413.html.
---------------------------------------------------------------------------
    Mr. Chairmen, ranking members, and distinguished committee and 
subcommittee members, thank you for the opportunity to testify before 
you today on this important issue.
    My testimony today will focus on the key findings from the RAND 
research \3\ on the implications of using foreign components in the 
Evolved Expendable Launch Vehicle (EELV) program. This study, mandated 
by Congress, was commissioned out of concern that the U.S. launch 
vehicle fleet depends on foreign components--most notably, the Russian 
RD-180 engine, the primary booster engine for the Atlas V rocket. I 
will identify the foreign components in the EELV program, describe the 
supply risk of these components, and assess the potential effects of 
supply interruptions on U.S. space launch capability and national 
security space missions.
---------------------------------------------------------------------------
    \3\ Section 916 of the National Defense Authorization Act for 
Fiscal Year 2013 directed the Under Secretary of Defense for 
Acquisition, Technology, and Logistics (USD [AT&L]) to conduct an 
independent study to assess the potential risk of using foreign 
components in the EELV program. The Space and Intelligence Office in 
the Office of the USD(AT&L) asked the RAND National Defense Research 
Institute to help in such a study, and this report constitutes RAND's 
response to that request.
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             foreign components in the eelv launch vehicles
    Both the Atlas V and Delta IV launch vehicles in the EELV program 
have complex supply chains with hundreds of participants, both U.S.-
based and foreign. An interruption in their supply for the EELV could 
prevent the launch of critical national security space assets.
    There are five major foreign components in the EELV. The RD-180 
engine, the primary booster in all Atlas V launch vehicles, is supplied 
by NPO Energomash, a Russian company largely owned by the Russian 
Government. The payload fairing, the interstage adapter, and the 
payload adapter system in certain Atlas V variants are supplied by 
RUAG, a Government-owned Swiss company. The fuel tank on certain Delta 
IV variants is supplied by Mitsubishi Heavy Industries, a publicly held 
Japanese company. Some Delta IV launch vehicles also use the RUAG 
payload adapter system.
    Lockheed Martin chose the RD-180 engine for its Atlas V launch 
vehicle because of its proven track record of success (based on the 
flight history of its predecessor engine), performance, and lower cost. 
The U.S. Government was actively pursuing space cooperation with Russia 
in the 1990s and encouraged private-sector cooperation with Russia and 
other former Soviet Union states because of proliferation concerns.
    The RD-180 engine is the most critical foreign component in terms 
of cost, schedule, and the technical difficulty of developing an 
alternative engine source. Other foreign components pose less risk: the 
cost and timelines associated with acquiring alternative sources for 
them would be less stressing, though not insignificant.
                      risk of supply interruption
    A supply interruption could occur for a number of reasons, 
including financial problems, production delays, and political 
disputes. We found the risk of financial problems or production delays 
is not that different for foreign and U.S. suppliers. Although NPO 
Energomash shows evidence of financial problems, it also has strong 
financial incentives to continue deliveries to United Launch Alliance 
(ULA). Moreover, in the event of financial distress or bankruptcy, it 
might be able to continue to operate under protection from its 
creditors, or its assets could be sold to other firms to avoid supply 
interruptions. NPO Energomash might also receive funding from the 
Russian Government, the primary owner of the company. Production risks 
from product failures, industrial accidents, labor strikes, and natural 
disasters do not occur very frequently, and they do not seem to be 
higher for foreign suppliers than for U.S. suppliers.
    Political factors, however, are a different matter. Foreign policy 
disputes with Russia in particular pose an uncertain threat. The risk 
of political conflicts with the other foreign suppliers is low because 
the United States has some form of defense cooperation (including 
defense space cooperation) with the countries in which these foreign 
suppliers' headquarters or production facilities are located. This is 
not the case with Russia. The only other potential area of concern 
involves Swiss restrictions on defense exports, but this risk is 
relatively low because these components are used in space launch 
vehicles, not in weapon systems.
    In addition to the major foreign suppliers mentioned above, many 
lower-tier foreign suppliers provide complex manufactured components, 
software, electronics, and raw materials. However, these suppliers do 
not appear to pose a risk because most of them are located in countries 
closely allied with the United States, and most of these components 
have alternative sources. The few components that are sole-source are 
in France and Germany, close allies of the United States.
      mitigation measures for an rd-180 engine supply interruption
    Despite longstanding concerns about reliance on the Russian engine, 
ULA has not experienced any major disruptions in the acquisition of the 
RD-180 itself. Since the first launch of Atlas V 12 years ago, the few 
minor problems with RD-180 engines have never caused either a delay in 
the launch of an Atlas V or a launch failure. Nevertheless, given the 
concerns within the Department of Defense and Congress, various 
mitigation measures have been developed in case the supply of RD-180 
engines is interrupted.
    Maintaining a stockpile of at least 2 years' supply of RD-180 
engines has been a risk-mitigation strategy since the beginning of the 
program. The stockpile provides a hedge against short-term supply 
interruptions. In the event of a supply interruption that lasts longer 
than 2 years, the Air Force would need to move some Atlas V satellites 
onto Delta IVs and increase production of Delta IV launch vehicles 
while an alternative engine for the Atlas V is being developed. Two 
launch vehicle families are required for the EELV program according to 
the United States' assured-access-to-space policy.
    A number of alternative liquid oxygen/hydrocarbon engine designs 
exist within the U.S. rocket engine industrial base, but they are in 
their infancy. The development cost of an alternative engine can be 
expected to be on the order of $1 billion and could take about 6 years. 
These engines could also require modifications to the Atlas V launch 
vehicle because the engine loads might differ from those of the RD-180 
engine. Thus, the cost, schedule, and risk implications of developing a 
new engine must include the effects on the launch vehicle.
    All these options have cost implications. Ramping up production of 
Delta IVs could entail additional manufacturing costs. It could take a 
few years to ramp up depending on how quickly the manufacturer could 
accelerate the manufacturing and supply-chain capability to increase 
production. It might also be necessary to invest in launch 
infrastructure at Cape Canaveral Air Force Station to support increased 
Delta IV launches that would minimize launch delays of national 
security space missions.
    Domestic production of the actual RD-180 engines in the United 
States is another possible mitigation measure, but this option may not 
be desirable because it is only marginally better than developing a 
completely new engine in terms of cost and technical challenges.
    In addition to these measures, other domestic launch vehicles are 
emerging that may be able to meet some of EELV launch needs. Although 
not technically a mitigation for a RD-180 supply interruption, a new 
space launch entrant increases the options available for assured access 
to space. SpaceX's Falcon 9 launch vehicle has made the most progress 
in the new entrant certification process and, once certified, it may be 
able to launch some of the satellites currently carried on Atlas V, 
although the first launch may not occur until 2 years after 
certification.\4\ SpaceX's Falcon Heavy would be required to launch all 
the satellites carried by Atlas V, but this launch vehicle is not as 
far along in the new entrant certification process as Falcon 9.
---------------------------------------------------------------------------
    \4\ After certification, we assumed it will take an additional 2 
years before the first routine NSS launch on Falcon 9, a typical lead 
time required to prepare a spacecraft to fly on a launch vehicle on 
which it has never flown.
---------------------------------------------------------------------------
    Even with the mitigation measures in place, however, there are 
other risks that the U.S. space launch capability might temporarily 
face during a RD-180 engine supply interruption. First, the engine 
design expertise lies within NPO Energomash, and access to that 
expertise may not be possible during a supply interruption driven by 
political disputes. If this is the case, the United States may not have 
the technical expertise needed to resolve RD-180 engine anomalies in a 
timely manner during the transition period. Second, any unexpected 
delays in the availability of an alternative launch vehicle, either a 
re-engined Atlas V or a new-entrant launch vehicle, could undermine 
U.S. assured-access-to-space capability. If the Delta IV launch vehicle 
family were to encounter a problem during the transition period, the 
United States could temporarily lose the capability to launch national 
security space satellites until the problem was resolved. Third, while 
the Atlas V launch vehicle production is being ramped down during the 
transition to an alternative engine, the supplier base for the Atlas V 
could be affected. Some suppliers could disappear, depending on their 
level of reliance on Atlas V production. Weakening of the industrial 
base could lead to potential delays in delivering re-engined Atlas V 
launch vehicles.
 effects of foreign supply interruption on u.s. space launch capability
    Because the United States is launching a larger number of 
satellites for the next few years, its vulnerability to a supply 
interruption, particularly of RD-180 engines, is likely to be highest 
now and in the immediate future. A supply interruption of the other 
foreign components is likely to pose only a minor disruption because 
these components are only used in some--not all--of the Atlas V and 
Delta IV launch vehicles and the mitigation options (i.e., the number 
of components in stockpile and flexibility to move the satellites from 
the affected launch vehicle to another launch vehicle) can minimize 
launch delays. But an RD-180 engine supply interruption could cause a 
serious disruption in EELV launches because of difficulties in 
establishing an alternative engine source and the large number of 
scheduled Atlas V launches.
    If the flow of RD-180 engines were interrupted in the near-term, 
the stockpile would be sufficient to last about 2 years without further 
mitigation efforts. An interruption that lasts longer than 2 years--or 
is permanent--will require moving many satellites currently carried on 
the Atlas V to Delta IVs. The current Air Force contingency plan would 
call for Atlas V operations to gradually ramp down and for Delta IV 
operations to ramp up to support the satellites originally intended to 
launch on Atlas Vs until a new entrant launch vehicle or a re-engined 
Atlas V becomes available.
    Based on our assumption that national security space launches would 
take priority over civil and commercial launches, we conclude that the 
RD-180 engine stockpile appears to be sufficient to protect the launch 
schedule of a set of Atlas V satellites that are too difficult or too 
costly to move to Delta IVs. Nevertheless, some national security space 
launches are likely to be delayed while the Delta IV launch vehicle 
production ramps up because of the limited number of Delta IV launch 
vehicles and the limited launch throughput capacity at Cape Canaveral 
Air Force Station. Decisions about which launches should be delayed 
would be based on the priority of the national security space mission 
that the satellite supports and the operational status of the satellite 
constellation, with inputs from senior U.S. space leadership. We 
believe the risk these delays would cause is low for most national 
security space missions. However, we note that many variables will 
influence the final decision on the mitigation approach and which 
launches would be delayed. Other assessments of the impact of an RD-180 
supply interruption on U.S. space launch capability may differ from 
ours if they are not based on the same assumptions.
    In summary, there are both risks and benefits of using foreign 
components in the EELV program. The risk of potential supply 
interruption of most foreign components is low and manageable. The 
foreign component of most concern is the Russian RD-180 engine, but the 
impact of an interruption in its supply could be mitigated. Many 
variables will influence the mitigation approach, which should be based 
on a consideration of the trade-offs regarding the costs and schedules, 
and thus mission risks, of different options.
    Again, thank you for inviting me here today to testify on this very 
important national issue. I look forward to your questions.

    Senator Nelson. Thank you.
    Congratulations, all of you have set a Senate record. 
[Laughter.]
    All seven of you. It leaves time for our Senators to ask 
questions. I will defer my questions and do cleanup at the end. 
Other than the chairman and the ranking member, we will call 
the Senators in order in which they came. Senator Udall?
    Senator Udall. Thank you, Mr. Chairman.
    Our mission here as a Congress and a country is to assure 
access to space for both civil and military missions. Both 
committees are here because this is so vital. Space access is 
vital to our economy, our national security, as well as 
communications, our weather forecast networks, and our 
scientific efforts. In that context, I want to just touch on 
two of, I think, key issues that are attached to this mission.
    First, is the ongoing effort to introduce competition into 
the launch market. Having additional certified competitors in 
the marketplace will help lower the cost of delivering payloads 
into space and, of course, drive innovation. We must also 
ensure that those providers--and many of you have spoken to 
this--are able to meet the technical requirements necessary to 
provide mission assurance. We make significant investments as a 
country in our space-based assets and we have to be absolutely 
confident that they reach the proper orbit safely.
    Second, we have to address the recent developments with 
Russia and our reliance on the Russian-built liquid rocket 
engine used on the Atlas V medium-lift vehicle. Atlas, as you 
all know, is a proven workhorse with a tremendous record of 
success for civilian and military lift. Since the 1990s, our 
policy has been to stockpile the Russian engine rather than 
develop a domestic engine. We are now reevaluating that policy, 
and you all have begun to give us a sense of how we should 
proceed.
    In that context, I want to turn to General Shelton, who is 
known as someone who will give us frank, no-nonsense 
assessments, and we truly appreciate your contributions in 
leadership, General Shelton. I know you are going to retire 
soon. I am particularly glad you are going to stay in Colorado 
Springs, and I look forward to working with you whatever your 
retirement holds because I know you, and I know you are not 
really going to retire. Let me turn to you.
    As the Commander of Air Force Space Command, you place a 
high value on mission assurance, given the critical importance 
of cost of the satellites that DOD launches. I have a multi-
part question related to mission assurance.
    Number one, can you explain what effects the launch 
failures in the 1990s had on DOD? That is number one.
    Number two, can you explain the role of mission assurance 
in the current EELV program as compared to the late 1990s when 
those failures occurred?
    Number three, finally, can you explain the importance of 
the added performance margin the Air Force puts on the EELV 
rockets and how that margin contributes to mission assurance?
    General Shelton. Thank you, Senator Udall. Thank you for 
your kind words too, of course.
    Senator Udall. Well deserved.
    General Shelton. As we look back at the 1990s, between 1997 
and 1999, we had significant failures both on the military side 
and the commercial side, including three Titan IVs which 
launched our most significant payloads at that time.
    We had adjusted our approach to mission assurance from what 
has been traditionally deep oversight into just insight. We 
pretty much gave it over to the contractors to provide their 
own mission assurance. We found out that just did not work well 
for us.
    As we turned that around and went through some extensive 
introspection, had a nationally significant study come forward, 
we decided to get back into the deep oversight business, and 
that is what we do today. Very deep penetration of process, 
very deep penetration of actual processing of every launch 
vehicle. As I said in my opening statement, we treat every 
launch as if it is our very first, and so what happened in the 
past in terms of success, we do not pay much attention to. We 
pay a lot of attention to the launch of the day.
    As we look at that performance margin, 7 percent, about 5 
percent of that--5 of the 7 is for mission growth. We order 
launch vehicles about 2 years in advance. We see payloads 
sometimes get heavier during their development process toward 
the end, and we reserve that 5 percent. The additional 2 
percent is just in case something goes wrong with that rocket. 
About a year and a half ago, we were launching a global 
positioning satellite (GPS) mission, and we had problems with 
the upper stage. Luckily, we had margin to make it to orbit or 
we would have had a failed mission. That is the reason for that 
margin. That is the reason for our continued emphasis on 
mission assurance.
    Senator Udall. In your opinion, do we need to develop a 
liquid rocket engine for medium and heavy lift, and if so, how 
urgent is that requirement?
    General Shelton. If you look at what has happened to us now 
in the last few months, I think it points to a vulnerability 
that we have. We had decided to rely on a foreign supplier. It 
is probably the most advanced rocket engine in the world, by 
the way. That has worked extremely well. If you look at the 
Atlas V performance, there is nothing to complain about the 
Atlas V performance.
    But given that reliance, it is probably time to look at 
strategies for the future, and I think we can certainly help 
our liquid rocket engine industrial base by moving into such a 
program. I think we need to study the requirements. I think we 
need to look at what kinds of technologies we need to develop, 
but in my opinion, it is time to move off reliance on that 
foreign engine.
    Senator Udall. Thank you.
    Senator Nelson. Senator Sessions?
    Senator Sessions. Thank you. It is good to follow my 
chairman, Senator Udall.
    To follow up on that, General Shelton, in your opinion is 
it a national security priority for the United States to 
develop an American-made engine that could replace the RD-180 
first?
    General Shelton. Yes, sir. If you consider space a national 
security priority, then you absolutely have to consider assured 
access to space a national security priority. Given that we 
have a vulnerability here, it is time to close that hole.
    Senator Sessions. I could not agree more. We definitely 
depend on space capability for communications, for observation, 
and it is just a base part of our national security, as well as 
our commercial activity.
    Mr. Rogozin, a deputy prime minister in Russia, also said 
in May, ``Russia is ready to continue deliveries of RD-180 
engines to the United States only under the guarantee that they 
will not be used in the interest of the Pentagon.'' You are 
part of the Pentagon, are you not?
    General Shelton. Yes, sir.
    Senator Sessions. Look, that is just not acceptable, and it 
puts us in a vulnerable position that I wish we did not have to 
be in, but it is time for us to rise to the occasion and fix 
this situation. I am open to ways to do it, and we will keep 
working to do it in a way that is effective.
    But I have been pleased with the Senate legislation that we 
worked on. I think that balanced and considered the challenges 
that we faced and tried to do it in the right way. The House 
has also come up with a similar proposal. I am glad to have a 
public hearing about this and discuss it. Let us just keep 
talking about it to try to get it right.
    Mr. Lightfoot, you have been at NASA for some time, and you 
started the National Institute for Rocket Propulsion Systems 
(NIRPS) and have studied these issues over the years. Does the 
institute at NASA have the people with the skills and 
experience that could assist the Air Force in this effort to 
develop an American replacement for this engine? I would ask, 
if so, would NASA desire to be compensated for their efforts?
    Mr. Lightfoot. Senator Sessions, I think the NIRPS that we 
put in place is not just NASA. DOD is part of that, as well as 
other agencies and a lot of the industry folks. I think the 
institute itself was set up to be able to pull together all the 
propulsion system resources this country has to solve problems 
that could come up, whatever they are. If we chose to go down 
that path, I surely would think we would use NIRPS. It would be 
part of that solution space, and you get to pull in the 
expertise that all the government agencies have if we choose to 
go that way.
    That is not in our plan today. Of course, we would be 
interested in getting compensated for that. But I think the 
team right now works together fairly well with us and DOD from 
that standpoint.
    Senator Sessions. You do have something, you believe, at 
NASA, and NASA has something they could contribute to the 
effort.
    Mr. Lightfoot. Yes. I think our expertise that has been 
hands-on for years in developing our own launch systems we can 
bring to that story as well.
    The issue that Mr. Dumbacher talked about in terms of the 
lack of development of LOX/hydrocarbon engines in the past--
this is a gap in our base, but the team at Marshall Space 
Flight Center, in particular, has been working on this for some 
time in a low level activity to try to keep up with that 
technology as we move forward. I think we can bring that to 
bear to help our friends out if we choose to go that way.
    Senator Sessions. Mr. Dumbacher, I will ask you. You are 
more of an independent observer here perhaps, but do you think 
that there will be any fundamental technological engineering 
difficulties that would make it hard or unlikely that we could 
develop this engine? Or do you believe the United States could 
produce an engine similar to the RD-180 that could be as 
effective or more so?
    Mr. Dumbacher. Senator, I believe that we can do that, that 
we can develop an engine within a sufficient time and money. 
There are development risks associated with it, three in 
particular. One is the high pressure oxygen compatibility of 
the materials that we use in the engine system. Combustion 
stability has been an historic issue with large LOX/kerosene 
engines, and also how you handle the start transient depending 
upon which cycle you use for those engines. There are technical 
issues to be addressed. I think we can overcome those, but it 
is a matter of time and money required to do that.
    Senator Sessions. Mr. Lightfoot, do you think it is also 
technologically--it seems to me it is a fairly mature 
technology now. How do you feel about it? What kind of 
confidence level do you have that such an engine could be 
produced?
    Mr. Lightfoot. Sir, I think that we could get to an engine, 
as Dan said. I think the challenge we have to look at is the 
launch system is not just the engine. There will be impacts 
that go to the launch vehicle, to the launch infrastructure. 
When we talk about a launch capability, I have an analogy I 
have been using related to--I have hybrid cars, 4-cylinder, 6-
cylinder, 8-cylinder, and I have diesels. If I change your 
engine, I would probably change your car a little bit as well. 
We have to look at the impacts on not just building an engine 
and having an engine to use, but the impacts on the 
infrastructure that goes around that. Can we do it? I am sure 
we can with the right resources to go do it. But I think we 
have to make sure we understand the other pieces that come with 
that as we go forward.
    Senator Sessions. My time is up.
    Senator Nelson. Senator Cruz?
    Senator Cruz. Thank you, Mr. Chairman. Thank you, all of 
you, for coming here and providing your expertise.
    In life, it is often a wise strategy to hope for the best 
and yet plan for the worst. That is especially true in the 
national security context. I would welcome the wisdom of this 
panel on what the implications would be for our national 
security if the worst occurs and what the best avenues we have 
to alleviate those implications.
    In particular, General Shelton, I would like to start with 
you. Assume that conditions and relations with Russia 
deteriorate substantially. I hope that they do not, but assume 
that they do. Assume that Putin adopts a position of maximum 
belligerence and picks up the phone and instructs all engine 
exports to end tomorrow. What would the implications be for 
U.S. national security if that decision were made?
    General Shelton. Senator, as we look at that, as one of the 
number of scenarios we have considered, we think as a minimum 
that would be about $1.5 billion. We think that that would 
stretch out launches. We have to ramp up the production of our 
Delta factory, which would take some time. That would stretch 
out launches maybe 12 to 20 months in some cases; for the 
heavier missions, maybe even 48 months. That puts 
constellations at risk, and the ones that we are talking about, 
the heaviest ones, are our most significant constellations. It 
is dire. If that should happen, there is no question that 
inside this manifest that we are considering right now, there 
would be serious national security implications.
    Senator Cruz. To what extent could our existing stockpile 
of engines reasonably be stretched to cover the needs? How long 
could we expect it to cover our needs?
    General Shelton. Sir, we have 15 engines left right now. 
Depending on how we chose to meter those out, I think Mr. 
Lightfoot said in his opening statement that we would have to 
meet nationally to decide how we would allocate those engines. 
But that is all part of this set of scenarios that we are 
considering right now. We do not know the exact impact until we 
get together and decide how we would allocate those 15.
    Senator Cruz. On best case, are we talking a year? Are we 
talking 2 years? How long would you reasonably expect the 
stockpile to be able to meet the needs?
    General Shelton. We could meter that out over a number of 
years depending on what you decided to spend those engines on.
    Senator Cruz. Mr. Lightfoot, let me ask you the same 
hypothetical, maximum belligerence, but let us assume that Mr. 
Putin did not just say engine exports. He also said the Soyuz 
has a shutdown. No more Americans will have access to our 
launch capacity for manned launch. What would the impact be on 
the Space Station and on our needs?
    Mr. Lightfoot. I think we would clearly have to go assess 
what that would do to us from access to station. To date, we 
have seen no change in the behaviors at all. We continue to 
launch Soyuz and put people up there. I want to make sure that 
is really clear regardless of Rogozin's comments. Our teams are 
working together with the Russians very well to continue the 
ISS operations. Clearly the ISS is our stepping stone to our 
larger exploration program. We would have to go look at the 
implications associated with that, and it would be significant 
from that standpoint. Then we would work----
    Senator Cruz. Can you briefly describe, if it was cut off, 
what the implications would be in your best judgment?
    Mr. Lightfoot. Yes. We would want to accelerate our 
commercial crew activity so that we are launching from here, 
from the United States, from that standpoint, and let our 
partners that have bid on that proposal now and the one that we 
have in selection--let them come forward and show us how they 
would provide the access to the ISS that we need.
    But it is more than just the launch to the station. The 
Russians also operate key components on the station just like 
we do for them. That would be the issues that we would have to 
go assess one by one.
    Senator Cruz. In light of those concerns, both with engines 
and manned launch capacity, if a decision were made to proceed 
forward with maximum speed towards acquiring the domestic 
capacity to fill these needs, realistically how quickly could 
we do so and how many commercial enterprises possess the skill 
and expertise to be credibly able to meet that need?
    General Shelton. I will start.
    The only provider that is really in a serious certification 
process right now is SpaceX. If everything goes extremely well, 
a very green light schedule, by December of this year, we could 
have them certified. If you look at Atlas V, there are 10 
configurations of Atlas V due to the various upper stages, 
strap-on solids, those sorts of things. SpaceX--there are seven 
of those 10 configurations that they could not launch. They do 
not have the lift capacity for that. They have a heavy vehicle 
planned in the future, but that is down the road a ways. That 
means that SpaceX could compete for some of those. We would 
need to ramp up Delta IV production to accommodate the rest. We 
are probably looking at, again, 12 to 48 months slip on some 
launches.
    Senator Cruz. Mr. Lightfoot, anything to add on the manned 
launch?
    Mr. Lightfoot. No. I think we would work with these guys to 
figure out which critical missions we needed to get done and 
how we would work them into the manifest. But we should expect 
a significant impact.
    Senator Cruz. How quickly could we fill the manifest?
    Mr. Lightfoot. At the current proposals that we have, we 
think we can be flying by 2017, putting humans into space from 
our location. I do not know if there is much we can accelerate 
at this point because of the way the process works, but what we 
would prefer to do is just keep the funding for the commercial 
crew program going so we can meet the 2017 date.
    Senator Cruz. Thank you very much.
    Senator Nelson. Be prepared to answer the question, if you 
got more money, could you accelerate that to 2016.
    Senator Wicker?
    Senator Wicker. Why don't you just answer that question? 
[Laughter.]
    Mr. Lightfoot. I think part of the issue we are dealing 
with is, is we are in the middle of a procurement. Right? We 
have a procurement right now that we will make a selection on 
later this fiscal year. Having not seen the proposals because I 
am not part of that procurement board, I cannot tell you what 
the acceleration options are. However, at some point, when you 
order--we are in 2014 already here. When you order a rocket, we 
typically order them 3 years in advance from when we are doing 
it. That is where we are.
    Senator Wicker. There are considerations other than funding 
that are going to take time.
    Mr. Lightfoot. Yes, sir. Yes, sir, exactly, to manufacture 
the long-lead items and all the different pieces that come into 
building these things.
    Senator Wicker. I think probably the chairman would want 
you to get back to us about how we can be helpful in pushing 
the timeline.
    Let me ask this. I will start with General Shelton and Mr. 
Estevez. Now, in developing the U.S. alternative to the Russian 
RD-180 engine, the Air Force research laboratories are going to 
want to be involved, and Stennis Space Center is going to be a 
key player. Can you tell us at this point how costs for testing 
compare between these two facilities? Given their respective 
workloads and priorities, would the developmental timeline and 
costs be less by utilizing the Stennis Space Center as opposed 
to the Air Force Research Laboratory (AFRL)?
    General Shelton. Sir, I could not give you an outright 
comparison, and I would not necessarily expect it would be an 
either/or. I would think that that would be divvied up. We have 
had work going on in the AFRL facility since 2007 on the 
hydrocarbon engine. That was part of the direction coming out 
after the decision to not co-produce RD-180s and to stockpile 
instead. I think Stennis has great capability. I think we would 
utilize Stennis for some things. I think we would use AFRL 
facilities for other things. We would use commercial facilities 
for yet other things.
    Senator Wicker. Okay. Before we move to Mr. Estevez, you 
could go back, though, and get the committee some cost 
comparisons for testing in the past and supply them to us on 
the record. Would you be able to do that?
    General Shelton. Yes, sir.
    Senator Wicker. Look for that and let us know.
    General Shelton. We will try to do something that is apples 
to apples. That may be difficult but we will give it a shot.
    [The information referred to follows:]

    The Air Force Research Lab (AFRL) Rocket Propulsion Division, 
located at Edwards Air Force Base, CA, has a mission to explore rocket 
propulsion science and technology for Air Force and Department of 
Defense applications. The primary mission of the National Aeronautics 
and Space Administration (NASA) Stennis Space Center (SSC), MS, is 
development testing, qualification testing, and production testing of 
engines. There are many variables in an engine test program and the 
types of testing and associated costs for both sites are nominally 
different; the AFRL focus is on experimentation and research, while the 
SSC focus is on testing and validation for acquisition activities. A 
specific test program is typically unique and tailored around a 
customer's test requirements. Thus, we have no comparable costs 
available between AFRL and SSC efforts.
    While a comparison of test costs is not meaningful due to unique 
capabilities, we can provide updates on current efforts at both SSC and 
AFRL facilities. The Air Force is working jointly with NASA to conduct 
hot-fire testing of U.S.-designed hydrocarbon components in fiscal year 
2017 using hardware from both NASA Marshall's Advanced Booster 
Engineering Demonstration and Risk Reduction (ABEDRR) hardware and 
AFRL's Hydrocarbon Boost (HCB) program. Planned development will 
leverage NASA's ABEDRR and AFRL's HCB to provide key engine component 
technical maturation and risk reduction. The Air Force intends to 
provide $3 million to the HCB effort in addition to the funding already 
allocated. The Air Force also plans to provide $37.6 million to NASA to 
complete the ABEDRR testing and modify the NASA Stennis Spaceflight 
Center test hardware.

    Senator Wicker. Okay.
    Mr. Estevez?
    Mr. Estevez. First, I would reiterate what General Shelton 
said. But we are looking at this, how to move forward with a 
replacement for the RD-180, as a whole-of-government issue. To 
Mr. Lightfoot's earlier comments, we would look at NASA 
capabilities, as well as what we have inside DOD and, as 
General Shelton said, look at what the commercial sector is 
also doing. We have not decided what the best way forward is; 
ergo, it is preliminary to decide where we would start that 
development. We do want to move forward with some risk 
reduction activities. In fact, we put some money in the 
reprogramming action that we just put before Congress to do 
that.
    Senator Wicker. Mr. Estevez, do you agree, though, with the 
General that Stennis and the AFRL would be key players in any 
path forward?
    Mr. Estevez. I do.
    Senator Wicker. Okay. Now, for all of you, who wants to 
volunteer here? GAO has argued that there is room for 
improvement in coordination between NASA and DOD for future 
programs. Who has seen this report, and what do you believe 
could be done to make the improvements that GAO has suggested 
would need to be made? Who wants to tackle that? Mr. Lightfoot?
    Mr. Lightfoot. I will start. Then I will let these guys 
jump in.
    We have done several things to----
    Senator Wicker. Do they have a point?
    Mr. Lightfoot. I think when the report came out, they had a 
point. I think we have done a lot since then, though, to 
improve that communication.
    Senator Wicker. Already?
    Mr. Lightfoot. Yes, sir. We both have folks on site at all 
of our new entrants and the ULA folks as well, and we share the 
information, as best we can, across with each other depending 
on where the certification process is between the launch 
vehicles. We are going through that process and sharing 
information, which we think is the most important thing as we 
move through certification of these new entrants in the 
process.
    General Shelton. Senator, I believe there is tremendous 
transparency between NASA and the Air Force. There are 
processes set up to ensure that we are communicating back and 
forth. There are summits that occur at NASA, Air Force, and the 
National Reconnaissance Office leadership levels. It is hard to 
imagine it could be any better. We have different requirements.
    Senator Wicker. The GAO conclusion was perhaps a little 
unfair.
    General Shelton. Senator, that is not what I am saying. In 
the past, I would agree there were some areas we could do 
better in and we have.
    Senator Wicker. Okay.
    Mr. Estevez, let me ask you this. We are all agreed that 
there is a great opportunity for public/private partnerships in 
this engine development idea. Is that correct?
    Mr. Estevez. Yes, sir. In fact, we are doing an assessment 
now about what course to take in a replacement for the RD-180. 
You can look at an inside-government-only development. That is 
probably not the best course, but we are going to look at that, 
look at jump starting some things, some risk reduction, and 
then turning that to the private sector, hopefully, that they 
will build. That is one way to do it. A public/private 
partnership is another way. We have an assessment, after the 
Mitchell study laid out some ways forward, that is ongoing 
inside the Air Force right now, and we expect that to come out 
sometime this fall.
    Senator Wicker. General Mitchell, do you want to conclude 
my brief few seconds on that issue?
    Mr. Mitchell. Yes, sir. There are some risk reduction 
activities that need to bring the technology levels up in 
hydrocarbon engines that need to be invested in. That will take 
a year and a half or so or 2 years to bring those technologies 
up that were discussed. They have to do with the materials. 
They have to do with the modeling of the combustion instability 
and some of the piece parts of the engine itself, injectors and 
other components, that need to be matured over the next year-
year and a half to position yourself to start a full-scale 
development program probably in the last fiscal year 2016-
fiscal year 2017 timeframe.
    Senator Wicker. Thank you, Mr. Chairman.
    Senator Nelson. I am going to recess the committee 
momentarily to go over and finish the vote. Chairman Udall will 
take over the committee when he arrives.
    Let me just ask. I have seen the Air Force study on a 
replacement for the RD-180. I have heard various estimates on 
costs. I have heard various estimates on time. Are we looking 
at, in reality, 7 or 8 years to have an engine ready to go in a 
rocket, whether it be a version of the Atlas V or whatever? Is 
that a realistic timeframe, or is it more or can it be less?
    Mr. Estevez. Too soon to tell, 5 to 8 years is what we are 
looking at. We want to do this right, though, to the earlier 
discussion about mission assurance, and figuring out the course 
and what the most affordable way to do it is also a key part of 
that decision point. While this is a priority, there are other 
things in the mix. I would hesitate to make a firm projection 
at this point, Senator, until we know exactly where we are 
going. We do know we are going to replace it, though.
    Senator Nelson. Do you want to give a ball park on cost to 
replace the RD-180?
    Mr. Estevez. Estimates were in the $1 billion to $2 
billion. Again, until we get a course ahead how we are going to 
do that public/private partnership, government-only, all those 
things change that dynamic. I would really hesitate to make a 
true assessment of that at this point.
    Senator Nelson. That is overall cost, including the 
alterations to the rocket that you would put it in.
    Mr. Estevez. I would have to go back and take that for the 
record, Senator, but I am happy to give you an estimate there.
    [The information referred to follows:]

    The $1 to $2 billion estimate is for an engine development program 
only. The additional cost associated with integrating a new engine into 
an existing launch vehicle can vary greatly depending on the designs 
involved. The cost associated will be significant, and could easily run 
into the hundreds of millions, if not more.

    Senator Nelson. Okay.
    The good news is that it seems like President Putin is not 
quite as aggressive as he first appeared to be. It is also 
fairly clear that Roscosmos certainly does not want to give up 
that income stream, and it looks like that from their 
standpoint, they clearly want to continue to supply the RD-180.
    But we have seen this movie before. It was back a decade or 
so ago that we said we were going to start the process of the 
replacement of the RD-180, right when we started acquiring 
these in the 1990s, and then we backed off of that. Here we are 
again, and that is part of the issue of the day.
    I am going to recess the committee because we are down to 1 
minute to vote. I am going to see if I can sprint. The 
committee will stand in recess until the call of the chair. 
[Recess.)
    Senator Udall [presiding]. The committee will come to 
order. Thank you for your patience.
    I want to recognize Senator Kaine for 5 minutes.
    Senator Kaine. Thank you, Mr. Chairman, and thank you to 
the witnesses for your service and your testimony today.
    I have questions that are primarily going to be addressed 
to General Shelton and Assistant Administrator Lightfoot on the 
Wallops facility in Virginia.
    I guess it was last Sunday, July 13, Orbital successfully 
launched the second resupply mission to the ISS from Wallops in 
Virginia. Orbital is lined up to carry out eight cargo space 
missions to the ISS through 2016, making it a critical player 
in commercial space. Wallops is also in a unique position, and 
it is capable of launching certain national security payloads 
from that facility.
    Administrator Lightfoot, what are some of the benefits of 
having facilities like Wallops for launching smaller and mid-
size payloads?
    Mr. Lightfoot. Sir, I think you saw it today. The Cygnus 
spacecraft birthed to the ISS about 6:30 a.m. this morning. It 
was pretty exciting for us to get the crews there.
    The other thing it gives us is it gives us two different 
access points to get to the station, not only two different 
providers in SpaceX and Orbital, but we now have two locations 
from which to fly, which helps us from that standpoint. It has 
been very good for us an agency to have the folks at Wallops 
and their little team do what they have done to provide us that 
access to the station.
    Senator Kaine. Just on that, it is good to have two places 
to launch from. Is that just a matter of scheduling, gives you 
more flexibility or also are there aerospace reasons why 
launching sites in different parts of the country are helpful?
    Mr. Lightfoot. What it does is it gives the commercial 
providers--because we do not pick their launch site for them. 
It gives them the opportunity to get the best value for their 
launch vehicle, and so that is the advantage that they have 
had. We do not set where they fly from. They just go make that 
agreement themselves, and that makes it more of a competitive 
process.
    Senator Kaine. What are we doing to ensure that national 
defense agencies have some redundant capability for launching 
national security payloads into space? In the event that 
problems at either Vandenberg or Canaveral would occur such as 
natural disasters, et cetera, I would imagine that redundancy 
is a positive. General Shelton?
    General Shelton. Senator, there are physics-based reasons 
for having two different launch locations. For example, going 
out of Vandenberg, you are looking at largely polar orbits or 
test activity that goes out to the west. From the Cape, you are 
looking at lower inclination orbits. There really is not a way 
to produce redundancy for that physics-based problem unless you 
build brand new launch facilities. So, yes, we would be 
susceptible to a very broad destructive kind of event, but that 
has not happened in the history of space flight.
    Senator Kaine. Let me move on to the RD-180 replacement. 
General Shelton, you may have answered questions on this 
already. Forgive me for coming in a few minutes late. But what 
can DOD do to accelerate a timeline to develop a U.S.-built 
alternative to the Russian engine?
    General Shelton. Certainly it will take a very serious 
funding commitment, and we will go through some risk reduction 
efforts here and technology maturation efforts over the next 
couple of years. Then beyond that, it will take some very 
serious investment. If we want to stretch out the program, we 
can, but if we want to really get after a serious program, then 
we are going to have to have significant investment.
    Senator Kaine. Thank you.
    No other questions, Mr. Chairman. I just want to indicate 
that Wallops, the launch site in Virginia, is a well-kept 
secret. Most Virginians do not even know that rockets launch 
out of Wallops, which is just off the eastern shore, but more 
rockets have launched from Wallops than either Vandenberg or 
Cape Canaveral. The reason they are not generally known is that 
they are unmanned and they tend to be smaller, but it serves as 
a significant asset. We worked hard on it with our colleagues 
in Maryland because it is very close to the Maryland border. 
Chairman Mikulski has been a huge supporter of investments 
there. That additional launch capacity, I think, has served the 
Nation well, and I look forward to working with you in the 
future to continue that.
    Thank you, Mr. Chairman.
    Senator Udall. Thank you, Senator Kaine. The Commonwealth 
never ceases to surprise all of us. [Laughter.]
    I learned something as well. That is an important part of 
our whole aerospace consortium, if you will. Thank you for 
that.
    Mr. Estevez, let me turn to you, if I might. Before the 
current 36-core block buy, we procured our space launch as a 
service using a commercial waiver under the Federal Acquisition 
Regulations (FAR) that provided no cost insight into the 
structure of the procurement. What was the result of this 
waiver on that particular decision?
    Mr. Estevez. The statute requires us to acquire space 
launch services under FAR, part 12, which is a commercial 
service. There are good reasons for that, especially as we 
moved into commercial areas. However, we bought the block buy 
under FAR 15. We have full cost and pricing data from ULA. It 
gives us great insight into the cost structure of that. Going 
forward, I am not sure----
    Senator Udall. Would you recommend having the EELV program 
use it again?
    Mr. Estevez. Again, we are looking at the benefits and the 
negatives on that. Certain commercial providers do not have to 
deal with the same business system background and the like that 
we require under FAR, part 15. It has to be weighed 
acquisition-by-acquisition, frankly. But there are benefits to 
having that full cost and pricing that have been helpful to us.
    Senator Udall. Let me follow up with asking you to give us 
an explanation. Can you explain the nature of the cost overruns 
of that prior EELV contract? Then, what cost savings were 
achieved in the current contract, and how were they obtained?
    Mr. Estevez. The past was not really cost overruns because 
we were buying launch services as a contract-by-contract, 
launch-by-launch. We are buying a one each. But if you look at 
the program overall for the depth of the manifest, there was 
great cost growth; ergo, we ran into a Nunn-McCurdy situation 
for the EELV program.
    What we were able to achieve by doing the 36-core buy is 
economies of scale. ULA could go to their industry subs and 
give them a deal because they know they are going to launch a 
certain number; ergo, it lowers the cost in total for that. It 
gave us price stability. It gave them an understanding of what 
their business base was going to be, $4.4 billion over our 
projections in fiscal year 2012 savings to DOD, to the American 
taxpayers. A great benefit to us.
    Senator Udall. Let me turn to Ms. Chaplain. Nice to see 
you, as always. I believe this is the third time you have 
testified this year before our subcommittee, which I believe 
qualifies you for frequent flyer status, whether on an airplane 
or rocket. You can maybe make the choice. [Laughter.]
    Can you explain why the waiver under the FAR led to the 
lack of transparency in the cost increases in the EELV program?
    Ms. Chaplain. Yes. It is pretty simple. With the waiver, 
the government did not have the type of underlying cost and 
pricing data on critical pieces like the engines that it needed 
to make good negotiations, especially as it was going to commit 
to a large span of time under the block buy. Without that kind 
of data and if you are in a sole source environment, you are 
really crippled in terms of your negotiating position. If there 
is a competitive environment, it might not be such an issue 
because the competition itself can drive down prices.
    Senator Udall. You have reviewed the 36-core block buy, the 
current core block buy. Do you agree with that estimated cost 
savings of $4 billion on the current EELV contract?
    Ms. Chaplain. We have not thoroughly assessed the savings 
claim, but we do know that the Air Force took all the actions 
it needed to obtain those kinds of significant savings. They 
did gain much more insight into cost and pricing. They went 
through their launch processes, understood them more. They 
understood pieces of cost better and were just able to account 
for more things. When they went to the bargaining table, they 
were in a much better bargaining position.
    Senator Udall. General Mitchell, let me turn to you, if I 
might. Thank you for your service both on Active Duty but also 
on the committee that you helmed.
    You recommended the development of a domestic engine, I 
believe, to replace the RD-180. I assume the committee reviewed 
proposals from industry. How mature are those proposals, and 
what are the major technical hurdles in their development?
    Mr. Mitchell. I think we talked to all of the folks who had 
engine developments, and they range from what I will call 
viewgraphs to some piece parts that have been done to concepts. 
Nobody has all of the technology ready to start a full-scale 
development program in our review. We think that that is going 
to take some investment and time to get the technologies up to 
where you could actually do what we call a full-scale 
development and commit to actually procuring the new engine.
    Senator Udall. It is more than possible, but there is a 
significant amount of time between here and there.
    Mr. Mitchell. Yes, sir. The areas primarily revolve around 
engine components, injectors, power heads, preverters, and then 
modeling and simulation of the combustion instability issue. We 
have better computers now of higher speed. They can better 
model those things but it takes some investment and algorithms 
to try and get a better handle on that. Combustion instability 
is a phenomenon that occurs in less than a second, and you 
cannot stop it. It will blow an engine up if it happens. The 
more you can do in computers, the less hardware you have to 
then have in your test program.
    Senator Udall. You have less than 1 second to get----
    Mr. Mitchell. Yes, sir, and you do not stop it. If it 
happens, it happens. You go get another engine.
    Senator Udall. Thank you for that insight.
    Senator King?
    Senator King. Thank you, Mr. Chairman.
    I want to go back and try to push down a little bit more on 
this RD-180 decision. I guess the first question--and perhaps, 
General Shelton, you are the best person to ask. If you are 
not, perhaps one of you all can chime in. Ms. Kim, you may be. 
How serious is the interruption risk? Is this a theoretical 
risk, or is there any indication of an interruption in supply 
by the Russians? General Shelton?
    General Shelton. Senator, I will echo what Mr. Lightfoot 
said earlier. We have seen no indication of an interruption 
threat other than what Mr. Rogozin said. We have seen no 
indication from the commercial side. We have talked to ULA 
extensively. They have talked to their counterparts in Russia 
extensively, and there has been no indication that that is a 
serious threat at this time.
    Senator King. Now, even after Ukraine, Crimea, the various 
unpleasantness, no threats.
    General Shelton. Yes, sir. Certainly the potential is still 
there, but what we are seeing right now is business as usual.
    Senator King. I want to press a little bit more on what it 
would mean. In answer to Senator Cruz's question, you have 15 
of these motors in stock, in inventory in a sense. How many 
launches a year do we normally do? What do we have planned, 
say, for the next 5 years, total number of launches?
    General Shelton. We do roughly six or so a year of Atlas V, 
six, seven a year. That is how many engines you are going to 
burn every year.
    Senator King. Basically we have a 2-year backlog of 
inventory.
    General Shelton. We do.
    Senator King. There may not be a short answer to this, but 
clearly one of the other things we have to ask about is the 
cost implications of developing our own engine. That is not 
going to be free.
    General Shelton. No, sir. You have heard some projections 
here this morning, somewhere between $1 billion to $2 billion. 
The question then becomes can you stand not to pay that price 
or the potential of an interruption.
    Senator King. That is the question. My questions do not 
presuppose an outcome. I just want to be sure we are analyzing. 
This strikes me as a low-risk, high-consequence kind of 
situation. There is a low risk of this happening, but if it 
does happen, the consequences are high. Is that fair? Mr. 
Estevez, you nodded when I said that.
    Mr. Estevez. That is fair. Again, the situation with Russia 
right now is volatile. So the risk is there. As General Shelton 
said, there is no indication that we would be cut off today. We 
can project into the future. Yes, there is a good rationale for 
why we would move down the path to develop our own engine. 
However, while we are doing that, use of the RD-180 is a cost-
effective and proven way to launch our national security 
payloads.
    Senator King. There was another factor, as I understand, in 
the late 1990s when the decision was made to go with the RD-
180, other than the fact that it appears to be a high quality, 
reliable engine, is--it is an odd thing to think about, but it 
was the desire to keep Russian rocket expertise in Russia. Are 
we not worried about that anymore, or is that no longer a 
factor? But that was apparently a national security 
consideration back when this decision was originally made.
    General Shelton. General Mitchell may want to comment more 
on this, but as I understand it, that was a consideration but 
certainly not the primary. If you look at this, this was really 
a commercial development as it started in the late 1990s. This 
was Lockheed-Martin building their own rocket, and they chose 
the RD-180 engine.
    Mr. Mitchell. I will just add to that, that the 
conversations on the RD-180 actually started with General 
Dynamics before they were procured by Lockheed-Martin. The 
Russians came to General Dynamics and said for $100,000 we can 
go modify the RD-171 engine which flies on the Zenit and 
produce you an engine that will be able to fit under your 
rocket. It was a deal they could not pass up. It was driven by 
a political situation but enabled by the cost benefit of doing 
it, and then the initial engines were only $10 million apiece. 
That cost has gone up, but initially it was very financially 
attractive to do it.
    Senator King. That is the kind of analysis that we have to 
do today. Clearly in an ideal world, we would want to make our 
own engines and have control of that piece of the industrial 
base. On the other hand, this is a proven quality product, and 
there will be additional costs.
    By the way, who makes this decision? Does Congress make 
this decision? Does the Air Force make it? Does ULA? Who is 
going to decide when to move from the RD-180 to another engine?
    General Shelton. Sir, I would speculate that what would 
happen here is the executive branch would bring a proposal to 
Congress and then Congress ultimately has to decide whether or 
not to spend the money.
    Senator King. You see it as part of the appropriations 
process, in effect.
    General Shelton. Absolutely, sir.
    Senator King. I realize, Mr. Chairman, my time is expiring, 
but I would like to ask one more question.
    A totally different subject--I notice the purchase and the 
competition versus single source. Under the proposed rules for 
2015 and 2016, there were going to be 14 competitive cores and 
20 only ULA-capable. Under the President's budget for 2015, it 
is 7 competitive cores and 20 ULA cores. It just strikes me--
those 20 were inviolate? The competitive part got cut in half. 
The other got cut zero. Talk to me about that decision.
    General Shelton. It actually is a very involved answer. 
Many of those launches that were set aside for competition were 
GPS launches. As we looked at the health of the GPS 
constellation and we have decided that those are projected to 
live longer than expected, we did not need to procure the GPS 
launches on the schedule that we thought we needed to. We have 
stretched that program out. That resulted in the loss of five 
of those seven that are no longer available for competition.
    Another launch became too heavy, such that nobody but ULA 
could lift it.
    Another launch was taken out for requirements reasons, and 
because we had a 36-core commitment to ULA as part of our 
pricing arrangement, we had to plug that hole that we had 
created by taking one of the requirements out. That results in 
the seven.
    It really was not an anticompetitive thing, and as we said 
all along, it was up to 2014. It is seven now. We think we may 
get an eighth in fiscal year 2015. But that is where we stand, 
and that is the reason we have reduced the number available for 
competition.
    Senator King. Just as we were talking about how the Russian 
engine creates risks, I think having a sole supplier creates 
risks for the country, not necessarily national security risks, 
but certainly financial risks. I believe that we need to move 
toward competition as rapidly and efficiently as possible just 
from the common sense competition is better than monopoly 
approach.
    General Shelton. Yes, sir, we would absolutely agree with 
you. The advantage we have with the current provider--it is a 
firm, fixed price arrangement. We know exactly what the costs 
are.
    Senator King. Thank you.
    Mr. Estevez. If I could, Senator. DOD's position in working 
with the Air Force is to drive you that competition, and that 
is what we put in the program when we moved to both the block 
buy to decrease the cost and at the same time drove to 
competition. The fact that the manifest moves around for 
budgetary and because of the health of the constellation 
reasons, it is not picking on those. It just happens to be that 
those are the ones----
    Senator King. You understand how it would appear.
    Mr. Estevez. I absolutely do understand that. But I want to 
just reemphasize that we are committed to driving down that 
competition road to do this.
    Senator King. I understand block buys are better than one 
off and you get a better price, and you have gotten that better 
price. But I think as a general principle, competition is where 
we ought to be heading.
    Thank you.
    Senator Udall. Thank you, Senator King.
    General Shelton, let me turn to you again. The EELV program 
mates its payload in a vertical configuration. Can you explain 
why that is done in terms of cost and risk?
    General Shelton. Yes, sir. We had to standardize how we 
were going to do this across our fleet. It has to do with 
really fragile satellites, how they are manufactured, how the 
lifting mechanisms work, all that. We standardize to vertical. 
You basically take a payload out, encapsulate it in its payload 
faring. We lift it up vertically and set it down on top of the 
launch vehicle. That has become our standard practice, and 
there are lots of good engineering reasons for doing it that 
way.
    Senator Udall. Let me turn to the Atlas V. It has a proven 
track record. We also agreed that we want more competition, and 
Senator King's got to the specifics on the competitive side 
versus the block buy side. But would you agree that we need a 
tested and certified domestic alternative that meets all 
relevant performance criteria before we halt the use of the 
current engine?
    General Shelton. Senator, if we can continue to purchase 
RD-180s, that is the most economical approach. No doubt about 
it. If we got into a situation where that supply was 
interrupted and we had to go into some sort of crash program on 
development of an engine, that is a wholly different matter. My 
personal opinion, if we can continue to buy RD-180s, we ought 
to buy them. It is a good deal.
    Senator Udall. What resources are being utilized on the 
part of the Air Force to help SpaceX become certified for DOD 
launches? When do we expect that process to be completed?
    General Shelton. Senator, we are spending 136 people on the 
problem and probably through fiscal year 2014, it will be 
somewhere around $60 million, probably approaching $100 million 
by the time we are done. As I said earlier, if we can 
accomplish this on what we would consider to be a very green 
light schedule, they will be certified by December. As we look 
at what we are projecting with a higher confidence on the 
schedule, we think it is going to be the first quarter of 
calendar year 2015.
    Senator Udall. I have one last question. Let me restate my 
previous question. I am not sure you answered it in the way I 
was hoping--not the actual answer but just that you heard what 
I was asking.
    Given the proven track record of Atlas V and the importance 
of competition in the launch market, would you agree that we 
need a tested and certified domestic alternative that meets all 
relevant performance criteria before we halt the use of the 
current engine? I think you said yes, but I want to make sure I 
was clear on that.
    General Shelton. I did say yes, Senator, because if you 
look at the manifest, Atlas V lifts about two-thirds of our 
manifest.
    Senator Udall. Thank you. I am going to yield to Senator 
Nelson.
    Senator Nelson [presiding]. I will still do cleanup.
    Senator Cruz?
    Senator Cruz. Thank you, Mr. Chairman.
    I would like to follow up on some of the very good 
questions that Senator King asked focusing on competition. 
General Shelton, how would you describe the benefits of 
competition in terms of acquiring engines and the capabilities 
for launch?
    General Shelton. Senator, I think there is no question that 
competition brings lower prices. It brings innovation and new 
ideas. What it cannot substitute for yet is reliability. We 
have a proven performer here, in fact, two lines, Delta and 
Atlas, that are very proven performers. The question we have to 
answer is, can we get to the place where we are as comfortable 
with a new entrant as we are with our current provider? That is 
why we have a very rigorous detailed certification process that 
is engineering-based, has 19 different engineering review 
boards that we will work our way through. That will have to be 
the substitute for numbers of launches. 72 in a row is a pretty 
good track record.
    Senator Cruz. When do you expect it is possible for all of 
these contracts to be competitively bid?
    General Shelton. Our schedule right now says that starting 
in fiscal year 2018, it will be a full and open competition.
    Senator Cruz. Between now and then, what is reasonable to 
expect?
    General Shelton. Between now and then, we have the 36-core 
buy with ULA. We will have at least seven, maybe eight launches 
available for competition, and there may be--who knows--some 
pop-up opportunities along the way as well. But we have a 
contractual agreement for a 36-core buy with ULA right now.
    Senator Cruz. Am I right in assuming that even with a 
competitive bid, it is entirely possible the current provider 
would win that bid?
    General Shelton. Absolutely.
    Senator Cruz. But with the benefits of competition, the 
taxpayers may get a far more favorable price through vigorous 
competition than they would with a no-bid contract.
    General Shelton. Pencils will be sharpened. Yes, sir.
    Senator Cruz. I would encourage expediting efforts down 
that road.
    Mr. Estevez, you said a moment ago, if I heard you 
correctly, that what had been discussed here was a good 
rationale why we would go down the path towards development of 
a new engine. I want to understand that comment and reconcile 
it with the administration's statement of administration policy 
on June 17th where the administration objected to the House 
allocating funds to a new engine. Can you explain in your 
judgment what we should be doing towards developing a domestic 
engine so that we are not dependent upon Russian providers?
    Mr. Estevez. There are a number of different paths that we 
can take to develop a new engine. What we said for that $220 
million, I believe it was, is it is preliminary to be putting 
that money into the budget within the trade space of the budget 
at this point where we do not know the course that we are going 
to take to pursue development of a new engine.
    Now, we have just asked for some reprogramming to do some 
risk reduction, and there is probably, as General Mitchell 
alluded to earlier, some time that you need to do that risk 
reduction before we decide whether it is going to be a public/
private partnership that develops it, we will go to a 
commercial entity that will develop engines based our risk 
reduction, or it is inside the government process to do that. 
It is not that we do not want to go down the path in getting a 
new engine. It is the fact that the money was preliminary for 
where we are in that direction.
    Senator Cruz. What is your best case estimate for design, 
construction, test, and certification of a new engine both in 
terms of cost and time?
    Mr. Estevez. Again, that will depend on the course that we 
select on getting to a new engine.
    Senator Cruz. But give me the best case.
    Mr. Estevez. Eight years.
    Senator Cruz. Eight years. We talked earlier that if Russia 
cuts off these exports tomorrow, we do not have 8 years' worth 
of engines sitting in the warehouse. Is that right?
    Mr. Estevez. That is correct.
    Senator Cruz. If the ramp-up to develop a new engine is 
substantially longer than our capacity to survive not having 
these imports, it would seem there is some considerable 
exigency to starting that process now and not getting caught 
flat-footed if the worst comes to pass.
    Mr. Estevez. Of course, if that happened, if we were cut 
off, we would use the stock that we have and we would allocate 
those in an interagency process. We would ramp up production of 
Delta, which can launch our manifest. As General Shelton said 
earlier, it would cause some significant delay and put some 
risk into our constellations, but we would do that. Commercial 
providers that we are pushing for our competitive environment 
will come on board. They will be able to launch some of the 
manifest, so there are mitigations. Now, those things will cost 
us money, and they will, as I said, put some risk into the time 
we get some of those constellations up.
    In the meantime, I would say throwing money at a problem 
that we do not know where we are going is not a good idea 
either at this point. It is not just a matter of rushing money 
into a development of a new engine. We want to do that in a 
considered manner so we get the engine that we need.
    Senator Cruz. Although if you said it is 8 years, the 
longer we delay the beginning of that 8 years, the further out 
the end of that 8 years is.
    Dr. Kim, do you have any thoughts on this question? We 
would welcome your thoughts as well.
    Dr. Kim. Our study did not look to an independent schedule 
estimate assessment, so I cannot comment on that.
    Senator Cruz. Thank you very much.
    Senator Nelson. Of course, were the worst to happen, that 
it cut off today, in addition to the Delta heavy to launch the 
heavy payloads, assuming that SpaceX is certified by the end of 
the year, you would have that capability of launching medium-
sized payloads. All is not lost were he to do the unlikely 
thing of shut off Roscosmos.
    Senator Sessions?
    Senator Sessions. Thank you.
    I went past the Pentagon the other day, and we discussed 
once again--did they actually build this thing in 1 year? Mr. 
Estevez, this delay costs more. Here DOD has asked for $40 
million for technology reduction for commercial new engine 
development this fiscal year through reprogramming. It will be 
needed to develop strategies. We ought to have a strategy by 
now. How long does it take to develop a strategy? Initiate 
engine risk reduction efforts, technology maturation 
activities, early concept studies, and surveys. It goes on to 
focus on key risk components, technological development.
    I would just say if this were a private business and they 
got a major supplier that they no longer find reliable, they 
would get busy right now. Why can we not develop a situation 
now?
    Now, I understand DOD is predicting, Mr. Chairman, it might 
cost $2 billion to develop the engine. I have heard recently 
that one of the people who would be wanting to supply it said 
they could do it for $840 million and would do it within 4 
years and would put penalties on themselves if they did not 
produce that.
    Mr. Estevez, do you think that is possible? Why do we not 
get busy? The fundamental question is are we going to continue 
with the Russian engine. Have we made a decision not to? If we 
are not going to do so, which I think we have no choice but to 
make that decision, why do we not get busy and get this done 
and not drag it out?
    Mr. Estevez. We agree that we should be moving away from 
the Russian engine. We want to use the Russian engine while it 
is available while we go through that development effort. 
Without sounding glib, it is rocket science and the development 
of new engine integration of that. If there is a commercial 
company that is willing to go do that, we are happy to work 
with that, and that is one of the options that we are looking 
at is whether we can do this in the commercial sector, how much 
government support is going to be needed. You have read our 
reprogramming action.
    Senator Sessions. How many years do you project this to 
take?
    Mr. Estevez. Our estimates are 5 to 8, Senator.
    Senator Sessions. Five?
    Mr. Estevez. Five to 8 years.
    Senator Sessions. That is not acceptable.
    Ms. Chaplain, do you think it is going to take 5--you mean 
to actually have the engine produced.
    Mr. Estevez. Have the engine developed.
    Senator Sessions. How long will it take us to decide on 
what process we need, what kind of engine, and get moving on 
it?
    Mr. Estevez. The Air Force is conducting an assessment 
right now that will be ready in the September timeframe what we 
believe our best, most affordable course within the timeframe 
on development is. Again, that will look at public/private 
partnership, internal government, or a commercial outsource on 
that.
    Senator Sessions. General Shelton, you know the history of 
this better than anyone. Do you agree that if we keep dragging 
this out, there is a danger we will slip back into uncertainty 
and delay, delay, costs go up, and maybe nothing ever gets 
done?
    General Shelton. That is a concern, Senator.
    Senator Sessions. You have been at this for a long time. 
You are about to leave DOD. Share with me what you think. Is 
there a danger and what do you think about it?
    General Shelton. We can stretch things out. We can make it 
longer.
    Senator Sessions. Unwisely you mean.
    General Shelton. Absolutely.
    Senator Sessions. Ms. Chaplain, do you have any thoughts? 
You have been around these programs for a long time yourself, 
and I think even some of your recommendations were taken into 
account, as you noted, saved $4 billion on the procurement that 
we have now, which was a good step. Do you have any idea how we 
could move quicker and less expensively in this crisis?
    Ms. Chaplain. I have been around long enough not to trust 
the numbers being thrown around today on either side and by 
vendors.
    Senator Sessions. You could put a penalty on a vendor.
    Ms. Chaplain. Yes, but sometimes you get stuck and when the 
problems happen, you go back to a cost-plus arrangement which 
the government has done numerous times during the middle.
    We do not know what we are actually pursuing right now. Is 
it a replacement, what is the design going to be? Is it going 
to extend all the way into the design of a whole launch 
vehicle? The more extensive it gets, the longer it takes. I 
agree that the need might be compelling, and if we lose time, 
we will be rushing activities even more later. The more you 
compress and have to take on a lot of concurrency in your 
acquisition program to meet tight deadlines, the more you are 
at risk of having problems later on. It is important to, first, 
figure out what it is we are really doing, get a good plan, and 
have disciplined processes in place. But I agree that if it is 
going to happen, we need to start working soon.
    Senator Sessions. Thank you all. It was a good panel. It is 
an important issue.
    General Mitchell, do you have any thoughts on this?
    Mr. Mitchell. Yes, sir. Just as one data point, when we 
were doing the EELV program, the RS-68 engine, which flies on 
the Delta, was a new development in a competitive environment. 
It took the contractor 6 years and $1 billion to develop that 
engine. That was without government oversight at the time. That 
was straight commercial in the competitive environment where 
Boeing was competing with Lockheed-Marin, and it took them 6 
years and $1 billion in 2013 dollars to do it. That is a data 
point for you. They were trying to be as aggressive as they 
could because they were in a competitive environment, and it 
was commercially developed.
    Senator Sessions. I just do not understand that.
    Mr. Mitchell. But that is a point for you.
    Senator Sessions. My time is up.
    But the plan was to develop an engine and many of the 
similar technologies in the Russian engine, nothing 
particularly new. If we got busy on it, I think we would save 
money in the long run. The longer we delay it, the more 
alternatives we are going to have to use, more expensive 
launches, delaying of launches, and all that. I just wish we 
could go faster and make a decision.
    Mr. Chairman, I am glad you are chairing this. Having flown 
on rockets and come back to be with us, it is not an issue that 
you do not know a lot about. You know a lot about it, and I 
appreciate you and Senator Udall for having the hearing.
    Senator Nelson. My critics wish that I had gone on a one-
way trip. [Laughter.]
    Senator Sessions. I have to tell this story. I was 
debating. I thought my opponent had said something against 
NASA, and I said I think we should explore the solar system and 
go to Mars, that I would like to go to Mars. He jumped up and 
reached in his pocket and said I will be the first to 
contribute to sending you to Mars. I thought that was the 
highlight of his campaign. [Laughter.]
    Senator Nelson. He only got about 5 percent of the vote.
    This is rocket science. Therefore it is not easy and these 
decisions are not easy. Ms. Chaplain has the historical 
perspective that somehow the cost of these programs grow, but 
they especially grow when you realize you are not just 
developing an engine. You are integrating it into a launch 
vehicle. You are going through a certification process, and 
then you have to have the ground systems infrastructure. Does 
that add cost, Ms. Chaplain?
    Ms. Chaplain. Yes, it certainly does, and I do not believe 
that is all being brought into the mix at this point with the 
numbers we are hearing about.
    Senator Nelson. What do you think about it, Mr. Dumbacher?
    Mr. Dumbacher. I think, as you pointed out, Senator, this 
is a major, complex systems issue. It is not just an engine 
itself. We have technical issues we have to work out for a LOX/
kerosene engine, but we also have to figure out how to 
integrate that into a launch vehicle. Typically when we develop 
engines, they are very integrally tied to the launch vehicle 
that we put them in. You cannot just move one engine from one 
launch vehicle to another very simply. You have to go through 
the entire systems process, the ground systems, the logistics, 
and take into account all the complex technical interactions 
that you have to deal with in a design that is trying to go 
from 0 to 17,000 miles an hour in the space of a few minutes. 
It is a very complex systems approach. It has affect on the 
industrial base, and decisions that are made on one launch 
system affect other launch systems.
    It reaches across the government. We know that if there is 
a major decision made with the NASA solid propulsion base, it 
affects the Navy's strategic D-5 missile program. We also know 
that if changes are made in terms of flight rate for the RS-68 
and the Delta 4s, that has impact over on the RS-25 usage and 
costs for the SLS. We have to look at this access to space 
question from an overall systems perspective and account for 
all of the complexities that are in this, not just the engine 
itself. The engine is one key part of it, but there are larger 
other impacts that have to be addressed.
    Senator Nelson. Plus, once you have the new engine in the 
new rocket, then you have to do payload integration, and that 
takes time and money in the new vehicle.
    Senator King, you had a question.
    Senator King. Senator, you mentioned this was a record-
breaking hearing, and it is for me because it is the longest 
SASC hearing that I have been to where the word ``sequester'' 
has not been mentioned. [Laughter.]
    I want to ask that question. I noticed the President's 
budget is listed as your planning budget, but the President's 
budget, as I recall, does not include the sequester. Does the 
sequester affect your procurement decisions, or are these 
forward procured, already contracted, and we do not worry about 
the sequester at least as far as these 36 cores are concerned, 
General?
    General Shelton. Senator, if sequestration comes back in 
2016, which is the law, we would have all kinds of priority 
decisions to make across DOD. What we have right now are 
pricing agreements with ULA on that 36 cores. We do not have 
actual procurements. Those are done in that given fiscal year. 
Come fiscal year 2016, the buys that would be included in that 
fiscal year would be considered for whether or not those were 
priorities for DOD.
    Senator King. That is one of the charming effects of the 
sequester. It not only messes up budget planning, but it also 
could end up costing us money because we broke the 36 
procurement block. We would end up paying more. Is that 
correct?
    General Shelton. That would be a negotiation with ULA, but 
I think the answer to that would be very likely yes.
    Senator King. The short answer is that sequester would 
affect what we are talking about here today, whether it is 
planning for a new engine or the launches or the acquisition of 
various launch vehicles. Sequester is a factor in everything 
that we have been discussing. Is that correct?
    General Shelton. Yes, sir.
    Senator King. Thank you.
    Senator Nelson. In other words, sequester is going to have 
an impact on assured U.S. access to space.
    Let me do some cleanup here, and then you all jump in if 
you have any more.
    Mr. Lightfoot, NASA is flying on SpaceX right now, going to 
and from cargo to the station. All right. Now, General Shelton, 
you said that with it is going to take an aggressive effort in 
order to get SpaceX certified to fly DOD missions. What is the 
additional certification required to meet your certification 
needs that NASA has not already certified?
    General Shelton. I will let Mr. Lightfoot talk about his 
side of this, but NASA has not certified SpaceX for their, for 
example, interplanetary missions. They are carrying cargo back 
and forth to the station, but in terms of the really high 
priority science missions, they have not certified SpaceX.
    Mr. Lightfoot. I think that is an important point. Just to 
frame it up here, there are classes of missions, and those 
classes range from A to D. This is simple stuff. But then there 
is a category of launch vehicles as well, and they are 1 to 3, 
1 being the ones that we would take the most risk on, 3 being 
the ones that we would fly our most important payloads on.
    Senator Nelson. Namely humans.
    Mr. Lightfoot. Yes, sir.
    What we have done is the missions that we are flying to the 
ISS with Orbital and SpaceX, the cargo is considered class D, 
which is the least level--where we are willing to take the most 
risk as an agency. What we did is we did not do as much insight 
into that from a launch vehicle perspective as we would, say, 
on a class A mission.
    However, what is really important is we focused most of our 
real oversight when they get close to the ISS because that is 
when critical activities can occur. The activity associated 
with the birthing today of the Orbital Cygnus and the SpaceX 
Dragon--those we made them do a series of tests, a series of 
approaches, back-outs, all these things we do to ensure our own 
safety. Really what you are talking about is a risk 
categorization here in terms of the type of mission or 
spacecraft you are flying and the launch vehicle that it goes 
on.
    For us, we are working on a Jason 3 flight that will be in 
December 2015. SpaceX is not certified for that flight yet. We 
are working through the certification process with them on that 
one, just like the Air Force is on the missions that they need. 
We have them flying to the ISS, SpaceX and Orbital, but the 
certification for the next class of payload is the thing we are 
working on. Then there will be an even further certification, 
as you said, for when we have a commercial group provider as 
well.
    Senator Nelson. Anybody want to add to that? [No response.]
    Secretary Estevez, what about the cost of accelerating a 
new entrant certification compared to developing a new engine?
    Mr. Estevez. Based on the costs of what we are doing now, 
obviously it is much cheaper to have a commercial provider, a 
capable, certified commercial provider, who can launch our 
payloads than it would be to develop a new engine. Now, right 
now we are not in a place where the providers that we have as 
new entrants can put up rockets that can launch the full 
manifest of payloads that are going on the Atlas 5.
    Senator Nelson. You could with the Delta 4.
    Mr. Estevez. I could with the Delta 4.
    Senator Nelson. But that is going to cost some more.
    Mr. Estevez. Yes, absolutely true. Development of a new 
engine and the integration costs of that are obviously much 
more expensive than the cost that it costs us to certify the 
new entrant. But, again, I want to make sure that we are 
certifying new entrants that are capable of launching the 
payloads that we are launching. Otherwise, I will be sitting up 
here and General Shelton's successor about why we launched into 
the ocean, and I do not want to be doing that either.
    Senator Nelson. Mr. Dumbacher, have we missed any other 
potential options other than a new launch vehicle or engine 
development that could address this RD-180 potential problem?
    Mr. Dumbacher. I think you have seen, Senator, across the 
board from DOD and NASA the involvement with General Mitchell's 
study and what it would take to replace the RD-180. That was 
all good work and I do not need to refute or take on any of 
that.
    I think, again, back to your previous question, I think my 
caution would be that we make sure we address this from an 
overall systems perspective and a larger perspective than just 
an engine replacement because it does have ramifications to 
other launch systems. These decisions are long-term and have 
ramifications for lots of years. The decision that this country 
made at the end of the Apollo program to dramatically reduce 
our work on LOX/hydrocarbon engines is still playing out today 
and is part of this conversation that we are having this 
morning. I think we need to be aware of that, that these 
decisions are long-ranging, have large impacts, and the 
unintended consequences that can be had with any of these 
decisions we need to think carefully through to make sure that 
we do not inadvertently end up in a place we do not want to be 
as a country.
    Senator Nelson. Just to make it more complicated, for 
example, you have already mentioned the impact on the Navy's 
rockets, which are solid rockets. If you do not have a solid 
rocket program in the other departments, that means the cost to 
the Navy is going to go up.
    Mr. Dumbacher. That is correct. In the past, NASA has 
worked with the Department of the Navy in the strategic missile 
program on what the impacts would be to them from an industrial 
base perspective and a supply chain perspective if NASA were to 
do something different than the solids. We understand that. 
NASA understands what that industrial base implication is, and 
we have to be wary of that.
    We also, as I mentioned earlier, need to be aware of the 
ramifications and the impacts on the liquid booster side 
between RS-68 and the supply chain that is shared between the 
RS-68 and the RS-25.
    In the end, I think our problem has been--in my view, the 
issue is getting the cost down and what we need to do to get 
the cost down. This Nation has spent over the last 40 years 
making significant investments in LOX/hydrogen, solid 
propulsion expertise. We are the world leaders in that, and I 
think it behooves us to look at those possible solutions as 
part of the overall system implications.
    Senator Nelson. Can anybody on the panel give us the 
historical perspective of how many programs we have actually 
started and then canceled and how this plays into this 
decision? How can we ensure that if we start this new program 
which, as I mentioned at the outset, some of us on the SASC 
have put $100 million in this coming fiscal year to start it--
how can we be assured that this is not going to get canceled in 
a few years and therefore the waste of the money?
    Mr. Estevez. I cannot give you the number, Senator, of how 
many programs--I am sure we could get you that--over the course 
of time. From an acquisition perspective, one of the things 
that we are trying to accomplish under Better Buying Power is 
do not start programs unless you are going to fund them and you 
are going to put the right structure in place to follow through 
on those programs. On the development side, there is always 
going to be some growth, especially in a high risk program like 
this that is complex. But we would have to commit the dollars 
in the budget. Again, that goes back to my earlier things of 
how are we going to do this and we are not sure what the course 
would be to develop a replacement whether it is commercial 
sector or public/private partnership and the whole integration 
of that for the RD-180.
    [The information referred to follows:]

    Upon review, since the mid-1990s, the Department of Defense (DOD) 
has not taken a rocket engine development program to a milestone 
decision and then subsequently cancelled it. DOD has had a number of 
engine science and technology activities during that period but none 
were elevated to a development program with the expectation that an 
operational rocket engine would be developed and fielded as a result.

    Mr. Estevez. I will go to Senator King's point on 
sequestration. Of course, that also impacts the point on the 
budget and where that trade space is related to this.
    Senator Nelson. Senator McCain?
    Senator McCain. Thank you, Mr. Chairman. I thank the 
witnesses.
    General Shelton, you are widely quoted as saying generally 
the person you are going to do business with you do not sue. Do 
you stand by that statement?
    General Shelton. Senator, the context for that was the 
conversation on the litigation between SpaceX and the Air 
Force, and yes, I do stand by that statement. We are trying 
very hard to get them certified and spending a lot of money, a 
lot of people.
    Senator McCain. First of all, what about the fact that 
already there is a suit pending by the ULA subsidiary seeking 
$400 million in additional payments from the Air Force? In 
other words, if some company or corporation thinks that they 
are not being fairly treated, you do not think that they should 
be able to sue? That is not our system of government, General 
Shelton. I do not really get your statement except that it 
shows real bias against the ability of any company or 
corporation in America to do what they think is best for their 
company or corporation. A subsidiary of ULA is suing for $400 
million. Do you think they should be suing?
    General Shelton. Senator, that is over a technical payment 
situation.
    Senator McCain. Oh, I see. It is okay it is over a 
technical payment situation but not any other. General Shelton, 
you have really diminished your stature with this committee 
when you decide whether people or organizations or companies 
should be able to sue or not and make comments about them.
    Ms. Chaplain, it seemed all of a sudden that the Air Force 
now found out that GPS satellites would now be able to stay up 
longer. Was that not known for a long time?
    Ms. Chaplain. They do analyses of the constellation on a 
regular basis and see how they are going to last. They tend to 
make adjustments to the manifest based on that. It is just not 
unusual to see changes, though the ones that were made this 
year were a little more substantial than usual.
    Senator McCain. The decision to cut the competitive 
launches even more by delaying launches really should not have 
come as a surprise.
    Ms. Chaplain. It is never a surprise to me generically that 
there are changes to the manifest either based on budgetary 
reasons or the length of a constellation. I have never believed 
you should trust what that manifest is year to year.
    Senator McCain. Facts are stubborn things.
    Mr. Kendall, who we had extensive conversations with when 
he came up in the SASC for his job because of the failure--is 
it not true that ULA has breached Nunn-McCurdy more than once 
or twice? Is that true, Ms. Chaplain?
    Ms. Chaplain. At least the last one that I know of was the 
most recent one. There may have been one before that.
    Senator McCain. At least we know of one breach of Nunn-
McCurdy, which is cost overruns of a dramatic and significant 
amount. That did not seem to bother anybody in the Air Force or 
the industrial complex because now, instead of increasing the 
numbers of competitive launches, we have decreased the 
competitive launches to an outfit that breached Nunn-McCurdy 
because of cost overruns. How does that give them any 
credibility? Do you want to respond to that? You do not have 
to.
    Now, Mr. Estevez, we will now see a total of three, 
although perhaps Congress will mandate at least one additional 
competitive launch, and that is fine with you. Is that right?
    Mr. Estevez. Senator, we are committed to the competitive 
course. We are aggressively pursuing to get SpaceX certified so 
that they can launch our satellites. They do not have the 
capability based on their current certification process to 
launch the full manifest of those satellites, but we look 
forward to getting them to be able to launch the ones that they 
are capable of launching.
    Senator McCain. Even though they have just completed a 
third successful launch. Is that right?
    Mr. Estevez. That does not complete the certification 
process, Senator.
    Senator McCain. I know that. But the certification was 
supposed to take place in January. Is that correct?
    Mr. Estevez. They are on their path to certification. It 
was not supposed to be completely certified in January to my 
knowledge.
    Senator McCain. Do you know when you will make a final 
decision?
    Mr. Estevez. As General Shelton discussed earlier, if 
everything goes well with their certification process, they 
should be certified by the end of this year.
    Senator McCain. Mr. Lightfoot, NASA introduced launch 
competition into its processes by having two competing 
companies for the commercial audit transportation service 
contract. Have there been benefits of that, Mr. Lightfoot?
    Mr. Lightfoot. Yes, sir, we think we have gotten a good 
value in the process. The payloads we are launching are what we 
call class D because we have the two providers to get to the 
ISS.
    Senator McCain. Let us talk about the so-called great 
savings that is supposed to take place with a block. You 
saved--quote, saved--you are arguing, General Shelton, that the 
Air Force repeatedly said it has saved $4.4 billion on space 
launch costs by awarding a sole source block buy contract to 
ULA, disregarding the fact that ULA breached Nunn-McCurdy, 
which required the notification to Congress of cost overruns. 
But it is really cost avoidance.
    Ms. Chaplain, do you have a view on that of whether that is 
actually a, quote, saving of the $4 billion which was 
advertised because of the sole source block buy contract to 
ULA?
    Ms. Chaplain. What it represents is--the ultimate price 
that they negotiated was substantially lower than the price 
they started out with in the negotiations. We did not 
investigate the exact $4.4 billion and what was behind it, but 
we do know that the Air Force took a number of actions to arm 
themselves with better information for the negotiation process, 
principally getting more information on costs and pricing in 
preparation.
    Senator McCain. Actually, the Office of Management and 
Budget refers to cost savings as a reduction in actual 
expenditures. That has not occurred in the EELV program.
    I think, Mr. Chairman, that the issue of Russian rockets 
has been already pretty well massaged, but the fact is we are 
seeing here--and I do not predict, but a few years ago, there 
was a situation concerning the Air Force tanker. I did not like 
it at the time and I fought against it at the time. People went 
to jail and people were fired. I do not like this deal. I do 
not like the fact that we are now going to have basically maybe 
three--or if Congress has its way, four--competitive space 
launches given to an outfit that has breached the cost overruns 
to the degree that it required notification to Congress of cost 
overruns.
    I thank you, Mr. Chairman.
    Senator Nelson. Thank you, Senator McCain.
    When you look at the value of competition, it is clearly 
well established. For example, NASA is going through a 
competition now of human rating rockets to take astronauts to 
and from the ISS, and there are probably at least three 
competitors in that competition.
    Senator McCain. What we are seeing here, Mr. Chairman, is a 
reduction in planned competition for whatever reasons. The 
actual reality is, despite Mr. Kendall's admonition to increase 
competition, we are seeing a decrease in competition. Then when 
the company does not like it and goes to court, they are 
criticized by a uniformed officer who really has no business 
talking about the conduct of a corporation as to what their 
legal options are.
    Senator Nelson. The Russians have certainly brought this to 
a head. At the outset of the hearing, it was mentioned that it 
was the policy of the U.S. Government back in the 1990s, once 
we decided to buy the RD-180 from the Russians because it is an 
excellent engine and it was cheaper and we were employing 
Russian engineers and scientists instead of them going 
elsewhere on the planet--but it was the policy of the 
government at the time we were going to develop a follow-on 
engine. That got put aside. We are where we are particularly 
because of the deputy prime minister's sarcastic comments from 
Russia even though the statements were said--he made them at 
the time--he was only going to not supply the RD-180 for 
military launches. He is still going to provide them for 
civilian. But you will notice there was not a peep out of 
Roscosmos. They obviously want to continue that.
    Nevertheless, it brings it to a head, and it brings us to 
the table today. These are complicated decisions, multifaceted, 
involving many different programs, but all of which come down 
to the bottom line, assured access to space for the United 
States.
    We want to thank you all. You have been most enlightening.
    The hearing is adjourned.
    [Whereupon, at 11:43 a.m., the subcommittee adjourned.]

    [Questions for the record with answers supplied follow:]
               Questions Submitted by Senator Mark Udall
                        rd-180 foreign supplier
    1. Senator Udall. General Shelton, would you please walk me through 
the history of how U.S. rockets ended up with the RD-180 engine?
    General Shelton. The Evolved Expendable Launch Vehicle (EELV) 
program was originally developed as a commercial program and foreign-
sourced engines were permitted. In addition, the use of foreign 
components or technologies in upgrading U.S. space transportation was 
encouraged through the Space Modernization Plan as part of the Moorman 
Study (1994). In 1995, the Secretary of Defense established policy 
(e.g. stockpiling) to ensure U.S. access to space is not jeopardized by 
delays or disruptions of former Soviet Union-produced systems, 
components, or technology. The Russian-made RD-180 engine was proposed 
by Lockheed Martin for Atlas V as part of the 1998 EELV competition 
because it offered significant cost, schedule, and performance 
benefits. The use of the RD-180 was approved by the Department of 
Defense (DOD).
    The original 1998 plan was to co-produce the RD-180 in the United 
States to comply with policy regarding use of former Soviet Union 
produced propulsion systems. The policy was changed in 2000 in order to 
reduce the risk of foreign dependence and allowed for buying RD-180s 
ahead of need and storing. In 2007, DOD deferred and eventually 
eliminated the requirement to co-produce the RD-180 in the United 
States due in part to the expected expense ($1 billion+) of co-
production. United Launch Alliance (ULA) maintains a stockpile of RD-
180 engines to mitigate the risk of supply interruption. Another reason 
why the co-production requirement was eliminated was the availability 
of the Delta IV family, powered by U.S. developed and produced engines. 
The Air Force regularly reviews and analyzes various components of the 
EELV program to include any potential risks associated with the use of 
RD-180 engines.

    2. Senator Udall. General Shelton, it is my understanding that the 
U.S. Government encouraged the use of former Soviet Union capabilities 
in prior administrations and that encouragement led to the use of the 
RD-180 engine on one of two certified EELV systems. Is this your 
understanding of the history?
    General Shelton. Yes, the EELV program was originally developed as 
a commercial program and foreign-sourced engines were permitted. In 
addition, the use of foreign components or technologies in upgrading 
U.S. space transportation was encouraged through the Space 
Modernization Plan as part of the Moorman Study (1994). In 1995, the 
Secretary of Defense established policy (e.g. stockpiling) to ensure 
U.S. access to space is not jeopardized by delays or disruptions of 
former Soviet Union-produced systems, components, or technology. The 
Russian-made RD-180 engine was proposed by Lockheed Martin for Atlas V 
as part of the 1998 EELV competition because it offered significant 
cost, schedule, and performance benefits. The use of the RD-180 was 
approved by DOD.
    The original 1998 plan was to co-produce the RD-180 in the U.S. to 
comply with policy regarding use of former Soviet Union produced 
propulsion systems. The policy was changed in 2000 in order to reduce 
the risk of foreign dependence and allowed for buying RD-180s ahead of 
need and storing. In 2007, DOD deferred and eventually eliminated the 
requirement to co-produce the RD-180 in the United States due in part 
to the expected expense ($1 billion+) of co-production. ULA maintains a 
stockpile of RD-180 engines to mitigate the risk of supply 
interruption. Another reason why the co-production requirement was 
eliminated was the availability of the Delta IV family, powered by U.S. 
developed and produced engines. The Air Force regularly reviews and 
analyzes various components of the EELV program to include any 
potential risks associated with the use of RD-180 engines.

    3. Senator Udall. General Shelton, have the engines and all the 
support provided the foreign and domestic contractors met all U.S. 
Government requirements for this program?
    General Shelton. Yes, the RD-180, RS-68, and RL-10 engines and 
their suppliers meet the U.S. Government's requirements.

    4. Senator Udall. General Shelton, did ULA, the EELV incumbent 
contractor, obtain the blueprints and specifications of the RD-180 
engine?
    General Shelton. Yes, ULA, acting through Aerojet Rocketdyne 
(previously Pratt-Whitney) and RD Amross, has all the information to 
produce RD-180 engines in the United States and is in discussions with 
NPO Energomash to increase the license period from 2022 through 2030.

    5. Senator Udall. General Shelton, with the Air Force technical 
oversight by DOD and Federally Funded Research and Development Centers, 
did contractor personnel go through a process of demonstrating the 
ability to build some of the most complex components and conduct 
independent design analysis to demonstrate the ability to produce the 
engine in country, if required?
    General Shelton. Yes. During the early acquisition activities of 
the EELV program, a three-phase co-production effort was initiated to 
develop a domestic production capability for the RD-180 engine. In the 
first two phases of this effort, executed from 1996 through 1998, the 
engine vendor (Pratt-Whitney Rocketdyne at the time) completed an 
initial design assessment and demonstrated 12 key manufacturing 
processes. These activities also included the production of several key 
components. The third phase of the effort was intended to fully 
demonstrate the capability of implementing domestic co-production and 
ran from the early 2000s through mid-2008, when the effort was 
deferred. During this phase, 10 of the original 12 manufacturing 
processes were re-demonstrated and some of the more complex components 
were produced and tested. This included manufacturing and burst testing 
of a domestically-produced full-scale preburner and stator. Throughout 
the co-production effort, an independent design analysis was also 
completed for significant portion of the engine components.

                          acquisition strategy
    6. Senator Udall. General Shelton, would you please comment on the 
report that an independent team of DOD experts conducted a study to 
determine the earliest possible time a new entrant would be close to 
being certified and capable to launch any or all of the EELV missions?
    General Shelton. The independent team assessed probable 
certification dates, analyzing the schedule using common statistical 
(Monte Carlo) analysis. The team concluded the new entrant would most 
likely be certified by the second quarter of fiscal year 2015 (80 
percent probability), but that the earliest they would be certified was 
probably best represented by the company's own schedule. As a note, in 
deciding when to compete, we used the company's own schedule.

    7. Senator Udall. General Shelton, would you please comment on the 
readiness of any new entrant to compete, when will they be certified, 
and will they have all the capabilities to launch all National Security 
Space (NSS) payloads?
    General Shelton. New entrants are required to be certified for 
contract award, but are allowed to compete once telemetry data from the 
final certification flight have been submitted. The Air Force and 
SpaceX are working aggressively toward certification of the Falcon 9 
v1.1 by December 2014. However, certification is an event-driven, not 
schedule-driven, process which requires all activities and assessments 
to be complete and the launch system deemed low risk.
    SpaceX is not seeking certification for all eight of the DOD 
reference orbits at this time. Due to weight limitations to the Falcon 
9 v1.1 and the orbits for which SpaceX is seeking certification, the 
Falcon 9 v1.1 rocket will not have the capability to launch all NSS 
payloads.

    8. Senator Udall. General Shelton, why did the missions available 
for competition decrease from the planned up-to-14, to up-to-7?
    General Shelton. The Air Force re-phased five Global Positioning 
System (GPS) III satellites (GPS III 7/8/9/10/11) due to our revised 
forecasted operational need. Of the eight GPS III missions originally 
identified for potential competition in 2015 to 2017, five have been 
delayed to 2018 to 2023. They remain available for competition, albeit 
a later time. These GPS changes were the result of careful sustainment 
of our on-orbit satellites, allowing us to project additional satellite 
lifetime without increased risk to the satellite constellations. This 
results in almost $400 million less required for space launch over the 
Future Years Defense Program (FYDP).
    The AFSPC-8 mission was reallocated due to mission requirements. 
Additionally, per the Cooperative Research and Development Agreement 
signed between SpaceX and the Air Force, SpaceX is not pursuing 
certification to this orbit.
    Finally, SBIRS GEO-4 was provisionally moved to the Phase 1 Block 
Buy to maintain the 36 core commitment.
    The Air Force continually reassesses constellation health for all 
its on-orbit assets and updates programming accordingly. Through 
subsequent POM cycles, AFSPC will annually reassess and adjust planned 
procurements as operational requirements, Space Vehicle development/
production, and fiscal realities dictate.
    It is important to note that, under the Phase 1 Block Buy, the Air 
Force orders launch vehicle configurations that can support multiple 
missions to enable mission assignment as late as 12 months prior to 
launch.

    9. Senator Udall. General Shelton, is it fair to say that the 
second phase, the so-called phase 1A of the Air Force acquisition 
strategy, that both the new entrant and the incumbent launch provider 
were equally hurt in the decision to reduce the number of missions for 
competition?
    General Shelton. The Air Force cannot speculate about the impact of 
reduced competitions on industry. The decision to reduce the number of 
missions available for Phase 1A competition was due to satellite 
constellation requirements changes. These changes were the result of 
careful sustainment of our on-orbit satellites, allowing us to assume 
additional satellite lifetime without increased risk to the satellite 
constellations. The Air Force has taken advantage of the extraordinary 
efforts by the operators at Air Force Space Command to delay launch 
procurements, resulting in almost $400 million less required for space 
launch over the FYDP.
    It is important to note that all missions designated for 
competitive missions are available for all launch service providers, 
including certified new entrants and incumbents. The Air Force is 
committed to competition within the EELV program, and we are currently 
evaluating options to move additional competitive opportunities into 
Phase IA.

    10. Senator Udall. General Shelton, what would it take to increase 
the competitive missions back to up-to-14?
    General Shelton. Along with an operational need, new funding to 
procure the additional launch services and adjustments to budget to 
accelerate delivery of new production satellites would be required to 
increase the number of competitive missions.

    11. Senator Udall. General Shelton, does the Air Force currently 
have a need for those satellite launches?
    General Shelton. No, the Air Force's current operational launch 
needs are reflected in the fiscal year 2015 President's budget request.
                                 ______
                                 
            Question Submitted by Senator Angus S. King, Jr.
                   explanation of configuration types
    21. Senator King. General Shelton, during the hearing you mentioned 
that the SpaceX Falcon 9 will likely only be able to support 3 of the 
10 configuration types that the Atlas V currently supports. Would you 
please explain what these three configuration types entail and give 
more details regarding what key steps remain for certification of 
SpaceX so that it can compete for the seven open competition missions?
    General Shelton. The Atlas V has multiple configurations; the 
configuration is indicated by a three digit number. The first digit 
indicates the diameter of the payload faring, which is the part 
enclosing the payload and protecting it during launch. On an Atlas V, 
this is either 4 meters or 5 meters. The second digit indicates the 
number of solid boosters, ranging from 0 to 5. The third digit 
indicates the number of RL-10 engines, 1 or 2.
    The Falcon 9v1.1 is most comparable in terms of capability to four 
configurations of the Atlas V (401, 411, 501, and 511). Each of these 
configurations has one RL-10 engine and either zero or one solid 
booster.
    There are three phases in the certification process (assessment, 
evaluation, and certification). SpaceX is currently in the middle of 
the evaluation phase. New entrants are required to be certified for 
contract award, but are allowed to compete once telemetry data from the 
final certification flight have been submitted. The Air Force and 
SpaceX are working aggressively toward certification by December 2014.
                                 ______
                                 
               Questions Submitted by Senator Bill Nelson
                          solid rocket motors
    12. Senator Nelson. Ms. Chaplain, you mentioned in your testimony 
the strategic need for maintaining solid rocket motors. How do you 
suggest that the need for solid rocket motors be factored into the 
government-wide approach that you are proposing?
    Ms. Chaplain. Solid rocket motors are an important part DOD weapons 
programs. They are used as supplementary boosters to the launch 
vehicles in the EELV program, and may be used in the National 
Aeronautics and Space Administration (NASA) new Space Launch System 
(SLS). In addition, the industrial base for these motors supports not 
only the EELV and NASA programs but also is shared with other important 
weapons programs such as strategic missiles. Since solid rocket motors 
will likely be a part of an architecture that replaces the Atlas 5 
launch vehicle, decisions could have an impact on other programs that 
depend on solid rocket motors and on the industrial base. Thus, they 
should be made in a government-wide context, that is, DOD should seek 
input from NASA and industry about the impacts associated with 
decisions on technologies, designs, and planned use. Moreover, DOD has 
found that it needs to better define its long-term needs for solid 
rocket motors and that it must preserve the scientific, engineering, 
and design skills and production capacity of the industry.

                          space launch system
    13. Senator Nelson. Mr. Lightfoot, could the NASA SLS variants 
eventually provide another domestic option for launching national 
security payloads or other NASA missions?
    Mr. Lightfoot. SLS is designed for the purpose of enabling human 
exploration beyond low-Earth orbit in support of national objectives 
and policy. In addition, consistent with existing law and policy, SLS 
is not to compete with commercial space transportation services 
provided by U.S. commercial companies, but is potentially available to 
support national priorities that may require SLS-unique capabilities, 
and/or provide an avenue for U.S. access to space should reliable U.S. 
commercial capabilities not be available.

                    new engine development programs
    14. Senator Nelson. Ms. Chaplain and Mr. Dumbacher, both NASA and 
DOD have previously invested in engine development programs. However, 
some of these programs have been cancelled or have experienced 
significant cost growth. What best practices should be implemented to 
ensure the success of a new development program?
    Ms. Chaplain. Our past work on acquisition best practices has 
highlighted the need for agencies--including DOD and NASA, to first 
match system requirements with available resources--the knowledge, 
time, and money necessary to meet those requirements, before committing 
a project--and necessary money--to development. Technology readiness 
level assessments and systems engineering reviews are critical metrics 
for agencies to use in order to assess whether or not resources 
available will meet the program's requirements. Moreover, our best 
practices work has shown that successful new programs sought to utilize 
the most mature technology available instead of attempting to design a 
program that required significant amounts of new technical content. It 
is also critical that once requirements have been set and subsequently 
matched to available resources, those requirements should be held 
stable. Our work has shown that this is best done by conducting early 
systems engineering analysis of requirements, working closely with 
industry to ensure requirements are clearly defined and then making 
trade-offs as necessary. In addition, programs need to avoid schedule-
driven development, and allow adequate time for a disciplined 
technology development processes. Many problems in DOD weapons system 
development programs have been tied to programs attempting to meet 
unrealistic schedules. Our best practices work has also shown the 
importance of considering the cost to operate and maintain systems 
prior to committing a program to development.
    Our reviews of some of the canceled rocket development programs you 
refer to also point out some important lessons learned. For instance, 
in 2001, we reported that NASA did not prepare risk management plans 
for its ambitious X-33 and X-34 programs until several years after the 
projects were implemented nor mechanisms for ensuring the completion of 
the program if significant cost growth occurred and/or the business 
case motivating industry participation weakened substantially. 
Moreover, communications within the program and with contractors about 
potential problems such as those with the composite fuel tank were not 
effective. The lessons from these programs are important because they 
represented an effort to establish a partnership with industry. On a 
subsequent canceled program, Constellation, we reported that a poorly 
phased funding plan contributed to delays and limited NASA's ability to 
mitigate technical risks early in development and precluded the orderly 
ramp up of workforce and development activities.
    Mr. Dumbacher. First and foremost, to ensure success of a 
development program, the top level design requirements or needs must be 
clearly understood and defined by all stakeholders. Prior to starting 
such a development program, sufficient resources to meet the 
requirements should be identified based upon the management structure, 
scope necessary to meet the requirements, and required schedule. It is 
essential that sufficient schedule and budget margins be established 
and protected throughout the entire program lifecycle to address 
technical and programmatic issues as they arise.

                         reducing launch costs
    15. Senator Nelson. Ms. Chaplain, based on your previous 
experience, what opportunities are there to reduce total long-term 
launch costs?
    Ms. Chaplain. The Air Force has taken some significant steps 
towards reducing long-term launch costs, including conducting in-depth 
reviews of the program's cost drivers and using the data it collected 
through these reviews to negotiate lower launch prices with ULA. In 
addition, our past work has shown that competition can help to lower 
prices, and the potential for new entrants to the EELV-class launch 
market also likely helped to lower launch prices. One area that should 
be explored further is potential duplication and overlap between NASA 
and DOD launch acquisition activities and launch infrastructure. GAO 
has examined this question to a limited extent. The agencies themselves 
can do this if they apply a government-wide perspective to their own 
program planning and work with other agencies to make sure investments 
are not duplicative or suboptimal. A second area is having a complete 
picture of government-wide launch costs and planned investments. This 
information could help to inform plans to lower launch costs, increase 
competition, and invest in new programs but it has been lacking. GAO's 
2013 review of government-wide launch costs could be used as a starting 
point for such assessments.

                      whole-of-government approach
    16. Senator Nelson. Ms. Chaplain, what opportunities are 
specifically tied to taking a whole-of-government approach?
    Ms. Chaplain. By having a more coordinated, government-wide launch 
strategy or policy, the government might be able to better leverage its 
buying power towards getting the best possible procurement deal with 
each launch services provider. In addition, a whole-of-government 
approach to launch services acquisitions may allow the government to 
reduce duplication in the current acquisition process. For example, in 
the current process, DOD and NASA contract separately for launch 
services from each launch provider, using different processes to 
certify launch vehicles and different contract mechanisms and 
workforces to manage the contracts. A detailed assessment of these 
areas could identify opportunities to consolidate work and simplify 
processes, without increasing launch risk. In addition, by having a 
coordinated plan or policy, the government could look at the launch 
enterprise as one entity benefiting the entire government, optimize 
investments and funding in the most efficient and effective way 
possible, and target these investments towards benefitting all 
government groups that use launch services. We acknowledge that there 
are substantial challenges to this approach, particularly the different 
launch services acquisition approaches among government launch 
customers, as well as somewhat different auxiliary launch needs, such 
as mission assurance and security. However, if the benefit to a 
coordinated approach, such as simplified and less duplicative 
processes, would likely outweigh the challenges and risks to adopting 
such an approach.
                                 ______
                                 
                Questions Submitted by Senator Tim Kaine
           small and medium national security space payloads
    17. Senator Kaine. General Shelton and Mr. Lightfoot, Wallops 
Island Flight Facility provides critical services to medium-sized space 
launches for both commercial and NSS purposes. Some NSS payloads that 
are part of the EELV construct can be launched from facilities like 
Wallops on smaller launch vehicles, which is more cost-effective than 
larger launchers. For example, the Defense Meteorological Satellite 
Program (DMSP) is a small-to-medium class satellite that can be 
delivered by Minotaur VI, Delta II, and Antares. The latter, Antares, 
was developed by Orbital Sciences Corporation and is slated to carry 
eight cargo missions out of Wallops to the International Space Station 
(ISS) through 2016. In your view, what are the benefits of using small- 
and mid-sized launches and launch capabilities to launch smaller NSS 
missions like DMSP, rather than larger rockets?
    General Shelton. When combined with the ability to launch multiple 
payloads on a single vehicle, the Air Force is able to better procure 
launch services and pursue certain missions that would have previously 
been cost prohibitive. Using small- and mid-sized launches and launch 
capabilities to launch smaller NSS missions allows us to maximize the 
cost and schedule efficiency of our launch services procurement. 
Launching smaller NSS missions can potentially reduce costs, but only 
in the case where the associated excess capacity of the larger rocket 
is not being used to carry additional payloads.
    The current DMSP Block 5D-3 satellite weighs 2,720 pounds at 
liftoff (with booster adapter). The Block 5D-3 has been launched on the 
following launch vehicles: Atlas V, Delta IV, and Titan II. Integration 
on any vehicle would add a year to launch schedule imposing extra 
storage and integration costs.
    Conceivably, DMSP can be launched on any launch vehicle capable of 
putting 2,500 pounds into a polar orbit from the West Coast. That said, 
no studies have been conducted to indicate if DMSP could go on 
Minotaur, Delta II, or Antares, or even Falcon 9, for that matter. To 
answer the question we would have to study the loads and possibly make 
software changes to DMSP to assess the feasibility of using small 
launch vehicles.
    Weather system follow-on programs, with smaller satellites, could 
potentially benefit from the availability of multiple launch options at 
a lower cost using smaller launch vehicles. Additional launch options 
introduce competition and drive down costs, while improving manifest 
scheduling flexibility. The ability to launch smaller satellites on 
smaller launch vehicles will make space more commercially viable.
    Mr. Lightfoot. The physical size and weight of the satellite, along 
with the lift energy required to reach the intended orbit or 
destination in space, determines the necessary size of a rocket that 
launches from a given launch point. From a NASA perspective, the 
benefits of using small- and medium-sized launchers to launch small- 
and medium-sized primary payloads are that these launchers are 
typically much less expensive than the large EELV-class rockets, 
thereby reducing overall mission costs for small- and medium-class 
missions. In addition, small- and medium-class launchers provide a 
dedicated ride for small- and medium-class missions that place the 
satellite directly into its proper orbit, and are able to fly when the 
satellite is ready to launch.

    18. Senator Kaine. General Shelton and Mr. Lightfoot, as space 
technology advances, do you see a trend in the direction of smaller NSS 
payloads with increased capability replacing larger payloads?
    General Shelton. Yes, I see a trend toward smaller NSS payloads. 
This is enabled by improved technology (smaller payloads with the same 
or better performance as previous systems) and more efficient and 
flexible launch options. Continued study into future smaller NSS 
payloads is ongoing in an effort to enhance resiliency in current space 
architecture through disaggregation. Although smaller payloads may not 
be appropriate in all mission areas, potential opportunities to meeting 
mission requirements with smaller NSS payloads are being investigated.
    Mr. Lightfoot. NASA defers to DOD for the assessment of trends 
related to NSS payloads.

            replacing u.s. dependency on the russian rd-180
    19. Senator Kaine. Mr. Estevez, the United States, between the 
government and private sector, has already invested nearly $300 million 
in risk reduction activities related to advanced oxygen rich staged 
combustion technology that will equal or exceed the performance of the 
RD-180. On the government side, these efforts have included the Air 
Force's Hydrocarbon Booster Technology Program and the NASA's Advanced 
Booster Engineering Demonstration and Risk Reduction Program. Both of 
these currently active contracts were competitively awarded in 2007 and 
2013, respectively. The U.S. rocket engine industrial base has 
experience in purchasing, disassembling, modifying, and launching 
Russian engines of the same basic type as the RD-180. It also has the 
advantage of utilizing modern technologies such as additive 
manufacturing and improved metallurgy. Based upon these facts and the 
experience gained executing ongoing risk reduction activities, industry 
experts estimate that with proper funding they can develop an advanced 
liquid rocket engine in 4 years. Would you please explain how you 
determined the time required to develop an alternative engine?
    Mr. Estevez. Initial government estimates for the cost and time 
required to develop an alternative engine are based, in part, from 
review of the Aerojet-Rocketdyne RS-68 development program. This engine 
is the main propulsion system for the Delta IV first stage and, though 
using a different fuel, is the most recent comparable experience in 
class and capability. This initial estimate was at least $2.9 billion 
and 8 years. More refined cost and schedule estimates will be prepared 
as DOD moves forward with its evaluation of future domestic propulsion 
and launch vehicle capabilities.

    20. Senator Kaine. Mr. Estevez, do you believe it is necessary that 
we restart already completed risk reduction work?
    Mr. Estevez. DOD has an ongoing rocket motor technology risk 
reduction program that currently has a completion date targeted for 
fiscal year 2021. The fiscal year 2014 omnibus reprograming action had 
$40 million included to accelerate the program focusing on several high 
return-on-investment activities, such as combustion modeling and full-
scale component testing. This program is leveraging previous risk 
reduction activity and building on those findings, not restarting or 
repeating them.
                                 ______
                                 
              Questions Submitted by Senator Jeff Sessions
                       rd-180 replacement funding
    22. Senator Sessions. General Shelton, late last week DOD sent 
Congress a reprograming request that included a request for $40 million 
to begin ``Technology Risk Reduction for Commercial New Engine 
Development.'' According to the explanation for the request, the funds 
are needed to develop strategies and initiate engine risk reduction 
efforts, technology maturation activities, and early concept studies 
and surveys. It goes on to state that the funding will focus on ``key 
risk components, technology development work on engine components of 
diverse types, requirements definitions, and maturation of key 
components.'' I am fully supportive of the funding request; however, I 
am concerned that the explanation is signaling a piecemeal approach 
that will never result in an engine replacement and keeps us reliant on 
Russia. You know the history of this program better than anyone; do you 
agree with my concern that if we fail to act now, we are very likely to 
fall back into the same complacency that got us in this mess in the 
first place?
    General Shelton. I agree with your concern that this is an 
appropriate time to commit to and pursue a next generation domestic 
engine program, both to assure reliable space access well into the 
future and reduce our reliance on foreign-made engines. The 
reprogramming request for $40 million is an immediate effort to reduce 
technical risk prior to a full-scale propulsion system development, by 
focusing on key systems and technologies. The work described in the 
reprogramming request is a necessary precursor to full-scale 
development, and should position the Air Force to hit the ground 
running on that effort. The particulars of the full-scale engine 
development effort are still in work, and will be delivered in a plan 
from the Secretary of the Air Force in coordination with the NASA 
Administrator.

    23. Senator Sessions. General Shelton, in your personal opinion, do 
you believe we should be more aggressive than the piecemeal approach 
that is being signaled in the reprograming request?
    General Shelton. No. In my personal opinion, the effort described 
in the reprogramming request is, in fact, aggressive, and should 
position the Air Force well for a full-scale propulsion system 
development. That full effort assumes additional funding in fiscal year 
2015 and/or fiscal year 2016. Full scale development contract(s) will 
begin as soon as the technology maturation is complete.

    24. Senator Sessions. General Shelton, why didn't the reprograming 
request identify a date to complete this engine by?
    General Shelton. We are in the process of reaching out to industry 
and requesting their inputs to better inform our decisionmaking 
regarding potential options. Additionally, we are discussing the matter 
with key government stakeholders. As a preferred course of action 
becomes evident, we will identify required completion dates. Our 
current estimate is that a new engine would require 5 to 8 years to 
complete, but we are continuing to refine that estimate as we obtain 
better information.

    25. Senator Sessions. General Shelton, the reprograming request 
states that there are no funds in the fiscal year 2015 budget for this 
effort. You are certainly aware that each of the congressional defense 
committees that have reported their bills out of committee thus far has 
included at least $100 million for the new engine in fiscal year 2015. 
Do you agree that if we are to replace the RD-180 by 2019 or shortly 
thereafter, funding will be required in fiscal year 2015 and across the 
FYDP?
    General Shelton. Yes, funding will be required in fiscal year 2015 
and across the FYDP. The reprogramming request was completed based on 
the fiscal year 2015 President's budget, which did not contain any 
funds for a new engine development effort.

               additional eelv launch in fiscal year 2015
    26. Senator Sessions. Mr. Estevez and General Shelton, the omnibus 
reprograming request included a request for a $100 million increase to 
fund an additional fiscal year 2015 launch that can be competitively 
awarded while maintaining the 36 core block buy. According to the 
justification materials, the funds are anticipated to be used to add 
DMSP #20 to the manifest. I appreciate that DOD appears to be following 
this committee's reported bill guidance on adding an additional 
competitive opportunity in fiscal year 2015. However, I am concerned 
with the decision to use DMSP #20 as that additional launch. Just a few 
months ago with the budget release, we were told that the reason the 
Air Force terminated the launch for DMSP #20 in the first place was 
because of the high cost of long-term storage and the low added mission 
benefit of launching DMSP #20. It is my understanding that there are no 
hard Air Force or DOD requirements which are satisfied by launching 
DMSP #20. What has changed requirements-wise since that decision not to 
launch DMSP #20 was made?
    Mr. Estevez. DOD's requirements have not changed. Although DMSP-20 
has capabilities that support many of DOD's space-based environmental 
monitoring (SBEM) requirements, the recently completed and JROC 
approved SBEM Analysis of Alternatives (AoA) determined that these 
requirements could be met by civil and international partner systems 
with acceptable risks. The fiscal year 2014 omnibus reprogramming 
request did include funding for an additional competitively awarded 
launch in fiscal year 2015, and DMSP-20 was identified as an option, 
but the manifest for the additional launch was not set. The fiscal year 
2015 appropriations bill language has directed launch of DMSP-20 by the 
end of calendar year 2016. DOD is currently evaluating its ability to 
comply with this direction.
    General Shelton. Nothing has changed. While DMSP-20 has 
capabilities supporting multiple Air Force and DOD space-based 
environmental monitoring requirements, the recently completed SBEM AoA 
determined these requirements could be allocated with acceptable risk 
to civil and international partner systems.
    The final decision on which mission the launch service will procure 
will be made based on multiple factors, including launch manifest 
requirements and available competitive opportunities for new entrants.

    27. Senator Sessions. Mr. Estevez and General Shelton, is it true 
that the launch of DMSP #20 is being pushed by the White House on 
behalf of the National Oceanic and Atmospheric Administration?
    Mr. Estevez. I am not aware of a request from the National Oceanic 
and Atmospheric Administration to DOD to launch DMSP #20. The 
President's budget request for fiscal year 2015 enables DOD to continue 
service-life extension, integration, and test activities for DMSP #20 
during fiscal year 2015. Continuing these activities enables DOD to 
prepare to launch and operate DMSP #20 successfully, if and when the 
decision is made to do so. Based on the finding from the SBEM AoA, DOD 
is currently working with the Executive Office of the President to 
review the benefit of launching DMSP #20.
    General Shelton. I do not know if that is the case. What I do know 
is that the fiscal year 2015 President's budget request for DMSP 
enables DOD to continue post-Service Life Extension Program Integration 
and Test of DMSP F-20 in fiscal year 2015 and avoid taking irreversible 
actions that would preclude the satellite from being launched and 
operated successfully on-orbit.

    28. Senator Sessions. Mr. Estevez and General Shelton, what was the 
justification for terminating the launch for DMSP #20 when DOD 
submitted the fiscal year 2015 budget earlier this year?
    Mr. Estevez. DOD considered terminating the launch of DMSP #20 
because the SBEM AoA suggested that contributions from civil and 
international partner systems could satisfy some of the Department's 
weather gaps. However, the decision was made to continue preparing DMSP 
#20 for launch during fiscal year 2015. Based on the finding from the 
SBEM AoA, DOD is currently working with Executive Office of the 
President to review the benefit of launching DMSP #20.
    General Shelton. The justification for proposing to terminate the 
DMSP F-20 launch was based on the SBEM AoA findings which identified 
that civil and international contributions are adequately supporting 
several of the key requirements. The Air Force plans to focus its 
resources to develop the future Weather System Follow-on (WSF) program 
which will fulfill the gaps that won't be sufficiently covered by DMSP, 
civil, or international systems.

    29. Senator Sessions. General Shelton, is it your professional 
military opinion that spending almost $200 million to launch DMSP #20, 
$100 million identified for the launch and the accompanying $80 million 
to store the satellite--which this committee already cut from the 
budget--is the best place to allocate our resources given our current 
fiscal concerns?
    General Shelton. The direct answer is no, I don't believe this is 
the best use of resources. While I understand the desire for another 
competitive launch, I believe the best use of resources for the 
environmental monitoring mission is to focus on the unique DOD 
requirements identified in the SBEM AoA. By pursuing the WSF program 
instead of launching DMSP #20 (which doesn't fully satisfy those 
requirements), we can avoid continued funding of a dedicated DMSP 
payload processing facility at Vandenberg, we can avoid paying the 
storage costs for DMSP #20, and we would not have to fund a booster for 
that satellite (the WSF would likely be launched by a small booster). 
An additional consideration is the cost of integrating DMSP #20 onto 
any booster other than Atlas V or Delta IV (it is already dual-
integrated on those).

           impact of spacex litigation on defense acquisition
    30. Senator Sessions. Mr. Estevez, according to a recent Department 
of Justice motion to dismiss the litigation brought by SpaceX in the 
Court of Federal Claims, the U.S. Government claims that SpaceX lacks 
standing to bring a challenge because SpaceX was not a qualified bidder 
at the time the Air Force issued its Request for Proposal (RFP). 
According to the U.S. Government's motion to dismiss, SpaceX is not an 
interested party to the block buy contract because while SpaceX knew 
about the intent of the Air Force to award that contract and received a 
copy of the solicitation, for SpaceX to be an interested party, they 
should have filed a statement of interest or lodged a complaint long 
before the contract was awarded. Essentially, SpaceX waived its right 
to challenge the block buy by not challenging the contract during the 
RFP period, prior to the contracts award. Given your position as the 
Principal Deputy Under Secretary of Defense for Acquisition, 
Technology, and Logistics, if the court does not grant the motion to 
dismiss, what could this mean for other defense acquisitions?
    Mr. Estevez. Since DOD is presently engaged in litigation before 
the U.S. Court of Federal Claims on the EELV program, we cannot comment 
on the motions filed before the Court. When the Court issues its 
decision, DOD will review its impact on the EELV and other defense 
acquisition programs.

                       block buy and competition
    31. Senator Sessions. Mr. Estevez and General Shelton, new entrants 
have stated that they feel the Air Force has been slow in its approval 
process and that they believe their rocket is ready to launch NSS 
payloads right now. Did the Commercial Research and Development 
Agreement (CRADA) that SpaceX entered into prior to beginning the 
certification process lay out everything that was expected of them and 
timelines for certification?
    Mr. Estevez. The CRADA that SpaceX entered into with the Air Force 
Space and Missile Systems Center includes an attachment titled Falcon 9 
v1.1 Certification Plan. The certification plan details the 
requirements including the timeline for the certification approach 
individually selected, and agreed to, by Space X. The certification 
timeline is based on the successful completion of a specified number of 
launches and technical reviews. The length of time to complete the 
technical reviews is dependent upon the quality of the data 
submissions.
    General Shelton. Yes, the CRADA signed by the Air Force and SpaceX 
June 7, 2013, laid out everything that was expected of SpaceX to 
achieve certification. The CRADA does not spell out certification 
timelines as completion of certification is an event-driven process 
requiring completion of exit criteria as defined within the CRADA.

    32. Senator Sessions. Mr. Estevez and General Shelton, isn't it 
true that SpaceX could have avoided the long study of technical data by 
launching more, so was it their choice to pursue the current 
certification process?
    Mr. Estevez. SpaceX chose their certification path from the 
multiple options provided in the New Entrant Certification Guide 
(NECG). As an example, the NECG Category 3 (low risk) certification 
approach requires anywhere from 14 launches with very little data 
delivery requirements to 2 launches with significant data delivery and 
review requirements.
    General Shelton. Yes, the U.S. Air Force launch services NECG 
outlines four possible alternatives to achieve the Category 3 (low 
risk) certification required by the EELV program. These alternatives 
require as many as 14 flights, and as few as 2 flights, with fewer 
flights requiring increased technical evaluation for certification.

    33. Senator Sessions. Mr. Estevez and General Shelton, why is the 
certification process necessary?
    Mr. Estevez. The certification process is necessary because DOD 
does not purchase launch insurance, as commercial launch service 
customers do, and the certification process is the first step in our 
integrated mission assurance process that maximizes the probability of 
successfully launching and deploying critical NSS payloads. As the U.S. 
Government was not involved in the new entrant's launch vehicle design 
process, it is incumbent on us to verify that all new entrants meet the 
EELV program requirements for a launch vehicle design reliability of 98 
percent and an overall system level reliability of 97 percent. The 
certification process allows DOD to have sufficient insight into a 
launch system so that it may act as an informed consumer when 
purchasing launch services to launch operational national security 
spacecraft. Additionally, certification provides the foundation for the 
flight-worthiness certification process, part of the recurring mission 
assurance activities for every NSS mission.
    The impact of a launch failure can be significant in both dollars 
and loss of critical capabilities. A single NSS operational payload can 
cost from hundreds of millions of dollars upward to over a billion 
dollars and may be designed to provide unique capabilities not 
available from other systems. Because of these potential significant 
impacts from the loss of a single payload, it is critical that DOD 
understand the reliability of all systems utilized to launch critical 
NSS payloads.
    General Shelton. The certification process is necessary to protect 
valuable government assets and ensure continued satisfaction of NSS 
mission requirements. NSS missions typically involve highly sensitive 
and very expensive payloads. Between 1997 and 1999, our country 
experienced a string of launch failures of which the value of those 
payloads lost exceeded $3 billion. Also lost were national security and 
warfighter capabilities those payloads were expected to provide.
    Additionally, certification actually allows us to reduce the risk 
of new entrants and facilitates their ability to compete in a best-
value environment that considers mission risk. Without the 
certification process, a new entrant would likely be less competitive 
given the lack of a mission success track record and the importance of 
mission risk in consideration of best value.

    34. Senator Sessions. Mr. Estevez and General Shelton, what are you 
hoping to learn from the certification process?
    Mr. Estevez. DOD expects to develop insight into the new entrant's 
launch system design and process reliability, which is a critical 
component in the overall EELV program's mission assurance process. 
Understanding of the new entrant's vehicle design and reliability, 
developed through the system's certification process, will be used to 
help tailor the recurring mission assurance activities that occur on 
each and every NSS launch operation. The insight into the vehicle 
design developed during the certification process allows DOD to focus 
the recurring missions assurance activities, minimizing cost to both 
the contractor and the government, while maximizing the probability of 
a successful launch.
    General Shelton. The purpose of the certification process is to 
ensure successful launches by determining if new entrants are capable 
of meeting Air Force established launch requirements. The Air Force has 
established standards that all launch providers must meet. Formal 
design and mission reliability assessments are necessary to ensure the 
launch system capability to provide the necessary payload mass-to-
orbit, orbital insertion accuracy, and other requirements to place a 
healthy payload into its intended orbit for maximum utility. We expect 
the certification process to produce new entrants that are ready to 
compete for NSS missions by resolving any launch anomalies and 
demonstrating a track record of mission success.

    35. Senator Sessions. Mr. Estevez and General Shelton, have any 
SpaceX launches had any issues that could be a concern?
    Mr. Estevez. SpaceX has launched its three certification flights 
for the Falcon 9 v1.1. The flights occurred on September 29, 2013; 
December 3, 2013; and January 6, 2014, and all inserted their payloads 
into their intended orbits and therefore have been declared successful 
by the Air Force Space and Missile Systems Center Commander. Even 
though categorized as successes during each mission, anomalies 
requiring post flight analysis occurred, which is not uncommon to space 
launch operations. All flight data associated with SpaceX launches is 
considered company proprietary and thus I am unable to discuss any 
anomalies in my response. DOD continues to evaluate available data from 
the certification missions to ensure it understands the details of the 
anomalies and their possible impact on future launch operations.
    General Shelton. Yes, SpaceX has had issues on each of their 
certification flights. SpaceX is working within their anomaly 
resolution process to resolve these issues and, per the CRADA, working 
with the Air Force to address any certification impacts.

    36. Senator Sessions. Mr. Estevez and General Shelton, this 
certification process is new for everyone; what do you believe the Air 
Force can do better to help streamline its process in the future to 
either shorten the time to certify or to better educate new entrants on 
the requirements?
    Mr. Estevez. The certification process was developed to ensure that 
all new entrants meet the EELV program launch system design and process 
reliability standards. The process is designed to provide the U.S. 
Government an in-depth understanding of the new entrants's system. In 
order to minimize the impact on the prospective suppliers, the NECG was 
developed with multiple certification levels and approaches, thus 
allowing the new entrants to select the certification approach most 
compatible with existing company processes and practices. While the 
NECG clearly delineates the certification requirements, in the future, 
spending some additional time informing a prospective new entrants to 
the intent and scope of the requirements prior to the beginning of the 
certification process is a lesson learned that we will apply to future 
new entrants certifications.
    General Shelton. The NECG, published in 2011 and based on proven 
NASA certification processes, provides a risk-based approach with 
multiple options to achieving certification to allow for flexibility 
with different timelines based on maturity of the launch system. 
However, certification is an event-driven, not schedule-driven, 
process. All requirements for certification are agreed to in any CRADA 
that would be signed by a new entrant seeking certification.
    The multiple alternatives available are based on an Air Force, NRO, 
and NASA developed joint strategy document titled, ``Coordinated 
Strategy Among the United States Air Force; The National Reconnaissance 
Office; and The National Aeronautics and Space Administration on New 
Entrant Launch Vehicle Certification,'' signed on October 12, 2011. In 
the strategy, the launch organizations agreed to adopt a certification 
framework consistent with NASA Policy Directive (NPD) 8610.7. This 
framework provides a methodology for certification of launch vehicles 
based on risk classifications for individual payloads.

                     recertification of the atlas v
    37. Senator Sessions. Mr. Estevez and General Shelton, once a 
domestic engine is developed to replace the RD-180, I suspect the Atlas 
V launch vehicle will have to be recertified with the new engine. Has 
DOD identified what that recertification process may look like?
    Mr. Estevez. In the event of a significant configuration change 
requiring recertification, any launch service provider will be expected 
to follow the guidance in the NECG. There are multiple paths to 
certification and we leave it to the provider's judgment to select 
their preferred approach.
    General Shelton. It would be premature to project what the final 
solution will be to address the concern about reliance to foreign 
engines; however, if an Air Force mission involves a significant change 
to the vehicle configuration or employs a previously undemonstrated 
mission profile, the launch provider must present design and 
qualification data for review and approval by the Air Force Space and 
Missile Center as part of the flight worthiness certification process.

                    waivers for spacex certification
    38. Senator Sessions. Mr. Estevez and General Shelton, did the Air 
Force give SpaceX any waivers regarding the need to meet all orbital 
regimes or provide additional time for SpaceX to achieve certain 
critical capabilities such as vertical integration of satellites?
    Mr. Estevez. When the SpaceX entered into the CRADA with the Air 
Force in June 2013, it was with the understanding that certification 
would be issued with limitations in the following areas: (1) 
verification of only four of the eight required reference orbits; (2) 
implementation of a secure flight termination system; (3) 
implementation of a GPS metric tracking system; (4) demonstration of a 
vertical integration capability; and (5) obtaining an ISO 2700 
information assurance certification. Areas 2 through 5 will have to be 
implemented prior to the launch of any NSS mission. If SpaceX decides 
to compete for missions in addition to the 4 specified in the CRADA, 
additional verification will be required. Space X is currently seeking 
certification for the following reference orbits: (1) 500 nautical mile 
circular Low Earth Orbit; (2) 450 nautical mile Sun Synchronous; (3) 55 
degree inclination Semi-Synchronous Orbit; and (4) GEO transfer Orbit 
(GTO).
    General Shelton. SpaceX has been given no waivers to EELV program 
requirements. The CRADA covers EELV certification for SpaceX, which is 
a necessary precondition for launching NSS missions. The requirements 
for each launch service are specific to that mission, and SpaceX can 
only compete for those missions for which they are seeking 
certification, currently four of the eight DOD reference orbits. 
Vertical integration is a necessary precondition for launching NSS 
missions and must be demonstrated and verified 12 months prior to 
launch.

    39. Senator Sessions. Mr. Estevez and General Shelton, does the Air 
Force have any concerns with the SpaceX plan for vertical integration?
    Mr. Estevez. Vertical integration is a required, critical 
capability for any potential EELV new entrant because all current NSS 
satellites were designed with the expectation that they would be 
integrated vertically to their launch vehicle. SpaceX agreed that, as a 
condition of contract award of a NSS launch service, SpaceX must 
provide data to include a Critical Design Review level design, detailed 
development and activation schedules, and construction plans for their 
vertical integration facility. Additionally, SpaceX must demonstrate a 
vertical integration capability either through a pathfinder activity or 
vertically integrating a commercial payload prior to the launch of any 
NSS payload. It is DOD's expectation that SpaceX will meet these 
requirements if they are awarded a NSS launch service contract.
    General Shelton. SpaceX is working in conjunction with the Air 
Force on implementing their vertical integration plan.

                        nasa use of the atlas v
    40. Senator Sessions. Mr. Lightfoot, while you were the Director at 
the Marshall Space Flight Center, you started the National Institute 
for Rocket Propulsion Systems (NIRPS). Does NIRPS have the people with 
the skills and experience to assist the Air Force in this effort to 
develop a domestic replacement for the RD-180 Russian engine?
    Mr. Lightfoot. National Institute for Rocket Propulsion Systems 
(NIRPS) personnel have the skills and experience to assist the U.S. Air 
Force in an effort to develop a domestic replacement for the RD-180 
engine. NIRPS is a small group of specialists assembled to help 
preserve and align Government and private rocket propulsion 
capabilities to meet present and future U.S. civil and defense needs, 
and to provide authoritative insight and recommendations to National 
decision authorities. Should the United States choose to pursue the 
development of a domestic replacement for the RD-180 engine, NASA is 
prepared to assist as directed. It should be noted, however, that--per 
administration policy--NASA is not planning to build a replacement for 
the RD-180. The Agency is pleased that ULA and Blue Origin have decided 
to partner and to pursue the development of a domestic ``boost phase'' 
rocket engine. This engine will join the ranks of other commercially 
developed US rocket engines used for ``boost phase,'' such as the 
Merlin 1D developed by SpaceX, and the RS-68, funded by Boeing, once 
its development and testing is complete.

    41. Senator Sessions. Mr. Lightfoot, if we are to meet the 
aggressive timelines necessary to replace the RD-180 by the end of the 
decade, we will need the support of our Nation's best and brightest. Do 
I have a commitment from NASA, if provided adequate resources from DOD, 
to be helpful to the Air Force and DOD in the development of a 
replacement for the RD-180 Russian engine?
    Mr. Lightfoot. Should the United States choose to pursue the 
development of a domestic replacement for the RD-180 engine, NASA is 
prepared to assist as directed. As noted above, per administration 
policy, NASA is not currently planning to build a replacement for the 
RD-180.

    42. Senator Sessions. Mr. Lightfoot, it is my understanding that 
NASA depends upon the Atlas V with its RD-180 engine for a number of 
its science missions and that it is the identified launch vehicle for 
two of the three commercial crew supply proposals. How would not having 
access to the RD-180 impact NASA's plans for ensuring competition in 
the commercial crew program?
    Mr. Lightfoot. In September, NASA awarded contracts to Boeing and 
SpaceX for commercial crew transportation system certification and 
transportation services to the ISS. The companies were required to 
provide a transportation solution that met our NASA safety and 
performance requirements, including the provision of risk mitigation 
plans for their solutions. Boeing proposed using the Atlas V launch 
vehicle with the RD-180 engine as part of its transportation solution. 
The companies are required to provide a service and they are 
responsible for planning for and resolving disruptions in their supply 
chain, which includes their launch vehicle and engine solution. NASA 
evaluated each company's proposal and selected them based on their 
ability to meet the CCtCap requirements. We cannot publicly provide 
additional details of the selection decision or the companies' 
mitigation plans at this time as the CCtiCap awards are currently part 
of a protest with the GAO. We expect a GAO decision in early January.
                                 ______
                                 
              Questions Submitted by Senator David Vitter
                        nasa space launch system
    61. Senator Vitter. Mr. Lightfoot, given the problems with 
obtaining Russian engines for the military's satellite launches, it is 
time to develop our own rocket. Years of development and testing are 
leading up the NASA SLS, which will be the largest rocket ever made, is 
well on its way to be ready for its first launch in 2017. Within that 
program there are a great set of talented and experienced staff on 
hand. There is expertise in manufacturing at the Michoud Assembly 
Facility, propulsion at the Marshall Space Center, and testing at the 
Stennis Space Center, and that means we have the personnel who can 
design, build, test, and complete a new rocket engine. Also, I believe 
that having the Air Force and NASA cooperate on this endeavor would 
bring the best minds together and save money by pooling talent and 
resources. Do you agree that the Air Force and NASA could effectively 
cooperate in developing a new rocket engine for our Nation's needs?
    Mr. Lightfoot. Should the United States choose to pursue the 
development of a domestic replacement for the RD-180 engine, NASA is 
prepared to assist as directed. It should be noted, however, that--per 
administration policy--NASA is not planning to build a replacement for 
the RD-180. The Agency is pleased that ULA and Blue Origin have decided 
to partner and to pursue the development of a domestic boost phase 
rocket engine. This engine will join the ranks of other commercially 
developed U.S. rocket engines used for boost phase, such as the Merlin 
1D developed by SpaceX, and the RS-68, funded by Boeing, once its 
development and testing is complete.

    62. Senator Vitter. Mr. Lightfoot, additionally, SLS is performing 
well across the board, and I strongly feel that SLS resources should 
not be diverted, which would slow important progress and delay the 
program's goals and the launch schedule. With separate budget 
priorities and Congress reimbursing NASA for involvement and 
cooperation with the Air Force to address this obvious need, would NASA 
object to bringing all skills and capability to solve this critical NSS 
problem?
    Mr. Lightfoot. Should the United States choose to pursue the 
development of a domestic replacement for the RD-180 engine, NASA is 
prepared to assist as directed. It should be noted, however, that--per 
administration policy--NASA is not planning to build a replacement for 
the RD-180. The Agency is pleased that ULA and Blue Origin have decided 
to partner and to pursue the development of a domestic boost phase 
rocket engine. This engine will join the ranks of other commercially 
developed U.S. rocket engines used for boost phase, such as the Merlin 
1D developed by SpaceX, and the RS-68, funded by Boeing, once its 
development and testing is complete.

     damage to cargo returning from the international space station
    63. Senator Vitter. Mr. Lightfoot, reports indicate SpaceX has 
encountered sea water intrusions into their reusable Dragon capsule on 
all three of their splashdown landings when returning cargo from the 
ISS, but NASA has yet to provide a conclusive answer regarding damage 
and has so far given no additional information about these reports. As 
we consider the issues of access to space, Congress should have the 
information necessary to provide proper oversight of the work done by 
government contractors. What equipment was damaged and what is the 
cost?
    Mr. Lightfoot. Regarding water intrusions experienced during the 
three SpaceX contracted Commercial Resupply Services (CRS) missions, 
SpaceX experienced water intrusions in the avionics bay of the Dragon 
capsule on two instances during splashdown. On the first instance, 
power was lost to the General Laboratory Active Cryogenic ISS 
Experiment Refrigerator (GLACIER) that contained laboratory samples. 
Even though power was lost, the samples were not damaged as their 
temperature did not fall below temperature limits. On the second 
occasion, water again was experienced in the avionics bay, but no 
anomalies occurred and the GLACIER maintained power.
    On the third incident, water intrusion was experience in the 
pressurized cargo compartment. The root cause has been determined to be 
unexpected high pressures seen on the hatch caused by rough seas, 
landing orientation and wind conditions. A small percentage of NASA 
cargo did sustain contamination from the saltwater exposure. ISSP is 
still evaluating the overall cost impacts to the contamination and has 
not completed the final payment to SpaceX for the mission while it 
finalizes the estimate.

    64. Senator Vitter. Mr. Lightfoot, why was Congress not notified of 
this damage?
    Mr. Lightfoot. NASA is still evaluating the extent of the seawater 
contamination.

    65. Senator Vitter. Mr. Lightfoot, has an Aeronautical Safety 
Advisory Review Panel inquiry taken place?
    Mr. Lightfoot. The ASAP has not been briefed on the results yet as 
NASA is evaluating the contaminated cargo and SpaceX's overall mission 
performance. The anomaly was discussed with the ASAP as part of an 
overall ISS status.

    66. Senator Vitter. Mr. Lightfoot, it is to be noted that the NASA 
Inspector General (IG) has glossed over much of this. Do we know if the 
IG has done an investigation since mention was made of the first leak 
in an IG report?
    Mr. Lightfoot. The anomalies that our CRS providers SpaceX and 
Orbital are experiencing are within the experience based on NASA 
directed programs and the broader industry. The NASA IG has not done an 
investigation. NASA maintains that these types of anomalies are within 
family for human spaceflight mission that utilize water landing.

    67. Senator Vitter. Mr. Lighfoot, are NASA and the taxpayers being 
refunded for damaged cargo?
    Mr. Lightfoot. Please see response to Question #63, above. No 
biological samples were damaged or lost during any of the SpaceX 
missions.

         cargo resupply missions suffered significant failures
    68. Senator Vitter. General Shelton, according to reports, SpaceX's 
three cargo resupply missions for NASA have suffered significant 
failures, including the loss of an engine on ascent, which resulted in 
the loss of a satellite; computer malfunctions; thruster failures; the 
Dragon capsule going into a spin; and the Dragon capsule leaking sea 
water and damaging cargo, yet NASA has not disclosed any details of 
these reports. Space travel involved dangerous and harsh environments, 
yet lesser occurrences have grounded military jets and commercial 
airlines to find the root cause of the issue to prevent loss of life 
and property. Would any of the incidents I listed, such as loss of an 
engine, loss of guidance, or loss of control, require the launch 
vehicle in question to be grounded by DOD?
    General Shelton. Yes. As you mentioned, space travel is very 
challenging, involves harsh environments and the fact that we only get 
one chance to get it right. All launch vehicle incidents or non-
conformances are taken very seriously and every effort is made to 
assess the risk, to include determining root cause, prior to launch.
    The Air Force tracks all incidents and non-conformances throughout 
the design, production, and launch operations. As these items are 
discovered, we work closely with the launch vehicle contractor to 
determine root cause, impacts, and closure plan in order to ensure a 
successful mission. After a launch, we accomplish an extensive post-
flight review of mission data looking for any incidents or out-of-
family data to ensure there are no concerns for the next mission. If an 
incident such as the ones you mentioned were to occur, we would 
implement the anomaly resolution process to guide the forward plan and 
delay future launches, if necessary, until it is resolved.
    For DOD launches, the integrated U.S. Government/Industry team 
would evaluate the incidents listed to determine impacts and root 
cause. The evaluation would result in corrective actions required for 
the launch vehicle supplier to maintain Space Flight Worthiness 
Certification. Space Flight Worthiness measures the degree to which a 
spacecraft, launch vehicle, or critical ground system, as constituted, 
has the capability to perform its mission with the confidence that 
significant risks are known and deemed acceptable.

    69. Senator Vitter. General Shelton, what is the process DOD uses 
to return a launch vehicle to active status?
    General Shelton. There are two Return To Flight (RTF) certification 
processes: safety assurance and mission assurance. The Launch Base 
Space Wing Commander is the designated authority for certifying safety 
RTF. The Space and Missile Systems Center Commander is the designated 
authority for certifying mission assurance RTF for Air Force missions 
and Air Force-managed payload and launch vehicles in support of non-Air 
Force customers. Following any launch mishap, if the mishap is launch 
system-related, applicable safety RTF criteria must be addressed before 
the system in question is allowed to launch from an AFSPC space launch 
range. Additionally, if the mishap is range safety-related or if range 
safety procedures failed to adequately protect the public or government 
personnel during a launch, the safety RTF criteria must be addressed 
before any launch can occur from an AFSPC space launch range. Mission 
assurance RTF criteria must be addressed prior to the next Air Force-
supported mission utilizing the launch vehicle, payload, subsystem, 
component, aerospace ground equipment, or procedure having contributed 
to a launch mishap.
    Safety RTF criteria are established to ensure that range safety 
system operation is not affected by the mishap, risk analyses are still 
valid, and that all other considerations which could affect launch risk 
are addressed and mitigated. At a minimum, it includes verification of 
the Flight Termination System, verification the range safety systems 
did not contribute to or cause the mishap, or that failures in these 
systems have been corrected to eliminate such contributions, ensures 
hazard/risk assessments were adequate, evaluation of range operations, 
and ensure appropriate measures have been taken to control the most 
likely failure cause.
    Mission Assurance RTF criteria focus on ensuring successful mission 
execution and establishing an acceptable technical risk baseline for 
Space Flight Worthiness Certification. At a minimum, it includes 
ensuring all failure-related issues involving pre-launch processing are 
resolved, ensuring all failure-related issues involving launch vehicle 
and/or payload performance go/no-go criteria are resolved, ensuring all 
failure-related issues involving launch vehicle and/or payload hardware 
production, integration, and test, vehicle inspection/checkout, or 
contractor processes/procedures are resolved, and ensuring all failure-
related issues involving launch vehicle and/or payload design flaws are 
resolved.

    70. Senator Vitter. General Shelton, what are the checks and 
balances to ensure the technical issue has been properly addressed and 
approximately how long does this process take? Please provide me an 
example of a recent return to flight process to use as a benchmark.
    General Shelton. The Air Force EELV Mission Assurance process, 
which has many checks and balances, establishes a technical risk 
baseline for Space Flight Worthiness certification. All technical 
issues are addressed with this process. It is comprised of three areas: 
(1) nonrecurring qualification activities that confirm the system 
design meets requirements and can demonstrate the necessary margins, 
the manufacturing processes are appropriate and repeatable, and test 
hardware works after qualification; (2) recurring verification of 
flight hardware conformance to qualifications; and (3) anomaly 
resolution and corresponding risk assessments for non-conformances and 
technical issues. The EELV Mission Assurance process includes the Air 
Force, Aerospace Corporation, Space and Missile Center's Independent 
Readiness Review Team, and the Launch Vehicle Contractor.
    The nonrecurring efforts are performed mainly during the launch 
vehicle design and qualification which occurs over several years. 
Portions of the nonrecurring effort can be re-accomplished to address 
any design changes and can be accomplished within weeks to months.
    The recurring effort is conducted for each individual mission and 
includes many different tasks from validating launch environments to 
evaluation of mission unique requirements. These efforts occur over the 
2 year launch integration contract period.
    The anomaly resolution effort evaluates the unpredicted technical 
issues that arise during design, production, and launch operations. Air 
Force, Aerospace Corporation, and launch vehicle contractor responsible 
engineers monitor the design, production, and launch operations and 
identify technical issues and non-conformances that need to enter the 
review process. The issues are reviewed by four independent engineering 
boards: (1) Launch Vehicle Contractor; (2) Air Force Chief Engineer; 
(3) Aerospace Corporation; and (4) Space and Missile Center's 
Independent Readiness Review Team. This process can take anywhere from 
hours to years depending on the resolution required to maintain or 
achieve Space Flight Worthiness Certification.
    Specifically, to address your request for an example of a return-
to-flight process, during the October 2012 launch of GPS IIF-3, a fuel 
leak occurred within the upper stage engine. Even though the mission 
was a success, the in-flight anomaly delayed launches of the Atlas V 
and Delta IV fleet in order to evaluate the anomaly. As the 
investigation progressed, information gathered allowed the independent 
engineering boards to determine a mission-by-mission acceptable risk 
level for Atlas V return-to-flight in December 2012 and was based on 
engineering and operational differences between the Atlas V and Delta 
IV upper stage engines. Delta IV mission-by-mission return-to-flight 
was achieved in May 2013. Atlas V and Delta IV fleet clearance was 
achieved in July 2014, almost 2 years from the initial anomaly.

    71. Senator Vitter. General Shelton, are these anomalies taken into 
consideration in the certification process?
    General Shelton. Yes, the Air Force began early insight efforts 
with SpaceX and observation of the Falcon 9 v1.0 missions, to include 
the Commercial Resupply Services missions, which have informed the 
certification process, and the Air Force has observed and will continue 
to observe every flight of the Falcon 9 v1.1 launch system while 
undergoing certification. We continue to work with SpaceX, within their 
anomaly resolution process, to reach concurrence on root cause of any 
anomaly and the implemented resolution for the fleet of vehicles and 
for the next flight.

    72. Senator Vitter. General Shelton, can you assure me that no 
efforts are being made inside or outside DOD to skirt this process?
    General Shelton. Yes, the Air Force is following the NECG and 
working through the signed CRADA with SpaceX. No efforts are being made 
inside or outside DOD to bypass this process.
                                 ______
                                 
                Questions Submitted by Senator Mike Lee
                     national security space launch
    73. Senator Lee. Mr. Estevez, this committee has been clear, that 
for national security purposes, it desires the development of a 
domestic replacement of the RD-180 so that we do not have to rely on 
Russia for certain launch capabilities. I believe that DOD should not 
be focused solely on liquid replacements for the RD-180 and future 
rocket systems, but should have an open competition that looks at all 
domestically produced capabilities, including solid rocket motors, to 
determine the system that provides the best cost-benefit for the 
government. Do you believe that DOD would benefit from considering 
other types of propulsion systems and allowing a fair and open 
competition that includes solid and liquid solutions when looking to 
domestically replace the RD-180 engine and for future launch systems?
    Mr. Estevez. I do believe DOD would benefit from considering other 
types of propulsion systems. A Request for Information (RFI), released 
by the Air Force on August 21, 2014, seeks industry inputs on a broad 
range of launch capabilities, to include booster propulsion systems 
and/or launch systems; it does not constrain itself to liquid 
propulsion systems. The industry input we have received in response to 
this RFI will be critical in shaping DOD's planning on this critical 
issue.

    74. Senator Lee. General Shelton, this committee included report 
language in the National Defense Authorization Act for Fiscal Year 2015 
regarding domestically produced rocket engines, stating that propulsion 
systems in addition to liquid rocket engines could provide future 
capabilities that support DOD requirements for medium or heavy launch 
vehicles, and recommends that DOD continually review the potential of 
using such propulsion systems. DOD is also required by the provision to 
report to the committee on the feasibility of using other propulsion 
systems in addition to liquid engines. Would you please give me an 
update on the status of this report and your thoughts on the usability 
of other propulsion systems like solid rocket motors for NSS launch?
    General Shelton. Solid rocket motors (SRM) are one course of action 
that the DOD is considering in mitigating reliance on the RD-180. The 
Air Force released a Request for Information (RFI) on August 20, 2014, 
seeking additional data on potential alternative propulsion systems. 
Industry may include SRMs as a potential course of action that may be 
provided in response to the RFI. RFI responses are due back to the Air 
Force on September 19, 2014. The report is still in work, and will be 
delivered as part of the full-scale engine development effort plan from 
the Secretary of the Air Force in coordination with the NASA 
Administrator.

    75. Senator Lee. Mr. Estevez and General Shelton, do you believe 
that it is in the national security interest of the United States for 
DOD to continue to ensure that we maintain a domestic source of the 
critical chemical ammonium perchlorate used in space launches and 
tactical and ballistic missiles?
    Mr. Estevez. Yes, I do believe that ammonium perchlorate is 
important. Within DOD, both the Defense Logistics Agency (DLA) 
Strategic Materials and USD(AT&L)/Manufacturing and Industrial Base 
Policy organizations are closely monitoring the needs of the defense 
industrial base regarding ammonium perchlorate and its associated 
supply. Specifically, ammonium perchlorate is among over 160 materials 
which compose a Watch List of materials of concern for the defense 
industrial base which was created by the Director of DLA Strategic 
Materials with input from industry and key government stakeholders, 
such as the DOD Critical Energetic Materials Working Group and the 
Joint Army-Navy-NASA-Air Force (JAANAF) Programmatic and Industrial 
Base Committee. These organizations collaborate to analyze, prioritize, 
and make informed decisions regarding all strategically important 
materials that may bear on national security, and will do so in the 
case of ammonium perchlorate.
    This year, DOD initiated a study to address concerns with ammonium 
perchlorate. The objective of the study is to develop mitigation 
alternatives that reduce the cost and schedule risks for DOD. 
Alternatives should include identifying approaches to reduce capacity 
in the existing facility and analyzing cost and schedule for 
development of a new right-sized facility. Reducing the re-
qualification cost burden for DOD weapons systems that experience an 
ingredient change also is being addressed. We expect to see results 
from this effort in the second quarter of fiscal year 2015. DOD has the 
necessary authorities to deal with this issue.
    General Shelton. Yes, solid rocket propulsion is a key enabler 
across several aspects of national security.
                                 ______
                                 
               Questions Submitted by Senator John McCain
               space launch competition and certification
    43. Senator McCain. Mr. Estevez, it was recently announced that the 
Air Force approved three flights that the new entrant has performed to 
show the Air Force of its capability for military payload launches. 
Please describe in detail what steps remain for certification of new 
entrants, the expected dates for these steps to occur, and whether 
these steps are the primary responsibility of the government or of the 
new entrant.
    Mr. Estevez. As part of the NECG and CRADA, the new entrant chose a 
certification approach that requires both launches as well as 
government evaluation of characteristics of their launch system. These 
characteristics include, for example: design reliability, manufacturing 
operations, test and verification processes, quality processes, and 
risk management processes. The new entrant must successfully pass three 
gate reviews prior to certification. Gate 1 occurs at the end of the 
System Assessment Phase; Gate 2 at the end of the System Evaluation 
Phase; and Gate 3 at the end of the Certification Phase. After the Gate 
3 review, the Air Force makes a certification determination. For the 
SpaceX Falcon9v1.1, the Assessment Phase Gate 1 review was conducted on 
June 27, 2014, with the Air Force providing approval (with liens) for 
entry into the next phase on August 7, 2014. The Falcon9v1.1 Evaluation 
and Certification Phase activities, currently underway, are running 
concurrently and the Gate 2 and Gate 3 reviews were combined into a 
single review; that review was held on December 8, 2014. At this time, 
we expect the Air Force will complete its certification determination 
within the next 120 days.

                            russian engines
    44. Senator McCain. Mr. Estevez, regarding EELV's Russian engine, 
the Government Accountability Office (GAO) noted a serious lack of 
transparency of EELV components in a recent March 2014 report that 
said: ``DOD may have lacked sufficient knowledge to negotiate fair and 
reasonable launch prices.'' With this in mind, how has DOD concluded 
that cost and pricing of these engines is now fair and reasonable?
    Mr. Estevez. The RD-180 engines were determined by the contracting 
officer to be commercial items in accordance with Federal Acquisition 
Regulation (FAR) 15.403-1(c)(3). Acquisitions of any supply or service 
deemed commercial are exempted from the requirement for certified cost 
or pricing data in accordance with 10 USC 2306a and FAR 15.403-1(b)(3). 
Commercial items are evaluated using price analysis in accordance with 
FAR 15.404-1(a)(2). Price analysis is the process of examining and 
evaluating a proposed price without evaluating its separate cost 
elements and proposed profit.
    As part of the price analysis of the RD-180 engines supplied to ULA 
under its subcontract with RD AMROSS, the Air Force first compared 
proposed prices for RD-180 rocket engines to historical prices paid. 
The Air Force then correlated and compared the RD-180 engine price to 
the Pratt & Whitney Rocketdyne (now Aerojet Rocketdyne) built RS-68 
engine for the Delta IV launch vehicle. The final method used was to 
compare the prices to the results of a Should Cost Study for a Pratt & 
Whitney co-produced RD-180. This method used a bottoms-up estimate of 
the entire effort required to establish co-production of the RD-180 
engine in the United States in lieu of in Russia. The price analysis 
justified the fairness and reasonableness of the RD-180 engine prices 
being charged to ULA by RD AMROSS, and ultimately to the Air Force. 
Nonetheless, we continue to assess the price reasonableness of the RD-
180 engine.

                  global positioning system satellites
    45. Senator McCain. General Shelton, the new GPS version III 
satellites the Air Force has decided to delay gives increased GPS 
capability to our warfighters compared to what they have today. Are GPS 
version III satellites needed by our troops to fulfill a validated 
operational requirement for our combatant commanders to have protected 
and improved positioning technology, and if this is the case, what is 
the impact to the warfighters and the combatant commanders of not 
having this capability?
    General Shelton. Yes. GPS III is very important to both the 
sustainment of a healthy GPS constellation and the deployment of M-code 
capability to improve GPS military capability in jamming environments. 
Not having M-code makes it easier for an adversary to deny our use of 
GPS. The current constellation plan provides the capability for M-code 
on schedule to meet the fiscal year 2017 congressional requirement 
(National Defense Authorization Act for Fiscal Year 2011).
                                 ______
                                 
              Questions Submitted by Senator Kelly Ayotte
   cost of transportation to and from the international space station
    46. Senator Ayotte. Mr. Lightfoot, how much do we pay to the 
Russians to get our astronauts to and from the ISS?
    Mr. Lightfoot. In April 2014, NASA contracted with the Russian 
Federal Space Agency (Roscosmos) on a sole-source basis for six Soyuz 
seats and associated services for calendar year 2017 with rescue and 
return services extending through spring 2018 via contract 
modification. Services include all necessary training and preparation 
for launch, flight operations, return and rescue of U.S. or U.S.-
designated astronauts and associated services. The seat price is 
approximately $76.0 million and is 8 percent higher than the last 
contract modification.

                           rd-180 replacement
    47. Senator Ayotte. Mr. Estevez, in your written statement, you 
state that, ``DOD believes the Nation needs to eliminate our 
utilization of Russian propulsion systems in the most efficient and 
affordable manner.'' Why do you believe that this is necessary?
    Mr. Estevez. The current situation between Russia and Ukraine 
obviously causes DOD concern. The Government of Russia could choose to 
unilaterally interrupt the supply of RD-180 engines which would 
seriously impact our space launch capability. DOD takes any risk to our 
assured access to space seriously and is looking at options to insulate 
the Nation from this possibility.

    48. Senator Ayotte. General Shelton, in your prepared statement, 
you discuss the Air Force's recently completed RD-180 Availability Risk 
Mitigation Study. You state that the study found that an RD-180 
production loss or interruption would have ``significant impact on our 
ability to reliably launch the current manifest of NSS payloads on a 
schedule of our choosing.'' Would you please provide more details on 
the impact on U.S. space capabilities and NSS if there is an 
interruption in the RD-180 supply?
    General Shelton. The RD-180 Availability Risk Mitigation Study 
showed the cost impact ranges from $2.5 billion to $5 billion, 
depending on when the United States would be cut off from using the RD-
180. The manifest impacts range from needing to remanifest nine 
missions with an average launch delay of 2 years, to the more severe 
case of needing to remanifest 31 missions with an average launch delay 
of 3.5 years. Consideration would have to be taken regarding the NSS 
priority of each payload in order to mitigate the impact to NSS. There 
would also be potential impacts to NASA and commercial missions.

    49. Senator Ayotte. General Shelton, what would be the benefits of 
a domestically produced new engine program?
    General Shelton. A new domestically-produced engine would eliminate 
our reliance on a foreign-made booster engine, would enable our 
technological advancement, and would stimulate the industrial base, 
resulting in more competitive U.S. launch capabilities in the future.

                    duplication between dod and nasa
    50. Senator Ayotte. Ms. Chaplain, since 2012, you have cited space 
launch contract costs as an area of government duplication. GAO has 
argued that increased collaboration between DOD and NASA could reduce 
launch contracting duplication. Would you please explain areas of 
duplication between DOD and NASA that could be eliminated in order to 
save money?
    Ms. Chaplain. In 2012. GAO reported that the government is not 
acting as a single buyer and therefore its investment in launch 
acquisitions may not be optimized. DOD and NASA currently negotiate and 
contract for launch services separately, though they are contracting 
with the same company as one another. This arrangement may not leverage 
the government's overall negotiating power to get the best prices for 
launch services from launch service providers. For example, when 
negotiating the new block buy contract with ULA, the Air Force did not 
include NASA's launch needs for the contract's duration into the 
negotiations. Had NASA's needs been included in the negotiations, the 
additional launch quantities included in the contract might have helped 
bring prices down even farther. Similarly, since NASA launches were not 
included in the block buy, NASA will negotiate contracts with ULA 
separately, under NASA's own contracting structure. NASA currently has 
contracts with both SpaceX and Orbital Sciences Corporation for space 
station resupply missions. If the Air Force begins awarding EELV launch 
services contracts to either or both of these companies, they will be 
negotiating separately from NASA for these contracts. In addition, 
there may be other instances of duplication between DOD and NASA in the 
launch area, such as mission assurance, test assets, and launch 
workforces, but we have not looked at them specifically.

                    rd-180 engine supply disruption
    51. Senator Ayotte. Mr. Estevez, General Shelton, and Mr. 
Lightfoot, if a disruption in the supply of the RD-180 engines occurs 
and we have to prioritize space launches based on national security, 
how will this affect civilian and commercial launches?
    Mr. Estevez. In the event a supply disruption occurs, all affected 
parties will first utilize the Current Launch Schedule Review Board 
(CLSRB) process to work together to find a mutually acceptable 
solution. If all parties are unable to reach agreement in the Air 
Force-led CLSRB, the issue will be raised to the interagency process 
for adjudication at the interdepartmental level.
    Because the timing of a disruption has significant influence on the 
actual impacts, it is difficult to quantify the potential effects to 
individual users. The CLSRB and the interagency review process will 
seek to balance national security needs with the civil and commercial 
users in a manner that results in the best solution for the Nation as a 
whole.
    General Shelton. To date, we have not seen any disruptions in 
supply of the RD-180. Effects from any potential disruptions would 
depend heavily on the specific timing and conditions of any supply 
disruption. Prioritization of space launch missions would occur through 
the standing CLSRB, which includes membership from the Services, DOD 
agencies, NASA, and launch service providers.
    Mr. Lightfoot. If such a disruption were to occur, there would be 
an impact on all missions that have an on-contract Atlas V launch 
service, not just civil and commercial missions. However, the magnitude 
of the impact would be greatly dependent on the timing and the 
circumstances of the disruption. NASA would expect to engage in a 
prioritization discussion with our DOD colleagues for the allocation of 
in-country RD-180 engines to on-contract Atlas V launch service 
missions. Any NASA Atlas V on-contract missions not allocated an RD-180 
engine would then need to move to Delta IV or Falcon 9. The cost for 
moving an on-contract mission would be dependent on the timing and 
circumstances for that mission. For NASA satellite missions that have 
yet to award the contract for a launch service requiring an ``Atlas V-
class'' lift performance, the ULA Delta IV and SpaceX Falcon 9 v1.1 
would be competitive options.

                               block buy
    52. Senator Ayotte. General Shelton, when the Air Force initiated 
the 36 core block buy, how much weight was given to the potential for 
new certified launch providers?
    General Shelton. A significant amount of weight was given to the 
potential for certification of a new entrant. The quantity for the 36-
core block buy was determined through a three-pronged analysis approach 
conducted in the summer/fall 2012.
    The first prong was the space vehicle assessment. This assessment 
was designed to determine how many satellites would require launching 
between fiscal year 2015 to fiscal year 2019. Launch vehicles are 
nominally ordered 2 years prior to the projected launch date (3 years 
for a heavy launch vehicle). This assessment concluded that 50 launch 
vehicle booster cores were required to be purchased between fiscal year 
2013 to fiscal year 2017 to meet the operational requirements.
    The second prong was the New Entrant Readiness Assessment. This 
assessment was designed to determine when one or more of the emerging 
new launch providers would be certified to launch EELV-class missions 
and which type of NSS satellites their launch systems could lift. The 
Air Force commissioned an independent team to conduct this assessment. 
Primarily based on the new entrant's own schedule, they concluded that 
the earliest a new entrant would be available for award of a launch 
vehicle (core) contract would be fiscal year 2015, with the first 
launch of EELV-class missions no earlier than fiscal year 2017. 
Additionally, this assessment stated that the SpaceX produced Falcon 
9v1.1 launch vehicle was the most mature new entrant launch system that 
would meet certification within the fiscal year 2013 to fiscal year 
2017 timeframe. However, the Falcon 9v1.1 is only capable of lifting 
the lower portion of the EELV lift requirement, referred to as medium 
class missions. The heavier portion of the EELV lift requirement, 
intermediate and heavy class missions, can currently only be performed 
by ULA.
    The third prong was the Air Force assessment of the ULA proposed 
quantity and length of commitment options. Per the RFP the Air Force 
submitted to ULA in March 2012, the Air Force requested ULA provide 
prices for launch vehicle booster core commitments ranging from 6 to 10 
cores per year over 3-, 4-, and 5-year periods. ULA proposed if the Air 
Force committed to procuring at least 40 cores over 5 years, ULA would 
procure an additional 10 cores and pass the quantities of scale savings 
to the Air Force. ULA later agreed to procure 14 additional cores for a 
total of 50 with an Air Force commitment of 36 cores over 5 years and 
still pass those quantity discount savings to the Air Force.
    The assimilation of these three assessments led to the conclusion 
that a 36-core commitment over 5 years to ULA provided a significant 
price break over previous procurement practices while still providing 
competitive missions opportunities to potential certified new entrants. 
At that time, the first 16 of those 36 cores were expected to be 
awarded before any new entrant would be certified. The other 20 were 
identified as having mission requirements that could only be met by 
ULA.

    53. Senator Ayotte. General Shelton, what cost estimates did you 
conduct to come to the conclusion that a 36 core block buy would be 
most financially advantageous?
    General Shelton. Through the analysis of historical program 
actuals, detailed technical evaluations, implementation of Better 
Buying Power principles, and tough negotiations, the government was 
able to realize significant cost reductions to the annual cost of 
launch. The quantity for the 36-core block buy was determined through a 
3-pronged analysis approach conducted in the summer/fall 2012.
    The first prong was the space vehicle assessment. This assessment 
was designed to determine how many satellites would require launching 
between fiscal year 2015 to fiscal year 2019. Launch vehicles are 
nominally ordered 2 years prior to the projected launch date (3 years 
for a heavy launch vehicle). This assessment concluded that 50 launch 
vehicle booster cores were required to be purchased between fiscal year 
2013 to fiscal year 2017 to meet the operational requirements.
    The second prong was the New Entrant Readiness Assessment. This 
assessment was designed to determine when one or more of the emerging 
new launch providers would be certified to launch EELV-class missions 
and which type of NSS satellites their launch systems could lift. The 
Air Force commissioned an independent team to conduct this assessment. 
Their assessment concluded that the earliest a new entrant would 
procure a launch vehicle would be fiscal year 2015 with the first 
launch of EELV-class missions no earlier than fiscal year 2017. 
Additionally, this assessment stated that the SpaceX produced Falcon 
9v1.1 launch vehicle was the most mature new entrant launch system that 
would meet certification with in the fiscal year 2013 to fiscal year 
2017 timeframe. The Falcon 9v1.1 is only capable of lifting the lower 
portion of the EELV lift requirement, referred to as medium class 
missions. The heavier portion of the EELV lift requirement, 
intermediate and heavy class missions, could only be performed by ULA, 
as well as missions to be procured in fiscal year 2013 to fiscal year 
2014, totaling 36 cores. At that time, the first 16 of those cores were 
expected to be awarded before any new entrants would be certified. The 
other 20 were identified as having mission requirements that could only 
be met by ULA. Based on this analysis, up to 14 cores were identified 
for potential competition, within the fiscal year 2015 to fiscal year 
2017 timeframe.
    The third prong was the Air Force assessment, which proposed 
quantity and length of commitment options. The Air Force received a 
proposal from ULA in 2013 with pricing points for commitment periods of 
3 to 5 years and quantities of 6 to 10 cores per year. ULA offered a 
price discount if a 5-year commitment of 8 cores per year was made. 
Prior to negotiations, the Air Force conducted extensive cost analysis, 
including a complete technical deep dive of all major subcontractors 
and the prime, site visits, DCMA involvement, and cost and price 
analysis. Through negotiations, the Air Force obtained better pricing 
than ULA's discounted offer for the 36 cores referenced above.
    The assimilation of these assessments led to the conclusion that a 
36-core commitment over 5 years to ULA provided a substantial price 
break over previous procurement practices, while still providing 
competitive missions opportunities to potential certified new entrants.

    54. Senator Ayotte. General Shelton, you note that block buy 
represents a $4.4 billion reduction from baseline in the fiscal year 
2012 budget. Reductions from the baseline are only useful if the 
baseline is accurate. Assuming at least one new launch provider is 
certified within the timespan of the block buy mission period, what 
further reductions might we have made--or will make--from that 2012 
baseline?
    General Shelton. The $4.4 billion reduction from the baseline in 
the fiscal year 2012 budget represents a culmination of cost savings 
achieved through Better-Buying-Power initiatives implemented starting 
in 2011, such as changing from Cost Plus Award Fee to Cost Plus 
Incentive Fee contract structure for EELV launch capability, economies 
of scale pricing from the Phase 1 block buy contract, and stability of 
the industrial base through the long-term commitment of the block buy. 
Although the Air Force cannot accurately estimate what savings could be 
obtained through competition of launch services as each potential 
bidder will make numerous business decisions in the process of 
developing bids, further reductions are possible if at least one new 
launch provider is certified to compete for missions above the block 
buy baseline. The Air Force will continue its strong, focused efforts 
to certify new launch providers and promote a competitive environment 
for launch services.
    The strategy for the block buy was to award cores based on analysis 
that we expected to buy from ULA, given our assessment of new entrant 
certification efforts. Of the 36 cores awarded, 16 were to be awarded 
when only ULA was certified. The remaining 20 were for missions only 
ULA would execute. While the assumption was that a new entrant could be 
certified and therefore available for fiscal year 2015 awards, as early 
as 2014, none has yet completed all steps toward certification.

                             spacex rockets
    55. Senator Ayotte. Mr. Estevez, we have been reading reports about 
the Air Force's rejection of SpaceX's unsolicited bid for GPS III 
satellites. Disregarding the eligibility requirements the Air Force may 
have used to reject the bid, is it technically possible to launch the 
satellites at issue aboard SpaceX rockets? If the answer is no, why 
not? If the answer is yes, why, and to what degree do current rules and 
regulations drive up the costs of launches?
    Mr. Estevez. Current analysis indicates that SpaceX Falcon 9v1.1 
can lift the GPS III satellite. When the proposal was received, SpaceX 
was not a certified EELV provider and therefore was not eligible for a 
launch service contract award. While there is a relatively small cost 
to both the contractor and the government associated with the 
certification process, it is critical that DOD ensure all launch 
service providers meet minimum design reliability requirements. DOD 
will continue to require that launch services contracts only be issued 
to certified providers. Insight into the vehicle design developed 
during the certification process allows DOD to minimize its cost in the 
long run by maximizing the probability of successfully launching our 
critical NSS payloads.

                           driving down costs
    56. Senator Ayotte. Mr. Dumbacher, in your testimony you state, 
``It is clear that cost growth associated with access to space and 
propulsion is a major threat to the competitive U.S. launch posture. 
Therefore, it is essential that the U.S. rocket propulsion industry 
directly and aggressively address launch system costs, working to drive 
down the cost to develop and operate launch vehicles and propulsion 
systems.'' Is competition an effective mechanism for driving down costs 
in the space launch ecosystem?
    Mr. Dumbacher. Competition is essential to reduce development and 
operations costs. It is an effective tool and should be used 
appropriately.

    57. Senator Ayotte. Mr. Dumbacher, does the government's NSS launch 
certification process drive up costs by reducing competition or does 
the compliance cost avoid failed launches that would be more costly?
    Mr. Dumbacher. I am not an expert on the NSS launch certification 
process. This country has learned through tough experience (base 
realignment and closure in the late 1990s) that sufficient technical 
and programmatic insight is needed to assure mission success. Loss of 
mission and loss of vehicle during launch are costly to the success of 
the industry. However, there is a needed risk based balance among 
insight, oversight, certification, and use of best commercial practices 
to assure mission success at an appropriate cost.

                            cost assumptions
    58. Senator Ayotte. Ms. Chaplain, does the $9.5 billion you mention 
DOD expects to spend in the next 5 years on the EELV include new launch 
providers?
    Ms. Chaplain. The $9.5 billion figure represents the amount that 
the Air Force requested in the fiscal year 2014 President's budget. The 
funding was requested to award contracts for the Air Force's national 
security space launch manifest over fiscal years 2014 to 2018, among 
other things. This figure includes launches that the Air Force planned 
to be launched by the ULA, as well as other launches that they planned 
to put up for competition between ULA and new entrants. This figure did 
not include launches funded by other military services or government 
organizations, such as the Navy or the National Reconnaissance Office. 
It should be noted that, due to the contract price reductions that the 
Air Force was able to negotiate with ULA, the fiscal year 2015 
President's budget for the same time period was about $7.4 billion.

    59. Senator Ayotte. Ms. Chaplain, either way, what cost assumptions 
has DOD made regarding new entrants in the provider market?
    Ms. Chaplain. We are unaware of any specific cost assumptions that 
DOD has made regarding new entrants to the launch market.

    60. Senator Ayotte. Ms. Chaplain, General Shelton noted that the 
block buy represents a $4.4 billion reduction from the baseline in the 
fiscal year 2012 budget. Reductions from baseline are only useful if 
the baseline is accurate. What do you think of the potential savings?
    Ms. Chaplain. GAO has not independently validated the Air Force's 
$4.4 billion savings claim. We have reported that DOD took on a 
significant effort to obtain and analyze contractor and subcontractor 
data, an important step to strengthening the government's negotiating 
position and lowering prices. For example, DOD officials and the 
National Reconnaissance Office cost analysis group collected detailed 
data on engine prices and subcontractor costs. DOD also scrutinized 
launch processes to identify and eliminate potentially redundant 
activities in the new contract. As a result, DOD contracting officials 
had a stronger bargaining position to lower overall contract costs than 
in previous negotiations, and through the stable unit pricing they 
negotiated for all launch vehicles they were able to enjoy lower prices 
on launch services under the new contract. The threat of potential 
competition in the EELV launch market also likely provided further 
bargaining power for the Air Force to reduce launch contract costs.
    With regards to the accuracy of the baseline of the 2012 budget, we 
have not analyzed the information that went into that budget.

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