Griffin on commercialization

[wvbraun]

On ISS Crew and Cargo:<br /><br /><i>Fundamentally, what we are going to be focusing on is what sort of performance crew and cargo delivery systems would require as opposed to what type of process they would have to follow.<br /><br />[You should] look for us to conduct such a competitive procurement - and [you should] look for us to pick a "leader" with whom we will get started - and also to fund a couple of "followers" at the study level in case the leader falls off the track. Because, the leader is only going to continue to get his money if progress continues to be met. We will set up verifiable milestones, agreed upon in the deal, the way that any commercial deal would be done. When the terms and conditions are met, the money will be provided.<br /><br />[You should] look for us to conduct our contracting on a fixed price basis. This is the way people buy things out in the world. I don't go out and buy a car or an airplane or (pretty much) anything else on the basis of "why don't you build me this car - and tell me how much it costs when you are done." That's not the way we are going to do things.<br /><br />In exchange for that [you should] look to be required to provide a commitment to sell at a specified price if I provide a commitment to buy - at a specified number. Those are the kinds of commercial terms that people insist on. When you close a deal you usually have an option to buy a certain number of units at a certain price. There won't be balloon payments at the end and there won't be "get well" arrangements if you screw up. On the other hand, there will be fairly substantial rewards for people who can deliver. </i><br /><br />Read it all. Link

 

[henryhallam]

Thank you, very interesting read.

 

[radarredux]

> <i><font color="yellow"> and also to fund a couple of "followers" at the study level in case the leader falls off the track. Because, the leader is only going to continue to get his money if progress continues to be met.</font>/i><br /><br />This sounds like a potential opening to fund t/Space (at $400 M) in addition to one of the major CEV contractors (at several Billion$). The t/Space funding could (1) provide some level of insurance to NASA and (2) keep a fire to the feet of the CEV contractor.<br /><br />Off to read the full story...</i>

 

[radarredux]

> <i><font color="yellow">This sounds like a potential opening to fund t/Space (at $400 M)</font>/i><br /><br />Oops: From the article: "<i>What are some characteristics of the deal that we might be willing to make? Despite the wishes and entreaties of those who would like me to dump $400-500 million on their enterprise (hopefully) - or on some enterprise - and then just stand back and wait to see if the results come in - that's not going to happen.</i>"</i>

 

[dream_on]

Um, with all due respect: Have you people actually READ his speech? I mean the whole thing? Here's some quotes from Kowing's transcript:<br /><br /><br />"So, there will - and there must - be a government-derived capability to service the space station even after the shuttle is retired. But because there must be such a capability does not imply to us that that is the way we would most prefer - to have cargo and crew logistics requirements for the station satisfied. What I would like to do is be able to buy those services from industry - and in fact I'd like to be able to buy those services from the industry represented in this group: the Space Transportation Association. <br /><br />"…one approach does not exclude the other. Today we don't have, in the space industry, the equivalent of the airline tickets or the airline cargo delivery services. But, using the NASA market for this traffic to the space station, I believe we can help create one. And I believe that if we do it will lower the amount of money we have to pay for such services - because I think we all know that when we can engage the engine of competition, [using] American industrial prowess, services will be provided in a far more efficient fashion than when the government has to do it.<br /><br />"…You can] expect to see the government looking to "make a deal" in a commercial sense. Again, rather than issuing a prime contract focused on process ... look for a deal-making arrangement where we tell you what it is we want the requested services or good to be able to perform.<br /><br />"…The buyer has to provide milestone money and progress payment money depending on the meeting and achieving of certain milestones in the development of the bird (satellite) - but the seller never really makes money until the final product is delivered and working well. We need arrangements like that when we begin to develop this ISS crew and cargo procurement.<br /><br />"…look for us to conduct our contracting on a fixed price basi

 

[radarredux]

> <i><font color="yellow">Um, with all due respect: Have you people actually READ his speech?</font>/i><br /><br />For the first post (pro t/Space), no. For the second post (not-pro t/Space), yes. This being my third post <img src="/images/icons/smile.gif" /><br /><br />Actually, I tend to agree with Griffin. NASA could still fund "study level" efforts for t/Space, but they are not going to throw $400 million their way. However, that "study level" funding plus the apparent intent to buy commercial services when they become available may be enough for t/Space to acquire additional funding from other sources (including DARPA & Air Force, Anglel investors, VCs, and maybe traditional equity sources).<br /><br />One trouble is that many investors may not trust NASA to actually buy commercial services when they do become available. There is a history of NASA changing or setting the rules so thay only they can satisfy the requirements. The recent GAO report on NASA's report on resupplying ISS is a good example.<br /><br />http://www.flatoday.com/apps/pbcs.dll/article?AID=/20050601/NEWS02/506010338/1007<br /></i>

 

[dream_on]

Time will tell. I suspect, at the least, that this is the most encouraging speech(for the alt.space community)given by a NASA adminnistrator in some time! The question is weather he will, or will be able to, turn those words into action.<br /><br /> Personally, I wouldn't be surprised if the various companies involved with t/space were throwing in at least a couple million each into the effort in addition to funding from government contract(Scaled, at least, should be able to throw in a couple million if it really wanted to, and the other companies may have been able to get the work required in their various contracts completed under-budget). <br /><br /> I suppose the down-side is that would imply t/space wasn't-well, wasn't QUITE-as cost-effective with their $3million contract as it appears! <img src="/images/icons/laugh.gif" /><br /><br /> <br /><br /> Joel

 

[wvbraun]

IMO the most important part in this speech is where Griffin says that the ISS Crew and Cargo program will conduct the contracting on a fixed price basis. That is truly revolutionary (for NASA)! <br />I think Griffin wants to play it safe with the the CEV program but really get things moving regarding commercialization in the ICC program.

 

[nacnud]

The way I see it is the if the ISS was the only destination then this method of commercialising space would forever leave the companies trying to make a profit from very slim pickings. However if there was more than one destination or more than one player trying to get to that destination then that is where the profit, and therefore the venture capital, lies.<br /><br />Neither space tourism or government program have all the elements need for a successful and growing commercial space industry, but combined the right mix of incentives and rewards seems to be there.<br />

 

[SpaceKiwi]

<blockquote><font class="small">In reply to:</font><hr /><p>This sounds like a potential opening to fund t/Space (at $400 M) in addition to one of the major CEV contractors (at several Billion$). The t/Space funding could (1) provide some level of insurance to NASA and (2) keep a fire to the feet of the CEV contractor.<p><hr /></p></p></blockquote><br /><br />I'm in Radar's camp on this one. Griffin's suggested method of procurement might work well in the free-market world, but he has the 'problem' that his business is not quite competitive enough yet to make this happen.<br /><br />Even if he agrees milestones with a Prime, what is to stop progress coming to a grinding halt down the road when that Prime hits an unanticipated technical bump and demands significantly more money? Take the TPS problems in Shuttle development as an example. Hopefully those kind of showstopper issues are better understood ahead of time with this next-generation of vehicle development, but Griffin's plan does seem risky to me.<br /><br />I agree with Radar that 400 Million clams thrown at t/Space might be a wise investment in the short term, rather than another couple of Billion to prop up the Prime contractor's design if they hit unexpected rough waters. It would keep the Prime focused on the ball in the same way Airbus and Boeing keep each other from meandering too much. The worst thing that could happen is that you get two launchable vehicles to play with. NASA could licence the t/Space design to recoup some, if not all, of the seed money back. Although I guess that runs into the inevitable technology export problems that Branson has encountered recently. <div class="Discussion_UserSignature"> <p><em><font size="2" color="#ff0000">Who is this superhero?  Henry, the mild-mannered janitor ... could be!</font></em></p><p><em><font size="2">-------------------------------------------------------------------------------------------</font></em></p><p><font size="5">Bring Back The Black!</font></p> </div>

 

[spacester]

<font color="yellow">The only one besides Rutan who talks like this is Griffin. It is certainly not LM or BA. </font><br /><br />Bingo. <br /><br />What Mike is saying is that the party is over folks, everybody out of the pool. No more cost plus, no more balloon payments, no more rewards for failure, no more milking the project until it dies.<br /><br />Only aerospace does business the way aerospace does business. The rest of the world expects results and pays for performance.<br /><br />My thinking is that Griffin LOVES t/space but cannot afford to admit it in public more than he already has. Realpolitik does not allow him to NOT go with the big two - they'd have his head on a platter if he tried to actually cut them off cold turkey.<br /><br />What he CAN do is kick them off the gravy train and let them know the party is over. There's a new sherriff in town. If they want to play by the new rules, great; straighten up and fly right, hop on board the new express train to space, hitch their horses to the big wagon and we'll all pull together. (I sure do love mixed metaphors)<br /><br />All t/space needs is a foot in the door, they'll take care of the rest. I agree that they will get a piece of the pie. <div class="Discussion_UserSignature"> </div>

 

[dragon04]

I think I'm going to like this guy. As both a taxpayer and an advocate of manned spaceflight. <img src="/images/icons/smile.gif" /> <div class="Discussion_UserSignature"> <em>"2012.. Year of the Dragon!! Get on the Dragon Wagon!".</em> </div>

 

[radarredux]

> <i><font color="yellow">Why doesn't NASA offer competitive prizes for launch-related accomplishments?</font>/i><br /><br />Griffin has said that he is concerned that the private sector (for either prizes or contracts) may not show up (perhaps for perfectly good business reasons), and the VSE is a must-have capability. Therefore the government will guarantee it.<br /><br />On the other hand, should a business show up (e.g., SpaceX for cargo to ISS or t/Space for crew transportation), then NASA will "stand down" and award contracts to these companies. That is, the prize is the service contract.<br /><br />Likewise, Griffin envisions a long-term Lunar base, where the initial set up will be expensive (e.g., requiring an HLV) but as infrastructure is put in place subsequent costs will be cheaper (e.g., using a Lagrange Point Rendezvous architecture). This again could offer commercial companies an opportunity.<br /><br />The big question (IMHO) is: Will NASA really "stand down" or will they throw up artificial barriers so that only they can provide the service?<br /><br />On a strictly political note: NASA is not even free to close down NASA facilities because Congress will block any such efforts. Basing everything on prizes is something Congress people will <b>not</b> accept (unless the prizes are already earmarked for their districts).</i>

 

[spacester]

Well said.<br /><br />IMO prizes make a lot of sense IF they are offered in a context that moves us forward. Currently, the big picture is very much undecided so prizes at this instant in time would be premature.<br /><br />As soon as the VSE gets some meat on its bones, IMO NASA should move forward on prizes. But as RR says, <i>launch</i> capability is too critical to be left to iffy results. What I see prizes being best used for is all those capabilities we need post launch to become truly space-faring. <div class="Discussion_UserSignature"> </div>

 

[wvbraun]

"I mean, who expected the x-prize to yield any useful results in the begining?"<br /><br />I did. <img src="/images/icons/cool.gif" />