Space Shuttle, Private Operations

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Space Shuttle, Private Operations

In the early twenty-first century, more than twenty years after the successful maiden voyage of space shuttle Columbia, the National Aeronautics and Space Administration's (NASA) Space Transportation System—commonly known as the space shuttle—remains the only U.S. transit system capable of supporting human spaceflight. The shuttle is also the world's only largely reusable launch vehicle, comprised of an airplane-shaped orbiter , which returns to Earth with its human crew for refurbishment and re-flight; two solid rocket boosters, which are recovered for reuse after they separate from the rest of the shuttle system during ascent to orbit; and an irrecoverable fuel tank. (In contrast, the stages of so-called expendable launch vehicles —which launch most of the world's satellites as well as passenger-carrying Russian Soyuz capsules—are jettisoned to disintegrate in Earth's atmosphere or are left as debris in space.)

Capable of sustaining a crew in Earth orbit for several days to weeks, the versatile shuttle has served NASA in such efforts as the deployment, repair, and retrieval of satellites; the conduct of medical, materials, and other scientific research; and the ferrying of astronauts and supplies to and from the former Russian space station Mir. Although NASA is studying options for retiring its aging fleet of four orbiters and developing a new reusable launch vehicle, plans call for continuing shuttle flight at least until the mid-2010s. Shuttle operations will be critical in upcoming years as NASA transfers crews and supplies between Earth and the International Space Station.

The Space Shuttle's Limitations

Despite the shuttle's remarkable achievements and unique capabilities, those familiar with the shuttle program have come to realize that the shuttle has failed to meet many of NASA's original objectives and expectations. At the program's beginning in the early 1980s, NASA expected the shuttle would fly some twenty-four times annually, launching astronauts, satellites, and other payloads for the U.S. government as well as for other nations and private companies. By the mid-1990s, however, the shuttle's average annual flight rate was a fraction of the predicted level. Also, fewer government payloads than expected had flown on the shuttle, and as a result of policy made after the 1986 space shuttle Challenger explosion that killed seven astronauts, commercial payloads had been effectively banned from the vehicle. Perhaps the greatest disappointment was that the costs of operating and refurbishing the shuttle were far higher than NASA's original projections.

Outsourcing Shuttle Operations to Reduce Costs

Throughout the shuttle's history, NASA considered placing shuttle operations under private industry's control to reduce costs. That idea was continually rejected on grounds that NASA needed to maintain control of the shuttle for national security reasons. But in 1995, then NASA administrator Daniel Goldin, who had previously spent twenty-five years at a private aerospace firm, asked a team of NASA, other governmental, and industry leaders to study shuttle operations management and propose a new, safe approach to reducing operations costs. The team found that shuttle operations tasks, as then assigned, were diffused among many contractors and that no single entity was responsible for streamlining operations and reducing costs. After considering multiple management options, the commission recommended that NASA give a single, private contractor responsibility for shuttle operations. Goldin agreed, and NASA began soliciting bids from companies to take charge of shuttle operations.

Two companies that then held contracts to manage major elements of shuttle operations, Rockwell International and Lockheed Martin Corporation, recognized that failing to secure the prime contract under NASA's new management scheme would result in a substantial economic loss. As a result, the two companies decided to compete for the contract as a single entity. In August 1995, Rockwell and Lockheed Martin agreed to form a joint venture called United Space Alliance (USA). From the forty companies that responded to NASA's search for a shuttle prime contractor, NASA chose to award USA the contract. USA took over the individual Rockwell and Lockheed Martin contracts and on September 30, 1996, signed the Space Flight Operations Contract (SFOC), by which NASA designated USA as prime contractor for shuttle operations. That December, Rockwell sold its aerospace business to the Boeing Company, which took over Rockwell's share of USA.

A New Way of Doing Business

The SFOC was an unprecedented step for NASA. Never before had the space agency given so much authority and responsibility to a contractor for such a major program. Under the contract, which was set up for six years with options for two, two-year extensions, USA took over operations and maintenance of both ground and flight systems associated with the shuttle at NASA's two primary centers for human spaceflight activity. At Johnson Space Center in Houston, Texas (the control and training center for shuttle missions), USA employees gained responsibility for flight operations, astronaut and flight controller training, mission control center management and operations, mission planning, flight design and analysis, and flight software development. Those at Florida's Kennedy Space Center (the shuttle's launch and processing site) took charge of vehicle testing and checkout, launch operations, procurement and repair of shuttle hardware and ground support equipment, payload integration, and retrieval of the solid rocket boosters that were jettisoned into the Atlantic Ocean after launches. The SFOC also made USA responsible for training astronauts and planning for operations aboard the International Space Station.

NASA emphasized that its expectations for USA under the contract included, in order of importance, maintaining safety of the shuttle system, supporting NASA's planned mission schedule, and reducing shuttle operating costs. In order to ensure that USA would meet these objectives, the SFOC was designed to reward USA on its quality of performance. The $7-billion contract—which could grow to a total of $12 billion with the extensions—was made contingent on the company's ability to meet safety standards, achieve mission and schedule objectives, and find more efficient ways to operate the shuttle program. Failure to meet these objectives could result in financial penalties.

The SFOC has presented USA with many challenges. As the first and only company in the world to be fully responsible for maintaining and operating a reusable launch system, USA has had to develop, from scratch, methods of fulfilling the basic contract requirements while finding ways to make operations less costly and more efficient. With accountability and quality of performance dominating the contract, USA has been forced to accept a new way of earning a profit. Nonetheless, USA has proven its ability to manage successfully the new type of contract and the responsibilities it has brought. Since managing its first shuttle mission in November 1996, USA has kept safety and reliability as top priorities: The shuttle has had no major operational problems under USA's oversight. Both NASA and USA have recognized that cost savings have been realized through the SFOC, with USA reporting a reduction in operations costs of nearly $400 million between the fiscal years 1996 and 1998. NASA has also pointed to more ontime launches and smoother prelaunch operations as indicators of USA's success in managing the shuttle program. USA keeps building on that success as it continues to absorb contracts for NASA's human spaceflight needs.

Prospects for the Future

While USA takes increasing responsibility for day-to-day shuttle operations, the SFOC made no provisions for ever giving USA ownership of the shuttle fleet. NASA still maintains ownership and ultimate control of the shuttle program. With the government still in charge, NASA determines the nature of each shuttle mission and flies only government payloads. USA would like that to change. The company's vision is to pioneer human spaceflight as an affordable, viable business. USA would like to see the shuttle fully privatized—that is, given to the private sector to own, control, and fund—and commercialized, which would open the shuttle for use by paying customers from outside the U.S. government. USA also wishes to become increasingly involved in operations of the International Space Station as well as any new space vehicles NASA develops.

Many people—including NASA as well as USA officials—believe that privatization and commercialization of the shuttle would bring numerous benefits to NASA, private industry, and taxpayers alike. By either turning over this asset to private hands or opening its use to commercial customers—or both—NASA could cut costs, which in turn could translate into savings for taxpayers. These measures could also allow NASA to focus more attention on and apply some of the funds saved to activities such as exploring the solar system and universe. By fully owning, managing, and commercializing the shuttle fleet, a private company potentially could realize revenues that far exceed NASA's current budget for operating the shuttle. As a result, the managing company could afford to conduct more shuttle missions and other space activities, in turn stimulating the growth of businesses whose satellites, experiments, or other hardware it launches.

Whether or not USA's vision of complete shuttle privatization becomes reality will depend on NASA's willingness to relinquish control of its assets and functions. NASA has been reluctant to give up control of the shuttle for reasons of national security and public safety. The agency is also aware that giving a single company full control of the shuttle could be viewed by companies that manufacture, develop, and market other launch vehicles as a transfer to one company of government assets that were already paid for with public funds, which creates unfair competition. NASA, nonetheless, recognizes the benefits of privatization and thus intends, at the very least, to increase the private role in shuttle management and operations in upcoming years. It is likely that, in any privatization scenario, the space agency will continue to maintain ownership and management of some launch infrastructure, play an active role in assuring safety of the program, and financially back the private company in the case of catastrophic disaster involving the shuttle.

NASA also believes that increasing the private role in shuttle management will enable future commercialization opportunities. By 2001, NASA had begun to explore opportunities for commercializing its various programs and assets, allowing USA to solicit payloads of private customers for two shuttle missions. Regardless of who owns the shuttle, however, commercialization will succeed only if potential customers find the shuttle's capabilities and prices attractive compared to other launching options. Moreover, the shuttle must be made available for commercial use: NASA's goal of completing work on the International Space Station now dominates the shuttle's schedule.

It is almost certain that NASA will, to some extent, privatize and commercialize the space shuttle. As the space agency will be looking for the most competent and efficient company to assume the job, USA must continue to perform at its best if it wishes to fulfill its vision of opening up the human spaceflight business.

see also Challenger (volume 3); Commercialization (volume 1); Launch Vehicles, Expendable (volume 1); Launch Vehicles, Reusable (volume 1); Nasa (volume 3); Reusable Launch Vehicles (volume 4); Solid Rocket Boosters (volume 3); Space Shuttle (volume 3).

Amy Paige Snyder

Bibliography

Dittemore, Ronald D. Concept of Privatization of the Space Shuttle Program. Washington, DC: National Aeronautics and Space Administration, 2001.

Heppenheimer, T. A. The Space Shuttle Decision: NASA's Search for a Reusable Space Vehicle. Washington, DC: National Aeronautics and Space Administration, 1999.

Pielke, Roger A., Jr. "A Reappraisal of the Space Shuttle Programme." Space Policy (May 1993):133-157.

Williamson, Ray A. "Developing the Space Shuttle." In Exploring the Unknown: Selected Documents in the History of the U.S. Civil Space Program, Vol. 4: Accessing Space, eds. John M. Logsdon et al. Washington, DC: National Aeronautics and Space Administration, 1999.