NASA Will Pay More for Less ISS Cargo Under New Commercial Contracts

WASHINGTON — NASA will pay more money for less cargo delivered to the International Space Station under a set of follow-on commercial cargo contracts awarded in 2016, according to a report by the agency's inspector general.

The report, released April 26 by NASA's Office of Inspector General (OIG), also flagged a number of issues with all three companies that received Commercial Resupply Services (CRS) 2 contracts, from one company's reliance on a single, unproven spacecraft to use of foreign hardware by another.

Under the existing CRS contracts awarded in 2008, Orbital ATK and SpaceX will deliver an estimated 93,800 kilograms of cargo to the ISS over 31 missions for a total cost of $5.93 billion. With the CRS-2 contracts, those two companies and Sierra Nevada Corporation (SNC) will transport 87,900 kilograms to the station on 21 missions for a projected cost of $6.31 billion. On a per-kilogram basis, cargo transported to the ISS on CRS-2 missions will cost 14 percent more than that under the ongoing CRS contract.

The report identified several reasons for the increased CRS-2 costs. One is an increase in per-kilogram costs for SpaceX missions by 50 percent. That increase, the company told OIG, is due to modifications of the Dragon spacecraft's interior to accommodate additional cargo, longer missions and accelerated cargo loading and unloading, including quicker access to cargo after the spacecraft returns to Earth.

The report noted that volume restrictions on the current Dragon spacecraft have often limited the total cargo mass each mission can take, such that Dragon missions have been averaging only 1,569 kilograms of pressurized cargo, compared to 2,723 kilograms per Cygnus flight. NASA officials told OIG that those averages have been improving throughout the course of the CRS contracts "due to packing efficiencies and other cargo integration improvements."

A second factor in the higher CRS-2 costs is linked to NASA's decision to pick three companies rather than two. Using three companies, OIG said, increases overall integration costs, but reduces the opportunities for volume discounts by spreading missions across three providers. NASA argued that having a third company provided additional redundancy, including having two companies — SNC and SpaceX — able to return cargo from the station.

A third factor was the large amount spent on integration costs for the CRS-2 vehicles to date: about $700 million, similar to what NASA spent on the Commercial Orbital Transportation Services (COTS) program that developed the initial Orbital ATK and SpaceX cargo systems, but without funding launch vehicle development or test flights. OIG said NASA missed an opportunity for savings by taking advantage of overlaps between technical requirements for SpaceX Dragon 2 cargo missions and those for crewed missions being funded by a separate commercial crew contract.

The OIG report flagged specifically $4.4 million in CRS-2 integration costs paid to SNC to work on a version of its Dream Chaser spacecraft that can dock with the ISS, even though initial missions of the spacecraft will instead be berthed using the station's robotic arm. "Given the inherent risk of an unproven spacecraft and lack of demonstration flight, we believe NASA should have deferred Sierra Nevada's docking integration costs until after its first successful CRS-2 mission," the report stated.

The report also raised more general risk issues with SNC's Dream Chaser. "The development, first launch, and safe return of the Dream Chaser are the greatest technical and schedule risks under the CRS-2 contract," the report stated, noting that, for now, the company plans to build only a single Dream Chaser spacecraft, flying it up to 15 times.

"Sierra Nevada's plan to build a single Dream Chaser spacecraft for CRS-2 missions is a single point-of-failure that represents substantial technical and schedule risks for the ISS Program," it argued, concluding that even if SNC built a second vehicle in the event of a mishap involving the first, it would likely not be ready in time to meet the company's CRS-2 contractual requirements.

For SpaceX, the OIG report raised questions about software development issues with the Dragon spacecraft, citing a February 2017 incident where an "uncertified software tool" caused an abort during the spacecraft's approach to the ISS, delaying its arrival by a day. "Because SpaceX continuously makes changes to its launch vehicle and spacecraft, the company has had more difficulty following industry standard systems engineering principles," the report stated.

Orbital ATK's reliance on Russian-built RD-181 engines to power the first stage of its Antares rocket also poses a risk, the report said, because federal waivers allowing the company to do business with Russia for ISS activities currently run only through the end of 2020. The company said it plans to buy enough RD-181 engines to handle the first four launches under its CRS-2 contract and is also studying the use of United Launch Alliance's Vulcan rocket and its own OmegA rocket, both under development, for launching future Cygnus missions.

The OIG report said that NASA can reduce its costs on the CRS-2 contract somewhat by flying multiple missions in a year by the same contractor, potentially saving $300 million over the CRS-2 contract. It also said that SNC could lower its per-mission costs by launching on a vehicle other than the ULA's Atlas 5. Company officials said last week that they are, in fact, considering other launch options for later Dream Chaser missions.

Despite those issues, the report concluded that the CRS and CRS-2 contracts "are positive steps" in establishing reliable cargo transportation needed to support operations of the ISS. It also noted a side benefit to the COTS and CRS efforts: prices for ULA's Atlas 5 that NASA paid for missions under its Launch Services Program dropped by about $20 million after SpaceX's Falcon 9, developed during the COTS effort, was eligible to complete for those NASA missions in 2013.

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