EELV: DOD Needs to Ensure New Acquisition Strategy (GAO)

EELV: DOD Needs to Ensure New Acquisition Strategy (GAO) by Chris Bergin on 17 Oct, 2011 17:16
Looks related to this:
http://www.nasaspaceflight.com/2011/10/spacex-to-compete-eelv-launch-market-air-force-agreement/

GAO-11-641
Evolved Expendable Launch Vehicle: DOD Needs to Ensure New Acquisition Strategy Is Based on Sufficient Information
http://www.gao.gov/Products/GAO-11-641

See attached doc

d11641.pdf
#1 by joek on 17 Oct, 2011 21:10
Thanks Chris. Good info, albeit somewhat depressing. While much was previously known, it provides some additional details and clarity regarding problems with the EELV program, both on the DOD and ULA sides. Also refreshingly forthright (at least for a government report) where others have waffled and qualified to the point of meaningless mush.

In particular, unless the DOD changes its mind about its EELV acquisition strategy--a commitment to a 5-year block-buy of 8 cores/year from ULA--it would it appear to bode ill for competition and those "new entrants" for the next 7-8 years, previous announcements notwithstanding.
#2 by Jim on 17 Oct, 2011 21:22
Quote from: joek on 17 Oct, 2011 21:10
a commitment to a 5-year block-buy of 8 cores/year from ULA--it would it appear to bode ill for competition

Not really.
Which DOD missions can Falcon 9 do right now or in the next five years?
WGS. MOUS, SIBRS, GPS?

When is F9H suppose to be ready? And when will it have completed few flights to prove the concept?
#3 by baldusi on 17 Oct, 2011 22:11
Quote from: joek on 17 Oct, 2011 21:10
In particular, unless the DOD changes its mind about its EELV acquisition strategy--a commitment to a 5-year block-buy of 8 cores/year from ULA--it would it appear to bode ill for competition and those "new entrants" for the next 7-8 years, previous announcements notwithstanding.
Do your numbers, assume almost all DoD is category A and B and high energy. That means Falcon Heavy. With a supposed IOC of 2013. Probably 2014. Assume one year to certificate. And add the "normal" three years from ordering to launch. That fits 2018 on a very aggressive schedule. And if this means fiscal years, that's a close yet.
#4 by joek on 17 Oct, 2011 22:18
Quote from: Jim on 17 Oct, 2011 21:22
Not really.
Which DOD missions can Falcon 9 do right now or in the next five years?
When is F9H suppose to be ready? And when will it have completed few flights to prove the concept?

Understood and no argument that F9 (much less F9H) still has years to go for certification. The point is only that the 5-year DOD acquisition strategy is in practical terms likely to turn into a 7-8 year hiatus on new entrants and competition.

The currently proposed DOD EELV acquisition strategy commits to 8 [ULA] cores/year for 5 years. USAF+NRO hasn't been close to that ~~rate for years~~ average. That would produce a surplus or overhang in following years. And, per the GAO, there is no justification for that buy rate/period, other than some unquantified assertions that it's necessary to stabilize the industrial base and reduce unit costs (without a good understanding of the basis for those costs).

Given that, celebration of the new harmony between NASA-USAF-NRO and the purported implications for competition and the ability of new entrants to carry DOD payloads and save $$$ (even if they are certified, ready and able) within the next 5 years is thus IMHO premature.

edit: correct (average not rate) per quasar's comment below.
#5 by joek on 17 Oct, 2011 22:31
Quote from: baldusi on 17 Oct, 2011 22:11
Do your numbers, assume almost all DoD is category A and B and high energy. That means Falcon Heavy. With a supposed IOC of 2013. Probably 2014. Assume one year to certificate. And add the "normal" three years from ordering to launch. That fits 2018 on a very aggressive schedule. And if this means fiscal years, that's a close yet.

Not really assuming any category... Simply basing my assertions on (1) historical DOD flight rates; (2) how long 40 cores (5yrX8) will last; and assuming (3), DOD will use paid-for and stockpiled/unused cores in subsequent years before turning to alternative providers.
#6 by Robotbeat on 17 Oct, 2011 23:38
Buying a certain number of cores per year seems far superior to just a straight subsidy. There should be a good way for new entries, though, that balances risk and cost-reduction.
#7 by joek on 18 Oct, 2011 00:30
Quote from: Robotbeat on 17 Oct, 2011 23:38
Buying a certain number of cores per year seems far superior to just a straight subsidy. There should be a good way for new entries, though, that balances risk and cost-reduction.

Agreed, assuming they can and are willing to differentiate between the two. By all indications, they have not and likely won't. The inability to accurately gauge or appropriate costs (e.g, ELC cost+ vs. LSP FFP) has been the subject of much debate for several years; DOD and ULA appear as clue*less (or unwilling?) today as yesterday.
#8 by quasar on 18 Oct, 2011 08:22
Quote from: joek on 17 Oct, 2011 22:18
The currently proposed DOD EELV acquisition strategy commits to 8 [ULA] cores/year for 5 years. USAF+NRO hasn't been close to that rate for years.

I get 8 cores for 2011:

NRO L-49 - Delta IV-H
X-37B OTV-2 FLT-1 - Atlas V 501
NRO L-27 - Delta IV-M+(4,2)
NRO L-34 - Atlas V 411
SBIRS-GEO 1 - Atlas V 401
GPS IIF-2 - Delta IV-M+(4,2)
#9 by Chris Bergin on 18 Oct, 2011 13:46
SpaceX:
GAO Report Raises Serious Concerns over ULA Block Buy

HAWTHORNE, CA - A Congressional watchdog report issued yesterday raises troubling questions for taxpayers about a proposed five-year block buy of 40 rocket booster cores being advocated by the rockets' manufacturer, United Launch Alliance (ULA). ULA is a joint venture between aerospace giants Lockheed Martin and Boeing.

The report by the Government Accountability Office (GAO), the nonpartisan, investigative arm of the U.S. Congress, found serious flaws with a proposal that would guarantee ULA's monopoly over Department of Defense (DoD) launches.

The report states that while ULA is pushing the 40-rocket purchase, the methodology and data used by ULA to justify the purchase were severely flawed, there is no justification for the five-year timeline, and a block purchase could kill opportunities for competition by forcing the government to commit to more boosters than are actually needed.

Key GAO findings include:

No Justification for Five-Year Duration. When asked why a block buy period of 5 years was optimal, "ULA [was] at a loss to explain the rationale." (p. 18)

Studies Rely on Faulty Inputs from ULA.

· A survey on the U.S. industrial base conducted by ULA and provided to DoD was not "administered in a manner consistent with sound survey methodology practices." (p. 11)

· The survey cover letter included "ULA's Chief Executive Officer's views on the 'inefficient' method used by DoD to acquire launch vehicles" and stated "that the goal of the survey is to 'justify' a new acquisition strategy 'that will enhance our collective business.'" (p. 11)

· One ULA official admitted: "We wanted certain answers." (p. 11)

Excess Purchases Would Kill Competition. "The expected block buy may commit the government to buy more booster cores than it needs."

· On Friday the Air Force, NASA and NRO issued a memorandum of understanding (MOU) setting the strategy to allow new companies to compete for launch contracts.

· For every year between FY 05 and FY 09, fewer than 50% of planned ULA missions actually launched. (p. 17)

· If ULA produces more cores than the USAF needs, there will be no competition for additional missions.

Competition Offers "Unprecedented" Opportunity to Lower Costs. "[A]s new launch providers emerge who may be able to compete for EELV launches, providing the government with an unprecedented opportunity to incentivize efficiencies at ULA." (p. 15)

ULA Costs Are Not Well-Understood; DoD Cannot Effectively Negotiate with Current Information.

· "According to Defense Contract Audit Agency (DCAA) reports, ULA proposals contain inadequate cost or pricing data that make it difficult for DoD to assess the adequacy and fairness of launch prices and the cost-effectiveness of launch operations." (p. 13)

· Since ULA's formation, every DCAA audit of EELV pricing found "unsupported or questioned costs ranging from 20-60 percent" and DCAA audits "consistently find ULA proposals and estimating techniques inadequate for evaluation."(p. 14)

· "DCAA officials believe that program contracting officials have an inadequate basis on which to negotiate launch contracts." (p. 14)

Read the report: http://www.gao.gov/new.items/d11641.pdf
#10 by Prober on 18 Oct, 2011 13:47
Quote from: joek on 17 Oct, 2011 22:31
Quote from: baldusi on 17 Oct, 2011 22:11
Do your numbers, assume almost all DoD is category A and B and high energy. That means Falcon Heavy. With a supposed IOC of 2013. Probably 2014. Assume one year to certificate. And add the "normal" three years from ordering to launch. That fits 2018 on a very aggressive schedule. And if this means fiscal years, that's a close yet.

Not really assuming any category... Simply basing my assertions on (1) historical DOD flight rates; (2) how long 40 cores (5yrX8) will last; and assuming (3), DOD will use paid-for and stockpiled/unused cores in subsequent years before turning to alternative providers.

with DoD cuts up shortly, wait until next month. Would hate to be a budget person/planner.
#11 by Prober on 18 Oct, 2011 15:38
Found this file and it fits into this thread.

Look at the flight rates listed on page 5 of the report.

19960027549_1996060647.pdf
#12 by Jim on 18 Oct, 2011 16:02
Quote from: Prober on 18 Oct, 2011 15:38
Found this file and it fits into this thread.

Look at the flight rates listed on page 5 of the report.

report is too old
#13 by joek on 18 Oct, 2011 22:02
Quote from: quasar on 18 Oct, 2011 08:22
Quote from: joek on 17 Oct, 2011 22:18
The currently proposed DOD EELV acquisition strategy commits to 8 [ULA] cores/year for 5 years. USAF+NRO hasn't been close to that rate for years.
I get 8 cores for 2011:
...

Thanks. My bad; corrected post as should have said average. 2005-2010 average is ~~4.3~~ 3.7 cores/yr. However, it's 7.3/yr 2009-2011. (Calendar years, too lazy to convert to FY at the moment).^*

So a case can be made that 8 cores/yr is not excessive assuming recent flight rates continue. OTOH, if a credible case can be made for those higher flight rates over the next 5 years, that would seem to undercut the case that a guarantee (block buy) is needed.

^* edit: DOD flights only; correct average.
#14 by Remes on 10 Mar, 2014 23:34
From the report p.19:
Quote
For example, the EELV Should Cost Review indicates
prices for the RS-68 engine, the main engine used on Delta IV launch
vehicles, are expected to increase four-fold, but is unable to attribute the
rise in prices to specific and identifiable cost increases. Air Force officials
requested a cost breakdown on the RS-68 from the same subcontractor
who provided cost data on the RL-10, but the subcontractor has not yet
provided adequate data, according to Air Force officials.
Is it known, whether this anticipated price increase happened? By now (Report is from Sep 2011) a RS-68 might be more expensive than a new ssme? What could be reasons for such an increase?
#15 by Zed_Noir on 11 Mar, 2014 02:17
Quote from: Remes on 10 Mar, 2014 23:34
From the report p.19:
Quote
For example, the EELV Should Cost Review indicates
prices for the RS-68 engine, the main engine used on Delta IV launch
vehicles, are expected to increase four-fold, but is unable to attribute the
rise in prices to specific and identifiable cost increases. Air Force officials
requested a cost breakdown on the RS-68 from the same subcontractor
who provided cost data on the RL-10, but the subcontractor has not yet
provided adequate data, according to Air Force officials.
Is it known, whether this anticipated price increase happened? By now (Report is from Sep 2011) a RS-68 might be more expensive than a new ssme? What could be reasons for such an increase?
My guess is when the STS was flying, it was sharing a lot of the overhead for LH2 engine production. That overhead is now only supported by the RS-68 program.