rotorcraft systems organization chart

BOEING is a trademark of Boeing Management Company.

Copyright © 2009 Boeing. All rights reserved.

Commercial Space Transportation James R. (Russ) McMurry Principal Senior Counsel Space Exploration The Boeing Company

AIAA CASE Track 3 12 September 2012


The Boeing Company | Space Exploration Division

Space Shuttle Apollo Command & Service Module

Space Station

Apollo Launch Mercury

Lunar Rover Apollo-Soyuz Test Project

Skylab

Saturn V

Gemini

Boeing’s Human Rated Space Legacy

Our Vision is to Enable a Broad Human Space Flight Market



Boeing Commercial Crew Overview

Simple capsule design on proven rocket with a focused mission

– Safe and reliable

– Low operations cost

– Low development risk

3



Commercial Crew Transportation Operations Concept

Pre-launch processing

Manufacturing and test Recovery

Pad operations

• Atlas V

Launch

Landing

Mission control

4



CCDev Demonstrations

Life Support Demonstration

Uprighting Test

Landing Bag Drop Tests

Crew Module Mockup

VIDEO

5

CST-100_Water_&_Drop_Tests.wmv



CCDev Demonstrations

Abort Engine Test Firing

Arc jet test

Integrated Automated

Rendezvous & Docking Sim

Pressure Vessel structural test Heat Shield Fab VIDEO

6

CST-100_PW_Bantam_Test_-_HiQual.wmv



Benefits of Commercial Crew Market

We believe a commercial LEO market will ultimately develop, enabling new business opportunities for industry, lower costs for NASA, and a new venue for global access to space

NASA funding for development of a commercial crew system will maintain U.S. leadership in HSF and hasten the emerging commercial LEO platform market

– Commercial market incubation will result

– Commercial LEO platform customers

beyond NASA will launch (Bigelow)

– Human presence drives commerce

– Global utilization of LEO market

Once commercial LEO platforms become operational, NASA will benefit from reduced crew transportation service costs (economies of scale)

A commercial focus on LEO will enable NASA to expend the majority of its attention on “Beyond LEO” missions for deep space exploration

NASA Will Benefit Directly From a Commercial LEO Market




BDS Network & Space Systems | Space Exploration | NASA Crew Transportation

Potential Commercial Customers

Orbital Technologies

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Summary

As pioneers of commercial aviation, Boeing is excited to be a part of pioneering a new commercial space venture

– Boeing can do in space what we’ve done in commercial aviation

We see no technical barriers to the design, development & build of a low-cost commercial crew system

NASA funding provides the impetus to increase the potential for development of the commercial HSF market

9/23/2012 9

We Stand Ready to Support NASA in Their New Vision as the Provider of Commercial Crew Services to LEO



Challenges for Commercial Space

Liability Challenges

– No established Risk Management Regime as in traditional Launch

– Unknown Potential Plaintiffs

– New insurance market

Regulatory Challenges

– NASA “commercial” program---NASA or FAA control?

– ITAR considerations---What must be considered a defense service?

– Balancing Safety and Innovation in early regulatory schemes

Programmatic and Acquisition Challenges

– NASA “commercial” program---NASA or FAA control?

– ITAR considerations---What must be considered a defense service?

– FAR vs. SAA

– Number of viable Competitors

– Industry business case

9/23/2012 10



BREAK



NASA Liability Risk Allocation Status

Shuttle Era--85-804 Indemnification provided

Defense nexus originated with early DoD missions and Vandenberg Launch

Defense missions prohibited post Challenger

Indemnification determination issued in perpetuity 15 June 2006

Current traditional NASA cost type programs (Space Launch

System {SLS} and Multipurpose Crew Vehicle {MPCV})

Contact clauses enabling Contractors’ requests for 85-804 indemnification

85-804 granted under these clause for limited specific events (Ares 1X test)

NASA concerned with defense nexus requirement

Commercial Programs (Commercial Crew Development {CCiCap})

No NASA acceptance of third party liability risks

Contractors left with commercial risk management protocols – CSLA

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NASA Risk Allocation Shift Impacts

Moving Human Space Flight (HSF) from a Government to

commercial model changes liability risk allocation

– Shuttle contractors enjoyed full Governmental indemnification and the

Government Contractor Defense

– Commercial model subjects HSF contractors (designers, OEMs and operators)

to liability exposure

Risk Management for commercial HSF challenging:

– New risk mitigation protocols

• New industry; minimal regulation at present

• Insurance coverage and price uncertain; no claims history

• Grounds for legal action and legal venues uncertain

– Potentially enterprise threatening risk in event of catastrophic loss

– High net worth Plaintiffs abound

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Commercial Crew Transportation Operational Risk

Pre-Launch • Checkout (on-pad)

• Hazardous Operations (on-pad)

• Crew Ingress/Egress

• Facility Damage

• 3rd Party Liability

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Boost • Crew Safety

• 3rd Party Liability (staging debris)

Docking • Crew Safety

• Damage to Space Station

• ISS Crew Safety

• 3rd Party Liability (Station/CST-100 de-orbit) Re-Entry • Crew Safety

• 3rd Party Liability (service module debris)

Landing • Crew Safety


• Recovery Operations

Abort • Crew Safety

• 3rd Party Liability (service module

debris)

Integration & Test • Integration/Transportation

Issues

• Hazardous Operations

• System Test/Checkout

• Facility Damage




Commercial Crew Transportation Liability Risk Mitigation Road Map

15



Regulatory Challenges

Regulatory Environment

NASA only USG agency with expertise in human space flight safety (NASA owns HRR)

Some uncertainy around CSLA regime extension into CY-13

FAA empowered in 2015 to regulate crew launch and re-entry

Is that appropriate for Orbital Flight?

Is that appropriate for Suborbital Flight?

NASA/FAA role uncertainty increases risk

Mitigated by recent MOU; working relationship

Complexity: NASA owns expertise; FAA has authority

No one has on-orbit regulatory authority

FCC and communications protocols

HIPPA

ITAR

ITAR compliance generally

Passenger experience sufficient?

Export of Space Vehicle viable?

Unresolved Issues will Deter Market Entry



Acquisition and Programmatic Issues

FAR vs. SAA

Misnomer

About level of oversight rather than legal authority

Only one current customer for crew to LEO: NASA

NASA ISS market size inadequate to support multiple suppliers

Sole Source to Russians today

Additional development extends lack of competition and NRE recoupment

Waste of industry and Government funds for those not selected

NASA can compete domestic vs. Russian transportation for competitive assessments

Unknown revenue base from potential commercial users over which to spread investment

International competition from government-subsidized systems can limit market capture

Government solution to ISS would end program and divert BEO resources

Unresolved Issues will Deter Market Entry



A Broad Spectrum of Potential Paths Forward

Boeing funds non-recurring (assumes cost risk) Over 200 customers provide input to design Boeing retains design authority FAA certifies compliance with well understood and

tested certification requirements

Navy funds non-recurring (assumes cost risk) Navy is only customer – owns requirements Navy retains design authority Navy approves compliance with unique/first-use

set of requirements

NASA & Boeing share non-recurring (CCDev) NASA & commercial customer (Bigelow) provide input to design; NASA owns HRR Boeing retains design authority with NASA insight only NASA reviews and approves compliance with HRR (unique/first use requirements)

Challenge: Finding a business model that bounds industry risk in bidding a fixed price development contract with NASA ownership of HRR and TBD level of insight

Commercial Development Cost-Plus Fixed Fee Development

Navy P-8 Poseidon 737 Airliner



Opportunities for NASA to Ensure Market Entry

Mitigate obstacles with SAA fixed price development contracts

– Verify that our commercial crew design architecture will satisfy NASA human rating requirements (HRR) prior to fixed price DDT&E bid

– Define RAA for determining and approving HRR between NASA and FAA

– Resolve concerns around financial, liability and regulatory risks so that industry can close a business case for this new market

– Provide appropriate liability relief for each risk category

– Eliminate Termination for Convenience clause without TL

– Fund the significant portion of DDT&E of commercial systems

– Invest in required infrastructure and maintain ownership of major assets

– Execute the appropriate level of NASA insight required for a commercial-type contract

9/23/2012 19

Need resolution of these issues



Additional Business Case Issues/Concerns

Emerging, unpredictable markets involve high risk

TBD revenue base from potential commercial customers

– Inability to rely on commercial market to recoup up-front investment and start-up costs

– Future commercial market limited due to subsidized international competitors – India, China, Russia

– Potential competition for internal NASA funding and external venture capital against a fully funded Deep Space capsule development program

ISS is the only LEO platform requiring crew transportation services

– Business case will have to close on those mission requirements alone

– Even NASA market is not sufficient to recoup private investment – Max NASA market entails 2-4 flights/year with multiple providers

Resolution of new market liability and regulatory standards

– Expand CSLA indemnification to cover crew and in-orbit ops

– Need time for a private insurance regime to mature to cover industry risk

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"We are embarked as pioneers

upon a new science and industry

in which our problems are so new

and unusual that it behooves no

one to dismiss any novel idea

with the statement that 'It can't be

done!'“ – Bill Boeing

rotorcraft systems organization chart

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