U.S. Senate Provision on NASA Seen as Hurting SpaceX

Photographer: Patrick T. Fallon/Bloomberg

Elon Musk, chief executive officer of Space Exploration Technologies Corp. (SpaceX), watches a video at the unveiling of the Manned Dragon V2 Space Taxi in Hawthorne, California, on May 29, 2014. Close

Elon Musk, chief executive officer of Space Exploration Technologies Corp. (SpaceX),... Read More

Close
Open
Photographer: Patrick T. Fallon/Bloomberg

Elon Musk, chief executive officer of Space Exploration Technologies Corp. (SpaceX), watches a video at the unveiling of the Manned Dragon V2 Space Taxi in Hawthorne, California, on May 29, 2014.

A U.S. Senate proposal tied to the NASA spending bill may thwart efforts by Elon Musk’s space venture while aiding Boeing Co. (BA), the government’s No. 2 contractor, a trade group president said today.

The seven-line provision would require companies seeking contracts to ferry astronauts to the International Space Station to file detailed financial reports justifying their costs. The Senate bill for the fiscal year beginning Oct. 1 includes $805 million for the program.

Newer contractors such as Musk’s Space Exploration Technologies Corp. and Jeff Bezos’s Blue Origin LLC will be at a disadvantage, Michael Lopez-Alegria, president of the Washington-based Commercial Spaceflight Federation, said in a Bloomberg Television interview. The measure would increase their costs because they would have to expand accounting staffs to do the work, he said.

The smaller companies don’t have “quite the army in place to do those calculations,” while Boeing is probably “best equipped” because it’s so large, he said.

The space organization represents companies such as Hawthorne, California-based SpaceX and Kent, Washington-based Blue Origin. Boeing, which is also competing for the National Aeronautics and Space Administration’s commercial crew program, isn’t a member of the federation.

Shelby’s State

The proposal was introduced by Senator Richard Shelby of Alabama, the top Republican on the Senate Appropriations Committee. It’s contained in a committee report attached to the spending bill, which later would have to be reconciled with the House version.

Shelby has said he’d rather see more funding directed to a space launch system that’s designed to carry astronauts to the moon and beyond. That project is being managed by NASA’s Marshall Space Flight Center in Huntsville, Alabama, in his home state. Boeing is a lead contractor on the system.

The issue reached the full Senate today as lawmakers began consideration of the fiscal 2015 spending bill.

The Commercial Spaceflight Federation and member companies are trying to persuade House and Senate negotiators to quash Shelby’s provision before it gets into the final bill.

If the measure cleared Congress, contracts may be delayed or even re-bid as companies such as SpaceX are tasked with providing the reports, Lopez-Alegria said.

‘More Efficient’

“We are trying to be more efficient,” Lopez-Alegria said in an interview. “Part of that efficiency is relieving some of the burdens that are in normal contracting law.”

In a statement today addressing the provision, the White House said it has “concerns about language that would seek to apply accounting requirements unsuitable for a firm, fixed-price acquisition, likely increasing the program’s cost and potentially delaying its schedule.”

A SpaceX spokesman, John Taylor, declined to comment. Also declining to comment were representatives for Blue Origin and Chicago-based Boeing.

‘Welfare Program’

Shelby has been skeptical of NASA’s decision to pay private companies to develop spacecraft capable of carrying astronauts to the station. At a 2010 hearing, he called commercial crew a “welfare program for the commercial space industry.”

“NASA is spending billions to help private companies develop a launch vehicle, but has little to no access to the books and records associated with its investment,” Shelby said at a May 1 hearing. “The fact is there is no transparency into the true total investment in these vehicles.”

Since retiring its space shuttle fleet in 2011, NASA has depended on Russia to taxi crews to and from the station orbiting 260 miles (418 kilometers) above Earth.

Lawmakers have asked NASA how the U.S. can continue using the station if Russia doesn’t extend its participation beyond 2020, as Russian Deputy Prime Minister Dmitry Rogozin told reporters last month in Moscow.

Four companies want to take American astronauts to and from the space station: SpaceX, Blue Origin, Boeing and Sparks, Nevada-based Sierra Nevada Corp.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editors responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net Mark McQuillan

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.