Space

The Testimony of Mr. Michael McCulley, President and CEO, United Space Alliance

Madam Chairwoman, Ranking Member Nelson, Members of the Subcommittee. I am Mike McCulley, the President and Chief Executive Officer of the United Space Alliance (USA).

Thank you for giving me the opportunity to address the Subcommittee on current Space Shuttle operations and the timing and scope of the planned retirement of the fleet.

It is my privilege to represent the 10,400 men and woman of USA located primarily in Texas, Florida, and Alabama.

USA is responsible for the day-to-day operations of NASA's Space Shuttle system, excluding the propulsions elements managed by the Marshall Space Flight Center. USA was formed in 1996 through consolidation of twenty-nine Shuttle contracts into one single contract and organization.

The foremost focus of USA and its employees today is the safe return to flight of the Shuttle. Beyond this imperative, we are also working with our NASA customer to face the reality of Shuttle retirement and do the necessary planning to ensure an efficient, timely and prudent transition to the CEV.

As the Subcommittee Members are aware, the current exploration plan contains a gap in U.S. human space flight capability between the projected retirement of the Shuttle and the availability of a fully operational Crew Exploration Vehicle (CEV) and its new launch system. This so called gap has a number of associated issues including U.S. reliance on foreign nations for human access to space, the need for a heavy-lift cargo launch capability for cargo to and from the International Space Station, the potential loss of vital workforce skills and experience, and related impacts to the U.S. industrial base.

Retention of the critical skills required to fly safely and successfully throughout the remaining life of the Shuttle program and the ability to transition those workers with the necessary skills and competencies to the next generation of launch vehicles, remains a top priority for NASA and USA. The new NASA Administrator, Dr. Michael Griffin, has testified that he has established an Exploration Systems Architecture Study team to examine ways to accelerate the development of the Crew Exploration Vehicles in order to minimize any gap in the US capability for human space flight.

USA understands and fully appreciates the need to plan for the future of our critically important workforce and has taken steps to develop such a plan. We are also working with NASA on all aspects of transition planning including: workforce, facilities, hardware, equipment, test assets, and supplier base.

TRANSITION

There are over 20,000 NASA and contractor employees working on the Shuttle Program. As the Shuttle is retired, it is expected that a number of contractor and civil servant employees will initiate personal retirement, while a number will remain, to continue to support human space flight by moving to the new exploration programs. However, as currently envisioned, the number of employees available for this opportunity could be limited both by the gap between Shuttle retirement and CEV operational capability, and by the exploration emphasis on increased operational efficiency. Although there remain uncertainties with respect to specific plans for implementation of the exploration Vision, we are continuing to assess options for the future to ensure a seamless transition for our employees while meeting the needs of our NASA customer.

Following President Bush's announcement of the Vision for Space Exploration, NASA, USA and other aerospace industries began an early initiative to identify and prioritize solutions to address both fly-out and phase-out of the Shuttle program. The Integrated Space Operations Summit (ISOS) was held earlier this year to identify the issues associated with transition planning for workforce, facilities and industrial base. The Summit considered the risks and challenges for the retention and recruitment of a critically skilled workforce as well as strategies for preservation or disposition of space flight assets, which include real property, equipment, tooling, and test sets. Since the Summit, NASA's Space Shuttle Program Office has initiated a transition plan and formed an asset management working group.

As reported by the Government Accountability Office (GAO) in its March 2005 Report entitled, ''Space Shuttle: Actions Needed to Better Position NASA to Sustain Its Workforce through Retirement,'' p.12:

''United Space Alliance has taken preliminary steps to begin to prepare for the Space Shuttle's retirement and its impact on the company's workforce. For example, the company has begun to define its critical skills needs to continue to support the Space Shuttle Program; has devised a communication plan; contracted with a human capital consulting firm to conduct a comprehensive study of its workforce; and continues to monitor indicators of employee morale and workforce stability. While these efforts are underway, further efforts to prepare for the Space Shuttle's retirement and its impact on their workforce are on hold until NASA first makes decisions that impact the Space Shuttle's remaining flight schedule and thus the time frames for retiring the program and transitioning its assets. Once these decisions have been made and United Space Alliance's contract requirements have been defined, these officials said that they would then be able to proceed with their workforce planning efforts for the Space Shuttle's retirement, a process that will likely take 6 months to complete.''

United Space Alliance has retained Watson Wyatt's Human Capital Practice to benchmark industry's effective employee retention programs and to conduct a comprehensive study of USA's human resource programs as they relate to current and anticipated workforce retention objectives. This study is focused on the current situation, as well as projections out six years, regarding human capital investments and risk mitigation, including, alignment, resources, turnover, selection, retention, transfer-of-knowledge and investments. The results of this study will be available this year, thus allowing implementation, as appropriate, well in advance of 2010.

USA may have the ability to transfer valued workers into its owner companies, Boeing and Lockheed Martin. USA has been successful in the past, placing employees at those companies and in assisting employees in transitioning to other space-related businesses. USA's human capital systems are monitored continuously with special emphasis on critical skills required and addressing identified gaps in these skills as a result of attrition and retirements. These processes will continue with heightened emphasis throughout the remainder of the Shuttle Program. USA will also continue to conduct annual compensation and benefit surveys and studies that address our labor market competitiveness and will continue to monitor indicators of potential issues regarding workforce morale and stability.

The execution and timing of skill retention and transition measures will depend entirely on the timing, sequence, and options chosen for transitioning from Shuttle to future exploration programs. Until we know more about these variables, it will be difficult to predict specific impacts. For instance, if NASA decides to pursue a launch vehicle based on current Shuttle components, then the impacts would be quite different from those of a vehicle program that does not involve Shuttle components. USA is actively evaluating and pursuing new business opportunities in space operations, such as CEV, that could utilize the unique skills and experience of the current Shuttle workforce. USA is also participating on the industry team evaluating ways to meet future launch system requirements with Shuttle Derived Launch Vehicle options.

Our Business Development Office is working to position USA to participate in all future human space flight operations. With unrivaled capabilities in terms of safety, experience, performance and innovation, combined with a diversity of skills, USA is uniquely positioned to play a major role in future human space programs.

INDUSTRIAL BASE

NASA's Space Shuttle budget pays for hardware, engineering, training, software development, Shuttle processing and many other things that go into flying the Shuttle. As the program winds down, there are elements that could phase-out of production, such as, the External Tank, Space Shuttle Main Engines, and Reusable Solid Rocket Motors. However, all of these major Shuttle system elements, which are managed by other NASA prime contractors, may be needed if Shuttle Derived Vehicles are selected for the exploration transportation system. Retaining critical supplies for the Shuttle must be a well thought out, carefully managed process. One approach is to use lifetime buys for consumable products that will last to the end of the program. However, there are some supplies that cannot be purchased in lifetime buys and cannot be transitioned to other suppliers. In those cases, it will require keeping a supplier on contract until the end of the program to support refurbishment requirements, provide on-going technical support, and retain process certification. NASA and USA already have many such contracts in place. An example is the Lockheed Martin contract for tooling and certified technician maintenance to refurbish and manufacture the Reinforced Carbon-Carbon (RCC) Wing Leading Edge. It is not likely that we will need additional RCC components however, we will require continuing support in the areas of testing and evaluation of flown hardware, failure analysis, and repair. A similar situation exists with United Technologies Corporation, which provides the Shuttle fuel cells. Maintenance of critical skills to support this hardware component through the last flight is critical.

Many of the skills and certifications needed to support the Shuttle Program are unique to the program. It is difficult to estimate the cost or schedule impact to the Shuttle or to the CEV should those skills begin to deplete. We continue to be a very small part of many of our suppliers' business bases so, for some, there is little incentive to invest in or maintain these skills. As we move closer to the last Shuttle flights and the corresponding reduction in hardware procurement, this base could become more fragile.

MANIFEST

You have asked that I also address current Space Shuttle operations and manifest.

NASA and its industry team have embarked on a proactive Return To Flight Plan, which not only responds to the CAIB recommendations, but also ''raises the bar'' by addressing other safety concerns. The Columbia Accident Investigation Board initially published 15 recommendations for various improvements to be completed before Space Shuttle Missions could resume. Of the original 15, 12 have been completed and 3 are in the process of being completed. NASA and its industry team have made improvements in technical excellence, communications and decision-making, improved the External Tank to reduce debris-shedding, instrumented the Shuttle wings to detect any debris hits during ascent and amassed an array of ground-based and space-based imagery detection hardware that will give experts the ability to know if any debris hit the orbiter. If so, NASA is developing in-flight repair techniques and we have procedures to safely protect the crew onboard the Space Station if necessary.

NASA and its contractor team are committed to flying the Shuttle only when all the risks have been appropriately mitigated. We are working with NASA to support the initial Return To Flight mission, STS-114, which is currently planned for the July 13-31 launch window.

At present, 28 Shuttle flights are baselined in the manifest -18 for assembly, 5 for utilization and 5 for logistical support. Relative to returning to flight, the first two flights, STS 114 and STS 121, carry much needed cargo to the Space Station and importantly serve as test flights of the improved Shuttle system. Testing will be conducted using the Orbiter Boom Sensor System (OBSS) to closely examine the Shuttle's Thermal Protection System and to assess on-orbit repair options and techniques for tile and the RCC. The remaining 26 Shuttle missions are manifested as Station assembly and outfitting flights.

The International Space Station (ISS) is currently dependent on the Space Shuttle for assembly. We are still planning to fly the 28 flights manifested including the 18 identified as assembly flights but as the new NASA Administrator testified, NASA is currently examining alternative configurations for the Space Station. If changes to the manifest are made, we will work with our NASA customer to evaluate the impact to the overall program, our workforce and the supplier base.

OPERATIONS

United Space Alliance is the leading human space flight space operations company in the world with experience in all aspects of ground processing, mission operations and planning, major system integration, and in-flight operations of multipurpose space systems. Through its support of the Space Shuttle and ISS programs, USA has developed an unrivaled combination of experience and capabilities in space operations. Our workforce and our supplier base have the spectrum of skills to support NASA's current and future human space flight programs including:

- Mission, manifest and trajectory planning and analyses

- On-Orbit assembly, payload deployment and servicing

- Extravehicular activity planning and execution

- Rendezvous and proximity, operations and docking operations

- Space logistics and supply chain management

- Space operations software engineering

- Advanced space flight technology

- Launch and recovery operations

- Launch vehicle and flight hardware processing

- Mission control operations

- Space systems and crew training

- Sustaining engineering

- Flight crew equipment preparation and maintenance.

- Large scale, complex systems integration

- Subcontracts management

CONCLUSION

United Space Alliance is committed to returning the Shuttle to flight and to supporting a seamless transition from the current program to future exploration programs. Workforce morale is high as the first step in the Vision draws near: the launch of Space Shuttle Discovery mission STS 114. We are committed to supporting NASA in our joint goal of making each flight safer for the crew than we believed that last one to have been.

We also support NASA's goal to undertake a journey of space exploration over the next several decades as outlined in the President's Vision for Space Exploration. We understand that the retirement of three capable and space-worthy Space Shuttle orbiters is needed in order to move the Vision forward. Our exceptional workforce is committed to these goals and deserves our utmost consideration in the transition to a new system for space exploration.

Let me again thank the Subcommittee for the opportunity to come before you today. I would be pleased to answer your questions.