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This article was Originally Published on Oct 08, 2006 in Volume: 5  Issue: 2

Lockheed Wins NASA’s CEV Race

In a move that ensures greater future competition in the manned space business, NASA selected Lockheed Martin over a NG/Boeing team to be the prime contractor to build the Orion Crew Exploration Vehicle.

By Rodney L. Pringle

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In a move that ensures greater future competition in the manned space business, NASA selected Lockheed Martin over a NG/Boeing team to be the prime contractor to build the Orion Crew Exploration Vehicle. The contract could be worth $104 billion over the next 15 years. What the decision also could mean is increased competition to land the hundreds of billions in contracts that NASA will spend on future space exploration. In picking the Lockheed-led team over more experienced manned space craft providers such as NG and Boeing, the nation’s space agency sent a message that it plans to spread the wealth and make sure that it has at least two major contractors that can deliver in the manned space business, analysts said.

The CEV is part of NASA’s mission to develop a cost-effective, next-generation space-transportation system. The new spacecraft is expected to carry six astronauts into Earth orbit soon after the space shuttle is retired in 2010 and then to the moon by 2018. The CEV is a key element of the Vision for Space Exploration, which seeks to send human explorers to the moon, Mars and beyond, NASA officials said.

In addition to its primary mission—carrying crews of four to six astronauts into Earth orbit—the vehicle’s 25-ton payload capacity also may be used to bring resources and supplies to the International Space Station or to exploration teams traveling to and from the moon, NASA said. Crew transportation to the space station is planned for no later than 2014. The first lunar excursion is scheduled as early as 2020.

The Constellation Systems Launch Vehicles Project Office at Marshall Space Flight Center in Huntsville, Ala., is in charge of CEV.

In March, NASA authorized contract extensions for development of the CEV. Lockheed Martin and the NG/Boeing team were selected as CEV Phase 1 contractors in June 2005. Since that time, the two companies have been working with NASA to define requirements and develop conceptual designs for the agency’s next-generation vehicle for human space flight.

NASA’s decision

At an Aug. 31, 2006, press conference to announce the decision, Doug Cooke, NASA’s associate administrator for exploration systems, said the competition was fierce and the proposals were strong, but that the agency chose Lockheed Martin because the team’s design was “achievable.” He said the design is based on known capabilities and that NASA is confident that the design can be built. Joanne Maguire, executive vice president of Lockheed Martin Space Systems Company, said the company is “humbled and excited” by the opportunity to continue its legacy of five decades of partnership with NASA in every aspect of human and robotic space exploration. “Work already is underway and we are fully focused on the vital tasks that lie ahead to meet NASA’s requirements for the program,” Maguire said. NASA has structured the initial contract into separate schedules for design, development, testing and evaluation (DDT&E). The contract for the beginning phase of the project, known as Schedule A, began on September 8, 2006, and will run through September 7, 2013. The initial part of the contract will be worth $3.9 billion, agency officials said. The contract also includes options for production of additional spacecraft and sustaining engineering. If fully exercised, the options available in Schedule B would be worth another $3.5 billion. Lockheed Martin will perform most of the Orion vehicle engineering work at NASA’s Johnson Space Center in Houston, Texas, and complete final assembly of the vehicle at the Kennedy Space Center, Fla. All 10 NASA centers will provide technical and engineering support to the Orion program, according to NASA officials.

How the two teams competed

Patrick McKenzie, business-development manager of the CEV for Lockheed Martin, told Military Aerospace Technology in the spring that the company decided to pursue the CEV contract because the program is a fit with the company’s experience, background and close working relationship with NASA in space programs.

“The heritage and resources that our company can bring to bear as well as the skills that we can bring to CEV make us a very good fit for this program and NASA,” McKenzie said. Lockheed’s partners for the CEV competition include Honeywell, Orbital Sciences, United Space Alliance and Hamilton Sundstrand. Each partner brings an expertise that strengthens the team’s ability to meet NASA’s requirements for the program, McKenzie said. For example, a company like Honeywell offers a vast amount of experience in avionics and vehicle space-management while Orbital Sciences provides critical expertise in launch systems, he said.

“Our company is taking this particular program and this particular opportunity very, very seriously,” McKenzie said. “This has been designated as the program for us to win for 2006. What CEV would do for us and our teammates and our personnel [currently working on NASA programs] is that it would allow a more ready and smooth transition from current programs to what comes next.”

Art Stephenson, sector vice president for space exploration at NG, said then that a team of NG and Boeing was a natural fit to compete for CEV. “In the days/months after President Bush announced the Vision for Space Exploration, we and Boeing each analyzed our internal strengths and weaknesses relative to space exploration,” he said. “Both companies are extremely competent in space systems—NG in integration of large systems, space systems engineering, high-reliability aircraft and advanced technology, while Boeing is the undisputed leader in human spaceflight systems. We felt that we could offer NASA and the nation a more reliable, more capable CEV by pooling our resources rather than by competing against each other.”

Chuck Allen, Boeing’s vice president for space exploration systems, said NG and Boeing had “come together in a spirit of collaborative partnership to use our technological and engineering expertise, unmatched human spaceflight experience and a singular focus on mission success to help NASA and the nation fulfill its space exploration goals.”

Partners with the NG/Boeing team include United Space Alliance, Alenia Alcatel Space, ARES Corporation, Draper Laboratory and Alliant Techsystems.

The estimated maximum total value for each Phase 1 contract of CEV (including the extension to Aug. 31, 2006) and the optional extension periods is approximately $60 million for each contractor, according to NASA officials. The approximate value of the basic extension period from March 31 to Aug. 31 is $17.5 million for each contractor, with an approximate value of each two-month option is $7 million. One of the Phase 1 contractors will be selected as the Phase 2 prime contractor to design, develop, test and evaluate and produce the CEV. Although the new contract authorizations include options that could extend the Phase 1 work until December, NASA expects to select the Phase 2 prime contractor by August.

The new contract extended Phase 1 work from March 31 until Aug. 31 and adds options for a pair of two-month extensions for each contractor. The first two-month option would extend Phase 1 work to Oct. 31, 2006. The second two-month option would extend Phase 1 work to Dec. 31, 2006.

The upper stage of CEV is in development by the Constellation Systems Launch Vehicles Project Office at NASA’s Marshall Space Flight Center in Huntsville, Ala. The upper stage component is expected to be propelled by a J-2X engine fueled with liquid oxygen and liquid hydrogen. The J-2X is an evolved and improved version of the powerful upper stage engine that propelled the Apollo-era Saturn 1B and Saturn V rockets to the moon.

In March, Lockheed Martin announced a deal with the state of Texas that it plans to locate its CEV program office in Houston, Texas, as well as systems engineering, software development and qualification testing, if the company is successful in landing the CEV program contract. The company said it would also partner with the state of Florida to locate final assembly and testing facilities in Florida if it wins the competition.

Close Race

Paul Nisbet, an aerospace analyst for JSA Research, said earlier this year that he doesn’t expect NASA’s CEV program to be a big revenue producer for either team, though a competition win would mean prestige and the possibility of landing other future space contracts. “You definitely want the job if you can get it, but it is not a big moneymaker within itself,” he said.

Marco Caceres, a senior space analyst for the Teal Group, said a bigger story than the winner of CEV is if NASA will continue to go with its “tried and true” contractors of Boeing, NG and Lockheed instead of selecting a smaller company that could possibly offer a new technology or approach to space travel. “My issue of going with an old familiar contractor is that you could run into some of the same cost overruns that you had with previous programs,” Caceres said. “There are some people who are saying, ‘Look, if we are ever going to get to Mars, we are going to have to bring in newer companies with more innovation.’ But that could increase the risk [to NASA]. It is a tough place to be, but from [NASA’s] standpoint, the only place for them to go with [for CEV] is a tried and true contractor.”

Lockheed Martin Media Contact:

Joan Underwood
Lockheed Martin Space Systems
303-971-7398 office
303-594-7073 mobile
800-745-8198 pager
Joan.b.underwood@lmco.com

Northrop Grumman Media Contact:

Brooks McKinney
310-331-6610 office
310-864-3785 cell
Brooks.mckinney@ngc.com

Boeing Contact:

Tanya Deason-Sharp
The Boeing Company
281-226-6070
Tanya.e.deason-sharp@boeing.com

Paul Nisbet, aerospace analyst for JSA Research, paulnisbet@jsaresearch.com

Marco Caceres, a senior space analyst for the Teal Group, mcaceres@tealgroup.com



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