Federal Roles and FAA’s Budget

In 2004, the Commercial Space Launch Amendments Act gave DOT,  among other things, the specific responsibility of overseeing the public  safety aspects of space tourism, but the act prohibited DOT from  regulating the safety of crew and spaceflight participants before 2012,  except in response to high-risk events, serious injuries, or fatalities—a  provision that in 2012 was extended to September 30, 2015. Launch Mishaps and Indemnification

Since October 2014, there have been three mishaps involving FAA  licensed or permitted launches. The U.S. Commercial Space Launch Industry Has Expanded in Recent Years

During the last decade, U.S. companies conducted fewer orbital launches  in total than companies in Russia or Europe, which are among their  main foreign competitors. However, in recent years U.S. companies have  conducted an increasing number of orbital launches. Moreover, in 2014, U.S.  companies conducted more orbital launches than companies in Russia,  which conducted four, or Europe, which conducted six. FAA Faces Multiple Challenges Regarding Developments in the Commercial Space Launch Industry

We asked FAA officials, representatives from nine commercial space  launch companies, and three experts to identify the challenges that FAA  faces—and is likely to face in the near future—to address significant  developments in the commercial space launch industry over the last  decade. The challenges for FAA that they identified included the  following: (1) determining whether and when to regulate the safety of  crew and spaceflight participants, (2) increased workload relating to  licensing and permitting launches and launch sites, (3) creating a safety  reporting system, and (4) responding to emerging business plans. Among the reasons provided were allowing  the space tourism industry and industry standards more time to  develop and because of changing technologies. An FAA official indicated that the agency’s position is that the  moratorium should be allowed to expire. FAA officials said that hybrid vehicles are  evaluated on a case-by-case basis to determine which  regulations apply. Several developments, such as NASA’s  commercial cargo and crew programs, continuing efforts to begin space  tourism operations, and the launching of small satellites, may increase  FAA’s workload for licensing and permitting launches. Because FAA has not provided this type of detailed  information in its budget submissions, Congress lacks information that  would be helpful in making decisions about the resources needed for the  agency’s commercial space launch activities. Recommendation

To provide Congress with more information about the resources  requested to address developments in the commercial space launch  industry, in justifying requested changes, we recommend that the  Secretary of Transportation direct the FAA Administrator to provide more  detailed information in its budget submissions for the Office of  Commercial Space Transportation regarding its workload. Specifically, we examined (1) how the  competitive landscape has changed for the U.S. commercial space  launch industry over the last decade, (2) challenges that FAA faces in  licensing and regulating commercial space launches, (3) the status of  developing industry standards for human spaceflight, (4) how FAA has  projected its commercial space launch licensing workload for future fiscal  years when submitting budget requests to Congress and how changes in  the number and types of launches might affect its budget needs in future  years, and (5) how changes in the number and types of commercial  space launches could affect the government’s overall exposure and  indemnification for commercial launches. The experts that  we interviewed were selected from academia and private industry based  on their knowledge of FAA’s oversight of the commercial space launch  industry. We also compared (1)  FAA’s fiscal year 2016 budget submission for the Office of Commercial  Space Transportation against the Office of Management and Budget’s  guidance on budget formulation and (2) the number of launches that FAA  projected during the last 10 fiscal years with the actual number of  launches that occurred.
Why GAO Did This Study

The U.S. commercial space launch industry has changed considerably since the enactment of the Commercial Space Launch Amendments Act of 2004. FAA is required to license or permit commercial space launches, but to allow the space tourism industry to develop, the act prohibited FAA from regulating crew and spaceflight participant safety before 2012—a moratorium that was later extended but will now expire on September 30, 2015. Since October 2014, there have been three mishaps involving FAA licensed or permitted launches.
GAO was asked to examine the changes in the commercial space launch industry and FAA's oversight of the industry. This report addresses, among other things, (1) changes in the industry over the last decade, (2) FAA challenges in addressing industry developments, and (3) FAA's launch licensing workload and budget. GAO reviewed FAA's guidance and documentation on its launch permit, licensing, and safety oversight activities; interviewed FAA officials, industry stakeholders, and experts who were selected on the basis of their knowledge of FAA's oversight of the commercial space launch industry; and visited the spaceports where the two 2014 launch mishaps occurred.

What GAO Found

During the last decade, U.S. companies conducted fewer orbital launches in total than companies in Russia or Europe, which are among their main foreign competitors. However, the U.S. commercial space launch industry has expanded recently. In 2014, U.S. companies conducted 11 orbital launches, compared with none in 2011. In addition, in 2014, U.S. companies conducted more orbital launches than companies in Russia, which conducted four, or Europe, which conducted six.
The Federal Aviation Administration (FAA)—which is responsible for protecting the public with respect to commercial space launches, including licensing and permitting launches—faces multiple challenges in addressing industry developments. If Congress does not extend the regulatory moratorium beyond September 2015, FAA will need to determine whether and when to regulate the safety of crew and spaceflight participants. Most commercial space launch company representatives told GAO that they favor extending the regulatory moratorium beyond September 2015 to allow the industry more time to develop. Current bills propose extending it as well. In addition, according to FAA officials and industry stakeholders, FAA faces an increasing workload related to licensing and permitting launches such as NASA's commercial cargo and crew programs that involve transporting cargo and crew to the International Space Station; space tourism; and the launching of small satellites.
FAA's budget requests for its commercial space launch activities generally have been based on the number of projected launches. However, in recent years, the actual number of launches has been much lower than the projections. For fiscal year 2016, FAA requested a 16 percent increase in staff for its commercial space launch activities to keep pace with industry growth. Office of Management and Budget guidance indicates that if an agency is requesting significant changes in full-time positions, it should provide a detailed justification of the changes and discuss alternative implementation strategies. However, FAA's fiscal year 2016 budget submission does not provide a detailed justification of the staffing changes and does not consider alternatives to hiring additional staff. Because FAA has not done this, Congress lacks information that would be helpful in making decisions about the resources needed for the agency's commercial space launch activities. FAA officials said that the agency lacked additional workload metrics, which officials are now developing to include in future budget submissions for its commercial space launch oversight activities.

What GAO Recommends

GAO recommends that FAA, in its budget submissions, provide more detailed information about the Office of Commercial Space Transportation's workload. FAA agreed with the recommendation but thought the report did not convey the extent of industry growth. GAO added information on challenges related to industry growth.