U.S. Rocket Propulsion Industrial Base Assessment

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BIS/OTE U.S. Rocket Propulsion Assessment 1

U.S. Department of Commerce Bureau of Industry and Security Office of Technology Evaluation

Final Results 2018

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 2

Who We Are: • Bureau of Industry and Security (BIS)

Mission: Advance U.S. national security, foreign policy, and economic objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership.

• Develops export control policies • Issues export licenses • Prosecutes violators to heighten national security • Develops and implements programs that ensure a technologically superior defense industrial base

• Office of Technology Evaluation (OTE)

Mission: OTE is the focal point within BIS for assessing the capabilities of the U.S. industrial base to support the national defense and the effectiveness of export controls.

•Under Section 705 of the Defense Production Act of 1950 and Executive Order 13603, ability to survey and assess: •Economic health and competitiveness •Defense capabilities and readiness

•Data is exempt from Freedom of Information Act (FOIA) Requests

•Enable industry and government agencies to: •Share data and collaborate in order to ensure a healthy and competitive industrial base •Monitor trends, benchmark industry performance, and raise awareness of diminishing manufacturing and technological capabilities

• Partnership with NASA’s Marshall Space Flight Center, and in collaboration with the Joint Army, Navy, NASA, Air Force (JANNAF) Working Group • The principal goal is to gain an understanding of the supply chain network supporting the development, production, and sustainment of products and services supporting both USG and commercial propulsion-related systems

• Objectives:

a) Map the propulsion industrial base supply chain in detail;

b) Identify interdependencies between respondents, suppliers, customers, and USG agencies;

c) Benchmark trends in business practices, competitiveness issues, financial health, etc. across many tiers of the propulsion industrial base; and

d) Share data results with USG stakeholders to aid planning, outreach, and problem resolution

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 5 Methodology

• The scope of the survey and assessment was limited to U.S. based organizations with Propulsion-related activities, defined as:

• “Any activity/component/subsystem/test/product/service that contributes to U.S. Government or Commercial propulsion systems (including the propulsion of a launch vehicle, missile, and in-space spacecraft propulsion). The activity/component/subsystem/test/product/service does not have to be specifically intended to support propulsion applications.”

• Survey exemptions were provided on a case-by-case basis with careful consideration provided by the BIS and relevant stakeholders

• Organization size was established based on sales from Propulsion related products manufactured in the U.S.: • Small: Under $10M in annual sales • Medium: $10M-$50M in annual sales • Large: Over $50M in annual sales

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 6

Survey Taxonomy Propulsion Business Lines - 24 Propulsion Business Categories - 7 1. Composite Materials 1. Large liquid propulsion 2. Composite Materials Processing a) Large chemical liquid propulsion systems 3. Electrical Systems b) All engines with turbopumps c) Features of the MPS that reside in the tanks 4. Engineering Services d) Booster/upper/in-space transit stages, propellant, pressurant 5. Fabrication, (sub)system assembly 2. Small liquid propulsion 6. Instrumentation, sensors, transducers a) Small chemical liquid propulsion systems 7. Insulation b) Pressure-fed engines c) Spacecraft propulsion 8. Interconnects, fasteners, standards, seals d) Pressurant and propellant tanks, flow-control components, 9. Launch services dedicated sensors, and engines 10. Liquid propellant materials 3. Large solid rocket motor 11. Machining a) 40” and larger motors requiring more than one mix to cast a 12. Maintenance/aftermarket/refurbishing services single motor and relatively limited production rate 13. Material preparation 4. Small solid rocket motor a) 40” and smaller motors allowing casting of multiple motors 14. Material processing/finishing from a single mix and relatively limited production rate 15. Mechanical controls 5. Science and technology 16. Ordnance/ignition components or systems a) Interagency collaboration for propulsion science and 17. Raw materials technology across all segments of the rocket propulsion industrial base (e.g. strategic missile boosters to space lift, in- 18. Research and development space chemical and electric propulsion for satellites, to tactical 19. Solid rocket linear material missiles and missile defense) 20. Solid rocket propellant material 6. Test and evaluation 21. System integration a) Connected with the National Rocket Propulsion Test Alliance 22. Test equipment 7. Electric propulsion 23. Testing services a) Electrothermal rocket propulsion b) Electrostatic or ion propulsion engine 24. Other c) Electromagnetic or magneto plasma engine Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 7

Overview of Survey Data 2013-2016

Data is aggregated to allow public distribution of business confidential responses

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 8

Respondent Profile

• The data presented in this assessment represents the submissions of 361 organizations with 531 owned/internal facilities

140 128 129 120 104 100

Number of Respondents of Number 20

0 Respondents by Organization Size Small Medium Large

Small: Under $10M in annual sales Medium: $10M-$50M in annual sales Large: Over $50M in annual sales

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment

Propulsion Business Lines - 24 Involvement by Industrial Base Business Category (8 Total) Large Liquid Propulsion Small Liquid Propulsion Large Solid Rocket Motor Small Solid Rocket Motor Science and Technology Test and Evaluation Electric Propulsion Other 250

200

150

100

Number of Responses of Number 50

Q1c, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 10 Propulsion Business Categories – 8 Total Company Participation by Category

450 *Other includes lower tier facilities who were unsure of 400 how they supported propulsion-related engines and systems 350

300

250 452 200 403 399 389 389

150 311 301 Number of Responses of Number

100 203

0 Small Liquid Test and Large Liquid Small Solid Science and Large Solid Other* Electric Propulsion Evaluation Propulsion Rocket Motor Technology Rocket Motor Propulsion Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 Q1c, A FOR PUBLIC DISTRIBUTION 531 Facilities BIS/OTE U.S. Rocket Propulsion Assessment 11

Organization Information

Countries (16) with Equity Ownership in U.S.-based Propulsion-Related Companies (33) United Kingdom 9

Japan 6 33 respondents identified non-U.S. based Germany 3 organizations with equity ownership Norway 3 4 respondents each had two countries with Cayman Islands 2 equity ownership, for a total of 37 non-U.S. based Switzerland 2 organizations with equity ownership

France 2

Belgium 2 16 unique countries were identified with equity ownership Netherlands, Canada, Austria, Sweden, United 1 each Arab Emirates, India, Israel and Luxembourg

Source: U.S. Department of Commerce, Q1a, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 33 respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 12

Organization Reporting Percentage of Respondents Level with Parent Organizations

Business Unit/Division, 31% Yes, 39% 113 Corporate/Whole No, 139 Organization, 61% 69% 222 248

Both questions are not mutually exclusive (e.g. respondents can report at the Business Unit/Division level and not have a parent organization)

Source: U.S. Department of Commerce, Q1a, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 13

Headquarter Location by State (361 Total)

14 1 5 1 1 4 3 4 14 18 12 1 15 18 10 5 14 9 4 11 6 2 2 3 3 1 4 82 1 8 8 Top States 19 1 2 California 82 15 15 1 Florida 24 Arizona 19 24 NY, PA 18 AL, CT 15

Q1a, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 14 Special Small Business Types Number of Respondents by Special Business Types

200

180 31% self-identified as being dependent on the USG for continued 160 viability

140 HUBZone businesses are 10% self-identified as being “unsure” located in and employ people if they were dependent on the USG living in Historically Under- 120 for continued viability utilized Business Zones as defined by the SBA 100 186 18% were at moderate to severe 80 financial risk according to 2016 152 financials

60 Number of Respondents of Number 40

20 29 3 5 19 22 0 Not Qualified Small Business 8(a) Firm HUBZone Minority-owned Woman-owned Veteran-Owned Administration Business Business Business Certified Small Business 55 respondents identified as multiple special business categories, and therefore are counted twice.

Q1a, D Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 15 Special Small Business Types Breakdown of 186 Certified Small Businesses Business Type JANNAF Agency Contracts 140 140 Primary Additional Direct Both Indirect 120 18 120

100 100

47 80 80 55

34 41 60 60 111 42 29

40 32 40 Number of Responses of Number Number of Responses of Number 20 23 19

20 20 9 35 26 28 27 25 4 50 4 35 24 12 1 14 1 2 2 0 0 Navy Army Air Force NASA

Some respondents identified multiple “Additional” business types and multiple agencies

Q1b, B Source: U.S. Department of Commerce, 186 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 16 Special Small Business Types Breakdown of 186 Certified Small Businesses Number of Small Businesses by Business Line (some respondents identified multiple business lines) Machining 128 Engineering services 101 Raw material provider 99 Fabrication/system assembly 98 Prototyping 76 Testing services 61 Composite materials 55 Number of Small Businesses by Industrial Base Material preparation 49 Category (some respondents identified multiple Material processing/finishing 48 industrial base categories) Composite materials processing 48 Small Liquid 201 System integration 45 Instrumentation, sensors, transducers 43 Large Liquid 174 Launch services 41 Test & Evaluation 146 Electrical systems 40 Interconnects, fasteners, standards, seals 37 Small Solid 140 R & D 34 Other 138 Test equipment 33 Mechanical controls 32 Science & Technology 131 Insulation 20 Ordnance/Ignition components or systems 16 Large Solid 125 Maintenance/aftermarket/repair/refurbishing 12 Electric Propulsion 80 Liquid propellant material 10 Solid rocket propellant material 9 “Other” includes lower-tier companies who were unsure how they supported propulsion-related engines and systems

Q1c, A Source: U.S. Department of Commerce, 186 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 17 Top 5 State Locations By Organizations, Facilities, Suppliers, Customers

Organization Locations (158) Internal Facility Locations (224) California 82 California 122 Florida 24 Florida 30 Arizona 19 Alabama 28 NY, PA 18 AZ, PA 23 California is the number one state in all four AL, CT 15 New York 21 categories

Supplier Locations (850) Customer Locations (713) A significant portion of the supply chain is California 464 California 354 located in Alabama, New York 108 Alabama 103 Arizona, Florida, New York, and Pennsylvania CT, PA 99 Virginia 91 Texas 96 Florida 90 Arizona 83 Colorado 75

Q1A, Q2A, Q6B, & Q10B Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 18 Highlight: California By Top Cities (27 total) HQ Locations (2 or more) Facility Locations (3 or more) Supplier Locations (10 or more) Customer Locations (10 or more) 50 Top Cities by Category: Customers may be double counted (e.g. 172 cities in California 45 HQ Locations – Torrance (5) an organization can list a single have at least one Facility Locations – El Segundo (9) customer 10 times which is represented organization, facility, 40 Supplier Locations – Los Angeles (26) below) supplier, or customer Customer Locations – Hawthorne (40) 35 40 respondents listed 10 or more of their customers are based in 30 Hawthorne

15 Number Respondents of Number 10

Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing (336415) 52

Machine Shops (336419) 37

Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing (332710) 36

Engineering Services (541330) 36

Research and Development in the Physical, Engineering, and Life 31 North American Sciences (except Biotechnology) (541712) Industry Classification System (NAICS) codes Aircraft Engine and Engine Parts Manufacturing (336414) 29 identify the category of product(s) or service(s) Guided Missile and Space Vehicle Manufacturing (336412) 28 provided

Other Aircraft Parts and Auxiliary Equipment Manufacturing 361 respondents’ (336413) 27 products and services were categorized by Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology) (541715) 17 173 unique NAICS codes out of 2,196 total All Other Miscellaneous Fabricated Metal Product Manufacturing (332999) 16

0 10 20 30 40 50 60 Number of Responses

Q1b, A Source: U.S. Department of Commerce, 361 respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 20 Propulsion-Related Product & Service Codes (PSC) Top 10 Most Common PSC Codes

Rocket Engines and Components (2845) 27

Space Vehicle Components (1675) 20

Guided Missile Components (1420) 16 Gas Turbines and Jet Engines, Aircraft, Prime Moving, Product and Service 14 and Components (2840) Code(s) (PSC) are federal supply codes Guided Missile and Space Vehicle Explosive Propulsion 13 used by the U.S. Units, Solid Fuel, and Components (1337) Government to describe R&D - Space: Aeronautics/Space Technology 12 the products, services, (Engineering Development) (AR14) and research and R&D - Defense System: Missile/Space Systems development purchased 12 (Advanced Development) (AC23) by the government R&D - Defense System: Missile/Space Systems (Applied 12 361 respondents’ Research/Exploratory Development) (AC22) products and services R&D - Defense System: Missile/Space Systems were categorized by 349 11 (Engineering Development) (AC24) unique PSC codes out Guided Missile and Space Vehicle Inert Propulsion Units, of 2,907 total recorded 11 Solid Fuel, and Components (1338) 0 5 10 15 20 25 30 Number of Responses

Q1b, A Source: U.S. Department of Commerce, 361 respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 21 Business Categories – 9 Total Business Category by Primary and Additional Focus

Manufacturer 232 31

Research & Development 31 92

Service Provider 38 65

Prototype Manufacturer 6 88

Testing Facility 5 71 34.3% of respondents either primarily or additionally Distributor 37 22 participated in manufacturing

Laboratory 31 1 Non-Profit 6 7

Holding Company 7

0 50 100 150 200 250 Number of Responses Primary Additional Source: U.S. Department of Commerce, Q1b, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 22 Business Categories by Financial Risk “Primary” Business Category by Financial Risk Levels

Manufacturer 151 52 10 19 3 Service Provider 26 7 2 Distributor 26 7 4 3 Research and Development 23 3 2 Prototype Manufacturer 4 1 17% of responses are classified as Moderate/Elevated Risk and 5% are 1 classified as High/Severe Risk Non-profit 3 3 Testing Facility 4 1

Laboratory 1

Holding Company

0 50 100 150 200 250 Number of Responses Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data

Research and Development 55 17 6 14

Prototype Manufacturer 55 20 5 8

Testing Facility 43 15 4 9

Service Provider 38 14 5 8 2.0% are classified as 3 Moderate/Elevated Risk and 6.8% Manufacturer 18 4 6 are classified as High/Severe Risk Laboratory 21 53 2

1 Distributor 15 2 4 Non-profit 42 1

Holding Company 42 1

0 50 100 150 200 250 Number of Responses Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data

Source: U.S. Department of Commerce, Q1b, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 respondents BIS/OTE U.S. Rocket Propulsion Assessment 24 Internal/Owned Facilities Anticipated Change (2017-2021) 400 Future Investment Respondents can have Investing in New or Improved Facilities 350 more than one facility 30 Owning: 28 Of the 83 respondents that plan 300 25 to expand operations, 47 respondents plan to invest in 66 respondents indicated new or improved R&D facilities 250 their organization intends 20 (owning, leasing or both) to invest in Additive Manufacturing/3-D 15 200 395 technology capabilities Leasing: 10 (propulsion-related 45, 10 Both: 9 non-propulsion 21) 150

5 Number of Facilities of Number

100 83 0

50 25 16 12 0 No Anticipated Expanding Other Closing/Shutting Moving Operations Changes Operations Down/Reducing Operations

Source: U.S. Department of Commerce, Q2, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 531 Facilities FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 25 Internal/Owned Facilities Expanding vs Closing/Reducing Operations

1 3 1 1

3 1 4 5 2 3 1 6 2 1 1 1 1 1 1 3 1 2 6 2 1 1 25 2 1

2 1 6 3

1 3

Expanding Operations - 83 Closing Operations/Reducing Operations - 16

Q2, A Source: U.S. Department of Commerce, 99 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 26

Internal/Owned Facilities Moving vs Closing/Reducing Operations

9 8 8 54% of these 28 facilities that are “Development work has gone away and we expecting to close or move are don't see any more work coming to us. Just manufacturers structural support to Rocket launcher OEM.” 7 -Large Company 60% of those manufacturers are 6 “California business climate is poor, intending expected to close/shutdown to relocate to another state.” -Small Company 5 5 “Other” includes lower-tier companies who were unsure how they supported propulsion-related engines and systems 4 3

3 Number o Facilities o Number 2 2 2 2 2 1 1 1 1 1

0 Large Liquid Small Liquid Large Solid Small Solid Science and Test and Electric Other Propulsion Propulsion Rocket Motor Rocket Motor Technology Evaluation Propulsion Moving Operations Closing/Shutting Down Facility

Q2, A Source: U.S. Department of Commerce, 28 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 27 Joint Ventures (JVs) U.S. and Non-U.S. - 2013-2017

12 12

10 9 8 8 8

6 Number of JVs of Number 4 3 3 3 2 2 2

0 2013 2014 2015 2016 2017

JV-Propulsion JV-Non Propulsion

Q3, B Source: U.S. Department of Commerce, 108 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 28 Mergers, Acquisitions, and Divestitures (MADs) U.S. and Non-U.S. - 2013-2017

60 58

51 50 47

40 38

31 30

Number of MADsof Number 20

10 8 8

2 3 3 0 2013 2014 2015 2016 2017

MAD-Propulsion MAD-Non Propulsion

Q3, B Source: U.S. Department of Commerce, 108 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 29 Mergers, Acquisitions, and Divestitures (MADs) and Joint Ventures (JVs) – by Country 2013-2017 JVs MADs 10

9 MADs & JVs 2013-2017: 8 Total MADs: 249 7 Total JVs: 56 6 For more information on Chinese 5 MAD and JV activity, see slide 164

3 Number of MADs & JVs & MADs of Number 2

Source: U.S. Department of Commerce, Q3, A-B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 17 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 30 All Foreign Mergers, Acquisitions, and Divestitures (MADs) and Joint Ventures (JVs) - 2013-2017

JV-Propulsion JV-Non Propulsion MAD-Propulsion MAD-Non Propulsion 12 11

8 8

6 6 5

Number of MADs & JVs & MADs of Number 3 3 3

2 2 2 1 1

0 2013 2014 2015 2016 2017

Q3, B Source: U.S. Department of Commerce, 17 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 31 Products and Services Organization Participation by Propulsion-Related Product/Service Category (6 Total)

Manufactured Components 169

Production Techniques 141

Systems and Services 129

Electrical, Ignition, and Control 111 Respondents may supply product/services under more than one category

Propellants and Other Materials 108 “Other” includes maintenance, cleaning agents, propellant tanks, and misc

Other 48

0 20 40 60 80 100 120 140 160 180 Number of Responses

Source: U.S. Department of Commerce, Q4a, A-F Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 32

Products and Services Respondent Financial Risk by Propulsion-Related Product/Service Categories

Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data

Manufactured Components 116 30 10 13

Production Techniques 96 23 9 13

Systems and Services 79 25 7 18

Electrical, Ignition, and Control 69 23 6 13 Financial Risk: based on profit margins, debt levels, liquidity, product Propellants and Other Materials 65 26 6 11 dependence, and performance over time 1

Other 31 12 4 Insufficient data is a result of unavailable/missing data and source data mismatches

0 20 40 60 80 100 120 140 160 Number of Responses

Q4a, A-F Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 33 Respondent Capabilities By Electrical, Ignition, and Control – 385 Total Electrical systems and components 20 10 12 Actuators 20 8 8 Avionics (sub)systems and components 14 12 8 Mechanical controls 16 9 6 Igniter system and components 12 6 11 Ordnance systems and components 12 9 4 Power electronics 11 4 9 Sensors 8 9 6

Harnesses 8 8 5 An additional 27 responses Arm fire device/Armed or safe 10 3 7 were reported as “Other” electrical, ignition, and Batteries 6 9 5 control products/services as Pyrotechnics, cartridge & propellant actuated devices 5 7 7 they fell outside the listed product/service categories Transducers 5 7 4 (i.e. combustion chamber, Igniter material 3 3 4 circuit boards, welding equipment, etc.) Fuses 3 3 2

0 5 10 15 20 25 30 35 40 45 Number of Responses

Q4b, A Product Service Both Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 34 Respondent Capabilities By Manufactured Components – 438 Total Nozzles 36 14 4 Fasteners, gaskets, o-rings, seals 24 6 8 Valves 30 5 2 Thrust chamber 19 10 4 Ducts, tubing, and hoses 20 4 5 Rotating machinery components 17 9 2 Pressure vessels/motor cases 22 4 1 Turbopump 16 4 3 Fairings and skirts 10 7 3 Bearings 15 2 1 An additional 53 responses Castings 9 6 1 were reported as “Other” Bellows 8 2 5 manufactured components Spun metal domes 9 4 1 as they fell outside the listed product/service types Regulators 8 2 (ex. textile cutters, cover Strut 5 2 plates, coils, etc.) Curvics 3 3 1 Springs 4 1 Dampers 3 1 0 10 20 30 40 50 60 Number of Responses Product Service Both Q4b, B Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 35 Respondent Capabilities By Production Techniques – 528 Total

Precision machining 42 15 12 Small machining 36 15 10 Fabrication 39 10 7 Additive manufacturing 19 11 10 Large machining 21 12 6 Heat treating 15 13 6 Sheet metal fabrication 15 6 7 Metal jointing 16 4 8 Brazing 10 8 6 Molding 13 3 6 An additional 23 responses Forming 12 7 3 were reported as “Other” production techniques as they Coating 9 8 5 fell outside the listed Turbopump machining 11 4 1 product/service types (i.e. cold Forging 10 3 3 treating, filament winding, rapid prototyping, etc.) Plating 6 3 3 Casting 7 2 2 Flow forming 2 1 2 0 10 20 30 40 50 60 70 Number of Responses Product Service Both

Source: U.S. Department of Commerce, Q4b, C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 36

Respondent Capabilities By Propellants and Other Materials Category – 273 Total Composite materials 11 8 10 Coatings 7 10 6 Raw materials 17 1 5 Adhesives and resins 9 4 7 Carbon fibers 7 6 6 Solid rocket propellant material 11 3 4 Oxidizer 9 6 3 Insulation 11 2 4 Polymer 10 2 3 Liquid propellant and/or materials 5 4 5 An additional 19 responses Solid rocket liner material 3 4 4 were reported as “Other” Fuels 5 4 2 propellants and other Weld wire 3 2 3 materials as they fell outside the listed product/service PBI-NBR rubber 3 2 3 types (ex. propellant fracture Rayon 2 2 3 modeling, thruster, Pressurant 3 1 3 intermediate chemicals, etc.) HC polymer 2 1 3 0 5 10 15 20 25 30 35 Number of Responses Product Service Both

Source: U.S. Department of Commerce, Q4b, D Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 37 Respondent Capabilities By Systems and Services – 509 Total

Engineering services 6 49 13

Component testing 19 21 14

Test services 2 32 12

Machine parts and tooling 27 10 9

System/subsystem assembly 17 12 12

Fabricated assemblies 16 6 15

System/subsystem integration 12 15 10

Materials testing 7 19 8 An additional 12 responses were reported as “Other” Composite materials testing 9 11 8 systems and services as they Test equipment 4 19 5 fell outside the listed product/service categories (i.e. Launch services 6 7 14 electric propulsion services, software services, Satellite Engine/motor system testing 9 8 10 ground systems and operations, etc.) Test stand design 7 7 10

0 10 20 30 40 50 60 70 80 Number of Responses Product Service Both Source: U.S. Department of Commerce, Q4b, E Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 38 Respondent Capabilities By “Other” Category – 92 Total

Propellant Tanks 12 5 4

Maintenance/Aftermarket/Repair/Refurbishing 3 10 7

An additional 43 responses were reported as “Other” miscellaneous products/services as they fell outside the listed product/service Cleaning Agents 2 5 1 types (ex. aerostructure fairing, risk analysis, etc.)

0 5 10 15 20 25 Number of Responses Product Service Both

Q4b, F Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 39

Domestic & Foreign Suppliers Number of Propulsion-Related Suppliers by Respondent Input Category by Supplier* 1% of 3% of Respondents Respondents B: Manufactured Components 840 D: Propellants and Other 313 Materials

26% of A: Electrical, Ignition, and Control 311 Respondents F: Other 219 Total Suppliers (not unique): 1,917 E: Systems and Services 163

C: Production Techniques 71

0 200 400 600 800 1,000 70% of Number of Suppliers Respondents *269 respondents had 1 or more suppliers

“F: Other” includes maintenance, cleaning agents, propellant tanks, and misc 500+ Suppliers 100-499 Suppliers Companies that are service providers can report zero suppliers. Lower- tier companies can report zero propulsion-related suppliers if they do 1-99 Suppliers 0 Suppliers not consider themselves part of the supply chain

Source: U.S. Department of Commerce, Q6, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 40 Suppliers Domestic Unique Suppliers by State: 1,343

33 1

33 4 2 10 3 8 1 14 49 83 4 40 1 73 78 49 24 65 44 3 10 12 13 4 6 17 6 7 12 342 17 5 21 4 4 67 7 1 21 19 74 7

Domestic unique suppliers (unique by 44 name only) refers to the headquarter location since suppliers may be associated 1 supplier in Puerto Rico with multiple state locations

Q6, A Source: U.S. Department of Commerce, 269 respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 41 Propulsion-Related Suppliers By Top Inputs Sourced from Domestic Suppliers Domestic Inputs – By Category Domestic Inputs – Top 10 Types Raw materials (including Additive Manufactured 77 798 Manufacturing Stock) Components Valves 68

Electrical, Ignition, and Actuators 57 298 Control Fasteners, gaskets, o-rings, seals 56

Propellants and Other Solid rocket propellant material 55 260 Materials Other Electrical, Ignition, and Control 54

Other 204 Electrical systems and components 49 Nozzles 47

Systems and Services 147 Pressure vessels/motor cases 45 Turbopump 33

Production Techniques 68 0 20 40 60 80 Number of Responses

0 200 400 600 800 1,000 1,343 domestic suppliers (unique by name) supplied 1,775 products/services across 6 distinct input categories Number of Responses Q6, A Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 269 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 42 Propulsion-Related Suppliers Top Inputs Sourced from Foreign Countries

Foreign Inputs – By Category Foreign Inputs – Top 10 Types

Propellants and Other Raw materials 32 53 Materials Other Manufactured Components 18 Manufactured 42 Other 15 Components Thrust chamber 8 Systems and Services 16 Solid rocket propellant material 7 Turbopump 7 Other 15 Launch services 6 Electrical, Ignition, and 13 Other Systems and Services Control 5 Insulation 5 Production Tehniques 3 Ordnance systems and components 5 0 20 40 60 0 20 40 Number of Responses Number of Responses

97 foreign unique suppliers (unique by name) provided 142 “Other” includes maintenance, cleaning agents, propellant tanks, products/services across 6 distinct input categories and misc.

Q6, A Source: U.S. Department of Commerce, 269 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 43 Propulsion-Related Suppliers Foreign Unique Suppliers – (97) by Country – (28) Country Unique Suppliers Country Unique Suppliers Country Unique Supplier

Canada 19 Norway 2 Austria 1

Germany 12 Switzerland 2 Malta 1

China 10 Israel 2 Ireland 1

Japan 7 New Zealand 2 United Kingdom 1

France 6 Norway 2 Swaziland 1

Belgium 5 Taiwan 2 Malaysia 1

Italy 4 Finland 2 Thailand 1

Russia 3 Chile 2 Sweden 1

New Zealand 3 Mexico 1 Ukraine 1

India 2

Foreign unique suppliers refers to the headquarters location since suppliers may be located in multiple countries

Supply Chain Practices Defined

• MRP (Materials Requirements Planning): obtaining the correct quantity of materials and precise timeline to support production

• Multiple Sourcing: using various suppliers

• ERP (Enterprise Resource Planning): connecting producers with makers of raw materials

• Bar Coding: using a bar code as an identification tool to track products

• CRM (Customer Relationship Management): managing and tracking relationships with customers

• MRPII (Manufacturing Resource Planning): orchestrating the correct quantity of materials throughout the entire value stream

Q7 Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 45 Propulsion-Related Supply Chain Disruptions/Impacts Number Companies Using Top 10 Experienced Supply Chain Practices 400 Materials Requirements 77 357 Planning 350 343 Multiple Sourcing 73

300 Enterprise Resource Planning 71 256 250 Bar Coding 67

200 Subcontracting 64

Outsourcing 63 150

105 External Consultants

Number of Responses of Number 52 100 Full Time Manager 51 50 Customer Relationship 18 46 4 Management 0 Manufacturing Resource Supply Chain Negative Supply Chain Planning 41 Disruptions Impact of Management Imports Practices 0 20 40 60 80 Yes No Number of Responses Source: U.S. Department of Commerce, Q7, A-C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 46 Employment - Space Primes Total U.S. Employment vs Propulsion-Related Employment

Total Space Primes - 11 Legacy Space Primes - 5

11,507 Total Employees 13,413 Propulsion Employees 53,828

New Space Primes - 6 61,312

1,906 Total Employees Propulsion Total Employees Employees 7,484 Propulsion Employees

Source: U.S. Department of Commerce, Q8, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 11 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 47 Employment at Legacy and New Space Primes Percentage of Propulsion Employees by Age and Education

Legacy Space Primes New Space Primes

65+ 65+

56-64 56-64

46-55 46-55

36-45 36-45

26-35 26-35

25 or Younger 25 or Younger

0% 10% 20% 30% 0% 10% 20% 30% 40% 50% Percent of Total Workforce Percent of Total Workforce

Associates and Below BA/BS Associates and Below BA/BS Masters/Professional Ph.D. Masters/Professional Ph.D.

Source: U.S. Department of Commerce, Q8, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 11 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 48

Employment - 2016 Total Number of Employees (All Respondents) by State: 268,545

New Hampshire 2,376 3 1,218 2,296 26 138 1,773 118 6,408 7,854 Massachusetts 201 672 31,890 21,789 459 7,081 Connecticut 6,532 24,315 2,431 301 7597 940 New Jersey 225 4,300 14,999 43,172 110 11,717 9,893 Delaware 273 2,066 9,483 2,841 Maryland 4,161 5,107 13,217 29

20,894

Q8, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 49

Employment - 2016 Total Number of Propulsion-Related Employees (All Respondents) by State: 29,238

New Hampshire 921 2 135 191 3 11 362 23 135 589 Massachusetts 201 199 439 49 768 252 Connecticut 386 541 1,998 11 25 1 29 49 New Jersey 13,383 220 113 3 265 2,850 82 12 Delaware 680 239 525 Maryland 803

1,528

13,384.00

Employment – 2013-2016 Total U.S. Citizen vs Total Non-U.S. Citizen Employees

300,000

262,869 262,118 250,000 251,033 254,731

200,000 Total U.S. citizen employment increased by 4.4% 150,000 Total Non-U.S. citizen employment increased by 34.7%

100,000 Number of Employees of Number

50,000

6,051 0 4,493 4,678 5,932 2013 2014 2015 2016 U.S. Non-U.S. Q8, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 51

Employment – 2013-2016 Total Propulsion-Related vs Non Propulsion-Related Employees

300,000

269,178 268,545 259,786 250,000 255,526

200,000 Non-propulsion related employment increased on average annually by 1.7% compared to 3.1% for propulsion-related 150,000 employment

100,000 Number ofNumberEmployees

50,000 26,568 27,184 28,063 29,238

0 2013 2014 2015 2016 Non Propulsion Propulsion

Employment – 2013-2016 U.S. Citizen Propulsion vs Non-U.S. Citizen Propulsion Employees

29,500

29,000 729 28,500

28,000 620 27,500

27,000 508

26,500 492 28,423 26,000

Number of Employees of Number 27,443 25,500 26,676 25,000 26,002

24,500

24,000 2013 2014 2015 2016 U.S. Non-U.S. Q8, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 53

Employment – 2013-2016 Average Percentage of FTEs by Occupational Category

2016 45.0% 31.6% 15.0% 6.2% 3.2%

2015 46.7% 31.2% 14.4% 6.2% 2.8%

2014 46.8% 31.2% 15.1% 5.9% 2.5%

2013 47.2% 30.5% 15.2% 6.0% 2.6%

0% 20% 40% 60% 80% 100% 120% Percentage of Total Workforce Values are industry averages and will not total to 100%

Production Line Workers Engineers Testing Operators/Support Technicians Scientists IT Professionals

Employment – 2013-2016 Average Turnover Rate by Operations

12%

10% 9.8% 9.2% 8.4% 8% 7.9%

4.4% 4.6% 4% 4.0%

Average Turnover Rate Turnover Average 3.1%

0% 2013 2014 2015 2016 Overall Turnover Rate Propulsion-Related Turnover Rate

65+ 275 257 92

166 56-64 1,602 1,484 780 149

46-55 1,830 1,227 629 178

36-45 1,404 1,077 590 114

26-35 1,453 1,684 604 73

25 or Younger 566 497 63

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Total Number of Employees Associates and Below BA/BS Masters/Professional Ph.D.

Source: U.S. Department of Commerce, Q8, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 56 Employment – 2016 Average STEM Degree Propulsion-Related FTEs by Age

65+ 2 2 1 1

56-64 11 9 6 1

46-55 11 7 4 1

36-45 9 6 4 1

26-35 9 9 4 1

25 or Younger 4 3 1

0 5 10 15 20 25 30 Average Number of Employees Associates and Below BA/BS Masters/Professional Ph.D.

Source: U.S. Department of Commerce, Q8, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 57 Employment – 2016 Total Non-U.S. FTE Employees and Contractors by Visa Type

2,500

In 2016, 94 respondents employed 6,051 Non- 264 U.S. Citizen FTEs 2,000 *Some respondents were unable provide a visa-based breakdown of their Non-U.S. Citizen FTEs. Their responses are only included in the aggregate total. 1,500

2,116

1,000

U.S. FTE Employees FTE U.S. Contractors and Employees -

500 30 9 38 18 39 256 305 338 Number Non of Number 0 H-2B O-1A F-1 H-1B Other L: Green Card Student Visa Intracompany Transferee FTE Employees FTE Contractors Q8, C Source: U.S. Department of Commerce, 94 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 58

Employment – 2016 Non-U.S. FTE Employees and FTE Contractors by Top 10 Countries

1,000 884 900 Mexico accounts for 54% of all Non-U.S. citizen FTE Employees and Contractors 800

700

600

500

400

U.S. U.S. Employees FTE andContractors 300 246 - 200 158 133 100 54 59 23 29 30 31

0 Number Number Non of

Q8, C Source: U.S. Department of Commerce, 94 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 59 Customers By Type of Customers Supported

Domestic Customers - 1,411 Foreign Customers - 226

167, 12% 36, 16%

473, 34% 90, 40% 388, 27% 42, 18%

383, 27% 58, 26%

USG Non-Defense Non-USG Non-Defense USG Defense Non-USG Government Defense U.S. Commercial Defense Non-U.S. Commercial Defense U.S. Commercial Non-Defense Non-U.S. Commercial Non-Defense

Source: U.S. Department of Commerce, Q10, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 60 Customers Total Propulsion-Related Unique Customers by State: 637

12 8 1 3 5 2 1 1 5 16 19 1 17 6 22 12 10 39 4 7 20 Rhode Island: 4 6 2 58 1 112 Connecticut: 7 4 12 16 2 9 10 2 New Jersey: 13 6 32 13 Delaware:1 32 6 Maryland: 21 34 Washington, DC: 22 One propulsion-related customer reported in Hawaii.

Q10, B Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 61 Customers Total Foreign Unique Customers by Country: 156

1 6 5 4 1 2 1 20 2 12 12 2 1 9 2 1 6 21 1 1 5 9 1 1 2 2 3 5 1 5 1 Top 10 # 2 Japan 21 UK 20 1 1 France 12 Germany 12 1 3 Israel 9 1 2 Italy 9 Norway 6 1 Turkey 6 156 total foreign unique customers

India 5

South Korea 5 Source: U.S. Department of Commerce, Q10, D Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 62 Customers Top 15 Product/Services Provided to U.S. and Non-U.S. Customers

116 Engineering services 9 60 Precision machining 4 54 Test services 1 50 System and/or subsystem assembly 9 41 Raw materials 14 41 Valves 13 39 Other 8 36 Fasteners, gaskets, o-rings, seals 13 35 Launch services 10 Products/services were reported as 35 “Other” if they fell outside the Composite materials (including carbon) 8 31 listed product/service types (i.e. Electrical systems and components 11 combustion chamber, textile System and or subsystem integration 31 cutters, filament winding, 23 propellant fracture modeling, etc.) Maintenance/aftermarket/repair/refurbishing 11 22 Solid rocket propellant material 9 14 Propellant tanks 10 0 20 40 60 80 100 120 140 Number of Products/Services U.S. Customers Non-U.S. Customers

Q10, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 63 R&D, Testing, and Evaluation General Participation

Percentage of All Respondents

No Yes 183, 51% 178, 49%

Q11a, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 64

R&D Expenditures – 2013-2016 Total and Propulsion-Related R&D Expenditures by Value

$11,827 2016 $1,191

$10,965 2015 $1,034

$10,587 2014 $849

$10,096 2013 $635

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 R&D Expenditures ($ Millions)

Total R&D Expenditures Propulsion Related R&D

Q11a, C Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 65

R&D Expenditures – 2013-2016 R&D Intensity Ratio by Average Sales

Average R&D Intensity Ratio = Average $735 R&D Expenditures / Average Total Sales 12.0% $732.6

$730 10.2% 10.1% 10.0% 10.0%

8.9% $725 $723.7 8.0%

$720 $718.0 6.0% $715 $713.7

4.0% R&D Intensity Ratio Intensity R&D

$710 Average Sales ($ Millions) ($ Sales Average 2.6% 2.1% 2.0% 2.2% 2.0% $705

$700 0.0% 2013 2014 2015 2016 Average Sales Average R&D Intensity Ratio Median R&D Intensity Ratio

R&D Expenditures – 2013-2016 Top Categories of R&D Expenditures by Percentage

80% Values are industry averages and will not total to 100%

70% 67.8% 65.7% 65.4% 65.0%

60%

50%

40% 33.3% 32.7% 30.6% 30.1% 30% 22.6% 22.9% 21.6% 20.8%

20% Percentage of R&D Expenditures R&D of Percentage 10%

0% 2013 2014 2015 2016 Basic Research Applied Research Product/Process Development

R&D Expenditures – 2013-2016 Average R&D Expenditures by Company Size

$140

$124.1 $120 $115.9 $112.4

$100 $97.1

$80

$64.4 $64.0 $60 $58.1 $59.4

$40

Average R&D Expenditures ($ Millions) ($ Expenditures R&D Average $20

$2.9 $3.0 $3.7 $0 $2.1 2013 2014 2015 2016 Small Medium Large Q11a, B Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 68

Propulsion-Related R&D Expenditures Top Sources of Propulsion-Related R&D Expenditures by Percentage Values are industry averages and will not total to 100% 45% 42.4% 39.9% 39.8% 40.6% 40% 36.7%

35.7% 36.0% Related Related - 35% 32.2%

30%

25% 22.7% 22.6% 23.4% 19.2% 20%

15% R&D Expenditures Expenditures R&D

10% 7.1% 6.5% 5.6% 5% 3.9%

Percentage of Top Sources Propulsion of Sources Top Percentage of 0% 2013 2014 2015 2016 Other USG-Related NASA-Related DOD-Related Non-USG-Related

Propulsion-Related R&D Expenditures – 2013-2016 Average Propulsion-Related R&D Expenditures by Company Size

$6 $6.1 $5.8

$5 $4.9

$4.2 $4

Related R&D Expenditures Expenditures Related R&D $3.2

- $3 ($ Millions) ($

$2.2 $2 $2.1 $1.8

$1.2 $1 $1.0

$0.8 $0.9 Average Propulsion Average

$0 2013 2014 2015 2016 Small Medium Large Q11a, B Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 70

R&D Funding Total R&D Funding, Expenditures, and Refunds - 2013-2016

$16

$14.1 $14 $13.7 $12.8 $12 $11.8 $11.0 $10.6 $10 $10.1 $9.1 $8

$4 $2.8 $3.0 $3.0 $3.0

$2 Total R&D Expenditures/Funding/Refunded ($ Billions) $0 2013 2014 2015 2016 Total R&D Funding Total R&D Expenditures Total R&D Expenditures Refunded by USG

Q11a, B Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 71

R&D Expenditures Reimbursed – 2013-2016 Total R&D Expenditures Reimbursed by USG Agencies

Values are industry 40% averages and will not 35.6% total to 100% 33.8% 35% 32.9% 33.7%

30%

25% 22.3% 20.5% 20% 18.9% 19.3%

14.9% 14.7% 14.0% 15% 12.8%

10% Reimbursed by USG Agencies Agencies USG by Reimbursed

Percentage of Total R&D Expenditures Expenditures R&D Total of Percentage 5%

0% 2013 2014 2015 2016 DOD-Related Propulsion-Related NASA-Related

R&D Funding – 2013-2016 Top 3 Sources of R&D Funding by Percentage

80% 72.2% 72.0% 73.1% 73.5%

70% Values are industry averages and will not total to 100% 60%

47.8% 48.2% 50% 45.5% 46.5%

40%

30%

20% 13.0%

Percentage of R&D Funding Sources Funding R&D of Percentage 9.2% 8.8% 10% 8.4%

0% 2013 2014 2015 2016 Internal/Self-Funded R&D USG U.S. Industry, Venture Capital, Non-Profit

USG-Related R&D Funding – 2013-2016 Top Sources of USG-Related R&D Funding by Percentage

50% Values are industry averages and will not 45% total to 100% 43.6% 43.1% 41.3% 40.1% 40%

35%

30%

25% 22.7% 22.1% 20.7% 20.8% 20%

15% 10.5% 10% 8.7% 7.8% 6.4%

5% Percentage of USG Related R&D Funding Sources Related Funding R&D Percentage USG of 0% 2013 2014 2015 2016 DOD NASA Other

R&D Funding – 2013-2016 Average Value of R&D Funding by Company Size

$180 $169 $160 Average R&D funding for medium sized companies $146 decreased by 79% $140

$120 $124

$100

$86.6 $83.0 $83.4 $80 $78.4

$60

$40

Average R&D Funding ($ Millions) ($ Funding R&D Average $35

$20

$4 $0 $2 $3 $3 2013 2014 2015 2016

Q11a, C Small Medium Large 178 Respondents Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 75

Research, Development, Testing, and Evaluation R&D Tax Credit Use and Type

R&D Tax Credit Usage Type of Tax Credit Used

54 43 58 105 19

Both Federal and State Yes Unsure No Federal Credit Only State Credit Only Q11a, D Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 178 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 76

Research, Development, Testing, and Evaluation R&D Tax Credit Use by Company Size

R&D Tax Credit R&D Tax Credit R&D Tax Credit Usage Usage Usage (Small Companies) (Medium Companies) (Large Companies) 46 Respondents 47 Respondents 85 Respondents

10, 21, 17, 21% 25% 23, 37% 50% 6, 13% 31, 7, 8% 57, 66% 67% 6, 13%

Yes Unsure No Yes Unsure No Yes Unsure No

Q11a, D Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 77 Research, Development, Testing, and Evaluation R&D Application by Propulsion-Related Areas: 400 Total Analytical modeling 41 In-space propulsion 28 Thrusters 23 Nozzles 23 Combustion chambers 23 High-temperature materials 21 Small liquid rockets 19 Propellant tanks 19 Small solid rockets 17 Large liquid rockets 17 Electric propulsion/rockets 17 Boosters 15 Hypersonic 13 Gas turbines 13 Liquid propellant and fuels 11 Environmentally friendly propellant/fuel 11 Nuclear thermal/nuclear fusion propulsion 10 Large solid rockets 10 Sensors 8 Missiles - solids 8 Hybrid rockets 8 Storable oxidizers 7 Solid propellant and fuels 7 Retropropulsion 6 1 company reported R&D related to Missiles - liquids 6 Inert propellants 6 hydro-propulsion Casings 4 Thermal rockets 2 Supersonic retropropulsion 2 No companies reported R&D Satellite tethers 2 related to laser electric propulsion Fuel oils 2 or laser thermal rockets Hydropropulsion 1 Laser thermal rockets Laser electric propulsion 0 10 20 30 40 50 Q11b Number of Responses Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 78 R&D, Testing, and Evaluation R&D Application Areas by Industrial Base Business Participation (Part 1 of 2) Small Liquid Propulsion Large Liquid Propulsion Other Small Solid Rocket Motor Science and Technology Large Solid Rocket Motor Electric Propulsion Test and Evaluation

Analytical modeling 5 7 10 5 8 2 3 1 In-space propulsion 15 3 3 3 1 3 Thrusters 12 2 1 2 3 2 1 Nozzles 4 9 2 4 1 2 1 Combustion chambers 7 10 4 1 1 High-temperature materials 4 4 2 4 3 4 Small liquid rockets 16 2 1 Propellant tanks 7 6 1 2 1 2 Small solid rockets 1 15 1 Large liquid rockets 17 “Other” includes material Electric propulsion/rockets 4 2 11 suppliers, materials testing, and Boosters 2 7 3 1 2 prototyping Hypersonic 1 6 1 3 2 Gas turbines 3 5 3 2 Liquid propellant and fuels 5 4 2 Environmentally friendly propellant/fuel 7 1 2 1 0 5 10 15 20 25 30 35 40 45 Number of Responses

Source: U.S. Department of Commerce, Q11b Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 178 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 79 R&D, Testing, and Evaluation R&D Application Areas by Industrial Base Business Participation (Part 2 of 2) Small Liquid Propulsion Large Liquid Propulsion Other Small Solid Rocket Motor Science and Technology Large Solid Rocket Motor Electric Propulsion Test and Evaluation

Nuclear thermal/nuclear fusion propulsion 2 3 5 Large solid rockets 1 8 1 Sensors 3 1 1 3 Missiles - solids 1 5 2 Hybrid rockets 5 3 Storable oxidizers 4 1 2 Solid propellant and fuels 1 1 2 1 2 Retropropulsion 2 2 2 Missiles - liquids 5 1 Inert propellants 2 1 1 1 1 Casings 1 1 2 “Other” includes manufacturing Thermal rockets 2 and additives, basic and applied Supersonic retropropulsion 1 1 research services, and Satellite tethers 1 1 experimental 3D printing Fuel oils 2 Hydropropulsion 1 Laser thermal rockets Laser electric propulsion 0 2 4 6 8 10 12 Number of Responses

Source: U.S. Department of Commerce, Q11b Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 178 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 80 R&D, Testing, and Evaluation Financial Risk by R&D Application Area (Part 1 of 2) Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data

Analytical modeling 22 10 5 4 In-space propulsion 16 6 3 3 Thrusters 10 9 1 3 Nozzles 10 9 2 2 Combustion chambers 11 9 1 2 High-temperature materials 11 6 1 3 Small liquid rockets 9 6 2 2 Propellant tanks 8 8 3 Small solid rockets 9 6 2 Large liquid rockets 8 8 1 Financial risk is defined as downside risk, estimating the Electric propulsion/rockets 9 3 1 4 potential for financial loss and Boosters 5 8 2 uncertainty about its extent. Hypersonic 7 2 2 2 Gas turbines 10 1 1 1 Liquid propellant and fuels 5 4 1 1 Environmentally friendly propellant/fuel 6 4 1 Nuclear thermal/nuclear fusion propulsion 5 2 1 2 0 5 10 15 20 25 30 35 40 45 Number of Responses

Source: U.S. Department of Commerce, Q11b Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 178 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 81 R&D, Testing, and Evaluation Financial Risk by R&D Application Area (Part 2 of 2) Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data

Large solid rockets 5 3 1 1 Sensors 5 2 1 Missiles - solids 5 2 1 Hybrid rockets 3 3 2 Storable oxidizers 3 2 1 1 Solid propellant and fuels 5 1 1 Retropropulsion 1 4 1 Missiles - liquids 4 2 Inert propellants 3 2 1 Casings 3 1 Thermal rockets 2 Supersonic retropropulsion 1 1 Satellite tethers 1 1 Fuel oils 1 1 Hydropropulsion 1 Laser thermal rockets Laser electric propulsion 0 2 4 6 8 10 12 Number of Responses

Research, Development, Testing, and Evaluation Received Federal Research and Development Funding (Direct and Indirect Funding)

Yes, 56, 31%

No, 122, 69%

Q11c, A Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 83 Research, Development, Testing, and Evaluation USG Propulsion-Related Spending Practices Adversely Impact Organization’s R&D Activities

USG Propulsion-Related Adverse Practices

Contract Type

26, 15% Decreased Spending Yes Fluctuation/ Erratic Spending 22, 12% Inadequate Guidance/ Outreach Unsure Inadequate Budget

Program Cancellations 130, 73% Domestic Sourcing/ Buy America/ Set Asides No Reliance on Prime Contractors

Revision of Requirements

No/ Limited R&D Reimbursement

Q11c, A Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 84 Research, Development, Testing, and Evaluation USG-Funded Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Contracts: 128 45 41 40 USG Agency SBIR STTR

35 DOD 54 4

30 NASA 56 12 DOC - National Institute of 2 0 25 Standards and Technology

20 15

15 Number of Respondents of Number 10 7 4 5 3 2 1 1 1 1 0 1 Contract 2 Contracts 3 Contracts 4 Contracts 5 Contracts > 5 Contracts (e.g. 41 respondents had 1 contract under SBIR funding. 15 respondents SBIR STTR had 2 contracts from SBIR funding). Source: U.S. Department of Commerce, Q11c, C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 69 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 85

Research, Development, Testing, and Evaluation SBIR Contract Financial Risk

45 SBIR USG Agency 40 Responses 6 DOD 54 35 6 NASA 56 30 DOC - National Institute of 2 Standards and Technology 25

15 29 Number of Respondents Respondents of Number 10 14 5 1 1 3 3 1 1 0 1 Contract 2 Contracts 3 Contracts 4 Contracts 5 Contracts > 5 Contracts

Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data Source: U.S. Department of Commerce, Q11c, C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 61 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 86

Research, Development, Testing, and Evaluation STTR Contract Financial Risk

STTR USG Agency 7 Responses 1 DOD 4 6 NASA 12 5 2 DOC - National Institute of 0 Standards and Technology 4 1 3

Number of Respondents of Number 2 3 1 1 1 1 0 1 Contract 2 Contracts 3 Contracts 4 Contracts 5 Contracts > 5 Contracts

Low/Neutral Risk Moderate/Elevated Risk High/Severe Risk Insufficient Data Source: U.S. Department of Commerce, Q11c, C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 8 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 87 Research, Development, Testing, and Evaluation Program Technology Transfer

• Program Technology Transfer - defined as the movement of knowledge or technology developed by a federal laboratory for private organizations in the commercial marketplace

• Examples: patent dissemination, licensing of intellectual property, and R&D collaborative relationships such as Cooperative Research and Development Agreements (CRADAs)

• 6 organizations each identified they participated in one propulsion-related technology transfer activity between 2013 and 2016

• The federal agencies/departments involved included: U.S. Navy, U.S. Army, U.S. Air Force, NASA, and U.S. Department of Energy

Q11c, D Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 88 Research, Development, Testing, and Evaluation Number of Organizations with Testing Needs Propulsion-Related Engine and/or Motor-Related

2 7 8

45 27

“No” and Blank responses are not included Both Past & Future Use Both Past & Future Use Anticipated Future Use (2017-2020) Anticipated Future Use (2017-2020) Past Use (2013-2016) Past Use (2013-2016) (0 Total) Source: U.S. Department of Commerce, Q11d, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 178 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 89 Research, Development, Testing, and Evaluation Location of Testing Facilities Used By Testing Needs

Facilities owned by your company 36 36 42

Facilities owned by other industry entities 28 21 31

Non-government facilities 19 17 20

NASA facilities 14 14 19

One additional testing facility Leased facilities 15 12 17 was reported as “Other” as it fell outside the types listed (Test Launch application) Other government facilities 11 11 14

Other

0 20 40 60 80 100 120 Number of Facilities

Past Use (2013-2016) Current Use (2017) Anticipated Future Use (2018-2020) Source: U.S. Department of Commerce, Q11d, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 178 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 90 Research, Development, Testing, and Evaluation Organization’s Ability to Perform Test Type (Internal/ External) Component (e.g. Preburner, etc.) Ambient Stage Ambient Engine (0-25K+ Lb Thrust) Ambient Solid Thermal Vacuum (Engine or Stage) Altitude Engine (0-25K Lb Thrust) Altitude Stage (< 50K Lb Thrust) Ambient Hypergolic Ambient Engine (25K-50K Lb Thrust) Ambient Engine (50K-100K+ Lb Thrust) Ambient Engine (100K+ Lb Thrust) Ambient Hybrid An additional 40 test types (23 internal and 17 external) were Altitude Hypergolic reported as “Other” as they fell Altitude Stage (50K-100K Lb Thrust) outside the listed test types Altitude Stage (100K+ Lb Thrust) (i.e. altitude electric engine, Altitude Engine (25K-50K Lb Thrust) nuclear fusion, cryogenic Altitude Hybrid fueled stages, etc.) Altitude Engine (50K-100K Lb Thrust) Altitude Engine (100K+ Lb Thrust) 0 5 10 15 20 25 Number of Responses Internal Capability Procured Externally Q11d, B Source: U.S. Department of Commerce, 178 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 91

Sales Total U.S. and Non-U.S. Sales – 2013-2016 $180

$164.6 $160 $157.4 $157.6 $153.2 $140

$120

$100

$80

$65.1

$60 $62.4 $62.0 $63.5 Total Sales ($Billions) Total

$40

$20

$0 2013 2014 2015 2016

U.S. Sales Total Non-U.S. Sales Total Source: U.S. Department of Commerce, Q9, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 92

Sales Total U.S. and Non-U.S. Propulsion-Related Sales – 2013-2016 $30 $28.0 $26.0 $25 $24.0 $22.4

$20

$15

Related Sales ($ Billions)Related -

$10

$5 Total Propulsion Total $2.3 $2.1 $2.0 $2.0 $0 2013 2014 2015 2016 U.S. Propulsion-Related Sales Non-U.S. Propulsion-Related Sales Source: U.S. Department of Commerce, Q9, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 93 Sales U.S. and Non-U.S. Propulsion-Related Sales as a Percent of Total Sales 2013 – 2016

20%

18% 18.4% 17.2% 17.4% 16% 15.8%

14%

12%

10%

Related Sales (% of Total) of (% Related Sales - 6% 4.5%

4% 4.1% 4.2% 4.3% Propulsion 2%

0% 2013 2014 2015 2016 U.S. Non-U.S. Q9, B Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 94 Sales Combined Total U.S. and Non-U.S. Propulsion, NASA, and Defense Related Sales – 2013-2016

$40 $37.6 $36.8 $36.9 $36.5 $35

$30 $29.9 $28.1 $26.0 $25 $24.7

$20 Total sales can be accounted for in more than one category (e.g. total sales can be both NASA and

$15 Propulsion-related) Total Sales ($ Billions) ($ Sales Total $10

$5 $4.6 $5.4 $5.3 $5.3

$0 2013 2014 2015 2016 Total Propulsion-Related Sales (U.S.+Non U.S.) Total NASA-Related Sales (U.S.+Non-U.S.) Total Defense-Related Sales (U.S.+Non-U.S.) Source: U.S. Department of Commerce, Q9, B-D Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 95

Financial Growth 2013–2016 Median Net Sales, Gross Profit, EBIT *Values used are industry medians $25 $22.5 $22.1 $21.6

$20 $18.4

$15

($ Millions)($ $10

$6.5 $6.4 $6.4 $6.0 $5

$1.32 $1.20 $1.00 $0.94 $0 2013 2014 2015 2016

Net Sales ($) Gross Profit ($) (Net Sales - COGS) EBIT ($) (Earnings Before Interest and Taxes)

*Data reflects all organizations activities Q12 Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 96

Financial Growth 2013–2016 Average Gross Profit Margin % by Business Size *Values used are industry averages 45% 42.1% 42.0% 41.7% 40% 40.3%

35%

30% 29.6% 30.2% 28.8% 28.1% 25% 25.0% 24.4% 24.0% 24.0%

20%

15%

Average Gross Profit Margin Profit Gross Average 10%

0% 2013 2014 2015 2016 Small Business Medium Business Large Business

Q12 Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 97

Financial Growth 2013–2016 Average Net Sales by Business Size *Values used are industry averages $350 $2.5

$2.1 $2.1 $300 $304.3 $297.7 $1.9 $1.9 $2.0

$250 $268.6 $264.9

$1.5 $200 Change in average net sales (2013-2016):

Small Businesses: +33.2% $150 Medium Businesses: -13.0% Large Businesses: -9.6% $1.0

$100

$0.5

$50 Billions) $ (Large, Sales Net Average Average Net Sales (Small & Medium, $ Millions) $ Medium, & (Small Sales Net Average $14.3 $20.8 $19.0 $0 $5.7 $0.0 2013 2014 2015 2016 Small Business Medium Business Large Business Q12 Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 98 Financial Risk – 2013-2016 Current Ratios *Values used are industry medians 3.5

Liquidity ratio - measures if current 3 2.91 assets can meet liabilities when due. Includes: current ratio and 2.77 2.50 quick ratio 2.56 2.5 2.51 2.48 Current ratio - ability to pay short- term and long-term liabilities 2.31 2.26 through the proportion of current assets to current liabilities. A 2 1.99 higher current ratio is better than a

Current Ratio Current 1.95 1.86 lower one 1.79

1.5

*Data reflects all organizations activities, 25 1 organizations had 2013 2014 2015 2016 insufficient data and were Small Business Current Ratio Medium Business Current Ratio excluded Large Business Current Ratio

Financial Risk – 2013-2016 Quick Ratios *Values used are industry medians 1.9

1.8 1.72 1.77 1.74 Liquidity ratio - measures if 1.7 1.69 current assets can meet liabilities when due. 1.6 1.59 Includes: current ratio and 1.57 quick ratio 1.5 1.49 1.48 Quick ratio - ability to meet short-term liabilities with 1.4 quick/near cash assets.

Quick Ratio Quick Excludes inventories. A 1.3 higher quick ratio is better than a lower one 1.23 1.2 1.20 1.17 1.19

1.1 *Data reflects all organizations activities, 25 1 organizations had 2013 2014 2015 2016 insufficient data and were excluded Small Business Quick Ratio Medium Business Quick Ratio Large Business Quick Ratio Q12

Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 100

Financial Risk – 2013-2016 Debt Ratio by Business Size *Values used are industry medians 0.48 0.47 0.46 0.46 Debt Ratio – capability to pay long- 0.44 0.44 0.43 term debt by measuring the 0.43 proportion of assets financed by debt. Ratio < 0.5 indicates most 0.42 0.43 0.40 0.42 assets are financed by equity 0.4 0.40 0.39 0.38 *Data reflects all organizations Debt Ratio Debt activities, 25 organizations had 0.36 0.36 insufficient data and were excluded

0.34 0.34

0.32

0.3 2013 2014 2015 2016

Small Business Debt Ratio Medium Business Debt Ratio

Large Business Debt Ratio

Source: U.S. Department of Commerce, 361 Respondents Q12 Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 101

Financial Risk – 2013-2016 Debt/Equity Ratio by Business Size *Values used are industry medians 0.7

0.67 Debt/Equity Ratio – Extent 0.65 debt is utilized to finance assets relative to value of equity. Ratio lower than 1 0.6 indicates more assets 0.58 financed by equity rather than 0.55 debt

0.51 0.5 0.48 0.48 0.46 0.45 0.47 0.45

Debt/Equity Ratio Debt/Equity 0.46 0.4 0.40 0.40

0.35 0.33 *Data reflects all organizations activities, 25 organizations had 0.3 insufficient data and were 2013 2014 2015 2016 excluded Small Business Debt/Equity Ratio Medium Business Debt/Equity Ratio Large Business Debt/Equity Ratio Q12

Financial Risk – 2013-2016 Asset and Industry Turnover Ratios *Values used are industry medians 6

5 4.88 4.74 4.69 4.67 Asset Turnover Ratio - Indicates the 4 efficiency in which an organization utilizes its assets to generate revenue. A higher ratio is better than a lower one 3 Inventory Turnover Ratio – Measures the effectiveness that inventory is 2 managed through a comparison of cost of goods sold with average 1.57 inventory. A lower ratio indicates 1.50 1.44 1.40 weaker sales and excess inventory

1 Asset and Inventory Turnover Ratio Turnover Inventory and Asset

0 2013 2014 2015 2016 *Data reflects all Asset Turnover (sales/average total assets) organizations activities Inventory Turnover (COGS/average inventory)

Source: U.S. Department of Commerce, Q12 Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 103

Financial Risk – 2013-2016 Profitability Measures *Values used are industry medians 30%

25% 24.7% 24.4% Net Profit Margin - Indicates the extent of 21.0% profit associated with each 20% dollar sold

16.6% Return on Assets (ROA) – 15% Indicates the efficiency in which an organization can manage its assets to generate profits 10% 8.1% 7.9% 6.6% 5.7% 5% 6.0% 5.8% 5.2% 5.2%

0% *Data reflects all 2013 2014 2015 2016 organizations activities

Net Profit Margin (net profit/ total revenues) Return on Assets (net income/ total assets) Q12 Percent of Companies with Elevated and Above Financial Risk 361 Respondents Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 104 Financial Risk and Facility Reduction/Closing

Financial risk is defined as downside risk which Number of Respondents by estimates the potential for financial loss and uncertainty Financial Risk - 2013-2016 60 From 2013 to 2016: -Total companies identified as moderate/elevated risk and high/severe risk grew by 48.3% 50 Propulsion-Related Facility

40 Reductions/Closings (Projected for 2017-2020) 10 30 8 53 55 48 6 20 40 9 4 7 35 34 Number of Respondents of Number 2 28

10 20 Facilities of Number 0 Reducing Operations Closing/Shutting Down

3% of propulsion-related facilities (16 of 531) are 0 projected to either reduce operations (9) or close (7) 2013 2014 2015 2016 between 2017 and 2020 Moderate/Elevated Risk High/Severe Risk

Q2, Q9 Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 105 Organization Standards/Certifications Standards/Certifications Organizations are Currently Holding or Pursuing

ISO 9001 225 12

AS9100 136 12

AS9100D 54 84

NADCAP 68 7

Currently Holding Total: 962 Independent/Internal (From Customer) 46 3 Pursuing Total: 175

ISO 14001 38 3 19 of 361 respondents had to requalify for propulsion-related purposes, FAA 27 1 which cost an average of $33,067 with potentially high variability J-STD-001DS 25 1

AMS 13 2

0 50 100 150 200 250 Number of Responses

Currently Holding In Process

Q13, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 106

Additive Manufacturing / 3-D Printing Level of Involvement 300

250 24% of survey respondents utilize additive manufacturing/3-D Printing. Most lower-tier respondents do not

200 The business types covered include: distributor, holding company, laboratory, manufacturer, non-profit, prototype manufacturer, research and 150 development, service provider, and testing facility 273

100 Number of Respondents of Number

50 53 9 26 0 None Propulsion Non-Propulsion Both

None Propulsion Non-Propulsion Both

Source: U.S. Department of Commerce, Q14, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 107 Additive Manufacturing / 3-D Printing Participation Participation By Application Area

Research and Development 10 22 33

Prototyping 10 22 33

Tooling/Machining 7 19 25

Direct Manufacturing 6 16 21

Integration into Systems/Subsystems 8 10 12

A.M./3-D Design Products/Services 2 9 12 Other Prop Non Both Fixtures - - 3 A.M./3-D Design Outsourcing 2 5 4 Testing - - 1 Advisory Services - 1 - Other 1 4

0 10 20 30 40 50 60 70 Number of Responses Propulsion Non-Propulsion Both

Q14, B Source: U.S. Department of Commerce, 88 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 108 Additive Manufacturing / 3-D Printing Participation By Process Type

Machining/Finishing A.M./3-D Products 10 10 13

Powder Bed Fusion 4 11 14

Material Extrusion 1 10 8

Directed Energy Deposition 7 4 6

Other 2 8 3 Other Prop Non Both 3-D Welding 2 3 4 FDM/FFF 1 2 2 VAT Photopolymerization 2 3 1 Plastic-related - 3 - SLA Castings 1 - - Material Jetting 2 4 Cold Spray - 1 - Binder Jetting 2 Composite Lay-up - 1 -

Sheet Lamination 1 EBAM - - 1 Liquid Additives - 1 - Continuous Liquid Interface Production 1

0 5 10 15 20 25 30 35 Number of Responses

Propulsion Non-Propulsion Both Q14, C Source: U.S. Department of Commerce, 88 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 109 Additive Manufacturing / 3-D Printing Propulsion-Related Investment – 2013-2016

$2,500 62 respondents listed either “Propulsion” or “Both” to indicate their level of involvement in additive manufacturing/ 3-D printing. $2,000

$1,500

$1,000 $2,028.6

$1,515.9

$500 InvestmentSpendingMillions)($ $511.4 $353.3 $0 2013 2014 2015 2016

Source: U.S. Department of Commerce, Q14, D Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 62 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 110

Capital Expenditures Median Capital Expenditures by Year – 2013-2016

$700

$600

$500

$400

$300 $610.0 $595.0

$474.0 $200 $374.0

MedianCapital Thousands)Expenditures ($ $100

$0 2013 2014 2015 2016 Source: U.S. Department of Commerce, Q15a, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 338 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 111

Capital Expenditures Average Capital Expenditures by Year – 2013-2016

$70

$60

$50

$40

$30 $57.4 $51.7 $47.5 $43.3 $20

Average CapitalExpenditures ($ Millions) Average $10

$180

$160

$140

$120

Related CapitalRelated - $100

$172.5 $80 $164.7 $133.0

$60 $114.7 Expenditures ($ Thousands) Expenditures($

MedianPropulsion $40

$20

$0 2013 2014 2015 2016

Source: U.S. Department of Commerce, Q15a, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 153 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 113 Capital Expenditures Average Propulsion-Related Capital Expenditures by Year – 2013-2016

$12

$10

Related CapitalRelated - $6 $10.5 $9.4 $4

ExpendituresMillions)($ $6.6 Average Propulsion Average $2 $4.4

$0 2013 2014 2015 2016

Source: U.S. Department of Commerce, Q15a, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 153 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 114 Capital Expenditures Organization CapEx Adversely Impacted by Reductions in USG Spending – 2013-2016 Overall CapEx Propulsion-Related CapEx

38, 54, 11% 15% Negative Impact No Negative307, 32310.8%, Impact85% 89% 82.23%

Adverse Impact Adverse Impact No Adverse Impact No Adverse Impact

Source: U.S. Department of Commerce, 15a, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 115 Capital Expenditures Anticipate Organization’s CapEx Will Be Adversely Impacted by Reductions/Fluctuations in USG Spending – 2017-2020

Overall CapEx Propulsion-Related CapEx

47, 35, 13% 10%

No Negative Impact 84.5%314, 326, 87% 90%

Anticipate Adverse Impact Anticipate Adverse Impact Do Not Anticipate Adverse Impact Do Not Anticipate Adverse Impact

Source: U.S. Department of Commerce, 15a, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 116 Production/Capacity Capacity and Utilization - 2016 • “Utilization” refers to the fraction of an organization’s potential output that is actually being used in current production. Potential output is based on a 7 day-a-week, 3x8-hour shift production schedule

• 311 organizations reported an average utilization rate of 61.4%, with 231 of these organizations reporting a propulsion-related utilization rate of 38.8%

• 262 organizations reported an average of 18 weeks to reach 100% utilization, with 240 organizations reporting an average of 22 weeks to reach 100% propulsion-related utilization

• Some organizations had difficulty reporting utilization rates because they are distributors, service providers, etc.

Q15a, C Source: U.S. Department of Commerce, 311 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 117 Production/Capacity Which constraints listed would your organization face during a surge in demand for propulsion-related products? 180 Comments: 164 • Labor, time, and inventory constraints 160 • Accommodate for recruitment, training, equipment, modification of facilities, suppliers, regulatory approval, and funding • Need technical skilled workers 140 • Noted productivity impact of regulatory burdens and audits • Ability to rapidly shift resources to face a surge in demand due to their small percentage of propulsion-related work 120 • Already plan for potential surges in demand 105 100

79 80 74

60 55 Number of Responses of Number

0 Workforce Capital Inventory Funding Quality Control Types of Constraints

Q15a, C Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 311 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 118

Participation in Propulsion-Related Cost Sharing Arrangement Types

Most Common Past and Future Cost Sharing Arrangement Types

U.S. Government-Sponsored 26 20

Partnership With Subcontractor 16 13

Public-Private Partnerships 18 15

Partnership With Downstream Suppliers 12 9 Examples: University-Sponsored: For R&D and non- Partnership With Subsidiary 8 profit goals 6 Inter-Agency: Reduce risk, leverage investments, utilize different talent and skill Inter-Agency Cooperation 8 sets, required by sponsor

6 Cost Sharing Arrangement Type Arrangement Sharing Cost University-Sponsored 8 4

0 5 10 15 20 25 30 Number of Responses Future (2017-2020) Past (2013-2016)

Source: U.S. Department of Commerce, Q15b, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 119 Cost Sharing Arrangements By Deterrents

Financial Concerns 25

Intellectual Property Concerns 17

Contract Vehicle 13 28 organizations responded “Yes” for deterrents to cost sharing arrangements Regulatory Burden 13

Legal Time/Burden 11 “The intense requirements and regulations required to Legal Costs 10 obtain and maintain classified computing equipment (are a deterrent)” Logistics/Operations 10 - Small Business

Export Control Adherence 8

0 5 10 15 20 25 30 Number of Responses Source: U.S. Department of Commerce, Q15b, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 28 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 120 Support to USG Support to U.S. Government Agencies by Organization Size 2013-2017

90 82 42% of respondents did not 80 support USG agencies

70 67 61 60

30 Numberof Respondents 20

0 Small (<$10M) Medium ($10M - $50M) Large (>$50M) Organization Size Based on Revenue

Q5c, A Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 121 Support to USG Top 10 Federal Agencies Supported (All Contracts) NASA 61 61 88

USAF 48 57 98

U.S. Navy 49 50 85

U.S. Army 38 45 73 Other Direct Both Indirect MDA 17 22 62 DOD Other 14 4 4 Misc. 6 1 3 Department of 4 1 1 DARPA 22 23 39 Transportation Defense Logistics 4 - - DOE 23 16 30 Agency National Science 2 1 - Foundation Research Other/Misc 36 11 14 1 2 - Laboratories Classified - 1 2 USMC 11 11 35 Coast Guard 1 - 1 EPA 2 - - Department of 1 - 1 Intelligence 8 11 12 Agriculture U.S. Postal Service - - 1 Nuclear Regulatory 0 50 100 150 1 200- - Number of Responses Commission FDA - - 1 Sample does not include “N/A” entries Direct Both Indirect IRAPA - 1 - Q5a, A Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 122 Propulsion-Related Support to USG Top 10 Federal Agencies Supported (All Contracts) NASA 74 45 91

USAF 51 60 92

U.S. Navy 28 80 76

U.S. Army 16 75 65

MDA 37 26 38

DARPA 17 37 30

DOE 3 49 17

Other/Misc 7 40 14

USMC 4 38 15

Sample does not include “N/A” entries Intelligence 7 11 13

0 50 100 150 200 Number of Responses Propulsion Non-Propulsion Both Q5a, A Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 123 Support to USG Programs Supported by 25 or More USG Dependent Respondents

70 210 respondents supported USG 60 Programs. Some reported supporting 50 multiple USG Programs

63 30 58 49 48 46 20 43 39 38 36 36 35 34 30 29 29 29 28 27 26 25 25 10

Number of Responses per Program per Responses of Number 0

Q5c, B Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 124 Support to USG Programs Supported by 25 or More USG Dependent Respondents With Non-U.S. Employees (Top 5 Countries) 350 33% of Non-U.S. employees were 300 identified as engineers

250 14% of Non-U.S. employees supported small liquid propulsion systems 200 India and China account for 55% of all Non-U.S. employees that support 150 USG programs.

100

0 Number of Responses per Program per Responses of Number

Non-U.S. employees are not program specific and can be accounted for in more than one USG program India Mexico China Canada Philippines

Support to USG Propulsion/Non-Propulsion-Related Support to USG JANNAF Agencies

U.S. 18 22 34 20 23 39 156 Army

U.S. 24 24 43 26 26 41 184 Navy

USAF 33 41 61 15 16 37 203

NASA 48 48 62 13 13 26 210

0 50 100 150 200 Number of Responses Direct-Propulsion Both-Propulsion Indirect-Propulsion

Direct-Non Propulsion Both-Non Propulsion Indirect-Non Propulsion

Q5a, A-E Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 126

Financial Risk of Organizations that Support USG JANNAF Agencies

250 Insufficient data is a result of unavailable/missing data and source data mismatches 10 200 12 25 17 9 16 34 29 150 9 Financial Risk 11 35 High/Severe

30 Insufficient Data Moderate/Elevated 100 Low/Neutral

Numberof Responses 140 146 124 50 106

0 USAF Army NASA Navy

Q5a Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 127

High/Severe Risk Organizations That Support USG JANNAF Agencies – 2013-2016

4 out of 16 or 25% of high/severe risk organizations support all 4 listed USG JANNAF Agencies across 10 Army programs

1 Not Shown: USAF & NASA: 1 Army & Navy: 1 1 *Denotes respondents that support all 1 JANNAF agencies USAF 1 1 4 2 NASA USG/Commercial Number of 2 Program* Respondents 1 SpaceX - Falcon 9 2 M270 MLRS 2 RAM 2 Antares 1 Atlas V 1 SLS Exploration Upper State 1 Navy EELV 1 Griffin 1 Javelin 1 MGM-140 (ATacMS) 1

Q5a Source: U.S. Department of Commerce, 16 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 128

High/Severe & Moderate/Elevated Risk Organizations that Support USG JANNAF Agencies – 2013-2016

19 out of 63 or 30% of high/severe or moderate/elevated risk organizations support all 4 listed USG JANNAF Army Agencies across 10 programs Not Shown: 3 USAF & NASA: 3 Army & Navy: 3 3 *Denotes respondents that support all 2 JANNAF agencies USAF 1 9 19 7 NASA USG/Commercial Number of 6 Program* Respondents 3 2 Atlas V 7 Delta IV 6 Delta IV - Heavy 6 2 Atlas V - Centaur 5 Atlas V - CCB 5 Delta IV - CBC 5 Navy Vulcan 5 Antares 4 Blue New Shepard 4 CST100 4

Q5a Source: U.S. Department of Commerce, 63 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 129 Support to USG Participation in Small Solid Engine/ Motor Programs – 2017-2018 SLS Launch Abort 23 2

SLS Jettison Motor 18

SLS Booster Separation Motor 16 2

Trident V5 - Launcher System Motors 15 An additional 55 responses were SLS Attitude Control Motor 14 1 reported as “Other” small solid engine/motor programs (53 currently STAR 48BV Solid Rocket Motors 12 and 2 between 2013-2016). These fell outside the programs listed (ex. NASA Oriole Rocket Motor (second stage) 11 THAAD Motors, Hydra Motors, Tomahawk Motors, Atlas Motors, etc.) Trident V5 - Post Boost Motors 10 1

Trident V5 - Vector Control Motors 8 1 These programs are either directly or Black Brant V (third stage) 6 indirectly related to USG. They may be commercial, but used by the military Trident V5 - Third Stage Eject Motors 5 or other agencies

NASA Peregrine Army Motor 5

Trident V5 - Fairing Eject Motors 4

Other 53 2

0 10 20 30 40 50 60 Number of Responses Yes No, But Supported Between 2013-2016

Source: U.S. Department of Commerce, Q5b, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 130 Support to USG Participation in Small Liquid Engine/Motor Programs – 2017-2018

SpaceX SuperDraco 15 1 An additional 38 responses were reported as “Other” liquid SpaceX Draco Thrusters 13 1 engine/motor programs (36 currently and 2 between 2013-2016). These fell outside the programs listed (ex. NASA Lunar Flashlight, Moog Virgin Galactic NewtonThree 10 1 Monarc, NASA NEA Scout, etc.)

These programs are either directly or SpaceX Kestrel (upper stage) 11 indirectly related to USG. Participation can be commercial and used by the military or other agencies Virgin Galactic NewtonFour 9 2

Other 36 2

0 5 10 15 20 25 30 35 40 Number of Responses Yes No, But Supported Between 2013-2016

Source: U.S. Department of Commerce, Q5b, B Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 131

Support to USG Participation in Large Solid Engine/Motor Programs – 2017-2018

Orbital ATK SLS Booster 30 1

Orbital ATK GEM 60 25 1

Aerojet Rocketdyne AJ-60A* 25 An additional 16 responses were reported as “Other” large solid Orbital ATK Castor 30 (A, B and/or XL) 22 1 engine/motor programs (13 currently and 3 between 2013-2016). Orbital ATK GEM 63XL 20 1 These fell outside the programs listed (ex. Super Strypi (Leonidas), Minotaur, Orbital ATK These programs are either Other 13 3 EELV, Atlas 5, etc.) directly or indirectly related to USG. They may be commercial, but used by the 0 5 10 15 20 25 30 35 military or other agencies. Number of Responses Yes No, But Supported Between 2013-2016

Source: U.S. Department of Commerce, Q5b, C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 132 Support to USG Participation in Large Liquid Engine/Motor Programs – 2017-2018 Aerojet Rocketdyne RL10 (A, B and/or C) 49 2 Aerojet Rocketdyne RS-68 (including A) 41 3 Aerojet Rocketdyne RS-25 35 1 Aerojet Rocketdyne AR-1 Booster 32 2 Aerojet Rocketdyne J-2X 26 6 SpaceX Merlin 1D 23 1 Blue Origin BE-4 21 2 Blue Origin BE-3 21 4 SpaceX Merlin 1D Vacuum (MVacD) 17 An additional 21 responses SpaceX Merlin 2 concept 15 were reported as “Other” SpaceX Raptor 15 1 large solid engine/motor programs. These fell outside Vulcan XR-8H21 (TBC) 9 the programs listed (ex. Delta Energomash RD-180 9 IV EELV, Blue Origin Shepard, Aerojet Rocketdyne AJ26 (first stage) 9 3 SpaceX Dragon, etc.) IHI Aerospace BT-4 2 1 Energomash RD- 181 11 These programs are either directly or Energomash RD- 193 1 indirectly related to USG. They may be Energomash RD- 191 1 commercial, but used by the military Energomash RD-151 1 or other agencies Other 21 0 10 20 30 40 50 60 Number of Responses Yes No, But Supported Between 2013-2016

Source: U.S. Department of Commerce, Q5b ,D Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION 361 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 133 Support to USG Top 15 Supported USG Programs and Systems

70 C: Centaur 63 SM: Standard Missile 60 58 CCB: Common Core Booster PAC: Patriot Advanced Capability 49 48 SLS: Space Launch System 50 46 THAAD: Terminal High Altitude Area Defense 43 39 38 40 36 36 35 34 33 29 29 30

0 Number of Primary Product/Service Associated Product/Service Primary of Number

USG Programs and Commercial Systems

Q5c, B Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 134 Support to USG Financial Risk of Organizations by Program/System - 2016 70 Insufficient data is a result of Financial Risk: based on profit margins, debt 2 unavailable/missing data and levels, liquidity, product dependence, and 60 6 3 source data mismatches performance over time 5 50 10 High/Severe Risk: organizations with low 4 4 profit margins, high debt levels, high product 10 4 2 4 dependence, and poor performance over time 40 9 1 1 1 5 10 9 4 1 6 3 1 3 3 4 30 5 2 1 2 8 7 6 8 7 3 6 45 6 20 40 36 35 Number of Reponses of Number 32 32 29 31 24 26 25 23 10 22 19 21

Low/Neutral Risk Moderate/Elevated Risk Insufficent Data High/Severe Risk

Q5c, B Source: U.S. Department of Commerce, 210 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 135 USG Contract Information Most Common Propulsion-Related Contract Type

Types of Contracts Used to Provide Do Particular Contract Types Inhibit/Discourage Ability to Propulsion Support Provide Propulsion 709 Products/Services? 700 Yes Do not Contract 600 with USG 30

500 An additional 43 responses were reported 119 as “Other” contract types as they fell 400 outside the programs listed (ex. Indefinite Delivery/Indefinite Quantity [IDIQ], Federal Acquisition Regulation [FAR], etc.) 300 212 No

200 163 Number of Contracts of Number

100 43 26 23 22 9 0 Fixed Price Cost Other Time and Best Value Lowest Price Incentive Reimbursement Materials Technically Acceptable (LPTA) Type of Contract

Q16, B-C Source: U.S. Department of Commerce, 242 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 136 USG Contract Information Most Concerning Contract Vehicles, Ranked 1-3 “Other” included contract types beyond those listed (ex. Indefinite Delivery/Indefinite Quantity 30 organizations reported particular contract types 14 [IDIQ], Federal Acquisition Regulation [FAR], etc.) inhibited/prevented them from providing propulsion- related support to the USG. Some reported multiple contract types as concerning 12

10 Fixed Price Comments: • Reported the high risk put on 3 1 contractors with this type of contract, 8 especially for small organizations • Reported the difficulty in accounting 13 3 1 for R&D estimates 6 2 • Suggested there should be variable

scope if utilizing this type of contract Number of Contract Vehicles Contract of Number 3 4 1 5 5 1 2 2 3 2 2 1 0 Fixed Price Other Cost Time and Lowest Price Incentive Best Value Reimbursement Materials Technically Acceptable (LPTA) Rank 1 Rank 2 Rank 3 Source: U.S. Department of Commerce, Q16, C, 1-3 Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 30 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 137 USG Contract Information Does Your Organization Effect of USG Acquisition Consider Itself Dependent on Reform on Business Lines* the USG? Helped Not Applicable 13, Hindered Unsure 35, 7% 17, 27, 10% Yes, 7% 9% 100, 28%

Neither, 151, No, 199, 55% * Blank 84% responses were not included

“Nobody comes to the small companies to get Dependency is based on an knowledge. USG not willing to understand organization’s own assessment of lower tier and know who is making the parts for its sustainability and operations the programs.” – Small Company

Q16, D-E Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 138 Perceived Support to USG Perceived Dependence USG - 2016 Respondents that are USG Dependent Financial Risk of Respondents by Financial Risk that are USG Dependent and High/Severe Risk Insufficient Data Engaging in DMSMS Activities Moderate/Elevated Risk Low/Neutral Risk Low/Neutral Risk Moderate/Elevated Risk

13 4, 36%

61 21 7, 64%

Of the 100 organizations that identified 11 respondents identified being their dependence on USG, 13 dependent on USG and identified respondents did not provide enough engaging in DMSMS activities. data to calculate financial risk.

Q16, E Source: U.S. Department of Commerce, 100 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 139

Perceived Support to USG Self-Determined Dependence USG JANNAF Agencies

Dependency is based on an organization’s own assessment of its sustainability and operations.

76: USAF USAF 25 26 25 support

73: NASA NASA 24 27 22 support

U.S. Navy 25 22 24 71: U.S. Navy support

62: U.S. Army U.S. Army 20 20 22 support

0 10 20 30 40 50 60 70 80 Number of Responses

Direct Both Indirect

Q16, E, 1 Source: U.S. Department of Commerce, 100 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 140

Counterfeit Parts

• Six organizations reported identifying counterfeit parts in 2013, 2014, and 2015

• Reported counterfeit parts included bearings, fabrications, electrical systems and components, and igniter systems and components

• Four organizations identified counterfeit parts as originating in the U.S., while two organizations identified counterfeit parts as originating outside the U.S.

• Nineteen organizations identified cyber security breaches as a threat to long-term viability. Of the nineteen organizations identified, three organizations also identify counterfeit parts as a threat

17b, D Source: U.S. Department of Commerce, 6 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 141 U.S. Air Force Release of Surplus ICBM Motors Respondent Perspectives - 2016 Indicate your organization’s anticipated harm/benefit Are you familiar with USAF resulting from the proposed plans to release surplus ICBM Does your organization perceive the release of surplus ICMB motors into the commercial release of ICBM motors as damaging? solid rocket motors by USAF market? Perceived Harm Respondents (361) Yes Direct 14 Yes, 36, Indirect 16 52, 14% 10% Both 6 Unsure Unsure 158 158, 44% None 167 No, No 309, 167, Perceived Benefit Respondents (361) 86% 46% Direct 12 Indirect 3 Both 4 Unsure 82 None 260

17b, E Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 142

Propulsion-Related Patents

• How many of your organization’s patents registered with U.S. Patent and Trademark Office (PTO) are propulsion-related?

• Thirty (30) respondents reported a total of 1,119 propulsion-related patents from 2013-2017 • Of the 30 respondents identified: 15 were large companies, 7 were medium companies, and 8 were small companies

• A single organization reported detecting a patent infringement

• The organization reported being unable to resolve the patent infringement issue • “They published proprietary information which they were prohibited from doing under an NDA they signed.” – Small Company

17b, G Source: U.S. Department of Commerce, 30 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 143 Diminishing Manufacturing Sources & Material Shortages (DMSMS) • 19 respondents indicated their facilities engage in DMSMS activities • A Diminishing Manufacturing Sources and Material Shortages (DMSMS) issue is the loss, or impending loss, of manufacturers or suppliers of items, raw materials, or software • Support of U.S. Agencies by those 19 respondents: 20

10 19 17 15 13 12 9 7 6 Number of Responses Responses of Number 4 4 3 1 0 2

Q17b, C Source: U.S. Department of Commerce, 19 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 144 Diminishing Manufacturing Sources & Material Shortages (DMSMS) Propulsion Industrial Base Support – By Business Categories

20 19 18 18 “Other” was most commonly identified by companies who 16 were unsure of how they supported propulsion- 14 14 related engines and systems

12 11

Number of Responses of Number 6 5

4 3

2 1

0 Electric Large Solid Test and Small Solid Small Liquid Large Liquid Other Propulsion Rocket Motor Evaluation Rocket Motor Propulsion Propulsion Business Category

Q17b, C 19 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 145 Diminishing Manufacturing Sources & Material Shortages By DMSMS Spending – 2013-2016

$127,023 $120,000

$106,228 $100,000 $102,633 $102,253

$80,000 Average DMSMS Spending: $5.76 Million

$60,000 Average NASA-Related DMSMS Spending: $0.80 Million

$40,000 $30,809

$20,000 DMSMS Spending ($ Thousands) DMSMS Spending($ $9,378 $10,353 $10,378 $0 2013 2014 2015 2016 Total DMSMS Spending NASA-Related DMSMS Spending

19 Respondents Q17b, C Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 146

Security: Cyber/Physical

• Cyber Security: The body of technologies, processes, and practices designed to protect networks, computers, programs, and data from attack, damage, or unauthorized access

• Commercially Sensitive Information (CSI): Privileged or proprietary information which, if compromised through alternation, corruption, loss, misuse, or unauthorized disclosure could cause serious harm to the organization owning it

• CSI Can Include: Customer/client financial records, intellectual property, internal communications, manufacturing and production line information, patents and trademarks, R&D information, and supplier/supply chain information

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 147 Security: Cyber/Physical Expenditures – 2013-2016 Total Expenditure on Cyber and Average Expenditure on Cyber and Physical Security Physical Security $1,200 $4.0

$3.5 $3.59 $1,000 $1,020 $3.32 $3.38 $3.11 $924 $3.0 $849 $2.83 $800 $2.5 $2.59 $705 $679 $600 $622 $2.0 $1.83 $1.81

($ Millions) ($ $1.5 ($ Millions) ($ $400 $378 $384 $1.0 $200 $0.5

Total Cyber/Physical Security Expenditures Expenditures Security Cyber/Physical Total $0 $0.0

2013 2014 2015 2016 Expenditures Security Cyber/Physical Average 2013 2014 2015 2016 Cyber Spending Physical Spending Cyber Spending Physical Spending

Q18, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 148 Security: Cyber/Physical Network Administration – 2016 Able to Detect the Responsibility for Number of Responses Theft of CSI? Computer Networks 0 50 100 150 200 250

130 No, 62 Internal IT Department 231 Unsure, 103 Internal IT Department and external 94 U.S. Service Provider 66 Yes, 196 46 Only U.S. External Service Provider 37

67 Not Applicable 12 Encryption of CSI Data 200 Internal IT Department and External 5 150 non-U.S. Service Provider 5 100 224 50 115 130 Both U.S. and Non-U.S. Service 9 0 Providers 4 In Storage Transmitted Across Transmitted (at rest) Internal Networks Outside Only Non-U.S. External Service 0 Oraganization's Provider 1 Networks

External Network Internal Network Source: U.S. Department of Commerce, Q18, C Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 149 Security: Cyber/Physical Direct JANNAF Suppliers and CSI Theft Detection Organizations that Cannot/Are Unable to Detect CSI Theft

50 46

40 31 30 30 28 30

16 16 17

20 Number of Respondents Respondents of Number

10 18 14 14 14

0 USAF Army NASA Navy Cannot/Are Unable Unsure

Q18, E Source: U.S. Department of Commerce, 165 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 150 Security: Cyber/Physical Direct JANNAF Suppliers Cyber Impacts by Type of DOD Service - 2013-2016

72 63 USAF Army NASA Navy

20 18 16 14 29 24 17 12 10 17 8 2 6 4

Number of Respondents Respondents of Number 2 0

Q18, E Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 151 Security Measures by Organization Size Large: >$50M Medium: $10M - $50M Small: <$10M (2016)

Large (129) Medium (104) Small (127) 0% 100% Penetration Test & Red Team Exercises Security Skills Assessments & Training Continuous Vulnerability Assessment Maintain/Monitor/Analysis of Audit Logs Inventory of Devices Inventory of Software Boundary Defense Secure Network Engineering Incident Response and Management Secure Configurations on Hardware Limit/Control of Network Ports/Services Application Software Security Secure Configurations Network Devices Account Monitoring and Control Controlled Access for Need to Know Data Protection Wireless Access Control Controlled Use of Admin. Privileges Data Recovery Capability Malware Defenses

0% 100% 0% 100%

Values denote % of Companies (e.g. 85- 0% - 60% 61% - 84% 85% - 100% 100% of Large Companies employ Malware 1 respondent excluded because they did Defenses not begin sales until after 2016 Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 Q18, D FOR PUBLIC DISTRIBUTION 360 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 152 Companies Seeking Cyber Security Support Large: >$50M Medium: $10M - $50M Small: <$10M (2016)

44% of companies seeking additional cyber security support 12, 18% are Small Businesses Large

29, 45% Small

25, 37% Medium

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 Q18, D FOR PUBLIC DISTRIBUTION 66 Respondents BIS/OTE U.S. Rocket Propulsion Assessment 153 Cyber Security Impacts and Actions of Malicious Cyber Activity – 2013-2016

Major New Investment in Cyber Security 106

IT Downtime 57

Costs from Damage Assessment/Remediation 38

Revised Approach to International Partnerships 26

Loss of Sales/Business Interruption 20

Significant Change in R&D Strategy 14

Damage to IT Infrastructure 12 Impact Experience

Damage to Production Capabilities or Systems 11 Action Undertaken Exfiltration of CSI Data 9

Exit from Foreign Markets or Market Segments 6

Exit from Product or Business Line 5

Theft of Software and/or Source Code 2

0 20 40 60 80 100 120 Number of Respondents

Q18, E Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 154 Top Organizational Challenges Large-Size Organizations (>$50M) Top 15 Rankings

Competition - Domestic 11 16 9 Reduction in U.S. Government Demand 8 13 11 Government Acquisition Process 5 14 12 Labor Availability 5 12 11 Aging Equipment 6 12 8 Government Purchasing Volatility 3 10 12 Skills Retention 9 16 High Fixed Costs 3 8 14 Labor Skills 2 11 12 Competition - Foreign 5 12 8 Material Availability - U.S. 3 4 17 Government Regulatory Burden 1 12 10 Labor Costs 1 10 12 Export Controls/ ITAR Regulations 1 11 10 Material Price Volatility 1 13 8

0 5 10 15 20 25 30 35 40 Number of Responses Primary Ranked Other Ranked Concerns Unranked Concerns Source: U.S. Department of Commerce, Q17a Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 129 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 155 Top Organizational Challenges Medium-Size Organizations ($10M - $50M) Top 15 Rankings Labor Availability 5 21 7 Labor Skills 7 15 9 Government Acquisition Process 2 19 5 Healthcare 6 13 4 Reduction in U.S. Government Demand 11 5 7 Government Regulatory Burden 5 6 11 Competition - Domestic 3 13 5 Government Purchasing Volatility 2 9 9 Export Controls 1 12 6 Access to USG R&D Funding 3 12 4 Labor Costs 1 7 8 Taxes 1 7 8 Supplier Reliability - U.S. 2 8 5 QA/QC Requirements (sosts, Lead Time, etc) 3 4 6 Program/System Cancellation 5 8

0 5 10 15 20 25 30 35 Number of Responses

Primary Ranked Other Ranked Concerns Unranked Concerns Source: U.S. Department of Commerce, Q17a Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 104 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 156 Top Organizational Challenges Small-Size Organizations (<$10M) Top 15 Rankings

Labor Availability 9 19 9 Government Acquisition Process 6 16 11 Competition - Domestic 6 15 12 Labor Skills 4 17 10 Healthcare 3 18 10 Government Regulatory Burden 6 16 8 Government Purchasing Volatility 6 7 15 Availability of Capital 8 12 6 Taxes 2 10 13 Export Controls 1 9 13 Aging Equipment 4 15 4 QA/QC Requirements (Costs, Lead Time, etc.) 1 9 13 Program/System Cancellation 7 14 Labor Costs 12 9 Access to USG R&D Funding 9 7 4

0 5 10 15 20 25 30 35 40 Number of Responses

Primary Ranked Other Ranked Concerns Unranked Concerns Source: U.S. Department of Commerce, Q17a Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 128 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 157 Competitiveness/Long-Term Viability Export Controls Sell Product/Services That Are Export Product/Services That Are Export Controlled (248) Export Controlled (158)

19, 12% 66, 19% 102, 28% 26, 7% 35, 22% 104, 11, 3% 156, 43% 66%

Yes - International Traffic in Arms Regulations Yes - International Traffic in Arms Regulations Yes - Export Administration Regulations Yes - Export Administration Regulations Yes - Both Yes - Both Unsure 248 of 361 respondents 158 of 361 respondents reported No reported selling export exporting product/ services that controlled product/services. are export controlled Source: U.S. Department of Commerce, Q17b, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 361 respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 158 Competitiveness/Long-Term Viability Export Controls – 2013-2016 Loss of Export Sales Opportunities Export Product/Services That Are of Propulsion-Related Export Controlled (158) Products/Services (60)

1 19 6 8 35 104 45

Yes - International Traffic in Arms Regulations Yes - International Traffic in Arms Regulations Yes - Export Administration Regulations Yes - Export Administration Regulations Yes - Both Yes - Both 15 of 158 directly attributed Unsure losses in export sales to export controls. Source: U.S. Department of Commerce, Q17b, A Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 158 Respondents FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 159 Competitiveness/Long-Term Viability Export Controls – 2013-2016 Countries Where Export-Related Sales Impact of Export Control Reform on Were Lost Propulsion-related Technology

Germany 7 France 6 3 United Kingdom 5 Israel 4 30 South Korea 3 96 Taiwan 2 Switzerland 2 China 2 Turkey 1 Russia 1 232 Respondents reported top three Poland 1 countries where sales were lost New Zealand 1 Netherlands 1 Italy 1 India 1 Favorable Unfavorable No Effect Unsure 0 1 2 3 4 5 6 7 Number of Organizations Who Lost Sales

17b, A&B Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 160

Competitiveness/Long-Term Viability Export Controls – 2013-2016

Actions Taken in Response to Export Controls ITAR Both EAR

Avoid Exporting 19 15 3

Incentivize "design-out" 14 6 -

Incentivize "ITAR Free" 13 6 -

Engage in Cost-sharing 7 3 1

Modify to avoid export-control 5 4 1

Reduce/eliminate investment in R&D 7 3 -

Related production outside the U.S. 6 3 -

Reduce/eliminate investment in production 6 3 -

Discontinue Production 2 5 1

Related R&D outside the U.S. 5 2 -

Cybersecurity 66

Export Licensing (ITAR/EAR) 55

Market Expansion/Business Growth 53

Continuous Improvement/Lean Manufacturing 44

R&D Assistance and Partnership 38

ITAR: International Traffic in Arms Quality Management and Control 38 Regulations

EAR: Export Administration Technology Acceleration 34 Regulations

Export Assistance 34 SBIR: Small Business Innovation Research

SBIR and STTR Contracts 34 STTR: Small Business Technology Transfer Design for Manufacturability 33

0 10 20 30 40 50 60 70 Number of Responses Q19, A Source: U.S. Department of Commerce, 361 Respondents Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 162

Highlight on China

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 163 Highlight China and the Propulsion Supply Chain Chinese Employees By Visa Type 120 A total of 158 Chinese Nationals Quotes Regarding China 110 (excluding Taiwan, Hong Kong, and and the Supply Chain Macau) were reported by 17 propulsion-related organizations. 100 However, most do not work in • “Chinese suppliers dump tungsten propulsion-related roles for the powders and semi-finished products surveyed organizations. in the U.S.” 80

China and Ownership • “Undercutting of price structure by Structure dumping of aluminum powder by 60 China.”

• Zero companies reported a Chinese parent company • “Availability of foreign made 40 • One company reported an spherical aluminum powders, internal/owned facility in China, particularly in the case of China 27 with no anticipated change in the market dumping practices, in next four years conjunction with the severe export 20 15 • Zero companies reported using licensing requirements for export of external facilitates inside China our product renders our Company 3 3 unable to compete in the non-U.S. 0 commercial market.” H1B F1 Green Card L O1A

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE U.S. Rocket Propulsion Assessment 164 Highlight China and the Propulsion Supply Chain Mergers, Acquisitions, Supplier/Customer As a supplier, China provides Raw materials (including Additive Divestures (MADs) and Manufacturing Stock), Solid rocket 10 propellant material, Weld wire, Joint Ventures (JVs) 10 Other Systems and Services, and 9 All Other 8 8 8 As a customer, China buys propulsion-related Raw materials (including Additive Manufacturing 7 Stock) 6 6 Companies engaging in JVs in China reported “Broaden customer 5 base” and “Improved access to 4 foreign markets” as the top reasons 4 3 Companies engaging in MADs in 3 China reported “Broaden customer 2 base” and “Reduce costs” as the 2 1 reasons

1 0 China as Propulsion Supplier 0 China as Propulsion Customer China MADs China JVs

Source: U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation, RPIBA, 2018 FOR PUBLIC DISTRIBUTION BIS/OTE 165

BIS/OTE Contact Information

Brad Botwin Erika Maynard Director, Industrial Studies Special Projects Manager (202) 482-4060 (202) 482-5572 [email protected] [email protected] Jason Bolton Senior Trade and Industry Analyst (202) 482-5936 [email protected]

Government Analysts: Jennifer Rice, Trade and Industry Analyst (Project Lead) Moriah Phillips, Trade and Industry Analyst Support Staff: Alex Csanadi, Alexander Werner, Ashira Naftali Greer, Caela Mandigo, Camden Landew, Christopher Whittle, Cole Welch, Connie Lee, Gauri Deshpande, Hannah Kim, Ian Bonanno, Ian Kearns, Kimberly Kruse, Lea Carroll, Lena Richenberg, Morgan Hughes, Norris Kpamegan, Ormond Derrick

U.S. Department of Commerce, Bureau of Industry and Security Office of Technology Evaluation HCHB 1093, 1401 Constitution Avenue, NW Washington, D.C. 20230 http://www.bis.doc.gov/DIB