National Aeronautics and Space Administration’s (NASA) Human Space Flight Industrial Base in the Post-Space Shuttle/Constellation Environment June 2012 PREPARED BY U.S. DEPARTMENT OF COMMERCE BUREAU OF INDUSTRY AND SECURITY OFFICE OF TECHNOLOGY EVALUATION FOR FURTHER INFORMATION ABOUT THIS REPORT, CONTACT: Jason Bolton, Trade & Industry Analyst (202) 482-5936 Anna Bruse, Trade & Industry Analyst (202) 482-7418 Erika Maynard, Trade & Industry Analyst (202) 482-5572 Christopher Nelson, Trade & Industry Analyst (202) 482-4727 Teresa Telesco, Trade & Industry Analyst (202) 482-4959 Brad Botwin, (202) 482-4060 Director, Industrial Base Studies [email protected] Fax: (202) 482-5361 Interns – Meaghan Archer, Lacey Frost, Meryl Nolan, Ryan Olivett, Jamie Tkach For more information about the Bureau of Industry and Security, please visit: http://www.bis.doc.gov/defenseindustrialbaseprograms Table of Contents Executive Summary ...................................................................................................................... 1 I. Introduction .............................................................................................................................. 3 Study Purpose ............................................................................................................................. 4 Study Authority ........................................................................................................................... 4 Study Methodology ..................................................................................................................... 4 Survey Respondents .................................................................................................................... 5 Study Findings ............................................................................................................................ 6 Select Study Conclusions .......................................................................................................... 16 II. Company Profile of Survey Respondents ........................................................................... 18 A. Survey Respondents and NASA Programs Supported ....................................................... 18 B. Business Lines ..................................................................................................................... 20 C. Company Locations............................................................................................................. 21 D. Company Certifications and Supply Chain Management Practices ................................... 23 E. Method of Sale to NASA .................................................................................................... 25 F. NASA Customers ................................................................................................................ 26 G. Dependency on NASA-Related Business ........................................................................... 27 III. Products and Services ......................................................................................................... 28 A. Participation in NASA HSF Program Elements ................................................................. 28 B. Product and Service List Breakdown .................................................................................. 28 IV. NASA Supplier Sales ........................................................................................................... 33 A. Total Company Sales Including NASA Sales ..................................................................... 33 B. Government/Non-Government Sales .................................................................................. 36 C. NASA Sales......................................................................................................................... 39 D. HSF Sales - Shuttle, ISS, and CxP ...................................................................................... 40 E. Non-U.S. Sales .................................................................................................................... 46 F. Impacts of Export Controls .................................................................................................. 49 G. Capacity Utilization Rates .................................................................................................. 52 H. Machinery, Tooling, and Facilities ..................................................................................... 54 I. Top Space-Related Customers.............................................................................................. 55 V. Employment ........................................................................................................................... 58 A. Total Aggregate Employment ............................................................................................. 58 B. Personnel Categories Difficult to Hire and Retain .............................................................. 62 C. Critical Personnel Skills and Competencies........................................................................ 65 D. Production and/or Inspection Personnel with NASA-Required Formal Qualifications/Certifications ..................................................................................................... 66 VI. Research and Development ................................................................................................ 68 A. Overall Research and Development Expenditures .............................................................. 68 B. NASA-Related R&D Expenditures ..................................................................................... 72 C. Overall R&D Funding Sources ........................................................................................... 76 D. NASA-Related R&D Funding Sources............................................................................... 79 E. R&D Employment ............................................................................................................... 81 VII. Capital Expenditures ......................................................................................................... 85 A. Total Capital Expenditure Breakdowns .............................................................................. 85 B. Total Capital Expenditure Trends between 2007-2010 ....................................................... 88 C. NASA-Related Capital Expenditure Trends ....................................................................... 92 D. Capital Expenditures as a Percentage of Total Sales .......................................................... 94 VIII. Supply Chain Relationships ............................................................................................ 97 A. Mergers and Acquisitions ................................................................................................... 97 B. Joint Venture Relationships ................................................................................................ 99 C. U.S. and Non-U.S. Competitors ........................................................................................ 100 D. U.S. and Non-U.S. Suppliers ............................................................................................ 104 IX. Future Outlook for NASA Suppliers ............................................................................... 110 A. Impact of Space Shuttle Retirement and Constellation Program Transition .................... 110 B. Preservation of Current Capabilities and Workforce ........................................................ 111 C. Existing Business Plan and Product Line Modifications .................................................. 115 D. Scheduled Business Plan and Product Line Modifications ............................................... 118 E. Current and Future Participation in Commercial HSF Programs ...................................... 120 F. Impact on Other USG Agencies ........................................................................................ 124 G. NASA-Related Product Compatibility with Non-NASA Customers ............................... 127 H. Post-Shuttle/Constellation Guidance from Prime Contractors ......................................... 129 I. Post Shuttle/Constellation Guidance from NASA.............................................................. 132 J. Interaction with Economic Development Agencies/Organizations ................................... 134 K. Willingness to Work with NASA on Future Programs ..................................................... 135 L. Market Segments Served in Last 5 Years/Next 5 Years ................................................... 137 M. Actions Taken to Improve Competitiveness in Last 5 Years/Next 5 Years ..................... 138 N. Main Issues Affecting Long-Term Industry Viability ...................................................... 140 O. Recommended Policy/Regulatory Changes for the U.S. Government ............................. 142 X. Supply Chain Dependency on NASA ................................................................................ 144 A. Profile of NASA-Dependent HSF Suppliers .................................................................... 145 B. NASA Dependency and Sales ........................................................................................... 149 C. Production Capacity Utilization Rates for NASA-Dependent Suppliers .........................