Understand that it is not in our interest of the nation to have two providers and one of them go out of business and end up with a monopoly. Which means theres going to be some level of security. Would you agree with that . And are your investors, your parents, aware of that . The only data i have to operate at the moment is the forecast the government has provided for the space lift that occurs in that window of time. And its important to remember that were the ride for National Security assets. Theyre recapitalized in waves. So we are currently recapitalizing a set of National Security satellites that are well past their design life. Thats going to complete in a short number of years. The pipeline being designed and built, it drops from about eight to ten a year to five. And then that will be divided between at least two providers. So two or three. And thats not a sustainable economic model if you do not also have access to civil and commercial markets. Okay. Mr. Chairman, i yield back. Thank you very much. Mr. Kaufman, five minutes. Thank you, mr. Chairman. First, mr. Bruno congratulations for an outstanding record of success. Jeff besozos said, quote, ula has put a satellite into orbit almost every month for the past aift eight years. Theyre the most successful provider in history. Im proud that ula is headquartered in colorado. Im fully confident ula will remain very competitive in the future. You enjoy an exclusive contract because of your competence. But i want to ask you what exactly can congress do to ensure that across the board we have created an environment that promotes innovation while not unfairly tipping the Playing Field toward or away from any potential provider . Certainly. That reveals mr. Bezos is obviously a very intelligent man. So in order to have a fair and even Playing Field in the interest of the government and good forestry its important, of course, that the participant necessary that competition are able to bring competitive products to the marketplace. Thats why we need continued access to atlas. In addition to that, the competition itself needs to be fair and even. So we must be held to the same technical standards in terms of the performance and the missions that were able to fly as well as the contracting requirements. So today, the ula is required to perform to whats called far part 15 which are a set of very complex and sophisticated acquisition regulations. They require us to provide elaborate, extensive and Financial Reporting tracking and reporting systems. Our competitor in a commercial marketplace does not. So all of these elements have to be level. And then i also also advise the government that for National Security missions for which our nations mystery depends that a low price acceptable technical priced shootout is not an appropriate methodology. You wouldnt buy your car that way, you wouldnt buy your home that way and our soldiers lives could not be dependent upon it. So they should consider cost, equally balanced with technical performance, reliability, and schedule certainty. The assets are generally beyond their shelf life. That, too, should be considered. Thank you. Mr. Thornburg congratulations on a successful certification of the fall con9. It was testified in this committee that you have ecaa auditors manufacturing audits right now and your cost and your rates have been audited. Was that testimony correct . And can you briefly describe the audit that spacex undergoes and the number of personnel resident at the spacex facilities. To your first question, was her testimony correct . I believe the answer to that is yes. With regard to the questions about dca audit and frequency and my position within engineering and working engine and Vehicle Development im not familiar with the frequency of the visits. I can tell you that were working very closely with the air force and the d. O. D. Id be happy to collect that information and get back to you. Id appreciate it if you would get back to us. I recognize the gentleman from colorado, mr. Lamborn for five minutes. Thank you, mr. Chairman, for having this very important hearing and thank you for the timeliness of this hearing. Mr. Thornburg b with id like to ask you about the current version of the merlin engine that youre using. Is the new baseline is the full thrust merlin engine, the new baseline for the falcon engine Going Forward and does spacex intend to use that system for upcoming dlv launches . The current engine were flying is the merlin 1d boost engine. Your reference to the full theft is a minor upgrade to that engine that basically takes the full potential of that engine system for future missions and the falcon 919. Now what are the differences between the two systems, both hardware and software . Ive heard that there are hundreds of differences. Is that correct . I cant recall the exact number of differences. I can say that from a technical engineeringwise, the differences are very minor in terms of the changes to the upgrades in the engine. Its all in line with our continual improvement of our Propulsion Systems and overall systems. But essentially were taking the existing merlin 1d with its present design and performance and taking the additional performance that we have available there and offering it to our customers and to enhance the performance of the falcon 919 system. What im trying to get at is with the changes that youve incorporated, does the previous certification cover the new what amounts to what i would consider a new version once you started making a lot of changes . As far as the certification effort to date, the recent certification of falcon nine, the merlin 1d and Going Forward, the bulk of that is identical. Were talking about minor upgrades to the system at all be reviewed through ongoing and future review board activity with the air force. So even though there are an undetermined number of changes, indeterminate number of changes you cant give a number you dont think that that amounts to anything worth recertifying . Or reopening the no i can comment that the ongoing dialogue with the air force through the certification process has been fantastic. Were working very closely with the air force as well as the aerospace corporation. The type of improvements and modifications that the falcon nine vehicle is no different than the improvements that have been taken on over the years. Okay. I just wish there was a little more certainty in this. You cant even tell me how many changes there are. I guess thats a concern. I think we should get to the bottom of. Changing gears here ms. Van kleeck, what technology does the rd180 use and why is it important that we bring that technology to the u. S. . Well, the rd180 is whats called an oxford stage Combustion Engine. Its a closed cycle engine its the most efficient engine that can be chemical rockets that can be used. The Space Shuttle is also one of these engines. The russians pie your neared and perfected the oxford stage Combustion Engine during the cold war and the u. S. Didnt the u. S. Perfected solids and hydrogen systems. So its a high performing hydro cashedon system. Some of things that are in it are advanced coding, advanced materials. Its very compact, very high pressure. Those are things, particularly the materials were things that this country did not choose to pursue and did not develop. And so that is where the there is a Technology Gap in this particular variant of rocket engines in this country. Mr. Meyerson, would you agree with that assessment . In terms of the rd180 and the importance and the efficiency of the cycling, yes, i agree. If you look back to the time that lockheed martin, and the choice of the rd180 was an enabler for the atlas 5. Today, i think its time to take a fresh look and look at a new engine. This is the oxford stage combustion cycle is critical and thats what has been chosen. The b84 is the choice of natural gas and the repellant is one of those enablers. Thank you and thank you all for being here. I thank the gentleman. Well start our second round of questions. I was listening to my buddy from tennessee when he was talking about his chevy and dropping a new engine in. And how sometimes that wasnt all that easy. I made it very clear. My priority is to reengine the at last atlas five. He had an opportunity to meet with retired general tom stafford, also an apollo astro nault. And we both visited these topic with him. How big a deal is this to reengine this rocket . He basically said this is nothing. We reengine fighter chens jets for generations and thats much more complicated than what were talking about here. So with that back drop mr. Culbertson your company is converting to the rd180 russian engine. Is that correct . Considering your current experience, how easy is it to change to that vehicle . It depends on the period of it at the time that you move forward with it. The engine that we are using in the future generation of launch vej vehicles which we intend to start flying next year was specifically designed as a replacement. So the arrangement of the thrust back there, the piping, if you will, for the fuel systems, the connections, the size of the engine and the thrust levels were all very comparable to the nk33 because it had been in development for all tm ten years now to replace that engine on a couple of different russian rockets. So when we started talking to them over three years ago, they were pretty far along on that path already. There was a lot of analysis and whether we reached a point where we needed to move forward with another engine, it was the one that was most likely to succeed in our application and the one that was available to make sure we could deliver cargokargcargo. Ms. Van kleeck, youve had heard some reference to it today and in the next panel, were going to hear that its going to cost a significant amount of money to reengine the atlas five with the ar1. Can you address where 200 and as i understand it, its going to cost at least 200 million to modify the other spot for the arrow one. Can you address that . Yes, i can. The weve been working closely with ula for several years now on replacing an rd180 in various forms. Like i said, we have looked at this problem over the last ten years. We have an active contract right now identifying the specific changes that need to be made, assuming this goes into an at atlas five vehicle. For the record in terms of the estimate for those costs, ive heard a variety of numbers. Ive never heard a 200 million number. The number ive heard are in the low tens of millions of dollars. I think that cost estimates still needs to be refined but the type of modifications that are required are very minor. For the ar1 . For the ar1. Yes. Now, mr. Meyerson. Can i add to mr. Culbertsons comments. His response, the key word was it, ten years of investment by the russian government to develop a replacement for the nk33 which was developed into the av26 thats the key point ten years and we dont know how much money was invested. The b4 is being developed. Its fully funded. Were more than three years into the development. So this is real. Its not a paper engine. Great. Do you have any mr. Bruno has stated both the b4 and the ar1 would work on the atlas five with modifications. One with more modifications than the other. Can you describe the extent to which we would have to modify the at last five for your engine to work . I think thats a better question for mr. Bruno. Its but the engine, when youre developing a new engine you start with requirements and the details really matter. Because it is so far along in its development, those details are much more well understood so that mr. Brunos team at ula can look at that and design the right system to meet the National Security needs. Mr. Bruno, id love for you to visit there topic. This is an excellent sort of example of the difference between an engine provider and a launch Vehicle Service provider. It will not cost tens of millions of dollars to incorporate any version of an ar1. Recall that we started with an understanding that the performance level coming out of either of these two engines will not match the rd180 and we will be using a pair of engines to do that. Let me ask you, would the combined thrust of the two engines be comparable . Yes, it will. In fact, it will be larger than the two. In addition to that, the rd180 uses a novel control system to move the no, sir 8 and steer the rocket based on tapping off the engine fuel system. Thats a technology that does not exist in the United States. And by the way one that we do not have an interesting in developing. So there will be a new thrust sector control system to go along with that. So when we do all of that with the new performance point thats required and the new thrust levels that will be delivered, there will be instruct furs changes, there will be alterations to the pad to accomplish even the ar1. The number that was quoted was not unreasonable, but i think you will hear from the 200 million i think were going to hear from the air force later. Do you think thats accurate . I do think thats accurate. I can drive that number down if i am willing to leave the tank exactly the same size that i have on atlas. But if i do that because of the lower efficiency of that engine and its first generation as they launch system for several missions, i will be adding one or more solid rocket boosters to the launch vehicle. And so the cost competitiveness, the affordable of that system will be less than the at last today. So getting you those modifications moves you towards the new rocket system you want but is not necessary for the replacement engine that we are pursuing or that im pursuing. It will not lift the same missions. So i think youre asking me could i keep the tank size the same take the engine that i am that is made available to me strap on the extra strap ones and deal with the additional cost . I could did that for the first set within the fleet. So remember that the at last is a fleet of rockets. The least capable of which is equivalent to a falcon there are much more difficult orbits that we go to. Eventually, theres a limit to how many strap ones i can physically attached to the rocket because of the way the rocket is configured. Those missions would suddenly become out of reach of an atlas in this configuration without a tank to carry more fuel. So the be4 requires more extensive changes to our infrastructure and to our rockets. So what does the 200 million figure turn into . It would not be unreasonable to triple or quadruple that number. So 600 to 800 million. Yes. Tell me lets talk about the other infrastructure involved when we change lets say we change to a new rocket. And im not saying im ready to go there but what else is required for the launch . Modifications other than just the rocket. Dont you have to change the infrastructure that you use for the launch process . Yes. So you know, you could think of it in these pieces. Theres the rocket, theres the pad, factory, of course, with its tooling and then the equipment that we use at the launch site to integrate the rocket to the launch site with the satellite and roll it out. So those things are more dependent upon the physical size and considerations with what changes we have to make to accommodate the engine. So my colleague is correct there are far fewer changes with the ar1 because of the same propellant and so the diameter and length of the rocket will be much more similar, much more of the tooling in the factory can be the same. The equivalent at the launchpad can be only slightly modified and the pad will have smaller modifications. For the methane engine, the tent will be much larger. Ill have to replace much more tooling in the factory. Ill have to redo what is called the rocket platform and then the changes to the pad are more extensive. Are those costs part of that triple or quadrupling inspect. Yes. Okay. So that was a comprehensive figure. Maybe i missed it, but were you able to explain the difference in the 16month leave that you assumed blue originalin has over arrow jet and their development . Yes. So both companies are under contract with us. We have sort of weekly engagements, monthly formal reviews, were tracking both schedules side by side. As i mentioned in my opening remarks, several years later than blue origin. And that is slily the nature of the 16 months. This will be for all the witnesses. Do you agree that the government should own that until it makes in the system . Mr. Meyerson do you believe that we should own some of the intellectual Property Value . I think if the government fully invested in the system they should. I do agree. Companies also investing should own their i. Mr. Thornburg. I agree with my colleagues in that if the government fully invests for systems that are prioritily dwopt developed they would not. What if we pay for 60 of the Development Costs . Is that something that you believe should inhibit our owning a percentage of the intellectual Properties Value . I think it would depend on what type of development we were talking about in terms of the technology. If the technology was an offshoot of something that had been completely developed and invested inti the private corporation, maybe not. But i think it would be case dependent. Mr. Meyerson. I think theres Public Private partnershipes and theres mechanisms that can be in place to allow industry to invest and account for shared ownership. Thats one of my concerns. Weve already set aside a little over 400 million for this and we project by the time its all said and done, 1. 5 million will be spent in pursuit of this new engine. And as much as 800 million or more will be paid for by the federal government. It seems to be there should be some intellectual property that arises out of that. I want to ask the witnesses this. And this is for all the witnesses. Are there clear requirements from the air force as we go into this process about what theyre not only clear, but fair and reasonable . Mr. Meyerson . I think yeah, i think the requirements are clear, yes. Ms. Van kleeck . I assume youre representing the current acquisition process thats under way. Yes, maam. And theres a process thats well spelled out in that. It does focus on an ultimate launch service as opposed to an engine. But its spelled out. I think theres a lot of different paths that that particular process can go. Mr. Culbertson. Yes, sir. We understand the requirements of the air force and what theyre looking for and we think it is focused on a system that could be developed in a Public Private p