Letter from Rep. Wolf and Rep. Aderholt Regarding NASA’s Leasing of Pad 39A

Jul 22, 2013

The Honorable Charles Bolden
Administrator
National Aeronautics and Space Administration
300 E Street, SW
Washington, DC 20546

Dear Administrator Bolden:

We are writing regarding our strong concerns about NASA’s AFP for leasing Kennedy Space Center (KSC) Launch Complex 39A (LC-39A). Specifically, we are concerned about the possibility that NASA may lease this pad for exclusive use by one company – which would effectively preclude its use as a multi-user facility for an unknown duration. Given the strategic importance of this unique, taxpayer-funded asset, as well as NASA’s questionable actions surrounding this proposed lease, we expect that no action will be taken until the concerns detailed in this letter are addressed to our satisfaction.

In addition to our concerns about providing the pad to one exclusive user, we are also concerned about the terms of the proposed lease, which would essentially make this asset available at minimal cost to the selected entity – hardly a fair market rate for the value of the leased asset. Given that taxpayers have invested hundreds of millions, if not a billion, dollars in to develop this launch complex, there are serious questions of fiscal responsibility and transparency.

Additionally, there are serious concerns about how the terms of this lease will impact the ability of other NASA launch facilities to attract additional users. Clearly there is no way another NASA launch facility would be able to offer a company a fully-developed pad at a competitive price. Should NASA proceed with this lease at KSC without considering its implications for other launch complexes, it could undermine the agency’s efforts to encourage the greatest use of its other facilities. It is imperative that before any final decision is made, NASA must consider and report on the impact of this lease on its other facilities.

As you know, LC-39A and LC-39B are unique in their capabilities. Originally built at taxpayer expense for the Apollo program and further developed at taxpayer expense for the Shuttle program, these launch pads represent a unique national asset for the United States. In this context, it is surprising that NASA appears to be racing to lease LC-39A with little transparency and absent Congressional consent. It is also noteworthy that there is no requirement or deadline set by Congress compelling such urgent action to lease this facility.

That is why we were particularly concerned by allegations that NASA initially intended to provide a sole-source lease to one company – without holding a public solicitation – before other commercial users became aware of these plans and protested. Although a public solicitation has now been held, it is clear that many of the factors surrounding the decision to lease LC-39A remain ambiguous and merit much closer examination, including the terms of the selection criteria and the apparently rushed solicitation period.

The award for the lease to LC-39A also has significant impacts on the plans for its sister pad, LC- 39B. Relegating access to LC-39A to only one company would provide that company with an unusual advantage compared to other companies and would hinder the opportunities of other commercial providers; those providers have raised strong concerns about being forced to share the only other pad of this capability, 39B, with NASA’s heavy-lift Space Launch System (SLS). Again, these impacts do not appear to have been carefully considered or briefed to the Congress and industry,

There other reports circulating on Capitol Hill in response to this lease that are inconsistent and raise further concern. One such allegation is that it is not possible to have a multi-user facility at KSC, and therefore NASA must award LC-39A to a single company. Yet, at the same time, NASA appears to be marketing LC-39B – the SLS pad – as a commercial multi-user pad. If the two pads are nearly identical, why must NASA, allegedly, lease 39A to a single user but also market 39B as a multi-user facility. This logic is inconsistent and another example of NASA’s failure to rationalize its strategic use of its facilities.

Above all, we question the seeming desire by NASA to lease LC-39A to a single user for sole use rather to an entity that would ensure that the pad was re-developed as a multi-user pad, which could be made available to a number of commercial launch providers. Our understanding is that this lease could be extended to a single entity for up to twenty years; it seems premature to restrict use of this unique asset to one entity, given that the commercial launch market is still in development. Additionally, the decision to lease the pad prior to the anticipated “downselect” to the ultimate provider of crew services to the International Space Station seems inexplicably premature.

Further, there has been other conflicting information surrounding the cost of maintenance to NASA for LC-39A. According to NASA and other parties, the cost of maintenance is so high that it’s imperative that it be leased as soon as possible. However, reports about the annual maintenance costs range from $1-2 million per year to as high as $20 million per year according to certain sources. NASA should resolve this conflicting information, and provide Congress with the actual annual cost of maintenance for LC-39A, a detailed rationale for the anticipated cost of the lease to the entity selected, and information on whether the cost represents a fair market rate for the lease of the facility.

Before proceeding with any decision regarding the lease of LC-39A, we respectfully request a briefing as soon as possible and for you to provide us with all supporting documents necessary to address the concerns noted above.

Sincerely

Frank R. Wolf
Member of Congress

Robert. B. Aderholt
Member of Congress