Safety Recommendation A-15-025

In your previous letter, you indicated that to address this recommendation, you had developed two policy documents, P-002, “License and Permit Application Reviews and Issuance Procedures,” and P-011, “Pre-Application Consultation Process.”

Although these procedures addressed the issues in this recommendation, we were concerned that they may institutionalize the procedures and practices that we found in our investigation of the SpaceShipTwo accident, and we asked that you describe how P-002 and P-011 address those issues, including the “filtering” and “scrubbing” of questions, the lack of direct communication between AST technical staff and the applicant’s technical staff, and the pressure on AST technical staff to complete their evaluation within 120 days, even when technical questions remained unanswered despite being needed to complete an appropriate evaluation.

In your current letter, you describe the meetings and procedures, as well as the composition of the various teams involved in pre application coordination and license or permit evaluations. These procedures include discussing issues such as question filtering and scrubbing and communication between AST technical staff and the applicant’s technical staff, as well as safeguards to prevent pressure from management to complete an evaluation within 120 days, even when technical questions remain unanswered.

In your previous letter, you also indicated that AST was comprehensively upgrading its safety management system (SMS). In our report about the SpaceShipTwo accident, we said that we were encouraged by AST’s progress in implementing SMS and we believed that this recommendation would be satisfied if SMS principles were followed.

However, in our January 11, 2016, letter, we said that we were concerned by the statement in your October 30, 2015, letter that you were developing your SMS for AST because “it is critical that all AST staff members understand the FAA’s statutory authority is limited to the protection of public safety and property, national security and foreign policy interests of the United States.”

In our report about the SpaceShipTwo accident, we discussed that the dividing line between the questions that need to be asked to determine public risk and those to assess mission objectives was not always apparent; certain aspects of a vehicle’s design and operation could impact both public safety and mission safety assurance. We were concerned that the purpose of AST’s SMS would be to limit its review to a narrowly defined interpretation of your statutory authority, and that such a narrow interpretation would not be consistent with our recommendation. Your current letter included a copy of the December 2015 version of the AST’s SMS manual.

We reviewed Appendix A, “Public Safety During Commercial Space Operations,” of this manual, and it addresses our concerns; therefore, Safety Recommendation A-15-25 is classified CLOSED—ACCEPTABLE ACTION.

-From Michael P. Huerta, Administrator: AST completed a comprehensive revision of our Safety Management System (SMS) manual to more clearly articulate our safety policy, safety risk management, safety assurance, and safety promotion for commercial space transportation. The AST SMS reflects an integrated framework of formalized roles, responsibilities, accountabilities, policies, and procedures that are used to manage safety in the course of AST's day to day operations. The revised AST SMS Manual was published in December 2015, and all AST staff were subsequently trained on the content. Further, all new staff are trained in the SMS as part of the new employee orientation.

The AST SMS Manual is available at the following Web site: https://www.faa.gov/about/initiatives/sms/referencelibrary/policyand_requirements/media/AST_SMS_Manual_V2.0.pdf

The Board requested that we provide additional clarity in two areas of concern: the first is a perceived Jack of technical staff engagement with the applicant, and the other is how staff are guided in considerations that may affect both public safety and mission assurance aspects within our revised SMS framework. Both of these areas are addressed in our P-002, License and Permit Application Reviews and Issuance Procedures, and P-0 I I, Pre-Application Consultation Process, documents and in our SMS. Under our framework, cross-functional teams comprised of staff from all operational divisions conduct both the pre-application coordination and license or permit evaluations.

Integrated team operational practices are intended to provide effective communications both between staff and applicants and within AST. Pre-application and evaluation staff team leads are responsible for scheduling meetings with applicants, and the team leads are required to invite all team members to these technical meetings. Team members may opt not to participate in a particular meeting if the subject of the meeting is outside their specific area of interest or responsibility.

Technical staff that are supporting teams are responsible for raising any potential issue or concern that they may have during the course of their activities, with the goal that these issues or concerns are identified as early as possible and resolved within the team. If, however, staff cannot resolve concerns within the team there are several avenues for them to elevate their concerns with management. AST management uses several meeting venues to encourage open communication and ensure issues are identified, views are heard and discussed, and appropriate actions are taken to disposition and resolve them. The associated meeting structure includes:

We are concerned by your statement that AST technical staff members have always been engaged in direct communications with applicants on technical matters. We found the opposite in our investigation of the SpaceShipTwo accident. We issued this recommendation because we found that, at the time of the evaluation of Scaled’s experimental permit applications, AST management underutilized AST evaluators’ expertise, even though the AST staff understood the risks associated with commercial space flight.

AST management appeared to be more concerned with ensuring that the FAA’s authority was not being exceeded beyond defined limits and maintaining the timeframe in which to approve experimental permit applications. Further, we found that the filtering of questions and the lack of direct communication between AST technical staff and Scaled technical staff impeded Scaled’s ability to take advantage of AST’s safety expertise. We note that you recently developed and issued new internal operating procedures P 011 covering pre-application coordination with prospective applicants, and that you revised P 002 for conducting reviews and issuing licenses and experimental permits.

You indicated that each of these procedures provides comprehensive guidance for the composition, management, and responsibilities of AST teams working in these areas, including such areas as coordination and communications within the team and with an applicant. The procedures also define the statutory basis and procedures used for conducting licensing and permit evaluations. The procedures also discuss the resolution of technical issues within the team, and the elevation of these issues to AST management if they cannot be resolved at the team level.

Although these procedures address issues in this recommendation, we are concerned that the procedures may institutionalize the procedures and practices that we found in the SpaceShipTwo investigation. We ask that you describe how P-011 and P-002 address the “filtering” and “scrubbing” of questions and the lack of direct communication between AST technical staff and the applicant’s technical staff, as well as the pressure on AST technical staff to complete their evaluation within 120 days even when there are unanswered technical questions that need to be answered before an appropriate evaluation can be completed.

In your letter, you indicated that AST is conducting a comprehensive upgrade of its safety management system (SMS). In our report about the SpaceShipTwo accident, we said that we were encouraged by AST’s progress in implementing SMS and we believed that, if SMS principles were followed, they would constitute an effective means for enhancing the regulatory oversight of the commercial space industry and would satisfy this recommendation.

-From Michael P. Huerta, Administrator: AST technical staff members have always been, and will continue to be, engaged in direct communications with applicants on technical matters. However, the FAA has recognized the need to improve the guidance and policy provided for our technical staff. As a result, the FAA has taken steps to clarify and improve communications among the staff, management, and applicants during the permit and licensing evaluation process.

Upgrades to AST's procedures were completed in accordance with AST's September 2014 business plan. Under this plan, AST developed and issued in March 201 5 a new internal operating procedures document, P-0 11 , covering pre-application coordination with prospective applicants. AST also revised and consolidated its internal procedures for conducting reviews and issuing licenses and experimental permits with the release of P-002 in August 2015. Each of these procedures provides comprehensive guidance for: • The composition, management, and responsibilities of AST teams working in these areas, including such areas as coordination and communications within the team and with the applicant;

• Defining the statutory basis and conducting licensing and permit evaluations in accordance with the CST regulations and their associated FAA guidance and policy; and • Resolution of technical issues within the team, and the elevation of these issues to AST management if they cannot be resolved at the team level. Elevation to management is also required in cases where waivers, equivalent levels of safety, or the existing regulations, guidance or policy may not be sufficient due to novel aspects of proposed vehicle or its operations.

AST uses a Management Review Board (MRB) process when making license or permit determinations, including the need for any waivers or equivalent levels of safety findings. The MRB is made up of AST's executive leadership, its division managers, and chief engineer. MRB meetings are open to all AST staff members and all AST staff and management are actively encouraged to raise any concerns associated with the license or permit review during MRB meetings.

It is critical that all AST staff members understand the FAA's statutory authority is limited to the protection of public safety and property, national security and foreign policy interests of the United States. To support this need, AST is also conducting a comprehensive upgrade of its Safety Management System (SMS) process to more clearly articulate our safety policy, safety risk management, safety assurance, and safety promotion within the context of our legislative authority and regulatory framework for CST. The upgrade will also clarify the roles and responsibilities of AST's management and staff in accordance with the recent improvements to AST operating practices and lessons learned.