Says Agency Should Update Its Methodology To Assess Risks

A study conducted by the Government Accountability Office (GAO) found that the FAA report evaluating its maximum probable loss (MPL) methodology for commercial space launches did not fully address the evaluation and consultation requirements specified by the U.S. Commercial Space Launch Competitiveness Act (CSLCA).

According to the GAO, the federal government shares liability risks with the commercial space launch industry for accidents that result in damages to third parties or federal property. This arrangement requires space launch companies to have a specific amount of insurance to cover these damages. The government is potentially liable for damages above that amount, up to a cap GAO estimated to be $3.1 billion in 2017, subject to appropriations in advance.

CSLCA, enacted in 2015, directed the Department of Transportation, of which the FAA is a part, to evaluate its MPL methodology and, if necessary, develop a plan to update that methodology. The act also included a provision requiring GAO to assess FAA's evaluation and any actions needed to update the methodology.

A report issued this month discusses the extent to which (1) the FAA's evaluation report addresses the requirements in CSLCA and (2) the agency has addressed previously identified weaknesses in the MPL methodology. GAO reviewed documents and interviewed the FAA on its loss methodology evaluation and actions to address weaknesses.

The GAO recommends that the FAA should fully address mandated requirements in evaluating its MPL— probability thresholds, direct costs, and stakeholder consultations— and establish an estimated completion date for developing guidance on tools and methods to use for specific launch scenarios. The Department of Transportation concurred with the recommendations, and provided technical comments.

FMI: Full GAO report