Commercial Spaceflight Federation Seeks Bailout Money for Industry

by Douglas Messier
Managing Editor

With the economy grinding to a halt, the Commercial Spaceflight Federation (CSF) is seeking billions of dollars from the federal government to keep the rockets launching on time.

In a March 18 letter sent to Congressional leaders, CSF President Eric Stallmer proposed establishing “a $5 billion grant and/or low-interest loan program to ensure the continued availability of critical aerospace infrastructure, capability, personnel, and mission readiness to maintain assured access to space for national security, civil, and commercial space missions.

“This goal could be satisfied at least in part by considering aerospace/space launch as a ‘critical’ industry qualified under the $150 billion fund proposed by the White House earlier today,” the letter added.

CSF also asked Congress to:

• create a supply chain stabilization program to provide access to zero or low-interest loans for companies as bridge capital in supporting ongoing operations and downstream suppliers;
• provide refunds of all R&D tax credits accumulated through fiscal year 2019;
• direct the Export-Import Bank to speed up the processing of applications for the funding of overseas aerospace deals;
• designate the space manufacturing workforce and critical suppliers as essential and exempt production facilities from local closure orders; and,
• provide essential contractor status to companies serving critical national security needs to allow them to continue operations.

“To maintain operations of essential contractors while minimizing transmission of COVID-19, the Federal Government should make available funding for personal protective equipment (PPE), thermometers, and other support necessary for employees at ‘essential contractors’ to safely continue operations,” the letter said.

The CSF letter follows.

The Honorable Mitch McConnell
Majority Leader
United States Senate

The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives

The Honorable Steny Hoyer Majority Leader
U.S. House of Representatives

The Honorable Charles E. Schumer
Minority Leader
United States Senate

The Honorable Kevin McCarthy
Minority Leader
U.S. House of Representatives

18 March 2020

Re: Support critical aerospace capability to ensure mission readiness for critical access to space capability

Dear Congressional Leaders:

On behalf of the Commercial Spaceflight Federation (CSF) and our more than 85 member organizations, I write to seek your support for protecting America’s commercial space industrial base during this time of crisis. Access to space is fundamental to the Nation’s immediate national security, economic, and scientific goals. However, the ongoing COVID-19 situation threatens to inflict lasting harm to this capability without urgent Congressional action.

The United States partners with the domestic commercial space industry to conduct all of its missions to space, including those for the Department of Defense, the Intelligence Community, and NASA. As commercial space companies and government agencies work diligently to prevent the spread of this virus and protect our workforces, the sudden slowdown in programmatic work, combined with the possible shuttering of federal space launch ranges, poses significant challenges to operational continuity for assured access to space for critical missions, and substantial impacts to the commercial space supply chain.

We ask for your attention to six primary measures to provide near-term relief and to maintain America’s assured access to space for NASA, the Space Force, and the Intelligence Community:

1) Establish a Critical Aerospace Capability Grant/Loan Program to ensure mission readiness for critical access to space capability. This program would seek to establish a $5 billion grant and/or low-interest loan program to ensure the continued availability of critical aerospace infrastructure, capability, personnel, and mission readiness to maintain assured access to space for national security, civil, and commercial space missions. This goal could be satisfied at least in part by considering aerospace / space launch as a “critical” industry qualified under the $150 billion fund proposed by the White House earlier today. If companies supporting national security or civil space activities are unable to conduct missions for the Government due to closures of federal facilities (including Launch Ranges), they will not be able to receive mission completion milestone payments, resulting in a significant shortfall of operating capital.

2) Speed up Ex-Im Bank Operations. The Ex-Im bank facilitates the export of U.S. goods and services and provides necessary financing solutions that keeps our nation’s companies competitive overseas. In addition, more than 90% of the Bank’s transactions have directly supported small business. It is a difficult time for the nation, as we struggle to reconcile the impact to our economy from COVID-19, it is important to keep U.S. industries open for business. The Bank could play a crucial role in reducing unemployment and maintaining American manufacturing base if Congress mandated that Ex-Im:

• Quickly process large and small transactions for American businesses to continue to effectively bring in business overseas.

3) Designate the nation’s space manufacturing workforce and its critical suppliers as essential. The Administration should designate the nation’s space manufacturing workforce and its critical suppliers as essential and exempt manufacturing facilities from city-wide closures as long as a plan to contain spread of COVID-19 is in place. This workforce is essential to maintaining the nation’s national security, transportation, and infrastructure industrial base, and support critical government missions. Any interruptions in the work these companies are doing could result in loss of high-tech jobs and talent, as well delays that could put risk in our nation’s space access infrastructure.

4) Direct the IRS to provide for refunds of all R&D Tax Credits accumulated through FY2019 so that companies may immediately access this deferred asset for liquidity, allowing for continued innovation through R&D reinvestment. Companies across the United States are seeing a significant reduction in operating capital as a result of COVID shutdowns and the broader economic slowdown, but companies require access to capital in order to continue operations. Therefore, the IRS should provide for refunds of all R&D Tax Credits accumulated through FY2019 so that companies may immediately access this deferred asset for liquidity.

5) Establish a Supply Chain Stabilization program. This program would provide access to zero or low-interest loans for companies in the aerospace and space launch industries to serve as bridge capital in supporting ongoing operations and downstream suppliers as existing cash flows slow or halt as a result of the ongoing public health crisis. This effort would allow companies to continue to pay suppliers for ongoing orders even as government programs slow for the foreseeable future.

6) Provide an “essential contractor” designation to companies serving critical national security needs to allow work to proceed. Widespread closures associated with COVID threaten to significantly postpone critical national security and civil space efforts. These closures could also halt cash flow to prime contractors and suppliers, potentially resulting in downstream closures that would harm the industrial base. Offering a Federal “essential contractor” designation to companies supporting national security and critical civil space programs would allow for continued operations within key sectors of the industrial base in support of critical national priorities. To maintain operations of essential contractors while minimizing transmission of COVID-19, the Federal Government should make available funding for personal protective equipment (PPE), thermometers, and other support necessary for employees at “essential contractors” to safely continue operations.

CSF and its members look forward to working with Congress on this matter that directly impacts the health, safety, and economic security of America’s critical aerospace capability and ability to maintain mission readiness for critical access to space. We appreciate your attention to this matter. Should you have any questions or wish to discuss further, please contact me.

Sincerely,

Eric W. Stallmer
President
Commercial Spaceflight Federation