Retired USAF General Larry D. Welch in 2010. Image source: Air Force Historical Foundation.
UPDATE March 31, 2015 — A member of the NASASpaceflight.com forum has posted the complete Welch report. Click here to read the report.
Multiple media outlets are reporting that an investigation led by retired U.S. Air Force Chief of Staff Larry D. Welch has concluded that the service went beyond its appropriate role by trying to impose its own standards on SpaceX, which hopes to be certified for launching military payloads.
The U.S. Air Force overstepped its bounds as it worked to certify privately held SpaceX to launch military satellites, undermining the benefit of working with a commercial provider, an independent review showed on Thursday.
The report cited a “stark disconnect” between the Air Force and SpaceX, or Space Exploration Technologies, about the purpose of the certification process and recommended changes ...
The report, prepared by former Air Force Chief of Staff General Larry Welch, said the Air Force treated the process like a detailed design review, dictating changes in SpaceX's Falcon 9 rocket and even the company's organizational structure.
That approach resulted in over 400 issues that needed to be resolved, which was “counterproductive” to a national policy aimed at encouraging competition in the sector.
In fact, the process was intended to show that SpaceX met overall requirements to launch military satellites, not carry out the more detailed review required for each launch on a case-by-case basis, he said.
A March 26 Bloomberg Business report said that the investigation was delivered to Congress on March 25 and was to be released to the public on March 26, however I've been unable to locate it online.
The Welch report also faulted SpaceX for failing to respect the Air Force's experience.
According to the Bloomberg report:
Describing the past conflicts, Welch said the company’s view “is that the Air Force should have confidence in SpaceX capabilities based on its track record of performance,” while the Air Force “has approached certification as a detailed design review.”
“Neither view was the intent of the original certification plan,” which envisioned a “partnership that leveraged the commercial practices and experience of SpaceX and decades of Air Force experience,” Welch said. “Both teams need to adjust.”
Aviation Week reported on March 25 that Air Force Secretary Deborah Lee James, who ordered the review, said in an interview that “The U.S. Air Force and SpaceX are modifying the Cooperative Research and Development Agreement (CRDA) signed two years ago to outline” the process necessary to complete certification.
The changes are needed to refocus the certification process on establishing top-level trust and confidence that the company can deliver a launch as planned. The current CRDA was “probably too focused on the government side on conducting detailed design reviews and instructing design changes … rather than focusing on the high-level question of do we trust this new entrant,” Air Force Secretary Deborah Lee James told Aviation Week during a March 25 interview.
SpaceX chose its path to certification and the CRDA was signed by both parties in June 2013. “Even though the certification process is governed by a CRDA — it is all written down — and you would think that would help people mutually understand what is expected, that, in fact, was not always the case,” James said. SpaceX’s culture of innovation and the Air Force’s culture — focused on “history and a lot of experience” — clashed.
The 80-year old General Welch retired in 1990 but has continued to serve on various panels, including a 2007 task force that reviewed Defense Department policies for handling nuclear weapons.
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